10:56:47 EDT Fri 24 Sep 2021
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Obsidian Energy Ltd (2)
Symbol OBE
Shares Issued 74,850,297
Close 2021-07-09 C$ 4.52
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Obsidian completes H1 program, estimates Q2 production

2021-07-12 10:08 ET - News Release

An anonymous director reports


Obsidian Energy Ltd. has released strong production results for the second quarter of 2021, supported by the company's nine-well first-half 2021 development program now on stream. Based on preliminary estimates, the company expect second quarter production to average approximately 24,650 barrels of oil equivalent per day, an increase from 23,225 barrels of oil equivalent per day in the first quarter. The company will discuss its full-year 2021 guidance in conjunction with its second quarter results, which are expected to be released before markets open on Friday, July 30, 2021.

2021 development program update

The company's nine-well first-half 2021 program was successfully completed ahead of schedule and within budget estimates in its high-economic-return Willesden Green Cardium area. Cost control of the program has been solid, with estimated per-well costs of $3.3-million (inclusive of construction, drilling, completions, equipping and tie-in costs to lease edge), representing a 2-per-cent decrease from the company's 2020 program average while increasing lateral length by 10 per cent. These cost improvements resulted from continuous progress in field execution as demonstrated by the company's first half drilling program that included a company pacesetter Cardium well with intermediate casing (11.1 days and 5,349 metres from spud to rig release) and a new company record length for a Cardium well of 5,576 metres (3,503-metre horizontal length).

Initial production rates for the nine commissioned Willesden Green Cardium wells were as shown in an attached table.

The company began its second-half 2021 drilling program approximately two weeks earlier than anticipated in June due to favourable spring ground conditions. The company's second well at the East Crimson 1-33 two-well pad was rig released on July 10, 2021, and the 1-33 pad is expected to be on stream at the end of August. The company also started drilling in its Central Pembina region, spudding the first well on the 7-17 three-well pad on July 9, 2021.

A two-rig continuous drilling program is being utilized to drill 23 wells (19.3 net) in the second half of 2021, predominantly in the company's Willesden Green and Pembina Cardium assets. Combined with the nine wells drilled in the first half of the year, the company expects to bring 25 wells (22.8 net) on production in 2021, with the remaining seven wells (6.8 net) expected on production early in the first quarter of 2022. The company has significant capability to scale its development drilling in response to changes in commodity prices.

Hedging update

The company has financial oil and gas contracts in place on a weighted average basis, as shown in an attached table.

Additionally, the company has physical contracts in place, as shown in an attached table.

Second quarter 2021 results release

The company intends to release its second quarter 2021 financial and operational results before North American markets open on Friday, July 30, 2021. In addition, the second quarter management discussion and analysis and the unaudited consolidated financial statements will be available on the company's website, on SEDAR and on EDGAR on or about the same date.

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