Q2 2026 profit jumps as Obsidian Energy (TSX: OBE) buys Belly River

Rhea-AI Filing Summary

Obsidian Energy Ltd. reported Q2 2026 results in Canadian dollars. The company generated adjusted funds flow from operationsnet income of $42.0 million ($0.63 per share basic). Average production was 28,200 boe/d, slightly below 28,943 boe/d a year earlier, while the average sales price rose to $77.17 per boe and corporate netback increased to $33.22 per boe despite realized hedging losses.

Capital expenditures were $39.1 million and free cash flow was $33.2 million. On June 30, Obsidian closed the $98.0 million Belly River light-oil acquisition adding about 2,500 boe/d and 35 net sections of land, funded with its credit facility. Net debt rose to $353.6 million at June 30, 2026, as the company expanded its $275.0 million syndicated credit facility, added senior unsecured notes and continued its normal course issuer bid and prepaid equity forward program covering 5.21 million shares.

Positive

• Q2 2026 net income increased to $42.0 million ($0.63 per share basic) from $15.3 million ($0.22 per share) in Q2 2025, supported by higher realized oil prices.
• Q2 2026 adjusted funds flow from operations rose to $73.6 million ($1.10 per share basic) versus $63.2 million ($0.90 per share) a year earlier.

Negative

• Obsidian’s net debt increased to $353.6 million at June 30, 2026, from $240.1 million at December 31, 2025, mainly reflecting the $98.0 million Belly River acquisition and capital returns.

Filing Explained

Up to C$7.0 million of acquisition consideration remains conditional, while post-quarter-end note financing increased senior debt to C$250.0 million.

As a Form 6-K interim report, the filing confirms that the Belly River Acquisition closed on June 30; existing holders face no disclosed new equity issuance from this transaction, but up to C$7.0 million of additional consideration remains possible.

The contingent value payment may be made in quarterly installments of up to C$1.75 million from the third quarter of 2026 through the second quarter of 2027, depending on quarterly WTI prices; the company assigned it no value at June 30 based on forecast prices.

After June 30, the company issued C$75.0 million of additional senior unsecured notes, increasing their principal outstanding to C$250.0 million; gross proceeds of C$77.1 million were used to reduce drawings under the syndicated credit facility.

The facility's C$275.0 million amount is a borrowing limit, not cash raised, while the C$250.0 million notes figure is principal outstanding after the add-on; the filing therefore describes a debt-structure change rather than an equity financing.

Key Figures

Adjusted funds flow from operations: $73.6 million Funds flow from operations: $67.8 million Net income: $42.0 million +5 more

8 metrics

Adjusted funds flow from operations $73.6 million Q2 2026, compared with $63.2 million in Q2 2025

Funds flow from operations $67.8 million Three months ended June 30, 2026

Net income $42.0 million Q2 2026, versus $15.3 million in Q2 2025

Free cash flow $33.2 million Three months ended June 30, 2026

Net debt $353.6 million As at June 30, 2026; up from $240.1 million at December 31, 2025

Total production 28,200 boe/d Average daily production in Q2 2026

Belly River acquisition consideration $98.0 million Light oil assets in Wilson Creek area, closed June 30, 2026

Syndicated credit facility capacity $275.0 million Aggregate amount available after Q2 2026 increase

Key Terms

Adjusted funds flow from operations, netback, barrels of oil equivalent ("boe"), prepaid equity forward contracts, +2 more

6 terms

Adjusted funds flow from operations financial

"The Company generated AFFO of $73.6 million ($1.10 per share basic)"

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.

netback financial

"Netback ($/boe) was $33.22 in Q2 2026 compared to $27.13 in 2025"

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.

barrels of oil equivalent ("boe") technical

"Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation"

prepaid equity forward contracts financial

"the Company 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.

normal course issuer bid ("NCIB") regulatory

"our return of capital initiative through our normal course issuer bid ("NCIB")"

contingent value payment ("CVP") financial

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

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FAQ

What were Obsidian Energy (OBE)’s key Q2 2026 financial results?

Obsidian Energy reported Q2 2026 net income of $42.0 million ($0.63 basic per share) and adjusted funds flow from operations of $73.6 million ($1.10 basic per share). Funds flow from operations was $67.8 million and free cash flow reached $33.2 million.

How did production change in Q2 2026 for Obsidian Energy (OBE)?

Average Q2 2026 production was 28,200 boe/d, down slightly from 28,943 boe/d in Q2 2025. The mix included 6,696 bbl/d of light oil, 10,757 bbl/d of heavy oil, 2,237 bbl/d of NGLs and 51 mmcf/d of natural gas.

What is the Belly River acquisition disclosed by Obsidian Energy (OBE)?

On June 30, 2026 Obsidian closed the Belly River light oil acquisition in Wilson Creek for total consideration of $98.0 million, adding about 2,500 boe/d of production (76% liquids, May 2026 basis) and 35 net sections of land.

How has Obsidian Energy (OBE) managed debt and liquidity in 2026?

Net debt was $353.6 million at June 30, 2026. The company increased its syndicated credit facility capacity to $275.0 million and, after quarter-end, issued an additional $75.0 million of 8.125% senior unsecured notes due 2030, using proceeds to reduce credit facility borrowings.

What capital spending and free cash flow did Obsidian Energy (OBE) report?

Q2 2026 capital expenditures were $39.1 million, alongside decommissioning expenditures of $1.3 million. After this spending, Obsidian generated free cash flow of $33.2 million for the quarter and $10.8 million for the first six months of 2026.

What share buybacks and equity forward contracts does Obsidian Energy (OBE) have?

In Q2 2026 Obsidian repurchased and cancelled about 0.1 million shares for $2.1 million. Since 2023 it has bought back 18.9 million shares under its NCIB and has prepaid equity forward contracts on 5,210,000 shares at a weighted average price of $9.65.

What hedging positions did Obsidian Energy (OBE) hold around Q2 2026?

Obsidian held oil swaps and collars totaling roughly 23,000 bbl/d across July–September 2026, AECO gas swaps on 35,077–44,556 mcf/d into March 2027, and foreign exchange forwards totaling $54.3 million notional between July and September 2026.

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 July 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 July 30, 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 July 30, 2026
99.2	Management’s Discussion and Analysis for the three and six months ended June 30, 2026
99.3 99.4 99.5	Financial Statements for the three and six months ended June 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 Second Quarter 2026 Results

CALGARY, July 30, 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 second quarter of 2026 (all amounts are in Canadian dollars unless otherwise noted).

Highlights:

•Average production of 28,200 boe/d in the second quarter, generated $67.8 million of funds flow from operations: $73.6 million adjusted funds flow from operations excluding a $5.8 million share-based compensation charge

•In late June, completed an accretive acquisition of high-return Belly River assets, strengthening our core Willesden Green light oil platform

•Increased our credit facility by $40 million and recently completed a $75 million add-on to our existing senior notes, enhancing financial strength and liquidity

•Second half 2026 development program underway with two active rigs in Peace River and one in Willesden Green

	Three months ended June 30								Six months ended June 30
	2026				2025				2026				2025
FINANCIAL
(millions, except per share amounts)
Cash flow from operating activities		$	38.2			$	55.2			$	78.2			$	151.9
Basic per share ($/share)1			0.57				0.79				1.17				2.12
Diluted per share ($/share)1			0.55				0.75				1.13				2.04
Funds flow from operations2			67.8				65.8				128.8				165.9
Basic per share ($/share)3			1.02				0.94				1.92				2.31
Diluted per share ($/share)3			0.98				0.90				1.86				2.23
Adjusted funds flow from operations2			73.6				63.2				132.6				164.1
Basic per share ($/share)3			1.10				0.90				1.98				2.29
Diluted per share ($/share)3			1.06				0.86				1.91				2.21
Net income (loss)			42.0				15.3				23.3				30.7
Basic per share ($/share)			0.63				0.22				0.35				0.43
Diluted per share ($/share)			0.61				0.21				0.34				0.41
Capital expenditures			39.1				40.2				118.8				168.6
Property acquisitions (dispositions), net			97.8				(210.9	)			98.4				(210.9	)
Decommissioning expenditures			1.3				4.0				3.0				10.6
Long-term debt			354.9				222.8				354.9				222.8
Net debt2		$	353.6			$	270.2			$	353.6			$	270.2
OPERATIONS
Daily Production
Light oil (bbl/d)			6,696				6,314				6,444				9,503
Heavy oil (bbl/d)			10,757				12,041				11,569				11,467
NGL (bbl/d)			2,237				2,189				2,163				2,628
Natural gas (mmcf/d)		51				50				50				60
Total production4 (boe/d)			28,200				28,943				28,465				33,653

Average sales price (before hedging)1
Light oil ($/bbl)		$	132.25			$	91.09			$	115.52			$	96.66
Heavy oil ($/bbl)			99.28			61.27					83.37			65.46
NGL ($/bbl)			62.00			39.42					50.05				47.60
Natural gas ($/mcf)		$	1.65			$	2.00			$	2.00			$	2.11
Netback ($/boe)
Sales price		$	77.17			$	51.83			$	67.33			$	57.09
Risk management gain (loss)			(14.34	)			(0.64	)			(10.13	)			0.17
Net sales price			62.83				51.19				57.20				57.26
Royalties			(9.90	)			(6.03	)			(7.44	)			(7.27	)
Transportation			(5.22	)			(4.49	)			(5.24	)			(4.69	)
Net operating costs3			(14.49	)			(13.54	)			(14.54	)			(14.78	)
Netback3 ($/boe)		$	33.22			$	27.13			$	29.98			$	30.52

(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

"The second quarter was highlighted by the execution of our Belly River acquisition while also generating $73.6 million in adjusted funds flow from operations on average production of 28,200 boe/d," commented Stephen Loukas, Obsidian Energy's President and CEO. "During the quarter, our development activities were primarily focused on bringing wells on production from our earlier 2026 drilling program. Although prolonged spring break-up conditions and unusually wet weather temporarily impacted our field operations, our teams executed well through the challenges, and we have built strong operational momentum during July. With two drilling rigs active in Peace River and one in Willesden Green, we are well positioned to execute our expanded $100.0 million development program through the balance of the year".

