Obsidian plans to sell entire i Inplay stake to third party

Obsidian plans to sell entire i Inplay stake to third party

Obsidian Energy Ltd. (TSX: OBE) (NYSE American: OBE) has announced plans to sell its entire stake in InPlay Oil Corp. to a third party. The transaction is expected to take place later this month, with Obsidian offering to exchange shares of InPlay for common shares of Obsidian Energy. This move comes as part of Obsidian's broader strategy to reduce its holding in InPlay and provide additional liquidity to its shareholders.

According to the press release from Obsidian Energy, the transaction will involve approximately 10 percent of Obsidian's InPlay shares, representing around 3.3 percent of InPlay's total current shares outstanding. The exchange offer will be available to Obsidian Energy shareholders located in the provinces and territories of Canada.

The decision to sell the InPlay stake is part of Obsidian's broader capital program and financial guidance for the second half of 2025. The company expects to invest between $110 and $120 million in capital expenditures, with a significant portion of this spending allocated to infrastructure projects in its Open Creek and Nampa fields. These projects aim to support future growth and bring more oil back into production.

Obsidian Energy's President and CEO, Stephen Loukas, commented on the transaction, stating that it provides a mechanism for the company to buy back shares while also reducing its InPlay holdings. He noted that the transaction will allow Obsidian to marginally reduce its InPlay position and provide additional optionality as the company works through the further monetization of its position.

The sale of the InPlay stake is expected to have a positive impact on Obsidian's financial performance, with the company anticipating funds flow from operations (FFO) of approximately $113 million in the second half of 2025. This FFO is based on commodity price assumptions of US$65.00/bbl WTI, US$3.50/bbl MSW differential, US$11.50/bbl WCS differential, and $2.50/GJ AECO natural gas.

In summary, Obsidian Energy's decision to sell its entire stake in InPlay Oil Corp. to a third party is part of its broader strategy to optimize its capital structure and provide additional liquidity to its shareholders. The transaction is expected to have a positive impact on Obsidian's financial performance and support its ongoing development projects.

References:
[1] https://www.newsfilecorp.com/release/258381/Obsidian-Energy-Announces-Second-Half-2025-Capital-Program-and-Guidance