Obsidian Energy Announces Fourth Quarter and Full Year 2024 Results
Press Release
- Generated $432.0 million of funds flow from operations, representing a 14 percent increase over 2023 (22 percent on a per share basis)
- representing a 14 percent increase over 2023 (22 percent on a per share basis)
- Average 2024 production increased 16 percent to 37,474 boe/d over 2023
- Repurchased and cancelled six percent of shares outstanding for $41.7 million in 2024
- 2024 capital program increased production, reserves, and funds flow from operations, and added both Clearwater and Bluesky locations to support Peace River growth
Calgary, Alberta–(February 25, 2025) – OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) is pleased to report our operating and financial results for the fourth quarter and full year of 2024.
| Three months ended December 31 |
Year ended December 31 |
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| 2024 | 2023 | 2024 | 2023 | ||||||||||
| FINANCIAL1 | |||||||||||||
| (millions, except per share amounts) | |||||||||||||
| Cash flow from operating activities | 115.0 | 117.7 | 361.9 | 352.7 | |||||||||
| Basic per share ($/share)2 | 1.55 | 1.49 | 4.76 | 4.36 | |||||||||
| Diluted per share ($/share)2 | 1.49 | 1.44 | 4.57 | 4.19 | |||||||||
| Funds flow from operations3 | 107.7 | 97.0 | 432.0 | 377.6 | |||||||||
| Basic per share ($/share)4 | 1.45 | 1.23 | 5.69 | 4.67 | |||||||||
| Diluted per share ($/share)4 | 1.39 | 1.18 | 5.46 | 4.49 | |||||||||
| Net income (loss) | (284.8 | ) | 34.3 | (202.6 | ) | 108.0 | |||||||
| Basic per share ($/share) | (3.83 | ) | 0.44 | (2.67 | ) | 1.33 | |||||||
| Diluted per share ($/share) | (3.83 | ) | 0.42 | (2.67 | ) | 1.28 | |||||||
| Capital expenditures | 84.1 | 100.0 | 343.1 | 292.5 | |||||||||
| Property acquisitions (dispositions), net | (1.5 | ) | – | 83.4 | 0.6 | ||||||||
| Decommissioning expenditures | 3.5 | 7.7 | 23.9 | 26.6 | |||||||||
| Long-term debt | 335.4 | 220.0 | 335.4 | 220.0 | |||||||||
| Net debt3 | 411.7 | 330.2 | 411.7 | 330.2 | |||||||||
| OPERATIONS | |||||||||||||
| Daily Production | |||||||||||||
| Light oil (bbl/d) | 13,271 | 12,176 | 13,463 | 12,485 | |||||||||
| Heavy oil (bbl/d) | 11,621 | 5,851 | 9,016 | 5,927 | |||||||||
| NGL (bbl/d) | 3,176 | 2,614 | 3,077 | 2,608 | |||||||||
| Natural gas (mmcf/d) | 72 | 68 | 72 | 68 | |||||||||
| Total production5 (boe/d) | 40,119 | 31,974 | 37,474 | 32,275 | |||||||||
| Average sales price2,6 | |||||||||||||
| Light oil ($/bbl) | 96.95 | 100.38 | 99.95 | 102.11 | |||||||||
| Heavy oil ($/bbl) | 67.70 | 58.53 | 70.46 | 61.46 | |||||||||
| NGLs ($/bbl) | 44.27 | 55.65 | 48.05 | 53.83 | |||||||||
| Natural gas ($/mcf) | 1.53 | 2.63 | 1.52 | 2.98 | |||||||||
| Netback ($/boe) | |||||||||||||
| Sales price | 57.94 | 59.08 | 59.70 | 61.37 | |||||||||
| Risk management gain | 1.62 | 2.27 | 1.58 | 1.50 | |||||||||
| Net sales price | 59.56 | 61.35 | 61.28 | 62.87 | |||||||||
| Royalties | (7.85 | ) | (8.52 | ) | (7.76 | ) | (8.30 | ) | |||||
| Net operating costs4 | (13.91 | ) | (13.66 | ) | (13.85 | ) | (14.21 | ) | |||||
| Transportation | (4.55 | ) | (3.67 | ) | (4.22 | ) | (3.48 | ) | |||||
| Netback4 ($/boe) | 33.25 | 35.50 | 35.45 | 36.88 | |||||||||
| (1) We adhere to generally accepted accounting principles (“GAAP“); however, we also employ certain non-GAAP measures to analyze financial performance, financial position, and cash flow, including funds flow from operations (“FFO”), net debt, netback and net operating costs. Additionally, other financial measures are also used to analyze performance. These non-GAAP and other financial measures do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS“) and therefore may not be comparable to similar measures provided by other issuers. Readers should not consider non-GAAP and other financial measures to be more meaningful than GAAP measures, which are determined in accordance with IFRS, such as net income and cash flow from operating activities, as indicators of our performance. (2) Supplementary financial measure. See ‘Non-GAAP and Other Financial Measures’. (3) Non-GAAP financial measure. See ‘Non-GAAP and Other Financial Measures‘. (4) Non-GAAP ratio. See ‘Non-GAAP and Other Financial Measures‘. (5) Please refer to the ‘Oil and Gas Information Advisory’ section below for information regarding the term “boe”. (6) Before realized risk management gains/(losses). |
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Detailed information can be found in Obsidian Energy’s consolidated financial statements and management’s discussion and analysis (“MD&A“) as at and for the year ended December 31, 2024, on our website at www.obsidianenergy.com, which will also be filed on SEDAR+ and EDGAR in due course.
