Obsidian Energy Q3 operating cash flow rises to $87M

Q: How much did OBE produce in Q3 2026?

OBE averaged 28,113 boe/d in Q3 2026, compared with 27,316 boe/d in Q3 2025. Production was affected by approximately 600 boe/d of third-party compressor downtime affecting Belly River assets in July and August, and weather-related development delays in July.

Q: What was OBE's net income in Q3 2026?

Obsidian Energy reported net income of $18.0 million in Q3 2026, compared with $16.8 million in Q3 2025. Funds flow from operations was $86.7 million, compared with $49.7 million; the company identifies funds flow as a non-GAAP measure.

Q: What were the terms of OBE's Belly River acquisition?

The total consideration was $98.0 million, inclusive of closing adjustments. A contingent value payment of up to $7.0 million may be payable in quarterly installments of up to $1.75 million from Q3 2026 through Q2 2027, subject to average WTI prices. No payment was made based on Q3 2026 average WTI prices, leaving a maximum payment of $5.25 million.

Q: What liquidity condition applies to OBE's share repurchases?

Repurchases under the normal course issuer bid are subject to maintaining at least $65 million of liquidity and complying with the terms of the company's current credit facilities.

A third Peace River rig is scheduled to mobilize in early December, supporting the company's winter heavy-oil drilling program.

Available on EDGAR 11/05/2026 - 02:23 PM EST Accepted by SEC EDGAR 11/05/2026 - 02:23 PM EST

Filing Impact

(Moderate)

Filing Sentiment

(Neutral)How Sentiment works

Sentiment and the balance of points

Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.

How Sentiment works How the balance works

Form Type

6-K

Rhea-AI Filing Summary

Obsidian Energy Ltd. reported third-quarter 2026 production of 28,113 boe/d and funds flow from operations of $86.7 million, compared with $49.7 million a year earlier. Production revenues were $176.4 million versus $128.7 million, and net income was $18.0 million versus $16.8 million. The company attributed higher quarterly cash flow mainly to higher realized oil prices, with higher light-oil production also contributing to funds flow.

For the first nine months, operating cash flow was $165.2 million versus $197.3 million, net income was $41.3 million versus $47.5 million, and production averaged 28,346 boe/d versus 31,518 boe/d. The company cited lower volumes following the Pembina asset disposition and hedge losses as factors in nine-month net income; additional prepaid equity forward contracts also affected operating cash flow. It closed the Belly River asset acquisition on June 30, 2026, for $98.0 million, including assets producing approximately 2,500 boe/d based on May production. During Q3, it repurchased and canceled 0.9 million shares for $13.0 million. Net debt was $363.3 million as of September 30, 2026. Assuming a constructive commodity price environment, management expects average production growth of approximately 20% in 2027 versus 2026.

2 points · 0 major

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance works How Sentiment works

0 major · 2 points

How the balance works

Positive

Moderate pointThird-quarter operating cash flow rose to $87.0 million from $45.4 million.
Moderate pointThird-quarter net income rose to $18.0 million from $16.8 million.

Negative

Moderate pointNine-month operating cash flow fell to $165.2 million from $197.3 million.
Moderate pointNine-month net income fell to $41.3 million from $47.5 million.

Filing Explained

Prepaid equity forwards cover 5,480,000 shares and may be settled before their listed maturities, which run from September 2028 to November 2029.

The company reports that the Belly River acquisition closed on June 30, 2026, but up to C$5.25 million in contingent value payments may still be payable, so closing did not end the price-linked payment exposure.

The payment depends on quarterly average WTI prices through the second quarter of 2027; no payment was made for the third quarter of 2026. As of September 30, 2026, the company recorded a C$2.6 million provision for potential payments over the remaining three quarters, based on forecast WTI prices.

The company says its prepaid equity forward contracts were entered into to mitigate share-based compensation price exposure and may be settled in whole or in part at any time.

Key Figures

Production revenues: $176.4 million Funds flow from operations: $86.7 million Net income: $18.0 million +5 more

8 metrics

Production revenues $176.4 million Canadian dollars; Q3 2026, compared with $128.7 million in Q3 2025

Funds flow from operations $86.7 million Q3 2026, compared with $49.7 million in Q3 2025; non-GAAP measure

Net income $18.0 million Q3 2026, compared with $16.8 million in Q3 2025

Cash flow from operating activities $165.2 million First nine months of 2026, compared with $197.3 million in 2025

Average production 28,113 boe/d Q3 2026, compared with 27,316 boe/d in Q3 2025

Shares repurchased and canceled 0.9 million shares Q3 2026

Share repurchase consideration $13.0 million Q3 2026

Net debt $363.3 million As of September 30, 2026

Key Terms

Funds Flow from Operations, Adjusted Funds Flow from Operations, prepaid equity forward contracts, contingent value payment, +1 more

5 terms

Funds Flow from Operations financial

"Funds Flow from Operations ("FFO") – The Company generated FFO"

Funds flow from operations is the actual cash a company generates through its regular business activities — the money coming in from selling goods or services minus the day-to-day costs required to run the business. Investors watch this measure because it shows whether the core business is producing real, spendable cash to cover dividends, repay debt, or invest in growth; think of it as a household’s paycheck from working versus one‑time windfalls or borrowed money.

Adjusted Funds Flow from Operations financial

"Adjusted Funds Flow from Operations ("AFFO")"

A non-GAAP measure of the cash a company’s core business produces, calculated by taking operating cash flow or net income and removing or adding non-cash items and one-time gains or costs so the result reflects recurring cash generation. It matters to investors because it shows the steady, usable cash a business produces to run operations, repay debt, pay dividends or reinvest—think of it as the regular monthly paycheck after ignoring one-off bonuses and accounting quirks.

prepaid equity forward contracts financial

"began entering into prepaid equity forward contracts in respect of our common shares"

A prepaid equity forward contract is an agreement where one party pays cash up front in exchange for receiving shares (or the cash value of shares) at a set future date or over time, with the price or number of shares linked to the future market value. Think of it like lending money today in return for a promise of stock later; it matters to investors because it provides immediate capital, can shift timing of ownership or tax exposure, and is used for financing, hedging, or monetizing holdings without an immediate sale.

contingent value payment financial

"a contingent value payment ("CVP") of up to $7.0 million may be payable"

netback financial

"The Company's netback per boe increased in 2026"

Netback measures how much money a company keeps for each unit of product sold after subtracting direct selling costs such as transportation, processing and royalties, so it represents the effective cash earned per barrel, ton or unit rather than the raw market price. For investors it reveals the real profitability of production—like comparing take-home pay after taxes and commuting costs—making it easier to compare operational efficiency across companies and projects.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much did OBE produce in Q3 2026?

OBE averaged 28,113 boe/d in Q3 2026, compared with 27,316 boe/d in Q3 2025. Production was affected by approximately 600 boe/d of third-party compressor downtime affecting Belly River assets in July and August, and weather-related development delays in July.

What was OBE's net income in Q3 2026?

Obsidian Energy reported net income of $18.0 million in Q3 2026, compared with $16.8 million in Q3 2025. Funds flow from operations was $86.7 million, compared with $49.7 million; the company identifies funds flow as a non-GAAP measure.

What were the terms of OBE's Belly River acquisition?

The total consideration was $98.0 million, inclusive of closing adjustments. A contingent value payment of up to $7.0 million may be payable in quarterly installments of up to $1.75 million from Q3 2026 through Q2 2027, subject to average WTI prices. No payment was made based on Q3 2026 average WTI prices, leaving a maximum payment of $5.25 million.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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     UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
___________________
Form 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER 
PURSUANT TO RULE 13a-16 OR 15d-16 
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of November 2026
 
Commission File Number 1-32895
___________________
 
Obsidian Energy Ltd.
(Translation of registrant's name into English) 
 
Suite 200, 207 – 9th Avenue SW
Calgary, Alberta T2P 1K3
Canada
(Address of principal executive offices)
___________________
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F 			Form 40-F ☑
 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)  
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)  
 
                         .
 

    

DOCUMENTS INCLUDED AS PART OF THIS FORM 6-K

See the Exhibit Index hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 5, 2026.



	OBSIDIAN ENERGY LTD.


	By:	/s/ Stephen Loukas
	Name:	Stephen Loukas
	Title:	President and Chief Executive Officer

EXHIBIT INDEX


Exhibit	Description

99.1	News Release, dated November 5, 2026
99.2	Management’s Discussion and Analysis for the three and nine months ended September 30, 2026
99.3 99.4 99.5	Financial Statements for the three and nine months ended September 30, 2026 Quarterly Certification of the Chief Executive Officer under Canadian law Quarterly Certification of the Chief Financial Officer under Canadian law

Exhibit 99.1

Obsidian Energy Announces Third Quarter 2026 Results

CALGARY, November 5, 2026 - OBSIDIAN ENERGY LTD. (TSX / NYSE American – OBE) (“Obsidian Energy”, the “Company”, “we”, “us” or “our”) is pleased to report our operating and financial results for the third quarter of 2026 (all amounts are in Canadian dollars unless otherwise noted).

Highlights:

•

Average production of 28,113 boe/d in the third quarter, generated strong funds flow from operations of $86.7 million with adjusted funds flow from operations of $80.7 million, excluding a $6.0 million share-based compensation recovery

•

Recent Belly River acquisition outperforming expectations with current production of ~2,600 boe/d

•

Exceptional Belly River results with 01-05 two-well pad producing 2,131 boe/d post cleanup

•

Active second-half capital program with two rigs operating in each of Peace River and Willesden Green, and a third rig mobilizing to Peace River in early December

•

Continued our return of capital initiatives by repurchasing and canceling 0.9 million shares for $13.0 million, at an average price of $15.08 per share


	Three months ended September 30						Nine months ended September 30
	2026			2025			2026			2025
FINANCIAL
(millions, except per share amounts)
Cash flow from operating activities		$	87.0		$	45.4		$	165.2		$	197.3
Basic per share ($/share)1			1.31			0.68			2.47			2.81
Diluted per share ($/share)1			1.26			0.66			2.39			2.74
Funds flow from operations2			86.7			49.7			215.5			215.6
Basic per share ($/share)3			1.31			0.74			3.23			3.07
Diluted per share ($/share)3			1.26			0.72			3.11			2.99
Adjusted funds flow from operations2			80.7			55.2			213.3			219.3
Basic per share ($/share)3			1.22			0.82			3.19			3.12
Diluted per share ($/share)3			1.17			0.80			3.08			3.04
Net income			18.0			16.8			41.3			47.5
Basic per share ($/share)			0.27			0.25			0.62			0.68
Diluted per share ($/share)			0.26			0.24			0.60			0.66
Capital expenditures			75.6			65.3			194.4			233.9
Property acquisitions (dispositions), net			2.7			0.3			101.1			(210.6	)
Decommissioning expenditures			4.0			7.9			7.0			18.5
Long-term debt			339.1			145.4			339.1			145.4
Net debt2		$	363.3		$	219.3		$	363.3		$	219.3

OPERATIONS
Daily Production
Light oil (bbl/d)			6,694			4,979			6,528			7,978
Heavy oil (bbl/d)			9,999			12,586			11,040			11,844
NGL (bbl/d)			2,650			1,955			2,328			2,401
Natural gas (mmcf/d)		53			47			51			56
Total production4 (boe/d)			28,113			27,316			28,346			31,518


Average sales price (before hedging)1
Light oil ($/bbl)	$	117.05		$	86.67		$	116.05		$	94.56
Heavy oil ($/bbl)		93.73		67.93				86.53		66.35
NGL ($/bbl)		43.02		36.44				47.35			44.53
Natural gas ($/mcf)	$	1.63		$	0.91		$	1.87		$	1.77

Netback ($/boe)
Sales price	$	68.31		$	51.26		$	67.66		$	55.39
Risk management gain (loss)		(0.94	)		(0.33	)		(7.06	)		0.02
Net sales price		67.37			50.93			60.60			55.41
Royalties		(11.37	)		(6.56	)		(8.75	)		(7.06	)
Transportation		(4.68	)		(4.46	)		(5.05	)		(4.63	)
Net operating costs3		(15.08	)		(15.01	)		(14.72	)		(14.84	)
Netback3 ($/boe)	$	36.24		$	24.90		$	32.08		$	28.88

(1)

Supplementary financial measure. See ‘Non-GAAP and Other Financial Measures’.

(2)

Non-GAAP financial measure. See ’Non-GAAP and Other Financial Measures’.

(3)

Non-GAAP ratio. See ’Non-GAAP and Other Financial Measures’.

(4)

Please refer to the 'Oil and Gas Information Advisory' section below for information regarding the term "boe".

PRESIDENT'S MESSAGE

“During the third quarter, we made meaningful progress across our light oil and heavy oil portfolios, demonstrating the expanding scale of our development programs in Peace River and Willesden Green,” commented Stephen Loukas, Obsidian Energy’s President and CEO. “With two rigs currently active in each area, we are advancing a balanced portfolio of high-return light and heavy oil opportunities and are reaffirming our ~31,000 boe/d December exit rate. We are particularly encouraged by the outstanding post-cleanup performance of our two Belly River wells at Crimson 01-05, which recently produced 2,131 boe/d, including 65% liquids, over the last 19 days, representing the highest rates we have experienced in the area and further validating another fairway in the play. We are confident that continued refinements to our well clean-up practices will drive significantly improved start-up results and support more stable production.”

“Looking ahead, alongside continued Belly River development, a third drilling rig will be added in Peace River in early December. This will accelerate our winter drilling program and support further expansion of our Clearwater waterflood initiatives. We are also making strategic infrastructure investments, including the planned Wilson Creek / Willesden Green facility integration, the recently completed tank farm expansion at our 13-27 Crimson facility, the ongoing expansion of our Peace River road network, to enhance our operating flexibility and unlock additional high-quality drilling inventory, as well as the addition of incremental waterflood injectors at our Dawson field.”

“Our financial results reflect the quality of our asset base and the benefits of higher realized oil prices, generating third-quarter FFO of $86.7 million and AFFO of $80.7 million. We continued to invest in high-return development opportunities while returning capital to shareholders through the repurchase and cancellation of approximately 0.9 million shares during the third quarter. Through accelerating development programs, advancing infrastructure initiatives, and disciplined capital allocation we are positioned to deliver sustainable growth and long-term shareholder value. Assuming a constructive commodity price environment, we expect average production growth of approximately 20% in 2027 compared to 2026 with potential upside beyond that should commodity prices prove conducive."

2026 THIRD QUARTER Highlights

•

Funds Flow from Operations ("FFO") – The Company generated FFO of $86.7 million ($1.31 per share basic), a substantial increase from $49.7 million ($0.74 per share basic) in the third quarter of 2025. The increase was mainly driven by higher realized oil prices, while higher light oil production also contributed to an improved netback and, consequently, higher FFO. The Company also recorded a $6.0 million share-based compensation recovery, reflecting an unrealized gain on our prepaid equity forward contracts resulting from the increase in our share price from $11.61 at June 30, 2026, to $14.69 at September 30, 2026. We currently have approximately 5.5 million shares contracted at a weighted average price of $9.94 per share.

•

Adjusted Funds Flow from Operations ("AFFO") – The Company generated AFFO of $80.7 million ($1.22 per share basic), up from $55.2 million ($0.82 per share basic) in the third quarter of 2025. Reflecting the Company’s share price appreciation during the third quarter of 2026, the $6.0 million share-based compensation recovery has been excluded from AFFO.

•

Capital Program – The Company continued to advance its second-half capital program, with two rigs operating across each of Peace River and Willesden Green. Third quarter capital expenditures totaled $75.6 million, compared with $65.3 million in 2025, while decommissioning expenditures decreased to $4.0 million from $7.9 million in 2025. The Company also continued to expand its Clearwater waterflood initiatives in Peace River, commissioning eight (8.0 net) injectors since September.

•

Net Operating Costs – Net operating costs were stable in the third quarter of 2026 at $15.08 per boe compared to $15.01 per boe in 2025. During the quarter, the Company completed planned turnarounds as well as additional repair and maintenance activities in Peace River in response to continued wet weather conditions.

•

G&A Costs – General and administrative ("G&A") costs trended slightly lower in the third quarter of 2026 at $4.8 million, or $1.83 per boe, compared to $4.9 million, or $1.95 per boe, in the third quarter of 2025.

•

Net Debt – Net debt was $363.3 million as at September 30, 2026, compared to $240.1 million as at December 31, 2025, reflecting the $98.0 million acquisition of Belly River light oil assets in the Wilson Creek area of Willesden Green (the "Belly River Acquisition"), which closed on June 30, 2026, and our share buyback program.

In July 2026, the Company issued an additional $75.0 million aggregate principal amount of our existing 8.125% senior unsecured notes due December 3, 2030 (the "Notes"), bringing the total aggregate principal amount outstanding to $250.0 million. The effective yield of the new issuance was 7.186%. In addition, we increased the commitment amount under our syndicated credit facility by $25 million to $275 million. Together, these two transactions replaced the liquidity used in the Belly River Acquisition.

•

Share Buyback Program – The Company continued to advance its return-of-capital initiatives during the third quarter of 2026 through its active share buyback program. We repurchased and cancelled approximately 0.9 million shares for $13.0 million, at an average price of $15.08 per share.

We have repurchased and cancelled approximately 19.9 million shares or 24% of our outstanding shares since our normal course issuer bid ("NCIB") program began in 2023 at an average price of $9.08 per share for $180.8 million.

•

Prepaid Equity Forward Program – We entered into prepaid equity forward contracts on a total of 50,000 shares during the third quarter of 2026 for $0.7 million or $13.70 per share.

Since launching this initiative in 2025, the Company has entered into prepaid equity forward contracts covering 5,480,000 shares at a weighted average price of $9.94 per share. These contracts mature in 2028 and 2029, however, we have the ability to monetize or extend them at our discretion, which provides the Company with additional flexibility.

•

Net Income – The Company recorded net income of $18.0 million ($0.27 per share basic) in the third quarter of 2026 compared to net income of $16.8 million ($0.25 per share basic) in 2025. In 2026, net income was driven by strong production revenues mainly due to higher oil prices.

2026 THIRD QUARTER OPERATIONAL HIGHLIGHTS

During the third quarter, the Company continued to advance its light oil and heavy oil growth initiatives through active development programs, expansion of our Clearwater waterflood program, strong well performance and strategic infrastructure investments.

Third-quarter production averaged 28,113 boe/d, compared with 27,316 boe/d in the third quarter of 2025. Production in the third quarter of 2026 was affected by ~600 boe/d due to a third-party compressor downtime affecting the recently acquired Belly River assets during July and August and by weather-related delays to our development program in July. Operations returned to plan in August, and the acquired Belly River assets are now performing above expectations, recently averaging 2,600 boe/d.

