obsidian energy corporate presentation · pdf filecorporate presentation january 2018. ......
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Obsidian EnergyCorporate Presentation
January 2018
ObsidianEnergy.com | TSX/NYSE: OBE
Important Notices to the ReadersThis presentation should be read in conjunction with the Company's audited consolidated financial statements, management's discussion and analysis ("MD&A") for the three and nine months ended September 30, 2017. All dollar amounts contained in this presentation are expressed in millions of Canadian dollars unless otherwise indicated.
Certain financial measures included in this presentation do not have a standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and therefore are considered non-generally accepted accounting practice ("non-GAAP") measures; accordingly, they may not be comparable to similar measures provided by other issuers. This presentation also contains oil and gas disclosures, various industry terms, and forward-looking statements, including various assumptions on which such forward-looking statements are based and related risk factors. Please see the Company's disclosures located in the Appendix at the end of this presentation for further details regarding these matters.
2
ObsidianEnergy.com | TSX/NYSE: OBE
Obsidian Energy Corporate Profile
3
Production boe/d 30,166
% Liquids % 62%
Operating Costs $/boe $12.26
Netback $/boe $18.70
2017 Capital Budget $MM $160
Share PriceDec. 31st, 2017
$/share $1.56
OBE-TSX Daily Volume% of shares outstanding
MM 0.90.2%
OBE -NYSE Daily Volume% of shares outstanding
MM 1.00.2%
Market Capitalization $MM $787
Net Debt $MM $410
Enterprise Value $MM $1,197
Corporate Metrics
Q3 2017 Operating Metrics
AlbertaViking1,766 boe/d
Net Sections: 170
Cardium18,876 boe/dNet Sections: 450
Index Map
Peace River
4,823 boe/dNet Sections: 235
Deep BasinNew Wells on Q4 2017
Net Sections: 700
Legacy Asset Production of 4,701 boe/d Operating cost are net of carry and netbacks include hedging
See end notes
4
A Balanced Portfolio with Significant Optionality
LOW DECLINE BASE PRODUCTION &
STABLE CASH FLOW
BALANCED SHORT & INTERMEDIATE CYCLE
DEVELOPMENT
LIQUIDS WEIGHTED, SUSTAINABLE
GROWTH
Cardium
Meaningful Free Cash Flow Generation
Waterflood Approach with Primary Optionality
Peace River
Manufactured Cold Flow, High Rate & Low Cost
Multiple Egress Options
Alberta Viking
Short Cycle Investment to Toggle Growth
Industry Leading Initial Production Rates
Deep Basin
Multi Horizon Potential
Focus Highly Economic Mannville Development
ObsidianEnergy.com | TSX/NYSE: OBE
On Track For High End of Guidance
5
Total Capital On Track for Guidance
On Track to Meet all 2017 Guidance Metrics
Q4 A&D Adj. Production boe/d
FY 2017 Productionboe/d
TotalExpenditures$MM
Operating Expenses$/boe
20,000
23,500
27,000
30,500
34,000
Q4 2016 Q4 2017
Reiterating Double Digit
Growth
Operating Costs on track for Guidance
Total Expenditures
Guidance $160
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
Total Expenditures Guidance
Operating Cost Guidance
$13.00 - $13.50
$12.50
$13.00
$13.50
$14.00
Guidance*Net of Peace River Carry
Production Guidance
30,500 - 31,500
30,000
30,500
31,000
31,500
32,000
See end notes See end notes
ObsidianEnergy.com | TSX/NYSE: OBE 6
Low Decline Rate Underpins Growth
16% Corporate Base Production Decline RateCardium Asset Under Historical Waterflood
Capital Efficiencies of $6,500/boe/d on 2017 Optimization ProjectsOptimization of existing base wellbores
10,000
15,000
20,000
25,000
30,000
35,000
Q1 2018 Q2 2018 Q3 2018 Q4 2018
(bo
e/d
)
Base Production 2017 Development 2018 Development
2017 Base Production & 2017 Development Declines 16% in 2019
Corporate Base Productionboe/d
16% Base Decline Rate
22% Base + 2017 Development Decline Rate
See end notes
ObsidianEnergy.com | TSX/NYSE: OBE 7
Waterflood Performance is Impressive• Cardium Decline Rate lowered from
approximately 20% to 5%
• Waterflood and base optimization projects initiated in 2016
Cardium Base Production Declineboe/d
Pembina Waterflood Activity
Converted and reactivated 37 wells in PCU #9 since Q3 2016
Drilled 8 new injectors to support 2017 new drills
Actively managing more than 120 existing injectors
5 miles
10 kms
T48
R10 R9W5
T47
10,000
12,500
15,000
17,500
20,000
Jan-16 Jul-16 Jan-17 Jul-17
Base with No Waterflood SupportBase with Waterflood SupportActual Base Production with Waterflood and Optimization Support
OBE Operated Cardium unit
OBE Cardium land
Waterflood activity since Q3 2016
Actively managed inj.
