Viking Play – Significant Development Upside

The Viking stands out as a sweet, light oil development play with associated natural gas located in central Alberta. As a result, this asset offers highly economic returns with current commodity prices while providing the Company with the opportunity to continue drilling through the typical spring break-up period due to favourable ground conditions in the area.

Some of the key attributes of the play include:

• Significant drilling inventory, including both low risk infill and step-out development
• Superior netbacks due to lower well costs, combined with owned and controlled infrastructure and direct market access
• Shallow, low geological risk resource play
• Close to multiple, successful offset producers

In 2022, we returned to development drilling in our Viking area (focused in the Esther area), licensing and drilling eight 100% working interest wells as part of a development program to revitalize this asset. The eight wells were successful, exceeding 1,100 boe/d on a peak production basis (67 percent light oil). We also made a material oil discovery with the first step-out well on Pad 14-02 producing exceptional results and delineating our western acreage. This well was recognized as the top 2022 Viking well in the basin on a cumulative and daily average production basis(1).

Following up on the success of the 2022 step-out well, we drilled and completed 11 (11.0 net) wells in our first half 2023 program with all wells on production in early May. The program showed robust average daily peak rate per well of 293 boe/d, and daily cumulative rate of over 2,000 boe/d on multiple days (as of August 2, 2023). Additionally, Obsidian Energy commissioned the new 13-16 battery in the Viking area to allow for continued growth in the expanded and delineated western region of the play.

As commodity prices remain strong, we have ample capacity for further Viking development with our strong established inventory of quality locations and 100% ownership of oil and gas infrastructure in the region. Our 2023 development program includes 11 (11.0 net) wells in the first half of the year, and provides the ability to increase future reserves following western exploration success and follow-up development.

(1) National Bank of Canada Financial Markets, ‘Oil, Gas & Consumable Fuels, North American Drilling Productivity Report’, March 21, 2023.