Canada's Obsidian Energy Q4 FFO drops due to lower production

Overview

• Canada oil and gas produce Q4 net loss shrinks; Funds Flow from Operations drop to C$272.1 mln from C$432 mln

• Company generated C$56.6 mln funds flow from operations in Q4

• Company repurchased 4.3 mln shares in Q4 under prepaid equity forward program

Outlook

• Obsidian Energy plans to renew NCIB in March 2026

• Company expects operating costs to decrease in 2026

• Obsidian Energy aims to reduce oil inventory levels in coming months

Result Drivers

• PRODUCTION DECLINE - Q4 production impacted by Pembina asset sale and extreme weather in Peace River, reducing output by 500 boe/d

• CAPITAL PROGRAM - Successful capital program in 2025 focused on waterflood initiatives and drilling in Peace River and Willesden Green

• SHARE REPURCHASE - Continued prepaid equity forward program, purchasing 4.3 mln shares in Q4 to mitigate share-based compensation

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil & gas exploration and production peer group is "buy."

• Wall Street's median 12-month price target for Obsidian Energy Ltd is C$10.00, about 6% below its February 18 closing price of C$10.64

• The stock recently traded at 56 times the next 12-month earnings vs. a P/E of 50 three months ago

Press Release: ID:nNFC30SJv

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