"We are also pleased to have closed the Belly River light oil acquisition in the Wilson Creek area of Willesden Green in late June. The addition of these high-quality, contiguous lands and production further strengthens our operating footprint and increases our scale in one of our core areas. The recent expansion of our syndicated credit facility combined with the successful issuance of an additional $75.0 million to our existing senior unsecured notes due in 2030, has further strengthened our financial position, providing us greater flexibility to capitalize on opportunities across our asset base. As we move through the second half of 2026, we remain focused on disciplined execution, operational excellence and delivering sustainable long-term value for our shareholders."

2026 SECOND QUARTER Highlights

•Adjusted Funds flow from Operations ("AFFO") – The Company generated AFFO of $73.6 million ($1.10 per share basic) compared to $63.2 million ($0.90 per share basic) in the second quarter of 2025. The increase was primarily driven by higher realized oil prices, partially offset by higher risk management losses.

•Funds Flow from Operations ("FFO") – The Company generated FFO of $67.8 million ($1.02 per share basic) compared to $65.8 million ($0.94 per share basic) in the second quarter of 2025. Similar to AFFO, the increase was mainly due to higher realized oil prices moderated by higher risk management losses, with the additional impact of a share-based compensation charge.

2

oThe Company recorded a $5.8 million share-based compensation charge, reflecting an unrealized loss on our prepaid equity forward contracts resulting from the change in our share price from $13.22 at March 31, 2026 to $11.61 at June 30, 2026. We have approximately 5.2 million shares contracted at a weighted average price of $9.65 per share.

•Capital Program – Second quarter capital expenditures totaled $39.1 million (2025: $40.2 million), while decommissioning expenditures totaled $1.3 million (2025: $4.0 million). Development activities during the second quarter of 2026 focused on bringing wells on production in Willesden Green (Belly River) and Peace River (Clearwater), while advancing the start of our expanded second half development program.

•Belly River Acquisition – 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"), adding approximately 2,500 boe/d of high-quality production (76% liquids, based on May 2026 production) and 35 net sections of land. Total consideration was $98.0 million (inclusive of closing adjustments) and was funded through available capacity under the Company's credit facility.

•Net Operating Costs – Net operating costs were higher in the second quarter of 2026 at $14.49 per boe compared to $13.54 per boe in 2025, primarily due to higher trucking costs associated with our expanded Peace River production base. Water handling optimization initiatives implemented across our operations contributed to an approximately $0.50 per boe reduction in operating costs during the first half of 2026 compared to the second half of 2025. We continue to identify opportunities to enhance our water handling infrastructure, reduce trucking requirements, and further improve operating efficiencies.

•G&A Costs – General and administrative ("G&A") costs remained consistent in the second quarter of 2026 at $5.2 million, or $2.05 per boe, compared to $5.0 million, or $1.92 per boe, in the second quarter of 2025.

•Net Debt – Net debt levels increased to $353.6 million at June 30, 2026, compared to $240.1 million at December 31, 2025 mainly due to the $98.0 million Belly River Acquisition.

oIn June 2026, the Company increased the aggregate amount available under our syndicated credit facility to $275.0 million from $235.0 million. The revolving period and maturity dates for our syndicated credit facility remain unchanged at May 31, 2027 and May 31, 2028, respectively.

oSubsequent to June 30, 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% and the net proceeds were used primarily to repay borrowings under the Company's syndicated credit facility.

•Share Buyback Program – In the second quarter of 2026, approximately 0.1 million shares were repurchased and cancelled for $2.1 million (at an average price of $14.38 per share).

oWe have repurchased and cancelled approximately 18.9 million shares or 23% of our outstanding shares since our normal course issuer bid ("NCIB") program began in 2023 at an average price of $8.72 per share for $164.6 million.

•Prepaid Equity Forward Program – We entered into prepaid equity forward contracts on a total of 715,000 shares during the second quarter of 2026 for $10.0 million or $14.03 per share.

oSince launching this initiative in 2025, the Company has entered into prepaid equity forward contracts covering 5,210,000 shares at a weighted average price of $9.65 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 additional flexibility.

3

•Net Income – The Company recorded net income of $42.0 million ($0.63 per share basic) in the second quarter of 2026 compared to net income of $15.3 million ($0.22 per share basic) in 2025. In 2026, net income was driven by strong production revenues mainly due to higher oil prices.

2026 SECOND QUARTER OPERATIONAL HIGHLIGHTS

The Company's second quarter program was focused on completing and tying in the wells drilled earlier in the year. While an extended spring break-up resulting from extremely wet conditions delayed certain activities and pushed the start of our second-half program, operations have resumed successfully. We currently have two drilling rigs active in Peace River and one in Willesden Green, positioning the Company for a strong second half of the year.

Key highlights are as follows:

Heavy Oil Highlights

•Clearwater Waterflood – Waterflood pilots are now operational, with injectors online at our Nampa and West Dawson fields. Initial injection performance is meeting expectations, and the Company now has integrated waterflood projects online across three Clearwater operating areas: Dawson, West Dawson, and Nampa.

oDuring the quarter, we drilled and rig-released seven (7.0 net) wells on the integrated Dawson 05-13 Clearwater pad, comprising three (3.0 net) producer wells and four (4.0 net) injector wells.

•Operations Update – Development activity in Peace River advanced during the quarter, with five (5.0 net) producer wells brought on production. The West Dawson 09-21 Clearwater pad delivered strong initial production results, while simultaneous operations at the Dawson 05-13 Clearwater pad enabled all producer wells to be brought on production prior to drilling rig release, improving efficiency.

•Production Results – Initial production results for the five (5.0 net) wells brought on production during the second quarter of 2026 were as follows:

oWest Dawson 09-21 Clearwater pad – Two (2.0 net) wells achieved an average IP30 of 299 boe/d per well (100% oil).

oDawson 05-13 Clearwater pad – Three (3.0 net) wells brought online delivering an average IP30 rate of 148 boe/d per well (100% oil).

Light Oil Highlights

•Crimson Development – One (1.0 net) well on the two-well Crimson 01-05 Belly River pad was rig-released during the second quarter, with drilling of the second well continuing into the third quarter.

•Open Creek Results – The three (3.0 net) wells on the Open Creek 06-04 Belly River pad delivered an average IP30 of 177 boe/d per well (71% liquids) and an average IP60 of 256 boe/d per well (69% liquids). Production improved through the early flowback period despite initial startup challenges. The wells were also drilled with shorter lateral lengths than those planned for the Company's future Belly River development.

4

•Production Enhancements - Optimization efforts on the Open Creek 11-28 Belly River pad have resulted in a significant improvement in overall well productivity, leading to new peak production rates after 120 days of production. Prior to the surface reconfiguration, the two (2.0 net) wells averaged sales rates of 289 boe/d (51% liquids) over the preceding 30 days. Following the reconfiguration, production has increased to an average of 529 boe/d (51% liquids) over the last 20 days. The modifications focused on improving produced sand management and reducing associated flow restrictions. Based on these results, these design improvements will be incorporated into future well and facility designs where applicable.

•Belly River Acquisition – The acquisition of the Wilson Creek asset closed on June 30, with work underway to optimize the acquired production and inventory into the Company's development program. The Company is planning a six-well development program on the acquired lands starting in early 2027.

•H2 2026 Development Activity – A second light oil drilling rig is expected to start in Willesden Green during the third quarter, supporting continued execution of the Company's Belly River and Cardium development program across the Crimson and Open Creek areas.

wells rig released and on production 2026

	Development	Appraisal	Injector	2026E
				Gross (Net) Wells
DEVELOPMENT WELLS
Heavy Oil Assets
H1 Peace River (Bluesky)	1 (1.0)	1 (1.0)	-	2 (2.0)
H1 Peace River (Clearwater)1	8 (8.0)	-	7 (7.0)	15 (15.0)
H2 Peace River (Bluesky)	6 (5.7)	-	-	6 (5.7)
H2 Peace River (Clearwater)2	6 (6.0)	-	10 (10.0)	16 (16.0)
Light Oil Assets
H1 Willesden Green (Belly River)	7 (7.0)	-	-	7 (7.0)
H1 Willesden Green (Cardium)	-	-	-	-
H2 Willesden Green (Belly River)	14 (14.0)	-	-	14 (14.0)
H2 Willesden Green (Cardium)	3 (3.0)	-	-	3 (3.0)
New Ventures
H2 Activity	2 (2.0)			2 (2.0)
Total Operated Wells3	47 (46.7)	1 (1.0)	17 (17.0)	65 (64.7)

(1)Including the last well of our 2025 program rig released on January 2, 2026.

(2)One of our 10 added Clearwater injector wells is anticipated to be rig released in early 2027.

(3)In addition, Obsidian Energy expects to participate in 9 (4.0 net) non-operated wells and drill one operated water source well in 2026.

5

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 Swap			10,982		July 2026	$		76.86
WTI Swap			2,450		August 2026			81.40
WTI Swap			1,500		September 2026			82.46
WTI Collar			7,500		August 2026		79.50 - 87.66
WTI Collar			1,350		September 2026	$	80.00 - 87.42

Type		Notional Amount ($ millions)			Remaining Term		Price (C$)
FX forward contract	$		21.3		July 2026	$		1.3729
FX forward contract			21.3		August 2026			1.3739
FX forward contract	$		11.7		September 2026	$		1.3866

Type		Volume (mcf/d)			Remaining Term		Price (C$/mcf)
Natural Gas
AECO Swap			35,077		July 2026 - October 2026	$		2.69
AECO Swap			9,479		November 2026 - March 2027	$		2.95

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
Total share volume			5,210,000		Weighted average price	$		9.65

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

ADDITIONAL READER ADVISORIES

6

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 six months ended June 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 six months ended June 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.

