Obsidian Energy Announces Second Quarter 2025 Results

Executive Summary

• Obsidian Energy reported Q2 2025 operating and financial results, highlighting a Funds Flow from Operations (FFO) of $65.8 million ($0.94 per share basic), a decline from $115.2 million in Q2 2024 due to lower production volumes following the Pembina asset disposition and reduced oil prices.
• The Company executed a significant share buyback program, repurchasing and cancelling 5.4 million shares (~7% of outstanding shares) for $36.6 million in Q2, bringing the total repurchased since inception of the program in 2023 to approximately 20% of outstanding shares.
• Operational highlights include the successful completion of the first half 2025 capital program, with 20 wells brought on production in Peace River, and the initiation of a Clearwater waterflood pilot project at the Dawson field.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Funds Flow from Operations (FFO): $65.8 million ($0.94/share basic) vs. $115.2 million ($1.51/share basic).
  • Net Income: $15.3 million ($0.22/share basic) vs. $37.1 million ($0.48/share basic).
  • Cash Flow from Operating Activities: $55.2 million vs. $77.9 million.
  • Capital Expenditures: $40.2 million vs. $59.2 million.
  • Net Debt: $270.2 million vs. $432.5 million (reduced due to proceeds from Pembina disposition applied to bank debt).
• Production Metrics (Q2 2025):
  • Total Production: 28,943 boe/d (vs. 35,773 boe/d in Q2 2024).
  • Light Oil: 6,314 bbl/d.
  • Heavy Oil: 12,041 bbl/d.
  • NGL: 2,189 bbl/d.
  • Natural Gas: 50 mmcf/d.
• Pricing and Netback:
  • Average Light Oil Price: $91.09/bbl.
  • Average Heavy Oil Price: $61.27/bbl.
  • Netback: $27.13/boe (vs. $38.99/boe in Q2 2024).
  • Net Operating Costs: $13.54/boe.
• Corporate Actions & M&A:
  • Pembina Disposition: Closed on April 7, 2025, to InPlay Oil Corp. with an effective date of December 1, 2024. This reduced production and debt levels.
  • Share Buyback (Q2): Repurchased 5.4 million shares for $36.6 million (avg price $6.80/share).
  • Share Buyback (Post-Q2): Repurchased an additional 0.6 million shares for $4.9 million (avg price $8.01/share) up to July 29, 2025.
  • InPlay Share Disposition: In July, a third-party non-binding offer was received to acquire the Company’s entire 9,139,784 share position in InPlay, priced above the July 15, 2025 closing price of $9.59/share.
• Operational Updates & Drilling Results:
  • Peace River (Bluesky): Brought on 8 wells (7.5 net). Notable IP30 rates: 546 boe/d (100% oil) at HVS 14-07 pad; average 395 boe/d (100% oil) at HVS 13-08 pad.
  • Peace River (Clearwater): Brought on 7 wells (7.0 net), including 2 waterflood injectors. Notable IP30 rates: 304 boe/d (100% oil) average at Dawson 4-24 pad; 253 boe/d (100% oil) average at Dawson 4-23 pad.
  • Pembina Cardium Unit #11: Final well (0.45 net) brought on in May with gross IP30 of 317 boe/d (92% oil).
  • Second Half 2025 Plan: Three rigs operating in Peace River; one rig returning to Willesden Green in August. Spud 6 net wells in Peace River to date.
• Hedging Portfolio:
  • Oil Swaps: Volumes ranging from 4,000 to 12,375 bbl/d with prices between $86.29 and $92.18/bbl for July–December 2025.
  • Natural Gas Swaps: Volumes ranging from 6,635 to 25,118 mcf/d with prices between $2.24 and $3.55/mcf.

Notable Quotes

• "Our second quarter was foundationally strong for the Company as we closed on the disposition of our operated Pembina assets, which further strengthened our balance sheet and reduced our decommissioning liabilities, allowing us to make significant progress on our return of capital initiative through our active share buyback program," commented Stephen Loukas, Obsidian Energy's President and CEO.
• "Operationally, the second quarter was a success as we brought all of our wells on production from our first half program, drilled our Clearwater waterflood pilot at the Dawson 4-24 pad and achieved our key guidance metrics."