Obsidian Energy to Sell Pembina Assets to InPlay for $224.7MM

Obsidian Energy Ltd. is selling its operating assets in the Pembina oil field in Alberta, Canada, to InPlay Oil Corp. for approximately $224.77 million (CAD 320 million).

Obsidian will retain its non-operated holdings in Pembina Cardium Unit #11, the company said in a news release.

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

Consideration for the acquisition will consist of $154.53 million (CAD 220 million) in cash, $59.71 million (CAD 85 million) of InPlay’s common shares, and InPlay’s 34.6 percent working interest in the Willesden Green Cardium Unit #2 oil field, which would bring Obsidian Energy’s ownership in the field to 99.8 percent. This additional interest is estimated to be valued at $15 million, according to the company.

As part of the transaction, Obsidian Energy said it has agreed to drill four wells on two pads in the Pembina area during the first quarter of 2025 at InPlay’s expense. All rights to the wells and associated infrastructure will be transferred to InPlay upon the close of the transaction.

The effective date of the transaction is December 1, 2024, and is expected to close early in the second quarter of 2025, subject to approval by InPlay shareholders, receipt of all necessary regulatory approvals and the satisfaction of other customary closing conditions.

Obsidian Energy said the transaction allows the company to focus on its light oil development in Willesden Green, part of the Willesden Green Oil and Gas Field and the Duvernay Formation.

As part of the transaction, InPlay will assume all assets and liabilities associated with the Pembina assets.

InPlay said in a separate statement that the petroleum and natural gas assets are producing approximately 10,000 barrels of oil equivalent per day (boepd), consisting of 68 percent oil and natural gas liquids (NGLs).

Inplay noted that the acquired assets would result in a greater than 100 percent increase in its production and an over 170 percent increase in its light oil production, to over 18,750 boepd, with oil production rising to over 9,500 barrels per day (bpd).

“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,” Obsidian Energy President and CEO Stephen Loukas said.

“Upon transaction close, we emerge as a significantly more focused company with an ability to accelerate our shareholder value creation strategy. Pro forma, Obsidian Energy will have a production base of over 29,000 boepd (based on estimated fourth quarter 2024 production) with Peace River now becoming our largest asset, where we will continue to execute on our growth plan and further grow our Clearwater and Bluesky production. Our Willesden Green and Viking light oil assets will continue to generate stable production and free cash flow to support Peace River’s development while maintaining optionality of growing both assets during periods when commodity prices and returns are conducive to doing so,” Loukas added.

“We also expect to secure additional future share price appreciation from our InPlay Share position as the addition of the Pembina Assets is both financially and strategically accretive to InPlay. During the second half of 2025, Obsidian Energy will consider different monetization options for our InPlay Share position with the goal of recycling that capital,” he said.

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