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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 six months ended June 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 six months ended June 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 June 30								Six months ended June 30
(millions, except per share amounts)		2026				2025				2026				2025
Cash flow from operating activities		$	38.2			$	55.2			$	78.2			$	151.9
Change in non-cash working capital			25.9				4.3				13.8				(1.5	)
Decommissioning expenditures			1.3				4.0				3.0				10.6
Equity forward contracts			1.2				-				32.4				-
Onerous office lease settlements			-				-				-				0.7
Deferred financing costs			(0.5	)			(0.6	)			(0.9	)			(1.0	)
Restructuring charges			0.1				0.7				0.3				0.8
Transaction costs			1.2				2.2				1.2				4.4
Other expenses			0.4				-				0.8				-
FFO			67.8				65.8				128.8				165.9
Deferred share units			(3.2	)			(1.5	)			7.1				(1.2	)
Performance share units			0.1				(1.1	)			7.6				(0.6	)
Equity forward contracts gain (loss)			8.9				-				(10.9	)			-
AFFO		$	73.6			$	63.2			$	132.6			$	164.1
Capital expenditures			(39.1	)			(40.2	)			(118.8	)			(168.6	)
Decommissioning expenditures			(1.3	)			(4.0	)			(3.0	)			(10.6	)
Free Cash Flow		$	33.2			$	19.0			$	10.8			$	(15.1	)

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Netback to Sales Price


		Three months ended June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Sales price		$	198.0			$	136.5			$	346.9			$	347.8
Risk management gain (loss)			(36.7	)			(1.7	)			(52.2	)			1.0
Royalties			(25.4	)			(15.9	)			(38.3	)			(44.3	)
Transportation			(13.4	)			(11.8	)			(27.0	)			(28.6	)
Net operating costs			(37.3	)			(35.6	)			(74.9	)			(90.0	)
Netback		$	85.2			$	71.5			$	154.5			$	185.9

Net Operating Costs to Operating Costs


	Three months ended June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Operating costs		$	40.8			$	39.7			$	82.0			$	98.7
Less processing fees			(2.0	)			(2.6	)			(4.1	)			(5.4	)
Less road use recoveries			(1.5	)			(1.5	)			(3.0	)			(3.3	)
Net operating costs		$	37.3			$	35.6			$	74.9			$	90.0

Net Debt to Long-Term Debt

	As at June 30
(millions)		2026				2025
Long-term debt
Syndicated credit facility		$	184.0			$	114.0
Senior unsecured notes (8.125%, maturing December 3, 2030)			175.0				-
Senior unsecured notes (11.95%, maturing July 27, 2027)			-				112.2
Unamortized discount of senior unsecured notes			-				(0.9	)
Deferred financing costs			(4.1	)			(2.5	)
Total			354.9				222.8
Working capital deficiency
Cash			(0.2	)			(1.6	)
Accounts receivable			(77.8	)			(68.1	)
Prepaid expenses and other			(14.3	)			(14.4	)
Prepaid equity forward contracts1			(60.5	)			-
Accounts payable and accrued liabilities			151.5				131.5
Total			(1.3	)			47.4
Net debt		$	353.6			$	270.2

(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.

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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 executing on our expanded development program for the balance of 2026 and delivering long-term value for our shareholders; how our recent changes in our debt structure creates greater flexibility to capitalize on opportunities across our asset base; how we plan to improve our operating efficiencies; our expectations in connection with our prepaid equity forward program; our expectations and opportunities for our production optimization program; 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

10

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 withdrawing from CUSMA, 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

11

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, are 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.

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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

13

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three and six months ended June 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 six months ended June 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 July 29, 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)

		Jun. 30				Mar. 31				Dec. 31				Sep. 30				Jun. 30				Mar. 31				Dec. 31				Sep. 30
Three months ended		2026				2026				2025				2025				2025				2025				2024				2024
Production revenues		$	197.7			$	148.7			$	123.8			$	128.7			$	136.3			$	211.0			$	213.6			$	218.2
Cash flow from operating activities			38.2				40.0				42.6				45.4				55.2				96.7				115.0				110.3
Basic per share (1)			0.57				0.59				0.63				0.68				0.79				1.32				1.55				1.45
Diluted per share (1)			0.55				0.59				0.62				0.66				0.75				1.27				1.49				1.40
Funds flow from operations (2)			67.8				61.0				56.6				49.7				65.8				100.1				107.7				124.7
Basic per share (3)			1.02				0.91				0.84				0.74				0.94				1.36				1.45				1.64
Diluted per share (3)			0.98				0.91				0.82				0.72				0.90				1.31				1.39				1.58
Adjusted funds flow from operations (2)			73.6				59.0				56.3				55.2				63.2				100.9				109.0				117.8
Basic per share (3)			1.10				0.88				0.84				0.82				0.90				1.37				1.47				1.55
Diluted per share (3)			1.06				0.88				0.81				0.80				0.86				1.32				1.47				1.49
Net income (loss)			42.0				(18.7	)			(12.3	)			16.8				15.3				15.4				(284.8	)			33.2
Basic per share			0.63				(0.28	)			(0.18	)			0.25				0.22				0.21				(3.83	)			0.44
Diluted per share		$	0.61			$	(0.28	)		$	(0.18	)		$	0.24			$	0.21			$	0.20			$	(3.83	)		$	0.42
Production
Light oil (bbl/d)			6,696				6,189				5,443				4,979				6,314				12,727				13,271				13,722
Heavy oil (bbl/d)			10,757				12,390				12,782				12,586				12,041				10,887				11,621				10,624
NGLs (bbl/d)			2,237				2,088				2,037				1,955				2,189				3,072				3,176				3,148
Natural gas (mmcf/d)			51				48				46				47				50				70				72				73
Total (boe/d)(4)			28,200				28,733				27,971				27,316				28,943				38,416				40,119				39,714

(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 SECOND 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 June 30								Six months ended June 30
(millions, except per share amounts)		2026				2025				2026				2025
Cash flow from operating activities		$	38.2			$	55.2			$	78.2			$	151.9
Change in non-cash working capital			25.9				4.3				13.8				(1.5	)
Decommissioning expenditures			1.3				4.0				3.0				10.6
Equity forward contracts			1.2				-				32.4				-
Onerous office lease settlements			-				-				-				0.7
Deferred financing costs			(0.5	)			(0.6	)			(0.9	)			(1.0	)
Restructuring			0.1				0.7				0.3				0.8
Transaction costs			1.2				2.2				1.2				4.4
Other expenses			0.4				-				0.8				-
Funds flow from operations (1)			67.8				65.8				128.8				165.9
Deferred share units			(3.2	)			(1.5	)			7.1				(1.2	)
Performance share units			0.1				(1.1	)			7.6				(0.6	)
Equity forward contracts loss (gain)			8.9				-				(10.9	)			-
Adjusted funds flow from operations (1)		$	73.6			$	63.2			$	132.6			$	164.1
Capital expenditures			(39.1	)			(40.2	)			(118.8	)			(168.6	)
Decommissioning expenditures			(1.3	)			(4.0	)			(3.0	)			(10.6	)
Free Cash Flow (1)		$	33.2			$	19.0			$	10.8			$	(15.1	)
Per share – funds flow from operations (2)
Basic per share		$	1.02			$	0.94			$	1.92			$	2.31
Diluted per share		$	0.98			$	0.90			$	1.86			$	2.23
Per share – adjusted funds flow from operations (2)
Basic per share		$	1.10			$	0.90			$	1.98			$	2.29
Diluted per share		$	1.06			$	0.86			$	1.91			$	2.21

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

(2)Non-GAAP ratio. See "Non-GAAP and Other Financial Measures".

Funds flow from operations and adjusted funds flow from operations in Q2 2026 increased from Q2 2025, primarily due to higher realized oil prices, which was partially offset by higher realized risk management losses. Cash flow from operating activities decreased from Q2 2025 due to the purchase of prepaid equity forward contracts to mitigate share-based compensation exposure and higher realized risk management losses.

For the first six months of 2026, cash flow from operating activities, funds flow from operations and adjusted funds flow from operations decreased compared to the same period in 2025, primarily due to lower production volumes resulting from the disposition of our operated Pembina assets (the "Pembina Disposition") at the beginning of Q2 2025, which was partially offset by higher oil prices.

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 SECOND 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. At June 30, 2026, based on forecasted WTI prices, no value was ascribed to the CVPs.

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, over the past few years, we have more than doubled production through a focused development program. With a land base of more than 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. Building on this success, we have expanded these initiatives in the first half of 2026 and expect to further advance our enhanced oil recovery program in the second half of the year.

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 18.9 million common shares, representing approximately 23 percent of the shares outstanding when the program commenced, for total consideration of $164.6 million.

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 5,210,000 shares at a weighted average share price of $9.65. The contracts expire between 2028 and 2029; however, the Company may monetize them at its discretion prior to expiry.

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 half of 2026 with a focus on abandoning and reclaiming inactive fields.

