Heavy Oil Assets:  Source of Future Growth at Peace River

Ownership in highly economic play with Bluesky and Clearwater upside

Peace River is a high-quality stable, cold-flow heavy oil Bluesky resource with Clearwater upside within the heart of the Peace River Oilsands region. We have full ownership in a large, contiguous ~525 section area of land at Peace River, providing substantial opportunity for future development with supportive commodity prices and recent well results. Some of the key attributes of the play include:

• Cold-flow heavy oil resource developed with multi-leg horizontal wells
• Competitive royalty structure with low royalty rates 
• Industry activity continues over emerging Clearwater formation play

OUR PEACE RIVER ASSETS

• Large, contiguous, long-term land base of ~525 sections with Bluesky and Clearwater heavy oil rights
• Established Bluesky development provides stable production
• Discovery and establishment of two new development fields offers significant production growth potential
  • Walrus field (Bluesky formation)
  • Dawson filed (Clearwater formation)
• Extensive owned infrastructure and multiple sales points
• Surface synergy between Bluesky and Clearwater lowers well and operating costs
• Highly economic play and source of future growth

Our Bluesky Formation Assets

• ~660 metres sub-surface
• Reliable and steady Bluesky production with shallow declines
• Established new development field at Walrus
• Expertise in multi-leg Bluesky heavy oil horizontal oil drilling

Our Bluesky assets represent a significant source of future growth with production currently from ~35 of ~525 sections. In 2023, we established a new development area at the Walrus field, which successfully delineated the area for future development.  At the same time, we drilled four oils sands exploration wells drilled to delineate our land base for both Bluesky and Clearwater formations. 

Our Clearwater Formation Assets

• ~450 metres sub-surface
• Established our first development field at Dawson
• Substantial opportunity for future development with significant recent well results
• Encouraged by the reservoir and fluid quality results 
• Able to leverage Bluesky operational experience and infrastructure to reduce well costs

Core data analyzed from our 2023 OSE wells further delineated our land position in Peace River, providing detailed subsurface data for both Bluesky and Clearwater formations. Encouraged by these results, Obsidian Energy followed up with exploratory/appraisal drilling, successfully delineated the Dawson area and establishing it as our first Clearwater development field. 

OUR PLANS FOR 2024

HISTORY

• 2023:  Further unlocked the additional substantial potential across our acreage through development and exploration/appraisal drilling, further delineating our land base
  • Successfully discovered and established a new Bluesky formation development area at Walrus
  • Successfully discovered and established a new Clearwater formation development area at Dawson
  • Gathered valuable information through the drilling of four vertical oilsands exploration wells, which was used to assess multiple formations and optimize our capital program This data was also key to the development of our multi-year Peace River development plan and to improve future well design
• 2022:  Established and expanded our Bluesky development through our development and exploration/appraisal work in 2022, showing strong reservoir and fluid quality results 
  • Drilled one well targeting the Clearwater play to further delineate our land base
• 2021:  Returned to Bluesky formation development with four wells that achieved strong production rates 
• 2000 and prior:  Development activity paused for several years due to low commodity prices