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Obsidian Energy Ltd T.OBE

Alternate Symbol(s):  OBE

Obsidian Energy Ltd. is a Canada-based exploration and production company. The Company operates in one segment, to explore for, develop and hold interests in oil and natural gas properties and related production infrastructure in the Western Canada Sedimentary Basin directly and through investments in securities of subsidiaries holding such interests. It has a portfolio of assets producing around 35,700 barrels of oil equivalent (boe) per day. Its operating areas include Cardium, Peace River and Viking areas of Alberta. Its Cardium asset is a fully delineated and de-risked asset. It is focused on manufacturing repeatable low-decline and high-netback light-oil wells across its Cardium land base. The Viking is a light oil, horizontal development play located in central Alberta. Its operations are focused on the Esther area. Peace River is a stable, cold-flow, base production asset. It operates on a contiguous and an acreage within the heart of the Peace River Oilsands region.


TSX:OBE - Post by User

Post by JohnJBondon Aug 29, 2022 1:58pm
357 Views
Post# 34927323

Nothing Special

Nothing SpecialFrom boereport.com you can see OBE has recently spud 3 Bluesky wells using Precision Drilling Rig number 182

July 13/22
Aug 9/22
Aug 24/22

Seems like they are working hard in that area.

Further South you can see they spud their Spirit River Gas well on Aug 21/22, using Ensign Drilling's Rig number 826

They also spud a cardium well on July 27/22 using Precision Drilling Rig 220

Looks like they have 3 rigs working presently.    I suspect they will keep all three busy until they add a fourth sometime in Q4.

The main hurdles are now behind us - the last being the refinancing - thus reduced frequency of posts on my part.

Going forward, in my view OBE will get to its stated $225 million net debt target sometime around Oct 15 - 30 (maybe off by a week or two, but nothing turns on it).

After that OBE stated it will switch from debt reduction to share buy backs (assuming share price remains undervalued in thier eyes).

It looks like some have the same expectation - ie if you want more shares, get them before OBE starts competing for them.   

The volume continues to be in the US.

There is a 10% annual share buy back limit.    My guess is that OBE may get to that 10% buy back by the end of January.    ie free cash in Nov, Dec, and Jan may be sufficient to buy back 10% (depending on the share price - and management's commitment)

Post 10% buy back would mean about 74 million shares remaining.

After that - ie Feb 2023 - dividends are likely next.    Lots of free cash - some will stay in the company, and some will probably get sent out as dividends.    Will the split be 50/50, or 80/20 or ........ time will tell.    With 74 million shares outstanding, its easy to see a multi dollar per share dividend

The futher you go out into the future, the more IF's there are.

In other news - its looking more and more like we may now be at peak global oil production.    We won't know until after its past.    We've never seen peak oil before, so we don't know what it looks like.    I suspect its a plateau at the peak - and I don't know how wide that plateau is.    Its looking like we might just be there now.    Last two weeks the EIA forecast a reduction of 100,000 boe production in the lower 48.  Up and down weekly production is what you'd expect at a plateau.     This is the second time this has happenned in the last few months.     Elsewhere we have most of OPEC unable to produce at their quota's.............time will tell.   


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