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 3

Business Environment

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

		Q2 2026				Q1 2026				Q4 2025				Q3 2025				Q2 2025				Q1 2025				Q4 2024				Q3 2024
Benchmark prices
WTI oil ($US/bbl)		$	92.79			$	71.93			$	59.14			$	64.93			$	63.74			$	71.42			$	70.27			$	75.09
Edm mixed sweet par price (CAD$/bbl)			131.53				93.39				76.30				86.57				84.04				95.00				94.39				97.60
Western Canada Select (CAD$/bbl)			107.89				79.19				66.65				75.28				73.89				84.04				80.67				83.80
NYMEX Henry Hub ($US/mmbtu)			2.90				5.04				3.55				3.07				3.44				3.65				2.79				2.16
AECO 5A Index (CAD$/mcf)			1.63				2.01				2.23				0.60				1.69				2.17				1.48				0.69
Foreign exchange rate ($US/CAD$)			1.38				1.37				1.39				1.38				1.38				1.43				1.40				1.37
Benchmark differentials
WTI - Edm Light Sweet ($US/bbl)			2.52				(3.76	)			(4.25	)			(2.20	)			(2.84	)			(4.98	)			(2.42	)			(3.35	)
WTI - Western Canadian Select Heavy ($US/bbl)			(14.61	)			(14.13	)			(11.19	)			(10.38	)			(10.20	)			(12.65	)			(12.54	)			(13.51	)
Average sales price (1) (2)
Light oil (CAD$/bbl)			132.25				97.23				75.30				86.67				91.09				99.46				96.95				100.09
Heavy oil (CAD$/bbl)			99.28				69.40				59.10				67.93				61.27				70.14				67.70				73.73
NGLs (CAD$/bbl)			62.00				37.11				35.33				36.44				39.42				53.49				44.27				48.92
Total liquids (CAD$/bbl)			106.25				74.47				61.07				69.56				68.11				82.21				78.88				84.04
Natural gas (CAD$/mcf)		$	1.65			$	2.38			$	2.38			$	0.91			$	2.00			$	2.18			$	1.53			$	0.86

(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$92.79/bbl during Q2 2026. Prices began the quarter at approximately US$98.00/bbl in April, peaked above US$110.00/bbl in early April, before declining to approximately US$70.00/bbl range in June. The decline was primarily driven by the ceasefire agreement between the U.S. and Iran, which eased concerns over supply disruptions through the Strait of Hormuz and allowed additional oil supply to return to the global market.

WCS differentials remained relatively stable during Q2 2026, averaging US$14.61/bbl compared to US$14.13/bbl in Q1 2026. In contrast, MSW traded at an average premium of US$2.52/bbl to WTI whereas it usually trades at a discount. The ongoing conflict in the Middle East kept significant light oil production offline, supporting demand for light oil from Western Canada and contributing to the premium.

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 Swap			10,982		July 2026	$		76.86
WTI Swap			2,450		August 2026			81.40
WTI Swap			1,500		September 2026			82.46
WTI Collar			7,500		August 2026		79.50 - 87.66
WTI Collar			1,350		September 2026	$	80.00 - 87.42

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 4

Natural Gas

The average NYMEX futures price was US$2.90/MMBtu during Q2 2026. In Alberta, AECO 5A prices averaged CAD$1.63/mcf in Q2 2026, down from CAD$2.01/mcf in Q1. The decline in Alberta natural gas prices was driven by strong natural gas supply and seasonally lower demand during the shoulder season.

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			35,077		July 2026 - October 2026	$		2.69
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	$		21.3		July 2026	$		1.3729
FX forward contract			21.3		August 2026			1.3739
FX forward contract	$		11.7		September 2026	$		1.3866

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
Total share volume			5,210,000		Weighted average price	$		9.65

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

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 5

RESULTS OF OPERATIONS

Average Sales Prices (1)

		Three months ended June 30												Six months ended June 30
		2026				2025				% change				2026				2025				% change
Light oil (per bbl)		$	132.25			$	91.09				45			$	115.52			$	96.66				20
Heavy oil (per bbl)			99.28				61.27				62				83.37				65.46				27
NGL (per bbl)			62.00				39.42				57				50.05				47.60				5
Total liquids (per bbl)			106.25				68.11				56				90.07				76.04				18
Realized risk management loss (per bbl)			(22.65	)			(1.11	)			1,941				(15.87	)			(0.54	)			2,839
Total liquids, net (per bbl)			83.60				67.00				25				74.20				75.50				(2	)
Natural gas (per mcf)			1.65				2.00				(18	)			2.00				2.11				(5	)
Realized risk management gain (per mcf)			0.82				0.08				925				0.64				0.30				113
Natural gas net (per mcf)			2.47				2.08				19				2.64				2.41				10
Weighted average (per boe)			77.17				51.83				49				67.33				57.09				18
Realized risk management gain (loss) (per boe)			(14.34	)			(0.64	)			2,141				(10.13	)			0.17			N/A
Weighted average net (per boe)		$	62.83			$	51.19				23			$	57.20			$	57.26			-

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

Production

		Three months ended June 30												Six months ended June 30
Daily production		2026				2025				% change				2026				2025				% change
Light oil (bbl/d)			6,696				6,314				6				6,444				9,503				(32	)
Heavy oil (bbl/d)			10,757				12,041				(11	)			11,569				11,467				1
NGL (bbl/d)			2,237				2,189				2				2,163				2,628				(18	)
Natural gas (mmcf/d)			51				50				2				50				60				(17	)
Total production (boe/d)			28,200				28,943				(3	)			28,465				33,653				(15	)

Production decreased in Q2 2026 compared to the corresponding period in 2025, primarily due to a reduced capital program in the second half of 2025 and a prolonged spring break-up and extremely wet conditions in Q2 2026 resulted in delays to certain tie-in and optimization activities. For the first six 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 six months of 2026, we drilled 28 (25.8 net) wells, including injector wells and non-operated activity, and a total of 29 (23.5 net) wells were brought on production.

OBSIDIAN ENERGY SECOND 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 June 30												Six months ended June 30
Daily production (boe/d) (1)		2026				2025				% change				2026				2025				% change
Willesden Green/PCU #11			15,393				14,462				6				14,831				19,687		(2)		(25	)
Peace River			11,734				12,827				(9	)			12,498				12,221				2
Viking			778				1,338				(42	)			849				1,428				(41	)
Legacy			295				316				(7	)			287				317				(9	)
Total			28,200				28,943				(3	)			28,465				33,653				(15	)

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

(2)Includes production from the Pembina Assets of approximately 11,000 boe/d.

Netbacks

		Three months ended June 30								Six months ended June 30
(per boe)		2026				2025				2026				2025
Netback:
Sales price (1) (3)		$	77.17			$	51.83			$	67.33			$	57.09
Risk management gain (loss) (2)			(14.34	)			(0.64	)			(10.13	)			0.17
Royalties			(9.90	)			(6.03	)			(7.44	)			(7.27	)
Transportation			(5.22	)			(4.49	)			(5.24	)			(4.69	)
Net operating costs (3)			(14.49	)			(13.54	)			(14.54	)			(14.78	)
Netback (3)		$	33.22			$	27.13			$	29.98			$	30.52
		(boe/d)				(boe/d)				(boe/d)				(boe/d)
Production			28,200				28,943				28,465				33,653

(1)Includes the impact of commodities purchased from and sold to third parties of $0.3 million for Q2 2026 (2025 – $0.2 million) and $0.5 million for the first six months of 2026 (2025 – $0.5 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 Q2 2026 compared to Q2 2025, primarily due to higher realized oil prices, partially offset by increased royalties and realized risk management losses on oil hedges. For the first six months of 2026, the Company's netback per boe decreased slightly from the corresponding period in 2025, primarily because the positive impact of higher realized oil prices was more than offset by higher realized risk management losses, royalties, and transportation costs.

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 7

		Three months ended June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Netback:
Sales (1) (3)		$	198.0			$	136.5			$	346.9			$	347.8
Risk management gain (loss) (2)			(36.7	)			(1.7	)			(52.2	)			1.0
Royalties			(25.4	)			(15.9	)			(38.3	)			(44.3	)
Transportation			(13.4	)			(11.8	)			(27.0	)			(28.6	)
Net operating costs (3)			(37.3	)			(35.6	)			(74.9	)			(90.0	)
Netback (3)		$	85.2			$	71.5			$	154.5			$	185.9

(1)Includes the impact of commodities purchased from and sold to third parties of $0.3 million for Q2 2026 (2025 – $0.2 million) and $0.5 million for the first six months of 2026 (2025 – $0.5 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 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 June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Production revenues		$	197.7			$	136.3			$	346.4			$	347.3
Sales of commodities purchased from third parties			1.8				1.3				2.4				3.3
Less: Commodities purchased from third parties			(1.5	)			(1.1	)			(1.9	)			(2.8	)
Sales (1)			198.0				136.5				346.9				347.8
Realized risk management gain (loss) (2)			(36.7	)			(1.7	)			(52.2	)			1.0
Gross revenues (1)		$	161.3			$	134.8			$	294.7			$	348.8

(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 Q2 2026 compared to Q2 2025 due to higher realized oil prices.

For the first six months of 2026, the Company's production revenues were relatively consistent with the comparable period in 2025, as higher realized oil prices were offset by lower production volumes resulting from the Pembina Disposition, which closed at the beginning of Q2 2025. Gross revenues were further impacted by realized risk management losses on outstanding oil hedges.

Change in Gross Revenues (1)

(millions)
Gross revenues – January 1 – June 30, 2025		$	348.8
Decrease in liquids production			(53.7	)
Increase in liquids prices			57.8
Decrease in natural gas production			(4.0	)
Decrease in natural gas prices			(1.0	)
Increase in realized oil risk management loss			(55.6	)
Increase in realized natural gas risk management gain			2.4
Gross revenues – January 1 – June 30, 2026 (2)		$	294.7

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

(2)Excludes processing fees and other income.

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 8

Royalties

		Three months ended June 30								Six months ended June 30
		2026				2025				2026				2025
Royalties (millions)		$	25.4			$	15.9			$	38.3			$	44.3
Average royalty rate (1)			13	%			12	%			11	%			13	%

(1)Excludes effects of risk management activities and other income.

The increase in absolute royalties and average royalty rate for Q2 2026 compared to Q2 2025 was primarily attributed to higher oil prices.

In the first six months of 2026, absolute royalties and the average royalty rate decreased compared with the same period in 2025, primarily reflecting production from new wells subject to royalty holidays, which carry lower royalty rates.

