Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document Information [Line Items] | |
Document Type | 40-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | FY |
Trading Symbol | OBE |
Entity Registrant Name | OBSIDIAN ENERGY LTD. |
Entity Central Index Key | 1,334,388 |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Common Stock, Shares Outstanding | 507,316,031 |
Consolidated Balance Sheets
Consolidated Balance Sheets - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current | ||
Cash | $ 2 | $ 2 |
Accounts receivable | 53 | 105 |
Risk management | 9 | 11 |
Other | 12 | 18 |
Deferred funding asset | 18 | |
Assets held for sale | 35 | |
Total current assets | 76 | 189 |
Non-current | ||
Property, plant and equipment | 2,574 | 2,819 |
Total non-current assets | 2,574 | 2,819 |
Total assets | 2,650 | 3,008 |
Current | ||
Bank overdraft | 2 | |
Accounts payable and accrued liabilities | 143 | 149 |
Current portion of long-term debt | 17 | 31 |
Current portion of provisions | 28 | 27 |
Risk management | 55 | |
Liabilities related to assets held for sale | 24 | |
Total current liabilities | 190 | 286 |
Non-current | ||
Long-term debt | 402 | 328 |
Provisions | 186 | 221 |
Risk management | 6 | |
Other non-current liabilities | 4 | 1 |
Total liabilities | 782 | 842 |
Shareholders' equity | ||
Shareholders' capital | 2,185 | 2,181 |
Other reserves | 99 | 96 |
Deficit | (416) | (111) |
Total shareholders' equity | 1,868 | 2,166 |
Total liabilities and shareholders' equity | $ 2,650 | $ 3,008 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - CAD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement [LineItems] | ||
Oil and natural gas sales and other income | $ 444 | $ 450 |
Royalties | (36) | (30) |
Gross Revenue | 408 | 420 |
Risk management gain (loss) | (26) | 24 |
Total revenue | 382 | 444 |
Expenses | ||
Operating | 158 | 189 |
Transportation | 36 | 29 |
General and administrative | 24 | 31 |
Restructuring | 16 | 10 |
Share-based compensation | 6 | 8 |
Depletion, depreciation, impairment and accretion | 411 | 323 |
Gain on dispositions | (3) | (74) |
Provisions | (6) | (8) |
Foreign exchange loss (gain) | 8 | (5) |
Financing | 21 | 23 |
Other | 16 | 15 |
Total expenses | 687 | 541 |
Loss before taxes | (305) | (97) |
Deferred tax recovery | 13 | |
Net and comprehensive loss | $ (305) | $ (84) |
Net loss per share | ||
Basic | $ (0.60) | $ (0.17) |
Diluted | $ (0.60) | $ (0.17) |
Weighted average shares outstanding (millions) | ||
Basic | 506.3 | 503.9 |
Diluted | 506.3 | 503.9 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | ||
Net income (loss) | $ (305) | $ (84) |
Depletion, depreciation, impairment and accretion | 411 | 323 |
Gain on dispositions | (3) | (74) |
Provisions | (6) | (8) |
Deferred tax recovery | (13) | |
Share-based compensation | 7 | 8 |
Unrealized risk management loss (gain) | (59) | 7 |
Unrealized foreign exchange gain | (11) | |
Restructuring | 8 | |
Other | 4 | |
Decommissioning expenditures | (9) | (16) |
Office lease settlements | (13) | (16) |
Change in non-cash working capital | 68 | 5 |
Cash flows from (used in) operating activities | 99 | 125 |
Investing activities | ||
Capital expenditures | (168) | (141) |
Property dispositions (acquisitions), net | 13 | 110 |
Change in non-cash working capital | (6) | (3) |
Cash flows from (used in) investing activities | (161) | (34) |
Financing activities | ||
Increase (decrease) in long-term debt | 84 | (76) |
Repayments of senior notes | (32) | (26) |
Realized foreign exchange loss on repayments | 8 | 6 |
Issue of equity compensation plans | (4) | |
Cash flows from (used in) financing activities | 60 | (100) |
Change in cash and cash equivalents | (2) | (9) |
Cash and cash equivalents, beginning of year | $ 2 | 11 |
Cash and cash equivalents, end of year | $ 2 |
Statements of Changes in Shareh
Statements of Changes in Shareholders' Equity - CAD ($) $ in Millions | Total | Shareholders' Capital [member] | Other Reserves [member] | Deficit [member] |
Beginning balance at Dec. 31, 2016 | $ 2,247 | $ 8,997 | $ 97 | $ (6,847) |
Statement [LineItems] | ||||
Net and comprehensive loss | (84) | (84) | ||
Share-based compensation | 8 | 8 | ||
Issued on exercise of options | (5) | 4 | (9) | |
Elimination of deficit | (6,820) | 6,820 | ||
Ending balance at Dec. 31, 2017 | 2,166 | 2,181 | 96 | (111) |
Statement [LineItems] | ||||
Net and comprehensive loss | (305) | (305) | ||
Share-based compensation | 7 | 7 | ||
Issued on exercise of options | 4 | (4) | ||
Ending balance at Dec. 31, 2018 | $ 1,868 | $ 2,185 | $ 99 | $ (416) |
Structure of Obsidian Energy
Structure of Obsidian Energy | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Structure of Obsidian Energy | 1. Structure of Obsidian Energy Obsidian Energy Ltd. (“Obsidian Energy” or the “Company”) is an exploration and production company and is governed by the laws of the Province of Alberta, Canada. 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 its financial performance at the enterprise level and resource allocation decisions are made on a project basis across its portfolio of assets, without regard to the geographic location of projects . Name change Effective June 26, 2017, the Company obtained shareholder approval to change its name from Penn West Petroleum Ltd. to Obsidian Energy Ltd. |
Basis of presentation and state
Basis of presentation and statement of compliance | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Basis of presentation and statement of compliance | 2. Basis of presentation and statement of compliance a) Statement of Compliance These annual consolidated financial statements are prepared in compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The annual consolidated financial statements have been prepared on a historical cost basis, except risk management assets and liabilities which are recorded at fair value as discussed in Note 9. The annual consolidated financial statements of the Company for the year ended December 31, 2018 were approved for issuance by the Board of Directors on March 6, 2019. b) Basis of Presentation The annual consolidated financial statements include the accounts of Obsidian Energy, its wholly owned subsidiaries and its proportionate interest in partnerships. 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. Certain comparative figures have been reclassified to correspond with current period presentation. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Significant accounting policies | 3. Significant accounting policies a) Critical accounting judgments and key estimates The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the recorded amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period. These and other estimates are subject to measurement uncertainty and the effect on the consolidated financial statements of changes in these estimates could be material. Management also makes judgments while applying accounting policies that could affect amounts recorded in its consolidated financial statements. Significant judgments include the identification of cash generating units (“CGUs”) for impairment testing purposes and determining whether a CGU has an impairment indicator. Management has performed an assessment of the Company’s ability to comply with covenants for the 12 month period ending December 31, 2019. This assessment includes judgements relating to future production volumes, forward commodity pricing, future costs including capital, operating and general and administrative, forward foreign exchange rates, interest rates, and income taxes, all of which are subject to measurement uncertainty. The following are the estimates that management has made in applying the Company’s accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements. i) Reserve and resource estimates Commercial petroleum reserves are determined based on estimates of petroleum-in-place, year-end. Reserve adjustments are made annually based on actual oil and natural gas volumes produced, the results from capital programs, revisions to previous estimates, new discoveries and acquisitions and dispositions made during the year and the effect of changes in forecast future crude oil and natural gas prices. There are a number of estimates and assumptions that affect the process of evaluating reserves. Proved reserves are the estimated quantities of crude oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a high degree of certainty (at least 90 percent) those quantities will be exceeded. Proved plus probable reserves are the estimated quantities of crude oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a 50 percent certainty those quantities will be exceeded. Obsidian Energy reports production and reserve quantities in accordance with Canadian practices and specifically in accordance with “Standards of Disclosure for Oil and Gas Activities” (“NI 51-101”). The estimate of proved plus probable reserves is an essential part of the depletion calculation, the impairment test and hence the recorded amount of oil and gas assets. Contingent Resources are defined in the COGE Handbook as those quantities of petroleum estimated to be potentially recoverable from known accumulations using established technology or technology under development, but which do not currently qualify as reserves or commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, operational, political and regulatory matters or a lack of markets. The estimate of contingent resources may be included as part of the recoverable amount in the impairment test. Obsidian Energy cautions users of this information that the process of estimating crude oil and natural gas reserves is subject to a level of uncertainty. The reserves are based on current and forecast economic and operating conditions; therefore, changes can be made to future assessments as a result of a number of factors, which can include commodity prices, new technology, changing economic conditions, future reservoir performance and forecast development activity. ii) Recoverability of asset carrying values Obsidian Energy assesses its property, plant and equipment (“PP&E”) for impairment by comparing the carrying amount to the recoverable amount of the underlying assets. The determination of the recoverable amount involves estimating the higher of an asset’s fair value less costs to sell or its value-in-use, iii) Decommissioning liability Obsidian Energy recognizes a provision for future abandonment activities in the consolidated financial statements at the net present value of the estimated future expenditures required to settle the estimated obligation at the balance sheet date. The measurement of the decommissioning liability involves the use of estimates and assumptions including the discount rate, the amount and expected timing of future abandonment costs and the inflation rate related thereto. The estimates were made by management and external consultants considering current costs, technology and enacted legislation. iv) Office lease liability Obsidian Energy recognizes a provision for certain onerous office lease commitments in the consolidated financial statements at the net present value of future lease payments the Company is obligated to make under non-cancellable sub-lease v) Fair value calculation on share-based payments The fair value of share-based payments is calculated using a Black-Scholes model. There are a number of estimates used in the calculation such as the expected future forfeiture rate, the expected period the share-based compensation is outstanding and the future price volatility of the underlying security all of which can vary from expectations. The factors applied in the calculation are management’s estimates based on historical information and future forecasts. vi) Fair value of risk management contracts Obsidian Energy records risk management contracts at fair value with changes in fair value recognized in income. The fair values are determined using external counterparty information which is compared to observable market data. vii) Taxation The calculation of deferred income taxes is based on a number of assumptions including estimating the future periods in which temporary differences and other tax credits will reverse and the general assumption that substantively enacted future tax rates at the balance sheet date will be in effect when differences reverse. viii) Litigation Obsidian Energy records provisions related to legal matters if it is probable that the Company will not be successful in defending the claim and if an amount can be reasonably estimated. Determining the probability of a claim being defended is subject to considerable judgment. Additionally, the potential claim is generally a wide range of figures and a single estimate must be made when recording a provision. Contingencies will only be resolved or unfounded when one or more future events occur. The assessment of contingencies involves significant judgment and estimates of the potential outcome of future events. b) Business combinations Obsidian Energy uses the acquisition method to account for business combinations. The net identifiable assets and liabilities acquired in transactions are generally measured at their fair value on the acquisition date. The acquisition date is the closing date of the business combination. Acquisition costs incurred by Obsidian Energy to complete a business combination are expensed in the period incurred except for costs related to the issue of any debt or equity securities, which are recognized based on the nature of the related financing instrument. Revisions may be made to the initial recognized amounts determined during the measurement period, which shall not exceed one year after the closing date of the acquisition. c) Revenue Policy Applicable from January 1, 2018 Obsidian Energy generally recognizes crude oil, natural gas and natural gas liquids (“NGLs”) revenue when title passes from Obsidian Energy to the purchaser or, in the case of services, as contracted services are performed. Production revenues are determined pursuant to the terms outlined in contractual agreements and are based on fixed or variable price components. The transaction price for crude oil, natural gas and NGLs is based on the commodity price in the month of production, adjusted for various factors including product quality and location. Commodity prices are based on monthly or daily market indices. Performance obligations in the contract are fulfilled on the last day of the month with payment typically on the 25 th Policy Applicable before January 1, 2018 Obsidian Energy generally recognizes oil and natural gas revenue when title passes from Obsidian Energy to the purchaser or, in the case of services, as contracted services are performed. Revenue is measured at the fair value of the consideration received or receivable. Revenue from the sale of crude oil, natural gas and natural gas liquids (prior to deduction of transportation costs) is recognized when all the following conditions have been satisfied: • The significant risks and rewards of ownership of the goods have been transferred to the buyer; • There is no continuing managerial involvement to the degree usually associated with ownership or effective control over the goods sold; • The amount of revenue can be reliably measured; • It is probable that the economic benefits associated with the transaction will flow to Obsidian Energy; and • The costs incurred or to be incurred in respect of the transaction can be reliably measured. d) Joint arrangements The consolidated financial statements include Obsidian Energy’s proportionate interest of jointly controlled assets and liabilities and its proportionate interest of the revenue, royalties and operating expenses. A significant portion of Obsidian Energy’s exploration and development activities are conducted jointly with others and involve joint operations. Under such arrangements, Obsidian Energy has the exclusive rights to its proportionate interest in the assets and the economic benefits generated from its share of the assets. Income from the sale or use of Obsidian Energy’s interest in joint operations and its share of expenses is recognized when it is probable that the economic benefits associated with the transactions will flow to/from Obsidian Energy and the amounts can be reliably measured. The Peace River Oil Partnership is a joint operation and Obsidian Energy records its 55 percent interest of revenues, expenses, assets and liabilities. e) Transportation expense Transportation costs are paid by Obsidian Energy for the shipping of natural gas, crude oil and natural gas liquids from the wellhead to the point of title transfer to buyers. These costs are recognized as services are received. f) Foreign currency translation Obsidian Energy and each of its subsidiaries use the Canadian dollar as their functional currency. Monetary items, such as accounts receivable and long-term debt, are translated to Canadian dollars at the rate of exchange in effect at the balance sheet date. Non-monetary g) PP&E i) Measurement and recognition Oil and gas properties are included in PP&E at cost, less accumulated depletion and depreciation and any impairment losses. The cost of PP&E includes costs incurred initially to acquire or construct the item and betterment costs. Capital expenditures are recognized as PP&E when it is probable that future economic benefits associated with the investment will flow to Obsidian Energy and the cost can be reliably measured. PP&E includes capital expenditures incurred in the development phases, acquisition and disposition of PP&E and additions to the decommissioning liability. ii) Depletion and Depreciation Except for components with a useful life shorter than the reserve life of the associated property, resource properties are depleted using the unit-of-production Components of PP&E that are not depleted using the unit-of-production iii) Derecognition The carrying amount of an item of PP&E is derecognized when no future economic benefits are expected from its use or upon sale to a third party. The gain or loss arising from derecognition is included in income and is measured as the difference between the net proceeds, if any, and the carrying amount of the asset. iv) Major maintenance and repairs Ongoing costs to maintain properties are generally expensed as incurred. These costs include the cost of labour, consumables and small parts. The costs of material replacement parts, turnarounds and major inspections are capitalized provided it is probable that future economic benefits in excess of cost will be realized and such benefits are expected to extend beyond the current operating period. The carrying amount of a replaced part is derecognized in accordance with Obsidian Energy’s derecognition policies. v) Impairment of oil and natural gas properties Obsidian Energy reviews oil and gas properties for circumstances that indicate its assets may be impaired at the end of each reporting period. These indicators can be internal (i.e. reserve changes) or external (i.e. market conditions) in nature. If an indication of impairment exists, Obsidian Energy completes an impairment test, which compares the estimated recoverable amount to the carrying value. The estimated recoverable amount is defined under IAS 36 (“Impairment of Assets”) as the higher of an asset’s or CGU’s fair value less costs to sell and its value-in-use. Where the recoverable amount is less than the carrying amount, the CGU is considered to be impaired. Impairment losses identified for a CGU are allocated on a pro rata basis to the asset categories within the CGU. The impairment loss is recognized as an expense in income. Value-in-use after-tax Impairment losses related to PP&E can be reversed in future periods if the estimated recoverable amount of the asset exceeds the carrying value. The impairment recovery is limited to a maximum of the estimated depleted historical cost if the impairment had not been recognized. The reversal of the impairment loss is recognized in depletion, depreciation and impairment. vi) Other Property, Plant and Equipment Obsidian Energy’s corporate assets include computer hardware and software, office furniture, buildings and leasehold improvements and are depreciated on a straight-line basis over their useful lives. Corporate assets are tested for impairment separately from oil and gas assets. h) Share-based payments The fair value of units granted under the Restricted and Performance Share Unit Plan (“RPSU”) following the equity method is recognized as compensation expense with a corresponding increase to other reserves in shareholders’ equity over the term of the units based on a graded vesting schedule. Obsidian Energy measures the fair value of units granted under this plan at the grant date using the share price from the Toronto Stock Exchange (“TSX”). The fair value is based on market prices and considers the terms and conditions of the units granted. The fair value of options granted under the Stock Option Plan (the “Option Plan”) is recognized as compensation expense with a corresponding increase to other reserves in shareholders’ equity over the term of the options based on a graded vesting schedule. Obsidian Energy measures the fair value of options granted under these plans at the grant date using the Black-Scholes option-pricing model. The fair value is based on market prices and considers the terms and conditions of the share options granted. The fair value of awards granted under the Deferred Share Unit Plan (“DSU”), Performance Share Unit Plan (“PSU”) and the RPSU plan following the liability method are based on a fair value calculation on each reporting date using the awards outstanding and Obsidian Energy’s share price from the TSX on each balance sheet date. The fair value of the awards is expensed over the vesting period based on a graded vesting schedule. Subsequent increases and decreases in the underlying share price result in increases and decreases, respectively, to the accrued obligation until the related instruments are settled. i) Provisions i) General Provisions are recognized based on an estimate of expenditures required to settle present obligations at the end of the reporting period. The provision is risk adjusted to take into account any uncertainties. When the effect of the time value of money is material, the amount of a provision is calculated as the present value of the future expenditures required to settle the obligations. The discount rate reflects the current assessment of the time value of money and risks specific to the liability when those risks have not already been reflected as an adjustment to future cash flows. ii) Decommissioning liability The decommissioning liability is the present value of Obsidian Energy’s future costs of obligations for property, facility and pipeline abandonment and site restoration. The liability is recognized on the balance sheet with a corresponding increase to the carrying amount of the related asset. The recorded liability increases over time to its future amount through accretion charges to income. Revisions to the estimated amount or timing of the obligations are reflected prospectively as increases or decreases to the recorded liability and the related asset. Actual decommissioning expenditures, up to the recorded liability at the time, are charged to the liability as the costs are incurred. Amounts capitalized to the related assets are amortized to income consistent with the depletion or depreciation of the underlying asset. iii) Office lease liability The office lease liability is the net present value of future lease payments Obsidian Energy is obligated to make under non-cancellable sub-lease sub-lease j) Leases A lease is classified as an operating lease if it does not transfer substantially all of the risks and rewards incidental to ownership of the related asset to the lessee. Operating lease payments are expensed on a straight-line basis over the life of the lease. k) Share capital Common shares are classified as equity. Share issue costs are recorded in shareholder’s equity, net of applicable taxes. Dividends are paid at the discretion of the Board of Directors and are deducted from retained earnings. If issued, preferred shares would be classified as equity and could be issued in one or more series. l) Earnings per share Earnings per share is calculated by dividing net income or loss attributable to the shareholders by the weighted average number of common shares outstanding during the period. Obsidian Energy computes the dilutive impact of equity instruments other than common shares assuming the proceeds received from the exercise of in-the-money m) Taxation Income taxes are based on taxable income in a taxation year. Taxable income normally differs from income reported in the consolidated Statements of Income (Loss) as it excludes items of income or expense that are taxable or deductible in other years or are not taxable or deductible for income tax purposes. Obsidian Energy uses the liability method of accounting for deferred income taxes. Temporary differences are calculated assuming that the financial assets and liabilities will be settled at their carrying amount. Deferred income taxes are computed on temporary differences using substantively enacted income tax rates expected to apply when deferred income tax assets and liabilities are realized or settled. A deferred income tax asset is recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences can be utilized. Deferred income tax assets are reviewed at each reporting date and are not recognized until such time that it is probable that the related tax benefit will be realized. n) Financial instruments Policy Applicable from January 1, 2018 Obsidian Energy recognizes financial assets and financial liabilities, including derivatives, on the consolidated Balance Sheets when the Company becomes a party to the contract. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or when the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized from the consolidated financial statements when the liability is extinguished either through settlement of or release from the obligation of the underlying liability. Classification and Measurement of Financial Instruments The classification of financial assets is determined by their context in Obsidian Energy’s business model and by the characteristics of the financial asset’s contractual cash flows. Financial assets and financial liabilities are measured at fair value on initial recognition, which is typically the transaction price unless a financial instrument contains a significant financing component. Subsequent measurement is dependent on the financial instrument’s classification, as described below: • Cash and cash equivalents (includes cash and bank overdraft), accounts receivable, accounts payable and accrued liabilities and long-term debt are measured at amortized cost. • Risk management contracts, all of which are derivatives, are measured initially at fair value through profit or loss (“FVTPL”) and are subsequently measured at fair value with changes in fair value immediately charged to the consolidated Statements of Income (Loss). Financial assets and liabilities are offset and the net amount is reported on the balance sheet when there is a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. Impairment of Financial Assets Financial assets are assessed with an expected credit loss (“ECL”) model. The new impairment model applies to financial assets measured at amortized cost, a lease receivable, a contract asset or a loan commitment and a financial guarantee. Policy Applicable before January 1, 2018 Financial instruments are measured at fair value and recorded on the balance sheet upon initial recognition of an instrument. Subsequent measurement and changes in fair value will depend on initial classification, as follows: • Fair value through profit or loss financial assets and liabilities and derivative instruments classified as held for trading or designated as fair value through profit or loss are measured at fair value and subsequent changes in fair value are recognized in income; • Loans and receivables are non-derivative • Available-for-sale • Held to maturity financial assets and loans and receivables are initially measured at fair value with subsequent measurement at amortized cost using the effective interest method. The effective interest method calculates the amortized cost of a financial asset and allocates interest income or expense over the applicable period. The rate used discounts the estimated future cash flows over either the expected life of the financial asset or liability or a shorter time-frame if it is deemed appropriate; and • Other financial liabilities are initially measured at fair value with subsequent changes to fair value measured at amortized cost. Obsidian Energy’s classifications are as follows: • Cash and cash equivalents and accounts receivable are designated as loans and receivables; • Accounts payable and accrued liabilities and long-term debt are designated as other financial liabilities; and • Risk management contracts are derivative financial instruments measured at fair value through profit or loss. Obsidian Energy assesses each financial instrument, except those valued at fair value through profit or loss, for impairment at the reporting date and records the gain or loss in income during the period. o) Embedded derivatives An embedded derivative is a component of a contract that affects the terms of another factor, for example, rent costs that fluctuate with oil prices. These “hybrid” contracts are considered to consist of a “host” contract plus an embedded derivative. The embedded derivative is separated from the host contract and accounted for as a derivative if the following conditions are met: • The economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; • The embedded item, itself, meets the definition of a derivative; and • The hybrid contract is not measured at fair value or designated as held for trading. p) Classification of debt or equity Obsidian Energy classifies financial liabilities and equity instruments in accordance with the substance of the contractual arrangement and the definitions of a financial liability or an equity instrument. Obsidian Energy’s debt instruments currently have requirements to deliver cash at the end of the term thus are classified as liabilities. q) New Accounting Policies IFRS 15 The International Accounting Standards Board (“IASB”) issued IFRS 15 “Revenue from Contracts with Customers” which replaces IAS 18 “Revenue”. IFRS 15 specifies revenue recognition criteria and expanded disclosures for revenue. The new standard was effective for annual periods beginning on or after January 1, 2018. The Company adopted IFRS 15 on January 1, 2018 using the modified retrospective method. IFRS 15 was applied retrospectively only to contracts that were not completed at the date of initial application. The Company completed an assessment of its revenue streams and major contracts following the guidance outlined in IFRS 15. Based on this review, there were no material changes to the timing of the Company’s previous revenue recognition. As a result of the adoption of IFRS 15, no cumulative effect adjustment to retained earnings was required. However, in accordance with the new standard, the Company did reclassify certain line items within its consolidated Statements of Income (Loss) to ensure it meets the presentation requirements under IFRS 15. This specifically related to processing fees which were previously included in operating expenses and will now be included in the Oil and natural gas sales and other income line. Comparative figures have been reclassified to correspond with current period presentation as outlined below. This change has no impact on the Company’s consolidated net income (loss) or within the Consolidated Statements of Cash Flows. Year ended December 31 2017 Increase in Oil and natural gas sales and other income 13 Increase in Operating expenses 13 Impact on Net income and comprehensive loss — IFRS 9 IFRS 9 provides guidance on the recognition and measurement, impairment and derecognition on financial instruments. The new standard was effective for annual periods beginning on or after January 1, 2018. The Company applied the new standard retrospectively and, in accordance with the transitional provisions, comparative figures have not been restated. On January 1, 2018, the Company adopted IFRS 9 which resulted in no material changes in the measurement and carrying value of the Company’s financial instruments. The following table outlines the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 as at January 1, 2018 for each class of the Company’s financial assets and financial liabilities. The Company has no contract assets or debt investments measured at Fair Value Through Other Comprehensive Income. Measurement Category Financial Instrument IAS 39 IFRS 9 Cash and cash equivalents Loans and receivables Amortized Cost Accounts receivable Loans and receivables Amortized Cost Accounts payable and accrued liabilities Other financial liabilities Amortized Cost Long term debt Other financial liabilities Amortized Cost Risk Management contracts FVTPL FVTPL r) Future accounting pronouncements The IASB issued IFRS 16 “Leases” in January 2016 which replaces IAS 17 “Leases”. IFRS 16 outlines several new requirements in regards to the recognition, measurement and disclosure of leases. A key principle within the standard includes a single lessee accounting model which requires lessees to recognize assets and liabilities for all leases which have a term more than 12 months. The accounting for lessors, which classify leases as either operating or finance, remains substantially unchanged from the previous standard. The new standard is effective for annual reporting periods beginning on or after January 1, 2019 and the Company plans to adopt the standard using the modified retrospective approach by recognizing the cumulative adjustment in opening retained earnings at the date of adoption. Obsidian Energy is currently completing a detailed review of its contracts to determine which contracts are in scope under IFRS 16 and their associated financial statement impact. The Company anticipates that the standard will impact its consolidated financial statements with increases in the assets and liabilities reported on the consolidated Balance Sheets. Additionally, the Company expects impacts to the consolidated Statements of Income (Loss), likely within depletion, depreciation, impairment and accretion expense, financing expense, operating expense, transportation expense and general and administrative expense. The Company’s leases that will be recognized on its balance sheet at January 1, 2019 include leases of real estate, vehicles, surface land rights, transportation contracts and equipment, however the full extent of the impact has not yet been finalized. As part of this review, the Company is also assessing potential changes to its processes, policies and internal controls. The impacts of IFRS 16 disclosed herein are subject to change in future periods pending updates to individual contract terms, assumptions, and other facts and circumstances arising subsequent to the date of these financial statements. |
Deferred funding asset
Deferred funding asset | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Deferred funding asset | 4. Deferred funding asset Deferred funding amounts relate to Obsidian Energy’s share of capital and operating expenses to be funded by the Company’s partner in the Peace River Oil Partnership. Amounts expected to be settled within the next 12 months are classified as current. The Company fully utilized the deferred funding asset in 2017. As at December 31 2018 2017 Current portion $ — $ 18 Long-term portion — — Total $ — $ 18 |
Assets and liabilities held for
Assets and liabilities held for sale | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Assets and liabilities held for sale | 5. Assets and liabilities held for sale Assets and liabilities classified as held for sale consisted of the following: As at December 31 2018 2017 Assets held for sale Working capital $ — $ 1 Property, plant and equipment — 34 $ — $ 35 Liabilities related to assets held for sale Working capital $ — $ 1 Decommissioning liability — 23 $ — $ 24 During the fourth quarter of 2017, as a result of entering into a definitive sale agreement, the Company classified certain non-core At December 31, 2017, these assets were recorded at the lower of fair value less costs to sell and their carrying amount, resulting in a PP&E impairment loss of $12 million. The impairment expense has been recorded as additional depletion, depreciation, impairment and accretion expense on the consolidated Statements of Income (Loss). |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Property, plant and equipment | 6. Property, plant and equipment Cost Oil and gas Facilities Corporate Total Balance at January 1, 2017 $ 6,229 $ 4,248 $ 171 $ 10,648 Capital expenditures 56 83 2 141 Joint venture, carried capital 50 — — 50 Acquisitions 5 1 — 6 Dispositions (61 ) (15 ) — (76 ) Transfers to asset held for sale (100 ) (25 ) — (125 ) Net decommissioning dispositions (1) (7 ) — — (7 ) SR&ED credits (note 11) (1 ) — — (1 ) Balance at December 31, 2017 $ 6,171 $ 4,292 $ 173 $ 10,636 Capital expenditures 97 70 1 168 Acquisitions 1 — — 1 Dispositions (8 ) (2 ) — (10 ) Net decommissioning dispositions (1) (19 ) — — (19 ) Balance at December 31, 2018 $ 6,242 $ 4,360 $ 174 $ 10,776 (1) Includes additions from drilling activity, facility capital spending and disposals from net property dispositions. Accumulated depletion, depreciation and impairment Oil and gas Facilities Corporate Total Balance at January 1, 2017 $ 5,794 $ 1,764 $ 108 $ 7,666 Depletion and depreciation 201 74 14 289 Impairments 12 3 — 15 Transfers to asset held for sale (73 ) (18 ) — (91 ) Dispositions (50 ) (12 ) — (62 ) Balance at December 31, 2017 $ 5,884 $ 1,811 $ 122 $ 7,817 Depletion and depreciation 188 86 14 288 Impairments 86 21 — 107 Dispositions (8 ) (2 ) — (10 ) Balance at December 31, 2018 $ 6,150 $ 1,916 $ 136 $ 8,202 Net book value As at December 31 2018 2017 Total $ 2,574 $ 2,819 In 2018, the Company continued to focus its asset base and completed asset dispositions which led to gains on dispositions of $3 million (2017 – $74 million). At December 31, 2018, the Company completed an assessment to determine if indicators of impairment or an impairment reversal were present. As a result of the Company’s net asset value being higher than its market capitalization the Company concluded that an impairment indicator was present resulting in impairment tests being completed across all its CGUs (Cardium, Peace River, Viking and Legacy). The Company followed the value-in Under the value-in-use pre-tax value-in-use after-tax For the Viking and Legacy tests, which were performed under the fair value less costs of disposal methodology, the recoverable amounts were calculated using proved plus probable reserves. In the Viking CGU, no impairment was noted as a result of completing the test. In the Legacy CGU, the Company noted an $18 million impairment as a result of the Company’s decision to voluntarily shut-in pre-tax pre-tax Additionally, the following table outlines benchmark prices and assumptions the Company used in completing the impairment tests as at December 31, 2018: WTI AECO Exchange rate Inflation rate 2019 $ 63.00 $ 1.95 $ 0.77 0 % 2020 67.00 2.44 0.80 2 % 2021 70.00 3.00 0.80 2 % 2022 71.40 3.21 0.80 2 % 2023 72.83 3.30 0.80 2 % 2024 – 2029 $ 78.10 $ 3.63 $ 0.80 2 % Thereafter (inflation percentage) 2 % 2 % — 2 % Impairments have been recorded as Depletion, depreciation, impairment and accretion expense on the consolidated Statements of Income (Loss). |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Long-term debt | 7. Long-term debt As at December 31 2018 2017 Bankers’ acceptances and prime rate loans $ 337 $ 253 Senior secured notes – 2007 Notes 5.90%, US$5 million, maturing May 31, 2019 6 5 Senior secured notes – 2008 Notes 6.30%, US$24 million, maturing May 29, 2018 — 31 6.40%, US$4 million, maturing May 29, 2020 6 5 Senior secured notes – 2009 Notes 9.32%, US$8 million, maturing May 5, 2019 11 10 Senior secured notes – 2010 Q1 Notes 5.85%, US$10 million, maturing March 16, 2020 13 12 Senior secured notes – 2010 Q4 Notes 4.88%, US$13 million, maturing December 2, 2020 18 17 4.98%, US$6 million, maturing December 2, 2022 8 7 5.23%, US$2 million, maturing December 2, 2025 3 3 Senior secured notes – 2011 Q4 Notes 4.79%, US$12 million, maturing November 30, 2021 17 16 Total long-term debt $ 419 $ 359 Current portion $ 17 $ 31 Long-term portion $ 402 $ 328 In 2018, the Company repaid senior notes in the amount of $32 million as part of normal course maturities (2017 – $26 million). There were no senior note issuances in either 2018 or 2017. Additional information on Obsidian Energy’s senior secured notes was as follows: As at December 31 2018 2017 Weighted average remaining life (years) 2.0 2.3 Weighted average interest rate 5.8 % 6.0 % The estimated fair values of the principal and interest obligations of the outstanding senior secured notes were as follows: As at December 31 2018 2017 2007 Notes $ 6 $ 6 2008 Notes 6 36 2009 Notes 11 10 2010 Q1 Notes 13 12 2010 Q4 Notes 26 25 2011 Notes 15 14 Total $ 77 $ 103 The Company has a reserve-based syndicated credit facility, with an underlying borrowing base of $550 million, less the amount of outstanding pari passu senior notes, resulting in $470 million currently being available under the syndicated credit facility. The revolving period of the syndicated credit facility ends on May 31, 2019, with an additional one-year Drawings on the Company’s bank facility are subject to fluctuations in short-term money market rates as they are generally held as short-term borrowings. As at December 31, 2018, 80 percent (2017 – 70 percent) of Obsidian Energy’s long-term debt instruments were exposed to changes in short-term interest rates. At December 31, 2018, letters of credit totalling $7 million were outstanding (2017 – $14 million) that reduce the amount otherwise available to be drawn on the syndicated credit facility. Obsidian Energy records unrealized foreign exchange gains or losses on its senior notes as amounts are translated into Canadian dollars at the rate of exchange in effect at the balance sheet date. Realized foreign exchange gains or losses are recorded upon repayment of senior notes upon their maturity. The split between realized and unrealized foreign exchange is as follows: Year ended December 31 2018 2017 Realized foreign exchange loss on debt maturities $ (8 ) $ (6 ) Unrealized foreign exchange gain — 11 Foreign exchange gain (loss) $ (8 ) $ 5 The Company is subject to certain financial covenants under its senior notes and syndicated credit facility. These types of financial covenants are typical for senior lending arrangements and include senior debt and total debt to Adjusted EBITDA and Senior debt and Total debt to capitalization, as more specifically defined in the applicable lending agreements. At December 31, 2018, the Company was in compliance with all of its financial covenants under such lending agreements. In November 2018, the Company entered into amending agreements with holders of its senior notes to temporarily amend its financial covenants. The maximum Senior debt to Adjusted EBITDA ratio was less than or equal to 3.75:1 for the period of October 1, 2018 through and including December 31, 2018. Subsequent to December 31, 2018, due to the impact of widening crude oil differentials in the fourth quarter of 2018, the Company entered into amending agreements with holders of its senior notes to temporarily amend its financial covenants for all quarters in 2019. Senior debt to Adjusted EBITDA and Total debt to Adjusted EBITDA will be reset during this period and calculated on a rolling basis starting on January 1, 2019. The maximum for both ratios will be less than or equal to 4.25:1 in 2019, decreasing to 3:1 from January 1, 2020 onwards for Senior debt to Adjusted EBITDA and 4:1 from January 1, 2020 onwards for Total debt to Adjusted EBITDA (which were the maximum ratios required prior to entering into the amending agreements). |
Provisions
Provisions | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Provisions | 8. Provisions Year ended December 31 2018 2017 Decommissioning liability $ 129 $ 147 Office lease provision 85 101 Total $ 214 $ 248 Current portion $ 28 $ 27 Long-term portion 186 221 Total $ 214 $ 248 Decommissioning liability The decommissioning liability is based on the present value of Obsidian Energy’s net share of estimated future costs of obligations to abandon and reclaim all wells, facilities and pipelines. These estimates were made by management using information from internal analysis and external consultants assuming current costs, technology and enacted legislation. The decommissioning liability was determined by applying an inflation factor of 2.0 percent (2017 - 2.0 percent) and the inflated amount was discounted using a credit-adjusted rate of 6.5 percent (2017 - 6.5 percent) over the expected useful life of the underlying assets, currently extending over 50 years into the future. The total decommissioning liability on an undiscounted, uninflated basis was $0.8 billion (2017 - $0.9 billion). Changes to the decommissioning liability were as follows: Year ended December 31 2018 2017 Balance, beginning of year $ 147 $ 182 Net liabilities added (disposed) (1) 4 (4 ) Decrease due to changes in estimates (2) (23 ) (3 ) Liabilities settled (9 ) (16 ) Transfers to liabilities for assets held for sale — (23 ) Accretion charges 10 11 Balance, end of year $ 129 $ 147 Current portion $ 12 $ 10 Long-term portion $ 117 $ 137 (1) Includes additions from drilling activity, facility capital spending and disposals from net property dispositions. (2) In 2018 and 2017, there were no changes in the discount rate. Office lease provision The office lease provision represents the net present value of the future lease payments that the Company is obligated to make under non-cancellable sub-lease Changes to the office lease provision were as follows: Year ended December 31 2018 2017 Balance, beginning of year $ 101 $ 117 Net additions (dispositions) (5 ) (7 ) Decrease due to changes in estimates (1 ) (1 ) Settlements (16 ) (16 ) Accretion charges 6 8 Balance, end of year $ 85 $ 101 Current portion $ 16 $ 17 Long-term portion $ 69 $ 84 |
Risk management
