Obsidian Energy provides corporate and operational update

April 23, 2020 CNW

CALGARY – OBSIDIAN ENERGY LTD. (TSX: OBE, OTCQB: OBEL) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) has taken further proactive action to shut-in currently uneconomic production with a focus on preserving its balance sheet and improving financial flexibility. Additionally, the Company releases the date of its first quarter 2020 results.

Production Shut-In Program & Operational Update

Obsidian Energy’s operations are very flexible and allow the Company to respond quickly to the current commodity price environment by shutting-in production at minimal cost without risk of long-term reservoir impairment. In order to improve the ongoing business performance of the Company in these conditions, the following volumes will be shut in by May 1, 2020:

Area	Production (boe/d)	Light Oil (bbl/d)	Heavy Oil (bbl/d)	NGLs (bbls/d)	Gas (mmcf/d)
Cardium	576	438	–	23	692
Alberta Viking	144	–	130	–	81
Peace River	3,064	–	2,538	2	3,148
Total	3,784	438	2,668	25	3,921

Given the current volatility in oil prices, Obsidian Energy is prepared to take further action to shut-in additional production should oil prices not improve in the near term. Alternatively, we can quickly restart shut-in production once oil prices permit doing so. We will further update our guidance should any of those decisions be implemented.

The Company’s capital program for the first half of 2020 has been successfully and safely completed. All ten development wells drilled in our program are on production or are ready to produce as desired by the Company. As with our base production, our new wells are highly tolerant of temporary production shut-ins and volumes can be adjusted or curtailed as pricing conditions warrant.

Pad	Status (average production per well)
12-26 Pad (3 wells)	IP10: 1,215 boe/d (82% light oil) IP30: 1,035 boe/d (74% light oil) (2 of 3 wells at 30 days)

1-27 Pad (2 wells)	Ready to produce

3-6 Pad (2 wells)	IP10: 493 boe/d (90% light oil) IP30: 526 boe/d (89% light oil)

14-17 Pad (2 wells)	Producing as of April 20.

3-29 Pad (1 well from existing pad)	IP10: 587 boe/d (90% light oil)

First Half 2020 Production and Cost Guidance

As a result of these production shut-in decisions, and our continued and extensive focus on cost reductions, further development drilling in 2020 has been deferred until pricing conditions justify the investment. In addition, since the beginning of 2020 we have successfully removed costs across several areas, including (prior to any shut-in production) an additional $8 million from our original operating cost estimate for the first half of the year due to increased efficiencies and reduced production volumes.

Metric	Previous Guidance	Updated Guidance
Production (boe/d)^{1 2 3}	26,500 – 27,100	25,500 – 26,000
Capital Expenditures ($millions)	46	43
Decommissioning Expenditures ($millions)	8	8
Operating Costs ($/boe)	11.90 – 12.30	11.50 – 11.90
General & Administrative ($/boe)	1.70 – 1.90	1.65 – 1.85

(1)	Adjusted for January 2020 Carrot Creek Disposition of 115 boe/d (85% light oil)
(2)	Previous guidance included 600 boe/d of shut-in production
(3)	Mid-point of guidance 12,500 bbls/d light oil, 2,500 bbls/d heavy oil, 2,200 bbls/d NGLs and 51,000 mcf/d natural gas

First Quarter 2020 Results Date

Obsidian Energy is expected to release its first quarter 2020 financial and operational results before North American markets open on Wednesday, May 6, 2020. In addition, the first quarter management’s discussion and analysis and the unaudited consolidated financial statements will be available on our website at www.obsidianenergy.com, on SEDAR at www.sedar.com, and on EDGAR at www.sec.gov on or about the same date.