# Obsidian Energy Ltd

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/fi/companies/Obsidian Energy Ltd).

## Overview

Obsidian Energy Ltd. is an exploration and production company focused on crude oil and natural gas properties in the Western Canada Sedimentary Basin. Its core asset base is concentrated in Alberta, where it develops, produces, and holds interests in oil and gas properties and related production infrastructure through a single operating segment.

## Products & services

• Exploration for crude oil and natural gas
• Development of oil and gas properties
• Production from Western Canada assets
• Ownership of related field infrastructure
• Portfolio management of producing assets

- **Crude oil production** (65%) — Production of crude oil from operated and non-operated assets in Alberta.
- **Natural gas production** (25%) — Natural gas volumes produced from the company’s Western Canada asset base.
- **Exploration and development** (5%) — Capital projects and drilling to add reserves and production capacity.
- **Production infrastructure** (5%) — Field facilities and related infrastructure supporting oil and gas output.

- Exploration for crude oil and natural gas
- Development of oil and gas properties
- Production from Western Canada assets
- Ownership of related field infrastructure
- Portfolio management of producing assets

## Customers

Obsidian Energy sells into commodity markets rather than to a small set of end customers, so its customer base is made up of purchasers of crude oil and natural gas production. Revenue ultimately depends on marketers, refiners, processors, and other counterparties that take physical volumes or buy production-linked output under market pricing.

- **Crude oil buyers** (primary) — Purchasers of produced crude oil that is sold at market-linked pricing.
- **Natural gas buyers** (primary) — Processors and marketers buying gas volumes produced from Alberta assets.
- **Financial counterparties** (secondary) — Banks and trading counterparties involved in hedges, forwards, and credit support.
- **Shareholders** (secondary) — Investors provide equity capital and monitor operational execution and capital allocation.

- Commodity buyers of crude oil production
- Natural gas purchasers and processors
- Marketing and trading counterparties
- Refiners and midstream-linked buyers
- Institutional investors and shareholders for capital access

## Geography

The company’s operations are concentrated in Alberta, Canada, primarily in the Peace River, Willesden Green, and Viking areas. Its business is tied to the Western Canada Sedimentary Basin, so transportation access, regional service costs, and Canadian commodity pricing conditions are central to performance.

- **Canada** (100%) — Operations and asset base are concentrated in Alberta and Western Canada.

- Operations are concentrated in Alberta, Canada
- Core areas include Peace River, Willesden Green, and Viking
- Business is centered in the Western Canada Sedimentary Basin
- Headquartered in Calgary, Alberta
- Listed on TSX and NYSE American

## Strategy

Obsidian Energy’s strategy is centered on managing a concentrated portfolio of Alberta oil and gas assets, adding inventory through development, and maintaining operating flexibility across its core areas. It also uses commodity and financial hedging, along with balance-sheet capacity, to support capital programs and acquisition opportunities.

- **Develop core Alberta assets** (medium-term) — The company’s value is driven by reserve replacement, drilling success, and production optimization in its main operating areas.
- **Preserve financial flexibility** (short-term) — A revolving credit facility and liquidity access support capital spending and weather commodity cycles.
- **Manage commodity exposure** (short-term) — Oil and gas prices directly affect cash generation, so hedging helps stabilize realized results.

- Develop core Alberta asset base
- Expand operating footprint in Willesden Green
- Use hedging to manage commodity price exposure
- Maintain credit capacity for capital program execution
- Allocate capital at the enterprise level across assets

## Risks

Obsidian Energy is exposed to commodity price volatility because its cash generation depends on realized oil and natural gas prices. It also faces operational concentration risk in Alberta, along with reserve, drilling, and infrastructure execution risk typical of an upstream producer.

- **Commodity price volatility** [high] — Upstream revenue is directly linked to crude oil and natural gas prices.
- **Geographic concentration in Alberta** [medium] — Operations are concentrated in a single basin, so regional disruptions can affect production and costs.
- **Reserve and drilling execution** [high] — Production depends on successful development, reservoir performance, and capital allocation.
- **Derivative valuation volatility** [medium] — Hedge and forward contract fair values move with market prices and flow through earnings.
- **Counterparty and credit risk** [medium] — The company relies on financial counterparties and lenders for hedging and liquidity.

- Oil and gas price volatility affects realized revenue and cash flow
- Production is concentrated in Alberta, increasing basin-specific exposure
- Drilling and reserve replacement risk can affect future output
- Derivative positions create mark-to-market earnings volatility
- Credit and counterparty risk matter for hedges and financing

## Accounting

The most important accounting areas are fair value measurement of commodity and equity derivatives, reserve and asset impairment judgments, and consolidation of acquired and sold properties. Because the company uses hedges and forward contracts, mark-to-market changes can cause notable quarter-to-quarter swings in reported earnings and balance-sheet values.

- **Derivative fair value accounting** — Can materially change quarterly reported profit or loss.
- **PP&E and asset impairment** — May lead to write-downs if expected cash flows weaken.
- **Consolidation of acquired/sold assets** — Affects comparability across periods.
- **Non-GAAP measures** — Useful for operations but not directly comparable across issuers.

- Fair value changes on oil, gas, FX, and equity forwards affect earnings
- Hedge accounting and mark-to-market can create quarter-to-quarter volatility
- PP&E and oil and gas asset impairment judgments depend on price assumptions
- Acquired and sold properties affect consolidation timing and comparability
- Non-GAAP measures like FFO, net debt, and FCF require careful interpretation

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*Last updated: 2026-09-28T12:13:29.727818+00:00*