Calgary, Alberta — February 19, 2026 — Leads & Copy — Obsidian Energy Ltd. (TSX: OBE) (NYSE American: OBE) has released its operating and financial results for the fourth quarter and full year of 2025.
The company reported an average production of 27,971 boe/d in the fourth quarter, generating $56.6 million of funds flow from operations. Obsidian Energy also cited the success of its 2025 capital program, including waterflood initiatives, which resulted in reserve replacement ratios exceeding 100%.
Obsidian Energy’s President and CEO, Stephen Loukas, commented on the company’s dynamic year, highlighting the sale of operated Pembina assets in April for approximately $325 million. He also noted the moderation of capital spending in response to lower WTI oil prices due to announced tariffs in the United States, the return of capital to shareholders through a share buyback program, and strong reserve replacement metrics.
Loukas stated that Obsidian Energy maintained a balanced capital program between its Willesden Green and Peace River areas as 2025 closed out. In Willesden Green, the company drilled a successful Belly River program and completed an infrastructure project in Open Creek, which will be used on 2026 wells and facilitate future production growth. In Peace River, the capital program focused on the Clearwater formation, advancing waterflood initiatives in the Dawson and Nampa areas.
The company reported that extreme cold weather and significant snowfall late in the fourth quarter impacted base operations in Peace River, affecting trucking routes and increasing oil inventories. This temporary interruption reduced fourth-quarter production by about 500 boe/d. Operations returned to normal by mid-January, and the company expects to reduce the oil inventory build over the next few months.
Obsidian Energy continued its prepaid equity forward program during the fourth quarter to mitigate the impact of share-based compensation plans. The company purchased approximately 3.3 million shares under this program in 2025 and has remained active in 2026, purchasing an additional approximately 1.0 million shares. Obsidian Energy is also in the process of renewing its normal course issuer bid (NCIB), expected to be in place in early March.
Funds flow from operations (FFO) totaled $272.1 million ($3.92 per share basic) in 2025, compared to $432 million ($5.69 per share basic) in the prior year. Fourth-quarter 2025 FFO was $56.6 million ($0.84 per basic share), compared to $107.7 million ($1.45 per basic share) in the fourth quarter of 2024. Lower oil prices and lower production levels after the Pembina asset disposition in April 2025 were the main drivers of the variance from 2024.
The 2025 capital program focused on the further development and delineation of the Peace River asset and progressing waterflood initiatives with two pilots in Peace River and active drilling in Open Creek. Capital expenditures totaled $298.9 million (2024: $343.1 million), while decommissioning expenditures totaled $28.8 million (2024: $23.9 million). Fourth-quarter capital expenditures were $65.0 million (2024: $84.1 million), and decommissioning expenditures were $10.3 million (2024: $3.5 million).
In April 2025, Obsidian Energy closed the disposition of its operated Pembina (Cardium) assets to InPlay Oil Corp. for approximately $325 million. The proceeds from the disposition were applied against the company’s syndicated credit facility. The transaction included all of the company’s operated assets in Pembina, which had first-quarter 2025 average production of approximately 11,000 boe/d.
Obsidian Energy’s decommissioning liability was reduced by over 50%, with a total of $390 million removed from the portfolio on an undiscounted, uninflated basis, including $189 million associated with inactive properties. The company also acquired InPlay’s 34.6 percent interest in the Willesden Green Cardium Unit #2 property as part of the transaction.
Net debt decreased to $268.2 million at December 31, 2025, compared to $411.7 million at December 31, 2024, due to the proceeds from the Pembina disposition being applied to outstanding debt. On December 31, 2025, the company had $9 million outstanding on its $235 million syndicated credit facility.
In December 2025, Obsidian Energy completed a refinancing and issued five-year senior unsecured notes for an aggregate principal amount of $175.0 million with an interest rate of 8.125 percent. These notes mature on December 3, 2030. The company used the net proceeds from the notes to redeem all of its previous outstanding 11.95% senior unsecured notes due July 27, 2027, and to pay down outstanding amounts on its syndicated credit facility.
Approximately 7.6 million shares were repurchased and canceled under the company’s NCIB for $54.9 million (at an average price of $7.20 per share) in 2025. No shares have been repurchased since August 2025, when the company reached the maximum purchase allotment approved under the current NCIB. Since the inception of the NCIB program in 2023, approximately 17.2 million shares have been repurchased and canceled at an average price of $8.37 per share for $143.9 million.
A total of 3,340,000 shares were purchased in 2025 for $28.7 million, or $8.62 per share, under the prepaid equity forward program. Subsequent to December 31, 2025, an incremental 950,000 shares were purchased for a total of $9.1 million, or $9.57 per share.
Net operating costs were higher in 2025 at $14.92 per boe (2024: $13.85 per boe) and $15.19 per boe for the fourth quarter of 2025 (2024: $13.91 per boe) as a result of higher trucking costs and processing fees in Peace River. The company anticipates operating costs per boe to decrease in 2026 as additional water disposal capabilities are expected to reduce trucking expenses in Peace River.
The Company recorded net income of $35.2 million ($0.51 per share basic) in 2025 compared to a net loss of $202.6 million ($(2.67) per share basic) in 2024.
The 2025 capital program consisted of further development and delineation in both Peace River and Willesden Green, resulting in a solid reserve performance with strong reserve replacement ratios. A combined total of 58 net wells and 34 net kilometers of pipeline were successfully abandoned in 2025 as part of activities from our decommissioning spend of $28.8 million.
Second half 2025 production was 27,644 boe/d with 72% Oil and NGLs. Capital expenditures were $130.3 million, and decommissioning expenditures were $18.2 million.
The company currently has oil, AECO natural gas, equity forward and FX forward contracts outstanding.
Obsidian Energy is an intermediate-sized oil and gas producer with a well-balanced portfolio of high-quality assets, primarily in the Peace River, Willesden Green and Viking areas in Alberta.
Source: Obsidian Energy