Highlights of our development program were as follows:

LIGHT OIL ASSET HIGHLIGHTS

Our light oil program continues to advance at Willesden Green, with strong early results from new Belly River production and infrastructure investments underway to support future growth.

•

Record Belly River Production at Crimson 01-05 — Two (2.0 net) Belly River wells were brought on production on this pad in the third quarter, delivering the strongest rates seen to date in the area. Following a clean-up period consistent with the broader Belly River development, both wells are now flowing at exceptional rates as load water declines.

Average total production on the two-well pad over the last 19 days was 2,131 boe/d (65% liquids), with a water cut of 34%. Comparatively, the pad displayed an IP30 production of approximately 147 boe/d (81% liquids) and a water cut of 59%. The production from the pad continued to increase substantially as the wells progressed through their clean-up period with a large performance improvement after 38 days coinciding with the transition from pumping to flowing.

•

02-17 well is exceeding expectations, producing an exceptional 1,593 boe/d over the last 19 days, including 69% liquids, while water cuts have declined to just 15%.

•

11-29 well also continues to steadily clean up, while delivering strong produced rates of 538 boe/d (60% liquids) and a water cut of 52% over the same period. With load water production continuing at a steady pace, the water cut on the 11-29 well is expected to continue to decline.

•

Belly River Optimization – We continue to optimize cleanup times on our future Belly River wells, having implemented several updated operating practices. These include proactive pump changes and reconfigurations earlier in the clean-up process, and if necessary, utilizing jointed pipe cleanouts to improve flow paths. In addition, following a high-rate production period, pumps are reinstalled with an enhanced downhole configuration to improve run time and pump efficiency. These practices have increased production rates and supported more stable production.

•

Facility Upgrade – We completed a planned upgrade to the tank farm at our Crimson 13-27 facility in October, enhancing infrastructure to support ongoing operations and future production growth in the area.

•

Infrastructure Expansion – We are advancing a strategic infrastructure expansion to integrate our recently acquired Wilson Creek property with our legacy Willesden Green operating area. The project includes a new battery and associated pipelines, creating meaningful additional capacity to support future production growth and development. Construction is expected to begin in late 2026, with the battery anticipated to be completed in 2027.

HEAVY OIL ASSET HIGHLIGHTS

Our Heavy Oil program in Peace River continued to advance during the third quarter, with two drilling rigs active in the area resulting in 11 (11.0 net) wells rig released, including four (4.0 net) Clearwater injection wells. A third rig is scheduled to mobilize in early December, supporting the expansion of our winter heavy oil drilling program and accelerating production growth in the area.

•

Strong Production Results – Five (5.0 net) producing wells were brought on production during the quarter, with results as follows:

HVS 16-18 Bluesky pad: two (2.0 net) wells achieved an average IP30 of 408 boe/d per well (100% oil). The third and final well on the pad was brought on production in early October and has attained an average IP20 of 181 boe/d (100% oil).

Dawson 08-24 Clearwater pad: three (3.0 net) wells achieved an average IP30 of 196 boe/d per well (100% oil).

•

Clearwater Waterflood Expansion – We now have 16 (16.0 net) Clearwater injection wells operating across approved enhanced oil recovery waterflood patterns in the Dawson, Nampa and West Dawson fields. Of these, eight injectors (8.0 net) are new: six (6.0 net) commenced injection in September and October, while two (2.0 net) are being commissioned. These wells continue to support the Company’s integrated, full-field waterflood development strategy.

•

Infrastructure Advancement – Construction of the North Walrus all-season access road is ongoing. The road will support production reactivation and provide access to additional near-term drilling inventory and exploration opportunities.

wells rig released and on production 2026


	Q1-Q3 2026	Q4 2026E	2026E
	Gross (Net) Wells	Gross (Net) Wells	Gross (Net) Wells

Heavy Oil Assets
Peace River (Bluesky)	5 (5.0)	4 (3.7)	9 (8.7)
Peace River (Clearwater)	12 (12.0)	3 (3.0)	15 (15.0)

Light Oil Assets
Willesden Green (Cardium)	1 (1.0)	3 (3.0)	4 (4.0)
Willesden Green (Belly River)	11 (11.0)	10 (10.0)	21 (21.0)

New Ventures
New Ventures	1 (1.0)	1 (1.0)	2 (2.0)

Development wells	30 (30.0)	21 (20.7)	51 (50.7)

Injector Wells	12 (12.0)	7 (7.0)	19 (19.0)

Total Operated Wells1	42 (42.0)	28 (27.7)	70 (69.7)

(1)

Including the last well of our 2025 program rig released on January 2, 2026

(2)

In addition, Obsidian Energy expects to participate in 10 (4.5 net) non-operated wells

HEDGING UPDATE

Currently, we have the following contracts outstanding on a weighted average basis:


Type	Volume (bbls/d)		Remaining Term		Price (US$/bbl)
Oil
WTI Collar		7,300	November 2026	$	88.40 - 100.02
WTI Collar		750	December 2026		97.00 - 107.00
WTI Collar		1,200	January 2027 - June 2027	$	82.81 - 95.44


Type		Notional Amount ($ millions)		Remaining Term		Price (C$)
FX forward contract	$		19.6	November 2026	$		1.4088
FX forward contract	$		21.1	December 2026	$		1.4126


Type	Volume (mcf/d)		Remaining Term		Price (C$/mcf)
Natural Gas
AECO Swap		9,479	November 2026 - March 2027	$		2.95


Type	Volume (bbls/d)		Remaining Term		Price (US$/bbl)
WCS Differential (Physical)
WCS Differential		1,630	November 2026	$		17.25
WCS Differential		1,630	December 2026	$		17.25


Type	Share Volume		Remaining Term (1)		Price (C$)
Equity
Equity Forward Contract		720,000	September 2028	$		8.89
Equity Forward Contract		1,300,000	October 2028			8.72
Equity Forward Contract		550,000	November 2028			8.43
Equity Forward Contract		715,000	December 2028			8.31
Equity Forward Contract		450,000	January 2029			8.76
Equity Forward Contract		680,000	February 2029			10.18
Equity Forward Contract		710,000	April 2029			13.82
Equity Forward Contract		85,000	June 2029			15.10
Equity Forward Contract		50,000	August 2029			13.70
Equity Forward Contract		220,000	November 2029	$		15.87

Total share volume		5,480,000	Weighted average price	$		9.94

(1)

The Company can settle the contract, or a portion of the contract, at any time.

UPDATED CORPORATE PRESENTATION

For further information on these and other matters, Obsidian Energy will post an updated corporate presentation on our website, www.obsidianenergy.com, in due course.

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 is headquartered in Calgary and is listed on the Toronto Stock Exchange and NYSE American (TSX / NYSE American: OBE). To learn more, visit Obsidian Energy’s website.

ADDITIONAL READER ADVISORIES

OIL AND GAS INFORMATION ADVISORY

Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of crude oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

TEST RESULTS AND INITIAL PRODUCTION RATES

Test results and initial production rates disclosed herein, particularly those short in duration, may not necessarily be indicative of long-term performance or of ultimate recovery. Readers are cautioned that short-term rates should not be relied upon as indicators of future performance of these wells and therefore should not be relied upon for investment or other purposes. A pressure transient analysis or well-test interpretation has not been carried out and thus certain of the test results provided herein should be considered preliminary until such analysis or interpretation has been completed.

NON-GAAP AND OTHER FINANCIAL MEASURES

Throughout this news release and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position, and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures provided by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income and cash flow from operating activities as indicators of our performance. The interim consolidated financial statements and MD&A for the three and nine months ended September 30, 2026, will be available in due course on the Company's website at www.obsidianenergy.com and under our SEDAR+ profile at www.sedarplus.ca and EDGAR profile at www.sec.gov. The disclosure under the section ’Non-GAAP and Other Financial Measures’ in the MD&A is incorporated by reference into this news release.

Non-GAAP Financial Measures

The following measures are non-GAAP financial measures: AFFO; FFO, free cash flow (“FCF”), netback, net debt and net operating costs. These non-GAAP financial measures are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See the disclosure under the section ’Non-GAAP and Other Financial Measures’ in our MD&A for the three and nine months ended September 30, 2026, for an explanation of the composition of these measures, how these measures provide useful information to an investor, and the additional purposes, if any, for which management uses these measures.

For a reconciliation of AFFO to cash flow from operating activities, being our nearest measure prescribed by IFRS, see ’Non-GAAP Measures Reconciliations’ below.

For a reconciliation of FFO to cash flow from operating activities, being our nearest measure prescribed by IFRS, see ’Non-GAAP Measures Reconciliations’ below.

For a reconciliation of FCF to cash flow from operating activities, being our nearest measure prescribed by IFRS, see ’Non-GAAP Measures Reconciliations’ below.

For a reconciliation of netback to sales price, being our nearest measure prescribed by IFRS, see ’Non-GAAP Measures Reconciliations’ below.

For a reconciliation of net debt to long-term debt, being our nearest measure prescribed by IFRS, see ’Non-GAAP Measures Reconciliations’ below.

For a reconciliation of net operating costs to operating costs, being our nearest measure prescribed by IFRS, see ’Non-GAAP Measures Reconciliations’ below.

Non-GAAP Ratios

The following measures are non-GAAP ratios: AFFO (basic per share ($/share) and diluted per share ($/share)), which use AFFO as a component; FFO (basic per share ($/share) and diluted per share ($/share)), which use FFO as a component; netback ($/boe), which uses netback as a component; net debt to FFO, which uses net debt and FFO as components; and net operating costs ($/boe), which uses net operating costs as a component. These non-GAAP ratios are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See the disclosure under the section ’Non-GAAP and Other Financial Measures’ in our MD&A for the three and nine months ended September 30, 2026, for an explanation of the composition of these non-GAAP ratios, how these non-GAAP ratios provide useful information to an investor, and the additional purposes, if any, for which management uses these non-GAAP ratios.

Supplementary Financial Measures

The following measures are supplementary financial measures: average sales price; cash flow from operating activities (basic per share and diluted per share); and G&A costs ($/boe). See the disclosure under the section ’Non-GAAP and Other Financial Measures’ in our MD&A for the three and nine months ended September 30, 2026, for an explanation of the composition of these measures.

Non-GAAP Measures Reconciliations

Cash Flow from Operating Activities, FFO, AFFO and FCF


	Three months ended September 30						Nine months ended September 30
(millions, except per share amounts)	2026			2025			2026			2025
Cash flow from operating activities	$	87.0		$	45.4		$	165.2		$	197.3
Change in non-cash working capital		(20.7	)		(11.6	)		(6.9	)		(13.1	)
Decommissioning expenditures		4.0			7.9			7.0			18.5
Equity forward contracts		16.8			7.4			49.2			7.4
Onerous office lease settlements		-			-			-			0.7
Deferred financing costs		(0.4	)		(0.4	)		(1.3	)		(1.4	)
Restructuring charges		0.4			0.1			0.7			0.9
Transaction costs		0.2			0.9			1.4			5.3
Other expenses		(0.7	)		-			0.1			-
Settlement of restricted share units		0.1			-			0.1			-
FFO		86.7			49.7			215.5			215.6
Deferred share units		6.8			3.3			13.9			2.1
Performance share units		3.3			2.3			10.9			1.7
Equity forward contracts gain (loss)		(16.1	)		(0.1	)		(27.0	)		(0.1	)
AFFO	$	80.7		$	55.2		$	213.3		$	219.3
Capital expenditures		(75.6	)		(65.3	)		(194.4	)		(233.9	)
Decommissioning expenditures		(4.0	)		(7.9	)		(7.0	)		(18.5	)
Free Cash Flow	$	1.1		$	(18.0	)	$	11.9		$	(33.1	)

Netback to Sales Price



	Three months ended September 30						Nine months ended September 30
(millions)	2026			2025			2026			2025
Sales price	$	176.6		$	128.8		$	523.5		$	476.6
Risk management gain (loss)		(2.4	)		(0.8	)		(54.6	)		0.2
Royalties		(29.4	)		(16.5	)		(67.7	)		(60.8	)
Transportation		(12.1	)		(11.2	)		(39.1	)		(39.8	)
Net operating costs		(38.9	)		(37.7	)		(113.8	)		(127.7	)
Netback	$	93.8		$	62.6		$	248.3		$	248.5

Net Operating Costs to Operating Costs



	Three months ended September 30							Nine months ended September 30
(millions)		2026			2025				2026			2025
Operating costs		$	42.5		$	41.3			$	124.5		$	140.0
Less processing fees			(2.0	)		(1.7	)			(6.1	)		(7.1	)
Less road use recoveries			(1.6	)		(1.9	)			(4.6	)		(5.2	)
Net operating costs		$	38.9		$	37.7			$	113.8		$	127.7

Net Debt to Long-Term Debt


	As at September 30
(millions)		2026			2025
Long-term debt
Syndicated credit facility		$	92.0		$	67.0
Senior unsecured notes (8.125%, maturing December 3, 2030)			250.0			-
Senior unsecured notes (11.95%, maturing July 27, 2027)			-			80.8
Unamortized premium (discount) of senior unsecured notes			2.0			(0.6	)
Deferred financing costs			(4.9	)		(1.8	)
Total			339.1			145.4

Working capital deficiency
Cash			(0.8	)		(1.0	)
Accounts receivable			(91.8	)		(60.9	)
Prepaid expenses and other			(14.4	)		(13.4	)
Prepaid equity forward contracts1			(77.3	)		(7.4	)
Accounts payable and accrued liabilities			208.5			149.2
Total			24.2			66.5

Net debt		$	363.3		$	211.9

(1)

The Company includes prepaid equity forward contracts in our working capital deficiency given we have paid for these contracts upon entering them and the corresponding share-based compensation liabilities are included in Accounts Payable and Accrued Liabilities.

ABBREVIATIONS


Oil		Natural Gas
bbl	barrel or barrels	mcf	thousand cubic feet
bbl/d	barrels per day	mcf/d	thousand cubic feet per day
boe	barrel of oil equivalent	mmcf	million cubic feet
boe/d	barrels of oil equivalent per day	mmcf/d	million cubic feet per day
MSW	Mixed Sweet Blend	mmbtu	Million British thermal unit
WTI	West Texas Intermediate	AECO	Alberta benchmark price for natural gas
WCS	Western Canadian Select	NGL	natural gas liquids
cP	Centipoise	GJ	gigajoule

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute forward-looking statements or information (collectively “forward-looking statements”) within the meaning of the "safe harbour" provisions of applicable securities legislation. Forward-looking statements are typically identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “budget”, “may”, “will”, “project”, “could”, “plan”, “intend”, “should”, “believe”, “outlook”, “objective”, “aim”, “potential”, “target” and similar words suggesting future events or future performance. In addition, statements relating to “reserves” or “resources” are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this document contains forward-looking statements pertaining to, without limitation, the following: our expectations for drilling rigs in the future; our expectation for clean-up practices and the impact that they will have; our winter drilling program and expansion of our waterflood initiatives; our expected 2026 exit production rate; our facility and road expansion expectations and timelines; how we plan to deliver sustainable growth and long-term shareholder value; our expected average production growth in 2027 compared with 2026 based on certain commodity price assumptions; our flexibility in connection with monetizing or extending our prepaid equity forward contracts in the future; our expected rig start, release and on production dates; our expected development

program; our hedges; and that we will file our updated corporate presentation and interim consolidated financial statements and MD&A on our website, SEDAR+ and EDGAR in due course.

With respect to forward-looking statements contained in this document, the Company has made assumptions regarding, among other things: the duration and impact of tariffs that are currently in effect on goods exported from or imported into Canada, and that other than the tariffs that are currently in effect, neither the U.S. nor Canada (i) increases the rate or scope of such tariffs, reenacts tariffs that are currently suspended, or imposes new tariffs, on the import of goods from one country to the other, including on oil and natural gas, and/or (ii) imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas; that the Company does not dispose of or acquire material producing properties or royalties or other interests therein (except as disclosed herein); that regional and/or global health-related events will not have any adverse impact on energy demand and commodity prices in the future; global energy policies going forward, including the continued ability and willingness of members of OPEC and other nations to agree on and adhere to production quotas from time to time; our ability to execute our plans as described herein and in our other disclosure documents, and the impact that the successful execution of such plans will have on our Company and our stakeholders, including our ability to return capital to shareholders and/or further reduce debt levels; future capital expenditure and decommissioning expenditure levels; expectations and assumptions concerning applicable laws and regulations, including with respect to environmental, safety and tax matters; future operating costs and G&A costs and the impact of inflation thereon; future oil, natural gas liquids and natural gas prices and differentials between light, medium and heavy oil prices and Canadian, WTI and world oil and natural gas prices; future hedging activities; future oil, natural gas liquids and natural gas production levels; future exchange rates, interest rates and inflation rates; future debt levels; our ability to execute our capital programs as planned without significant adverse impacts from various factors beyond our control, including extreme weather events such as wild fires, flooding and drought, infrastructure access (including the potential for blockades or other activism) and delays in obtaining regulatory approvals and third party consents; the ability of the Company's contractual counterparties to perform their contractual obligations; our ability to obtain equipment in a timely manner to carry out development activities and the costs thereof; our ability to market our oil and natural gas successfully to current and new customers; our ability to obtain financing on acceptable terms, including our ability (if necessary) to extend the revolving period and term out period of our credit facility, our ability to maintain the existing borrowing base under our credit facility, our ability (if necessary) to replace our syndicated bank facility and our ability (if necessary) to finance the repayment of our senior unsecured notes on maturity or pursuant to the terms of the underlying agreement; the accuracy of our estimated reserve volumes; and our ability to add production and reserves through our development and exploitation activities.

The future acquisition by the Company of the Company's common shares pursuant to its share buyback program (including through its NCIB), if any, and the level thereof is uncertain. Any decision to acquire common shares of the Company pursuant to the share buyback program will be subject to the discretion of the board of directors of the Company and may depend on a variety of factors, including, without limitation, the Company's business performance, financial condition, financial requirements, growth plans, expected capital requirements and other conditions existing at such future time including, without limitation, contractual restrictions and satisfaction of the solvency tests imposed on the Company under applicable corporate law. There can be no assurance of the number of common shares of the Company that the Company will acquire pursuant to its share buyback program, if any, in the future.