2017 OBE well
Drilled 8 new injectors in 2017
Actual Decline 5%
Decline 20%
Optimized Waterflood
Decline 10%
Decline 20%
See end notes
ObsidianEnergy.com | TSX/NYSE: OBE 8
Early Cardium Rates Above Type Curve
INDEX MAP
10 miles
15 kms
WILLESDENGREEN
OBE land
OBE producing well
Industry HZ well
R10W5
T45
T40
T50
R5
3 miles
5 kms
T43
R8W5
11-03-43-8W5 CARDIUM4 well Hz pad
Expected on productionby YE 2017
WILLESDEN GREEN11-03-43-8W5 Pad• PCU #9 Program is
>100 boe/d above type curve
• Crimson (Willesden Green) wells on production by year end T48
3 miles
5 kms T47
R10W5
PEMBINA
100/15-02-48-9W5On Production: 10/8/2017
Initial Stabilized Rate: 195 boe/d
102/13-02-48-9W5On Production: 10/8/2017
Initial Stabilized Rate: 140 boe/d
103/14-02-48-9W5On Production: 10/8/2017
Initial Stabilized Rate: 205 boe/d
PCU#9 6-35-48-9W5 Pad
ObsidianEnergy.com | TSX/NYSE: OBE
100/04-18-32-1W4On Production: 10/11/2017
IP30: 188 boe/dPercent Liquids: 76%
100/14-06-33-2W4On Production: 9/15/2017
IP30: 118 boe/dPercent Liquids: 39%
100/03-18-32-1W4On Production: 10/13/2017
IP30: 212 boe/dPercent Liquids: 76%
Compeer GP
Esther GP
Misty GP
Monitor West GP
102/02-18-32-1W4On Production: 9/5/2017
IP30: 218 boe/dPercent Liquids: 57%
INDEX MAP
10 miles
15 kms
OBE gas plant
OBE land
R5 R1W4R10
T35
T30
102/03-18-32-1W4On Production: 10/3/2017
IP30: 237 boe/dPercent Liquids: 73%
T25102/04-18-32-1W4
On Production: 10/7/2017IP30: 179 boe/d
Percent Liquids: 66%
100/02-18-32-1W4On Production: 8/28/2017
IP30: 295 boe/dPercent Liquids: 50%
9
AB Viking Program Continues to Exceed Expectations
102/01-30-32-2W4On Production: 8/30/2017
IP30: 248 boe/dPercent Liquids: 29%
103/02-23-32-2W4On Production: 9/27/2017
IP30: 296 boe/dPercent Liquids: 46%
Continuing to evolve development strategy to enhance economics and maximize capital efficiency
102/02-23-32-2W4On Production: 9/26/2017
IP30: 227 boe/dPercent Liquids: 46%
ObsidianEnergy.com | TSX/NYSE: OBE
Obsidian Energy 55% OwnershipIn the Peace River Oil Partnership
HarmonValley
HarmonValleySouth Seal
100/15-34-83-18W5On Production: 10/9/2017
IP25: 47 bopdDrill Cost: $74/m
INDEX MAP
10 miles
15 kms
R20W5
T80
R15
T85
OBE land
Acquired land in 2017
PROP
104/16-36-82-18W5On Production: 10/14/2017
IP22: 236 bopdDrill Cost: $79/m
1-5-83-17W5 Surface 2 Wells
TD Wells: 11/7/2017
100/10-36-82-18W5On Production: 10/29/2017
First Oil: 11/6/2017Drill Cost: $84/m
100/04-36-82-18W5On Production: 10/3/2017
Last 30 Days: 215 bopdDrill Cost: $120/m
102/15-26-82-18W5On Production: 9/20/2017Last 30 Days: 302 bopd
Drill Cost: $107/m
102/08-25-82-18W5On Production: 8/12/2017Last 30 Days: 216 bopd
Drill Cost: $120/m
10
PROP Program Returned to the Heart of Harmon Valley South• Economics still
attractive post carry
• Well costs dropped 17% in H2 versus H1 due to optimized well length and cheaper cost per meter
100/15-34-82-18W5On Production: 8/31/2017
IP30: 288 bopdDrill Cost: $65/m
103/14-34-83-18W5On Production: 9/20/2017
IP30: 201 bopdDrill Cost: $69/m
102/14-34-83-18W5On Production: 9/21/2017
IP29: 79 bopdDrill Cost: $62/m
100/02-27-82-18W5On Production: 8/31/2017
IP30: 78 bopdDrill Cost: $51/m
See end notes
ObsidianEnergy.com | TSX/NYSE: OBE 11
INDEX MAP
5 miles
10 kms
OBE land
OBE operated Cardium unit
R8W5
T44
T41
WILLESDENGREEN
100/02-07-043-07W5 MNVLOn Production: 10/12/2017
Initial Rate: 3.4 MMCFD, 38 bbl/mmcf free condensate
24 bbl/mmcf other liquidsCurrently choked for liquids
100/14-30-043-07W5 MNVLOn Production: 8/30/2017
Initial Rate: 3.2 MMCFD, 8 bbl/mmcf free condensate
31 bbl/mmcf other liquids
Deep Basin Results are Liquids Rich
