Obsidian Energy Achieves Massive Growth In 2017’s Third Quarter Report


Obsidian Energy reported strong third quarter financial and operational results for the year 2017. The President and CEO, David French, praised the Obsidian team for successfully executing one of the busiest oil drilling forays in years and generating excellent results. French said Obsidian is looking forward to continuing in the same direction in 2018.

 

In their first Deep Basin expedition, the company reports that its three Mannville wells are producing a total of 2,000 boe per day, with liquids of about 60 bbl per mmcf. These results surpassed Obsidian Oil’s projections for the period.

 

The Alberta Viking, Peace River Oil Sands, and Pembina Cardium projects also reported high rates, motivating the company to proceed with further funding and project execution. Through careful production management which has resulted in promising results, Obsidian Energy predicts that its full-year production will be at the upper limit of its 30,500 to 31,500 boe per day guidance range.

 

The CEO also notes that the Waterflood investment is encouraging. The base decline in the company’s Cardium business is at a mere five percent as a result of base optimization and waterflood projects launched in 2016.

 

Obsidian Energy projects a five percent production boost in 2018 despite investing only 80% of funds flow from operations. According to David French, the company has prospects which are ready for drilling and its operational versatility will enable it to exceed five percent increase by regulating their second half program depending on oil prices.

 

The Board has ratified a budget of $135 million for the year 2018 which will run their chief drilling opportunities. The 2018 plan provides a scalable and dependable weighted growth profile, and the 2017 third-quarter report only hints what 2018 could offer the company. The average production per day in the third quarter was 30,166 boe, a capacity consistent with the second quarter.

 

French reveals that the Obsidian Energy entered into an agreement to sell its royalty interests in Eastern Alberta in October 2017 for $40 million. The proceeds from the transaction will help reduce borrowing and will not affect the operations funds flow in 2018. Go To This Page for related information about the company.

 

The company, according to the CEO, is confident that it can achieve a double-digit percentage growth between the 2016 fourth quarter and the fourth quarter of 2017 without borrowing. David French describes the company’s outlook as one which integrates a foreseeable low decline asset base with extensive opportunities for development.

 

Obsidian Energy renamed from Penn West Petroleum in June 2017. French says that the inspiration for the name change was that Obsidian is a natural glass which can be honed and sharpened.

 

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New Resolutions For The Obsidian Energy Limited After Name Change


Obsidian Energy Limited was founded in 1979 in Calgary, Canada. It is an oil and natural gases producer and was previously known as Penn West until 92 percent of shareholders voted to change the name on the 26th of June 2017 to give it a new beginning. The new CEO and President David French, who started in October 2016, stated that the Obsidian Energy is now focused on progressing and increasing profits through discipline, transparency, accountability, and innovation. He also added that the company’s new name was inspired by the obsidian which is a naturally occurring glass in volcanic activities and it has the potential to be sharpened, improved, and respected. Furthermore, the shareholders also approved all resolutions in the 30th April 2017 annual and special meeting notice. These resolutions included the appointment of Ernst and Young LLP, Chartered Accountants as the auditors of Penn West for the subsequent year. The company’s shareholders through the ballot, elected eight directors of the company to represent shareholders until the next shareholders annual meeting or a successor is appointed or elected.

 

96 percent of the shareholders voted for the reduction of Penn West share capital used for accounting with 94 percent of them voting for the change of restricted unit plan to become the restricted and performance share unit plan. 93 percent of the shareholders voted for the approval of the company’s suggested resolution plan according to the circular. While still operating under its previous name, the company was once on the Toronto Stock Exchange amongst S&P/TSX 60 the 60 largest companies. On January 2008, it reached peak market capitalization of almost 9.5 billion dollars, and it was a Canadian royal trust from 2005 to 2011. Go To This Page for more information.

 

Obsidian recorded a strong third quarter result of 2017 and their proposed budget for the year 2018. The company is to focus on reinvestment and growth. The board has allocated 135 million dollars in the 2018 budget with 86 million dollars to be used in improvement and expansion of the already existing wellbore, while 25 million dollars will go to business capital and infrastructure while the rest is allocated to meetings financing and decommissioning costs.

 

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