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.