Obsidian Energy 80% Working Interest
• Foray into Deep Basin executed on schedule and on budget
• Tested different upper Mannville targets with variable pressure and reservoir quality
• 2 of 3 wells are flow rate restricted to optimize liquids rates
100/02-03-044-09W5 MNVLOn Production: 10/26/2017
Initial Rate: 3.9 MMCFD, 33 bbl/mmcf free condensate
30 bbl/mmcf other liquidsCurrently choked for liquids
See end notes
ObsidianEnergy.com | TSX/NYSE: OBE 12
Strong Hedge Position Protects Capital ProgramClear downside protection through our hedge book with ~65% of Net Liquids Volumes Hedged for FY 2018
Oil Volumes Hedged (bbl/d)~65% of Net Liquids Volumes Hedged for FY 2018
Gas Volumes Hedged (Mcf/d)40% of Net Gas Volumes Hedged for FY 2018
53.19 US$/bbl
52.89 US$/bbl
52.42 US$/bbl
52.05 US$/bbl
51.79 US$/bbl
51.47 US$/bbl
52.87 US$/bbl
7,900
12,000 12,000 12,000 12,000
7,000
2,000
Q4 Q1 Q2 Q3 Q4 Q1 Q2
2017 2018 2019
3.00 C$/Mcf
2.83 C$/Mcf
2.75 C$/Mcf
2.73 C$/Mcf
2.73 C$/Mcf
7,500
7,500
7,5007,500
29,000 28,400
22,700
17,100 15,200
29,000
35,900
30,200
24,600 22,700
Q4 Q1 Q2 Q3 Q4
2017 2018
7,500 mcf/d of gas production is hedged at Ventura pricing, realizing a significant premium to AECO in Q3 2017
See end notes
ObsidianEnergy.com | TSX/NYSE: OBE 13
Focused 2018 Plan
• Predictable & Liquids Weighted Growth Profile• Development Capital is 64% of Total Expenditures• Flexibility to expand capital program in H2 and extend growth rate
2018 Production (boe/d)2018 Production 31,000 – 32,000 boe per day
Capital Spend ($MM)2018 $135MM Capital Expenditures
20,000
22,000
24,000
26,000
28,000
30,000
32,000
34,000
2017E A&D Adjusted FY 2018E
5% A&D Adjusted Production Growth Base &
Infrastructure Capital
$25 18%
2018 Development
$86 64%
Enviro$10 8%
Regulatory$14 10%
See end notes
ObsidianEnergy.com | TSX/NYSE: OBE
AB Viking$9
10%
PROP$8
10%
Deep Basin$11 13%
Optimization$14 16%
Cardium$44 51%
14
Vast Portfolio Optionality on DisplayEmploying a quicker payout program that balances primary drilling with targeted low capital integrated waterflood opportunities
2018 Development Allocations ($MM) 2018 Operated Spuds22 Operated spuds planned in 2018
80% Av. IRR45% Av. IRR
40% Av. IRR100% Av. IRR
50% Av. IRR
Cardium 8
Deep Basin3
PROP5
AB Viking6
22
0
5
10
15
20
25
2018 Wells Spud
See end notes
ObsidianEnergy.com | TSX/NYSE: OBE 15
Short Cycle Focused Cardium Program
PCU#9 2018 Development4 Well Pad with 3 Injection Conversions
2018 Cardium Development Allocations ($MM)
Cardium Hz Drills$2353%
Non-Operated Primary Drilling
$1227%
Pembina Waterflood
Optimization$511%
Land & Seismic
$49%
Willesden Green 2018 Development2 Well Primary Pad
5 miles
10 kms
R10
T47
R10
5 miles
10 kms
R9W5
T47
T48
OBE operated Cardium unit
OBE Cardium land
Water injector
2017 OBE well
2018 OBE well
5 miles
10 kms
T48
Drilling 4 well pad and converting 3 injectors. Also utilizing existing
injectors
• Taking advantage of existing injectors in Pembina for low cost integrated waterflood
• Primary drilling in Willesden Green accessing clean sand and bioturbated intervals
R9
10 miles
15 kms
R7W5
T43
Non-Operated partner well
OBE (40% WI)
OBE operated Cardium unit
OBE Cardium land
Water injector
Hz injector conversion
OBE Recent Activity
2018 OBE well
2 Operated primary wells for 2018
ObsidianEnergy.com | TSX/NYSE: OBE 16
Total 2018 Corporate Capital Efficiencies$/boe/d
2018 Capital Efficiency Buildup• Program leverages the short cycle opportunity set in our portfolio• Development Capital efficiencies of <$15,000/boe/d• Total Capital efficiencies of <$25,000/boe/d
