Obsidian Energy Announces Fourth Quarter and Full Year 2025 Results

Executive Summary

• Obsidian Energy reported Q4 2025 funds flow from operations (FFO) of $56.6 M ($0.84 /basic share) and full‑year 2025 FFO of $272.1 M ($3.92 /basic share), down from 2024 levels.
• Net income turned positive at $35.2 M for 2025 versus a $202.6 M loss in 2024, driven by the April 2025 sale of Pembina assets and lower depreciation/amortization.
• The company completed a $325 M asset disposition (Pembina), reduced net debt to $268.2 M, issued $175 M senior notes at 8.125%, repurchased ~7.6 M shares for $54.9 M, and continued its prepaid equity forward program (3.34 M shares purchased in 2025).

Key Details

• Production: Average Q4 2025 production of 27,971 boe/d; full‑year 2025 average 30,624 boe/d (down from 37,474 boe/d in 2024).
• Financial Highlights – Q4 2025 vs. Q4 2024
• Cash flow from operating activities: $42.6 M vs. $115.0 M.
• Funds flow from operations: $56.6 M vs. $107.7 M.
• Net income: –$12.3 M vs. –$284.8 M.
• Capital expenditures: $65.0 M vs. $84.1 M.
• Full‑Year 2025 vs. 2024
• FFO: $272.1 M vs. $432.0 M.
• Net income: $35.2 M vs. –$202.6 M.
• Capital expenditures: $298.9 M vs. $343.1 M.
• Net debt reduced to $268.2 M from $411.7 M (debt repayment using Pembina proceeds).
• Pembina Asset Disposition – Closed April 2025; total consideration ≈ $325 M (including InPlay share‑sale proceeds); assets produced ~11,000 boe/d in Q1 2025. Transaction also transferred a 34.6 % interest in Willesden Green Cardium Unit #2 to Obsidian.
• Financing Activity – Issued $175 M five‑year senior unsecured notes (8.125%, maturing Dec 3 2030); proceeds used to redeem 11.95 % notes and reduce syndicated credit facility balance. Remaining $9 M on the $235 M facility as of Dec 31 2025.
• Share Repurchase (NCIB) – ~7.6 M shares repurchased for $54.9 M in 2025 (average $7.20/share). Total to date since 2023: ~17.2 M shares for $143.9 M (avg $8.37/share). NCIB renewal expected March 2026.
• Prepaid Equity Forward Program – Purchased 3,340,000 shares in 2025 for $28.7 M ($8.62/share); additional 950,000 shares post‑year end for $9.1 M ($9.57/share). Total program shares ≈ 4.3 M.
• Capital Program Highlights – 63 wells rig‑released (61.4 net), 58 on production (56.4 net) by year‑end; water‑flood pilots in Dawson and HVS; Belly River drilling with strong initial results.
• Reserve Replacement – 118 % PDP, 185 % 1P, 235 % 2P reserve replacement ratios (adjusted for dispositions). NPV10: $1.0 B (PDP), $1.4 B (1P), $2.1 B (2P).
• Operating Costs – Net operating cost increased to $14.92/boe (2025) from $13.85/boe (2024); Q4 2025 cost $15.19/boe due to extreme cold and snow impacting Peace River logistics. Expected decline in 2026 with additional water‑disposal capacity.
• Hedging Positions (as of early 2026) – WTI swaps covering ~52 k bbl/d through May 2026 at prices $62–$84/bbl; AECO gas swaps covering ~63 k mcf/d through Oct 2026 at $2.68–$3.30/mcf. Equity forward contracts for 4.24 M shares expiring Sep 2028‑Feb 2029 at $8.31–$10.10 per share.
• Guidance vs. Actual (H2 2025) – Production slightly below guidance (27,644 boe/d vs. 27,800‑28,300 range); capital spend exceeded upper guidance ($130.3 M vs. $120‑125 M); decommissioning higher ($18.2 M vs. $14‑15 M); net operating cost above midpoint ($15.10/boe vs. $14.35‑14.60). FFO below midpoint ($106.3 M vs. $114 M).

Notable Quotes

• “Obsidian Energy had a very dynamic year in 2025… we generated $272.1 million of funds flow from operations and returned capital to shareholders via our share buyback program.” – Stephen Loukas, President & CEO
• “We are actively renewing our normal‑course issuer bid, which should be in place in early March.” – Stephen Loukas

All figures are presented in Canadian dollars unless otherwise noted.