Although the Company believes that the expectations reflected in the forward-looking statements contained in this document, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the forward-looking statements contained herein will not be correct, which may cause our actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or

implied by such forward-looking statements. These risks and uncertainties include, among other things: the risk that (i) the tariffs that are currently in effect on goods exported from or imported into Canada continue in effect for an extended period of time, the tariffs that have been threatened are implemented, that tariffs that are currently suspended are reactivated, the rate or scope of tariffs are increased, or new tariffs are imposed, including on oil and natural gas, (ii) the U.S. and/or Canada imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas, and (iii) the tariffs imposed or threatened to be imposed by the U.S. on other countries and retaliatory tariffs imposed or threatened to be imposed by other countries on the U.S., will trigger a broader global trade war which could have a material adverse effect on the Canadian, U.S. and global economies, and by extension the Canadian oil and natural gas industry and the Company, including by decreasing demand for (and the price of) oil and natural gas, disrupting supply chains, increasing costs, causing volatility in global financial markets, and limiting access to financing; risks associated with the refusal of the U.S. to renew the Canada-United States-Mexico Agreement ("CUSMA") by the July 1, 2026 deadline, including the risk that the U.S. ultimately withdraws from CUSMA or that CUSMA is renegotiated and renewed on terms that are less favourable to Canada, either of which could result in a significant increase in trade barriers, which could in turn have a material adverse effect on the Canadian and U.S. economies, and by extension the Canadian oil and natural gas industry and the Company; the possibility that we change our budgets (including our capital expenditure budgets) in response to internal and external factors, including those described herein; the possibility that the Company will not be able to continue to successfully execute our business plans and strategies in part or in full, and the possibility that some or all of the benefits that the Company anticipates will accrue to our Company and our stakeholders as a result of the successful execution of such plans and strategies do not materialize (such as our inability to return capital to shareholders and/or reduce debt levels to the extent anticipated or at all); the impact on energy demand and commodity prices of regional and/or global health-related events and the responses of governments and the public thereto, including the risk that the amount of energy demand destruction and/or the length of the decreased demand exceeds our expectations; the risk that the financial capacity of the Company's contractual counterparties is adversely affected and potentially their ability to perform their contractual obligations; the possibility that the revolving period and/or term out period of our credit facility and the maturity date of our senior unsecured notes is not extended (if necessary), that the borrowing base under our credit facility is reduced, that the Company is unable to renew or refinance our credit facilities on acceptable terms or at all and/or finance the repayment of our senior unsecured notes when they mature on acceptable terms or at all and/or obtain new debt and/or equity financing to replace our credit facilities and/or senior unsecured notes or to fund other activities; the possibility that we are unable to complete one or more repurchase offers pursuant to our senior unsecured notes when otherwise required to do so; the possibility that we are forced to shut-in production, whether due to commodity prices decreasing, extreme weather events such as wild fires, inability to access our properties due to blockades or other activism, or other factors; the risk that OPEC and other nations fail to agree on and/or adhere to production quotas from time to time that are sufficient to balance supply and demand fundamentals for oil; general economic and political conditions in Canada, the U.S. and globally, and in particular, the effect that those conditions have on commodity prices and our access to capital; industry conditions, including fluctuations in the price of oil, natural gas liquids and natural gas, price differentials for oil and natural gas produced in Canada as compared to other markets, and transportation restrictions, including pipeline and railway capacity constraints; fluctuations in foreign exchange, including the impact of the Canadian/U.S. dollar exchange rate on our revenues and expenses; fluctuations in interest rates, including the effects of interest rates on our borrowing costs and on economic activity, and including the risk that elevated interest rates cause or contribute to the onset of a recession; the risk that our costs increase due to inflation, supply chain disruptions, scarcity of labour and/or other factors, adversely affecting our profitability; unanticipated operating events or environmental events that can reduce production or cause production to be shut-in or delayed (including extreme cold during winter months, wild fires, flooding and droughts (which could limit our access to the water we require for our operations)); the risk that wars and other armed conflicts adversely affect world economies and the demand for oil and natural gas, including the ongoing war between Russian and Ukraine and/or hostilities in the Middle East, particularly between Iran, the United States and Israel; the possibility that fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to hydrocarbons, government mandates requiring the sale of electric vehicles and/or electrification of the power grid, and technological advances in fuel economy and renewable

energy generation systems could permanently reduce the demand for oil and natural gas and/or permanently impair the Company's ability to obtain financing and/or insurance on acceptable terms or at all, and the possibility that some or all of these risks are heightened as a result of the response of governments, financial institutions and consumers to a regional and/or global health-related event and/or the influence of public opinion and/or special interest groups.

Additional information on these and other factors that could affect Obsidian Energy, or its operations or financial results, is included in the Company's Annual Information Form (see ’Risk Factors’ and ’Forward-Looking Statements’ therein) which may be accessed through the SEDAR+ website (www.sedarplus.ca), EDGAR website (www.sec.gov) or Obsidian Energy's website. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

Unless otherwise specified, the forward-looking statements contained in this document speak only as of the date of this document. Except as expressly required by applicable securities laws, we do not undertake any obligation to publicly update or revise any forward-looking statements. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

All figures are in Canadian dollars unless otherwise stated.

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

E-mail: investor.relations@obsidianenergy.com

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2026

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) of Obsidian Energy Ltd. (“Obsidian Energy”, the “Company”, “we”, “us”, “our”) should be read in conjunction with the Company's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2026 and the Company’s audited consolidated financial statements and MD&A for the year ended December 31, 2025. The date of this MD&A is November 4, 2026. All dollar amounts contained in this MD&A are expressed in millions of Canadian dollars unless noted otherwise.

Throughout this MD&A and in other materials disclosed by the Company, we adhere to generally accepted accounting principles ("GAAP"), however the Company also employs certain non-GAAP measures to analyze financial performance, financial position, and cash flow, including funds flow from operations, adjusted funds flow from operations, netback, sales, gross revenues, net operating costs, net debt and free cash flow. Additionally, other financial measures are also used to analyze performance. These non-GAAP and other financial measures do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and therefore may not be comparable to similar measures provided by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income (loss) and cash flow from operating activities, as indicators of our performance.

This MD&A also contains oil and natural gas information and forward-looking statements. Please see the Company's disclosure under the headings "Non-GAAP and Other Financial Measures", "Oil and Natural Gas Information", and "Forward-Looking Statements" included at the end of this MD&A.

Quarterly Financial Summary

(millions, except per share and production amounts) (unaudited)


	Sep. 30		Jun. 30		Mar. 31			Dec. 31			Sep. 30		Jun. 30		Mar. 31		Dec. 31
Three months ended	2026		2026		2026			2025			2025		2025		2025		2024
Production revenues	$	176.4	$	197.7	$	148.7		$	123.8		$	128.7	$	136.3	$	211.0	$	213.6
Cash flow from operating activities		87.0		38.2		40.0			42.6			45.4		55.2		96.7		115.0
Basic per share (1)		1.31		0.57		0.59			0.63			0.68		0.79		1.32		1.55
Diluted per share (1)		1.26		0.55		0.59			0.62			0.66		0.75		1.27		1.49
Funds flow from operations (2)		86.7		67.8		61.0			56.6			49.7		65.8		100.1		107.7
Basic per share (3)		1.31		1.02		0.91			0.84			0.74		0.94		1.36		1.45
Diluted per share (3)		1.26		0.98		0.91			0.82			0.72		0.90		1.31		1.39
Adjusted funds flow from operations (2)		80.7		73.6		59.0			56.3			55.2		63.2		100.9		109.0
Basic per share (3)		1.22		1.10		0.88			0.84			0.82		0.90		1.37		1.47
Diluted per share (3)		1.17		1.06		0.88			0.81			0.80		0.86		1.32		1.47
Net income (loss)		18.0		42.0		(18.7	)		(12.3	)		16.8		15.3		15.4		(284.8	)
Basic per share		0.27		0.63		(0.28	)		(0.18	)		0.25		0.22		0.21		(3.83	)
Diluted per share	$	0.26	$	0.61	$	(0.28	)	$	(0.18	)	$	0.24	$	0.21	$	0.20	$	(3.83	)
Production
Light oil (bbl/d)		6,694		6,696		6,189			5,443			4,979		6,314		12,727		13,271
Heavy oil (bbl/d)		9,999		10,757		12,390			12,782			12,586		12,041		10,887		11,621
NGLs (bbl/d)		2,650		2,237		2,088			2,037			1,955		2,189		3,072		3,176
Natural gas (mmcf/d)		53		51		48			46			47		50		70		72
Total (boe/d)(4)		28,113		28,200		28,733			27,971			27,316		28,943		38,416		40,119

(1)

Supplementary financial measure. See "Non-GAAP and Other Financial Measures".

(2)

Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

(3)

Non-GAAP ratio. See "Non-GAAP and Other Financial Measures".

(4)

Disclosure of production on a per boe basis in this MD&A consists of the constituent product types and their respective quantities. See also "Supplemental Production Disclosure" and "Oil and Natural Gas Information".

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  1

Cash flow from Operating Activities, Funds Flow from Operations, Adjusted Funds Flow from Operations and Free Cash Flow


	Three months ended September 30						Nine months ended September 30
(millions, except per share amounts)	2026			2025			2026			2025
Cash flow from operating activities	$	87.0		$	45.4		$	165.2		$	197.3
Change in non-cash working capital		(20.7	)		(11.6	)		(6.9	)		(13.1	)
Decommissioning expenditures		4.0			7.9			7.0			18.5
Equity forward contracts		16.8			7.4			49.2			7.4
Onerous office lease settlements		-			-			-			0.7
Settlement of restricted share units		0.1			-			0.1			-
Deferred financing costs		(0.4	)		(0.4	)		(1.3	)		(1.4	)
Restructuring		0.4			0.1			0.7			0.9
Transaction costs		0.2			0.9			1.4			5.3
Other expenses		(0.7	)		-			0.1			-
Funds flow from operations (1)		86.7			49.7			215.5			215.6
Deferred share units		6.8			3.3			13.9			2.1
Performance share units		3.3			2.3			10.9			1.7
Equity forward contracts gain		(16.1	)		(0.1	)		(27.0	)		(0.1	)
Adjusted funds flow from operations (1)		80.7			55.2			213.3			219.3
Capital expenditures		(75.6	)		(65.3	)		(194.4	)		(233.9	)
Decommissioning expenditures		(4.0	)		(7.9	)		(7.0	)		(18.5	)
Free Cash Flow (1)	$	1.1		$	(18.0	)	$	11.9		$	(33.1	)

Per share – funds flow from operations (2)
Basic per share	$	1.31		$	0.74		$	3.23		$	3.07
Diluted per share	$	1.26		$	0.72		$	3.11		$	2.99

Per share – adjusted funds flow from operations (2)
Basic per share	$	1.22		$	0.82		$	3.19		$	3.12
Diluted per share	$	1.17		$	0.80		$	3.08		$	3.04

(1)

Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

(2)

Non-GAAP ratio. See "Non-GAAP and Other Financial Measures".

Cash flow from operating activities, funds flow from operations and adjusted funds flow from operations in Q3 2026 were higher than Q3 2025, primarily due to higher realized oil prices and higher production.

For the first nine months of 2026, funds flow from operations and adjusted funds flow from operations were relatively consistent with the comparable period in 2025, as realized risk management losses combined with lower production volumes, mainly due to the disposition of our operated Pembina assets (the "Pembina Disposition") early in 2025, were offset by higher oil prices. Cash flow from operating activities decreased from the 2025 period as we entered into additional prepaid equity forward contracts in the 2026 period to help mitigate our share-based compensation exposure.

Belly River Acquisition

On June 30, 2026, the Company closed an asset acquisition to acquire high-return Belly River light oil assets in the Wilson Creek area of Willesden Green (the “Belly River Acquisition”), which included approximately 2,500 boe/d of Belly River production (based on May 2026 production) and 35 net sections of land. Total consideration paid was $98.0 million, inclusive of closing adjustments. This acquisition complements our existing lands, adding a number of drilling locations and further supporting our growth strategy in the Willesden Green area.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  2

In addition, a contingent value payment (“CVP”) of up to $7.0 million may be payable in quarterly installments of up to $1.75 million from Q3 2026 through to Q2 2027, subject to a range of average West Texas Intermediate ("WTI") oil prices in the applicable quarter. Based on the average WTI price for Q3 2026, no CVP payment was made. As a result, the maximum CVP payment is now $5.25 million. As at September 30, 2026, the Company recognized a $2.6 million provision in Other expenses for potential CVP payments over the remaining three quarters, based on forecast WTI prices.

Pembina Disposition

On April 7, 2025, the Company closed the Pembina Disposition to InPlay Oil Corp. ("InPlay") of our operated Pembina (Cardium) assets (the "Pembina Assets"). Total consideration for the transaction included $208.3 million of cash (inclusive of final closing adjustments), 9,139,784 common shares of InPlay, after giving effect to InPlay's consolidation of its common shares on a one for six basis effective April 14, 2025, ("InPlay Shares") and a $14.7 million value associated with acquiring InPlay's 34.6 percent interest in the Willesden Green Cardium Unit #2 property. The transaction included all the Company's assets in Pembina, with the exception of our non-operated interest in Pembina Cardium Unit #11 which we retained. As part of the transaction, InPlay assumed all assets and liabilities associated with the Pembina Assets, including the Company’s decommissioning liabilities.

In August 2025, the Company closed the sale of all of our InPlay Shares to a third party, for proceeds of $91.4 million, resulting in a $15.2 million gain.

This transaction further strengthened our balance sheet while reducing our decommissioning liabilities by over 50 percent, with the cash proceeds from the transaction used to initially pay down outstanding debt on our syndicated credit facility at closing and subsequently used to accelerate our share buyback program.

Business Strategy

The Company has a high-quality, balanced portfolio of heavy and light oil assets with significant development opportunities that support our long-term growth strategy. In Peace River, since 2023, we have doubled production through a focused development program. With a land base of approximately 830 net sections, we expect to continue growing Clearwater and Bluesky production through the development and delineation of existing and new fields. We also continue to advance our enhanced oil recovery strategy through waterflood initiatives and are encouraged by the results to date. We are continuing to advance these initiatives in the second half of 2026.

In Willesden Green, we also expect to grow our light oil production through ongoing development. The Company began developing the Belly River formation in 2025 and expanded development activity in the formation in the first half of 2026, supported by strong results and expanded infrastructure. Our recent Belly River Acquisition in the area further strengthens this opportunity, and we expect to accelerate growth by leveraging our larger production base and expanded operational footprint. The pace of future development across our heavy and light oil assets will depend on the macroeconomic environment, including commodity prices and service costs, as we seek to generate attractive returns while maintaining the Company's financial strength.

Alongside investing in high-return development opportunities, we remain committed to disciplined capital allocation and enhancing shareholder returns. In 2023, we launched our return of capital initiative through our normal course issuer bid ("NCIB"). The NCIB has enhanced shareholder returns through a disciplined focus on per-share growth. Repurchases under the NCIB are subject to maintaining at least $65 million of liquidity and complying with the terms of our current credit facilities. Since launching the NCIB in 2023, we have repurchased and cancelled approximately 19.9 million common shares, representing approximately 24 percent of the shares outstanding when the program commenced, for total consideration of $180.8 million or an average purchase price of $9.08 per share.

In addition to our NCIB, we have implemented capital management initiatives to support shareholder value and manage financial risk. In 2025, the Company began mitigating its share-based compensation exposure by entering into prepaid equity forward contracts. To date, the Company has entered into prepaid equity forward contracts covering a total of 5,480,000 shares at a weighted average share price of $9.94. The contracts expire between 2028 and 2029; however, the Company may monetize them at our discretion prior to expiry.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  3

Beyond investing in our asset base and returning capital to shareholders, we remain committed to responsible environmental stewardship. We continued with our environmental remediation efforts in the first nine months of 2026 with a focus on abandoning and reclaiming inactive fields.

Business Environment

The following table outlines quarterly averages for benchmark prices and Obsidian Energy’s realized prices for the previous eight quarters.


	Q3 2026			Q2 2026			Q1 2026			Q4 2025			Q3 2025			Q2 2025			Q1 2025			Q4 2024
Benchmark prices
WTI oil ($US/bbl)	$	85.79		$	92.79		$	71.93		$	59.14		$	64.93		$	63.74		$	71.42		$	70.27
Edm mixed sweet par price (CAD$/bbl)		119.24			131.53			93.39			76.30			86.57			84.04			95.00			94.39
Western Canada Select (CAD$/bbl)		100.69			107.89			79.19			66.65			75.28			73.89			84.04			80.67
NYMEX Henry Hub ($US/mmbtu)		2.95			2.90			5.04			3.55			3.07			3.44			3.65			2.79
AECO 5A Index (CAD$/mcf)		1.57			1.63			2.01			2.23			0.60			1.69			2.17			1.48
Foreign exchange rate ($US/CAD$)		1.40			1.38			1.37			1.39			1.38			1.38			1.43			1.40

Benchmark differentials
WTI - Edm Light Sweet ($US/bbl)		(0.62	)		2.52			(3.76	)		(4.25	)		(2.20	)		(2.84	)		(4.98	)		(2.42	)
WTI - Western Canadian Select Heavy ($US/bbl)		(13.87	)		(14.61	)		(14.13	)		(11.19	)		(10.38	)		(10.20	)		(12.65	)		(12.54	)

Average sales price (1) (2)
Light oil (CAD$/bbl)		117.05			132.25			97.23			75.30			86.67			91.09			99.46			96.95
Heavy oil (CAD$/bbl)		93.73			99.28			69.40			59.10			67.93			61.27			70.14			67.70
NGLs (CAD$/bbl)		43.02			62.00			37.11			35.33			36.44			39.42			53.49			44.27
Total liquids (CAD$/bbl)		94.85			106.25			74.47			61.07			69.56			68.11			82.21			78.88
Natural gas (CAD$/mcf)	$	1.63		$	1.65		$	2.38		$	2.38		$	0.91		$	2.00		$	2.18		$	1.53

(1)

Excludes the impact of realized hedging gains or losses.

(2)

Supplementary financial measures. See "Non-GAAP and Other Financial Measures".

Oil

WTI averaged US$85.79/bbl in Q3 2026, down from US$92.79/bbl in Q2 2026. Prices were volatile, rising from approximately US$70/bbl in early July to the peak of approximately US$105/bbl in mid-September. Middle Eastern supply risks, including uncertainty around shipments through the Strait of Hormuz and disruptions to energy infrastructure, contributed to the increase later in the quarter.

WCS differentials averaged US$13.87/bbl in Q3 2026, compared with US$14.61/bbl in Q2. Despite the narrower quarterly average, the differential widened from US$12.06/bbl in July to US$15.32/bbl in September as Canadian heavy oil supply rebounded and export flows began to normalize. Recently, WCS differentials widened to greater than US$25/bbl, driven by refinery maintenance temporarily reducing demand, higher shipping costs stemming from the Middle East conflict, and increased Venezuelan supply at the U.S. Gulf Coast.