Expenses

		Three months ended June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Net operating (1)		$	37.3			$	35.6			$	74.9			$	90.0
Transportation			13.4				11.8				27.0				28.6
Financing			8.3				8.7				15.7				21.4
Share-based compensation		$	8.8			$	(0.2	)		$	9.0			$	2.7

(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 June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Operating costs		$	40.8			$	39.7			$	82.0			$	98.7
Less processing fees			(2.0	)			(2.6	)			(4.1	)			(5.4	)
Less road use recoveries			(1.5	)			(1.5	)			(3.0	)			(3.3	)
Net operating costs (1)		$	37.3			$	35.6			$	74.9			$	90.0

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

Operating and net operating costs in Q2 2026 were relatively unchanged compared to Q2 2025, as the sale of higher-cost production pursuant to the Pembina Disposition was largely offset by growth in Peace River production, which carries higher water handling costs. For the first six months of 2026, operating and net operating costs decreased compared to the corresponding period in 2025, primarily due to 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 half of 2026. We are successfully implementing 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 SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 9

Transportation

The Company continues to utilize multiple sales points in the Peace River area to increase realized prices. New wells drilled in the Peace River area over the past year resulted in higher production and thus higher transportation costs on a per boe basis in the first six months of 2026 compared to the 2025 comparable period. 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 impacted Peace River trucking costs in Q2 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 June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Interest		$	5.2			$	5.1			$	9.7			$	12.6
Accretion on decommissioning liability			2.1				2.7				4.2				7.3
Accretion on discount of senior unsecured notes			-				0.1				-				0.2
Accretion on lease liabilities			0.5				0.1				0.9				0.2
Loss on repurchased/redeemed senior unsecured notes			-				0.1				-				0.1
Deferred financing costs			0.5				0.6				0.9				1.0
Financing		$	8.3			$	8.7			$	15.7			$	21.4

Obsidian Energy’s debt structure includes short-term borrowings under our syndicated credit facility and term financing through our senior unsecured notes. Interest charges were lower in the first half of 2026 compared to first half of 2025 mainly due to lower drawings on our syndicated credit facility following the Pembina Disposition as the proceeds received from the transaction were used to reduce the amount outstanding under our syndicated credit facility.

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, which was increased in Q2 2026 from $235.0 million. The current revolving period and maturity dates are May 31, 2027, and May 31, 2028, respectively.

At June 30, 2026, the Company had $175.0 million aggregate principal amount of 8.125% senior unsecured notes outstanding, maturing on December 3, 2030 (the "Notes"). Subsequent to June 30, 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 June 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.

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.

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 10

Share-based compensation expense consisted of the following:

		Three months ended June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
DSUs		$	(3.2	)		$	(1.5	)		$	7.1			$	(1.2	)
PSUs			0.1				(1.1	)			7.6				(0.6	)
Equity forward contracts loss (gain) (1)			8.9				-				(10.9	)			-
Liability based incentive plans		$	5.8			$	(2.6	)		$	3.8			$	(1.8	)
RSUs		$	1.6			$	1.9			$	3.1			$	3.6
Options			1.4				0.5				2.1				0.9
Equity based incentive plans			3.0				2.4				5.2				4.5
Share-based compensation		$	8.8			$	(0.2	)		$	9.0			$	2.7

(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 June 30, 2026, the share price used to measure these obligations was $11.61 per share, compared to $13.22 per share at March 31, 2026, $8.42 per share at December 31, 2025, and $7.58 per share at June 30, 2025.

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. Realized gains and losses are recognized only upon settlement.

The unrealized gain for the first six months of 2026 was based on the June 30, 2026, closing share price of $11.61 per share compared to the weighted average forward price for all of our equity forward contracts of $9.65 per share. For Q2 2026, the unrealized loss 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 $13.33 per share.

General and Administrative Expenses ("G&A")

		Three months ended June 30								Six months ended June 30
(millions, except per boe amounts)		2026				2025				2026				2025
Gross		$	10.1			$	9.9			$	20.7			$	20.8
Per boe (1)			3.95				3.78				4.02				3.42
Net (2)			5.2				5.0				10.7				10.6
Per boe (1)		$	2.05			$	1.92			$	2.09			$	1.74

(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.

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, the impact of the Pembina Disposition in early Q2 2025 and resultant lower production levels led to higher costs in the 2026 periods compared to the 2025 periods.

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 11

Depletion, Depreciation and Impairment

		Three months ended June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Depletion and depreciation (“D&D”)		$	46.2			$	45.5			$	92.2			$	88.7
PP&E Impairment		$	0.4			$	1.2			$	0.3			$	13.3

The Company's D&D expense increased in the 2026 periods compared to the corresponding periods in 2025, primarily due to the Pembina Assets being 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 six months of 2026, we recorded a $0.3 million impairment (2025 - $14.2 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 June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Deferred income tax expense		$	13.0			$	4.3			$	7.1			$	9.3

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 June 30								Six months ended June 30
(millions, except per share amounts)		2026				2025				2026				2025
Net income		$	42.0			$	15.3			$	23.3			$	30.7
Basic per share			0.63				0.22				0.35				0.43
Diluted per share		$	0.61			$	0.21			$	0.34			$	0.41

Net income for Q2 2026 was higher than Q2 2025 primarily as a result of higher realized oil prices, which increased production revenues, although this was partially offset by higher risk management losses.

For the first six months of 2026, net income was lower than 2025 primarily as the result of a risk management loss on our outstanding hedging position, which was partially offset by lower royalties, operating costs and depletion due to lower production as a result of the Pembina disposition.

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 12

Capital Expenditures

		Three months ended June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Drilling and completions		$	23.1			$	14.6			$	82.2			$	102.4
Well equipping and facilities			15.3				25.0				32.7				58.8
Land and geological/geophysical			0.5				0.5				3.6				6.9
Corporate			0.2				0.1				0.3				0.5
Capital expenditures		$	39.1			$	40.2			$	118.8			$	168.6
Property acquisitions, net			97.8				(210.9	)			98.4				(210.9	)
Total		$	136.9			$	(170.7	)		$	217.2			$	(42.3	)

In Q2 2026, capital expenditures were primarily directed toward completing and tying in wells drilled earlier in the year in Peace River and Willesden Green, while also furthering our Peace River waterflood initiatives. Overall, capital expenditures were relatively consistent with Q2 2025.

For the first six months 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.

For the first six months of 2026, 29 (23.5 net) wells were brought on production, including operated and non-operated activities, which included 10 (10.0 net) wells in Peace River, 9 (9.0 net) wells in Willesden Green and 10 (4.5 net) wells in PCU #11.

Drilling

		Six months ended June 30
		2026								2025
(number of wells)		Gross				Net				Gross				Net
Oil			20				18				35				31
Injectors, stratigraphic and service			8				8				2				2
Total			28				26				37				33

The Company drilled 24 (24.0 net) operated wells, including 4 (4.0 net) injector wells, during the first six 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 minimum amount of spending is required to abandon inactive sites.

OBSIDIAN ENERGY SECOND 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)		June 30, 2026				December 31, 2025
Long-term debt
Syndicated credit facility		$	184.0			$	9.0
Senior unsecured notes (8.125%, maturing December 3, 2030)			175.0				175.0
Deferred financing costs			(4.1	)			(4.1	)
Total			354.9				179.9
Working capital deficiency
Cash			(0.2	)			-
Accounts receivable			(77.8	)			(56.1	)
Prepaid expenses and other			(14.3	)			(11.0	)
Prepaid equity forward contracts (1)			(60.5	)			(28.1	)
Bank overdraft			-				0.4
Accounts payable and accrued liabilities			151.5				155.0
Total			(1.3	)			60.2
Net debt (2)		$	353.6			$	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 our return of capital initiative through our share buyback program and the purchase of prepaid equity forwards contracts.

Liquidity

The Company has a reserve-based syndicated credit facility with a borrowing limit of $275.0 million (increased from $235.0 million) and $250.0 million of senior unsecured notes, including the July 2026 add-on note issuance of $75.0 million, 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 $75.0 million note add-on in July, 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 SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 14

Financial Instruments

Obsidian Energy had the following financial instruments outstanding at June 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			8,950		July 2026	$		76.15			$	2.6
WTI Swap			2,250		August 2026			81.20				1.2
WTI Swap			1,375		September 2026			82.14				0.8
WTI Collar			5,050		August 2026	$	80.25 - 87.69				$	2.5
Total oil											$	7.1
		Notional Volume (mcf/d)			Remaining Term		Price (C$/mcf)				Fair value (millions)
Natural Gas
AECO Swap			35,077		July 2026 - October 2026	$		2.69			$	4.4
AECO Swap			4,739		November 2026 - March 2027	$		3.31			$	0.4
Total natural gas											$	4.8
Total											$	11.9

Foreign exchange forward contracts

		Notional Amount ($ millions)			Remaining Term		Price (C$)				Fair value (millions)
Foreign exchange forward contracts
FX forward contract	$		21.3		July 2026	$		1.3729			$	(0.7	)
FX forward contract			21.3		August 2026			1.3739				(0.7	)
FX forward contract	$		11.7		September 2026	$		1.3866			$	(0.2	)
Total											$	(1.6	)

OBSIDIAN ENERGY SECOND 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 June 30								Six months ended June 30
(millions)		2026				2025				2026				2025
Realized
Settlement of oil contracts loss		$	(40.5	)		$	(2.1	)		$	(57.9	)		$	(2.3	)
Settlement of natural gas contracts gain			3.8				0.4				5.7				3.3
Settlement of foreign exchange contracts loss			(0.7	)			-				(0.6	)			-
Total realized risk management gain (loss)		$	(37.4	)		$	(1.7	)		$	(52.8	)		$	1.0
Unrealized
Oil contracts gain (loss)		$	45.4			$	4.5			$	7.1			$	(5.8	)
Natural gas contracts gain (loss)			(4.0	)			4.3				1.2				(0.6	)
Foreign exchange contracts loss			(0.3	)			-				(1.6	)			-
Total unrealized risk management gain (loss)			41.1				8.8				6.7				(6.4	)
Risk management gain (loss)		$	3.7			$	7.1			$	(46.1	)		$	(5.4	)

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 ("TSX") 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			$	8.4
Equity Forward Contract			1,300,000		October 2028			8.72				15.1
Equity Forward Contract			550,000		November 2028			8.43				6.4
Equity Forward Contract			715,000		December 2028			8.31				8.3
Equity Forward Contract			450,000		January 2029			8.76				5.2
Equity Forward Contract			680,000		February 2029			10.18				7.9
Equity Forward Contract			710,000		April 2029			13.82				8.2
Equity Forward Contract			85,000		June 2029	$		15.10			$	1.0
Total			5,210,000			$		9.65			$	60.5

(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 June 30, 2026.

