Obsidian Energy’s Position In The Energy Industry

Obsidian Energy Limited is a company that was previously known as the Penn West Exploration Ltd. It is a mid-sized company that deals with the extraction of Canadian natural resources such as oil and natural gas. The Calgary, Alberta based firm is currently being headed by Dave French, who is the acting CEO.

 

Despite its situation as a mid-sized company, Obsidian has featured in the previous list as among the top 60 largest energy companies on the Toronto Stock Exchange. Between 2005 and 2011, the company was a Canadian royalty trust. It is during this period that it reached the peak market for capitalization at the beginning of 2008. In this ranking, it was attributed to being worth an approximation of US $9.5 billion.

 

One of the chief factors that have led to the success and the top ranking of Obsidian Energy is their ability to stand out in 2014 when oil prices had significantly dropped. During this period, many energy companies flopped down while others experienced both financial and operational constraints.

 

More to this most of the companies that were not well established failed significantly while others collapsed completely. During this same period, some companies were leased out to compensate for the losses they had undergone during this period. To Obsidian, despite being slightly affected by the challenge, they were able to withstand the storm.

 

Another key factor that has been contributing to the remarkable success of Obsidian is the geographical position where the firm is situated. As mentioned earlier, Obsidian is located in Alberta just along the Western Canadian Sedimentary.

 

This specific location is known as the world largest reserve more so with petroleum products. With its situation at this location, the company has never run out of resources. More to this, they also never need to spend much to get the resources more so on the transportation of the products.

 

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The main source of its resources includes Alberta Vikings and the places surrounding, therefore, increasing the amount they save. More to this, the company has always been on a remarkable progress in the previous years it has been in existence with its current production per day being estimated at 31,000 bbl.

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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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