MSW traded at an average discount to WTI of US$0.62/bbl, weaker than in Q2 and more consistent with its typical relationship to WTI.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  4

The Company currently has the following oil hedging contracts in place on a weighted average basis:


Type	Volume (bbls/d)		Remaining Term		Price (US$/bbl)
WTI Collar		7,300	November 2026	$	88.40 - 100.02
WTI Collar		750	December 2026		97.00 - 107.00
WTI Collar		1,200	January 2027 - June 2027	$	82.81 - 95.44

In addition, the Company has a physical WCS differential contract in place for Q4 2026 on 1,630 bbl/d of production at a price of US$17.25/bbl.

Natural Gas

The NYMEX natural gas futures price averaged US$2.95/MMBtu in Q3 2026, compared with US$2.90/MMBtu in Q2. In Alberta, AECO 5A averaged C$1.57/mcf, largely unchanged from Q2.

The Company currently has the following natural gas hedging contracts in place on a weighted average basis:


Type	Volume (mcf/d)		Remaining Term		Price ($/mcf)
AECO Swap		9,479	November 2026 - March 2027	$		2.95

Foreign Exchange Forward Contracts

The Company enters into foreign exchange forward contracts to mitigate the risk of changes in the $US/$CAD exchange rate on oil sales that reference $US benchmark prices and commodity hedging contracts that are settled in $US. The Company currently has the following contracts in place on a weighted average basis:


Type		Notional Amount ($ millions)		Remaining Term		Price (C$)
FX forward contract	$		19.6	November 2026	$		1.4088
FX forward contract	$		21.1	December 2026	$		1.4126

Prepaid Equity Forward Contracts

In Q3 2025, the Company began entering into prepaid equity forward contracts in respect of our common shares to mitigate the equity price risk associated with our share-based compensation plans. The Company currently has the following contracts in place on a weighted average basis:


Type	Share Volume		Remaining Term (1)		Price (C$)
Equity Forward Contract		720,000	September 2028	$		8.89
Equity Forward Contract		1,300,000	October 2028			8.72
Equity Forward Contract		550,000	November 2028			8.43
Equity Forward Contract		715,000	December 2028			8.31
Equity Forward Contract		450,000	January 2029			8.76
Equity Forward Contract		680,000	February 2029			10.18
Equity Forward Contract		710,000	April 2029			13.82
Equity Forward Contract		85,000	June 2029			15.10
Equity Forward Contract		50,000	August 2029			13.70
Equity Forward Contract		220,000	November 2029	$		15.87

Total share volume		5,480,000	Weighted average price	$		9.94

(1)

The Company can settle the contract, or a portion of the contract, at any time.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  5

RESULTS OF OPERATIONS

Average Sales Prices (1)


	Three months ended September 30								Nine months ended September 30
	2026			2025			% change		2026			2025			% change
Light oil (per bbl)	$	117.05		$	86.67			35	$	116.05		$	94.56			23
Heavy oil (per bbl)		93.73			67.93			38		86.53			66.35			30
NGL (per bbl)		43.02			36.44			18		47.35			44.53			6
Total liquids (per bbl)		94.85			69.56			36		91.63			74.12			24
Realized risk management loss (per bbl)		(3.44	)		(2.22	)		55		(11.79	)		(1.04	)		1,034
Total liquids, net (per bbl)		91.41			67.34			36		79.84			73.08			9

Natural gas (per mcf)		1.63			0.91			79		1.87			1.77			6
Realized risk management gain (per mcf)		0.76			0.74			3		0.68			0.43			58
Natural gas net (per mcf)		2.39			1.65			45		2.55			2.20			16

Weighted average (per boe)		68.31			51.26			33		67.66			55.39			22
Realized risk management gain (loss) (per boe)		(0.94	)		(0.33	)		185		(7.06	)		0.02		N/A
Weighted average net (per boe)	$	67.37		$	50.93			32	$	60.60		$	55.41			9

(1)

Supplementary financial measures. See "Non-GAAP and Other Financial Measures".

Production


	Three months ended September 30							Nine months ended September 30
Daily production	2026		2025		% change			2026		2025		% change
Light oil (bbl/d)		6,694		4,979		34			6,528		7,978		(18	)
Heavy oil (bbl/d)		9,999		12,586		(21	)		11,040		11,844		(7	)
NGL (bbl/d)		2,650		1,955		36			2,328		2,401		(3	)
Natural gas (mmcf/d)		53		47		13			51		56		(9	)
Total production (boe/d)		28,113		27,316		3			28,346		31,518		(10	)

Production increased in Q3 2026 compared to the corresponding period in 2025, primarily due to an active drilling program in Willesden Green combined with the Belly River Acquisition, which closed on June 30, 2026. Heavy oil production decreased in Q3 2026 reflecting our decision to reduce capital in 2025 and earlier in 2026 due to the lower commodity price environment at that time.

For the first nine months of 2026 versus 2025, production decreased primarily due to the Pembina Disposition, which closed at the beginning of Q2 2025. Prior to the disposition, the Pembina Assets produced approximately 11,000 boe/d in Q1 2025, consisting of light oil, NGLs and natural gas.

In the first nine months of 2026, we drilled 46 (43.8 net) wells, including injector wells and non-operated activity, and a total of 36 (30.5 net) wells were brought on production.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  6

Average production within the Company’s key development areas and within the Company’s Legacy asset area was as follows:


	Three months ended September 30							Nine months ended September 30
Daily production (boe/d) (1)	2026		2025		% change			2026		2025			% change
Willesden Green/PCU #11		16,093		12,401		30			15,256		17,232	(2)		(11	)
Peace River		10,992		13,503		(19	)		11,990		12,653			(5	)
Viking		752		1,156		(35	)		816		1,336			(39	)
Legacy		276		256		8			284		297			(4	)
Total		28,113		27,316		3			28,346		31,518			(10	)

(1)

Refer to “Supplemental Production Disclosure” for details by product type.

(2)

Includes production from the Pembina Assets of approximately 11,000 boe/d until their disposition on April 7, 2025.

Netbacks


	Three months ended September 30						Nine months ended September 30
(per boe)	2026			2025			2026			2025
Netback:
Sales price (1) (3)	$	68.31		$	51.26		$	67.66		$	55.39
Risk management gain (loss) (2)		(0.94	)		(0.33	)		(7.06	)		0.02
Royalties		(11.37	)		(6.56	)		(8.75	)		(7.06	)
Transportation		(4.68	)		(4.46	)		(5.05	)		(4.63	)
Net operating costs (3)		(15.08	)		(15.01	)		(14.72	)		(14.84	)
Netback (3)	$	36.24		$	24.90		$	32.08		$	28.88

	(boe/d)			(boe/d)			(boe/d)			(boe/d)
Production		28,113			27,316			28,346			31,518

(1)

Includes the impact of commodities purchased from and sold to third parties of $0.2 million for Q3 2026 (2025 – $0.1 million) and $0.7 million for the first nine months of 2026 (2025 – $0.6 million). See "Production Revenues" below for a reconciliation of "Sales" to "Production revenues".

(2)

Realized risk management gains (losses) on commodity contracts.

(3)

Non-GAAP ratios. See "Non-GAAP and Other Financial Measures".

The Company's netback per boe increased in 2026 from the comparable periods in 2025, primarily due to higher oil prices. This was partially offset by increased royalties and realized risk management losses on oil hedges.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  7


	Three months ended September 30						Nine months ended September 30
(millions)	2026			2025			2026			2025
Netback:
Sales (1) (3)	$	176.6		$	128.8		$	523.5		$	476.6
Risk management gain (loss) (2)		(2.4	)		(0.8	)		(54.6	)		0.2
Royalties		(29.4	)		(16.5	)		(67.7	)		(60.8	)
Transportation		(12.1	)		(11.2	)		(39.1	)		(39.8	)
Net operating costs (3)		(38.9	)		(37.7	)		(113.8	)		(127.7	)
Netback (3)	$	93.8		$	62.6		$	248.3		$	248.5

(1)

(2)

Realized risk management gains (losses) on commodity contracts.

(3)

Non-GAAP financial measures. See "Non-GAAP and Other Financial Measures" and see "Expenses - Operating" for a reconciliation of net operating costs to operating costs.

Production Revenues

A reconciliation from production revenues to gross revenues is as follows:


	Three months ended September 30						Nine months ended September 30
(millions)	2026			2025			2026			2025
Production revenues	$	176.4		$	128.7		$	522.8		$	476.0
Sales of commodities purchased from third parties		1.0			0.4			3.4			3.7
Less: Commodities purchased from third parties		(0.8	)		(0.3	)		(2.7	)		(3.1	)
Sales (1)		176.6			128.8			523.5			476.6
Realized risk management gain (loss) (2)		(2.4	)		(0.8	)		(54.6	)		0.2
Gross revenues (1)	$	174.2		$	128.0		$	468.9		$	476.8

(1)

Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

(2)

Relates to realized risk management gains (losses) on commodity contracts.

The Company's production revenues and gross revenues were higher in Q3 2026 compared to Q3 2025 mainly due to higher realized oil prices.

For the first nine months of 2026, the Company's production revenues were higher than the comparable period in 2025, as higher realized oil prices were partially offset by lower production volumes resulting from the Pembina Disposition, which closed at the beginning of Q2 2025. Gross revenues were lower than the comparable period in 2025 due to the impact of realized risk management losses on outstanding oil hedges.

Change in Gross Revenues (1)


(millions)
Gross revenues – January 1 – September 30, 2025	$	476.8
Decrease in liquids production		(49.6	)
Increase in liquids prices		97.5
Decrease in natural gas production		(2.4	)
Increase in natural gas prices		1.4
Increase in realized oil risk management loss		(57.7	)
Increase in realized natural gas risk management gain		2.9
Gross revenues – January 1 – September 30, 2026 (2)	$	468.9

(1)

Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

(2)

Excludes processing fees and other income.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  8

Royalties


	Three months ended September 30						Nine months ended September 30
	2026			2025			2026			2025
Royalties (millions)	$	29.4		$	16.5		$	67.7		$	60.8
Average royalty rate (1)		17	%		13	%		13	%		13	%

(1)

Excludes effects of risk management activities and other income.

The increase in absolute royalties and average royalty rate for Q3 2026 compared to Q3 2025 was primarily attributed to higher oil prices.

In the first nine months of 2026, absolute royalties increased while the average royalty rate remained consistent with the same period in 2025, primarily reflecting production from new wells subject to royalty holidays, which carry lower royalty rates, offsetting the impact of higher prices.

Expenses


	Three months ended September 30					Nine months ended September 30
(millions)	2026			2025		2026		2025
Net operating (1)	$	38.9		$	37.7	$	113.8	$	127.7
Transportation		12.1			11.2		39.1		39.8
Financing		10.0			9.1		25.7		30.5
Share-based compensation	$	(2.9	)	$	7.2	$	6.1	$	9.9

(1)

Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

Operating

A reconciliation of operating costs to net operating costs is as follows:


	Three months ended September 30						Nine months ended September 30
(millions)	2026			2025			2026			2025
Operating costs	$	42.5		$	41.3		$	124.5		$	140.0
Less processing fees		(2.0	)		(1.7	)		(6.1	)		(7.1	)
Less road use recoveries		(1.6	)		(1.9	)		(4.6	)		(5.2	)
Net operating costs (1)	$	38.9		$	37.7		$	113.8		$	127.7

(1)

Non-GAAP financial measure. See “Non-GAAP and Other Financial Measures”.

Operating and net operating costs in Q3 2026 were relatively unchanged from Q3 2025, as the sale of higher-cost production under the Pembina Disposition was largely offset by repair and maintenance activity in Peace River resulting from unseasonably wet weather. For the first nine months of 2026, operating and net operating costs decreased compared to the corresponding period in 2025, primarily due to lower production from the impact of the Pembina Disposition, which closed at the beginning of Q2 2025.

To further improve operating efficiencies, the Company has focused on reducing trucking costs through water handling initiatives in Peace River during the first nine months of 2026. We have successfully implemented several initiatives and will continue to expand these efforts as we further grow our Peace River production base, thereby supporting continued improvements in operating efficiencies.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  9

Transportation

The Company continues to utilize multiple sales points in Peace River to increase realized prices. Water handling optimization efforts have resulted in lowering operating costs but have, to a lesser degree, increased transportation costs due to increased loads of clean trucked oil. Transportation costs increased on a per boe basis during Q3 2026 and for the first nine months of 2026, compared with the same periods in 2025. On an absolute basis transportation costs are roughly flat in the 2026 periods compared to the 2025 comparable periods. The prolonged spring break-up conditions also impacted Peace River trucking costs in 2026 and contributed to higher costs, while the Pembina Disposition in early Q2 2025 removed costs from that point forward.

Financing

Financing expense consists of the following:


	Three months ended September 30					Nine months ended September 30
(millions)	2026			2025		2026			2025
Interest	$	7.1		$	4.5	$	16.8		$	17.1
Accretion on decommissioning liability		2.2			2.5		6.4			9.8
Amortization on premium of senior unsecured notes		(0.1	)		-		(0.1	)		-
Accretion on discount of senior unsecured notes		-			0.1		-			0.3
Accretion on lease liabilities		0.4			0.1		1.3			0.3
Loss on redeemed senior unsecured notes		-			1.5		-			1.6
Deferred financing costs		0.4			0.4		1.3			1.4
Financing	$	10.0		$	9.1	$	25.7		$	30.5

Obsidian Energy’s debt structure includes short-term borrowings under our syndicated credit facility and term financing through our senior unsecured notes. Interest charges increased in Q3 2026 compared to Q3 2025 due to higher drawings on our syndicated credit facility following the Belly River Acquisition while the Q3 2025 period had lower drawings as a result of the Pembina Disposition in April 2025. In addition, the refinancing of our senior unsecured notes in December 2025 and the subsequent issuance of additional senior unsecured notes in July 2026, although issued at a significantly lower interest rate, increased the amount of term debt outstanding resulting in a higher overall interest expense.

The Company has a reserve-based syndicated credit facility which is subject to a semi-annual borrowing base redetermination (typically completed in May and November of each year). The aggregate amount available under the syndicated credit facility is $275.0 million and the revolving period and maturity dates are May 31, 2027, and May 31, 2028, respectively.

At September 30, 2026, the Company had $250.0 million aggregate principal amount of 8.125% senior unsecured notes outstanding, maturing on December 3, 2030 (the "Notes"). In July 2026, the Company issued an additional $75.0 million aggregate principal amount of our existing Notes. The additional Notes were issued at a price of 102.75 resulting in an effective yield of 7.186% and gross proceeds of $77.1 million which were used to reduce drawings under our syndicated credit facility. Following the issuance, the aggregate principal amount outstanding of Notes increased to $250.0 million. The Notes constitute direct senior unsecured obligations of Obsidian Energy and rank equally with all of the Company's existing and future senior unsecured indebtedness.

At September 30, 2026, letters of credit totaling $2.5 million were outstanding (December 31, 2025 – $2.5 million) that reduce the amount otherwise available to be drawn on our syndicated credit facility.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  10

Share-Based Compensation

Share-based compensation expense relates to options ("Options") to acquire common shares granted under the Company's Stock Option Plan (the “Option Plan”), restricted share units (“RSUs") granted under the Restricted and Performance Share Unit Plan (“RPSU plan”), deferred share units ("DSUs") granted under the Deferred Share Unit Plan (“DSU plan”), performance share units (“PSUs”) granted under the RPSU plan and unrealized gains or losses under the equity forward contracts.

Share-based compensation expense consisted of the following:


	Three months ended September 30						Nine months ended September 30
(millions)	2026			2025			2026			2025
DSUs	$	6.8		$	3.3		$	13.9		$	2.1
PSUs		3.3			2.3			10.9			1.7
Equity forward contracts gain (1)		(16.1	)		(0.1	)		(27.0	)		(0.1	)
Liability based incentive plans	$	(6.0	)	$	5.5		$	(2.2	)	$	3.7

RSUs	$	1.6		$	1.1		$	4.7		$	4.7
Options		1.5			0.6			3.6			1.5
Equity based incentive plans		3.1			1.7			8.3			6.2
Share-based compensation	$	(2.9	)	$	7.2		$	6.1		$	9.9

(1)

Relates to the equity forward contracts entered into to mitigate the Company's exposure to our share-based compensation plans.

The DSU and PSU obligations are measured at fair value based on the Company's share price at the balance sheet date. At September 30, 2026, the share price used to measure these obligations was $14.69 per share, compared to $11.61 per share at June 30, 2026, $8.42 per share at December 31, 2025, and $9.07 per share at September 30, 2025.

The unrealized gain for the first nine months of 2026 was based on the September 30, 2026, closing share price of $14.69 per share compared to the weighted average forward price for all of our equity forward contracts of $9.69 per share. For Q3 2026, the unrealized gain recognized in the period reflected quarter-over-quarter changes in our share price, including the impact of equity forward contracts entered into during the quarter at an average fair value of $11.63 per share.

General and Administrative Expenses ("G&A")


	Three months ended September 30				Nine months ended September 30
(millions, except per boe amounts)	2026		2025		2026		2025
Gross	$	9.7	$	9.8	$	30.4	$	30.6
Per boe (1)		3.76		3.89		3.93		3.56
Net (2)		4.8		4.9		15.5		15.5
Per boe (1)	$	1.83	$	1.95	$	2.00	$	1.80

(1)

Supplementary financial measure. See “Non-GAAP and Other Financial Measures”.

(2)

Net G&A includes the impact of overhead recoveries and capitalized G&A.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  11

On an absolute basis, G&A was similar in the 2026 periods compared to the 2025 periods as staff levels were relatively consistent year-over-year. On a per boe basis, higher production in Q3 2026 compared with Q3 2025, resulted in lower G&A costs per boe. For the first nine months of 2026, the impact of the Pembina Disposition in April 2025 and the resulting lower production levels led to higher G&A costs per boe compared with the corresponding 2025 period.

Depletion, Depreciation and Impairment


	Three months ended September 30						Nine months ended September 30
(millions)	2026			2025			2026			2025
Depletion and depreciation (“D&D”)	$	46.9		$	45.6		$	139.1		$	134.3

PP&E Impairment (reversal)	$	(1.2	)	$	(1.0	)	$	(0.9	)	$	12.3

The Company's D&D expense increased in the 2026 periods compared to the corresponding periods in 2025, primarily due to capital expenditures and the Belly River Acquisition. The Pembina Assets were classified as held for sale prior to their disposition in 2025 and, accordingly, were no longer subject to depletion before the transaction closed.

During the first nine months of 2026, we recorded a $0.9 million impairment reversal (2025 - $15.1 million impairment reversal) in our Legacy cash generating unit ("Legacy CGU") due to changes in the decommissioning liability in the area. The Legacy CGU has no recoverable amount, as such changes in our decommissioning liability are either expensed or recovered each period.

