Obsidian beats drilling goals, lifts Peace River output

Executive Summary

• Obsidian Energy provided an operational update on its second half (H2) 2025 capital program, reporting that initial drilling results are above internal expectations and supporting a record production average in Peace River.
• The company revised its year-end 2025 net debt guidance downward to $213 million (from $295 million) due to the monetization of InPlay Oil Corp. shares and share buybacks.
• The company completed its current normal course issuer bid (NCIB) by buying back and cancelling 7.1 million shares and announced plans to renew the NCIB in March 2026.

Key Details

• Drilling Progress: The company is operating two rigs in Peace River and one rig in Willesden Green. It has rig-released 13 net wells out of the 28-net-well H2 2025 capital program.
• Production Performance:
  • Achieved a record seven-day production average in Peace River of approximately 14,500 barrels of oil equivalent per day (boe/d).
  • Six wells that have reached 30 days of production are performing well ahead of predrill expectations.
• Peace River Asset Highlights (Heavy Oil):
  • Harmon Valley South (HVS) 14-07 Pad (Bluesky): Two net wells achieved an average IP30 of 385 boe/d (98% oil).
  • Dawson 4-24 Pad (Clearwater): Two net follow-up wells achieved an average IP30 of 316 boe/d (100% oil). The pad now has five net primary producers and two net water injectors.
  • Dawson 13-23 Pad (Clearwater): Two net wells achieved an average IP30 of 298 boe/d (100% heavy oil).
• Enhanced Oil Recovery (EOR):
  • Started water injection on pilots in both the Bluesky and Clearwater formations at Peace River.
  • A two-net-well Bluesky injector pilot at the HVS 9-25 pad is operational.
  • Water injection has started on a two-net-well integrated Clearwater waterflood pilot on the Dawson 4-24 pad.
• Willesden Green Asset Highlights (Light Oil):
  • Drilling the first horizontal Belly River well in the Crimson field.
  • The area includes an eight-net-well operated program (one Mannville well at Crimson; six wells at Open Creek consisting of four Cardium and two Belly River wells).
  • A regional infrastructure project at Open Creek is under construction and progressing as planned.
• Financial Updates & Liquidity:
  • Monetized InPlay Oil Corp. shares for $91 million (above issue price).
  • Redeemed $30 million of senior unsecured notes in August to save on future interest expenses.
  • Revised year-end 2025 net debt guidance to $213 million (previously $295 million).
  • Completed the current NCIB by buying back and cancelling 7.1 million shares (the maximum allowed).
  • Expects to renew the NCIB in March 2026.
• Hedging: Added new oil and gas contracts in Q3 2025 to mitigate commodity price risk.

Notable Quotes

• "Our second half 2025 development program is off to an excellent start... Production results from the six wells that have reached 30 days of production are all well ahead of predrill expectations, supporting a record seven-day production average in Peace River of approximately 14,500 boe/d." — Stephen Loukas, President and CEO
• "In addition, the successful monetization of our InPlay Oil Corp. shares (at a value above the issue price) allowed us to maintain our strong liquidity position while redeeming $30-million of senior unsecured notes in August, providing additional go-forward interest expense savings." — Stephen Loukas, President and CEO