$7,000 $8,000
$14,000
$16,000
$20,000
<$15,000
<$25,000
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
DeepBasin
Optimization PROP AB Viking Cardium Total 2018Development
Total 2018Capital
Ca
pit
al
Eff
icie
nc
ies (
$/b
oe
/d
)
$86MM Development Capital
See end notes
ObsidianEnergy.com | TSX/NYSE: OBE
2018 Guidance
UnitsFY 2018
Guidance
Production
Average Production boe/d 31,000 – 32,000
Growth
2018 Production Growth % 5%
Capital Expenditures
Capital Expenditures $MM $125
Decommissioning Expenditures $MM $10
Expenses
Operating Expense $/boe $13.50 - $14.00
General & Administrative Expense $/boe $2.00 – $2.50
ObsidianEnergy.com | TSX/NYSE: OBE
Appendix
ObsidianEnergy.com | TSX/NYSE: OBE
End Notes
19
All slides should be read in conjunction with “Definitions and Industry Terms”, “Non-GAAP Measure Advisory” and “Forward-Looking Advisory”
Slide 3. Obsidian Corporate Profile
Daily Volume (shares) is the 30 day average share volume traded on Canadian and US Exchanges per Bloomberg. Production, % Liquids, Operating Costs, and Netback and Net Debt are based on Q3 2017 results. Operating costs are net of carry from the Peace River Oil Partnership and netbacks include hedging. The net sections for Deep Basin are approximate numbers and are internal estimates
Slide 5. On track to meet all 2017 guidance metrics
Production, capital expenditures and operating costs are all internal estimates for year end 2017. Operating costs include the benefit of the operating cost carry as per the Peace River Oil Partnership
Slide 6. Low Decline Rate Underpins Growth
Corporate base production and decline is based on actual data. Lines have been smoothed for illustrative effect to adjust for volatility inherent in day to day oil and gas operations. Capital efficiencies on optimization projects are internal estimates and rounded
Slide 7. Waterflood Performance is Impressive
Cardium base production and decline is based on actual data. Lines have been smoothed for illustrative effect to adjust for volatility inherent in day to day oil and gas operations. Capital efficiencies on optimization projects are internal estimates and rounded. The number of actively managing existing injectors is an internal estimate
Slide 10. Program Returned to the Heart of Harmon Valley South
Peace River Oil Partnership carry is expected to end in 2017
Slide 11. Deep Basin Results are Liquids Rich
Choked is an industry term that refers to device that is used to control fluid flow rate or downstream system pressure
Slide 12. Strong Hedge Position Protects Capital Program
All crude oil and gas hedges have been converted into US$ or $CAD price implied price using foreign exchange rate 1.2729 CAD/USD on Nov 8th, 2017. Ventura Gas Hedges include $0.55 per mcf of transportation deductions to bring product to the Ventura market
Slide 13. A Nimble & Focused 2018 Plan
Production, capital expenditures are based on internal estimates for 2018
Slide 14. Vast Portfolio Optionality on Display
Internal Rates of Returns are rounded and based on a blended Sep 30, 2017 strip price and 3rd party reserve evaluator deck
Slide 16. 2018 Capital Efficiency Buildup
Capital efficiencies for each core area are based on capital spent in that area on new production adds, 12 month forward production average, on an capital weighted average basis and rounded. Corporate Capital efficiencies includes all capital spent, 12 month forward production average, on an capital weighted average basis and rounded
ObsidianEnergy.com | TSX/NYSE: OBE
Definitions and Industry Terms
20
Hz means horizontal well.