Taxes


	Three months ended September 30				Nine months ended September 30
(millions)	2026		2025		2026		2025
Deferred income tax expense	$	5.9	$	0.4	$	13.0	$	9.7

The Company previously recognized a deferred tax asset, as we expect to have sufficient taxable profits in future years in order to fully utilize the remaining deferred tax asset balance. The deferred income tax expense in the 2026 and 2025 periods was due to the Company’s net income and resultant reduction of our deferred income tax asset.

Net Income


	Three months ended September 30				Nine months ended September 30
(millions, except per share amounts)	2026		2025		2026		2025
Net income	$	18.0	$	16.8	$	41.3	$	47.5
Basic per share		0.27		0.25		0.62		0.68
Diluted per share	$	0.26	$	0.24	$	0.60	$	0.66

Net income for Q3 2026 was higher than Q3 2025 primarily as a result of higher realized oil prices, which increased production revenues.

For the first nine months of 2026, net income was lower than in the same period of 2025, primarily due to risk management losses on our outstanding hedges and lower production volumes resulting from the Pembina disposition. These factors were partially offset by higher oil prices.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  12

Capital Expenditures


	Three months ended September 30				Nine months ended September 30
(millions)	2026		2025		2026		2025
Drilling and completions	$	60.6	$	42.6	$	142.8	$	145.0
Well equipping and facilities		14.1		20.7		46.8		79.5
Land and geological/geophysical		0.7		1.4		4.3		8.3
Corporate		0.2		0.6		0.5		1.1
Capital expenditures	$	75.6	$	65.3	$	194.4	$	233.9
Property acquisitions, net		2.7		0.3		101.1		(210.6	)
Total	$	78.3	$	65.6	$	295.5	$	23.3

In Q3 2026, capital expenditures were primarily directed toward an active drilling program with two rigs running in both our Peace River and Willesden Green plays, as well as continued investment in Peace River waterflood initiatives, resulting in higher capital expenditures compared with Q3 2025.

In the first half of 2026, the Company took a disciplined approach to capital spending, moderating activity during Q1 2026 in response to lower commodity prices while preserving the flexibility to advance its development program in the second half of 2026 as market conditions improved. This resulted in lower capital expenditures in the first nine months of 2026 compared to the 2025 comparative period.

For the first nine months of 2026, 36 (30.5 net) wells were brought on production, including operated and non-operated activities, which included 15 (15.0 net) wells in Peace River, 11 (11.0 net) wells in Willesden Green and 10 (4.5 net) wells in PCU #11.

Drilling


	Nine months ended September 30
	2026				2025
(number of wells)	Gross		Net		Gross		Net
Oil		34		32		53		48
Gas		-		-		1		1
Injectors, stratigraphic and service		12		12		2		2
Total		46		44		56		51

The Company drilled 42 (42.0 net) operated wells, including 12 (12.0 net) injector wells, during the first nine months of 2026. In addition, the Company had non-operated working interests in 4 (1.8 net) wells that were drilled by various partners during the period.

Environmental and Climate Change

The oil and natural gas industry has a number of environmental risks and hazards and is subject to regulation by all levels of government. Environmental legislation includes, but is not limited to, operational controls, site rehabilitation requirements and restrictions on emissions of various substances produced in association with oil and natural gas operations. Compliance with such legislation is expected to require additional expenditures and a failure to comply may result in fines and penalties which could, in the aggregate and under certain assumptions, become material.

Obsidian Energy monitors our operations for environmental impacts and allocates capital to reclamation and other activities to mitigate the impact on the areas in which the Company operates. The Company follows the Alberta Energy Regulator guidance under Directive 088 where a specified amount of spending is required to abandon inactive sites.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  13

Liquidity and Capital Resources

Net Debt

Net debt is the total of long-term debt and working capital deficiency as follows:


	As at
(millions)	September 30, 2026			December 31, 2025
Long-term debt
Syndicated credit facility	$	92.0		$	9.0
Senior unsecured notes (8.125%, maturing December 3, 2030)		250.0			175.0
Unamortized premium of senior unsecured notes		2.0			-
Deferred financing costs		(4.9	)		(4.1	)
Total		339.1			179.9

Working capital deficiency
Cash		(0.8	)		-
Accounts receivable		(91.8	)		(56.1	)
Prepaid expenses and other		(14.4	)		(11.0	)
Prepaid equity forward contracts (1)		(77.3	)		(28.1	)
Bank overdraft		-			0.4
Accounts payable and accrued liabilities		208.5			155.0
Total		24.2			60.2

Net debt (2)	$	363.3		$	240.1

(1)

The Company includes prepaid equity forward contracts in our working capital deficiency given we have paid for these contracts upon entering into them and the corresponding share-based compensation liabilities are included in Accounts Payable and Accrued Liabilities.

(2)

Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

Net debt increased compared to December 31, 2025, primarily as a result of higher drawings under our syndicated credit facility due to the Belly River Acquisition and the subsequent issuance of $75.0 million in July 2026. Additionally, our return of capital initiative through our share buyback program and the purchase of prepaid equity forwards contracts contributed to the increase.

Liquidity

The Company has a reserve-based syndicated credit facility with a borrowing limit of $275.0 million and $250.0 million of senior unsecured notes, including the July 2026 issuance of $75.0 million principal amount of additional Notes, maturing in December 2030. For further details on the Company’s debt instruments please refer to the “Financing” section of this MD&A.

The Company actively manages our debt portfolio and considers opportunities to reduce or diversify our debt capital structure. In December 2025, we refinanced our existing senior unsecured notes, which provided additional term to our debt structure and additional proceeds, which we used to largely pay down our syndicated credit facility and increase the overall liquidity of the Company. With the issuance of an additional $75.0 million principal amount of Notes in July, post the Belly River Acquisition, we reduced borrowings under our syndicated credit facility and further increased our liquidity. Management contemplates both operating and financial risks and takes action as appropriate to limit the Company’s exposure to certain risks. Management maintains close relationships with the Company’s lenders and agents to monitor credit market developments. These actions and plans aim to increase the likelihood of maintaining the Company’s financial flexibility and an appropriate capital program, supporting the Company’s ongoing operations and ability to execute longer-term business strategies.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  14

Financial Instruments

Obsidian Energy had the following financial instruments outstanding at September 30, 2026. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits our credit risk by executing counterparty risk procedures which include transacting only with institutions within our syndicated credit facility or companies with high credit ratings, and by obtaining financial security in certain circumstances.

Commodity contracts


	Notional Volume (bbl/d)		Remaining Term		Price (US$/bbl)		Fair value (millions)
Oil
WTI Swap		500	October 2026	$		97.32	$	0.2
WTI Collar		9,450	October 2026		81.44 - 92.22			(0.9	)
WTI Collar		3,000	November 2026	$	83.67 - 98.04			0.2
Total oil							$	(0.5	)

	Notional Volume (mcf/d)		Remaining Term		Price (C$/mcf)		Fair value (millions)
Natural Gas
AECO Swap		34,360	October 2026	$		2.71	$	1.4
AECO Swap		9,479	November 2026 - March 2027	$		2.95		0.9
Total natural gas							$	2.3

Total							$	1.8

Foreign exchange forward contracts


		Notional Amount ($ millions)		Remaining Term		Price (C$)		Fair value (millions)
Foreign exchange forward contracts
FX forward contract	$		19.6	October 2026	$		1.4110	$	(0.2	)
FX forward contract			19.6	November 2026			1.4088		(0.2	)
FX forward contract	$		14.0	December 2026	$		1.4088		(0.1	)
Total								$	(0.5	)

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  15

The components of risk management within Income on the Consolidated Statements of Income are as follows:


	Three months ended September 30						Nine months ended September 30
(millions)	2026			2025			2026			2025
Realized
Settlement of oil contracts loss	$	(6.1	)	$	(4.0	)	$	(64.0	)	$	(6.3	)
Settlement of natural gas contracts gain		3.7			3.2			9.4			6.5
Settlement of foreign exchange contracts loss		(0.8	)		-			(1.4	)		-
Total realized risk management gain (loss)	$	(3.2	)	$	(0.8	)	$	(56.0	)	$	0.2

Unrealized
Oil contracts gain (loss)	$	(7.7	)	$	4.6		$	(0.6	)	$	(1.2	)
Natural gas contracts loss		(2.5	)		(0.8	)		(1.3	)		(1.4	)
Foreign exchange contracts gain (loss)		1.2			-			(0.4	)		-
Total unrealized risk management gain (loss)		(9.0	)		3.8			(2.3	)		(2.6	)
Risk management gain (loss)	$	(12.2	)	$	3.0		$	(58.3	)	$	(2.4	)

Prepaid Equity Forward Contracts

Obsidian Energy is exposed to equity price risk on our common share price in relation to our share-based compensation plans. Given the value of our share-based compensation plans fluctuates based on the Company’s common share price on the Toronto Stock Exchange at each period end date, beginning in Q3 2025, the Company began mitigating this exposure by entering into equity forward contracts. Unrealized and realized gains/losses on our equity forward contracts for the period are recorded through share-based compensation.


	Share Volume		Remaining Term (1)		Price (C$)		Fair value (millions)
Equity
Equity Forward Contract		720,000	September 2028	$		8.89	$	10.6
Equity Forward Contract		1,300,000	October 2028			8.72		19.1
Equity Forward Contract		550,000	November 2028			8.43		8.1
Equity Forward Contract		715,000	December 2028			8.31		10.5
Equity Forward Contract		450,000	January 2029			8.76		6.6
Equity Forward Contract		680,000	February 2029			10.18		10.0
Equity Forward Contract		710,000	April 2029			13.82		10.4
Equity Forward Contract		85,000	June 2029			15.10		1.3
Equity Forward Contract		50,000	August 2029	$		13.70	$	0.7
Total		5,260,000		$		9.69	$	77.3

(1)

The Company can settle the contract, or a portion of the contract, at any time.

Refer to the Business Environment section above for a full list of hedges currently outstanding including contracts that were entered into subsequent to September 30, 2026.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  16

Based on commodity prices and contracts in place at September 30, 2026, the Company notes the following sensitivities:

•

a $1.00 change in the price per barrel of liquids would change pre-tax unrealized risk management by $0.4 million;

•

a $0.10 change in the price per mcf of natural gas would change pre-tax unrealized risk management by $0.2 million;

•

a $0.01 change in the CAD/US foreign exchange rate would change pre-tax unrealized risk management by $0.3 million; and

•

a $1.00 change in our share price would change pre-tax unrealized risk management by $5.3 million.

Sensitivity Analysis

Estimated sensitivities to selected key assumptions on funds flow from operations for the 12 months subsequent to the date of this MD&A, including risk management contracts entered into to date, are based on forecasted results.


	Impact on funds flow from operations (1)
Change of:	Change			$ millions		$/share
WTI - Price per barrel of liquids	WTI US$1.00				10.1		0.15
WCS - Price per barrel of liquids	WCS US$1.00				5.5		0.08
Liquids production	1,000 bbl/day				28.1		0.42
Price per mcf of natural gas	AECO $0.10				1.6		0.02
Natural gas production	1 mmcf/day				0.6		0.01
Effective interest rate		1	%		1.1		0.02
Exchange rate ($US per $CAD)	$	0.01			6.1		0.09

(1)

Non-GAAP financial measure or non-GAAP ratio. See “Non-GAAP and Other Financial Measures”.

Contractual Obligations and Commitments

As at September 30, 2026, Obsidian Energy was committed to certain payments over the next five calendar years and thereafter as follows:


	2026		2027		2028		2029		2030		Thereafter		Total
Long-term debt (1)	$	-	$	-	$	92.0	$	-	$	250.0	$	-	$	342.0
Transportation		4.2		16.5		13.4		12.1		5.7		-		51.9
Interest obligations		11.5		25.7		22.5		20.3		20.3		-		100.3
Lease liability		0.8		3.5		2.5		1.7		1.5		18.7		28.7
Decommissioning liability (2)		3.5		12.0		11.3		10.7		10.1		57.9		105.5
Total	$	20.0	$	57.7	$	141.7	$	44.8	$	287.6	$	76.6	$	628.4

(1)

The 2028 figure includes our syndicated credit facility which has a term-out date of May 2028. The 2030 figure includes our senior unsecured notes due in December 2030. Refer to the Financing section above for further details. Historically, the Company has successfully renewed our syndicated credit facility.

(2)

These amounts represent the inflated, discounted future reclamation and abandonment costs that are expected to be incurred over the life of the Company’s properties.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  17

At September 30, 2026, the Company had an aggregate of $250.0 million in senior unsecured notes maturing in December 2030 and the revolving period of our syndicated credit facility was May 31, 2027, with a term out period to May 31, 2028. In the future, if the Company is unsuccessful in renewing or replacing the syndicated credit facility or obtaining alternate funding for some or all of the maturing amounts of the senior unsecured notes, it is possible that we could be required to seek other sources of financing, including other forms of debt or equity arrangements if available. Please see the Financing section of this MD&A for further details regarding our outstanding debt instruments.

The Company is involved in various litigation and claims in the normal course of business and records provisions for claims as required.

Equity Instruments


Common shares issued:
As at September 30, 2026	66,004,000
Issuance under Option and RPSU Plans	15,502
Repurchase and cancellation of common shares	(224,500	)
As at November 4, 2026	65,795,002

Options outstanding:
As at September 30, 2026	2,700,332
Exercised	(14,605	)
Forfeited	(13,070	)
As at November 4, 2026	2,672,657

RSUs outstanding:
As at September 30, 2026	1,490,701
Vested	(1,727	)
As at November 4, 2026	1,488,974

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  18

Supplemental Production Disclosure

Outlined below is production by product type for each area and in total for the three and nine months ended September 30, 2026 and 2025.


	Three months ended September 30				Nine months ended September 30
Daily production (boe/d)	2026		2025		2026		2025
Willesden Green/PCU #11 (1)
Light oil (bbl/d)		6,395		4,411		6,155		7,244
Heavy oil (bbl/d)		-		-		-		33
NGLs (bbl/d)		2,578		1,871		2,259		2,319
Natural gas (mmcf/d)		43		37		41		46
Total production (boe/d)		16,093		12,401		15,256		17,232

Peace River
Light oil (bbl/d)		-		1		-		4
Heavy oil (bbl/d)		9,891		12,493		10,935		11,704
NGLs (bbl/d)		16		15		14		15
Natural gas (mmcf/d)		7		6		6		6
Total production (boe/d)		10,992		13,503		11,990		12,653

Viking
Light oil (bbl/d)		243		523		310		669
Heavy oil (bbl/d)		88		73		83		81
NGLs (bbl/d)		27		43		29		43
Natural gas (mmcf/d)		2		3		3		3
Total production (boe/d)		752		1,156		816		1,336

Legacy
Light oil (bbl/d)		56		44		63		61
Heavy oil (bbl/d)		20		20		22		26
NGLs (bbl/d)		29		26		26		24
Natural gas (mmcf/d)		1		1		1		1
Total production (boe/d)		276		256		284		297

Total
Light oil (bbl/d)		6,694		4,979		6,528		7,978
Heavy oil (bbl/d)		9,999		12,586		11,040		11,844
NGLs (bbl/d)		2,650		1,955		2,328		2,401
Natural gas (mmcf/d)		53		47		51		56
Total production (boe/d)		28,113		27,316		28,346		31,518

(1)

Includes production from the Pembina Assets from January 1, 2025 to April 6, 2025. On April 7, 2025, the Company closed the Pembina Disposition. Production associated with the Pembina Assets averaged approximately 11,000 boe/d in Q1 2025.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  19

Reconciliation of Cash flow from Operating Activities to Funds flow from Operations and Adjusted Funds flow from Operations


	Sep. 30			Jun. 30			Mar. 31			Dec. 31			Sep. 30			Jun. 30			Mar. 31			Dec. 31
Three months ended ($ millions)	2026			2026			2026			2025			2025			2025			2025			2024
Cash flow from operating activities	$	87.0		$	38.2		$	40.0		$	42.6		$	45.4		$	55.2		$	96.7		$	115.0
Change in non-cash working capital		(20.7	)		25.9			(12.1	)		(17.5	)		(11.6	)		4.3			(5.8	)		(13.5	)
Decommissioning expenditures		4.0			1.3			1.7			10.3			7.9			4.0			6.6			3.5
Equity forward contracts		16.8			1.2			31.2			21.3			7.4			-			-			-
Onerous office lease settlements		-			-			-			-			-			-			0.7			2.3
Settlement of restricted share units		0.1			-			-			-			-			-			-			-
Deferred financing costs		(0.4	)		(0.5	)		(0.4	)		(0.3	)		(0.4	)		(0.6	)		(0.4	)		(0.5	)
Restructuring		0.4			0.1			0.2			0.1			0.1			0.7			0.1			-
Transaction costs		0.2			1.2			-			0.1			0.9			2.2			2.2			-
Other expenses		(0.7	)		0.4			0.4			-			-			-			-			0.9
Funds flow from operations	$	86.7		$	67.8		$	61.0		$	56.6		$	49.7		$	65.8		$	100.1		$	107.7
Deferred share units		6.8			(3.2	)		10.3			(1.1	)		3.3			(1.5	)		0.3			1.8
Performance share units		3.3			0.1			7.5			0.1			2.3			(1.1	)		0.5			(0.5	)
Equity forward contracts loss (gain)		(16.1	)		8.9			(19.8	)		0.7			(0.1	)		-			-			-
Adjusted funds flow from operations	$	80.7		$	73.6		$	59.0		$	56.3		$	55.2		$	63.2		$	100.9		$	109.0

Changes in Internal Control Over Financial Reporting (“ICFR”)

Obsidian Energy’s senior management has evaluated whether there were any changes in the Company's ICFR that occurred during the period beginning on July 1, 2026 and ending on September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company's ICFR. No changes to the Company’s ICFR were made during the quarter.

Off-Balance-Sheet Financing

Obsidian Energy has off-balance-sheet financing arrangements consisting of operating leases. The operating lease payments are summarized in the Contractual Obligations and Commitments section.

Non-GAAP and Other Financial Measures

Throughout this MD&A and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position, and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures provided by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income (loss) and cash flow from operating activities, as indicators of our performance.