2024 OVERVIEW
Obsidian Energy continued to successfully implement our growth plan in 2024, increasing average annual production by 16 percent to 37,474 boe/d from 32,275 boe/d in 2023 and surpassing the top end of our previously increased guidance range. Due to the Company’s active capital program and strong drilling results over the year, we achieved average production of 40,119 boe/d in the fourth quarter, of which our Peace River area comprised 12,280 boe/d. As a result of our larger $343.1 million capital program in 2024 combined with our Peace River acquisition in June (the “Peace River Clearwater Acquisition“), we achieved volume and value increases across all our reserve categories. FFO increased 14 percent to $432.0 million in 2024 over 2023 due to the strong results from our active capital program that led to higher production levels and revenues. This impact was partially offset by weaker commodity prices in 2024 with oil prices averaging WTI US$75.72 per barrel (2023: US$77.62 per barrel), and natural gas prices averaging $1.36 per GJ (2023: $2.14 per GJ).
In addition, we remained active on our share buyback program through our normal course issuer bid (“NCIB“) in 2024, repurchasing and cancelling 4.5 million of shares outstanding for $41.7 million in our efforts to return capital to shareholders. The Company is currently in the process of renewing our NCIB when it expires at the end of February.
2024 FOURTH QUARTER AND FULL YEAR CORPORATE HIGHLIGHTS
- Increased Funds Flow – The Company generated FFO of $432.0 million ($5.69 per share basic) compared to $377.6 million ($4.67 per share basic) in the prior year. Fourth quarter 2024 FFO totaled $107.7 million ($1.45 per basic share) compared to $97.0 million ($1.23 per basic share) in the fourth quarter of 2023. Higher revenues from increased production levels and realized hedging gains resulted in higher FFO in both 2024 periods, which was partially offset by lower commodity prices.
- Capital Development Resulted in Production Growth – Our 2024 capital program focused on growing production through the development and further delineation of our Peace River asset as we maintained production in our light oil assets, generating significant free cash flow. Capital expenditures totalled $343.1 million (2023: $292.5 million), while decommissioning expenditures totaled $23.9 million (2023: $26.6 million). Fourth quarter capital expenditures were $84.1 million (2023: $100.0 million) and decommissioning expenditures were $3.5 million (2023: $7.7 million).
- We also made net property acquisitions of $83.4 million in 2024 (2023: $0.6 million), the majority of which was used for the Peace River Clearwater Acquisition to purchase additional Clearwater production, reserves and land.
- Active Share Buyback Program – A total of approximately 4.5 million shares were repurchased and cancelled under the Company’s NCIB for $41.7 million (at an average price of $9.30 per share) in 2024. Of this amount, 1.6 million shares were repurchased and cancelled in the fourth quarter for $13.2 million ($8.17 per share).
- In total, we repurchased and cancelled approximately 9.6 million shares at an average price of $9.31 per share for $89.1 million under our NCIB from inception in 2023 to date. With current shares outstanding of 73,684,802, we are currently in the process of renewing our NCIB once it expires at the end of February.
- Reduced Operating Costs – Net operating costs were lower at $13.85 per boe in 2024 (2023: $14.21 per boe) and $13.91 per boe for the fourth quarter of 2024 (2023: $13.66 per boe) as the Company benefited from our higher production base and lower power prices. On an absolute basis, net operating costs increased on both an annual and quarterly basis in 2024 due to the impact of the larger production base and increased trucking costs from our expanded Peace River operations.
- Lower G&A Costs – General and administrative (“G&A“) costs decreased by seven percent to $1.50 per boe in 2024 compared to $1.61 per boe in 2023, and by eight percent to $1.39 per boe in the fourth quarter of 2024 compared to $1.51 per boe for the same quarter in 2023. Our higher production base more than offset increased staffing levels required to execute our growth plan, which led to the decrease on a per boe basis.
- Net Debt – Net debt levels increased to $411.7 million at December 31, 2024, compared to $330.2 million at December 31, 2023. The increase in 2024 was mainly due to the $80.5 million funding of our Peace River Clearwater Acquisition.
- Net Income – The Company recorded a net loss of $202.6 million ($2.67 per share basic) in 2024 compared to net income of $108.0 million ($1.33 per share basic) in 2023. The net loss in 2024 is due to the classification of our Pembina assets as held for sale at December 31, 2024 (see ‘Announced Pembina Asset Transaction’), which led to a non-cash impairment charge as we valued the assets at the expected transaction proceeds. This was partially offset by the Company’s higher revenues from increased production. Excluding the after-tax non-cash impairment, the Company would have recorded net income of $101.9 million ($1.34 per share basic).
2024 FOURTH QUARTER AND FULL YEAR CAPITAL PROGRAM & HIGHLIGHTS
Obsidian Energy focused on the execution of our growth plan with an active 2024 capital program that continued to illustrate the value of our assets. Weighted toward our Peace River heavy oil assets, the program expanded development in new and existing fields to increase production, while continuing to delineate and assess the potential of our large land base through exploration/appraisal drilling in both our Clearwater and Bluesky plays. At the same time, we continued to invest in our Willesden Green/Pembina (Cardium) light oil assets, resulting in stable production and continued free cash flow generation. During the fourth quarter of 2024, we focused on accelerated development at both our Peace River Bluesky and Clearwater development fields while simultaneously expanding our portfolio with the drilling of an initial delineation well targeting the Belly River formation in Willesden Green. In December, we shifted a portion of our 2025 development program into 2024 due to favourable weather conditions. Capital program highlights for 2024 are as follows:
IBF4