IP means initial production, which is the average production over a specified time period.
IRR means Internal Rate of Return which is the interest rate at which the NPV equals zero.
Liquids % means the percentage of crude oil and NGLs from the total barrels of oil equivalent of production.
Liquids means crude oil and NGLs
Mmcf means million cubic feet.
Mmcf/d means million cubic feet per day
M means meters
MM means millions
Net Debt means Senior Debt plus bank debt plus non-cash working capital deficit, detailed in the Non-GAAP measure advisory.
NGL means natural gas liquids which includes hydrocarbon not marketed as natural gas (methane) or various classes of oil.
PCU #9 Means Pembina Cardium Unit number 9
PROP means Peace River Oil Partnership
TD means total depth where drilling has stopped
Q3 means the third quarter
Q4 means the fourth quarter
Spud mean the process of beginning to drill a well
A&D means oil and natural gas property acquisitions and divestitures.
A&D Adj. means oil and natural gas property acquisitions and divestitures.
Base means production with no additional production from new drilling
bbl means barrel or barrels.
boe and boe/d mean barrels of oil equivalent and barrels of oil equivalent per day, respectively.
Capital Expenditures includes all direct costs related to our operated and non-operated development programs including drilling, completions, tie-in, development of and expansions to existing facilities and major infrastructure, optimization and EOR activities.
Company or OBE means Obsidian Energy Ltd, as applicable.
Enviro means decommissioning expenditures.
E means estimate
FX means foreign exchange rate, in our case typically refers to C$ to US$ exchange rates.
Free Cash Flow, which is Funds Flow from Operations less Total Capital Expenditures
FY means fiscal year
G&A means general and administrative expenses.
H2 mean second half of the year
ObsidianEnergy.com | TSX/NYSE: OBE
Non-GAAP Measures Advisory
21
Non-GAAP measures advisory
In this presentation, we refer to certain financial measures that are not determined in accordance with IFRS. These measures as presented do not have any standardized meaning prescribed by IFRS and therefore they may not be comparable with calculations of similar measures for other companies. We believe that, in conjunction with results presented in accordance with IFRS, these measures assist in providing a more complete understanding of certain aspects of our results of operations and financial performance. You are cautioned, however, that these measures should not be construed as an alternative to measures determined in accordance with IFRS as an indication of our performance. These measures include the following:
Netback is a measure of cash operating margin on an absolute or per-unit-of-production basis and is calculated as the absolute or per-unit-of-production amount of revenue less royalties, operating costs and transportation. The measure is used to assess the operational profitability of the company as well as relative profitability of individual assets. For additional information relating to netbacks, including a detailed calculation of our netbacks, see our latest management's discussion and analysis which is available in Canada at www.sedar.com and in the United States at www.sec.gov; and
Net debt is the amount of long-term debt, comprised of long-term notes and bank debt, plus net working capital (surplus)/deficit. Net debt is a measure of leverage and liquidity
ObsidianEnergy.com | TSX/NYSE: OBE
Forward-Looking Information Advisory
22
Certain statements contained in this presentation constitute forward-looking statements or information (collectively "forward-looking statements. Forward-looking statements are typically identified by words such as
"anticipate", "continue", "estimate", "expect", "forecast", "budget", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "objective", "aim", "potential", "target" and similar words suggesting
future events or future performance. In addition, statements relating to "reserves" or "resources" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates
and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this presentation contains, without limitation,
forward-looking statements pertaining to the following: that we are on track to meet all 2017 guidance metrics including Q4 A&D adjusted production growth, 2017 total production per day, total capital expenditures
for the year and operating expenses within the guidance range; our expected base decline rates for production in 2018 and 2019; our expectation for when certain wells will come on production; that we will
continue to evolve our development strategy to enhance economics and maximize capital efficiencies; that the economics in Peace River will continue to be attractive post the carry ending; that there is clear
downside protection to our capital program through our current hedge book; our expected approach to development including the area-specific asset development plans; the timing and our expectations of such
development activities; that there could be flexibility to expand the 2018 capital program in H2 2018, which in turn would drive more growth; our capital spending plans in 2018; our expected percentage production
growth rate for 2018; the expected average internal rates of return at the various locations; the expectation that short cycle development drives strong capital efficiencies; the expected 2018 corporate capital
efficiencies by location and the Company as a whole; our expectation for the average 2018 production range per day; and our expectations for operating costs and G&A costs for 2018 and the associated target
ranges for those costs.
