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Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

Mar 19, 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 tar