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 16

Based on commodity prices and contracts in place at June 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 $0.5 million;

•a $0.10 change in the price per mcf of natural gas would change pre-tax unrealized risk management by $0.5 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 $5.2 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. The table below includes the impact of the Belly River Acquisition.

		Impact on funds flow from operations (1)
Change of:		Change				$ millions				$/share
WTI - Price per barrel of liquids		WTI US$1.00					9.9				0.15
WCS - Price per barrel of liquids		WCS US$1.00					5.3				0.08
Liquids production		1,000 bbl/day					23.7				0.35
Price per mcf of natural gas		AECO $0.10					1.3				0.02
Natural gas production		1 mmcf/day					0.7				0.01
Effective interest rate			1	%			1.1				0.02
Exchange rate ($US per $CAD)		$	0.01				5.2				0.08

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

Contractual Obligations and Commitments

As at June 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)		$	-			$	-			$	184.0			$	-			$	175.0			$	-			$	359.0
Transportation			8.6				16.0				12.5				12.1				5.7				-				54.9
Interest obligations			12.3				24.5				18.5				14.2				14.2				-				83.7
Lease liability			1.7				3.5				2.5				1.6				1.5				18.5				29.3
Decommissioning liability (2)			5.9				12.2				11.5				10.9				10.3				57.9				108.7
Total		$	28.5			$	56.2			$	229.0			$	38.8			$	206.7			$	76.4			$	635.6

(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 SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 17

At June 30, 2026, the Company had an aggregate of $175.0 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 July 2026 the Company issued an additional $75.0 million in senior unsecured notes also maturing in December 2030. 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 June 30, 2026			66,762,000
Issuance under Option and RPSU Plans			3,570
Repurchase and cancellation of common shares			(40,000	)
As at July 29, 2026			66,725,570
Options outstanding:
As at June 30, 2026			2,798,041
Granted			7,770
As at July 29, 2026			2,805,811
RSUs outstanding:
As at June 30, 2026			1,514,515
Granted			5,680
Vested			(6,873	)
As at July 29, 2026			1,513,322

OBSIDIAN ENERGY SECOND 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 six months ended June 30, 2026 and 2025.

		Three months ended June 30								Six months ended June 30
Daily production (boe/d)		2026				2025				2026				2025
Willesden Green/PCU #11 (1)
Light oil (bbl/d)			6,330				5,568				6,033				8,684
Heavy oil (bbl/d)			-				24				-				49
NGLs (bbl/d)			2,171				2,107				2,097				2,546
Natural gas (mmcf/d)			41				41				40				50
Total production (boe/d)			15,393				14,462				14,831				19,687
Peace River
Light oil (bbl/d)			-				11				-				6
Heavy oil (bbl/d)			10,665				11,910				11,466				11,303
NGLs (bbl/d)			13				16				13				15
Natural gas (mmcf/d)			6				5				6				5
Total production (boe/d)			11,734				12,827				12,498				12,221
Viking
Light oil (bbl/d)			288				663				344				743
Heavy oil (bbl/d)			72				79				80				85
NGLs (bbl/d)			29				41				29				43
Natural gas (mmcf/d)			3				3				3				3
Total production (boe/d)			778				1,338				849				1,428
Legacy
Light oil (bbl/d)			78				72				67				70
Heavy oil (bbl/d)			20				28				23				30
NGLs (bbl/d)			24				25				24				24
Natural gas (mmcf/d)			1				1				1				2
Total production (boe/d)			295				316				287				317
Total
Light oil (bbl/d)			6,696				6,314				6,444				9,503
Heavy oil (bbl/d)			10,757				12,041				11,569				11,467
NGLs (bbl/d)			2,237				2,189				2,163				2,628
Natural gas (mmcf/d)			51				50				50				60
Total production (boe/d)			28,200				28,943				28,465				33,653

(1)Includes production from the Pembina Assets from January 1, 2025 to April 7, 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 SECOND 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

		Jun. 30				Mar. 31				Dec. 31				Sep. 30				Jun. 30				Mar. 31				Dec. 31				Sep. 30
Three months ended		2026				2026				2025				2025				2025				2025				2024				2024
Cash flow from operating activities		$	38.2			$	40.0			$	42.6			$	45.4			$	55.2			$	96.7			$	115.0			$	110.3
Change in non-cash working capital			25.9				(12.1	)			(17.5	)			(11.6	)			4.3				(5.8	)			(13.5	)			6.1
Decommissioning expenditures			1.3				1.7				10.3				7.9				4.0				6.6				3.5				6.3
Equity forward contracts			1.2				31.2				21.3				7.4				-				-				-				-
Onerous office lease settlements			-				-				-				-				-				0.7				2.3				2.2
Deferred financing costs			(0.5	)			(0.4	)			(0.3	)			(0.4	)			(0.6	)			(0.4	)			(0.5	)			(0.6	)
Restructuring			0.1				0.2				0.1				0.1				0.7				0.1				-				-
Transaction costs			1.2				-				0.1				0.9				2.2				2.2				-				-
Other expenses			0.4				0.4				-				-				-				-				0.9				0.4
Funds flow from operations		$	67.8			$	61.0			$	56.6			$	49.7			$	65.8			$	100.1			$	107.7			$	124.7
Deferred share units			(3.2	)			10.3				(1.1	)			3.3				(1.5	)			0.3				1.8				(5.1	)
Performance share units			0.1				7.5				0.1				2.3				(1.1	)			0.5				(0.5	)			(1.8	)
Equity forward contracts loss (gain)			8.9				(19.8	)			0.7				(0.1	)			-				-				-				-
Adjusted funds flow from operations		$	73.6			$	59.0			$	56.3			$	55.2			$	63.2			$	100.9			$	109.0			$	117.8

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 April 1, 2026 and ending on June 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 SECOND 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 SECOND 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 SECOND 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 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 expect to further advance our enhanced oil recovery program in the second half of the year; 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; our expectation that entering into equity forward contracts will help reduce volatility in our funds flow from operations and adjusted funds flow from operations; 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 action as appropriate to limit the Company’s exposure to

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 23

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.

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

OBSIDIAN ENERGY SECOND 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 withdrawing from CUSMA, 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.

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

OBSIDIAN ENERGY SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 25

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 SECOND QUARTER 2026 MANAGEMENT’S DISCUSSION AND ANALYSIS 26

Exhibit 99.3

Obsidian Energy Ltd.

Consolidated Balance Sheets

				As at
(CAD millions, unaudited)		Note		June 30, 2026				December 31, 2025
Assets
Current
Cash				$	0.2			$	-
Accounts receivable					77.8				56.1
Risk management		7			39.6				23.0
Prepaid expenses and other					14.3				11.0
					131.9				90.1
Non-current
Property, plant and equipment		3			1,620.8				1,494.5
Risk management		7			32.9				8.7
Deferred income tax		11			254.7				261.5
					1,908.4				1,764.7
Total assets				$	2,040.3			$	1,854.8
Liabilities and Shareholders’ Equity
Current
Bank overdraft				$	-			$	0.4
Accounts payable and accrued liabilities					151.5				155.0
Current portion of lease liabilities		5			3.6				3.3
Current portion of provisions		6			12.0				8.9
Risk management		7			1.7				-
					168.8				167.6
Non-current
Long-term debt		4			354.9				179.9
Lease liabilities		5			16.2				16.2
Provisions		6			96.7				98.3
Other non-current liabilities					3.8				1.2
					640.4				463.2
Shareholders’ equity
Shareholders’ capital		9			2,071.9				2,084.8
Other reserves		9			107.5				109.6
Deficit					(779.5	)			(802.8	)
					1,399.9				1,391.6
Total liabilities and shareholders’ equity				$	2,040.3			$	1,854.8

Subsequent events (Notes 4 and 7)

Commitments and contingencies (Note 12)

See accompanying notes to the unaudited interim consolidated financial statements.

OBSIDIAN ENERGY SECOND QUARTER 2026 INTERIM CONSOLIDATED FINANCIAL STATEMENTS 1

Obsidian Energy Ltd.

