Obsidian Energy Announces 2026 Guidance and Provides an Operational Update

Executive Summary

• Obsidian Energy announces its 2026 capital budget of $190‑$230 million and production guidance of 27,900‑29,900 boe/d (midpoint 28,900 boe/d), with 73% liquids.
• Expected funds flow from operations (FFO) of $225 million ($3.35 per share) and positive free cash flow of ~$7 million at assumed WTI prices of US$58/bbl H1 and US$62/bbl H2 2026.
• Detailed drilling program includes 38 net operated wells (26 development, 2 appraisal, 8 injectors) across Peace River (heavy oil) and Willesden Green/PCU #11 (light oil), plus optionality for additional water‑flood injectors.

Key Details

• Capital Expenditures
• Total $190‑$230 M; $128 M allocated to light‑oil assets (Willesden Green/PCU #11) and $80 M to heavy‑oil assets (Peace River).

• $22 M of the Peace River budget dedicated to water‑flood projects (Dawson & Nampa areas).

• Production Guidance

• 2026 average production: 27,900‑29,900 boe/d (midpoint 28,900 boe/d).
• Liquids mix: 73% oil/NGLs.

• Asset‑level averages: Heavy Oil 12,700 boe/d (93% liquids); Light Oil 16,200 boe/d (58% liquids).

• Financial Guidance

• FFO: $225 M ($3.35/share) at WTI $58/H1, $62/H2.
• Positive free cash flow: ~$7 M ($0.10/share).
• Net operating costs: $14‑$15 per boe.

• Net debt (pre‑NCIB): $272 M; net‑debt/FFO ratio 1.2×.

• Drilling Program – Heavy Oil (Peace River)

• Total 26 net wells planned: 9 development in Bluesky, 9 producers in Clearwater, plus 8 water‑flood injectors (first half) and optional 9 additional injectors (second half).

• Water‑flood spend: $22 M (first half), optional $14 M (second half).

• Drilling Program – Light Oil (Willesden Green/PCU #11)

• 12 net wells planned in Willesden Green (10 in Open Creek, 2 in Crimson) plus 4.5 net non‑operated wells at PCU #11.

• New pipeline infrastructure completed in Open Creek, reducing tie‑in costs.

• Operational Update – Q4 2025

• Completed second half of 2025 capital program; added 2 net wells in Willesden Green and 7 net wells in Peace River (including 5 Clearwater producers and 2 injection wells).

• Notable initial production rates: Clearwater pads averaging 209‑230 boe/d IP30; Open Creek Belly River pad IP30 rising from 199 to 418 boe/d after infrastructure commissioning.

• Hedging Position (as of Jan 2026)

• WTI swap: 6,127 bbl/d at $84.12 per barrel (Jan 2026).
• AECO natural‑gas swaps: total ~62,756 mcf/d at $2.71‑$3.30 per mcf (Jan–Oct 2026).
• FX forwards covering CAD/USD exposure (~8.5 M USD).

• Equity forward contracts for 2028‑2029 expiries at C$8.31‑$8.89.

• Sensitivity Analysis – Impact on 2026 FFO (midpoint)

• ± $1/bbl WTI → $9.4 M change.
• ± 0.01 CAD/USD → $3.4 M change.
• ± $1/bbl MSW differential → $3.6 M change.
• ± $1/bbl WCS differential → $6.1 M change.

• ± $0.25/GJ AECO price → $1.6 M change.

• Corporate Actions

• Plan to renew Normal Course Issuer Bid (NCIB) in March 2026; share‑repurchase volume may vary with market conditions.

Notable Quotes

“We employed a disciplined approach to our 2026 plans given the current volatility in commodity prices, resulting in a small free cash flow positive budget for the year… while marginally growing production.” – Stephen Loukas, President & CEO

All figures are presented as disclosed by Obsidian Energy and reflect forward‑looking assumptions.