For many years, the energy industry has felt like it was sitting on some sort of precipice that would either lead to the implosion of the industry or a new swing in an upward direction. 2017 showed signs that what is going to happen will be the latter, not the former, with industry leaders like Obsidian Energy leading the way and displaying a ton of exciting potential for growth in the years to come.
For Obsidian Energy, the year 2017 presented tons of new opportunities that have the potential to dramatically change the direction and proverbial face of the company. These changes, while possibly rather significant, have not been felt yet and the ramifications of some of the new resources coupled with new investments does leave a lot up in the air. But these will only lead to positive developments as this will help them to secure new technologies and bring online new wells and increase production in the future.
Obsidian Energy is a medium sized energy producer and distributor that is based in Calgary, Alberta, in Canada. It was formerly known as Penn West Exploration, but rebranded under new management and a new direction for the company. Most of their oil reserves are shale oil reserves located in Alberta, which has the potential to produce over 30,000 barrels of oil a day and this number is continuing to expand with new fields coming online and production in others beginning to speed up. The region is known as the Western Canadian Sedimentary Basin, and is one of the largest reserves in the world.
The restructuring of the company on the heels of its legal and financial troubles was a full-scale restructuring. The board was reformed and the name change from Penn West to Obsidian Energy was approved, but the name change was, of course, by no means the only thing that change. Operations became more streamlined, innovative, and designed to make use of the most cutting edge techniques and technology. Additionally, once this entirely new board was elected, the approved a new position for an auditor, as well as some new rules regarding executive compensation and more.
The company experienced some financial and legal issues under its former incarnation as Penn West, but with the settlement of lawsuits and organizational restructuring, the future for Obsidian Energy looks quite bright indeed. In 2017, the activist investment company FourFront Capital bought some 27 million shares in the company and what kind of influence they wish to have on the direction of Obsidian Energy has yet to really be fleshed out.
However, FourFront Capital’s investment is not the only dramatic thing that happened in 2017. Ed Kernaghan joined the board of Obsidian Energy. Kernaghan, along with his family and associated business, own some 33 million stocks in the company, so his joining the board is bound to have an impact on the vision for the future. It must be stated that FourFront Capital is also going to have a say in the operations, growth, and vision of the future.
Growth in production capacity is also on the increase as the number of barrels of oil produced during December of 2017 was a bit higher than it was the same month of the previous year. Additionally, in January, a four well pad came online, which will increase the company’s energy production in the area by as much as 30%.
So while the status of Obsidian looked pretty questionable for some time, their rebranding and restructure appear to be working wonderfully. With the name change came a new view for the future of the company. An entirely new board at Obsidian was brought on and they took proactive measures to help avoid past problems becoming future problems. They streamlined operations both in the field and in terms of management, bringing on some quality new talent that can help further the company’s goal to embrace innovation and technology to help leverage the energy market of the future.
2017 and 2018 have brought even more positive changes to Obsidian. They received a large new investor in the form of FourFront Capital, who purchased some 27 million shares. They also brought another key shared holder, Ed Kernaghan, on as a new member of the board of directors. Kernaghan some 33 million shares. It isn’t just new financial investments and members joining the team that makes the future for the company look bright.
Already, they have seen an increase in their level of oil production from previous years, which is a great sign for the future. Additionally, a new well was recently opened up and brought online, which will also expand the amount of oil the company can produce. This will allow them to become an even larger player on the international industry market and with their focus on streamlined operations and bold new investments, they are positioned to leverage that potential quite successfully.
