The Success Story Of Obsidian Energy In The Energy Sector

Obsidian Energy is a medium-sized gas and oil company with a long-standing portfolio of topnotch assets producing nearly 30,000 barrels each day. The first-class assets and the corporation developed around them has paved the way for the firm to deliver net income results and a spirit of innovation that enables them to succeed in the developing sector. The basis of the corporation is discipline and persistent passion in their endeavors, and high accountability to their shareholders, partners as well as the communities in which the firm operates. Obsidian has several subsidiaries including Canetic Resources Trust, Endev Resources Partnership, and Sifton Energy Inc. Currently, the company has approximately 300 employees on staff.

 

Obsidian Energy, previously known as Penn West Petroleum, has laid down strategies to pursue realistic growth over the next couple of years with their spending budgets firmly tied to the price of oil and gas. 92 percent of the firm’s shareholders voted in favor of a proposal to convert the name of the corporation to Obsidian Energy due to the significant renovation and restructuring. The Chief Executive Officer of the firm, Mr. Dave French said that the company settled on the name because obsidian is a volcanic glass that naturally occurs and it can undergo the refining process and get honed effectively.

 

The growth of production of Obsidian Energy in 2017 is getting support through a 90 percent carry of operation costs in addition to capital expenditures with its Peace River maneuvers. The carry is projected to end in 2017, and this will reduce the growth of production prospects by nearly 6 percent at various oil prices after 2017. The cost to stock value and book value and looks favorable, but it is influenced significantly by the conjectures of oil prices used to evaluate reserves and impairment tests.

 

These speculations integrate $70 of oil in 2019, which is comparatively optimistic. Nonetheless, $45 to $55 of oil is a more likely range due to the high production growth which is at $55 in addition to oil. Obsidian Energy, currently priced for average-$40s long-standing oil can attain almost double upside with $55 longstanding oil. According to Dave French, the company is positioned suitably with high-end assets, well-balanced portfolio and a pragmatic strategy which will enable it to set an exceptional standard in performance even in the low-priced environments.

 

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