- Obsidian Energy (OBE) provides initial results from the 2021 and 2022 development programs and announces a $13.5 million land acquisition
- The 2021 development program has ended and 2022 has eight wells in production
- Obsidian acquired 14 highly prospective sections of Peace River land for $13.5 million
- This attracted broad industry attention generating $53.2 million in bonus consideration
- 28 potential opportunities are on the new land, worth $115 million net present value discounted at 10 per cent
- Obsidian Energy (OBE) is up 1.44 per cent trading at $10.54 per share as of 3:54 p.m. ET
Obsidian Energy (OBE) has provided initial results from its 2021 and 2022 development programs and announced a $13.5 million land acquisition.
The 2021 development program has now come to a close with all 35 wells on production.
During the 2022 development program, a total of 20 wells have been rig-released to date with eight wells currently in production. Seven additional wells are expected to be in production before the end of the second quarter.
In addition, Obsidian has acquired 14 highly prospective sections of Peace River land with Bluesky and Clearwater opportunities, and a broad commercial agreement with Whitecap Resources Inc.
The strong results of the recent program contributed to the first quarter production of approximately 29,400 barrels of oil equivalent per day.
In conjunction with the acceleration of several Peace River Bluesky wells, the company is increasing its 2022 production guidance range for the year to 31,100 barrels of oil equivalent per day.
In March, Obsidian successfully purchased 14 sections of prospective oil sands rights from the Alberta land sale in the Peace River region for a consideration of approximately $13.5 million.
Obsidian was the main driver behind this sale, which attracted broad industry attention and generated $53.2 million in bonus consideration from all participants in the areas directly surrounding the company’s established operations.
This is the largest consideration generated at a land sale in Alberta in over a decade, signalling continued growth in demand and activity in the region.
The company identified 28 potential opportunities on the new Bluesky land, representing approximately $115 million net present value, discounted at 10 per cent at WTI US$85.00 per barrel and an initial well cost of approximately $3.5 million per well.
Obsidian and Whitecap entered a broad commercial transaction to recommence development in a prospective area with 70 producing opportunities yet to be drilled.
As part of this agreement, Obsidian will transfer operatorship to Whitecap, while retaining its existing 44.7805 percent working interest.
Obsidian Energy (OBE) is up 1.44 per cent trading at $10.54 per share as of 3:54 p.m. ET.