The key metrics for the Company set forth in this presentation may be considered to be future-oriented financial information or a financial outlook for the purposes of applicable Canadian securities laws. Financial
outlook and future-oriented financial information contained in this presentation are based on assumptions about future events based on management's assessment of the relevant information currently available. In
particular, this presentation contains projected operational and financial information for end of 2017, 2018 and beyond for the Company. The future-oriented financial information and financial outlooks contained in
this presentation have been approved by management as of the date of this presentation. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not
be used for purposes other than those for which it is disclosed herein.
With respect to forward-looking statements contained in this document, we have made assumptions regarding, among other things: our ability to complete asset sales and the terms and timing of any such sales;
the economic returns that we anticipate realizing from expenditures made on our assets; future crude oil, natural gas liquids and natural gas prices and differentials between light, medium and heavy oil prices and
Canadian, WTI and world oil and natural gas prices; future capital expenditure levels; future crude oil, natural gas liquids and natural gas production levels; drilling results; future exchange rates and interest rates;
future taxes and royalties; the continued suspension of our dividend; our ability to execute our capital programs as planned without significant adverse impacts from various factors beyond our control, including
weather, infrastructure access and delays in obtaining regulatory approvals and third party consents; our ability to obtain equipment in a timely manner to carry out development activities and the costs thereof; our
ability to market our oil and natural gas successfully; our ability to obtain financing on acceptable terms, including our ability to renew or replace our reserve based loan; our ability to finance the repayment of our
senior secured notes on maturity; and our ability to add production and reserves through our development and exploitation activities. In addition, many of the forward-looking statements contained in this document
are located proximate to assumptions that are specific to those forward-looking statements, and such assumptions should be taken into account when reading such forward-looking statements. Please note that
illustrative examples are not to be construed as guidance for the Company and further details on assumptions can be found in the Endnotes section of the presentation.
Although Obsidian Energy believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking
information because Obsidian Energy can give no assurances that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature it involves inherent risks
and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: the risks associated with the oil and gas industry in
general such as operational risks in development, exploration and production; the possibility that the semi-annual borrowing base re-determination under our of our reserve-based loan is not acceptable to the
Company or that we breach one or more of the financial covenants pursuant to our amending agreements with holders of our senior, secured notes; delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; health, safety and environmental risks; commodity price and
exchange rate fluctuations; interest rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to complete or realize
the anticipated benefits of acquisitions or dispositions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals; reliance on third parties; and
changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Readers are cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect Obsidian Energy, or its operations or financial results, are included in the Company's most recently filed Management's Discussion and Analysis
(See "Forward-Looking Statements" therein)), Annual Information Form (See "Risk Factors" and "Forward-Looking Statements" therein) and other reports on file with applicable securities regulatory authorities and
may be accessed through the SEDAR website (www.sedar.com), EDGAR website (www.sec.gov) or Obsidian Energy's website.
Unless otherwise specified, the forward-looking statements contained in this document speak only as of January 5, 2017. Except as expressly required by applicable securities laws, we do not undertake any
obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly
qualified by this cautionary statement.