Risk management | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Risk management | 9. Risk management Financial instruments consist of cash and cash equivalents, accounts receivable, fair values of derivative financial instruments, accounts payable and accrued liabilities and long-term debt. At December 31, 2018, except for the senior notes described in Note 7 with a carrying value of $82 million (2017 – $106 million) and a fair value of $77 million (2017 – $103 million), the fair values of these financial instruments approximate their carrying amounts due to the short-term maturity of the instruments, the mark to market values recorded for the financial instruments and the market rate of interest applicable to the syndicated credit facility. The fair values of all outstanding financial, commodity, interest rate and foreign exchange contracts are reflected on the balance sheet with the changes during the period recorded in income as unrealized gains or losses. At December 31, 2018 and 2017, 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. The following table reconciles the changes in the fair value of financial instruments outstanding: Year ended December 31 Risk management asset (liability) 2018 2017 Balance, beginning of year $ (50 ) $ (43 ) Unrealized gain (loss) on financial instruments: Commodity collars and swaps 43 (7 ) Foreign exchange forwards (2 ) (6 ) Cross currency swaps 18 6 Total fair value, end of year $ 9 $ (50 ) As at December 31 Total fair value consists of the following: 2018 2017 Current asset portion $ 9 $ 11 Current liability portion — (55 ) Non-current — — Non-current — (6 ) Total fair value $ 9 $ (50 ) Obsidian Energy records its risk management assets and liabilities on a net basis in the consolidated balance sheets. At December 31, 2018 and 2017, there were no differences between the gross and net amounts. Obsidian Energy had the following financial instruments outstanding as at December 31, 2018. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits its 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. Notional Remaining term Pricing Fair value Crude Oil WTI Swaps 1,000 bbl/d Q1 2019 US$ 50.20/bbl $ 1 WTI Swaps 2,000 bbl/d Q1 2019 $ 66.50/bbl 1 WTI Swaps 2,000 bbl/d Q1 2019 US$ 49.93/bbl 1 WTI Swaps 4,000 bbl/d Jan/19 – Jun/19 $ 68.58/bbl 4 WTI Swaps 2,000 bbl/d Q2 2019 US$ 56.53/bbl 2 Foreign exchange forward contracts on revenue FX Swap US$6 Q1 2019 1.3000 — Total $ 9 Based on December 31, 2018 pricing, a $1.00 change in the price per barrel of liquids of WTI would have changed pre-tax The components of risk management on the consolidated Statements of Income (Loss) are as follows: Year ended December 31 2018 2017 Realized Settlement of commodity contracts/assignment $ (65 ) $ 23 Settlement of foreign exchange contracts (20 ) 8 Total realized risk management gain (loss) (85 ) 31 Unrealized Commodity contracts 43 (7 ) Foreign exchange contracts (2 ) (6 ) Cross-currency swaps 18 6 Total unrealized risk management gain (loss) 59 (7 ) Risk management gain (loss) $ (26 ) $ 24 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 and liquidity risk. The Company seeks to mitigate these risks through various business processes and management controls and from time to time by using financial instruments. Commodity Price Risk Commodity price fluctuations are among the Company’s most significant exposures. Crude oil prices are influenced by worldwide factors, including, but not limited to, OPEC actions, world supply and demand fundamentals, pipeline capacity availability and geopolitical events. Natural gas prices are influenced by, including, but not limited to, the price of alternative fuel sources such as oil or coal and by North American natural gas supply and demand fundamentals including the levels of industrial activity, weather, storage levels and liquefied natural gas activity. In accordance with policies approved by Obsidian Energy’s Board of Directors, the Company may, from time to time, manage these risks through the use of swaps or other financial instruments up to a maximum of 50 percent of forecast sales volumes, net of royalties, for the balance of any current year plus one additional year forward and up to a maximum of 25 percent, net of royalties, for one additional year thereafter. Risk management limits included in Obsidian Energy’s policies may be exceeded with specific approval from the Board of Directors. In November 2017, the Board approved the Company to hedge up to a maximum of 75 percent of forecast sales volumes on natural gas and up to a maximum of 67 percent of forecast sales volumes on crude oil, both net of royalties, for the 2018 calendar year. Foreign Currency Rate Risk Prices received for crude oil are referenced in US dollars, thus Obsidian Energy’s realized oil prices are impacted by Canadian dollar to US dollar exchange rates. A portion of the Company’s debt capital is denominated in US dollars, thus the principal and interest payments in Canadian dollars are also impacted by exchange rates. When considered appropriate, the Company may use financial instruments to fix or collar future exchange rates to fix the Canadian dollar equivalent of crude oil revenues or to fix US denominated long-term debt principal repayments. During the third quarter of 2018, the Company’s outstanding Pound Sterling cross currency swap matured resulting in an $18 million realized loss. Credit Risk Credit risk is the risk of loss if purchasers or counterparties do not fulfill their contractual obligations. As at December 31, 2018, the Company’s maximum exposure to credit risk was $62 million (2017 – $117 million) which was comprised of $53 million (2017 – $106 million) being the carrying value of the accounts receivable and $9 million (2017 – $11 million) related to the fair value of the derivative financial assets. The Company’s accounts receivable are principally with customers in the oil and natural gas industry and are generally subject to normal industry credit risk, which includes the ability to recover unpaid receivables by retaining the partner’s share of production when Obsidian Energy is the operator or the potential to net offsetting payables to mitigate exposure. Obsidian Energy continuously monitors credit risk and maintains credit policies to ensure collection risk is limited. For oil and natural gas sales and financial derivatives, a counterparty risk procedure is followed whereby each counterparty is reviewed on a regular basis for the purpose of assigning a credit limit and may be requested to provide security if determined to be prudent. For financial derivatives, the Company normally transacts with counterparties who are members of its banking syndicate or counterparties that have investment grade bond ratings. Credit events related to all counterparties are monitored and credit exposures are reassessed on a regular basis. At December 31, 2018, $15 million of accounts receivable are past due (90+ days) the balance of which are considered to be collectible (2017—$9 million). The lifetime ECL allowances related to Obsidian Energy’s commodity product sales receivables and joint venture receivables recognized in accounts receivable was nominal as at and for the periods ended December 31, 2018 and 2017. As at December 31, the following accounts receivable amounts were outstanding. Current 30-90 days 90+ days Total (1) 2018 $ 29 $ 9 $ 15 $ 53 2017 $ 94 $ 3 $ 9 $ 106 (1) In 2018, $nil of accounts receivable is related to assets classified as held for sale (2017 – $1 million). Interest Rate Risk A portion of the Company’s debt capital can be held in floating-rate bank facilities, which results in exposure to fluctuations in short-term interest rates, which remain at lower levels than longer-term rates. From time to time, Obsidian Energy may increase the certainty of its future interest rates by entering fixed interest rate debt instruments or by using financial instruments to swap floating interest rates for fixed rates or to collar interest rates. As at December 31, 2018, 80 percent of the Company’s long-term debt instruments were exposed to changes in short-term interest rates (2017 – 70 percent). As at December 31, 2018, a total of $82 million (2017 – $106 million) of fixed interest rate debt instruments was outstanding with an average remaining term of 2.0 years (2017 – 2.3 years) and an average interest rate of 5.8 percent (2017 – 6.0 percent). Liquidity Risk Liquidity risk is the risk that the Company will be unable to meet its financial liabilities as they come due. Management utilizes short and long-term financial and capital forecasting programs to ensure credit facilities are sufficient relative to forecast debt levels and capital program levels are appropriate, and that financial covenants will be met. Management also regularly reviews capital markets to identify opportunities to optimize the debt capital structure on a cost-effective basis. In the short term, liquidity is managed through daily cash management activities, short-term financing strategies and the use of swaps and other financial instruments to increase the predictability of cash flow from operating activities. The following table outlines estimated future obligations for non-derivative Long-term (1) Accounts Share-based Bank Total 2019 $ 17 $ 142 $ 1 $ 2 $ 162 2020 374 — — — 374 2021 17 — — — 17 2022 8 — — — 8 2023 — — — — — Thereafter $ 3 $ — $ — $ — $ 3 (1) The 2020 figure includes $337 million related to the syndicated credit facility that is due for renewal in 2020. Historically, the Company has successfully renewed its syndicated credit facility. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Revenue | 10. Revenue The Company’s significant revenue streams consist of the following: Year ended December 31 2018 2017 Crude Oil $ 337 $ 334 NGLs 32 28 Natural gas 50 75 Production revenues $ 419 $ 437 Processing fees 11 13 Other income 14 — Oil and natural gas sales and other income $ 444 $ 450 In the fourth quarter of 2018, the Company monetized a physical delivery contract to Northern Border Ventura for $14 million. It has been included in Other income in the above table. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Income taxes | 11. Income taxes The provision for income taxes is as follows: Year ended December 31 2018 2017 Deferred tax recovery $ — $ (13 ) The provision for income taxes reflects an effective tax rate that differs from the combined federal and provincial statutory tax rate as follows: Year ended December 31 2018 2017 Loss before taxes $ (305 ) $ (97 ) Combined statutory tax rate (1) 27.0 % 27.0 % Computed income tax recovery $ (82 ) $ (26 ) Increase (decrease) resulting from: Share-based compensation 2 2 Non-taxable 2 (2 ) Unrecognized deferred tax asset 89 5 Adjustments related to prior years (11 ) 5 Other — 3 Deferred tax recovery $ — $ (13 ) (1) The tax rate represents the combined federal and provincial statutory tax rates for the Company and its subsidiaries for the years ended December 31, 2018 and December 31, 2017. The net deferred income tax liability is comprised of the following: Balance January 1, 2018 Provision Recognized in Balance December 31, Deferred tax liabilities (assets) PP&E $ 614 $ (89 ) $ — $ 525 Risk management (35 ) 15 — (20 ) Decommissioning liability (46 ) 11 — (35 ) Share-based compensation (1 ) 2 — 1 Non-capital (532 ) 61 — (471 ) Net deferred tax liability $ — $ — $ — $ — Balance January 1, 2017 Provision Recognized in Balance December 31, Deferred tax liabilities (assets) PP&E $ 668 $ (53 ) $ (1 ) $ 614 Risk management (40 ) 5 — (35 ) Decommissioning liability (69 ) 23 — (46 ) Share-based compensation (4 ) 3 — (1 ) Non-capital (541 ) 9 — (532 ) Net deferred tax liability $ 14 $ (13 ) $ (1 ) $ — As at December 31, 2018, Obsidian Energy had approximately $2.5 billion (2017 - $2.4 billion) in total tax pools, including non-capital non-capital non-capital At December 31, 2018, Obsidian Energy had realized and unrealized net capital losses of $600 million (2017 – $586 million). A deferred tax asset has not been recognized in respect of these losses as they may only be applied against future capital gains. The Company has income tax filings that are subject to audit by taxation authorities, which may impact its deferred income tax position or amount. The Company does not anticipate adjustments arising from these audits and believes it has adequately provided for income taxes based on available information, however, adjustments that arise could be material. |
Shareholders' equity
Shareholders' equity | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Shareholders' equity | 12. Shareholders’ equity a) Authorized i) An unlimited number of Common Shares. ii) 90,000,000 preferred shares issuable in one or more series. If issued, preferred shares of each series would rank on parity with the preferred shares of other series with respect to accumulated dividends and return on capital. Preferred shares would have priority over the common shares with respect to the payment of dividends or the distribution of assets. b) Issued Shareholders’ capital Common Amount Balance, January 1, 2017 502,763,763 $ 8,997 Issued on exercise of equity compensation plans (1) 1,577,225 4 Elimination of deficit — (6,820 ) Balance, December 31, 2017 504,340,988 $ 2,181 Issued on exercise of equity compensation plans (1) 2,975,043 4 Balance, December 31, 2018 507,316,031 $ 2,185 (1) Upon exercise of awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. In June 2017, the Company’s shareholders approved the reduction of the Company’s share capital and the elimination of its deficit as stated at March 31, 2017. Year ended December 31 Other Reserves 2018 2017 Balance, beginning of year $ 96 $ 97 Share-based compensation expense 7 8 Net benefit on options exercised (1) (4 ) (9 ) Balance, end of year $ 99 $ 96 (1) Upon exercise of awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. Preferred Shares No Preferred Shares were issued or outstanding. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Share-based compensation | 13. Share-based compensation Restricted and Performance Share Unit plan (“RPSU plan”) Obsidian Energy has an RPSU plan whereby employees receive consideration that fluctuates based on the Company’s share price on the TSX. Since March 2016, consideration can be in the form of cash or shares purchased on the open market therefore all grants subsequent to March 2016 are accounted for based on the equity method. In June 2017, the shareholders approved amendments to the RPSU plan such that shares provided under the plan can either be purchased on the open market or issued from treasury. RPSU plan (number of shares equivalent) Year ended December 31 2018 2017 Outstanding, beginning of year 8,397,378 10,199,595 Granted 6,406,210 4,472,510 Vested (3,602,134 ) (3,935,186 ) Forfeited (2,555,038 ) (2,339,541 ) Outstanding, end of year 8,646,416 8,397,378 Outstanding units – liability method 28,832 730,297 Outstanding units – equity method 8,617,584 7,667,081 As at December 31 RPSU plan obligation: 2018 2017 Current liability (1) $ — $ 1 Non-current $ — $ — (1) Included within Accounts payable and accrued liabilities in 2017. The fair value of the RPSU plan units under the equity method used the following weighted average assumptions: Year ended December 31 2018 2017 Average fair value of units granted (per unit) $ 1.23 $ 2.11 Expected life of units (years) 3.0 3.0 Expected forfeiture rate 5.8 % 7.8 % Performance Share Unit (“PSU”) plan under the RPSU Since June 2017, issuances of performance share units are made under the RPSU plan. The PSU plan under the RPSU allows Obsidian Energy to grant PSUs to employees of the Company. Members of the Board of Directors are not eligible for the RPSU plan. The PSU obligation is classified as a liability due to the cash settlement feature and could be settled in cash or shares. Year ended December 31 PSU awards (number of shares equivalent) 2018 2017 Outstanding, beginning of year — — Granted 1,141,900 — Outstanding, end of year 1,141,900 — As at December 31 PSU obligation: 2018 2017 Non-current $ — $ — Stock Option Plan Obsidian Energy has an Option Plan that allows the Company to issue options to acquire common shares to officers, employees and other service providers. In March 2017, the Board of Directors resolved to suspend all future grants of options under the Option Plan. Year ended December 31 2018 2017 Options Number of Options Weighted Exercise Price Number of Weighted Outstanding, beginning of year 3,662,575 $ 4.60 7,612,625 $ 6.01 Exercised (154,975 ) 1.20 (1,577,225 ) 1.44 Forfeited (1,491,625 ) 6.27 (2,372,825 ) 11.22 Outstanding, end of year 2,015,975 $ 3.62 3,662,575 $ 4.60 Exercisable, end of year 1,450,800 $ 4.47 1,980,876 $ 6.50 Options Outstanding Options Exercisable Range of Grant Prices Number Weighted Weighted Number Weighted $1.00 - $1.99 1,247,225 $ 1.42 1.8 714,825 $ 1.48 $2.00 - $4.99 304,050 3.88 1.2 271,275 4.01 $5.00 - $9.99 464,700 9.35 0.3 464,700 9.35 2,015,975 $ 3.62 0.8 1,450,800 $ 4.47 Deferred Share Unit (“DSU”) plan The DSU plan allows the Company to grant DSUs in lieu of cash fees to non-employee PSU plan Prior to June 2017, issuances of performance share units were made under the PSU plan. The PSU obligation is classified as a liability due to the cash settlement feature. Year ended December 31 PSU awards (number of shares equivalent) 2018 2017 Outstanding, beginning of year 1,539,000 1,855,500 Granted — 569,000 Vested (424,200 ) (638,750 ) Forfeited (284,000 ) (246,750 ) Outstanding, end of year 830,800 1,539,000 As at December 31 PSU obligation: 2018 2017 Non-current $ — $ 1 Share-based compensation Share-based compensation is based on the fair value of the options and units at the time of grant under the Option Plan and RPSU plan (equity method), which is amortized over the remaining vesting period on a graded vesting schedule. Share-based compensation under the RPSU plan (liability method), DSU plan and PSU plan is based on the fair value of the awards outstanding at the reporting date and is amortized based on a graded vesting schedule. Share-based compensation consisted of the following: Year ended December 31 2018 2017 Options $ — $ 1 PSU plan (1 ) 1 RPSU plan – equity method 7 7 RPSU plan – liability method — (1 ) Share-based compensation $ 6 $ 8 The share price used in the fair value calculation of the RPSU plan (liability method), PSU plan and DSU plan obligations at December 31, 2018 was $0.51 per share (2017 – $1.56). The expense under the DSU plan was insignificant. Employee retirement savings plan Obsidian Energy has an employee retirement savings plan (the “savings plan”) for the benefit of all employees. Under the savings plan, employees may elect to contribute up to 10 percent of their salary and Obsidian Energy matches these contributions at a rate of $1.50 for each $1.00 of employee contribution up to and including December 31, 2017, $1.25 for each $1.00 of employee contribution for 2018 and $1.00 for each $1.00 of employee contribution thereafter. Both the employee’s and Obsidian Energy’s contributions are used to acquire Obsidian Energy common shares or are placed in low-risk |
Per share amounts
Per share amounts | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Per share amounts | 14. Per share amounts The number of incremental shares included in diluted earnings per share is computed using the average volume-weighted market price of shares for the period. In addition, contracts that could be settled in cash or shares are assumed to be settled in shares if share settlement is more dilutive. Year ended December 31 2018 2017 Net loss – basic and diluted $ (305 ) $ (84 ) The weighted average number of shares used to calculate per share amounts is as follows: Year ended December 31 2018 2017 Basic and Diluted 506,322,077 503,933,024 For 2018, 2.0 million shares (2017 – 3.7 million) that could be issued under the Option Plan were excluded in calculating the weighted average number of diluted shares outstanding as they were considered anti-dilutive. |
Changes in non-cash working cap
Changes in non-cash working capital (increase) decrease | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Changes in non-cash working capital (increase) decrease | 15. Changes in non-cash Year ended December 31 2018 2017 Accounts receivable (1) $ 53 $ 12 Other current assets 6 — Deferred funding asset 18 25 Accounts payable and accrued liabilities (2) (3) (15 ) (35 ) 62 2 Operating activities 68 5 Investing activities (6 ) (3 ) $ 62 $ 2 Interest paid $ 20 $ 23 Income taxes recovered $ — $ — (1) No accounts receivable is related to assets classified as held for sale in 2018 (2017 - $1 million). (2) No accounts payable and accrued liabilities is related to assets classified as held for sale in 2018 (2017 - $1 million). (3) Includes share-based compensation plans. |
Capital management
Capital management | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Capital management | 16. Capital management Obsidian Energy manages its capital to provide a flexible structure to support capital programs, production maintenance and other operational strategies. Attaining a strong financial position enables the capture of business opportunities and supports Obsidian Energy’s business strategy of providing strong shareholder returns. Obsidian Energy defines capital as the sum of shareholders’ equity and long-term debt. Shareholders’ equity includes shareholders’ capital, other reserves and retained earnings (deficit). Long-term debt includes bank loans and senior notes. Management continuously reviews Obsidian Energy’s capital structure to ensure the objectives and strategies of Obsidian Energy are being met. The capital structure is reviewed based on a number of key factors including, but not limited to, current market conditions, hedging positions, trailing and forecast debt to capitalization ratios, debt to EBITDA and other economic risk factors. The Company is subject to certain quarterly financial covenants under its secured, syndicated credit facility and the senior secured notes. These financial covenants are typical for senior secured lending arrangements and include Senior debt and Total debt to Adjusted EBITDA and Senior debt and Total debt to capitalization as defined in Obsidian Energy’s lending agreements. As at December 31, 2018, the Company was in compliance with all of its financial covenants under such lending agreements. Year ended December 31 (millions, except ratio amounts) 2018 2017 Components of capital Shareholders’ equity $ 1,868 $ 2,166 Long-term debt $ 419 $ 359 Ratios Senior debt to Adjusted EBITDA (1) 3.66 1.88 Total debt to Adjusted EBITDA (2) 3.66 1.88 Senior debt to capitalization (3) 19 % 15 % Total debt to capitalization (4) 19 % 15 % Priority debt to consolidated tangible assets (5) — — Adjusted EBITDA (6) $ 116 $ 194 Long-term debt $ 419 $ 359 Bank overdraft 2 — Letters of credit (7) 4 10 Senior debt and total debt 425 369 Total shareholders’ equity 1,868 2,166 Total capitalization $ 2,293 $ 2,535 (1) As at December 31, 2018, less than 3.75:1 (2) As at December 31, 2018, less than 4:1 (3) Not to exceed 50 percent (4) Not to exceed 55 percent (5) Priority debt not to exceed 15% of consolidated tangible assets. (6) Adjusted EBITDA as defined by Obsidian Energy’s debt agreements excludes the EBITDA contribution from assets sold in the prior 12 months and is used within Obsidian Energy’s covenant calculations related to its syndicated bank facility and senior notes. Additionally, under the syndicated credit facility, realized foreign exchange gains or losses related to debt maturities are excluded from the calculation. (7) Letters of credit defined as financial under the lending agreements are included in the calculation. The Company intends to continue to identify and evaluate hedging opportunities in order to reduce its exposure to fluctuations in commodity prices and protect its future cash flows and capital programs. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Commitments and contingencies | 17. Commitments and contingencies Obsidian Energy is committed to certain payments over the next five calendar years and thereafter as follows: 2019 2020 2021 2022 2023 Thereafter Total Long-term debt (1) $ 17 $ 374 $ 17 $ 8 $ — $ 3 $ 419 Transportation 12 8 5 4 3 9 41 Power infrastructure 7 2 — — — — 9 Interest obligations 17 8 1 1 — — 27 Office lease 33 33 33 33 33 36 201 Decommissioning liability 12 11 11 11 10 74 129 Total $ 98 $ 436 $ 67 $ 57 $ 46 $ 122 $ 826 (1) The 2020 figure includes $337 million related to the syndicated credit facility that is due for renewal in 2020. Historically, the Company has successfully renewed its syndicated credit facility. Obsidian Energy has an aggregate of $82 million in senior notes maturing between 2019 and 2025. Obsidian Energy’s commitments relate to the following: • Transportation commitments relate to costs for future pipeline access. • Power infrastructure commitments pertain to electricity contracts. • Interest obligations are the estimated future interest payments related to Obsidian Energy’s debt instruments. • Office leases pertain to total leased office space. A portion of this office space has been sub-leased • The decommissioning liability represents the inflated, discounted future reclamation and abandonment costs that are expected to be incurred over the life of the properties. The Company entered into a settlement agreement regarding a recent legal claim related to a covenant provided on a predecessor company’s long-term office lease, which was assumed by a third party that subsequently filed for creditor protection. Under the terms of the settlement, the Company will pay $13 million over three years as follows: October 2018 - $4 million, July 2019 - $5 million and July 2020 - $4 million. The settlement was recorded as restructuring in the second quarter of 2018 on the consolidated Statements of Income (Loss). The outstanding 2019 amount is recorded in accounts payable and accrued liabilities and the 2020 amount is recorded in other non-current The Company is involved in various litigation and claims in the normal course of business and records provisions for claims as required. |
Related-party transactions
Related-party transactions | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Related-party transactions | 18. Related-party transactions Operating entities The consolidated financial statements include the results of Obsidian Energy Ltd. and its wholly-owned subsidiaries, notably the Obsidian Energy Partnership. Transactions and balances between Obsidian Energy Ltd. and all of its subsidiaries are eliminated upon consolidation. Compensation of key management personnel In 2018, key management personnel include the President and Chief Executive Officer, Chief Financial Officer, Vice-Presidents and the Board of Directors. The Human Resources, Governance & Compensation Committee makes recommendations to the Board of Directors who approves the appropriate remuneration levels for management based on performance and current market trends. Compensation levels of the Board of Directors are also recommended by the Human Resources, Governance & Compensation Committee of the Board. The remuneration of the directors and key management personnel of Obsidian Energy during the year is below. Year ended December 31 2018 2017 Salary and employee benefits $ 3 $ 3 Termination benefits — 2 Share-based payments (1) — 3 $ 3 $ 8 (1) Includes changes in the fair value of PSUs, DSUs and non-cash |
Supplemental Items
Supplemental Items | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Supplemental Items | 19. Supplemental Items In the consolidated financial statements, compensation costs are included in both operating and general and administrative expenses. For 2018, employee compensation costs of $17 million (2017 - $14 million) were included in operating expenses and $26 million (2017 - $30 million) were included in general and administrative expenses on a gross basis. |
Supplementary Oil and Gas Infor
Supplementary Oil and Gas Information - (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Supplementary Oil and Gas Information - (Unaudited) | SUPPLEMENTARY OIL AND GAS INFORMATION—(UNAUDITED) The disclosures contained in this section provide oil and gas information in accordance with the U.S. standard, “Extractive Activities – Oil and Gas”. Obsidian Energy’s financial reporting is prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. For the years ended December 31, 2018 and 2017, Obsidian Energy has filed its reserves information under National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities 51-101”), There are significant differences to the type of volumes disclosed and the basis from which the volumes are economically determined under the United States Securities and Exchange Commission (“SEC”) requirements and NI 51-101. 12-month 51-101 For the purposes of determining proved crude oil and natural gas reserves for SEC requirements as at December 31, 2018 and 2017 Obsidian Energy used the 12-month first-day-of-the-month 12-month NET PROVED OIL AND NATURAL GAS RESERVES Obsidian Energy engaged independent qualified reserve evaluator, Sproule Associates Limited (“Sproule”), to evaluate Obsidian Energy’s proved developed and proved undeveloped oil and natural gas reserves. As at December 31, 2018, substantially all of Obsidian Energy’s oil and natural gas reserves are located in Canada. The changes in the Company’s net proved reserve quantities are outlined below. Net reserves include Obsidian Energy’s remaining working interest and royalty reserves, less all Crown, freehold, and overriding royalties and other interests that are not owned by Obsidian Energy. Proved reserves are those estimated quantities of crude oil, natural gas and natural gas liquids that can be estimated with a high degree of certainty to be economically recoverable under existing economic and operating conditions. Proved developed reserves are those proved reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure to put the reserves on production. Proved developed reserves may be subdivided into producing and non-producing. Proved undeveloped reserves are those reserves that are expected to be recovered from known accumulations where a significant expenditure is required to render them capable of production. Obsidian Energy cautions users of this information as the process of estimating crude oil and natural gas reserves is subject to a level of uncertainty. The reserves are based on economic and operating conditions; therefore, changes can be made to future assessments as a result of a number of factors, which can include new technology, changing economic conditions and development activity. YEAR ENDED DECEMBER 31, 2018 CONSTANT PRICES AND COSTS Light and Heavy Natural Natural Gas Barrels of Oil Net Proved Developed and Proved Undeveloped Reserves (1) December 31, 2017 41 7 138 5 76 Extensions & Discoveries 2 — 9 — 4 Improved Recovery & Infill Drilling 1 — 2 — 1 Technical Revisions 4 — 18 1 8 Acquisitions — — — — — Dispositions (1 ) — (1 ) — (1 ) Production (4 ) (2 ) (22 ) (1 ) (11 ) Change for the year 3 (2 ) 5 1 2 December 31, 2018 43 5 143 6 78 Developed 31 5 109 4 58 Undeveloped 13 — 34 2 20 Total (2) 43 5 143 6 78 (1) Columns may not add due to rounding. (2) Obsidian Energy does not file any estimates of total net proved crude oil or natural gas reserves with any U.S. federal authority or agency other than the SEC. YEAR ENDED DECEMBER 31, 2017 CONSTANT PRICES AND COSTS Light and Heavy Natural Natural Gas Barrels of Oil Net Proved Developed and Proved Undeveloped Reserves (1) December 31, 2016 43 7 164 4 81 Extensions & Discoveries 2 — 14 1 5 Improved Recovery & Infill Drilling 1 1 2 — 3 Technical Revisions 5 1 60 3 19 Acquisitions — — — — — Dispositions (7 ) — (76 ) (1 ) (21 ) Production (4 ) (2 ) (26 ) (1 ) (12 ) Change for the year (3 ) — (26 ) 2 (6 ) December 31, 2017 41 7 138 5 76 Developed 32 5 119 4 62 Undeveloped 9 1 20 1 14 Total (2) 41 7 138 5 76 (1) Columns may not add due to rounding. (2) Obsidian Energy does not file any estimates of total net proved crude oil or natural gas reserves with any U.S. federal authority or agency other than the SEC. In 2018, the Company focused its development activities in the Cardium area of Alberta. In 2017 Obsidian Energy closed a number of asset dispositions as it consolidated its asset portfolio. CAPITALIZED COSTS As at December 31, ($CAD millions) 2018 2017 Proved oil and gas properties $ 10,776 $ 10,636 Unproved oil and gas properties — — Total capitalized costs 10,776 10,636 Accumulated depletion and depreciation (8,202 ) (7,817 ) Net capitalized costs $ 2,574 $ 2,819 COSTS INCURRED For the years ended December 31, ($CAD millions) 2018 2017 Property acquisition (disposition) costs (1) Proved oil and gas properties—acquisitions $ 1 $ 6 Proved oil and gas properties—dispositions (14 ) (116 ) Unproved oil and gas properties 2 3 Exploration costs (2) — 2 Development costs (3) 165 184 Joint venture, carried capital — (50 ) Capital expenditures 154 29 Corporate acquisitions — — Total expenditures $ 154 $ 29 (1) Acquisitions are net of disposition of properties. (2) Cost of geological and geophysical capital expenditures and costs on exploratory plays. (3) Includes equipping and facilities capital expenditures. STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS AND CHANGES THEREIN The standardized measure of discounted future net cash flows is based on estimates made by Sproule of net proved reserves. Future cash inflows are computed based on constant prices and cost assumptions from annual future production of proved crude oil and natural gas reserves. Future development and production costs are based on constant price assumptions and assume the continuation of existing economic conditions. Constant prices are calculated as the average of the first day prices of each month for the prior 12-month Obsidian Energy cautions users of this information that the discounted future net cash flows relating to proved crude oil and natural gas reserves are neither an indication of the fair market value of our oil and gas properties, nor of the future net cash flows expected to be generated from such properties. The discounted future cash flows do not include the fair market value of exploratory properties and probable or possible oil and gas reserves, nor is consideration given to the effect of anticipated future changes in crude oil and natural gas prices, development, asset retirement and production costs and possible changes to tax and royalty regulations. The prescribed discount rate of 10 percent is arbitrary and may not reflect applicable future interest rates. STANDARD MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS For the years ended December 31, ($CAD millions) 2018 2017 Future cash inflows $ 3,886 $ 3,384 Future production costs (1,769 ) (1,625 ) Future development costs (469 ) (302 ) Undiscounted pre-tax 1,648 1,457 Deferred income taxes (1) — — Future net cash flows 1,648 1,457 Less 10% annual discount factor (822 ) (661 ) Standardized measure of discounted future net cash flows $ 826 $ 796 (1) Obsidian Energy is currently not cash taxable. STANDARD MEASURE OF DISCOUNTED FUTURE NET CASH FLOW CHANGES For the years ended December 31, ($CAD millions) 2018 2017 Standardized measure of discounted future net cash flows at beginning of year $ 796 $ 631 Oil and gas sales during period net of production costs and royalties (1) (193 ) (213 ) Changes due to prices (2) 82 481 Development costs during the period (3) 168 141 Changes in forecast development costs (4) (309 ) (202 ) Changes resulting from extensions, infills and improved recovery (5) 8 73 Changes resulting from discoveries (2) — 1 Changes resulting from acquisitions of reserves (5) — — Changes resulting from dispositions of reserves (5) (5 ) (71 ) Accretion of discount (6) 80 63 Net change in income tax (7) — — Changes resulting from other changes and technical reserves revisions plus effects on timing (8) 201 (109 ) Standardized measure of discounted future net cash flows at end of year $ 826 $ 796 (1) Company actual before income taxes, excluding general and administrative expenses. (2) The impact of changes in prices and other economic factors on future net revenue. (3) Actual capital expenditures relating to the exploration, development and production of oil and gas reserves. (4) The change in forecast development costs. (5) End of period net present value of the related reserves. (6) Estimated as 10 percent of the beginning of period net present value. (7) The difference between forecast income taxes at beginning of period and the actual taxes for the period plus forecast income taxes at the end of period. (8) Includes changes due to revised production profiles, development timing, operating costs, royalty rates and actual prices received versus forecast, etc. |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Critical accounting judgments and key estimates | a) Critical accounting judgments and key estimates The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the recorded amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period. These and other estimates are subject to measurement uncertainty and the effect on the consolidated financial statements of changes in these estimates could be material. Management also makes judgments while applying accounting policies that could affect amounts recorded in its consolidated financial statements. Significant judgments include the identification of cash generating units (“CGUs”) for impairment testing purposes and determining whether a CGU has an impairment indicator. Management has performed an assessment of the Company’s ability to comply with covenants for the 12 month period ending December 31, 2019. This assessment includes judgements relating to future production volumes, forward commodity pricing, future costs including capital, operating and general and administrative, forward foreign exchange rates, interest rates, and income taxes, all of which are subject to measurement uncertainty. The following are the estimates that management has made in applying the Company’s accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements. i) Reserve and resource estimates Commercial petroleum reserves are determined based on estimates of petroleum-in-place, year-end. Reserve adjustments are made annually based on actual oil and natural gas volumes produced, the results from capital programs, revisions to previous estimates, new discoveries and acquisitions and dispositions made during the year and the effect of changes in forecast future crude oil and natural gas prices. There are a number of estimates and assumptions that affect the process of evaluating reserves. Proved reserves are the estimated quantities of crude oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a high degree of certainty (at least 90 percent) those quantities will be exceeded. Proved plus probable reserves are the estimated quantities of crude oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a 50 percent certainty those quantities will be exceeded. Obsidian Energy reports production and reserve quantities in accordance with Canadian practices and specifically in accordance with “Standards of Disclosure for Oil and Gas Activities” (“NI 51-101”). The estimate of proved plus probable reserves is an essential part of the depletion calculation, the impairment test and hence the recorded amount of oil and gas assets. Contingent Resources are defined in the COGE Handbook as those quantities of petroleum estimated to be potentially recoverable from known accumulations using established technology or technology under development, but which do not currently qualify as reserves or commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, operational, political and regulatory matters or a lack of markets. The estimate of contingent resources may be included as part of the recoverable amount in the impairment test. Obsidian Energy cautions users of this information that the process of estimating crude oil and natural gas reserves is subject to a level of uncertainty. The reserves are based on current and forecast economic and operating conditions; therefore, changes can be made to future assessments as a result of a number of factors, which can include commodity prices, new technology, changing economic conditions, future reservoir performance and forecast development activity. ii) Recoverability of asset carrying values Obsidian Energy assesses its property, plant and equipment (“PP&E”) for impairment by comparing the carrying amount to the recoverable amount of the underlying assets. The determination of the recoverable amount involves estimating the higher of an asset’s fair value less costs to sell or its value-in-use, iii) Decommissioning liability Obsidian Energy recognizes a provision for future abandonment activities in the consolidated financial statements at the net present value of the estimated future expenditures required to settle the estimated obligation at the balance sheet date. The measurement of the decommissioning liability involves the use of estimates and assumptions including the discount rate, the amount and expected timing of future abandonment costs and the inflation rate related thereto. The estimates were made by management and external consultants considering current costs, technology and enacted legislation. iv) Office lease liability Obsidian Energy recognizes a provision for certain onerous office lease commitments in the consolidated financial statements at the net present value of future lease payments the Company is obligated to make under non-cancellable sub-lease v) Fair value calculation on share-based payments The fair value of share-based payments is calculated using a Black-Scholes model. There are a number of estimates used in the calculation such as the expected future forfeiture rate, the expected period the share-based compensation is outstanding and the future price volatility of the underlying security all of which can vary from expectations. The factors applied in the calculation are management’s estimates based on historical information and future forecasts. vi) Fair value of risk management contracts Obsidian Energy records risk management contracts at fair value with changes in fair value recognized in income. The fair values are determined using external counterparty information which is compared to observable market data. vii) Taxation The calculation of deferred income taxes is based on a number of assumptions including estimating the future periods in which temporary differences and other tax credits will reverse and the general assumption that substantively enacted future tax rates at the balance sheet date will be in effect when differences reverse. viii) Litigation Obsidian Energy records provisions related to legal matters if it is probable that the Company will not be successful in defending the claim and if an amount can be reasonably estimated. Determining the probability of a claim being defended is subject to considerable judgment. Additionally, the potential claim is generally a wide range of figures and a single estimate must be made when recording a provision. Contingencies will only be resolved or unfounded when one or more future events occur. The assessment of contingencies involves significant judgment and estimates of the potential outcome of future events. |
Business combinations | b) Business combinations Obsidian Energy uses the acquisition method to account for business combinations. The net identifiable assets and liabilities acquired in transactions are generally measured at their fair value on the acquisition date. The acquisition date is the closing date of the business combination. Acquisition costs incurred by Obsidian Energy to complete a business combination are expensed in the period incurred except for costs related to the issue of any debt or equity securities, which are recognized based on the nature of the related financing instrument. Revisions may be made to the initial recognized amounts determined during the measurement period, which shall not exceed one year after the closing date of the acquisition. |
Revenue | c) Revenue Policy Applicable from January 1, 2018 Obsidian Energy generally recognizes crude oil, natural gas and natural gas liquids (“NGLs”) revenue when title passes from Obsidian Energy to the purchaser or, in the case of services, as contracted services are performed. Production revenues are determined pursuant to the terms outlined in contractual agreements and are based on fixed or variable price components. The transaction price for crude oil, natural gas and NGLs is based on the commodity price in the month of production, adjusted for various factors including product quality and location. Commodity prices are based on monthly or daily market indices. Performance obligations in the contract are fulfilled on the last day of the month with payment typically on the 25 th Policy Applicable before January 1, 2018 Obsidian Energy generally recognizes oil and natural gas revenue when title passes from Obsidian Energy to the purchaser or, in the case of services, as contracted services are performed. Revenue is measured at the fair value of the consideration received or receivable. Revenue from the sale of crude oil, natural gas and natural gas liquids (prior to deduction of transportation costs) is recognized when all the following conditions have been satisfied: • The significant risks and rewards of ownership of the goods have been transferred to the buyer; • There is no continuing managerial involvement to the degree usually associated with ownership or effective control over the goods sold; • The amount of revenue can be reliably measured; • It is probable that the economic benefits associated with the transaction will flow to Obsidian Energy; and • The costs incurred or to be incurred in respect of the transaction can be reliably measured. |
Joint arrangements | d) Joint arrangements The consolidated financial statements include Obsidian Energy’s proportionate interest of jointly controlled assets and liabilities and its proportionate interest of the revenue, royalties and operating expenses. A significant portion of Obsidian Energy’s exploration and development activities are conducted jointly with others and involve joint operations. Under such arrangements, Obsidian Energy has the exclusive rights to its proportionate interest in the assets and the economic benefits generated from its share of the assets. Income from the sale or use of Obsidian Energy’s interest in joint operations and its share of expenses is recognized when it is probable that the economic benefits associated with the transactions will flow to/from Obsidian Energy and the amounts can be reliably measured. The Peace River Oil Partnership is a joint operation and Obsidian Energy records its 55 percent interest of revenues, expenses, assets and liabilities. |
Transportation expense | e) Transportation expense Transportation costs are paid by Obsidian Energy for the shipping of natural gas, crude oil and natural gas liquids from the wellhead to the point of title transfer to buyers. These costs are recognized as services are received. |
Foreign currency translation | f) Foreign currency translation Obsidian Energy and each of its subsidiaries use the Canadian dollar as their functional currency. Monetary items, such as accounts receivable and long-term debt, are translated to Canadian dollars at the rate of exchange in effect at the balance sheet date. Non-monetary |
PP&E | g) PP&E i) Measurement and recognition Oil and gas properties are included in PP&E at cost, less accumulated depletion and depreciation and any impairment losses. The cost of PP&E includes costs incurred initially to acquire or construct the item and betterment costs. Capital expenditures are recognized as PP&E when it is probable that future economic benefits associated with the investment will flow to Obsidian Energy and the cost can be reliably measured. PP&E includes capital expenditures incurred in the development phases, acquisition and disposition of PP&E and additions to the decommissioning liability. ii) Depletion and Depreciation Except for components with a useful life shorter than the reserve life of the associated property, resource properties are depleted using the unit-of-production Components of PP&E that are not depleted using the unit-of-production iii) Derecognition The carrying amount of an item of PP&E is derecognized when no future economic benefits are expected from its use or upon sale to a third party. The gain or loss arising from derecognition is included in income and is measured as the difference between the net proceeds, if any, and the carrying amount of the asset. iv) Major maintenance and repairs Ongoing costs to maintain properties are generally expensed as incurred. These costs include the cost of labour, consumables and small parts. The costs of material replacement parts, turnarounds and major inspections are capitalized provided it is probable that future economic benefits in excess of cost will be realized and such benefits are expected to extend beyond the current operating period. The carrying amount of a replaced part is derecognized in accordance with Obsidian Energy’s derecognition policies. v) Impairment of oil and natural gas properties Obsidian Energy reviews oil and gas properties for circumstances that indicate its assets may be impaired at the end of each reporting period. These indicators can be internal (i.e. reserve changes) or external (i.e. market conditions) in nature. If an indication of impairment exists, Obsidian Energy completes an impairment test, which compares the estimated recoverable amount to the carrying value. The estimated recoverable amount is defined under IAS 36 (“Impairment of Assets”) as the higher of an asset’s or CGU’s fair value less costs to sell and its value-in-use. Where the recoverable amount is less than the carrying amount, the CGU is considered to be impaired. Impairment losses identified for a CGU are allocated on a pro rata basis to the asset categories within the CGU. The impairment loss is recognized as an expense in income. Value-in-use after-tax Impairment losses related to PP&E can be reversed in future periods if the estimated recoverable amount of the asset exceeds the carrying value. The impairment recovery is limited to a maximum of the estimated depleted historical cost if the impairment had not been recognized. The reversal of the impairment loss is recognized in depletion, depreciation and impairment. vi) Other Property, Plant and Equipment Obsidian Energy’s corporate assets include computer hardware and software, office furniture, buildings and leasehold improvements and are depreciated on a straight-line basis over their useful lives. Corporate assets are tested for impairment separately from oil and gas assets. |
Share-based payments | h) Share-based payments The fair value of units granted under the Restricted and Performance Share Unit Plan (“RPSU”) following the equity method is recognized as compensation expense with a corresponding increase to other reserves in shareholders’ equity over the term of the units based on a graded vesting schedule. Obsidian Energy measures the fair value of units granted under this plan at the grant date using the share price from the Toronto Stock Exchange (“TSX”). The fair value is based on market prices and considers the terms and conditions of the units granted. The fair value of options granted under the Stock Option Plan (the “Option Plan”) is recognized as compensation expense with a corresponding increase to other reserves in shareholders’ equity over the term of the options based on a graded vesting schedule. Obsidian Energy measures the fair value of options granted under these plans at the grant date using the Black-Scholes option-pricing model. The fair value is based on market prices and considers the terms and conditions of the share options granted. The fair value of awards granted under the Deferred Share Unit Plan (“DSU”), Performance Share Unit Plan (“PSU”) and the RPSU plan following the liability method are based on a fair value calculation on each reporting date using the awards outstanding and Obsidian Energy’s share price from the TSX on each balance sheet date. The fair value of the awards is expensed over the vesting period based on a graded vesting schedule. Subsequent increases and decreases in the underlying share price result in increases and decreases, respectively, to the accrued obligation until the related instruments are settled. |
Provisions | i) Provisions i) General Provisions are recognized based on an estimate of expenditures required to settle present obligations at the end of the reporting period. The provision is risk adjusted to take into account any uncertainties. When the effect of the time value of money is material, the amount of a provision is calculated as the present value of the future expenditures required to settle the obligations. The discount rate reflects the current assessment of the time value of money and risks specific to the liability when those risks have not already been reflected as an adjustment to future cash flows. ii) Decommissioning liability The decommissioning liability is the present value of Obsidian Energy’s future costs of obligations for property, facility and pipeline abandonment and site restoration. The liability is recognized on the balance sheet with a corresponding increase to the carrying amount of the related asset. The recorded liability increases over time to its future amount through accretion charges to income. Revisions to the estimated amount or timing of the obligations are reflected prospectively as increases or decreases to the recorded liability and the related asset. Actual decommissioning expenditures, up to the recorded liability at the time, are charged to the liability as the costs are incurred. Amounts capitalized to the related assets are amortized to income consistent with the depletion or depreciation of the underlying asset. iii) Office lease liability The office lease liability is the net present value of future lease payments Obsidian Energy is obligated to make under non-cancellable sub-lease sub-lease |
Leases | j) Leases A lease is classified as an operating lease if it does not transfer substantially all of the risks and rewards incidental to ownership of the related asset to the lessee. Operating lease payments are expensed on a straight-line basis over the life of the lease. |
Share capital | k) Share capital Common shares are classified as equity. Share issue costs are recorded in shareholder’s equity, net of applicable taxes. Dividends are paid at the discretion of the Board of Directors and are deducted from retained earnings. If issued, preferred shares would be classified as equity and could be issued in one or more series. |
Earnings per share | l) Earnings per share Earnings per share is calculated by dividing net income or loss attributable to the shareholders by the weighted average number of common shares outstanding during the period. Obsidian Energy computes the dilutive impact of equity instruments other than common shares assuming the proceeds received from the exercise of in-the-money |
Taxation | m) Taxation Income taxes are based on taxable income in a taxation year. Taxable income normally differs from income reported in the consolidated Statements of Income (Loss) as it excludes items of income or expense that are taxable or deductible in other years or are not taxable or deductible for income tax purposes. Obsidian Energy uses the liability method of accounting for deferred income taxes. Temporary differences are calculated assuming that the financial assets and liabilities will be settled at their carrying amount. Deferred income taxes are computed on temporary differences using substantively enacted income tax rates expected to apply when deferred income tax assets and liabilities are realized or settled. A deferred income tax asset is recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences can be utilized. Deferred income tax assets are reviewed at each reporting date and are not recognized until such time that it is probable that the related tax benefit will be realized. |
Financial instruments | n) Financial instruments Policy Applicable from January 1, 2018 Obsidian Energy recognizes financial assets and financial liabilities, including derivatives, on the consolidated Balance Sheets when the Company becomes a party to the contract. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or when the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized from the consolidated financial statements when the liability is extinguished either through settlement of or release from the obligation of the underlying liability. Classification and Measurement of Financial Instruments The classification of financial assets is determined by their context in Obsidian Energy’s business model and by the characteristics of the financial asset’s contractual cash flows. Financial assets and financial liabilities are measured at fair value on initial recognition, which is typically the transaction price unless a financial instrument contains a significant financing component. Subsequent measurement is dependent on the financial instrument’s classification, as described below: • Cash and cash equivalents (includes cash and bank overdraft), accounts receivable, accounts payable and accrued liabilities and long-term debt are measured at amortized cost. • Risk management contracts, all of which are derivatives, are measured initially at fair value through profit or loss (“FVTPL”) and are subsequently measured at fair value with changes in fair value immediately charged to the consolidated Statements of Income (Loss). Financial assets and liabilities are offset and the net amount is reported on the balance sheet when there is a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. Impairment of Financial Assets Financial assets are assessed with an expected credit loss (“ECL”) model. The new impairment model applies to financial assets measured at amortized cost, a lease receivable, a contract asset or a loan commitment and a financial guarantee. Policy Applicable before January 1, 2018 Financial instruments are measured at fair value and recorded on the balance sheet upon initial recognition of an instrument. Subsequent measurement and changes in fair value will depend on initial classification, as follows: • Fair value through profit or loss financial assets and liabilities and derivative instruments classified as held for trading or designated as fair value through profit or loss are measured at fair value and subsequent changes in fair value are recognized in income; • Loans and receivables are non-derivative • Available-for-sale • Held to maturity financial assets and loans and receivables are initially measured at fair value with subsequent measurement at amortized cost using the effective interest method. The effective interest method calculates the amortized cost of a financial asset and allocates interest income or expense over the applicable period. The rate used discounts the estimated future cash flows over either the expected life of the financial asset or liability or a shorter time-frame if it is deemed appropriate; and • Other financial liabilities are initially measured at fair value with subsequent changes to fair value measured at amortized cost. Obsidian Energy’s classifications are as follows: • Cash and cash equivalents and accounts receivable are designated as loans and receivables; • Accounts payable and accrued liabilities and long-term debt are designated as other financial liabilities; and • Risk management contracts are derivative financial instruments measured at fair value through profit or loss. Obsidian Energy assesses each financial instrument, except those valued at fair value through profit or loss, for impairment at the reporting date and records the gain or loss in income during the period. |
Embedded derivatives | o) Embedded derivatives An embedded derivative is a component of a contract that affects the terms of another factor, for example, rent costs that fluctuate with oil prices. These “hybrid” contracts are considered to consist of a “host” contract plus an embedded derivative. The embedded derivative is separated from the host contract and accounted for as a derivative if the following conditions are met: • The economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; • The embedded item, itself, meets the definition of a derivative; and • The hybrid contract is not measured at fair value or designated as held for trading. |
Classification of debt or equity | p) Classification of debt or equity Obsidian Energy classifies financial liabilities and equity instruments in accordance with the substance of the contractual arrangement and the definitions of a financial liability or an equity instrument. Obsidian Energy’s debt instruments currently have requirements to deliver cash at the end of the term thus are classified as liabilities. |
New Accounting Policies | q) New Accounting Policies IFRS 15 The International Accounting Standards Board (“IASB”) issued IFRS 15 “Revenue from Contracts with Customers” which replaces IAS 18 “Revenue”. IFRS 15 specifies revenue recognition criteria and expanded disclosures for revenue. The new standard was effective for annual periods beginning on or after January 1, 2018. The Company adopted IFRS 15 on January 1, 2018 using the modified retrospective method. IFRS 15 was applied retrospectively only to contracts that were not completed at the date of initial application. The Company completed an assessment of its revenue streams and major contracts following the guidance outlined in IFRS 15. Based on this review, there were no material changes to the timing of the Company’s previous revenue recognition. As a result of the adoption of IFRS 15, no cumulative effect adjustment to retained earnings was required. However, in accordance with the new standard, the Company did reclassify certain line items within its consolidated Statements of Income (Loss) to ensure it meets the presentation requirements under IFRS 15. This specifically related to processing fees which were previously included in operating expenses and will now be included in the Oil and natural gas sales and other income line. Comparative figures have been reclassified to correspond with current period presentation as outlined below. This change has no impact on the Company’s consolidated net income (loss) or within the Consolidated Statements of Cash Flows. Year ended December 31 2017 Increase in Oil and natural gas sales and other income 13 Increase in Operating expenses 13 Impact on Net income and comprehensive loss — IFRS 9 IFRS 9 provides guidance on the recognition and measurement, impairment and derecognition on financial instruments. The new standard was effective for annual periods beginning on or after January 1, 2018. The Company applied the new standard retrospectively and, in accordance with the transitional provisions, comparative figures have not been restated. On January 1, 2018, the Company adopted IFRS 9 which resulted in no material changes in the measurement and carrying value of the Company’s financial instruments. The following table outlines the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 as at January 1, 2018 for each class of the Company’s financial assets and financial liabilities. The Company has no contract assets or debt investments measured at Fair Value Through Other Comprehensive Income. Measurement Category Financial Instrument IAS 39 IFRS 9 Cash and cash equivalents Loans and receivables Amortized Cost Accounts receivable Loans and receivables Amortized Cost Accounts payable and accrued liabilities Other financial liabilities Amortized Cost Long term debt Other financial liabilities Amortized Cost Risk Management contracts FVTPL FVTPL |
Future accounting pronouncements | r) Future accounting pronouncements The IASB issued IFRS 16 “Leases” in January 2016 which replaces IAS 17 “Leases”. IFRS 16 outlines several new requirements in regards to the recognition, measurement and disclosure of leases. A key principle within the standard includes a single lessee accounting model which requires lessees to recognize assets and liabilities for all leases which have a term more than 12 months. The accounting for lessors, which classify leases as either operating or finance, remains substantially unchanged from the previous standard. The new standard is effective for annual reporting periods beginning on or after January 1, 2019 and the Company plans to adopt the standard using the modified retrospective approach by recognizing the cumulative adjustment in opening retained earnings at the date of adoption. Obsidian Energy is currently completing a detailed review of its contracts to determine which contracts are in scope under IFRS 16 and their associated financial statement impact. The Company anticipates that the standard will impact its consolidated financial statements with increases in the assets and liabilities reported on the consolidated Balance Sheets. Additionally, the Company expects impacts to the consolidated Statements of Income (Loss), likely within depletion, depreciation, impairment and accretion expense, financing expense, operating expense, transportation expense and general and administrative expense. The Company’s leases that will be recognized on its balance sheet at January 1, 2019 include leases of real estate, vehicles, surface land rights, transportation contracts and equipment, however the full extent of the impact has not yet been finalized. As part of this review, the Company is also assessing potential changes to its processes, policies and internal controls. The impacts of IFRS 16 disclosed herein are subject to change in future periods pending updates to individual contract terms, assumptions, and other facts and circumstances arising subsequent to the date of these financial statements. |
Significant accounting polici_3
Significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Impact of Adoption of IFRS 15 on Certain Line Items within Consolidated Statements of Income (Loss) (Detail) | Year ended December 31 2017 Increase in Oil and natural gas sales and other income 13 Increase in Operating expenses 13 Impact on Net income and comprehensive loss — |
Summary of Original Measurement Categories Under IAS 39 and New Measurement Categories Under IFRS 9 | The following table outlines the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 as at January 1, 2018 for each class of the Company’s financial assets and financial liabilities. The Company has no contract assets or debt investments measured at Fair Value Through Other Comprehensive Income. Measurement Category Financial Instrument IAS 39 IFRS 9 Cash and cash equivalents Loans and receivables Amortized Cost Accounts receivable Loans and receivables Amortized Cost Accounts payable and accrued liabilities Other financial liabilities Amortized Cost Long term debt Other financial liabilities Amortized Cost Risk Management contracts FVTPL FVTPL |
Deferred funding asset (Tables)
Deferred funding asset (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Disclosure of Detailed Information About Composition of Deferred Funding Asset | The Company fully utilized the deferred funding asset in 2017. As at December 31 2018 2017 Current portion $ — $ 18 Long-term portion — — Total $ — $ 18 |
Assets and liabilities held f_2
Assets and liabilities held for sale (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Disclosure of Detailed Information about Assets and Liabilities Held for Sale | Assets and liabilities classified as held for sale consisted of the following: As at December 31 2018 2017 Assets held for sale Working capital $ — $ 1 Property, plant and equipment — 34 $ — $ 35 Liabilities related to assets held for sale Working capital $ — $ 1 Decommissioning liability — 23 $ — $ 24 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Disclosure of Property Plant and Equipment | Cost Oil and gas Facilities Corporate Total Balance at January 1, 2017 $ 6,229 $ 4,248 $ 171 $ 10,648 Capital expenditures 56 83 2 141 Joint venture, carried capital 50 — — 50 Acquisitions 5 1 — 6 Dispositions (61 ) (15 ) — (76 ) Transfers to asset held for sale (100 ) (25 ) — (125 ) Net decommissioning dispositions (1) (7 ) — — (7 ) SR&ED credits (note 11) (1 ) — — (1 ) Balance at December 31, 2017 $ 6,171 $ 4,292 $ 173 $ 10,636 Capital expenditures 97 70 1 168 Acquisitions 1 — — 1 Dispositions (8 ) (2 ) — (10 ) Net decommissioning dispositions (1) (19 ) — — (19 ) Balance at December 31, 2018 $ 6,242 $ 4,360 $ 174 $ 10,776 (1) Includes additions from drilling activity, facility capital spending and disposals from net property dispositions. Accumulated depletion, depreciation and impairment Oil and gas Facilities Corporate Total Balance at January 1, 2017 $ 5,794 $ 1,764 $ 108 $ 7,666 Depletion and depreciation 201 74 14 289 Impairments 12 3 — 15 Transfers to asset held for sale (73 ) (18 ) — (91 ) Dispositions (50 ) (12 ) — (62 ) Balance at December 31, 2017 $ 5,884 $ 1,811 $ 122 $ 7,817 Depletion and depreciation 188 86 14 288 Impairments 86 21 — 107 Dispositions (8 ) (2 ) — (10 ) Balance at December 31, 2018 $ 6,150 $ 1,916 $ 136 $ 8,202 Net book value As at December 31 2018 2017 Total $ 2,574 $ 2,819 |
Disclosure of Benchmark Prices Used in Impairment Tests | the following table outlines benchmark prices and assumptions the Company used in completing the impairment tests as at December 31, 2018: WTI AECO Exchange rate Inflation rate 2019 $ 63.00 $ 1.95 $ 0.77 0 % 2020 67.00 2.44 0.80 2 % 2021 70.00 3.00 0.80 2 % 2022 71.40 3.21 0.80 2 % 2023 72.83 3.30 0.80 2 % 2024 – 2029 $ 78.10 $ 3.63 $ 0.80 2 % Thereafter (inflation percentage) 2 % 2 % — 2 % |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Schedule of Long-term Debt | As at December 31 2018 2017 Bankers’ acceptances and prime rate loans $ 337 $ 253 Senior secured notes – 2007 Notes 5.90%, US$5 million, maturing May 31, 2019 6 5 Senior secured notes – 2008 Notes 6.30%, US$24 million, maturing May 29, 2018 — 31 6.40%, US$4 million, maturing May 29, 2020 6 5 Senior secured notes – 2009 Notes 9.32%, US$8 million, maturing May 5, 2019 11 10 Senior secured notes – 2010 Q1 Notes 5.85%, US$10 million, maturing March 16, 2020 13 12 Senior secured notes – 2010 Q4 Notes 4.88%, US$13 million, maturing December 2, 2020 18 17 4.98%, US$6 million, maturing December 2, 2022 8 7 5.23%, US$2 million, maturing December 2, 2025 3 3 Senior secured notes – 2011 Q4 Notes 4.79%, US$12 million, maturing November 30, 2021 17 16 Total long-term debt $ 419 $ 359 Current portion $ 17 $ 31 Long-term portion $ 402 $ 328 In 2018, the Company repaid senior notes in the amount of $32 million as part of normal course maturities (2017 – $26 million). There were no senior note issuances in either 2018 or 2017. Additional information on Obsidian Energy’s senior secured notes was as follows: As at December 31 2018 2017 Weighted average remaining life (years) 2.0 2.3 Weighted average interest rate 5.8 % 6.0 % |
Estimated Fair Values of Principal and Interest Obligations of Outstanding Senior Secured Notes | The estimated fair values of the principal and interest obligations of the outstanding senior secured notes were as follows: As at December 31 2018 2017 2007 Notes $ 6 $ 6 2008 Notes 6 36 2009 Notes 11 10 2010 Q1 Notes 13 12 2010 Q4 Notes 26 25 2011 Notes 15 14 Total $ 77 $ 103 |
Realized and Unrealized Gain (Loss) on Foreign Exchange | The split between realized and unrealized foreign exchange is as follows: Year ended December 31 2018 2017 Realized foreign exchange loss on debt maturities $ (8 ) $ (6 ) Unrealized foreign exchange gain — 11 Foreign exchange gain (loss) $ (8 ) $ 5 |
Provisions (Tables)
Provisions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Summary of Provisions | Year ended December 31 2018 2017 Decommissioning liability $ 129 $ 147 Office lease provision 85 101 Total $ 214 $ 248 Current portion $ 28 $ 27 Long-term portion 186 221 Total $ 214 $ 248 |
Summary of Changes to Decommissioning Liability | Changes to the decommissioning liability were as follows: Year ended December 31 2018 2017 Balance, beginning of year $ 147 $ 182 Net liabilities added (disposed) (1) 4 (4 ) Decrease due to changes in estimates (2) (23 ) (3 ) Liabilities settled (9 ) (16 ) Transfers to liabilities for assets held for sale — (23 ) Accretion charges 10 11 Balance, end of year $ 129 $ 147 Current portion $ 12 $ 10 Long-term portion $ 117 $ 137 (1) Includes additions from drilling activity, facility capital spending and disposals from net property dispositions. (2) In 2018 and 2017, there were no changes in the discount rate. |
Summary of Changes to Office Lease Provision | Changes to the office lease provision were as follows: Year ended December 31 2018 2017 Balance, beginning of year $ 101 $ 117 Net additions (dispositions) (5 ) (7 ) Decrease due to changes in estimates (1 ) (1 ) Settlements (16 ) (16 ) Accretion charges 6 8 Balance, end of year $ 85 $ 101 Current portion $ 16 $ 17 Long-term portion $ 69 $ 84 |
Risk management (Tables)
Risk management (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Summary of Reconcilation of Change in Fair Value of Financial Instruments Outstanding | The following table reconciles the changes in the fair value of financial instruments outstanding: Year ended December 31 Risk management asset (liability) 2018 2017 Balance, beginning of year $ (50 ) $ (43 ) Unrealized gain (loss) on financial instruments: Commodity collars and swaps 43 (7 ) Foreign exchange forwards (2 ) (6 ) Cross currency swaps 18 6 Total fair value, end of year $ 9 $ (50 ) As at December 31 Total fair value consists of the following: 2018 2017 Current asset portion $ 9 $ 11 Current liability portion — (55 ) Non-current — — Non-current — (6 ) Total fair value $ 9 $ (50 ) |
Schedule of Financial Instruments Outstanding | Obsidian Energy records its risk management assets and liabilities on a net basis in the consolidated balance sheets. At December 31, 2018 and 2017, there were no differences between the gross and net amounts. Obsidian Energy had the following financial instruments outstanding as at December 31, 2018. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits its 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. Notional Remaining term Pricing Fair value Crude Oil WTI Swaps 1,000 bbl/d Q1 2019 US$ 50.20/bbl $ 1 WTI Swaps 2,000 bbl/d Q1 2019 $ 66.50/bbl 1 WTI Swaps 2,000 bbl/d Q1 2019 US$ 49.93/bbl 1 WTI Swaps 4,000 bbl/d Jan/19 – Jun/19 $ 68.58/bbl 4 WTI Swaps 2,000 bbl/d Q2 2019 US$ 56.53/bbl 2 Foreign exchange forward contracts on revenue FX Swap US$6 Q1 2019 1.3000 — Total $ 9 |
Components of Risk Management on Consolidated Statements of Income (Loss) | The components of risk management on the consolidated Statements of Income (Loss) are as follows: Year ended December 31 2018 2017 Realized Settlement of commodity contracts/assignment $ (65 ) $ 23 Settlement of foreign exchange contracts (20 ) 8 Total realized risk management gain (loss) (85 ) 31 Unrealized Commodity contracts 43 (7 ) Foreign exchange contracts (2 ) (6 ) Cross-currency swaps 18 6 Total unrealized risk management gain (loss) 59 (7 ) Risk management gain (loss) $ (26 ) $ 24 |
Disclosure of Detailed Information about Accounts Receivable | As at December 31, the following accounts receivable amounts were outstanding. Current 30-90 days 90+ days Total (1) 2018 $ 29 $ 9 $ 15 $ 53 2017 $ 94 $ 3 $ 9 $ 106 (1) In 2018, $nil of accounts receivable is related to assets classified as held for sale (2017 – $1 million). |
Summary of Estimated Future Obligations for Non-Derivative Financial Liabilities | The following table outlines estimated future obligations for non-derivative Long-term (1) Accounts Share-based Bank Total 2019 $ 17 $ 142 $ 1 $ 2 $ 162 2020 374 — — — 374 2021 17 — — — 17 2022 8 — — — 8 2023 — — — — — Thereafter $ 3 $ — $ — $ — $ 3 (1) The 2020 figure includes $337 million related to the syndicated credit facility that is due for renewal in 2020. Historically, the Company has successfully renewed its syndicated credit facility. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Disclosure of Significant Revenue | The Company’s significant revenue streams consist of the following: Year ended December 31 2018 2017 Crude Oil $ 337 $ 334 NGLs 32 28 Natural gas 50 75 Production revenues $ 419 $ 437 Processing fees 11 13 Other income 14 — Oil and natural gas sales and other income $ 444 $ 450 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Summary of Provision for Income Taxes | The provision for income taxes is as follows: Year ended December 31 2018 2017 Deferred tax recovery $ — $ (13 ) |
Summary of Provision for Income Taxes Reflects Effective Tax Rate | The provision for income taxes reflects an effective tax rate that differs from the combined federal and provincial statutory tax rate as follows: Year ended December 31 2018 2017 Loss before taxes $ (305 ) $ (97 ) Combined statutory tax rate (1) 27.0 % 27.0 % Computed income tax recovery $ (82 ) $ (26 ) Increase (decrease) resulting from: Share-based compensation 2 2 Non-taxable 2 (2 ) Unrecognized deferred tax asset 89 5 Adjustments related to prior years (11 ) 5 Other — 3 Deferred tax recovery $ — $ (13 ) (1) The tax rate represents the combined federal and provincial statutory tax rates for the Company and its subsidiaries for the years ended December 31, 2018 and December 31, 2017. |
Summary of Net Deferred Income Tax Liability | The net deferred income tax liability is comprised of the following: Balance January 1, 2018 Provision Recognized in Balance December 31, Deferred tax liabilities (assets) PP&E $ 614 $ (89 ) $ — $ 525 Risk management (35 ) 15 — (20 ) Decommissioning liability (46 ) 11 — (35 ) Share-based compensation (1 ) 2 — 1 Non-capital (532 ) 61 — (471 ) Net deferred tax liability $ — $ — $ — $ — Balance January 1, 2017 Provision Recognized in Balance December 31, Deferred tax liabilities (assets) PP&E $ 668 $ (53 ) $ (1 ) $ 614 Risk management (40 ) 5 — (35 ) Decommissioning liability (69 ) 23 — (46 ) Share-based compensation (4 ) 3 — (1 ) Non-capital (541 ) 9 — (532 ) Net deferred tax liability $ 14 $ (13 ) $ (1 ) $ — |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Summary of Issued Capital | b) Issued Shareholders’ capital Common Amount Balance, January 1, 2017 502,763,763 $ 8,997 Issued on exercise of equity compensation plans (1) 1,577,225 4 Elimination of deficit — (6,820 ) Balance, December 31, 2017 504,340,988 $ 2,181 Issued on exercise of equity compensation plans (1) 2,975,043 4 Balance, December 31, 2018 507,316,031 $ 2,185 (1) Upon exercise of awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. |
Summary of Other Reserves | In June 2017, the Company’s shareholders approved the reduction of the Company’s share capital and the elimination of its deficit as stated at March 31, 2017. Year ended December 31 Other Reserves 2018 2017 Balance, beginning of year $ 96 $ 97 Share-based compensation expense 7 8 Net benefit on options exercised (1) (4 ) (9 ) Balance, end of year $ 99 $ 96 (1) Upon exercise of awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Summary of Weighted Average Assumptions of RPSU Plan Units Under Equity Method | The fair value of the RPSU plan units under the equity method used the following weighted average assumptions: Year ended December 31 2018 2017 Average fair value of units granted (per unit) $ 1.23 $ 2.11 Expected life of units (years) 3.0 3.0 Expected forfeiture rate 5.8 % 7.8 % |
Summary of Stock Option Activity and Related Information | Year ended December 31 2018 2017 Options Number of Options Weighted Exercise Price Number of Weighted Outstanding, beginning of year 3,662,575 $ 4.60 7,612,625 $ 6.01 Exercised (154,975 ) 1.20 (1,577,225 ) 1.44 Forfeited (1,491,625 ) 6.27 (2,372,825 ) 11.22 Outstanding, end of year 2,015,975 $ 3.62 3,662,575 $ 4.60 Exercisable, end of year 1,450,800 $ 4.47 1,980,876 $ 6.50 |
Summary of Options Outstanding and Exercisable | Options Outstanding Options Exercisable Range of Grant Prices Number Weighted Weighted Number Weighted $1.00 - $1.99 1,247,225 $ 1.42 1.8 714,825 $ 1.48 $2.00 - $4.99 304,050 3.88 1.2 271,275 4.01 $5.00 - $9.99 464,700 9.35 0.3 464,700 9.35 2,015,975 $ 3.62 0.8 1,450,800 $ 4.47 |
Summary of Share-Based Compensation | Share-based compensation consisted of the following: Year ended December 31 2018 2017 Options $ — $ 1 PSU plan (1 ) 1 RPSU plan – equity method 7 7 RPSU plan – liability method — (1 ) Share-based compensation $ 6 $ 8 |
Restricted share unit plan [member] | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | RPSU plan (number of shares equivalent) Year ended December 31 2018 2017 Outstanding, beginning of year 8,397,378 10,199,595 Granted 6,406,210 4,472,510 Vested (3,602,134 ) (3,935,186 ) Forfeited (2,555,038 ) (2,339,541 ) Outstanding, end of year 8,646,416 8,397,378 Outstanding units – liability method 28,832 730,297 Outstanding units – equity method 8,617,584 7,667,081 As at December 31 RPSU plan obligation: 2018 2017 Current liability (1) $ — $ 1 Non-current $ — $ — (1) Included within Accounts payable and accrued liabilities in 2017. |
PSU Plan [member] | Options granted prior to June 2017 [member] | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Year ended December 31 PSU awards (number of shares equivalent) 2018 2017 Outstanding, beginning of year 1,539,000 1,855,500 Granted — 569,000 Vested (424,200 ) (638,750 ) Forfeited (284,000 ) (246,750 ) Outstanding, end of year 830,800 1,539,000 As at December 31 PSU obligation: 2018 2017 Non-current $ — $ 1 |
PSU Plan [member] | Options granted from June 2017 [member] | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Year ended December 31 PSU awards (number of shares equivalent) 2018 2017 Outstanding, beginning of year — — Granted 1,141,900 — Outstanding, end of year 1,141,900 — As at December 31 PSU obligation: 2018 2017 Non-current $ — $ — |
Per share amounts (Tables)
Per share amounts (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Disclosure of Detailed Information about Net Loss Basic and Diluted | The number of incremental shares included in diluted earnings per share is computed using the average volume-weighted market price of shares for the period. In addition, contracts that could be settled in cash or shares are assumed to be settled in shares if share settlement is more dilutive. Year ended December 31 2018 2017 Net loss – basic and diluted $ (305 ) $ (84 ) |
Disclosure of Detailed Information about Weighted Average Number of Shares Per Share | The weighted average number of shares used to calculate per share amounts is as follows: Year ended December 31 2018 2017 Basic and Diluted 506,322,077 503,933,024 |
Changes in non-cash working c_2
Changes in non-cash working capital (increase) decrease (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Summary of Changes in Non-cash Working Capital (Increase) Decrease | Year ended December 31 2018 2017 Accounts receivable (1) $ 53 $ 12 Other current assets 6 — Deferred funding asset 18 25 Accounts payable and accrued liabilities (2) (3) (15 ) (35 ) 62 2 Operating activities 68 5 Investing activities (6 ) (3 ) $ 62 $ 2 Interest paid $ 20 $ 23 Income taxes recovered $ — $ — (1) No accounts receivable is related to assets classified as held for sale in 2018 (2017 - $1 million). (2) No accounts payable and accrued liabilities is related to assets classified as held for sale in 2018 (2017 - $1 million). (3) Includes share-based compensation plans. |
Capital management (Tables)
Capital management (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Summary of Financial Covenants Under Lending Agreements | As at December 31, 2018, the Company was in compliance with all of its financial covenants under such lending agreements. Year ended December 31 (millions, except ratio amounts) 2018 2017 Components of capital Shareholders’ equity $ 1,868 $ 2,166 Long-term debt $ 419 $ 359 Ratios Senior debt to Adjusted EBITDA (1) 3.66 1.88 Total debt to Adjusted EBITDA (2) 3.66 1.88 Senior debt to capitalization (3) 19 % 15 % Total debt to capitalization (4) 19 % 15 % Priority debt to consolidated tangible assets (5) — — Adjusted EBITDA (6) $ 116 $ 194 Long-term debt $ 419 $ 359 Bank overdraft 2 — Letters of credit (7) 4 10 Senior debt and total debt 425 369 Total shareholders’ equity 1,868 2,166 Total capitalization $ 2,293 $ 2,535 (1) As at December 31, 2018, less than 3.75:1 (2) As at December 31, 2018, less than 4:1 (3) Not to exceed 50 percent (4) Not to exceed 55 percent (5) Priority debt not to exceed 15% of consolidated tangible assets. (6) Adjusted EBITDA as defined by Obsidian Energy’s debt agreements excludes the EBITDA contribution from assets sold in the prior 12 months and is used within Obsidian Energy’s covenant calculations related to its syndicated bank facility and senior notes. Additionally, under the syndicated credit facility, realized foreign exchange gains or losses related to debt maturities are excluded from the calculation. (7) Letters of credit defined as financial under the lending agreements are included in the calculation. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Summary of Certain Payments Over the Next Five Years | Obsidian Energy is committed to certain payments over the next five calendar years and thereafter as follows: 2019 2020 2021 2022 2023 Thereafter Total Long-term debt (1) $ 17 $ 374 $ 17 $ 8 $ — $ 3 $ 419 Transportation 12 8 5 4 3 9 41 Power infrastructure 7 2 — — — — 9 Interest obligations 17 8 1 1 — — 27 Office lease 33 33 33 33 33 36 201 Decommissioning liability 12 11 11 11 10 74 129 Total $ 98 $ 436 $ 67 $ 57 $ 46 $ 122 $ 826 (1) The 2020 figure includes $337 million related to the syndicated credit facility that is due for renewal in 2020. Historically, the Company has successfully renewed its syndicated credit facility. |
Related-party transactions (Tab
Related-party transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Summary of Compensation of key Management Personnel | The remuneration of the directors and key management personnel of Obsidian Energy during the year is below. Year ended December 31 2018 2017 Salary and employee benefits $ 3 $ 3 Termination benefits — 2 Share-based payments (1) — 3 $ 3 $ 8 (1) Includes changes in the fair value of PSUs, DSUs and non-cash |
Supplementary Oil and Gas Inf_2
Supplementary Oil and Gas Information - (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Net Proved Oil and Natural Gas Reserves | YEAR ENDED DECEMBER 31, 2018 CONSTANT PRICES AND COSTS Light and Heavy Natural Natural Gas Barrels of Oil Net Proved Developed and Proved Undeveloped Reserves (1) December 31, 2017 41 7 138 5 76 Extensions & Discoveries 2 — 9 — 4 Improved Recovery & Infill Drilling 1 — 2 — 1 Technical Revisions 4 — 18 1 8 Acquisitions — — — — — Dispositions (1 ) — (1 ) — (1 ) Production (4 ) (2 ) (22 ) (1 ) (11 ) Change for the year 3 (2 ) 5 1 2 December 31, 2018 43 5 143 6 78 Developed 31 5 109 4 58 Undeveloped 13 — 34 2 20 Total (2) 43 5 143 6 78 (1) Columns may not add due to rounding. (2) Obsidian Energy does not file any estimates of total net proved crude oil or natural gas reserves with any U.S. federal authority or agency other than the SEC. YEAR ENDED DECEMBER 31, 2017 CONSTANT PRICES AND COSTS Light and Heavy Natural Natural Gas Barrels of Oil Net Proved Developed and Proved Undeveloped Reserves (1) December 31, 2016 43 7 164 4 81 Extensions & Discoveries 2 — 14 1 5 Improved Recovery & Infill Drilling 1 1 2 — 3 Technical Revisions 5 1 60 3 19 Acquisitions — — — — — Dispositions (7 ) — (76 ) (1 ) (21 ) Production (4 ) (2 ) (26 ) (1 ) (12 ) Change for the year (3 ) — (26 ) 2 (6 ) December 31, 2017 41 7 138 5 76 Developed 32 5 119 4 62 Undeveloped 9 1 20 1 14 Total (2) 41 7 138 5 76 (1) Columns may not add due to rounding. (2) Obsidian Energy does not file any estimates of total net proved crude oil or natural gas reserves with any U.S. federal authority or agency other than the SEC. |
Capitalized Costs | CAPITALIZED COSTS As at December 31, ($CAD millions) 2018 2017 Proved oil and gas properties $ 10,776 $ 10,636 Unproved oil and gas properties — — Total capitalized costs 10,776 10,636 Accumulated depletion and depreciation (8,202 ) (7,817 ) Net capitalized costs $ 2,574 $ 2,819 |
Costs Incurred | COSTS INCURRED For the years ended December 31, ($CAD millions) 2018 2017 Property acquisition (disposition) costs (1) Proved oil and gas properties—acquisitions $ 1 $ 6 Proved oil and gas properties—dispositions (14 ) (116 ) Unproved oil and gas properties 2 3 Exploration costs (2) — 2 Development costs (3) 165 184 Joint venture, carried capital — (50 ) Capital expenditures 154 29 Corporate acquisitions — — Total expenditures $ 154 $ 29 (1) Acquisitions are net of disposition of properties. (2) Cost of geological and geophysical capital expenditures and costs on exploratory plays. (3) Includes equipping and facilities capital expenditures. |
Standardized Measure of Discounted Future Net Cash Flows | STANDARD MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS For the years ended December 31, ($CAD millions) 2018 2017 Future cash inflows $ 3,886 $ 3,384 Future production costs (1,769 ) (1,625 ) Future development costs (469 ) (302 ) Undiscounted pre-tax 1,648 1,457 Deferred income taxes (1) — — Future net cash flows 1,648 1,457 Less 10% annual discount factor (822 ) (661 ) Standardized measure of discounted future net cash flows $ 826 $ 796 (1) Obsidian Energy is currently not cash taxable. |
Standardized Measure of Discounted Future Net Cash Flow Changes | STANDARD MEASURE OF DISCOUNTED FUTURE NET CASH FLOW CHANGES For the years ended December 31, ($CAD millions) 2018 2017 Standardized measure of discounted future net cash flows at beginning of year $ 796 $ 631 Oil and gas sales during period net of production costs and royalties (1) (193 ) (213 ) Changes due to prices (2) 82 481 Development costs during the period (3) 168 141 Changes in forecast development costs (4) (309 ) (202 ) Changes resulting from extensions, infills and improved recovery (5) 8 73 Changes resulting from discoveries (2) — 1 Changes resulting from acquisitions of reserves (5) — — Changes resulting from dispositions of reserves (5) (5 ) (71 ) Accretion of discount (6) 80 63 Net change in income tax (7) — — Changes resulting from other changes and technical reserves revisions plus effects on timing (8) 201 (109 ) Standardized measure of discounted future net cash flows at end of year $ 826 $ 796 (1) Company actual before income taxes, excluding general and administrative expenses. (2) The impact of changes in prices and other economic factors on future net revenue. (3) Actual capital expenditures relating to the exploration, development and production of oil and gas reserves. (4) The change in forecast development costs. (5) End of period net present value of the related reserves. (6) Estimated as 10 percent of the beginning of period net present value. (7) The difference between forecast income taxes at beginning of period and the actual taxes for the period plus forecast income taxes at the end of period. (8) Includes changes due to revised production profiles, development timing, operating costs, royalty rates and actual prices received versus forecast, etc. |
Structure of Penn West - Additi
Structure of Penn West - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018Segment | |
Disclosure of operating segments [line items] | |
Number of operating segment | 1 |
Percentage of ownership in petroleum and natural gas assets | 100.00% |
Peace River Oil Partnership [member] | |
Disclosure of operating segments [line items] | |
Proportion of ownership interest in joint arrangement | 55.00% |
Significant accounting polici_4
Significant accounting policies - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Summary Of Significant Accounting Policies [Line items] | |
Description of conversion of oil and gas products | Natural gas volumes are converted to equivalent oil volumes based upon the relative energy content of six thousand cubic feet of natural gas to one barrel of oil. |
Corporate asset component [member] | |
Summary Of Significant Accounting Policies [Line items] | |
Estimated useful life | 10 years |
Peace River Oil Partnership [member] | |
Summary Of Significant Accounting Policies [Line items] | |
Proportion of ownership interest in joint arrangement | 55.00% |
Bottom of range [member] | |
Summary Of Significant Accounting Policies [Line items] | |
Percentage of economically recoverable proved reserves | 90.00% |
Bottom of range [member] | Turnaround component [member] | |
Summary Of Significant Accounting Policies [Line items] | |
Estimated useful life | 3 years |
Top of range [member] | Turnaround component [member] | |
Summary Of Significant Accounting Policies [Line items] | |
Estimated useful life | 5 years |
Significant accounting polici_5
Significant accounting policies - Impact of Adoption of IFRS 15 on Certain Line Items within Consolidated Statements of Income (Loss) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Significant changes in financial statement line items due to application of IFRS15 [line items] | ||
Increase in Oil and natural gas sales and other income | $ 444 | $ 450 |
Increase in Operating expenses | 158 | 189 |
Net and comprehensive loss | $ (305) | (84) |
Increase (decrease) due to application of IFRS 15 [member] | ||
Significant changes in financial statement line items due to application of IFRS15 [line items] | ||
Increase in Oil and natural gas sales and other income | 13 | |
Increase in Operating expenses | 13 | |
Net and comprehensive loss | $ 0 |
Significant accounting polici_6
Significant accounting policies - Summary of Original Measurement Categories Under IAS 39 and New Measurement Categories Under IFRS 9 (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
IFRS9 [member] | Cash and cash equivalents [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | Amortized Cost |
IFRS9 [member] | Accounts receivable [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | Amortized Cost |
IFRS9 [member] | Accounts payable and accrued liabilities [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | Amortized Cost |
IFRS9 [member] | Long term debt [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | Amortized Cost |
IFRS9 [member] | Risk management contracts [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | FVTPL |
IAS 39 [member] | Cash and cash equivalents [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | Loans and receivables |
IAS 39 [member] | Accounts receivable [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | Loans and receivables |
IAS 39 [member] | Accounts payable and accrued liabilities [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | Other financial liabilities |
IAS 39 [member] | Long term debt [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | Other financial liabilities |
IAS 39 [member] | Risk management contracts [member] | |
Disclosure of original measurement categories under IAS 39 and new measurement categories under IFRS 9 for each class of company financial assets and financial liabilities [line items] | |
Measurement category | FVTPL |
Deferred Funding Asset - Disclo
Deferred Funding Asset - Disclosure of Detailed Information About Composition of Deferred Funding Asset (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of financial assets [line items] | ||
Current portion | $ 18 | |
Long-term portion | $ 0 | 0 |
Total | $ 18 |
Assets and Liabilities Held f_3
Assets and Liabilities Held for Sale - Disclosure of Detailed Information about Assets and Liabilities Held for Sale (Detail) $ in Millions | Dec. 31, 2017CAD ($) |
Disclosure of assets and liabilities classified as held for sale [line items] | |
Assets held for sale | $ 35 |
Liabilities related to assets held for sale | 24 |
Working capital [member] | |
Disclosure of assets and liabilities classified as held for sale [line items] | |
Assets held for sale | 1 |
Liabilities related to assets held for sale | 1 |
Disposal of property, plant and equipment [member] | |
Disclosure of assets and liabilities classified as held for sale [line items] | |
Assets held for sale | 34 |
Decommissioning liability [member] | |
Disclosure of assets and liabilities classified as held for sale [line items] | |
Liabilities related to assets held for sale | $ 23 |
Assets and Liabilities Held f_4
Assets and Liabilities Held for Sale - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2017CAD ($) | |
Depletion depreciation, impairment and accretion [member] | |
Disclosure of assets and liabilities classified as held for sale [line items] | |
Impairment loss, net of tax | $ 12 |
Property, plant and equipment -
Property, plant and equipment - Disclosure of Property Plant and Equipment (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | $ 2,819 | |
Ending balance | 2,574 | $ 2,819 |
Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 10,636 | 10,648 |
Capital expenditures | 168 | 141 |
Joint venture, carried capital | 50 | |
Acquisitions | 1 | 6 |
Dispositions | (10) | (76) |
Transfers to asset held for sale | (125) | |
Net decommissioning dispositions | (19) | (7) |
SR&ED credits (note 11) | (1) | |
Ending balance | 10,776 | 10,636 |
Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (7,817) | (7,666) |
Depletion and depreciation | (288) | (289) |
Impairments | (107) | (15) |
Dispositions | 10 | 62 |
Transfers to asset held for sale | 91 | |
Ending balance | (8,202) | (7,817) |
Oil and gas assets [member] | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 6,171 | 6,229 |
Capital expenditures | 97 | 56 |
Joint venture, carried capital | 50 | |
Acquisitions | 1 | 5 |
Dispositions | (8) | (61) |
Transfers to asset held for sale | (100) | |
Net decommissioning dispositions | (19) | (7) |
SR&ED credits (note 11) | (1) | |
Ending balance | 6,242 | 6,171 |
Oil and gas assets [member] | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (5,884) | (5,794) |
Depletion and depreciation | (188) | (201) |
Impairments | (86) | (12) |
Dispositions | 8 | 50 |
Transfers to asset held for sale | 73 | |
Ending balance | (6,150) | (5,884) |
Facilities [member] | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 4,292 | 4,248 |
Capital expenditures | 70 | 83 |
Acquisitions | 1 | |
Dispositions | (2) | (15) |
Transfers to asset held for sale | (25) | |
Ending balance | 4,360 | 4,292 |
Facilities [member] | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (1,811) | (1,764) |
Depletion and depreciation | (86) | (74) |
Impairments | (21) | (3) |
Dispositions | 2 | 12 |
Transfers to asset held for sale | 18 | |
Ending balance | (1,916) | (1,811) |
Corporate assets [member] | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 173 | 171 |
Capital expenditures | 1 | 2 |
Ending balance | 174 | 173 |
Corporate assets [member] | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (122) | (108) |
Depletion and depreciation | (14) | (14) |
Ending balance | $ (136) | $ (122) |
Property, plant and equipment_2
Property, plant and equipment - Additional Information (Detail) - CAD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Gains on disposition of assets | $ 3,000,000 | $ 74,000,000 |
Impairment reversal | 0 | |
Peace River CGU [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Impairment | $ 79,000,000 | |
Description of value in use calculation | At December 31, 2018, for the Peace River CGU a one percent change in the discount rate would result in a $19 million pre-tax impairment expense or recovery and a five percent change in the forecast cash flows would result in $25 million pre-tax impairment expense or recovery. | |
Peace River CGU [member] | 1% percent change in discount rate [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Pre-tax impairement expense recovery | $ 19,000,000 | |
Peace River CGU [member] | 5% change in forecast cash flows [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Pre-tax impairement expense recovery | $ 25,000,000 | |
Peace River CGU [member] | Bottom of range [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Discount rate used in current estimate of value in use | 9.50% | |
Peace River CGU [member] | Top of range [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Discount rate used in current estimate of value in use | 13.00% | |
Viking CGU [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Impairment | $ 0 | |
Legacy CGU [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Impairment | $ 18,000,000 | |
Description of value in use calculation | At December 31, 2018, for the Legacy CGU a one percent change in the discount rate or a five percent change in the forecast cash flows would result in $1 million pre-tax impairment expense or recovery. | |
Pre-tax impairement expense recovery | $ 1,000,000 | |
Legacy CGU [member] | Bottom of range [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Discount rate used in current estimate of value in use | 10.00% | |
Legacy CGU [member] | Top of range [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Discount rate used in current estimate of value in use | 15.00% |
Property, plant and equipment_3
Property, plant and equipment - Disclosure of Benchmark Prices Used in Impairment Tests (Detail) | Dec. 31, 2018$ / CAD$ / bbl$ / MMBTU |
Disclosure of detailed information about property, plant and equipment [line items] | |
2019 | $ / CAD | 0.77 |
2020 | $ / CAD | 0.80 |
2021 | $ / CAD | 0.80 |
2022 | $ / CAD | 0.80 |
2023 | $ / CAD | 0.80 |
2024 - 2029 | $ / CAD | 0.80 |
2,019 | 0.00% |
2,020 | 2.00% |
2,021 | 2.00% |
2,022 | 2.00% |
2,023 | 2.00% |
2024 - 2029 | 2.00% |
Thereafter (inflation percentage) | 2.00% |
WTI [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
2019 | $ / bbl | 63 |
2020 | $ / bbl | 67 |
2021 | $ / bbl | 70 |
2022 | $ / bbl | 71.40 |
2023 | $ / bbl | 72.83 |
2024 - 2029 | $ / bbl | 78.10 |
Thereafter (inflation percentage) | 2.00% |
AECO [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
2019 | $ / MMBTU | 1.95 |
2020 | $ / MMBTU | 2.44 |
2021 | $ / MMBTU | 3 |
2022 | $ / MMBTU | 3.21 |
2023 | $ / MMBTU | 3.30 |
2024 - 2029 | $ / MMBTU | 3.63 |
Thereafter (inflation percentage) | 2.00% |
Long-term debt - Schedule of Lo
Long-term debt - Schedule of Long-term Debt (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | $ 419 | $ 359 |
Current portion | 17 | 31 |
Long-term portion | $ 402 | $ 328 |
Weighted average remaining life (years) | 2.0 Years | 2.3 Years |
Weighted average interest rate | 5.80% | 6.00% |
Bankers acceptances and prime rate loans [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | $ 337 | $ 253 |
5.90%, US$5 Million, maturing May 31, 2019 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 6 | 5 |
6.30%, US$24 Million, maturing May 29, 2018 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 31 | |
6.40%, US$4 Million, maturing May 29, 2020 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 6 | 5 |
9.32%, US$8 Million, maturing May 5, 2019 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 11 | 10 |
5.85%, US$10 Million, maturing March 16, 2020 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 13 | 12 |
4.88%, US$13 Million, maturing December 2, 2020 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 18 | 17 |
4.98%, US$6 Million, maturing December 2, 2022 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 8 | 7 |
5.23%, US$2 Million, maturing December 2, 2025 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 3 | 3 |
4.79%, US$12 Million, maturing November 30, 2021 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | $ 17 | $ 16 |
Long-term debt - Schedule of _2
Long-term debt - Schedule of Long-term Debt (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
5.90%, US$5 Million, maturing May 31, 2019 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 5.90% | 5.90% |
Debt | $ 5 | $ 5 |
Debt, maturity date | May 312,019 | May 312,019 |
6.30%, US$24 Million, maturing May 29, 2018 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 6.30% | 6.30% |
Debt | $ 24 | $ 24 |
Debt, maturity date | May 29, 2018 | May 29, 2018 |
6.40%, US$4 Million, maturing May 29, 2020 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 6.40% | 6.40% |
Debt | $ 4 | $ 4 |
Debt, maturity date | May 29, 2020 | May 29, 2020 |
9.32%, US$8 Million, maturing May 5, 2019 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 9.32% | 9.32% |
Debt | $ 8 | $ 8 |
Debt, maturity date | May 5, 2019 | May 5, 2019 |
5.85%, US$10 Million, maturing March 16, 2020 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 5.85% | 5.85% |
Debt | $ 10 | $ 10 |
Debt, maturity date | March 16, 2020 | March 16, 2020 |
4.88%, US$13 Million, maturing December 2, 2020 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 4.88% | 4.88% |
Debt | $ 13 | $ 13 |
Debt, maturity date | December 2, 2020 | December 2, 2020 |
4.98%, US$6 Million, maturing December 2, 2022 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 4.98% | 4.98% |
Debt | $ 6 | $ 6 |
Debt, maturity date | December 2, 2022 | December 2, 2022 |
5.23%, US$2 Million, maturing December 2, 2025 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 5.23% | 5.23% |
Debt | $ 2 | $ 2 |
Debt, maturity date | December 2, 2025 | December 2, 2025 |
4.79%, US$12 Million, maturing November 30, 2021 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 4.79% | 4.79% |
Debt | $ 12 | $ 12 |
Debt, maturity date | November 30, 2021 | November 30, 2021 |
Long-term debt - Additional Inf
Long-term debt - Additional Information (Detail) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018CAD ($) | Dec. 31, 2017CAD ($) | Jan. 01, 2020 | Dec. 31, 2019 | |
Disclosure of detailed information about borrowings [line items] | ||||
Repayment of senior notes | $ 32 | $ 26 | ||
Percentage of long-term debt instruments exposed to changes in short-term interest rates | 80.00% | 70.00% | ||
Letters of credit outstanding | $ 7 | $ 14 | ||
Senior debt to Adjusted EBITDA | 3.66 | 1.88 | ||
Total debt to Adjusted EBITDA | 3.66 | 1.88 | ||
Top of range [member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Senior debt to Adjusted EBITDA | 3.75 | |||
Total debt to Adjusted EBITDA | 4 | |||
Top of range [member] | Amending agreements [member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Senior debt to Adjusted EBITDA | 4.25 | |||
Total debt to Adjusted EBITDA | 4.25 | |||
Top of range [member] | Prior amending agreements [member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Senior debt to Adjusted EBITDA | 3 | |||
Total debt to Adjusted EBITDA | 4 | |||
Syndicated credit facility [member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Debt | $ 550 | |||
Available borrowing facilities | $ 470 | |||
Debt, maturity date | May 31, 2019 | |||
Credit facilities term out period | 1 year |
Long-term debt - Estimated Fair
Long-term debt - Estimated Fair Values of Principal and Interest Obligations of Outstanding Senior Secured Notes (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | $ 77 | $ 103 |
2007 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | 6 | 6 |
2008 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | 6 | 36 |
2009 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | 11 | 10 |
2010 Q1 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | 13 | 12 |
2010 Q4 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | 26 | 25 |
2011 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | $ 15 | $ 14 |
Long-term debt - Realized and U
Long-term debt - Realized and Unrealized Gain (Loss) on Foreign Exchange (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of foreign exchange rates [line items] | ||
Realized foreign exchange loss on debt maturities | $ (8) | $ (6) |
Unrealized foreign exchange gain | 11 | |
Foreign exchange gain (loss) | $ (8) | $ 5 |
Provisions - Summary of Provisi
Provisions - Summary of Provisions (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of Provisions [line items] | |||
Decommissioning liability | $ 129 | $ 147 | $ 182 |
Office lease provision | 85 | 101 | $ 117 |
Total | 214 | 248 | |
Current portion | 28 | 27 | |
Long-term portion | 186 | 221 | |
Total | $ 214 | $ 248 |
Provisions - Additional Informa
Provisions - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018CAD ($)Years | Dec. 31, 2017CAD ($) | Dec. 31, 2016CAD ($) | |
Disclosure of provision matrix [line items] | |||
Decommissioning liability, inflation factor rate | 2.00% | 2.00% | |
Decommissioning liability, credit-adjusted rate | 6.50% | 6.50% | |
Decommissioning liability, expected useful life | Years | 50 | ||
Decommissioning liability | $ 129 | $ 147 | $ 182 |
Office lease provision, credit-adjusted discount rate | 6.50% | 6.50% | |
Decommissioning liability on undiscounted uninflated basis [member] | |||
Disclosure of provision matrix [line items] | |||
Decommissioning liability | $ 800 | $ 900 |
Provisions - Summary of Changes
Provisions - Summary of Changes to Decommissioning Liability (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Provisions [line items] | ||
Balance, beginning of year | $ 147 | $ 182 |
Net liabilities added (disposed) | 4 | (4) |
Decrease due to changes in estimates | (23) | (3) |
Liabilities settled | (9) | (16) |
Transfers to liabilities for assets held for sale | (23) | |
Accretion charges | 10 | 11 |
Balance, end of year | 129 | 147 |
Current portion | 12 | 10 |
Long-term portion | $ 117 | $ 137 |
Provisions - Summary of Chang_2
Provisions - Summary of Changes to Decommissioning Liability (Parenthetical) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Provisions [line items] | ||
Increase (decrease) in decommissioning liability due to change in discount rate | $ 0 | $ 0 |
Provisions - Summary of Chang_3
Provisions - Summary of Changes to Office Lease Provision (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Provisions [line items] | ||
Balance, beginning of year | $ 101 | $ 117 |
Net additions (dispositions) | (5) | (7) |
Decrease due to changes in estimates | (1) | (1) |
Settlements | (16) | (16) |
Accretion charges | 6 | 8 |
Balance, end of year | 85 | 101 |
Current portion | 16 | 17 |
Long-term portion | $ 69 | $ 84 |
Risk management - Additional In
Risk management - Additional Information (Detail) $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018CAD ($) | Dec. 31, 2018CAD ($)bbl | Dec. 31, 2017CAD ($) | |
Disclosure of risk management strategy [line items] | |||
Risk management, description | The Company may, from time to time, manage these risks through the use of swaps or other financial instruments up to a maximum of 50 percent of forecast sales volumes, net of royalties, for the balance of any current year plus one additional year forward and up to a maximum of 25 percent, net of royalties, for one additional year thereafter. | ||
Realized loss | $ (85) | $ 31 | |
Maximum exposure to credit risk | 62 | 117 | |
Accounts receivable, carrying value | 53 | 106 | |
Derivative financial assets, fair value | $ 9 | $ 11 | |
Percentage of long term debt instruments exposed to changes in short term interest rates | 80.00% | 70.00% | |
Fixed interest rate debt instruments outstanding | $ 82 | $ 106 | |
Fixed interest rate debt instruments average remaining term | 2 years | 2 years 3 months 18 days | |
Average interest rate | 5.80% | 6.00% | |
Later than three months [member] | |||
Disclosure of risk management strategy [line items] | |||
Accounts receivable, carrying value | $ 15 | $ 9 | |
Pound sterling cross currency swap [member] | |||
Disclosure of risk management strategy [line items] | |||
Realized loss | $ 18 | ||
Natural gas [member] | |||
Disclosure of risk management strategy [line items] | |||
Pre-tax unrealized risk management, change in price per unit | bbl | 1 | ||
Pre-tax unrealized risk management, change in price, amount | $ 2 | ||
Senior notes [member] | |||
Disclosure of risk management strategy [line items] | |||
Senior notes | 82 | 106 | |
Senior notes [member] | At fair value [member] | |||
Disclosure of risk management strategy [line items] | |||
Senior notes | $ 77 | $ 103 |
Risk management - Summary of Re
Risk management - Summary of Reconciliation of Change in Fair Value of Financial Instruments Outstanding (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total fair value consists of the following: | ||
Current asset portion | $ 9 | $ 11 |
Current liability portion | (55) | |
Non-current liability portion | (6) | |
At fair value [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Balance, beginning of year | (50) | (43) |
Unrealized gain (loss) on financial instruments: | ||
Commodity collars and swaps | 43 | (7) |
Foreign exchange forwards | (2) | (6) |
Cross currency swaps | 18 | 6 |
Total fair value, end of year | 9 | (50) |
Total fair value consists of the following: | ||
Current asset portion | 9 | 11 |
Current liability portion | (55) | |
Non-current asset portion | 0 | 0 |
Non-current liability portion | (6) | |
Total fair value, end of year | $ 9 | $ (50) |
Risk management - Schedule of F
Risk management - Schedule of Financial Instruments Outstanding (Detail) - 12 months ended Dec. 31, 2018 $ in Millions, $ in Millions | CAD ($)CAD_perUSDbbl$ / bbl$ / bbl | USD ($)CAD_perUSDbbl$ / bbl$ / bbl |
Disclosure of detailed information about financial instruments [line items] | ||
Financial Assets, at fair value | $ 9 | |
Foreign exchange forward contracts on revenue [member] | FX swap [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional value | $ 6 | |
Foreign exchange forward rate | CAD_perUSD | 1.3000 | 1.3000 |
Foreign exchange forward contracts on revenue [member] | FX Swap 3 [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial instruments, remaining term, description | Q1 2019 | |
Foreign exchange forward contracts on revenue [member] | FX swap [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial liabilities, at fair value | $ 0 | |
Crude oil [member] | W T I swaps [member] | Q1 2019 [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial instruments, notional volume | bbl | 1,000 | 1,000 |
Financial instruments, remaining term, description | Q1 2019 | |
Financial instruments, benchmark pricing per unit | $ / bbl | 50.20 | 50.20 |
Financial liabilities, at fair value | $ 1 | |
Crude oil [member] | W T I swaps [member] | Q1 2019 [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial instruments, notional volume | bbl | 2,000 | 2,000 |
Financial instruments, remaining term, description | Q1 2019 | |
Financial instruments, benchmark pricing per unit | $ / bbl | 66.50 | 66.50 |
Financial liabilities, at fair value | $ 1 | |
Crude oil [member] | W T I swaps [member] | Q1 2019 [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial instruments, notional volume | bbl | 2,000 | 2,000 |
Financial instruments, remaining term, description | Q1 2019 | |
Financial instruments, benchmark pricing per unit | $ / bbl | 49.93 | 49.93 |
Financial liabilities, at fair value | $ 1 | |
Crude oil [member] | W T I swaps [member] | Jan/19 - Jun/19 [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial instruments, notional volume | bbl | 4,000 | 4,000 |
Financial instruments, remaining term, description | Jan/19 - Jun/19 | |
Financial instruments, benchmark pricing per unit | $ / bbl | 68.58 | 68.58 |
Financial liabilities, at fair value | $ 4 | |
Crude oil [member] | W T I swaps [member] | Q2 2019 [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial instruments, notional volume | bbl | 2,000 | 2,000 |
Financial instruments, remaining term, description | Q2 2019 | |
Financial instruments, benchmark pricing per unit | $ / bbl | 56.53 | 56.53 |
Financial liabilities, at fair value | $ 2 |
Risk management - Components of
Risk management - Components of Risk Management on Consolidated Statements of Income (Loss) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Realized risk management gain/loss on settlement of commodity contracts/assignment | $ (65) | $ 23 |
Realized risk management gain/loss on settlement of foreign exchange contracts | (20) | 8 |
Total realized risk management gain (loss) | (85) | 31 |
Unrealized risk management gain/loss on commodity contracts | 43 | (7) |
Unrealized risk management gain/loss on foreign exchange contracts | (2) | (6) |
Unrealized risk management gain/loss on cross currency swaps | 18 | 6 |
Total unrealized risk management gain (loss) | 59 | (7) |
Risk management gain (loss) | $ (26) | $ 24 |
Risk management - Disclosure of
Risk management - Disclosure of Detailed Information about Accounts Receivable (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of accounts receivables [line items] | ||
Accounts receivables | $ 53 | $ 106 |
Current [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | 29 | 94 |
Later than one month and not later than three months [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | 9 | 3 |
Later than three months [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | $ 15 | $ 9 |
Risk management - Disclosure _2
Risk management - Disclosure of Detailed Information about Accounts Receivable (Parenthetical) (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of accounts receivables [line items] | ||
Accounts receivables | $ 53 | $ 105 |
Disposal groups classified as held for sale [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | $ 0 | $ 1 |
Risk management - Summary of Es
Risk management - Summary of Estimated Future Obligations for Non-Derivative Financial Liabilities (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of financial liabilities [line items] | ||
Long-term debt | $ 419 | $ 359 |
Bank overdraft | 2 | |
2019 [member] | ||
Disclosure of financial liabilities [line items] | ||
Long-term debt | 17 | |
Accounts payable & accrued liabilities | 142 | |
Share-based compensation accrual | 1 | |
Bank overdraft | 2 | |
Total | 162 | |
2020 [member] | ||
Disclosure of financial liabilities [line items] | ||
Long-term debt | 374 | |
Total | 374 | |
2021 [member] | ||
Disclosure of financial liabilities [line items] | ||
Long-term debt | 17 | |
Total | 17 | |
2022 [member] | ||
Disclosure of financial liabilities [line items] | ||
Long-term debt | 8 | |
Total | 8 | |
Thereafter [member] | ||
Disclosure of financial liabilities [line items] | ||
Long-term debt | 3 | |
Total | $ 3 |
Risk management - Summary of _2
Risk management - Summary of Estimated Future Obligations for Non-Derivative Financial Liabilities (Parenthetical) (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of financial liabilities [line items] | ||
Long-term debt | $ 419 | $ 359 |
2020 [member] | ||
Disclosure of financial liabilities [line items] | ||
Long-term debt | 374 | |
Syndicated credit facility [member] | 2020 [member] | ||
Disclosure of financial liabilities [line items] | ||
Long-term debt | $ 337 |
Revenue - Disclosure of Signifi
