Obsidian Energy Is On Pace To Hit Volume Targets

Like most energy producers, Obsidian Energy is seeking to earn profits in an environment where retail oil prices remain flat. The company focuses on maintaining energy-producing assets while keeping expenses to a minimum. Obsidian Energy currently produces around 30,000 BOE (Barrels of Oil Equivalent) each day. The total output includes light oil, heavy oil, and natural gas.

 

The company’s management has set a strategy based on commodity prices that have been trending down for the past few years.

 

Obsidian Energy has been spending less capital in anticipation of declining returns. The company has been able to pay less cash as their current projects keep producing at significant levels. Even with less investment money in play, they plan on delivering 31,500 BOE daily by the end of the year. Learn More Here.

 

Obsidian Is Expanding Production

 

The energy business is volatile, but barrel pricing has remained down as many world importers expect a spike in output. The key to profitability moving forward is keeping a tight rein on production, investment outlay, and expenses. David French, the current President and Chief Executive Officer of Obsidian has announced a systematic production plan that’s in-line with potentially low retail prices. The company, which maintains its headquarters in Calgary, Alberta, plans on stepping up their development program to its highest levels in three years now that they are retiring several legacy assets that ran with higher operating costs.

 

Management is also reinvesting money into the production centers with the highest production. The Cardium Waterflood Platform will get the lion’s share or funds this year with $80,000,000 put in. That’s exactly half of the years $160 million total outlay. The current plan also involves cutting expense to $13.00 to $13.50 BOE. Belt-tightening has been going on in the oil industry since 2013, and the new emphasis on controlling expenses appears to be paying off. Obsidian has been able to diversify their production and continued to manage their assets carefully. At the current time, the energy sector continues to face the middle of the road pricing demand. Obsidian is well-positioned for a firming of retail energy demand and prices.

Obsidian Energy Performance After Its Renaissance

Obsidian Energy is an oil and natural gas production company. The middle-sized company is based in Calgary, Alberta in Canada. The company was initially called Penn West Exploration Ltd., Penn West Petroleum, and Penn West Energy Trust. It changed its name during a shareholders’ meeting held on July 2017 after a series of changes that restructured the structures within the organization. Approximately 92% of the shareholders were in favor of changing the name of the organization to Obsidian Energy.

 

The mother company, Penn West, went through various high levels of debt that it managed to survive. Moreover, it underwent numerous accounting scandals that accrued in lawsuits that were resolved in court. The transformation of Obsidian Energy from the mother company, allowed it to reduce its net debts. The company has also channeled its focus on only for production areas that it deems key. The company also reduced its number of employees to 300. This improvement has enabled Obsidian Energy to function properly.

 

According to Dave French, the Chief Executive Officer of the company, the name Obsidian was chosen because obsidian is a volcanic glass that occurs naturally. Moreover, the volcanic glass can be sharpened and refined. The organization has the potential of succeeding in the industry given its transformation that allowed it to emerge stronger. Moreover, its assets, entrepreneurial spirit and professional staff put the company in a better position of succeeding in the Oil and Natural Gas industry. Get More Info Here.

 

The company has taken positive steps of collaborating with other companies in the industry in order to achieve a common goal. Obsidian Energy jointly ventured into the Manufacturing of Cold Flow in Peace River with China Investment Corporation. The partnership is referred to as the Peace River Operated Partnership (PROP). The partnership has invested a lot of resources into the venture in to manufacture cold flow from crude oil.

 

Obsidian Energy also focused on building a Cardium Waterflood Platform. The waterflood platform will sustain a reservoir pressure during the initial stages of production that will decrease the declining rates experienced on the new wells. For over decades, waterfloods have been used in the Cardium to elevate production and rates of recovery.

 

Source: http://boereport.com/2017/06/26/penn-west-changes-name-to-obsidian-energy-ltd-and-announces-voting-results-from-the-2017-annual-and-special-meeting-of-shareholders/