Non-GAAP Financial Measures

“Adjusted funds flow from operations” is cash flow from operating activities before changes in non-cash working capital, decommissioning expenditures, equity forward contracts, onerous office lease settlements, the effects of financing related transactions from foreign exchange contracts and debt repayments, restructuring, transaction costs, certain other revenues and expenses and the impact on share based compensation of liability based incentive plans (includes the DSUs, PSUs and equity forward contracts gains and losses) and is representative of cash related to our underlying operations. Adjusted funds flow from operations is used to assess the Company’s ability to fund our planned capital programs. See “Cash flow from Operating Activities, Funds Flow from Operations, Adjusted funds flow from operations and Free Cash Flow” and "Reconciliation of Cash flow from operating activities to Funds flow from operations and Adjusted funds flow from operations" above for reconciliations of adjusted funds flow from operations to cash flow from operating activities, being our nearest measure prescribed by IFRS.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  20

“Free cash flow” is adjusted funds flow from operations less both capital and decommissioning expenditures and the Company believes it is a useful measure to determine and indicate the funding available to Obsidian Energy for investing and financing activities, including the repayment of debt, reallocation to existing areas of operation, deployment into new ventures and return of capital to shareholders. See “Cash flow from Operating Activities, Funds Flow from Operations, Adjusted Funds Flow from Operations and Free Cash Flow” above for a reconciliation of free cash flow to cash flow from operating activities, being our nearest measure prescribed by IFRS.

“Funds flow from operations” is cash flow from operating activities before changes in non-cash working capital, decommissioning expenditures, equity forward contracts, onerous office lease settlements, the effects of financing related transactions from foreign exchange contracts and debt repayments, restructuring, transaction costs and certain other revenues and expenses and is representative of cash related to our underlying operations. Funds flow from operations is used to assess the Company’s ability to fund our planned capital programs. See “Cash flow from Operating Activities, Funds Flow from Operations, Adjusted funds flow from operations and Free Cash Flow” and "Reconciliation of Cash flow from operating activities to Funds flow from operations and Adjusted funds flow from operations" above for reconciliations of funds flow from operations to cash flow from operating activities, being our nearest measure prescribed by IFRS.

“Gross revenues” are production revenues including realized risk management gains and losses on commodity contracts and adjusted for commodities purchased from third parties and sales of commodities purchased from third parties and is used to assess the cash realizations on commodity sales. See “Results of Operations – Production Revenues” above for a reconciliation of gross revenues to production revenues, being our nearest measure prescribed by IFRS.

"Sales” are production revenues plus sales of commodities purchased from third parties less commodities purchased from third parties and is used to assess the cash realizations on commodity sales before realized risk management gains and losses. See “Results of Operations – Production Revenues” above for a reconciliation of gross revenues and sales to production revenues, being our nearest measure prescribed by IFRS.

“Net debt” is the total of long-term debt and working capital deficiency and is used by the Company to assess our liquidity. See “Liquidity and Capital Resources – Net Debt” above for a reconciliation of net debt to long-term debt, being our nearest measure prescribed by IFRS.

“Net operating costs” are calculated by deducting processing fees and road use recoveries from operating costs and is used to assess the Company’s cost position. Processing fees are primarily generated by processing third party volumes at the Company’s facilities. In situations where the Company has excess capacity at a facility, it may agree with third parties to process their volumes to reduce the cost of operating/owning the facility. Road use recoveries are a cost recovery for the Company as we operate and maintain roads that are also used by third parties. See “Results of Operations – Expenses – Operating” above for a reconciliation of net operating costs to operating costs, being our nearest measure prescribed by IFRS.

“Netback” is production revenues plus sales of commodities purchased from third parties less commodities purchased from third parties (sales), less royalties, net operating costs, transportation expenses and realized risk management gains and losses, and is used in capital allocation decisions and to economically rank projects. See "Results of Operations – Netbacks" above for a reconciliation of netbacks to sales and "Results of Operations – Production Revenues" above for a reconciliation of sales to production revenues, being our nearest measure prescribed by IFRS.

Non-GAAP Ratios

“Adjusted funds flow from operations – basic per share” is comprised of adjusted funds flow from operations divided by basic weighted average common shares outstanding. Adjusted funds flow from operations is a non-GAAP financial measure. See “Cash flow from Operating Activities, Funds Flow from Operations, Adjusted Funds Flow from Operations and Free Cash Flow” and “Reconciliation of Cash flow from operating activities to Funds flow from operations and Adjusted Funds Flow from Operations” above.

“Adjusted funds flow from operations – diluted per share” is comprised of adjusted funds flow from operations divided by diluted weighted average common shares outstanding. Adjusted funds flow from operations is a

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  21

non-GAAP financial measure. See “Cash flow from Operating Activities, Funds Flow from Operations, Adjusted Funds Flow from Operations and Free Cash Flow” and “Reconciliation of Cash flow from operating activities to Funds flow from operations and Adjusted funds flow from Operations” above.

“Funds flow from operations – basic per share” is comprised of funds flow from operations divided by basic weighted average common shares outstanding. Funds flow from operations is a non-GAAP financial measure. See “Cash flow from Operating Activities, Funds Flow from Operations, Adjusted Funds Flow from Operations and Free Cash Flow” and “Reconciliation of Cash flow from operating activities to Funds flow from operations and Adjusted funds flow from operations” above.

“Funds flow from operations – diluted per share” is comprised of funds flow from operations divided by diluted weighted average common shares outstanding. Funds flow from operations is a non-GAAP financial measure. See “Cash flow from Operating Activities, Funds Flow from Operations, Adjusted Funds Flow from Operations and Free Cash Flow” and “Reconciliation of Cash flow from operating activities to Funds flow from operations and Adjusted funds flow from operations” above.

“Net operating costs per bbl”, “Net operating costs per mcf” and “Net operating costs per boe” are net operating costs divided by weighted average daily production on a per bbl, per mcf or per boe basis, as applicable. Net operating costs is a non-GAAP financial measure. See “Results of Operations – Expenses – Operating" above.

“Netback per bbl”, “Netback per mcf” and “Netback per boe” are netbacks divided by weighted average daily production on a per bbl, per mcf or per boe basis, as applicable. Management believes that netback per boe is a key industry performance measure of operational efficiency and provides investors with information that is also commonly presented by other oil and natural gas producers. Netback is a non-GAAP financial measure. See “Results of Operations – Netbacks” above.

"Sales per boe" is sales divided by weighted average daily production on a per boe basis. Sales is a non-GAAP financial measure. See “Results of Operations – Production Revenues" above.

Supplementary Financial Measures

Average sales prices for light oil, heavy oil, NGLs, total liquids and natural gas are supplementary financial measures calculated by dividing each of these components of production revenues by their respective production volumes for the periods.

“Cash flow from operating activities – basic per share” is comprised of cash flow from operating activities, as determined in accordance with IFRS, divided by basic weighted average common shares outstanding.

“Cash flow from operating activities – diluted per share" is comprised of cash flow from operating activities, as determined in accordance with IFRS, divided by diluted weighted average common shares outstanding.

"G&A gross – per boe" is comprised of general and administrative expenses on a gross basis, as determined in accordance with IFRS, divided by boe for the period.

"G&A net – per boe" is comprised of general and administrative expenses on a net basis, as determined in accordance with IFRS, divided by boe for the period.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  22

Oil and Natural Gas Information

Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

Abbreviations


Oil		Natural Gas
bbl	barrel or barrels	mcf	thousand cubic feet
bbl/d	barrels per day	mcf/d	thousand cubic feet per day
boe	barrel of oil equivalent	mmcf	million cubic feet
boe/d	barrels of oil equivalent per day	mmcf/d	million cubic feet per day
MSW	Mixed Sweet Blend	mmbtu	Million British thermal unit
WTI	West Texas Intermediate	AECO	Alberta benchmark price for natural gas
WCS	Western Canadian Select	NGL	natural gas liquids
		LNG	liquefied natural gas
		NYMEX	New York Mercantile Exchange price for natural gas

References to Q1, Q2, Q3 and Q4 are to the three-month periods ended March 31, June 30, September 30 and December 31, respectively.

Forward-Looking Statements

Certain statements contained in this document constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of the "safe harbour" provisions of applicable securities legislation. In particular, this document contains forward-looking statements pertaining to, without limitation, the following: the anticipated benefits of the Belly River Acquisition and our growth strategy in the Willesden Green area, including that we expect to accelerate growth by leveraging our larger production base and expanded operational footprint; the potential CVP associated with the Belly River Acquisition and the potential amount thereof; the expected growth in production of our Clearwater and Bluesky assets through further development and delineation of existing and new fields; the belief that we have a balanced portfolio of heavy and light oil with significant development opportunities that support our long-term growth strategy; that we continue to progress our enhanced oil recovery strategy through our waterflood initiatives, that we are encouraged by our results of such initiatives, and the expected benefits of such initiatives; that we are continuing to advance our enhanced oil recovery program in the second half of 2026; the continued development of our light oil production in Willesden Green through ongoing development; that the Company's pace and level of future development and growth depend on the macroeconomic environment and the Company's intention to generate acceptable returns and maintain our financial strength; that we remain committed to disciplined capital allocation and enhancing shareholder returns; that we remain committed to responsible environmental stewardship and our environmental remediation efforts including our focus on abandoning and reclaiming inactive fields; our hedges; that we may monetize our equity forward contracts prior to expiry; our belief that our water handling initiatives will help reduce trucking costs, and that we will expand such initiatives as we further expand our Peace River production base; the expectation that compliance with environmental legislation will require additional expenditures and a failure to comply may result in fines and penalties and the effect of such fines and penalties; our intention to monitor our operations for environmental impacts and allocate capital to reclamation and other activities in the areas we operate; our intention to follow the Alberta Energy Regulator guidance under Directive 088; our intention to use multiple sales points in the Peace River area and the anticipated benefits in connection therewith; our expectations in connection with taxable profits and the Company's ability to utilize its remaining deferred tax asset balance; the terms and conditions under our syndicated credit facility and senior unsecured notes and our expectations if the Company is unsuccessful in renewing or replacing them in the future; our involvement with various litigation in the normal course of business and the anticipated effects thereof; how we plan to manage our debt portfolio; all information disclosed under "Sensitivity Analysis"; our future payment obligations as disclosed under "Contractual Obligations and Commitments"; that the Company actively manages our debt portfolio and considers opportunities to reduce or diversify our debt capital structure; that management contemplates both operating and financial risks and takes

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  23

action as appropriate to limit the Company’s exposure to certain risks; that management maintains close relationships with the Company's lenders and agents to monitor credit market developments, and these actions and plans aim to increase the likelihood of maintaining the Company's financial flexibility and capital program and the anticipated benefits in connection therewith; and that the Company limits credit risk by executing counterparty risk procedures which include transacting only with institutions within its syndicated credit facility or companies with high credit ratings, and by obtaining financial security in certain circumstances.

With respect to forward-looking statements contained in this document, the Company has made assumptions regarding, among other things: the duration and impact of tariffs that are currently in effect on goods exported from or imported into Canada, and that other than the tariffs that are currently in effect, neither the U.S. nor Canada (i) increases the rate or scope of such tariffs, reenacts tariffs that are currently suspended, or imposes new tariffs, on the import of goods from one country to the other, including on oil and natural gas, and/or (ii) imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas; that the Company does not dispose of or acquire material producing properties or royalties or other interests therein (except as disclosed herein); that regional and/or global health related events will not have any adverse impact on energy demand and commodity prices in the future; global energy policies going forward, including the continued ability and willingness of members of OPEC and other nations to agree on and adhere to production quotas from time to time; our ability to execute our plans as described herein and in our other disclosure documents, and the impact that the successful execution of such plans will have on our Company and our stakeholders, including our ability to return capital to shareholders and/or reduce debt levels; future capital expenditure and decommissioning expenditure levels; expectations and assumptions concerning applicable laws and regulations, including with respect to environmental, safety and tax matters; future operating costs and G&A costs and the impact of inflation thereon; future oil, natural gas liquids and natural gas prices and differentials between light, medium and heavy oil prices and Canadian, WTI and world oil and natural gas prices; future hedging activities; future oil, natural gas liquids and natural gas production levels; future exchange rates, interest rates and inflation rates; future debt levels; our ability to execute our capital programs as planned without significant adverse impacts from various factors beyond our control, including extreme weather events such as wild fires, flooding and drought, infrastructure access (including the potential for blockades or other activism) and delays in obtaining regulatory approvals and third party consents; the ability of the Company's contractual counterparties to perform their contractual obligations; our ability to obtain equipment in a timely manner to carry out development activities and the costs thereof; our ability to market our oil and natural gas successfully to current and new customers; our ability to obtain financing on acceptable terms, including our ability (if necessary) to extend the revolving period and term out period of our credit facility, our ability to maintain the existing borrowing base under our credit facility, our ability (if necessary) to replace our syndicated bank facility and our ability (if necessary) to finance the repayment of our senior unsecured notes on maturity or pursuant to the terms of the underlying agreement; the accuracy of our estimated reserve volumes; and our ability to add production and reserves through our development and exploitation activities.

The future acquisition by the Company of the Company's common shares pursuant to its NCIB and the level thereof is uncertain. Any decision to acquire common shares of the Company pursuant to the NCIB will be subject to the discretion of the board of directors of the Company and may depend on a variety of factors, including, without limitation, the Company's business performance, financial condition, financial requirements, growth plans, expected capital requirements and other conditions existing at such future time including, without limitation, contractual restrictions and satisfaction of the solvency tests imposed on the Company under applicable corporate law. There can be no assurance of the number of common shares of the Company that the Company will acquire pursuant to its NCIB in the future.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  24

into Canada continue in effect for an extended period of time, the tariffs that have been threatened are implemented, that tariffs that are currently suspended are reactivated, the rate or scope of tariffs are increased, or new tariffs are imposed, including on oil and natural gas, (ii) the U.S. and/or Canada imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas, and (iii) the tariffs imposed or threatened to be imposed by the U.S. on other countries and retaliatory tariffs imposed or threatened to be imposed by other countries on the U.S., will trigger a broader global trade war which could have a material adverse effect on the Canadian, U.S. and global economies, and by extension the Canadian oil and natural gas industry and the Company, including by decreasing demand for (and the price of) oil and natural gas, disrupting supply chains, increasing costs, causing volatility in global financial markets, and limiting access to financing; risks associated with the refusal of the U.S. to renew the Canada-United States-Mexico Agreement ("CUSMA") by the July 1, 2026 deadline, including the risk that the U.S. ultimately withdraws from CUSMA or that CUSMA is renegotiated and renewed on terms that are less favourable to Canada, either of which could result in a significant increase in trade barriers, which could in turn have a material adverse effect on the Canadian and U.S. economies, and by extension the Canadian oil and natural gas industry and the Company; the possibility that we change our budgets (including our capital expenditure budgets) in response to internal and external factors, including those described herein; the possibility that the Company will not be able to continue to successfully execute our business plans and strategies in part or in full, and the possibility that some or all of the benefits that the Company anticipates will accrue to our Company and our stakeholders as a result of the successful execution of such plans and strategies do not materialize (such as our inability to return capital to shareholders and/or reduce debt levels to the extent anticipated or at all); the impact on energy demand and commodity prices of regional and/or global health related events and the responses of governments and the public thereto, including the risk that the amount of energy demand destruction and/or the length of the decreased demand exceeds our expectations; the risk that the financial capacity of the Company's contractual counterparties is adversely affected and potentially their ability to perform their contractual obligations; the possibility that the revolving period and/or term out period of our credit facility and the maturity date of our senior unsecured notes is not extended (if necessary), that the borrowing base under our credit facility is reduced, that the Company is unable to renew or refinance our credit facilities on acceptable terms or at all and/or finance the repayment of our senior unsecured notes when they mature on acceptable terms or at all and/or obtain new debt and/or equity financing to replace our credit facilities and/or senior unsecured notes or to fund other activities; the possibility that we are forced to shut-in production, whether due to commodity prices decreasing, extreme weather events such as wild fires, inability to access our properties due to blockades or other activism, or other factors; the risk that OPEC and other nations fail to agree on and/or adhere to production quotas from time to time that are sufficient to balance supply and demand fundamentals for oil; general economic and political conditions in Canada, the U.S. and globally, and in particular, the effect that those conditions have on commodity prices and our access to capital; industry conditions, including fluctuations in the price of oil, natural gas liquids and natural gas, price differentials for oil and natural gas produced in Canada as compared to other markets, and transportation restrictions, including pipeline and railway capacity constraints; fluctuations in foreign exchange, including the impact of the Canadian/U.S. dollar exchange rate on our revenues and expenses; fluctuations in interest rates, including the effects of interest rates on our borrowing costs and on economic activity, and including the risk that elevated interest rates cause or contribute to the onset of a recession; the risk that our costs increase due to inflation, supply chain disruptions, scarcity of labour and/or other factors, adversely affecting our profitability; unanticipated operating events or environmental events that can reduce production or cause production to be shut-in or delayed (including extreme cold during winter months, wild fires, flooding and droughts (which could limit our access to the water we require for our operations)); the risk that wars and other armed conflicts adversely affect world economies and the demand for oil and natural gas, including the ongoing war between Russian and Ukraine and/or hostilities in the Middle East, particularly between Iran, the United States and Israel; the possibility that fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to hydrocarbons, government mandates requiring the sale of electric vehicles and/or electrification of the power grid, and technological advances in fuel economy and renewable energy generation systems could permanently reduce the demand for oil and natural gas and/or permanently impair the Company's ability to obtain financing and/or insurance on acceptable terms or at all, and the possibility that some or all of these risks are heightened as a result of the response of governments, financial institutions and consumers to a regional and/or global health related event and/or the influence of public opinion and/or special interest groups; and the other factors described under "Risk Factors" in our Annual Information Form and described in our public filings, available in Canada at www.sedarplus.ca and in the United States at www.sec.gov. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  25

The forward-looking statements contained in this document speak only as of the date of this document. Except as expressly required by applicable securities laws, the Company does not undertake any obligation to publicly update any forward-looking statements. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

This document contains future-oriented financial information and financial outlook information (collectively, "FOFI") including all information disclosed under "Sensitivity Analysis" which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth herein and such variation may be material. The Company and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, the Company undertakes no obligation to update such FOFI. FOFI contained in this document was made as of the date of this document and was provided for the purpose of providing further information about the Company's anticipated future business operations. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.

Additional Information

Additional information relating to Obsidian Energy, including Obsidian Energy’s Annual Information Form, is available on the Company’s website at www.obsidianenergy.com, on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS  26

Exhibit 99.3

Obsidian Energy Ltd.

