Obsidian Energy CEO David French said that company accomplishments in 2017 have set up the year 2018 “perfectly” for this newly reorganized energy exploration operation based in Calgary, Alberta.
Saying the company plan laid out at the beginning of the 2017 “played out nicely,” French insists Obsidian is well situated to extend its leading position in one of Canada’s most productive oil and natural gas regions.
Obsidian Energy has major operations in the Western Canadian Sedimentary Basin which is among the world’s largest petroleum reserves. Specifically, Obsidian works fields in the Pembina Cardium, the Peace River oil sands and the Alberta Viking formation.
French said that recent severe winter cold created a mild setback in production values, but that total winter output has gone “well beyond company expectations.” He said that production has averaged 700 BUEs per well through early January. Throughout 2017, three Obsidian wells averaged 500 barrels a day – again, a production measure that exceeded expectations.
A primary advantage for Obsidian Energy going into 2018 is a balanced portfolio that includes light sweet oil, heavy oil, natural gas and natural gas liquid. French said his company’s marketing group has a strategy that actively seeks out the most favorable markets to optimize sales of each commodity.
French also said it is important for industry observers and investors to understand Obsidian Energy’s innovative hedging strategy. To that end, he said Obsidian’s method is not to try and time the market. Rather, they systematically ensure cash flow and underpin operational planning by looking ahead on a rolling six quarter time frame. The Obsidian Energy method is to releases capital, make rate commitments and set up well programming on a forward-looking 12-month view. The company’s hedge is also fully set for the entire 2018 operational year.
In the meantime, planning the hedge for 2019 as well as operational planning is already on the drawing board. French said that “consistently disciplined planning” will enable Obsidian to have a rich portfolio of drill-ready prospects in the second half of 2018.
It’s all part of the new Obsidian Energy corporate culture centered around the values of discipline, accountability and a relentless pursuit of success.
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