Obsidian Energy (OBE) Q2 2024 earnings summary

Executive summary

• Achieved highest quarterly production since 2016, with Q2 2024 average daily production up 15% year-over-year to 35,773 boe/d, driven by the Peace River Clearwater acquisition and active development.

• Funds flow from operations (FFO) rose 32% to $115.2 million, or $1.51 per share basic, compared to Q2 2023, supported by higher production and oil prices.

• Completed first half capital program with 34 operated wells rig released and 33 wells brought on production; Peace River Clearwater acquisition added 1,700 boe/d and 148 net sections of land.

• Net income for Q2 2024 was $37.1 million ($0.48 per share basic), up from $18.4 million in Q2 2023.

Financial highlights

• Q2 2024 FFO: $115.2 million ($1.51/share basic), up from $87.4 million ($1.07/share) in Q2 2023.

• Net income: $37.1 million ($0.48/share basic) vs. $18.4 million ($0.22/share) in Q2 2023.

• Capital expenditures: $59.2 million in Q2 2024, up from $39.5 million in Q2 2023.

• Net debt increased to $432.5 million at June 30, 2024, mainly due to the acquisition, with net debt to annualized FFO at 0.9x.

• Average sales price per boe: $64.11 in Q2 2024, up from $58.97 in Q2 2023.

Outlook and guidance

• Second half 2024 capital program plans 38 (37.2 net) wells, focused on further development in Peace River Bluesky and Clearwater fields.

• Free cash flow in H2 2024 expected to be used for debt repayment and further share repurchases under the NCIB.

• Continued production growth anticipated, with higher FFO expected to reduce net debt to FFO ratio.