Consolidated Balance Sheets


		As at
(CAD millions, unaudited)	Note	September 30, 2026			December 31, 2025
Assets
Current
Cash		$	0.8		$	-
Accounts receivable			91.8			56.1
Risk management	7		37.9			23.0
Prepaid expenses and other			14.4			11.0
			144.9			90.1
Non-current
Property, plant and equipment	3		1,652.3			1,494.5
Risk management	7		42.1			8.7
Deferred income tax	11		249.5			261.5
			1,943.9			1,764.7
Total assets		$	2,088.8		$	1,854.8

Liabilities and Shareholders’ Equity
Current
Bank overdraft		$	-		$	0.4
Accounts payable and accrued liabilities			208.5			155.0
Current portion of lease liabilities	5		3.5			3.3
Current portion of provisions	6		12.5			8.9
Risk management	7		1.4			-
			225.9			167.6
Non-current
Long-term debt	4		339.1			179.9
Lease liabilities	5		16.0			16.2
Provisions	6		93.0			98.3
Other non-current liabilities			5.6			1.2
			679.6			463.2
Shareholders’ equity
Shareholders’ capital	9		2,060.2			2,084.8
Other reserves	9		110.5			109.6
Deficit			(761.5	)		(802.8	)
			1,409.2			1,391.6
Total liabilities and shareholders’ equity		$	2,088.8		$	1,854.8

Subsequent events (Note 7)

Commitments and contingencies (Note 12)

See accompanying notes to the unaudited interim consolidated financial statements.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

INTERIM CONSOLIDATED FINANCIAL STATEMENTS  1

Obsidian Energy Ltd.

Consolidated Statements of Income


		Three months ended September 30						Nine months ended September 30
(CAD millions, except per share amounts, unaudited)	Note	2026			2025			2026			2025

Production revenues	8	$	176.4		$	128.7		$	522.8		$	476.0
Processing fees	8		2.0			1.7			6.1			7.1
Royalties			(29.4	)		(16.5	)		(67.7	)		(60.8	)
Sales of commodities purchased from third parties			1.0			0.4			3.4			3.7
			150.0			114.3			464.6			426.0

Other income	8		1.6			19.5			4.6			25.2
Risk management gain (loss)	7		(12.2	)		3.0			(58.3	)		(2.4	)
			139.4			136.8			410.9			448.8

Expenses
Operating			42.5			41.3			124.5			140.0
Transportation			12.1			11.2			39.1			39.8
Commodities purchased from third parties			0.8			0.3			2.7			3.1
General and administrative			4.8			4.9			15.5			15.5
Share-based compensation	10		(2.9	)		7.2			6.1			9.9
Depletion, depreciation and impairment	3		45.7			44.6			138.2			146.6
Financing	4		10.0			9.1			25.7			30.5
Restructuring			0.4			0.1			0.7			0.9
Transaction costs			0.2			0.9			1.4			5.3
Other			1.9			-			2.7			-
			115.5			119.6			356.6			391.6
Income before taxes			23.9			17.2			54.3			57.2

Deferred income tax	11		5.9			0.4			13.0			9.7

Net and comprehensive income		$	18.0		$	16.8		$	41.3		$	47.5

Net income per share
Basic		$	0.27		$	0.25		$	0.62		$	0.68
Diluted		$	0.26		$	0.24		$	0.60		$	0.66
Weighted average shares outstanding (millions)
Basic	9		66.4			67.1			66.8			70.2
Diluted	9		68.8			68.9			69.2			72.1

See accompanying notes to the unaudited interim consolidated financial statements.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

INTERIM CONSOLIDATED FINANCIAL STATEMENTS  2

Obsidian Energy Ltd.

Consolidated Statements of Cash Flows


		Three months ended September 30						Nine months ended September 30
(CAD millions, unaudited)	Note	2026			2025			2026			2025

Operating activities
Net income		$	18.0		$	16.8		$	41.3		$	47.5
Depletion, depreciation and impairment	3		45.7			44.6			138.2			146.6
Financing	4		2.9			4.6			8.9			13.4
Share-based compensation	10		3.1			1.7			8.3			6.2
Unrealized risk management loss (gain)	7		9.0			(3.8	)		2.3			2.6
Unrealized equity forward contract gain	7		(16.1	)		(0.1	)		(27.0	)		(0.1	)
Gain on share disposition	8		-			(15.2	)		-			(15.2	)
Deferred income tax	11		5.9			0.4			13.0			9.7
Decommissioning expenditures	6		(4.0	)		(7.9	)		(7.0	)		(18.5	)
Equity forward contracts	7		(0.7	)		(7.3	)		(22.2	)		(7.3	)
Onerous office lease settlements	6		-			-			-			(0.7	)
Other			2.6			-			2.6			-
Settlement of RSUs			(0.1	)		-			(0.1	)		-
Change in non-cash working capital			20.7			11.6			6.9			13.1
			87.0			45.4			165.2			197.3
Investing activities
Capital expenditures	3		(75.6	)		(65.3	)		(194.4	)		(233.9	)
Property acquisitions	3		(2.8	)		(0.3	)		(101.2	)		(0.3	)
Property dispositions	3		0.1			-			0.1			210.9
Proceeds from share disposition	8		-			91.4			-			91.4
Change in non-cash working capital			21.2			15.9			9.9			(12.7	)
			(57.1	)		41.7			(285.6	)		55.4
Financing activities
Increase (decrease) in syndicated credit facility	4		(92.0	)		(47.0	)		83.0			(158.0	)
Issuance of senior unsecured notes	4		77.1			-			77.1			-
Repayment of senior unsecured notes	4		-			(32.4	)		-			(34.4	)
Financing fees paid			(1.3	)		-			(2.2	)		(0.9	)
Lease liabilities settlements	5		(1.0	)		(0.5	)		(2.9	)		(1.6	)
Exercised compensation plans			0.9			0.9			0.7			(0.7	)
Repurchase of common shares	9		(13.0	)		(8.7	)		(33.2	)		(54.9	)
Tax paid on repurchase of common shares			-			-			(0.9	)		(0.7	)
			(29.3	)		(87.7	)		121.6			(251.2	)

Change in cash and cash equivalents			0.6			(0.6	)		1.2			1.5
Cash and cash equivalents (overdraft), beginning of period			0.2			1.6			(0.4	)		(0.5	)
Cash and cash equivalents, end of period		$	0.8		$	1.0		$	0.8		$	1.0

Supplementary information
Cash interest paid		$	1.6		$	8.8		$	11.3		$	21.8

See accompanying notes to the unaudited interim consolidated financial statements.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

INTERIM CONSOLIDATED FINANCIAL STATEMENTS  3

Obsidian Energy Ltd.

Statements of Changes in Shareholders’ Equity


(CAD millions, unaudited)	Note	Shareholders’ Capital			Other Reserves			Deficit			Total
Balance at January 1, 2026		$	2,084.8		$	109.6		$	(802.8	)	$	1,391.6
Net and comprehensive income			-			-			41.3			41.3
Share-based compensation	10		-			8.3			-			8.3
Issued on exercise of equity compensation plans	9		8.9			(8.4	)		-			0.5
Repurchase of common shares for cancellation	9		(33.2	)		-			-			(33.2	)
Tax adjustment on excess value - RSUs	11		-			1.0			-			1.0
Tax on repurchases of common shares	9		(0.3	)		-			-			(0.3	)
Balance at September 30, 2026		$	2,060.2		$	110.5		$	(761.5	)	$	1,409.2


(CAD millions, unaudited)	Note	Shareholders’ Capital			Other Reserves			Deficit			Total
Balance at January 1, 2025		$	2,135.2		$	108.6		$	(838.0	)	$	1,405.8
Net and comprehensive income			-			-			47.5			47.5
Share-based compensation	10		-			6.2			-			6.2
Issued on exercise of equity compensation plans			4.0			(4.7	)		-			(0.7	)
Repurchase of common shares for cancellation			(54.9	)		-			-			(54.9	)
Tax on repurchases of common shares			(0.9	)		-			-			(0.9	)
Balance at September 30, 2025		$	2,083.4		$	110.1		$	(790.5	)	$	1,403.0

See accompanying notes to the unaudited interim consolidated financial statements.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

INTERIM CONSOLIDATED FINANCIAL STATEMENTS  4

Notes to the Unaudited Interim Consolidated Financial Statements

(All tabular amounts are in millions of Canadian dollars except numbers of common shares, per share amounts, percentages and various figures in Note 7)

1. Structure of Obsidian Energy

Obsidian Energy Ltd. (“Obsidian Energy”, the “Company”, “we”, “us” or “our”) is an exploration and production company and is governed by the laws of the Province of Alberta, Canada. The Company's registered office is located at Suite 200, 207 - 9th Avenue S.W. Calgary, Alberta, Canada T2P 1K3. The Company operates in one segment, to explore for, develop and hold interests in oil and natural gas properties and related production infrastructure in the Western Canada Sedimentary Basin directly and through investments in securities of subsidiaries holding such interests. Obsidian Energy’s portfolio of assets is managed at an enterprise level, rather than by separate operating segments or business units. The Company assesses our financial performance at the enterprise level and resource allocation decisions are made on a project basis across our portfolio of assets, without regard to the geographic location of projects. Obsidian Energy owns the petroleum and natural gas assets or 100 percent of the equity, directly or indirectly, of the entities that carry on the remainder of the oil and natural gas business of Obsidian Energy.

2. Basis of presentation and statement of compliance

a) Basis of Presentation

The unaudited condensed interim consolidated financial statements ("interim consolidated financial statements") include the accounts of Obsidian Energy and our wholly owned subsidiaries. Results from acquired properties are included in Obsidian Energy’s reported results subsequent to the closing date and results from properties sold are included until the closing date.

All intercompany balances, transactions, income and expenses are eliminated on consolidation.

b) Statement of Compliance

These interim consolidated financial statements are prepared in compliance with IAS 34 “Interim Financial Reporting” and accordingly do not contain all of the disclosures included in Obsidian Energy’s annual audited consolidated financial statements. These interim consolidated financial statements should be read in conjunction with Obsidian Energy’s audited annual consolidated financial statements as at and for the year ended December 31, 2025. Additionally, these interim consolidated financial statements were prepared using the same accounting policies as in the annual consolidated financial statements as at and for the year ended December 31, 2025, except as described below.

These interim consolidated financial statements were approved for issuance by the Board of Directors on November 4, 2026.

c) Material Accounting Policies

The International Accounting Standards Board issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures with the intention to clarify the date of recognition and derecognition of some financial assets and liabilities. The Company adopted the amendments on their effective date of January 1, 2026. This adoption had no material impact on our interim consolidated financial statements.

d) Future accounting pronouncements

IFRS 18 Presentation and Disclosure in Financial Statements has been issued, which will replace IAS 1 Presentation of Financial Statements. The new standard establishes a revised structure for the consolidated statements of comprehensive profit (net income). The statement of comprehensive profit (net income) will now include three categories: operating, investing and financing. Additionally, increased disclosures in the financial statements around management performance measures will be required. IFRS 18 is effective for annual periods beginning on or after January 1, 2027 and will be applied retroactively. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  5

3. Property, plant and equipment ("PP&E")

Oil and Gas assets/ Facilities, Corporate assets


Cost	Nine months ended September 30, 2026			Year ended December 31, 2025
Balance, beginning of period	$	8,720.9		$	8,417.0
Capital expenditures		194.4			279.3
Property acquisitions		102.1			15.0
Property dispositions		(1.0	)		-
Net decommissioning changes		(1.1	)		9.6
Balance, end of period	$	9,015.3		$	8,720.9


Accumulated depletion and depreciation	Nine months ended September 30, 2026			Year ended December 31, 2025
Balance, beginning of period	$	7,244.7		$	7,073.2
Depletion and depreciation		135.9			178.3
Impairment (reversal)		(0.9	)		(6.8	)
Balance, end of period	$	7,379.7		$	7,244.7


			As at
Net book value	September 30, 2026		December 31, 2025
Total	$	1,635.6	$	1,476.2

Right-of-use assets

The following table presents right-of-use assets by category.


Cost	Nine months ended September 30, 2026		Year ended December 31, 2025
Balance, beginning of period	$	29.4	$	14.8
Additions		1.6		14.6
Balance, end of period	$	31.0	$	29.4


Accumulated amortization	Nine months ended September 30, 2026		Year ended December 31, 2025
Balance, beginning of period	$	11.1	$	9.4
Amortization		3.2		1.7
Balance, end of period	$	14.3	$	11.1


			As at
Net book value	September 30, 2026		December 31, 2025
Total	$	16.7	$	18.3

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  6

Total PP&E

Total PP&E, including oil and gas assets/facilities, corporate assets and right-of-use assets, is as follows:


			As at
PP&E	September 30, 2026		December 31, 2025
Oil and Gas assets/Facilities, Corporate assets	$	1,635.6	$	1,476.2
Right-of-use assets		16.7		18.3
Total	$	1,652.3	$	1,494.5

At September 30, 2026, the Company completed an assessment to determine if indicators of impairment or an impairment reversal were present. No indicators were noted for our Willesden Green, Peace River and Viking cash generating units ("CGUs").

During the first nine months of 2026, we recorded a $0.9 million impairment reversal (2025 - $15.1 million impairment reversal) in our Legacy CGU due to changes in the decommissioning liability in the area. The Legacy CGU has no recoverable amount. As such changes in our decommissioning liability are either expensed or recovered each period.

Willesden Green (Belly River) Acquisition - 2026

On June 30, 2026, the Company closed the acquisition of Belly River light oil assets in the Wilson Creek area of Willesden Green (the "Belly River Acquisition"), which added land and production that complement the Company's existing position. Total consideration was $98.0 million, inclusive of closing adjustments. The Belly River Acquisition was funded through available capacity under the Company's credit facility.

In addition, a contingent value payment (“CVP”) of up to $7.0 million may be payable in quarterly installments of up to $1.75 million from the third quarter of 2026 through the second quarter of 2027, subject to a range of average West Texas Intermediate ("WTI") oil prices in the applicable quarter. Based on the average WTI price for the third quarter of 2026, no CVP payment was made. As a result, the maximum CVP payment is now $5.25 million. As at September 30, 2026, the Company recognized a $2.6 million provision in Other expenses for potential CVP payments over the remaining three quarters, based on forecast WTI prices.

The Belly River Acquisition was accounted for as a business combination in accordance with IFRS 3, Business Combinations. The preliminary purchase price allocation is based on management's estimates of the fair values of the assets acquired and liabilities assumed and remains subject to change during the measurement period. The preliminary allocation resulted in the recognition of property, plant and equipment of $98.6 million and decommissioning liabilities of $0.6 million. Assuming the Belly River Acquisition had occurred on January 1, 2026, the combined entity would have reported the following pro forma production revenue and net income, including estimated depletion and depreciation and financing costs, for the nine months ended September 30, 2026.


	Obsidian Energy Reported		Belly River Acquisition		Pro forma
Production revenue	$	522.8	$	30.3	$	553.1
Net income	$	41.3	$	11.8	$	53.1

Transaction costs associated with the Belly River Acquisition totaled $1.3 million and were expensed.

Pembina Disposition - 2025

On April 7, 2025, the Company closed the disposition (the "Pembina Disposition") of our operated Pembina assets to InPlay Oil Corp. ("InPlay"). Total consideration for the transaction included $208.3 million of cash (inclusive of final closing adjustments), 9,139,784 common shares of InPlay ("InPlay Shares") and a $14.7 million value associated with acquiring InPlay's 34.6 percent interest in the Willesden Green Cardium Unit #2 property.

During the third quarter of 2025, the Company sold all of our InPlay Shares for total proceeds of $91.4 million and recorded a $15.2 million gain on the sale within Other Income on the Consolidated Statements of Income.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  7

4. Long-term debt


				As at
	September 30, 2026			December 31, 2025
Syndicated credit facility	$	92.0		$	9.0
Senior unsecured notes
8.125% $250.0 million, maturing December 3, 2030		250.0			175.0
Total		342.0			184.0
Unamortized premium of senior unsecured notes		2.0			-
Deferred financing costs		(4.9	)		(4.1	)
Total long-term debt	$	339.1		$	179.9

Non-current portion	$	339.1		$	179.9

The Company has a reserve-based syndicated credit facility which is subject to a semi-annual borrowing base redetermination (typically completed in May and November of each year). The aggregate amount available under the syndicated credit facility is $275.0 million and the current revolving period and maturity dates are May 31, 2027, and May 31, 2028, respectively.

At September 30, 2026, the Company had $250.0 million aggregate principal amount of 8.125% senior unsecured notes outstanding, maturing on December 3, 2030 (the "Notes"). In July 2026, the Company issued an additional $75.0 million aggregate principal amount of Notes. The additional Notes were issued at a price of 102.75 resulting in an effective yield of 7.186% and gross proceeds of $77.1 million. The Notes constitute direct senior unsecured obligations of Obsidian Energy and rank equally with all of the Company's existing and future senior unsecured indebtedness.

Financing expense consists of the following:


	Three months ended September 30					Nine months ended September 30
	2026			2025		2026			2025
Interest	$	7.1		$	4.5	$	16.8		$	17.1
Accretion on decommissioning liability		2.2			2.5		6.4			9.8
Amortization on premium of senior unsecured notes		(0.1	)		-		(0.1	)		-
Accretion on discount of senior unsecured notes		-			0.1		-			0.3
Accretion on lease liabilities		0.4			0.1		1.3			0.3
Loss on redeemed senior unsecured notes		-			1.5		-			1.6
Deferred financing costs		0.4			0.4		1.3			1.4
Financing	$	10.0		$	9.1	$	25.7		$	30.5

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  8

5. Lease liabilities

Total lease liabilities included in the Consolidated Balance Sheets are as follows:


	Nine months ended September 30, 2026			Year ended December 31, 2025
Balance, beginning of period	$	19.5		$	6.6
Additions		1.6			14.6
Accretion charges		1.3			0.4
Lease payments		(2.9	)		(2.1	)
Balance, end of period	$	19.5		$	19.5

Current portion	$	3.5		$	3.3
Non-current portion	$	16.0		$	16.2

6. Provisions

Decommissioning liability

At September 30, 2026, the decommissioning liability was determined by applying an inflation factor of 2.0 percent (December 31, 2025 – 2.0 percent) and the inflated amount was discounted using a credit-adjusted rate of 8.0 percent (December 31, 2025 – 8.0 percent) over the expected useful life of the underlying assets, currently extending over 50 years into the future. At September 30, 2026, the total decommissioning liability on an undiscounted, uninflated basis was $347.9 million (December 31, 2025 - $324.0 million) which includes $11.4 million for the Belly River Acquisition.

Changes to the decommissioning liability were as follows:


	Nine months ended September 30, 2026			Year ended December 31, 2025
Balance, beginning of period	$	107.2		$	115.7
Net liabilities added (1)		0.9			2.0
Acquisition		0.6			-
Increase (decrease) due to changes in estimates		(2.6	)		7.0
Liabilities settled		(7.0	)		(28.8	)
Transfers to liabilities for assets held for sale		-			(0.9	)
Accretion charges		6.4			12.2
Balance, end of period	$	105.5		$	107.2

Current portion	$	12.5		$	8.9
Non-current portion	$	93.0		$	98.3

(1)

Includes additions from drilling activity, facility capital spending and activity related to minor net property acquisitions (dispositions).

