OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE:OBE) ("Obsidian Energy", the "Company", "we", "us" or "our") is pleased to provide an update to our 2024 guidance that includes ongoing strong second half 2024 drilling results that continue to exceed our initial expectations. As a result, we have further increased our 2024 production guidance range to 37,000 to 37,400 boe/d (midpoint of 37,200 boe/d) with associated adjustments to our funds flow from operations ("FFO") and free cash flow ("FCF").

Considering the recent softness in commodity prices and market uncertainty due to global factors, Obsidian Energy has also revised our 2024 capital expenditures downwards by approximately $15 million, reallocating a portion of light oil spending towards incremental share buybacks through our normal course issuer bid ("NCIB") and further debt reduction. In total, the reallocation of capital is only expected to impact average 2024 production by approximately 40 boe/d.

"The continued outperformance of our development program has led to a further increase to our 2024 production guidance," said Stephen Loukas, Obsidian Energy's President and CEO. "However, the recent volatility in both the broader oil and gas markets as well as with our share price has resulted in a dynamic whereby our equity valuation is significantly below new development economics within our light oil portfolio. Accordingly, Obsidian Energy's Board of Directors has approved the postponement of our fourth quarter light oil program (excluding the drilling of our initial delineation well targeting the Belly River formation in our Willesden Green area) and capital reallocation into a combination of incremental share buybacks and additional debt repayment. Notwithstanding a minor impact to 2024 production, we believe that this decision will result in superior FFO and FCF per share metrics. Moreover, it will afford Obsidian Energy's shareholders greater exposure to our growing Peace River play, preserving light oil inventory for more favourable market while still meeting our 50,000 boe/d 2026 production target."

REVISED 2024 GUIDANCE

We have revised our 2024 guidance with annual production expected to be between 37,000 to 37,400 boe/d with a midpoint of 37,200 boe/d - a 15 percent increase from 32,275 boe/d in 2023 - and an approximate $15 million decrease to capital expenditures that will be reallocated to further share buybacks and debt reduction. Although we have lowered our WTI forecast to US$72.50/bbl for the remainder of 2024, our FFO increased by $5 million to $420 million, resulting in a 2024 net debt to FFO of approximately 0.9 times and a related increase to FCF by approximately $17 million to $69 million. Our revised 2024 guidance, incorporating key assumptions used by the Company, is as follows: