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Obsidian Energy Corporate Presentation January 2018
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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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Page 1: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

Obsidian EnergyCorporate Presentation

January 2018

Page 2: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 3: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 4: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 5: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 6: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 7: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 8: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 9: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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%

Page 10: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 11: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 12: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 13: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 14: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 15: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 16: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 17: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 18: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

ObsidianEnergy.com | TSX/NYSE: OBE

Appendix

Page 19: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 20: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 21: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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

Page 22: Obsidian Energy Corporate Presentation · PDF fileCorporate Presentation January 2018. ... This presentation should be read in conjunction with the Company's audited consolidated ...

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.