Consolidated Statements of Income

				Three months ended June 30								Six months ended June 30
(CAD millions, except per share amounts, unaudited)		Note		2026				2025				2026				2025
Production revenues		8		$	197.7			$	136.3			$	346.4			$	347.3
Processing fees		8			2.0				2.6				4.1				5.4
Royalties					(25.4	)			(15.9	)			(38.3	)			(44.3	)
Sales of commodities purchased from third parties					1.8				1.3				2.4				3.3
					176.1				124.3				314.6				311.7
Other income		8			1.5				3.9				3.0				5.7
Risk management gain (loss)		7			3.7				7.1				(46.1	)			(5.4	)
					181.3				135.3				271.5				312.0
Expenses
Operating					40.8				39.7				82.0				98.7
Transportation					13.4				11.8				27.0				28.6
Commodities purchased from third parties					1.5				1.1				1.9				2.8
General and administrative					5.2				5.0				10.7				10.6
Share-based compensation		10			8.8				(0.2	)			9.0				2.7
Depletion, depreciation and impairment		3			46.6				46.7				92.5				102.0
Financing		4			8.3				8.7				15.7				21.4
Restructuring					0.1				0.7				0.3				0.8
Transaction costs					1.2				2.2				1.2				4.4
Other					0.4				-				0.8				-
					126.3				115.7				241.1				272.0
Income before taxes					55.0				19.6				30.4				40.0
Deferred income tax		11			13.0				4.3				7.1				9.3
Net and comprehensive income				$	42.0			$	15.3			$	23.3			$	30.7
Net income per share
Basic				$	0.63			$	0.22			$	0.35			$	0.43
Diluted				$	0.61			$	0.21			$	0.34			$	0.41
Weighted average shares outstanding (millions)
Basic		9			66.8				70.1				67.0				71.8
Diluted		9			69.2				73.3				69.3				74.4

See accompanying notes to the unaudited interim consolidated financial statements.

OBSIDIAN ENERGY SECOND QUARTER 2026 INTERIM CONSOLIDATED FINANCIAL STATEMENTS 2

Obsidian Energy Ltd.

Consolidated Statements of Cash Flows

				Three months ended June 30								Six months ended June 30
(CAD millions, unaudited)		Note		2026				2025				2026				2025
Operating activities
Net income				$	42.0			$	15.3			$	23.3			$	30.7
Depletion, depreciation and impairment		3			46.6				46.7				92.5				102.0
Financing		4			3.1				3.6				6.0				8.8
Share-based compensation		10			3.0				2.4				5.2				4.5
Unrealized risk management loss (gain)		7			(41.1	)			(8.8	)			(6.7	)			6.4
Unrealized equity forward contract loss (gain)		7			8.9				-				(10.9	)			-
Deferred income tax		11			13.0				4.3				7.1				9.3
Decommissioning expenditures		6			(1.3	)			(4.0	)			(3.0	)			(10.6	)
Equity forward contracts		7			(10.1	)			-				(21.5	)			-
Onerous office lease settlements		6			-				-				-				(0.7	)
Change in non-cash working capital					(25.9	)			(4.3	)			(13.8	)			1.5
					38.2				55.2				78.2				151.9
Investing activities
Capital expenditures		3			(39.1	)			(40.2	)			(118.8	)			(168.6	)
Property acquisitions		3			(97.8	)			-				(98.4	)			-
Property dispositions		3			-				210.9				-				210.9
Change in non-cash working capital					(9.7	)			(59.3	)			(11.3	)			(28.6	)
					(146.6	)			111.4				(228.5	)			13.7
Financing activities
Increase (decrease) in syndicated credit facility		4			110.0				(125.5	)			175.0				(111.0	)
Repayment of senior unsecured notes		4			-				(2.0	)			-				(2.0	)
Financing fees paid					(0.9	)			(0.9	)			(0.9	)			(0.9	)
Lease liabilities settlements		5			(1.0	)			(0.5	)			(1.9	)			(1.1	)
Exercised compensation plans					1.1				0.2				(0.2	)			(1.6	)
Repurchase of common shares		9			(2.1	)			(36.6	)			(20.2	)			(46.2	)
Tax paid on repurchase of common shares					-				-				(0.9	)			(0.7	)
					107.1				(165.3	)			150.9				(163.5	)
Change in cash and cash equivalents					(1.3	)			1.3				0.6				2.1
Cash and cash equivalents (overdraft), beginning of period					1.5				0.3				(0.4	)			(0.5	)
Cash and cash equivalents, end of period				$	0.2			$	1.6			$	0.2			$	1.6
Supplementary information
Cash interest paid				$	8.8			$	2.0			$	9.7			$	13.0

See accompanying notes to the unaudited interim consolidated financial statements.

OBSIDIAN ENERGY SECOND 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					-				-				23.3				23.3
Share-based compensation		10			-				5.2				-				5.2
Issued on exercise of equity compensation plans		9			7.4				(7.6	)			-				(0.2	)
Repurchase of common shares for cancellation		9			(20.2	)			-				-				(20.2	)
Tax adjustment on excess value - RSUs		11			-				0.3				-				0.3
Tax on repurchases of common shares		9			(0.1	)			-				-				(0.1	)
Balance at June 30, 2026				$	2,071.9			$	107.5			$	(779.5	)		$	1,399.9

(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					-				-				30.7				30.7
Share-based compensation		10			-				4.5				-				4.5
Issued on exercise of equity compensation plans		9			2.6				(4.2	)			-				(1.6	)
Repurchase of common shares for cancellation		9			(46.2	)			-				-				(46.2	)
Tax on repurchases of common shares		9			(0.8	)			-				-				(0.8	)
Balance at June 30, 2025				$	2,090.8			$	108.9			$	(807.3	)		$	1,392.4

See accompanying notes to the unaudited interim consolidated financial statements.

OBSIDIAN ENERGY SECOND 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 July 29, 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.

OBSIDIAN ENERGY SECOND QUARTER 2026   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 5

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

Oil and Gas assets/ Facilities, Corporate assets

Cost		Six months ended June 30, 2026				Year ended December 31, 2025
Balance, beginning of period		$	8,720.9			$	8,417.0
Capital expenditures			118.8				279.3
Property acquisitions			99.3				15.0
Property dispositions			(0.9	)			-
Net decommissioning changes			0.3				9.6
Balance, end of period		$	8,938.4			$	8,720.9

Accumulated depletion and depreciation		Six months ended June 30, 2026				Year ended December 31, 2025
Balance, beginning of period		$	7,244.7			$	7,073.2
Depletion and depreciation			90.1				178.3
Impairment (reversal)			0.3				(6.8	)
Balance, end of period		$	7,335.1			$	7,244.7

						As at
Net book value		June 30, 2026				December 31, 2025
Total		$	1,603.3			$	1,476.2

Right-of-use assets

The following table includes a break-down of the categories for right-of-use assets.

Cost		Six months ended June 30, 2026				Year ended December 31, 2025
Balance, beginning of period		$	29.4			$	14.8
Additions			1.3				14.6
Balance, end of period		$	30.7			$	29.4

Accumulated amortization		Six months ended June 30, 2026				Year ended December 31, 2025
Balance, beginning of period		$	11.1			$	9.4
Amortization			2.1				1.7
Balance, end of period		$	13.2			$	11.1

						As at
Net book value		June 30, 2026				December 31, 2025
Total		$	17.5			$	18.3

OBSIDIAN ENERGY SECOND 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		June 30, 2026				December 31, 2025
Oil and Gas assets/Facilities, Corporate assets		$	1,603.3			$	1,476.2
Right-of-use assets			17.5				18.3
Total		$	1,620.8			$	1,494.5

At June 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 six months of 2026, we recorded a $0.3 million impairment (2025 - $14.2 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 to compliment 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. At June 30, 2026, based on forecasted WTI prices, no value was ascribed to the CVPs.

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 DD&A and financing costs, for the six months ended June 30, 2026.

		Obsidian Energy Reported				Belly River Acquisition				Pro forma
Production revenue		$	346.4			$	30.3			$	376.7
Net income		$	23.3			$	11.8			$	35.1

Transaction costs associated with the Belly River Acquisition totaled $1.2 million and were expensed.

Pembina Disposition - 2025

On April 7, 2025, the Company closed the 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 SECOND QUARTER 2026   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 7

4. Long-term debt

						As at
		June 30, 2026				December 31, 2025
Syndicated credit facility		$	184.0			$	9.0
Senior unsecured notes
8.125% $175.0 million, maturing December 3, 2030			175.0				175.0
Total			359.0				184.0
Deferred financing costs			(4.1	)			(4.1	)
Total long-term debt		$	354.9			$	179.9
Non-current portion		$	354.9			$	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, which was increased from $235.0 million in the second quarter of 2026. The current revolving period and maturity dates are May 31, 2027, and May 31, 2028, respectively.

At June 30, 2026, the Company had $175.0 million aggregate principal amount of 8.125% senior unsecured notes outstanding, maturing on December 3, 2030 (the "Notes"). Subsequent to June 30, 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. 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 June 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.

Financing expense consists of the following:

		Three months ended June 30								Six months ended June 30
		2026				2025				2026				2025
Interest		$	5.2			$	5.1			$	9.7			$	12.6
Accretion on decommissioning liability			2.1				2.7				4.2				7.3
Accretion on discount of senior unsecured notes			-				0.1				-				0.2
Accretion on lease liabilities			0.5				0.1				0.9				0.2
Loss on repurchased/redeemed senior unsecured notes			-				0.1				-				0.1
Deferred financing costs			0.5				0.6				0.9				1.0
Financing		$	8.3			$	8.7			$	15.7			$	21.4

5. Lease liabilities

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

		Six months ended June 30, 2026				Year ended December 31, 2025
Balance, beginning of period		$	19.5			$	6.6
Additions			1.3				14.6
Accretion charges			0.9				0.4
Lease payments			(1.9	)			(2.1	)
Balance, end of period		$	19.8			$	19.5
Current portion		$	3.6			$	3.3
Non-current portion		$	16.2			$	16.2

OBSIDIAN ENERGY SECOND QUARTER 2026   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 8

6. Provisions

Decommissioning liability

At June 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 June 30, 2026, the total decommissioning liability on an undiscounted, uninflated basis was $348.4 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:

