Sign Up for FREE Daily Energy News
WEC - Western Engineered Containment
Hazloc Heaters
Copper Tip Energy Services
WEC - Western Engineered Containment
Hazloc Heaters
Copper Tip Energy

Obsidian Energy Announces Proposed Sale of its 55% Working Interest in the Peace River Oil Partnership

CALGARYMay 17, 2019 /CNW/ – OBSIDIAN ENERGY LTD. (TSX – OBE, NYSE – OBE.BC) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) is pleased to announce it has signed a purchase and sale agreement (the “Agreement“) to sell its 55% working interest in the Peace River Oil Partnership (“PROP“) for total consideration of approximately $97 million, before normal closing adjustments. Total consideration includes $85.8 million in cash and cash equivalents, with the remainder comprised of purchasers’ shares and the present value of additional liabilities. The Agreement is subject to financing and the terms of the partnership agreement which provides for a 30-day right of first refusal with an additional 15-day tag-along right to our partner. The effective date of the transaction is February 1, 2019 with an anticipated closing date on or about July 31, 2019. All figures are in Canadian dollars unless otherwise stated.

Strategic Rationale

Consistent with our previously announced strategy, this transaction divests a significant non-core, lower netback asset, reduces our overall corporate operating costs and allows the Company to focus on our Cardium assets. Along with the sale of PROP, the Company will be divesting other non-producing assets in the area, which reduces our total decommissioning liabilities. Proceeds will be used to strengthen our balance sheet by paying down debt, with additional consideration going towards growing our fast-cycle primary oil development program. Transaction metrics are outlined below:

Transaction Metrics

Transaction Value

$97 million

Production (1)

4,160 boe/d

Implied Production Multiple


Net Operating Income (“NOI“) (2)(3)

$15.0 million

Implied NOI Multiple



Production is based on the estimated next twelve months


NOI is based on May 15th strip pricing for the estimated next twelve months


The term NOI is a non-GAAP measure.  Please refer to the “Non-GAAP Measures Advisory” section below for further details.

Share This:

More News Articles

New SHOWCASE Directory Companies


Insight Analytical
Caliper Inspection
Challenger Geomatics
CDN Controls
DyCat Solutions
Environmental Mats
Canline Pipeline Solutions
Gemini Fabrication