Mr. Stephen Loukas reports

OBSIDIAN ENERGY ANNOUNCES 2024 GUIDANCE WITH 12 PERCENT GROWTH IN AVERAGE ANNUAL PRODUCTION TO 36,000 BOE/D

Obsidian Energy Ltd. has released its 2024 capital and operating program, and financial guidance, which outlines the company's activity for the first year of its three-year corporate growth plan, building on Obsidian's success in 2023.

"In September, 2023, we unveiled our three-year growth plan with a stated production goal of over 50,000 boe/d [barrels of oil equivalent] in 2026. Today, we are pleased to provide our formal 2024 capital and operating program that matches our growth plan forecast of 36,000 boe/d, with approximately $30-million less capital spending," commented Stephen Loukas, Obsidian Energy's president and chief executive officer. "The momentum of our second-half 2023 drilling program has allowed us to optimize our capital program and reduce capital spending from our previous forecast. Consistent with our growth plan, our 2024 capital program is focused on maintaining production in our light oil business to generate free cash flow to support growth within our heavy oil business at Peace River, as well as to continue to fund our normal course issuer bid (NCIB) activity."

Mr. Loukas continued, "Our 2024 capital program is flexible and affords us optionality to accelerate our growth and/or NCIB activity in a strengthening commodity price scenario or reduce our capital expenditures if commodity prices materially weaken."

Two thousand twenty-four guidance

Obsidian Energy's 2024 capital program is designed to grow production through the development of new and existing fields while further delineating the company's Peace River asset. The company is planning between $345-million and $355-million in capital expenditures (including $25-million for exploration/appraisal activities) plus an additional $23-million to $24-million in decommissioning expenditures in 2024. Capital expenditures are weighted toward Obsidian's Peace River asset, and the continued development of its derisked Walrus Bluesky and Dawson Clearwater plays to build on the momentum from the success of the company's 2023 program. The company's plan calls for continued investment in its light oil business to maintain production while generating significant free cash flow to be utilized in its heavy oil business. Results from the company's first-half development and exploration/appraisal activities are expected to provide Obsidian the opportunity to further optimize its second-half program.

In 2024, production is expected to average approximately 36,000 boe/d (midpoint of guidance) -- a 12-per-cent increase from 32,275 boe/d in 2023. Production is expected to grow consistently in the first half of 2024 and exit the second quarter over 36,000 boe/d as new wells come on stream. In the beginning of the second half of the year, production is expected to decline as development activity slows during spring breakup, then increase to over 37,000 boe/d by year-end. Production growth is expected to continue over the year and into 2025 with forecasted first-quarter 2025 production of approximately 40,000 boe/d.

In 2024, net operating costs per boe are expected to be slightly lower than 2023 levels, driven by higher production. Obsidian's 2024 guidance is based on $75 (U.S.)/bbl (barrel) WTI (West Texas Intermediate), $3 (U.S.)/bbl MSW (Mixed Sweet Blend) differential, $15 (U.S.)/bbl WCS (Western Canadian Select) differentials and $2.25/gigajoule (GJ) AECO (Alberta Energy Company) natural gas (down from $3/GJ as previously forecast). The company's plan anticipates funds flow from operations (FFO) of approximately $400-million, resulting in a 2024 net debt to FFO of approximately 0.8 times, and free cash flow (FCF) of approximately $27-million. Obsidian's full-year 2024 guidance is presented in the associated table.

Two thousand twenty-four capital and operating program

The company's 2024 plan is focused on the continued development and exploration/appraisal of its heavy oil assets in Peace River and its light oil assets in Willesden Green/Pembina (Cardium/Mannville) in central Alberta. In Obsidian's heavy oil business, the company intends to build momentum on its 2023 success in its Bluesky and Clearwater plays, as well as executing the company's exploration/appraisal program to further delineate its extensive Peace River land position. In Obsidian's light oil business, the company will be predominantly active in its Willesden Green/Pembina (Cardium) assets, where it will continue to exploit its Cardium position with a focus on strong returns and FCF generation.

Obsidian's first-half 2024 program is under way with five rigs in the process of drilling 30 wells (29.4 net) of the company's 78 well (77.3 net) full-year operated program. Obsidian anticipates further optimizing its second-half 2024 program as new results from offset wells come on-line and first-half exploration/appraisal drilling provides additional information. The breakdown of operated wells expected to be rig released during 2024 is as shown in the associated table.

Hedging update

The contracts shown in the associated tables are currently in place on a weighted-average basis.

Two thousand twenty-four guidance release webcast and updated presentation

In conjunction with this release, Mr. Loukas, the company's president and chief executive officer, and other members of management will host a webcast presentation on-line today, Thursday, Jan. 25, 2024, at 9 a.m. MT (11 a.m. ET).

The presentation will be broadcast live on the Internet and may be accessed either through Obsidian's website or directly at the webcast portal. Those who wish to listen to the presentation via phone should connect five to 10 minutes prior to the scheduled start time through the following numbers:

• Canada/United States: 1-800-319-4610 (toll-free);
• Toronto: 1-416-915-3239;
• Calgary: 1-403-351-0324.

A question-and-answer session will be held following the presentation. If you wish to submit a question to the company, participants can do so ahead of time after registering on the webcast portal on the Internet or by e-mailing questions to investor.relations@obsidianenergy.com. The updated presentation will be available for replay following the webcast on the company's website.

Fourth quarter and full year 2023 results release

The company intends to release its fourth quarter and full year 2023 financial and operational results before North American markets open on Feb. 22, 2024. In addition, the 2023 management's discussion and analysis, and the audited 2023 consolidated financial statements will be available on the company's website, the SEDAR+ website and the EDGAR website on or about the same date.

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