7. Risk management

Financial instruments consist of cash (overdrafts), accounts receivable, fair values of derivative financial instruments, accounts payable and accrued liabilities and long-term debt. At September 30, 2026, the fair values of these financial instruments approximate their carrying amounts.

The fair values of all outstanding financial commodity contracts and equity forward contracts are reflected on the Consolidated Balance Sheets with the changes during the period recorded in income as unrealized gains or losses for financial commodity contracts and in share-based compensation for equity forward contracts.

At September 30, 2026 and December 31, 2025, the only asset or liability measured at fair value on a recurring basis was the risk management asset and liability, which was valued based on “Level 2 inputs” being quoted prices in markets that are not active or based on prices that are observable for the asset or liability.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  9

The following table reconciles the changes in the fair value of financial instruments outstanding:


Risk management asset (liability)	Nine months ended September 30, 2026			Year ended December 31, 2025
Balance, beginning of period	$	31.7		$	7.1
Unrealized gain (loss) on financial instruments:
Oil		(0.6	)		(3.3	)
Natural gas		(1.3	)		(0.2	)
Foreign exchange forward contract		(0.4	)		-
Equity forward contracts (1)		27.0			(0.6	)
Equity forward contracts purchased		22.2			28.7
Total fair value, end of period	$	78.6		$	31.7

Current asset portion	$	37.9		$	23.0
Current liability portion		(1.4	)		-
Non-current asset portion		42.1			8.7
Non-current liability portion	$	-		$	-

(1)

Unrealized gain (loss) on equity forward contracts is included in share-based compensation expense.

Obsidian Energy records our risk management assets and liabilities on a net basis in the Consolidated Balance Sheets. At September 30, 2026, and December 31, 2025, there were no differences between the gross and net amounts.

Obsidian Energy had the following financial instruments outstanding at September 30, 2026. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits our credit risk by executing counterparty risk procedures which include transacting only with institutions within our syndicated credit facility or companies with high credit ratings and by obtaining financial security in certain circumstances.

Commodity contracts


	Notional Volume (bbl/d)		Remaining Term		Price (US$/bbl)		Fair value (millions)
Oil
WTI Swap		500	October 2026	$		97.32	$	0.2
WTI Collar		9,450	October 2026		81.44 - 92.22			(0.9	)
WTI Collar		3,000	November 2026	$	83.67 - 98.04			0.2
Total oil							$	(0.5	)

	Notional Volume (mcf/d)		Remaining Term		Price (C$/mcf)		Fair value (millions)
Natural Gas
AECO Swap		34,360	October 2026	$		2.71	$	1.4
AECO Swap		9,479	November 2026 - March 2027	$		2.95		0.9
Total natural gas							$	2.3

Total							$	1.8

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  10

Subsequent to September 30, 2026, the Company entered into the following additional commodity contracts:


	Notional Volume (bbl/d)		Remaining Term		Price (US$/bbl)
Oil
WTI Swap		137	October 2026	$		96.85
WTI Collar		200	October 2026		87.00 - 93.75
WTI Collar		4,300	November 2026		91.70 - 101.40
WTI Collar		750	December 2026		97.00 - 107.00
WTI Collar		1,200	January 2027 - June 2027	$	82.81 - 95.44

Foreign Exchange Forward Contracts

Obsidian Energy is exposed to fluctuations in the US/CAD exchange rate on oil sales based on the US dollar benchmark prices. The Company mitigates this exposure by entering into foreign exchange forward contracts.


		Notional Amount ($ millions)		Remaining Term		Price (C$)		Fair value (millions)
Foreign exchange forward contracts
FX forward contract	$		19.6	October 2026	$		1.4110	$	(0.2	)
FX forward contract			19.6	November 2026			1.4088		(0.2	)
FX forward contract	$		14.0	December 2026	$		1.4088		(0.1	)
Total								$	(0.5	)

Subsequent to September 30, 2026, the Company entered into the following additional foreign exchange forward contracts:


		Notional Amount ($ millions)		Remaining Term		Price (C$)
Foreign exchange forward contracts
FX forward contract	$		7.1	December 2026	$		1.4200

The components of risk management within Income on the Consolidated Statements of Income are as follows:


	Three months ended September 30						Nine months ended September 30
	2026			2025			2026			2025
Realized
Settlement of oil contracts loss	$	(6.1	)	$	(4.0	)	$	(64.0	)	$	(6.3	)
Settlement of natural gas contracts gain		3.7			3.2			9.4			6.5
Settlement of foreign exchange contracts loss		(0.8	)		-			(1.4	)		-
Total realized risk management gain (loss)	$	(3.2	)	$	(0.8	)	$	(56.0	)	$	0.2

Unrealized
Oil contracts gain (loss)	$	(7.7	)	$	4.6		$	(0.6	)	$	(1.2	)
Natural gas contracts loss		(2.5	)		(0.8	)		(1.3	)		(1.4	)
Foreign exchange contracts gain (loss)		1.2			-			(0.4	)		-
Total unrealized risk management gain (loss)		(9.0	)		3.8			(2.3	)		(2.6	)
Risk management gain (loss)	$	(12.2	)	$	3.0		$	(58.3	)	$	(2.4	)

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  11

Prepaid Equity Forward Contracts

Obsidian Energy is exposed to equity price risk on our common share price in relation to our share-based compensation plans. Given the value of our share-based compensation plans fluctuates based on the Company’s common share price on the Toronto Stock Exchange ("TSX") at each period end date, the Company mitigates this exposure by entering into equity forward contracts. Unrealized and realized gains/losses on our equity forward contracts for the period are recorded through share-based compensation (see note 10 for the Consolidated Statements of Income impact).


	Share Volume		Remaining Term (1)		Price (C$)		Fair value (millions)
Equity
Equity Forward Contract		720,000	September 2028	$		8.89	$	10.6
Equity Forward Contract		1,300,000	October 2028			8.72		19.1
Equity Forward Contract		550,000	November 2028			8.43		8.1
Equity Forward Contract		715,000	December 2028			8.31		10.5
Equity Forward Contract		450,000	January 2029			8.76		6.6
Equity Forward Contract		680,000	February 2029			10.18		10.0
Equity Forward Contract		710,000	April 2029			13.82		10.4
Equity Forward Contract		85,000	June 2029			15.10		1.3
Equity Forward Contract		50,000	August 2029	$		13.70	$	0.7
Total		5,260,000		$		9.69	$	77.3

(1)

The Company can settle the contract, or a portion of the contract, at any time.

Changes to the prepaid equity forward contracts balance were as follows:


	Nine months ended September 30, 2026		Year ended December 31, 2025
Balance, beginning of period	$	28.1	$	-
Prepaid equity forward contracts share purchases		22.2		28.7
Unrealized settlement gain (loss) on equity forward contracts		27.0		(0.6	)
Balance, end of period	$	77.3	$	28.1

Current portion	$	35.2	$	19.4
Non-current portion	$	42.1	$	8.7

Subsequent to September 30, 2026, the Company entered into the following additional equity forward contracts:


	Share Volume		Remaining Term		Price (C$)
Equity
Equity Forward Contracts		220,000	November 2029	$		15.87

Market Risks

Obsidian Energy is exposed to normal market risks inherent in the oil and natural gas business, including, but not limited to, commodity price risk, foreign currency rate risk, credit risk, interest rate risk, liquidity risk, inflation risk, geopolitical risk and climate change risk. The Company seeks to mitigate these risks through various business processes and management controls and from time to time by using financial instruments.

The ongoing conflicts in the Middle East, together with the continued Russia-Ukraine conflict have contributed to uncertainty in global energy markets, resulting in volatile commodity prices. If these conflicts continue for a prolonged period, they could lead to further disruptions in the supply of energy products, increased commodity price volatility and adversely impact the Company's financial condition. The Company will continue to monitor these situations.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  12

There have been no material changes to these risks from those discussed in the Company’s annual audited consolidated financial statements as at and for the year ended December 31, 2025.

8. Revenue and Other Income

The Company’s significant revenue streams consist of the following:


	Three months ended September 30				Nine months ended September 30
	2026		2025		2026		2025
Oil	$	158.0	$	118.3	$	466.8	$	419.9
NGLs		10.5		6.5		30.1		29.2
Natural gas		7.9		3.9		25.9		26.9
Production revenues		176.4		128.7		522.8		476.0
Processing fees		2.0		1.7		6.1		7.1
Oil and natural gas sales		178.4		130.4		528.9		483.1
Other income		1.6		19.5		4.6		25.2
Oil and natural gas sales and other income	$	180.0	$	149.9	$	533.5	$	508.3

Other income typically consists of road use income which totaled $4.6 million in the first nine months of 2026 (2025 - $5.2 million).

In 2025, the Company received dividends on our InPlay Shares (received as part of the consideration in the Pembina Disposition) and recorded this income within Other Income. During the third quarter of 2025, InPlay paid a cash dividend of $0.09 per common share per month, resulting in the Company receiving $0.8 million during the period before the Company disposed of the InPlay Shares. For the first nine months of 2025, the Company received $3.3 million in dividend income.

In August 2025, the Company sold all of our InPlay Shares to a third party. This consisted of selling 9,139,784 InPlay Shares, at a price per InPlay Share of $10.00 for total proceeds of $91.4 million, which resulted in a $15.2 million gain on the sale of these shares which was recorded in Other Income.

9. Shareholders’ equity

Issued


Shareholders’ capital	Common Shares			Amount
Balance, December 31, 2024		73,684,802		$	2,135.2
Issued pursuant to equity compensation plans (1)		1,210,911			5.4
Repurchase of common shares for cancellation		(7,621,387	)		(54.9	)
Tax on repurchases of common shares (2)		-			(0.9	)
Balance, December 31, 2025		67,274,326			2,084.8
Issued pursuant to equity compensation plans (1)		1,238,084			8.9
Repurchase of common shares for cancellation		(2,508,410	)		(33.2	)
Tax on repurchases of common shares (2)		-			(0.3	)
Balance, September 30, 2026		66,004,000		$	2,060.2

(1)

Upon vesting or exercise of equity awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital.

(2)

Includes tax associated with common share repurchases less common share issuances under the Company's share-based compensation plans.

Normal course issuer bid ("NCIB")

Pursuant to our return of capital initiative to our shareholders, the Company has an NCIB with the TSX. Purchases under the NCIB are subject to having $65 million of liquidity and complying with the terms of our current credit facilities. The total consideration paid includes commissions and fees and is recorded as a reduction to Shareholders' Equity.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  13

The Company's NCIB program consisted of the following:


	Nine months ended September 30
	2026		2025
Number of common shares repurchased		2,508,410		7,621,387
Total consideration for common shares repurchased	$	33.2	$	54.9
Average price per share	$	13.23	$	7.20

Earnings per share - Basic and Diluted

The weighted average number of shares used to calculate per share amounts was as follows:


	Three months ended September 30				Nine months ended September 30
Average shares outstanding (millions)	2026		2025		2026		2025
Basic		66.4		67.1		66.8		70.2
Dilutive impact (1)		2.4		1.8		2.4		1.9
Diluted		68.8		68.9		69.2		72.1

(1)

Includes impact of stock options, restricted share units and performance share units.

10. Share-based compensation

Share-based compensation expense relates to options to acquire common shares ("Options") granted under the Company's Stock Option Plan (the "Option Plan"), restricted share units ("RSUs") granted under the Restricted and Performance Share Unit Plan ("RPSU plan"), deferred share units ("DSUs") granted under the Deferred Share Unit Plan ("DSU plan"), performance share units ("PSUs") granted under the RPSU plan and unrealized gains or losses under the equity forward contracts.

The DSU's and PSU's follow the liability method of accounting where the change in share price at the balance sheet date results in a mark-to-market valuation. Settlement of the units or awards, which can be in the form of cash or shares, only occurs when they vest. To mitigate the exposure to fluctuations in our share price, beginning in the third quarter of 2025, the Company began entering into equity forward contracts and the mark-to-market valuation on these contracts is also included in share-based compensation.

The Options and RSU's follow the equity method of accounting where the fair value of the option or unit is calculated at the grant date and expensed over the expected life because these securities are typically settled in shares.

Share-based compensation consisted of the following:


	Three months ended September 30						Nine months ended September 30
	2026			2025			2026			2025
DSUs	$	6.8		$	3.3		$	13.9		$	2.1
PSUs		3.3			2.3			10.9			1.7
Equity forward contracts gain (1)		(16.1	)		(0.1	)		(27.0	)		(0.1	)
Liability based incentive plans	$	(6.0	)	$	5.5		$	(2.2	)	$	3.7

RSUs	$	1.6		$	1.1		$	4.7		$	4.7
Options		1.5			0.6			3.6			1.5
Equity based incentive plans		3.1			1.7			8.3			6.2
Share-based compensation	$	(2.9	)	$	7.2		$	6.1		$	9.9

(1)

Relates to the equity forward contracts entered into to mitigate the Company's exposure to our share-based compensation plans.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  14

Unrealized gains and losses on the prepaid equity forward contracts are measured by comparing the contracts' fair value at each reporting date, including the change in fair value of contracts purchased during the period. The unrealized gain for the first nine months of 2026 was based on the September 30, 2026, closing share price of $14.69 per share compared to the weighted average forward price for all of our equity forward contracts of $9.69 per share. For the third quarter of 2026, the unrealized gain recognized in the period reflected quarter-over-quarter changes in our share price, including the impact of equity forward contracts entered into during the quarter at an average fair value of $11.63 per share.

The weighted average trading price of the Company's common shares was $13.60 for the first nine months of 2026 (2025 - $7.67).

Restricted and Performance Share Unit plan

RSU grants under the RPSU plan

Obsidian Energy awards RSU grants under the RPSU plan whereby employees receive consideration that fluctuates based on the Company’s share price on the TSX. Consideration can be in the form of cash or shares purchased on the open market or issued from treasury.


RSUs (number of shares equivalent)	Nine months ended September 30, 2026			Year ended December 31, 2025
Outstanding, beginning of period		1,417,152			1,559,563
Granted		719,990			859,920
Vested		(575,342	)		(848,812	)
Forfeited		(71,099	)		(153,519	)
Outstanding, end of period		1,490,701			1,417,152

The fair value and weighted average assumptions of the RSUs granted during the periods were as follows:


	Nine months ended September 30
	2026			2025
Average fair value of RSUs granted (per RSU)	$	10.75		$	7.86
Expected life of RSUs (years)		3.0			3.0
Expected forfeiture rate		5.7	%		0.1	%

PSU grants under the RPSU plan

The RPSU plan allows Obsidian Energy to grant PSUs to employees of the Company.

The PSUs are classified as a liability on our Consolidated Balance Sheets as the PSUs are typically settled in cash. The PSU liability fluctuates based on the Company’s share price on the TSX at each period end date. Employees receive consideration only when the PSUs vest.


PSUs (number of shares equivalent)	Nine months ended September 30, 2026			Year ended December 31, 2025
Outstanding, beginning of period		947,820			635,910
Granted		-			438,140
Vested		(239,360	)		(124,610	)
Forfeited		(4,550	)		(1,620	)
Outstanding, end of period		703,910			947,820

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  15


	As at
PSU liability	September 30, 2026		December 31, 2025
Current	$	5.4	$	1.2
Non-current		5.6		1.2
Total	$	11.0	$	2.4

Option Plan

The Option Plan allows the Company to issue Options to officers, employees, directors and other service providers.


	Nine months ended September 30, 2026					Year ended December 31, 2025
Options	Number of Options			Weighted Average Exercise Price		Number of Options			Weighted Average Exercise Price
Outstanding, beginning of period		1,978,228		$	6.50		2,240,120		$	4.59
Granted		1,657,530			10.57		521,070			7.46
Exercised		(894,156	)		3.63		(779,722	)		1.64
Forfeited		(41,270	)		10.37		(3,240	)		9.65
Outstanding, end of period		2,700,332		$	9.89		1,978,228		$	6.50
Exercisable, end of period		634,249		$	9.24		1,290,527		$	5.39

The fair value and weighted average assumptions of the Options granted during the periods were as follows:


	Nine months ended September 30
	2026			2025
Average fair value of Options granted (per Option)	$	4.51		$	4.35
Expected volatility		48.2	%		69.5	%
Expected life of Options (years)		3.5			4.8
Expected forfeiture rate		0.1	%		0.1	%

Deferred Share Unit plan

The DSU plan allows the Company to grant DSUs to non-employee directors only.

The DSU plan is classified as a liability on our Consolidated Balance Sheets as the DSUs are settled in cash. The DSU liability fluctuates based on the Company’s share price on the TSX at each period end date. Non-employee directors receive consideration only upon redemption of the DSUs following retirement from the Board of Directors, not before this date, with the consideration based on the volume-weighted-average trading price of the common shares on the TSX.


Deferred Share Units	Nine months ended September 30, 2026		Year ended December 31, 2025
Outstanding, beginning of period		2,061,930		1,960,272
Granted		66,049		101,658
Outstanding, end of period		2,127,979		2,061,930


	As at
DSU Liability	September 30, 2026		December 31, 2025
Current	$	31.4	$	17.5
Total	$	31.4	$	17.5

At September 30, 2026, the Company had no outstanding DSUs that were redeemable.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  16

11. Deferred income tax asset


	Nine months ended September 30, 2026			Year ended December 31, 2025
Balance, beginning of period	$	261.5		$	273.3
Deferred income tax expense		(13.0	)		(11.8	)
Tax adjustment on excess value - RSUs		1.0			-
Balance, end of period	$	249.5		$	261.5

The Company has recognized a deferred tax asset, as we expect to have sufficient taxable profits in future years in order to fully utilize the remaining deferred tax asset balance. The deferred tax asset is reduced by net income for the period on an after-tax basis.

12. Commitments and contingencies

The Company is involved in various litigation and claims in the normal course of business and records provisions for claims as required.

      
OBSIDIAN ENERGY THIRD QUARTER 2026

  NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS  17

Exhibit 99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Stephen Loukas, President and Chief Executive Officer of Obsidian Energy Ltd., certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together the “interim filings”) of Obsidian Energy Ltd. (the “issuer”) for the interim period ended September 30, 2026.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2 N/A.

5.3 N/A.

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2026 and ended on September 30, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 5, 2026

(signed) “Stephen Loukas”

_______________________

Stephen Loukas

President & Chief Executive Officer

Exhibit 99.5

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Peter Scott, Senior Vice President and Chief Financial Officer of Obsidian Energy Ltd., certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Obsidian Energy Ltd. (the “issuer”) for the interim period ended September 30, 2026.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

5.2 N/A.

5.3 N/A.

Date: November 5, 2026

(signed) “Peter Scott”

_______________________

Peter Scott

Senior Vice President and Chief Financial Officer

Source: View Original Filing on SEC EDGAR

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