		Six months ended June 30, 2026				Year ended December 31, 2025
Balance, beginning of period		$	107.2			$	115.7
Net liabilities added (1)			0.7				2.0
Acquisition			0.6				-
Increase (decrease) due to changes in estimates			(1.0	)			7.0
Liabilities settled			(3.0	)			(28.8	)
Transfers to liabilities for assets held for sale			-				(0.9	)
Accretion charges			4.2				12.2
Balance, end of period		$	108.7			$	107.2
Current portion		$	12.0			$	8.9
Non-current portion		$	96.7			$	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 June 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 June 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 SECOND 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)		Six months ended June 30, 2026				Year ended December 31, 2025
Balance, beginning of period		$	31.7			$	7.1
Unrealized gain (loss) on financial instruments:
Oil			7.1				(3.3	)
Natural gas			1.2				(0.2	)
Foreign exchange forward contract			(1.6	)			-
Equity forward contracts (1)			10.9				(0.6	)
Equity forward contracts purchased			21.5				28.7
Total fair value, end of period		$	70.8			$	31.7
Current asset portion		$	39.6			$	23.0
Current liability portion			(1.7	)			-
Non-current asset portion			32.9				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 June 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 June 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			8,950		July 2026	$		76.15			$	2.6
WTI Swap			2,250		August 2026			81.20				1.2
WTI Swap			1,375		September 2026			82.14				0.8
WTI Collar			5,050		August 2026	$	80.25 - 87.69				$	2.5
Total oil											$	7.1
		Notional Volume (mcf/d)			Remaining Term		Price (C$/mcf)				Fair value (millions)
Natural Gas
AECO Swap			35,077		July 2026 - October 2026	$		2.69			$	4.4
AECO Swap			4,739		November 2026 - March 2027	$		3.31			$	0.4
Total natural gas											$	4.8
Total											$	11.9

OBSIDIAN ENERGY SECOND QUARTER 2026   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 10

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

	Notional Volume (bbl/d)			Remaining Term		Price (US$/bbl)
Oil
WTI Swap		2,032		July 2026	$		80.00
WTI Swap		200		August 2026			83.65
WTI Swap		125		September 2026			86.00
WTI Collar		2,450		August 2026		77.96 - 87.61
WTI Collar		1,350		September 2026	$	80.00 - 87.42
	Notional Volume (mcf/d)			Remaining Term		Price (C$/mcf)
Natural Gas
AECO Swap		4,739		November 2026 - March 2027	$		2.58

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	$		21.3		July 2026	$		1.3729			$	(0.7	)
FX forward contract			21.3		August 2026			1.3739				(0.7	)
FX forward contract	$		11.7		September 2026	$		1.3866			$	(0.2	)
Total											$	(1.6	)

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

		Three months ended June 30								Six months ended June 30
		2026				2025				2026				2025
Realized
Settlement of oil contracts loss		$	(40.5	)		$	(2.1	)		$	(57.9	)		$	(2.3	)
Settlement of natural gas contracts gain			3.8				0.4				5.7				3.3
Settlement of foreign exchange contracts loss			(0.7	)			-				(0.6	)			-
Total realized risk management gain (loss)		$	(37.4	)		$	(1.7	)		$	(52.8	)		$	1.0
Unrealized
Oil contracts gain (loss)		$	45.4			$	4.5			$	7.1			$	(5.8	)
Natural gas contracts gain (loss)			(4.0	)			4.3				1.2				(0.6	)
Foreign exchange contracts loss			(0.3	)			-				(1.6	)			-
Total unrealized risk management gain (loss)			41.1				8.8				6.7				(6.4	)
Risk management gain (loss)		$	3.7			$	7.1			$	(46.1	)		$	(5.4	)

OBSIDIAN ENERGY SECOND 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			$	8.4
Equity Forward Contract			1,300,000		October 2028			8.72				15.1
Equity Forward Contract			550,000		November 2028			8.43				6.4
Equity Forward Contract			715,000		December 2028			8.31				8.3
Equity Forward Contract			450,000		January 2029			8.76				5.2
Equity Forward Contract			680,000		February 2029			10.18				7.9
Equity Forward Contract			710,000		April 2029			13.82				8.2
Equity Forward Contract			85,000		June 2029	$		15.10			$	1.0
Total			5,210,000			$		9.65			$	60.5

(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:

		Six months ended June 30, 2026				Year ended December 31, 2025
Balance, beginning of period		$	28.1			$	-
Prepaid equity forward contracts share purchases			21.5				28.7
Unrealized settlement gain (loss) on equity forward contracts			10.9				(0.6	)
Balance, end of period		$	60.5			$	28.1
Current portion		$	27.6			$	19.4
Non-current portion		$	32.9			$	8.7

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, including attacks on Russian energy infrastructure, 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.

Other than the aforementioned risk, 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.

OBSIDIAN ENERGY SECOND QUARTER 2026   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 12

8. Revenue and Other Income

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

		Three months ended June 30								Six months ended June 30
		2026				2025				2026				2025
Oil		$	177.4			$	119.2			$	308.8			$	301.6
NGLs			12.6				7.9				19.6				22.7
Natural gas			7.7				9.2				18.0				23.0
Production revenues			197.7				136.3				346.4				347.3
Processing fees			2.0				2.6				4.1				5.4
Oil and natural gas sales			199.7				138.9				350.5				352.7
Other income			1.5				3.9				3.0				5.7
Oil and natural gas sales and other income		$	201.2			$	142.8			$	353.5			$	358.4

Other income typically consists of road use income which totaled $3.0 million in the first six months of 2026 (2025 - $3.3 million).

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)			1,136,495				7.4
Repurchase of common shares for cancellation			(1,648,821	)			(20.2	)
Tax on repurchases of common shares (2)			-				(0.1	)
Balance, June 30, 2026			66,762,000			$	2,071.9

(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.

The Company's NCIB program consisted of the following:

		Six months ended June 30
		2026				2025
Number of common shares repurchased			1,648,821				6,533,704
Total consideration for common shares repurchased		$	20.2			$	46.2
Average price per share		$	12.27			$	7.06

OBSIDIAN ENERGY SECOND QUARTER 2026   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 13

Earnings per share - Basic and Diluted

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

	Three months ended June 30								Six months ended June 30
Average shares outstanding (millions)	2026				2025				2026				2025
Basic		66.8				70.1				67.0				71.8
Dilutive impact (1)		2.4				3.2				2.3				2.6
Diluted		69.2				73.3				69.3				74.4

(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 June 30								Six months ended June 30
		2026				2025				2026				2025
DSUs		$	(3.2	)		$	(1.5	)		$	7.1			$	(1.2	)
PSUs			0.1				(1.1	)			7.6				(0.6	)
Equity forward contracts loss (gain) (1)			8.9				-				(10.9	)			-
Liability based incentive plans		$	5.8			$	(2.6	)		$	3.8			$	(1.8	)
RSUs		$	1.6			$	1.9			$	3.1			$	3.6
Options			1.4				0.5				2.1				0.9
Equity based incentive plans			3.0				2.4				5.2				4.5
Share-based compensation		$	8.8			$	(0.2	)		$	9.0			$	2.7

(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 June 30, 2026, the share price used to measure these obligations was $11.61 per share, compared to $13.22 per share at March 31, 2026, $8.42 per share at December 31, 2025, and $7.58 per share at June 30, 2025.

OBSIDIAN ENERGY SECOND 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 six months of 2026 was based on the June 30, 2026, closing share price of $11.61 per share compared to the weighted average forward price for all of our equity forward contracts of $9.65 per share. For the second quarter of 2026, the unrealized loss 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 $13.33 per share.

The weighted average trading price of the Company's common shares was $12.96 for the first six months of 2026 (2025 - $7.40).

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)		Six months ended June 30, 2026				Year ended December 31, 2025
Outstanding, beginning of period			1,417,152				1,559,563
Granted			714,310				859,920
Vested			(564,170	)			(848,812	)
Forfeited			(52,777	)			(153,519	)
Outstanding, end of period			1,514,515				1,417,152

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

		Six months ended June 30
		2026				2025
Average fair value of RSUs granted (per RSU)		$	10.74			$	7.50
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)		Six months ended June 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

		As at
PSU liability		June 30, 2026				December 31, 2025
Current		$	3.9			$	1.2
Non-current			3.8				1.2
Total		$	7.7			$	2.4

OBSIDIAN ENERGY SECOND QUARTER 2026   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 15

Option Plan

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

		Six months ended June 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			1,649,760				10.56				521,070				7.46
Exercised			(796,447	)			2.84				(779,722	)			1.64
Forfeited			(33,500	)			10.01				(3,240	)			9.65
Outstanding, end of period			2,798,041			$	9.90				1,978,228			$	6.50
Exercisable, end of period			731,958			$	9.36				1,290,527			$	5.39

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

		Six months ended June 30
		2026				2025
Average fair value of Options granted (per Option)		$	4.50			$	4.35
Expected volatility			48.1	%			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		Six months ended June 30, 2026				Year ended December 31, 2025
Outstanding, beginning of period			2,061,930				1,960,272
Granted			46,567				101,658
Outstanding, end of period			2,108,497				2,061,930

		As at
DSU Liability		June 30, 2026				December 31, 2025
Current		$	24.6			$	17.5
Total		$	24.6			$	17.5

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

OBSIDIAN ENERGY SECOND QUARTER 2026   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 16

11. Deferred income tax asset

		Six months ended June 30, 2026				Year ended December 31, 2025
Balance, beginning of period		$	261.5			$	273.3
Deferred income tax expense			(7.1	)			(11.8	)
Tax adjustment on excess value - RSUs			0.3				-
Balance, end of period		$	254.7			$	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 SECOND 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 June 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 April 1, 2026 and ended on June 30, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: July 30, 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 June 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 April 1, 2026 and ended on June 30, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: July 30, 2026

(signed) “Peter Scott”

_______________________

Peter Scott

Senior Vice President and Chief Financial Officer

Filing Exhibits & Attachments

5 documents

Press Releases

• EX-99.1 EX-99.1 789.5 KB
• EX-99.2 EX-99.2 2.6 MB
• EX-99.3 EX-99.3 1.9 MB
• EX-99.4 EX-99.4 21.0 KB
• EX-99.5 EX-99.5 20.5 KB