Obsidian Energy Completes Offer to Purchase $1.4 Million of Our Outstanding Senior Unsecured Notes

Rhea-AI Summary

Obsidian Energy (NYSE American: OBE) has completed its previously announced cash offer to purchase up to $48.4 million of its outstanding 11.95% Senior Unsecured Notes due July 27, 2027. The offer, which expired on August 12, 2025, was significantly undersubscribed, with only $1.4 million in aggregate principal amount of Notes being validly tendered.

Following the completion of the offer and settlement on August 15, 2025, Obsidian Energy now has $110.8 million of Notes outstanding. The purchase was conducted according to specific denomination requirements, with minimum amounts of $2,000 and integral multiples of $1,000 thereafter.

Positive

• Company reduced its debt by $1.4 million through note repurchase
• Maintains flexibility with $110.8 million of notes still outstanding

Negative

• Very low participation rate in the tender offer (only $1.4M vs $48.4M target)
• High interest rate of 11.95% on remaining notes continues to impact company

Insights

Corporate Finance Specialist

Obsidian Energy's debt repurchase attempt failed to attract significant participation, with only $1.4M of the targeted $48.4M notes redeemed.

Obsidian Energy's attempt to repurchase up to $48.4 million of its outstanding 11.95% Senior Unsecured Notes has resulted in minimal participation from bondholders. The company managed to repurchase only $1.4 million of the notes, representing just 2.9% of the maximum amount it was willing to buy back.

This significantly undersubscribed tender offer suggests bondholders are reluctant to part with these high-yield notes that mature in July 2027. With the current 11.95% interest rate being substantially higher than typical corporate debt costs, bondholders appear to be valuing the income stream over immediate liquidity.

After this minor repurchase, Obsidian still carries $110.8 million in outstanding notes. The minimal participation indicates bondholders likely view the notes as appropriately priced or even undervalued at par, particularly in today's interest rate environment where obtaining similar yields might be challenging.

The company's apparent willingness to reduce its debt burden is a positive signal regarding its cash position, but the failed buyback attempt leaves its capital structure largely unchanged. This outcome doesn't significantly impact Obsidian's debt service requirements or change its financial leverage profile in any meaningful way.

Calgary, Alberta--(Newsfile Corp. - August 15, 2025) - OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) ("Obsidian Energy", the "Company", "we", "us" or "our") today announced completion of our previously announced offer (the "Offer") to purchase for cash, up to an aggregate amount of $48.4 million of our outstanding 11.95 percent Senior Unsecured Notes due July 27, 2027 (the "Notes"). The Offer expired on August 12, 2025, and was made on the terms and subject to the conditions set forth in the Offer to Purchase dated July 31, 2025 (the "Statement").

The Offer was undersubscribed, with approximately $1.4 million aggregate principal amount of Notes validly tendered prior to 5:00 p.m., EDT, on August 12, 2025. The aggregate purchase consideration paid by the Company pursuant to the Offer was $1.4 million (approximately, due to rounding). Notes were accepted for purchase and cancellation only in principal amounts equal to minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. Notes that were accepted and prorated pursuant to the Offer were rounded up or down to the nearest $1,000. Holders who tendered less than all of their Notes must not hold Notes in less than the minimum authorized denomination of $2,000 principal amount as a result of the Offer.

Settlement of the Offer was completed by the Company today. Holders will receive payment for the accepted Notes as soon as practicable, in accordance with the terms of the Statement. Upon completion of the Offer, the Company has $110.8 million of Notes outstanding.

Computershare Investor Services Inc. served as the tender agent for the Offer.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

About Obsidian Energy

Obsidian Energy is an intermediate-sized oil and gas producer with a well-balanced portfolio of high-quality assets, primarily in the Peace River, Willesden Green and Viking areas in Alberta. The Company's business is to explore for, develop and hold interests in oil and natural gas properties and related production infrastructure in the Western Canada Sedimentary Basin.

Obsidian Energy shares are listed on both the Toronto Stock Exchange in Canada and the NYSE American exchange in the United States under the symbol "OBE".

All figures are in Canadian dollars unless otherwise stated.

ADDITIONAL READER ADVISORIES

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable Canadian and U.S. securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this news release contains forward-looking statements and information concerning: the consummation of the Offer described above, and when holders of the Notes can expect payment.

The forward-looking statements and information are based on certain key expectations and assumptions made by Obsidian Energy. Although Obsidian Energy believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Obsidian Energy can give no assurance that they will prove to be correct. By its nature, such forward-looking statements and information are subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include but are not limited to: risks related to the successful consummation of the Offer; the risk of a downgrade in the Company's credit ratings and the potential impact on the Company's access to capital markets and other sources of liquidity; fluctuations in currency and interest rates; and changes in or interpretation of laws or regulations. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are cautioned that the assumptions used in the preparation of such forward-looking statements and information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on such forward-looking statements and information. Obsidian Energy gives no assurance that any of the events anticipated will transpire or occur, or, if any of them do, what benefits Obsidian Energy will derive from them. The forward-looking statements and information contained in this news release are expressly qualified by this cautionary statement. Except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein. Readers should also carefully consider the matters discussed that could affect Obsidian Energy, or its operations or financial results in Obsidian Energy's Annual Information Form (see "Risk Factors" and "Forward-Looking Statements" therein) for the year ended December 31, 2024, which is available on the SEDAR+ website (www.sedarplus.ca), EDGAR website (www.sec.gov) or Obsidian Energy's website (www.obsidianenergy.com).

CONTACT

OBSIDIAN ENERGY

Suite 200, 207 - 9th Avenue SW, Calgary, Alberta T2P 1K3
Phone: 403-777-2500
Toll Free: 1-866-693-2707
Website: www.obsidianenergy.com

Investor Relations:
Toll Free: 1-888-770-2633
Email: investor.relations@obsidianenergy.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/262547

FAQ

How much debt did Obsidian Energy (OBE) repurchase in its 2025 tender offer?

Obsidian Energy repurchased $1.4 million of its 11.95% Senior Unsecured Notes due 2027, significantly below the maximum offer amount of $48.4 million.

What is the remaining balance of Obsidian Energy's (OBE) Senior Unsecured Notes after the tender offer?

After completing the tender offer, Obsidian Energy has $110.8 million of Senior Unsecured Notes still outstanding.

What was the interest rate on Obsidian Energy's (OBE) Senior Unsecured Notes?

The Senior Unsecured Notes carried an interest rate of 11.95% and are due July 27, 2027.

When did Obsidian Energy's (OBE) 2025 tender offer expire?

The tender offer expired on August 12, 2025, with settlement completed on August 15, 2025.

What was the minimum denomination requirement for Obsidian Energy's (OBE) tender offer?

The minimum denomination requirement was $2,000 principal amount, with integral multiples of $1,000 in excess thereof.