About our Peace River Plays

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 ~500 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:

• Large, contiguous, long-term land base of ~500 sections with Bluesky and Clearwater heavy oil rights
• Established Bluesky development and emerging Clearwater heavy oil play
• Cold-flow heavy oil resource developed with multi-leg horizontal wells
• Extensive owned infrastructure and multiple sales points
• Surface synergy between Bluesky and Clearwater lowers well and operating costs
• Competitive royalty structure with low royalty rates 
• Highly economic play and source of future growth

After pausing development activity for several years due to low commodity prices, we returned to Bluesky formation development at Peace River in 2021 with drilling of four wells that achieved strong initial-production rates, which continue over time. Since then, we have established and expanded our Bluesky development through our development and exploration/appraisal work in 2022 and 2023 and continue to be encouraged by the reservoir and flid quality results from drilled wells.

Through our first half 2023 program, we made the first step in unlocking the additional substantial potential across our acreage through development and exploration/appraisal drilling, further delineating our land base and successfully establishing a new Bluesky development area at Walrus. At the same time, we gathered valuable information through the drilling of four vertical oilsands exploration wells, which was used to assess multiple formations and optimize our second half 2023 capital program. The data is also key to the development of our multi-year Peace River development plan and to improve future well design. 

All 500 sections at Peace River are prospective for both the Bluesky formation and emerging Clearwater formation play.  

Bluesky Growth

Some of the key attributes of the Bluesky formation play include:

• ~660 metres sub-surface
• Reliable and steady Bluesky production with shallow declines
• Expertise in multi-leg Bluesky heavy oil horizontal oil drilling
• Top Alberta cumulative 12-month production well in 2022

Our Bluesky assets represent a significant source of future growth with production currently from ~34 of ~500 sections. In 2023, we established a new development area at the Walrus field through the drilling of two (2.0 net) exploration/appraisal wells, 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.

Clearwater Potential

Some of the key attributes of the Clearwater formation play include:

• ~450 metres sub-surface
• Able to leverage Bluesky operational experience and infrastructure to reduce well costs
• Substantial opportunity for future development with significant recent well results
• Encouraged by the reservoir and fluid quality results from wells drilled to date

In 2022, we drilled one well in our second half development program that target the Clearwater play to further delineate our land base. The core data analyzed from the OSE wells in 2023 help to further delineate our land position in Peace River, providing detailed subsurface data for both Bluesky and Clearwater formations. Encouraged by these results, Obsidian Energy plans to drill three (3.0 net) exploration/appraisal wells targeting the Clearwater formation in the Dawson area in the second half of 2023 to further appraise our land and increase our future inventory of locations. We believe there is strong potential for future development in this area.