Calgary, Alberta-based Obsidian Energy is divesting operated Cardium Pembina assets to InPlay Oil Corp. for CA$320 million (US$224.7 million) in cash, equity and asset interests, according to a Feb. 19 press release.

The Pembina assets include 498 net sections of lands in the Pembina area of Central Alberta, including associated facilities and gathering systems.

InPlay Oil Corp. is buying Obsidian Energy's Pembina Cardium assets in Alberta. (Source: InPlay investor presentation)
InPlay Oil Corp. is buying Obsidian Energy's Pembina Cardium assets in Alberta. (Source: InPlay investor presentation)

Obsidian said it will retain its non-operated holdings in the Pembina Cardium Unit #11, which was estimated to have an average fourth-quarter production of approximately 2,500 net boe/d.

Calgary-based InPlay will pay Obsidian CA$220 million in cash, CA$85 million of common shares and InPlay’s 34.6% working interest, valued at CA$15 million, in the Willesden Green Cardium Unit #2 oilfield.

Following the transaction, Obsidian’s ownership of Willesden will increase to 99.8% and is expected to boost its production in the field by approximately 150 net boe/d, the company said.

Obsidian Energy is divesting its operated Pembina assets to InPlay Oil Corp. for CA$320 million
Obsidian Energy is divesting its operated Pembina assets in the Cardium Formation to InPlay Oil Corp. for CA$320 million. As part of the deal, InPlay will hand over its 34.6% working interest in the Willesden Green Cardium Unit #2 oilfield. (Source: Obsidian Energy website)

Pro forma, Obsidian Energy will have an estimated production base of over 29,000 boe/d, President and CEO Stephen Loukas said. Obsidian's average production in the fourth quarter was approximately 40,000 boe/d, the company said in January.

Obsidian said the sale will allow the company to focus on its now largest asset, the Peace River play. The asset will account for 42% of Obsidian’s total production and 33% of its total proved plus probable reserves, based on fourth-quarter 2024 estimates.

Cash proceeds from the sale are expected to reduce Obsidian’s debt to CA$192 million (US$134.85 million), the company said.

“The successful execution of our growth plan to date has put us in a position to rationalize our asset portfolio at a value that we believe to be accretive to our shareholders, while securing increased financial flexibility and meaningfully reducing asset retirement obligations,” Loukas said.

Obsidian will also be entitled to two nominees on InPlay’s board of directors at transaction close, which is expected for early second-quarter 2025.

RBC Capital Markets is acting as exclusive financial adviser and Burnet, Duckworth & Palmer LLP and Stikeman Elliott LLP are acting as legal counsel to Obsidian Energy on the Transaction.

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