Obsidian Energy Announces Third Quarter 2025 Results

Executive Summary

• Obsidian Energy reported Q3 2025 results with average production of 27,316 boe/d and funds flow from operations (FFO) of $49.7 million ($0.74 per share basic).
• The company raised its H2 2025 production guidance to 27,800‑28,300 boe/d and increased capital‑expenditure guidance to $120‑$125 million, reflecting strong early results from the Peace River development program and the first Belly River well in Crimson (IP25 = 538 boe/d).
• A pre‑paid equity forward program was launched to hedge share‑based incentive plan exposure; $8.92 per share average price for 820,000 shares purchased in Q3.

Key Details

• Financial Highlights (Q3 2025 vs Q3 2024)
• Cash flow from operations: $45.4 M vs $110.3 M.
• Funds flow from operations: $49.7 M ($0.74/share basic) vs $124.7 M ($1.64/share).
• Net income: $16.8 M ($0.25/share basic) vs $33.2 M ($0.44/share).
• Capital expenditures: $65.3 M (down from $85.5 M).

• Long‑term debt reduced to $145.4 M; net debt $219.3 M (down from $413.6 M).

• Production & Pricing

• Total production Q3 2025: 27,316 boe/d (light oil 4,979 bbl/d, heavy oil 12,586 bbl/d, NGL 1,955 bbl/d, gas 47 mmcf/d).

• Average sales price (pre‑hedge) for light oil $86.67/bbl; heavy oil $67.93/bbl; NGL $36.44/bbl; natural gas $0.91/mcf.

• Operational Updates

• Peace River: record 7‑day average ~15,000 boe/d in September; 16 rigs released (14 net) with strong IP30 rates (385–316 boe/d, 100% oil).
• First Belly River well at Crimson (pad 12‑21): IP25 = 538 boe/d (76% oil). Two additional Belly River wells rig‑released in Open Creek, expected on‑production Q4.
• Waterflood pilots started at Bluesky and Clearwater; two injector wells converted; further injectors planned for Q4.

• Road infrastructure project commenced in Nampa field, slated for Q4 completion.

• Guidance Updates (H2 2025)

• Production: 27,800‑28,300 boe/d (up from prior 27,100‑28,300).
• Capital expenditures: $120‑$125 M (up from $110‑$120 M).
• Decommissioning: $14‑$15 M.
• Net operating costs: $14.35‑$14.60 per boe (up from $13.45‑$14.35).
• G&A costs: $1.95‑$2.05 per boe.

• Expected FFO: $113‑$114 M; net debt to annualized FFO ≈ 1.0×.

• Hedging & Equity Forward Activity

• WTI swaps covering ~32,500 bbl/d at ~$90/bbl for Oct–Dec 2025.
• AECO gas swaps covering ~76,777 mcf/d at $2.24‑$3.31/mcf (Oct 2025‑Mar 2026).

• Pre‑paid equity forward contracts: 720,000 shares (Sept 2028) @ C$8.89; 1,200,000 shares (Oct 2028) @ C$8.78.

• Share Repurchase

• NCIB repurchased ~1.1 M shares for $8.7 M (average $7.99/share); total repurchases since March 2025 = 7.1 M shares.

• Other Material Transactions

• Disposed of InPlay Oil Corp. share position received in Pembina disposition for $91.4 M; gain $15.2 M, proceeds applied to debt reduction and accelerated buybacks.
• Partial redemption of $30 M senior unsecured notes; $80.8 M notes now outstanding.

Notable Quotes

• “The execution of our second half development program is ahead of schedule… the results from this initial Belly River well are very encouraging, validating an additional fairway in the emerging Belly River play.” – Stephen Loukas, President & CEO
• “We have narrowed our guidance range by increasing the lower end target… we anticipate being in the upper‑end of this range.” – Stephen Loukas, President & CEO