Based in Calgary, Alberta Obsidian Energy Ltd. has been a leader in western Canada’s oil and gas extraction. Listed on the Toronto Stock Exchange and the New York Stock Exchange, the company reached $9.5 Billion USD market capitalization in 2008.
In 2017, Obsidian Energy exceeded their estimated 31,000 barrels of oil extraction per day, averaging 31,700 over the year. The firm noted that issues related to shallow base decline, ongoing waterflood and on target execution of their second half development plan combined to create the exceptional production numbers. These extraction figures hold in spite of unforeseen downtime that resulted from the adverse cold weather interfering with drilling activities in December.
The company announced even better output numbers coming into this year, reporting an average of more than 32,000 barrels per day.
President and CEO David French stated that 2017 was an outstanding year for Obsidian, with the company meeting challenges in the volatile currency and commodity markets.
Obsidian’s fossil fuel production relies on three primary locations in Alberta. The Alberta Viking, the Peace River Oil Sands and The Pembina Cardium. The company recorded outstanding output increases from the Willesden Green Cardium Production at figures higher than 30 percent over the previous reporting period.
Investors have benefited greatly from energy sector financial regulations. For instance, Obsidian’s generous annual dividend, paid out monthly, is taxed at the lower rate applicable to capital, rather than the standard dividend rate. Obsidian is considered a trust and its assets are treated as depletable resources, subjecting investors to the lower tax rates. This tax advantage is applicable to all royalty trusts in the United States. See Related Link for additional information.
When combined with the company’s high production rates, the trust assets dividend tax advantage comes as a welcome benefit to the firm’s investors.
The firm is covered by a number of energy financial analysts and firms including Thomas Matthews of Altacorp, Grant Hofer of Barclays, Jason Frew of Credit Suisse, Darren Engels of GMP FirstEnergy and Brian Milne of the National Bank of Canada.
Formerly known as Penn West Petroleum, the company changed its name to Obsidian Energy in June 2017 following the approval of the company’s board of directors and shareholders.
With forward looking statements disclosures applying, Obsidian’s management anticipates another year of strong growth in 2018.
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