Obsidian Energy Announces Operational Update

• On April 13, 2026, Obsidian Energy released an operational update confirming strong Q1 2026 results.
• Key highlights include record oil quality in Peace River (Clearwater/Bluesky) with viscosity as low as 497 cP and IP rates up to 299 boe/d on Clearwater pads.
• The company expanded its water-flood pilot program, commissioning additional injection wells at Nampa and West Dawson with start-up expected late April.
• 2026 guidance remains unchanged from the January announcement: Production 27,900–29,900 boe/d, Capex $190–$230M, FFO $225M base case.
• Hedging coverage was increased significantly to ~90 kb/d of oil through August 2026 (weighted average price $64.29–$86.00/bbl), up from previous disclosures covering ~52 kb/d.
• Financial sensitivity shows FFO could reach $331M under an $80 WTI scenario, indicating potential upside if prices remain elevated.

• The news is confirmatory rather than transformative. Management maintained the guidance set in January 2026 despite strong Q1 operational metrics, suggesting a conservative approach to capital allocation and production ramp-up.
• The expansion of hedging coverage from ~52 kb/d (Jan 2026) to ~90 kb/d (Apr 2026) materially reduces downside risk on cash flow but caps participation in potential WTI spikes above $86/bbl.
• Operational metrics (IP rates, oil quality) exceed internal expectations ("best quality to date"), which supports the long-term thesis for water-flood recovery factors but does not immediately alter the 2026 production guidance numbers.
• Given the stock price has appreciated from ~$5.44 in May 2025 to $12.56 in April 2026 (approx. 130% gain), much of this operational success is likely already priced into the current valuation.
• The lack of guidance increase despite strong Q1 performance may be viewed as a missed opportunity by growth investors, though it aligns with risk-averse capital discipline.

• Obsidian Energy is an Alberta-based oil and gas producer focused on heavy oil (Peace River) and light oil (Willesden Green/PCU #11).
• Flagship projects include the Peace River asset (Clearwater and Bluesky formations) utilizing water-flood technology to enhance recovery, and Willesden Green (Belly River/Cardium plays).
• The company transitioned from a heavy-heavy portfolio to a more balanced mix following the April 2025 sale of Pembina assets ($325M), reducing decommissioning liabilities significantly.