Revenue - Disclosure of Significant Revenue (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | $ 419 | $ 437 |
Processing fees | 11 | 13 |
Other income | 14 | |
Oil and natural gas sales and other income | 444 | 450 |
Crude oil [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | 337 | 334 |
Natural gas liquids [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | 32 | 28 |
Natural gas [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | $ 50 | $ 75 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - CAD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2018 | |
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Other income | $ 14 | |
Natural gas liquids [member] | Northern Border Ventura [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Other income | $ 14 |
Income taxes - Summary of Provi
Income taxes - Summary of Provision for Income Taxes (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2017CAD ($) | |
Disclosure representing major components of tax expense income [line items] | |
Deferred tax recovery | $ (13) |
Income taxes - Summary of Pro_2
Income taxes - Summary of Provision for Income Taxes Reflects Effective Tax Rate (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure representing major components of tax expense income [line items] | ||
Loss before taxes | $ (305) | $ (97) |
Combined statutory tax rate | 27.00% | 27.00% |
Computed income tax recovery | $ (82) | $ (26) |
Increase (decrease) resulting from: | ||
Share-based compensation | 2 | 2 |
Non-taxable foreign exchange (gain) loss | 2 | (2) |
Unrecognized deferred tax asset | 89 | 5 |
Adjustments related to prior years | $ (11) | 5 |
Other | 3 | |
Deferred tax recovery | $ (13) |
Income taxes - Summary of Net D
Income taxes - Summary of Net Deferred Income Tax Liability (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | $ 14 | |
Provision (Recovery) in Income | (13) | |
Recognized in Property, Plant and Equipment | (1) | |
PP&E [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | $ 614 | 668 |
Provision (Recovery) in Income | (89) | (53) |
Recognized in Property, Plant and Equipment | (1) | |
Ending Balance | 525 | 614 |
Risk Management [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (35) | (40) |
Provision (Recovery) in Income | 15 | 5 |
Ending Balance | (20) | (35) |
Decommissioning liability [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (46) | (69) |
Provision (Recovery) in Income | 11 | 23 |
Ending Balance | (35) | (46) |
Share-based Compensation [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (1) | (4) |
Provision (Recovery) in Income | 2 | 3 |
Ending Balance | 1 | (1) |
Non-capital Losses [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (532) | (541) |
Provision (Recovery) in Income | 61 | 9 |
Ending Balance | $ (471) | $ (532) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Tax pool | $ 2,500 | $ 2,400 |
Non-capital losses | 2,100 | 2,000 |
Non-capital losses for which deferred tax asset has not been recognized | 348 | 17 |
Realized and unrealized net capital losses | $ 600 | $ 586 |
Shareholders' equity - Addition
Shareholders' equity - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Common shares [member] | |||
Disclosure of classes of share capital [line items] | |||
Number of authorized common shares | An unlimited number of Common Shares. | ||
Number of shares issued | 507,316,031 | 504,340,988 | 502,763,763 |
Preferred shares [member] | |||
Disclosure of classes of share capital [line items] | |||
Number of authorized preferred shares | 90,000,000 | ||
Number of authorized common shares | Shares issuable in one or more series. | ||
Number of shares issued | 0 | ||
Number of shares outstanding | 0 |
Shareholders' equity - Summary
Shareholders' equity - Summary of Issued Capital (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of classes of share capital [line items] | ||
Balance, beginning of year | $ 2,181 | |
Issued on exercise of equity compensation plans | 7 | $ 8 |
Balance, end of year | 2,185 | 2,181 |
Common shares [member] | ||
Disclosure of classes of share capital [line items] | ||
Balance, beginning of year | 2,181 | 8,997 |
Issued on exercise of equity compensation plans | 4 | 4 |
Elimination of deficit | (6,820) | |
Balance, end of year | $ 2,185 | $ 2,181 |
Balance, beginning of year | 504,340,988 | 502,763,763 |
Issued on exercise of equity compensation plans | 2,975,043 | 1,577,225 |
Balance, end of year | 507,316,031 | 504,340,988 |
Shareholders' equity - Summar_2
Shareholders' equity - Summary of Other Reserves (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of reserves within equity [line items] | ||
Balance, beginning of year | $ 96 | $ 97 |
Share-based compensation expense | 7 | 8 |
Net benefit on options exercised | (4) | (9) |
Balance, end of year | $ 99 | $ 96 |
Share-based compensation - Summ
Share-based compensation - Summary of Restricted Share Units Plan (Detail) - Restricted share unit plan [member] $ in Millions | 12 Months Ended | |
Dec. 31, 2018CAD ($) | Dec. 31, 2017CAD ($) | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Outstanding, beginning of year | 8,397,378 | 10,199,595 |
Granted | 6,406,210 | 4,472,510 |
Vested | (3,602,134) | (3,935,186) |
Forfeited | (2,555,038) | (2,339,541) |
Outstanding, end of year | 8,646,416 | 8,397,378 |
Outstanding units - liability method | 28,832 | 730,297 |
Outstanding units - equity method | 8,617,584 | 7,667,081 |
Current liability (1) | $ 1 | |
Non-current liability | $ 0 | $ 0 |
Share-based compensation - Su_2
Share-based compensation - Summary of Weighted Average Assumptions of RPSU Plan Units Under Equity Method (Detail) - Restricted share unit plan [member] - $ / shares | 1 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Average fair value of units granted (per unit) | $ 1.23 | $ 2.11 |
Expected life of units (years) | 3.0 Years | 3.0 Years |
Expected forfeiture rate | 5.80% | 7.80% |
Share-based compensation - Su_3
Share-based compensation - Summary of Performance Share Unit Plan (Detail) - PSU Plan [member] $ in Millions | 12 Months Ended | |
Dec. 31, 2018CAD ($) | Dec. 31, 2017CAD ($) | |
Options granted from June 2017 [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Outstanding, beginning of year | ||
Granted | 1,141,900 | |
Outstanding, end of year | 1,141,900 | |
Non-current liability | ||
Options granted prior to June 2017 [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Outstanding, beginning of year | 1,539,000 | 1,855,500 |
Granted | 569,000 | |
Vested | (424,200) | (638,750) |
Forfeited | (284,000) | (246,750) |
Outstanding, end of year | 830,800 | 1,539,000 |
Non-current liability | $ 1 |
Share-based compensation - Su_4
Share-based compensation - Summary of Stock Option Activity and Related Information (Detail) | 12 Months Ended | |
Dec. 31, 2018CAD ($) | Dec. 31, 2017CAD ($) | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of Options Outstanding, end of year | 2,015,975 | |
Number of Options Exercisable, end of year | 1,450,800 | |
Weighted Average Exercise Price, Outstanding, end of year | $ 3.62 | |
Weighted Average Exercise Price, Exercisable, end of year | $ 4.47 | |
Options [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of Options Outstanding, beginning of year | 3,662,575 | 7,612,625 |
Number of Options, Exercised | (154,975) | (1,577,225) |
Number of Options, Forfeited | (1,491,625) | (2,372,825) |
Number of Options Outstanding, end of year | 2,015,975 | 3,662,575 |
Number of Options Exercisable, end of year | 1,450,800 | 1,980,876 |
Weighted Average Exercise Price Outstanding, beginning of year | $ 4.60 | $ 6.01 |
Weighted Average Exercise Price, Exercised | 1.20 | 1.44 |
Weighted Average Exercise Price, Forfeited | 6.27 | 11.22 |
Weighted Average Exercise Price, Outstanding, end of year | 3.62 | 4.60 |
Weighted Average Exercise Price, Exercisable, end of year | $ 4.47 | $ 6.50 |
Share-based compensation - Su_5
Share-based compensation - Summary of Options Outstanding and Exercisable (Detail) | Dec. 31, 2018CAD ($)yr |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of Options Outstanding | 2,015,975 |
Options Outstanding, Weighted Average Exercise Price | $ 3.62 |
Options Outstanding, Weighted Remaining Contractual Life(years) | yr | 0.8 |
Number of Options Exercisable | 1,450,800 |
Options Exercisable, Weighted Average Exercise Price | $ 4.47 |
$1.00-$1.99 [member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of Options Outstanding | 1,247,225 |
Options Outstanding, Weighted Average Exercise Price | $ 1.42 |
Options Outstanding, Weighted Remaining Contractual Life(years) | yr | 1.8 |
Number of Options Exercisable | 714,825 |
Options Exercisable, Weighted Average Exercise Price | $ 1.48 |
$2.00-4.99 [member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of Options Outstanding | 304,050 |
Options Outstanding, Weighted Average Exercise Price | $ 3.88 |
Options Outstanding, Weighted Remaining Contractual Life(years) | yr | 1.2 |
Number of Options Exercisable | 271,275 |
Options Exercisable, Weighted Average Exercise Price | $ 4.01 |
$5.00-$9.99 [member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of Options Outstanding | 464,700 |
Options Outstanding, Weighted Average Exercise Price | $ 9.35 |
Options Outstanding, Weighted Remaining Contractual Life(years) | yr | 0.3 |
Number of Options Exercisable | 464,700 |
Options Exercisable, Weighted Average Exercise Price | $ 9.35 |
Bottom of range [member] | $1.00-$1.99 [member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Range of Grant Prices | |
Bottom of range [member] | $2.00-4.99 [member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Range of Grant Prices | |
Bottom of range [member] | $5.00-$9.99 [member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Range of Grant Prices | |
Top of range [member] | $1.00-$1.99 [member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Range of Grant Prices | 1.99 |
Top of range [member] | $2.00-4.99 [member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Range of Grant Prices | 4.99 |
Top of range [member] | $5.00-$9.99 [member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Range of Grant Prices | $ 9.99 |
Share-based compensation - Addi
Share-based compensation - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2018CAD ($) | Dec. 31, 2017CAD ($) | |
Disclosure of classes of share capital [line items] | ||
Weighted average share price | $ 0.51 | $ 1.56 |
Employer contributions to employee retirement savings plan percentage of employee contribution | 150.00% | |
Percentage of employees contribution | 10.00% | |
2020 [member] | ||
Disclosure of classes of share capital [line items] | ||
Employer contributions to employee retirement savings plan percentage of employee contribution | 125.00% | |
After year two [member] | ||
Disclosure of classes of share capital [line items] | ||
Employer contributions to employee retirement savings plan percentage of employee contribution | 100.00% | |
Deferred share unit [member] | ||
Disclosure of classes of share capital [line items] | ||
Number of options outstanding, | 1,323,856 | 640,705 |
Current liability | $ 1,000,000 | $ 1,000,000 |
Share-based compensation - Su_6
Share-based compensation - Summary of Share-Based Compensation (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | $ 6 | $ 8 |
Options [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | 1 | |
PSU Plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | (1) | 1 |
RPSU Plan - equity method [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | $ 7 | 7 |
RPSU Plan - liability method [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | $ (1) |
Per share amounts - Disclosure
Per share amounts - Disclosure of Detailed Information about Net Loss Basic and Diluted (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share [line items] | ||
Net loss - basic and diluted | $ (305) | $ (84) |
Per share amounts - Disclosur_2
Per share amounts - Disclosure of Detailed Information about Weighted Average Number of Shares Per Share (Detail) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share [line items] | ||
Basic and Diluted | 506.3 | 503.9 |
Per share amounts - Additional
Per share amounts - Additional Information (Detail) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share [line items] | ||
Anti-dilutive securities issued under option plan | 2 | 3.7 |
Changes in non-cash working c_3
Changes in non-cash working capital (increase) decrease - Summary of Changes in Non-cash Working Capital (Increase) Decrease (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Increase Decrease In Non-cash Working Capital [line items] | ||
Accounts receivable | $ 53 | $ 12 |
Other current assets | 6 | |
Deferred funding asset | 18 | 25 |
Accounts payable and accrued liabilities | (15) | (35) |
Net changes in non cash working capital | 62 | 2 |
Operating activities | 68 | 5 |
Investing activities | (6) | (3) |
Net changes in non cash working capital | 62 | 2 |
Interest paid | 20 | 23 |
Income taxes recovered | $ 0 | $ 0 |
Changes in non-cash working c_4
Changes in non-cash working capital (increase) decrease - Summary of Changes in Non-cash Working Capital (Increase) Decrease (Parenthetical) (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of Increase Decrease In Non-cash Working Capital [line items] | ||
Accounts receivable | $ 53 | $ 105 |
Accounts payable and accrued liabilities | 143 | 149 |
Current assets held for sale [member] | ||
Disclosure of Increase Decrease In Non-cash Working Capital [line items] | ||
Accounts receivable | 0 | 1 |
Accounts payable and accrued liabilities | $ 0 | $ 1 |
Capital management - Summary of
Capital management - Summary of Financial Covenants Under Lending Agreements (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018CAD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2016CAD ($) | |
Disclosure of objectives, policies and processes for managing capital [line items] | |||
Long-term debt | $ 419 | $ 359 | |
Components of capital | |||
Shareholders' equity | 1,868 | 2,166 | $ 2,247 |
Long-term debt | $ 419 | $ 359 | |
Ratios | |||
Senior debt to Adjusted EBITDA | 3.66 | 1.88 | |
Total debt to Adjusted EBITDA | 3.66 | 1.88 | |
Senior debt to capitalization | 19.00% | 15.00% | |
Total debt to capitalization | 19.00% | 15.00% | |
Priority debt to consolidated tangible assets | 0.00% | 0.00% | |
Adjusted EBITDA | $ 116 | $ 194 | |
Long-term debt | 419 | 359 | |
Total shareholders' equity | 1,868 | 2,166 | $ 2,247 |
Total capitalization | 2,293 | 2,535 | |
Bank overdraft [member] | |||
Disclosure of objectives, policies and processes for managing capital [line items] | |||
Long-term debt | 2 | ||
Components of capital | |||
Long-term debt | 2 | ||
Ratios | |||
Long-term debt | 2 | ||
Letters of credit [member] | |||
Disclosure of objectives, policies and processes for managing capital [line items] | |||
Long-term debt | 4 | 10 | |
Components of capital | |||
Long-term debt | 4 | 10 | |
Ratios | |||
Long-term debt | 4 | 10 | |
Senior debt and total debt [member] | |||
Disclosure of objectives, policies and processes for managing capital [line items] | |||
Long-term debt | 425 | 369 | |
Components of capital | |||
Long-term debt | 425 | 369 | |
Ratios | |||
Long-term debt | $ 425 | $ 369 |
Capital management - Summary _2
Capital management - Summary of Financial Covenants Under Lending Agreements (Parenthetical) (Detail) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of objectives, policies and processes for managing capital [line items] | ||
Senior debt to EBITDA | 3.66 | 1.88 |
Total debt to EBITDA | 3.66 | 1.88 |
Maximum senior debt to capitalization | 50.00% | |
Maximum total debt to capitalization | 55.00% | |
Maximum priority debt to consolidated tangible assets | 15.00% | |
Bank EBITDA | Adjusted EBITDA as defined by Obsidian Energy's debt agreements excludes the EBITDA contribution from assets sold in the prior 12 months and is used within Obsidian Energy's covenant calculations related to its syndicated bank facility and senior notes. | |
Top of range [member] | ||
Disclosure of objectives, policies and processes for managing capital [line items] | ||
Senior debt to EBITDA | 3.75 | |
Total debt to EBITDA | 4 |
Commitments and contingencies -
Commitments and contingencies - Summary of Certain Payments Over the Next Five Years (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | $ 419 | $ 359 |
Transportation | 41 | |
Power infrastructure | 9 | |
Interest obligations | 27 | |
Office lease | 201 | |
Decommissioning liability | 129 | |
Total | 826 | |
2019 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | 17 | |
Transportation | 12 | |
Power infrastructure | 7 | |
Interest obligations | 17 | |
Office lease | 33 | |
Decommissioning liability | 12 | |
Total | 98 | |
2020 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | 374 | |
Transportation | 8 | |
Power infrastructure | 2 | |
Interest obligations | 8 | |
Office lease | 33 | |
Decommissioning liability | 11 | |
Total | 436 | |
2021 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | 17 | |
Transportation | 5 | |
Interest obligations | 1 | |
Office lease | 33 | |
Decommissioning liability | 11 | |
Total | 67 | |
2022 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | 8 | |
Transportation | 4 | |
Interest obligations | 1 | |
Office lease | 33 | |
Decommissioning liability | 11 | |
Total | 57 | |
2023 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Transportation | 3 | |
Office lease | 33 | |
Decommissioning liability | 10 | |
Total | 46 | |
Thereafter [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | 3 | |
Transportation | 9 | |
Office lease | 36 | |
Decommissioning liability | 74 | |
Total | $ 122 |
Commitments and contingencies_2
Commitments and contingencies - Summary of Certain Payments Over the Next Five Years (Parenthetical) (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | $ 419 | $ 359 |
2020 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | 374 | |
Bankers acceptances and prime rate loans [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | 337 | $ 253 |
Bankers acceptances and prime rate loans [member] | 2020 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Long-term debt | $ 337 |
Commitments and contingencies_3
Commitments and contingencies - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of commitments and contingencies [line items] | ||
Amount of outstanding funds | $ 419 | $ 359 |
Sublease recoveries | 86 | |
Lease costs, net of recoveries | 19 | |
Payment in respect of settlement agreements | 13 | |
October 2018 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Payment in respect of settlement agreements | 4 | |
July 2019 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Payment in respect of settlement agreements | 5 | |
July 2020 [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Payment in respect of settlement agreements | 4 | |
Senior notes [member] | ||
Disclosure of commitments and contingencies [line items] | ||
Amount of outstanding funds | $ 82 | |
Senior notes, maturity | Maturing between 2019 and 2025. |
Related-party transactions - Su
Related-party transactions - Summary of Compensation of Key Management Personnel (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of transactions between related parties [line items] | ||
Salary and employee benefits | $ 3 | $ 3 |
Termination benefits | 2 | |
Share-based payments | 3 | |
Key Management Personnel Compensation | $ 3 | $ 8 |
Supplemental Items - Additional
Supplemental Items - Additional Information (Detail) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating expense [member] | ||
Supplemental Information [line items] | ||
Employee compensation costs | $ 17 | $ 14 |
General and administrative expense [member] | ||
Supplemental Information [line items] | ||
Employee compensation costs | $ 26 | $ 30 |
Supplementary Oil and Gas Inf_3
Supplementary Oil and Gas Information - (Unaudited) - Net Proved Oil and Natural Gas Reserves (Detail) | 12 Months Ended | |
Dec. 31, 2018BcfMMBbls | Dec. 31, 2017BcfMMBbls | |
Light and medium crude oil [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | 41 | 43 |
Extensions & Discoveries | 2 | 2 |
Improved Recovery & Infill Drilling | 1 | 1 |
Technical Revisions | 4 | 5 |
Acquisitions | 0 | 0 |
Dispositions | (1) | (7) |
Production | (4) | (4) |
Change for the year | 3 | (3) |
Ending balance | 43 | 41 |
Developed | 31 | 32 |
Undeveloped | 13 | 9 |
Heavy crude oil and bitumen [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | 7 | 7 |
Improved Recovery & Infill Drilling | 1 | |
Technical Revisions | 1 | |
Acquisitions | 0 | 0 |
Production | (2) | (2) |
Change for the year | (2) | |
Ending balance | 5 | 7 |
Developed | 5 | 5 |
Undeveloped | 1 | |
Natural gas [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | Bcf | 138 | 164 |
Extensions & Discoveries | Bcf | 9 | 14 |
Improved Recovery & Infill Drilling | Bcf | 2 | 2 |
Technical Revisions | Bcf | 18 | 60 |
Acquisitions | Bcf | 0 | 0 |
Dispositions | Bcf | (1) | (76) |
Production | Bcf | (22) | (26) |
Change for the year | Bcf | 5 | (26) |
Ending balance | Bcf | 143 | 138 |
Developed | Bcf | 109 | 119 |
Undeveloped | Bcf | 34 | 20 |
Natural gas liquids [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | 5 | 4 |
Extensions & Discoveries | 1 | |
Technical Revisions | 1 | 3 |
Acquisitions | 0 | 0 |
Dispositions | (1) | |
Production | (1) | (1) |
Change for the year | 1 | 2 |
Ending balance | 6 | 5 |
Developed | 4 | 4 |
Undeveloped | 2 | 1 |
Barrels of oil equivalent [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | 76 | 81 |
Extensions & Discoveries | 4 | 5 |
Improved Recovery & Infill Drilling | 1 | 3 |
Technical Revisions | 8 | 19 |
Acquisitions | 0 | 0 |
Dispositions | (1) | (21) |
Production | (11) | (12) |
Change for the year | 2 | (6) |
Ending balance | 78 | 76 |
Developed | 58 | 62 |
Undeveloped | 20 | 14 |
Supplementary Oil and Gas Inf_4
Supplementary Oil and Gas Information - (Unaudited) - Capitalized Costs (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Capitalized Costs Relating To Oil and Gas Producing Activities By Geographic Area [line items] | ||
Proved oil and gas properties | $ 10,776 | $ 10,636 |
Unproved oil and gas properties | 0 | 0 |
Total capitalized costs | 10,776 | 10,636 |
Accumulated depletion and depreciation | (8,202) | (7,817) |
Net capitalized costs | $ 2,574 | $ 2,819 |
Supplementary Oil and Gas Inf_5
Supplementary Oil and Gas Information - (Unaudited) - Costs Incurred (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [line items] | ||
Proved oil and gas properties - acquisitions | $ 1 | $ 6 |
Proved oil and gas properties - dispositions | (14) | (116) |
Unproved oil and gas properties | 2 | 3 |
Exploration costs | 2 | |
Development costs | 165 | 184 |
Joint venture, carried capital | (50) | |
Capital expenditures | 154 | 29 |
Corporate acquisitions | 0 | 0 |
Total expenditures | $ 154 | $ 29 |
Supplementary Oil and Gas Inf_6
Supplementary Oil and Gas Information - (Unaudited) - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |
Discounted future net cash flows, annual discount factor | 10.00% |
Supplementary Oil and Gas Inf_7
Supplementary Oil and Gas Information - (Unaudited) - Standardized Measure of Discounted Future Net Cash Flows (Detail) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |||
Future cash inflows | $ 3,886 | $ 3,384 | |
Future production costs | (1,769) | (1,625) | |
Future development costs | (469) | (302) | |
Undiscounted pre-tax cash flows | 1,648 | 1,457 | |
Deferred income taxes | 0 | 0 | |
Future net cash flows | 1,648 | 1,457 | |
Less 10% annual discount factor | (822) | (661) | |
Standardized measure of discounted future net cash flows | $ 826 | $ 796 | $ 631 |
Supplementary Oil and Gas Inf_8
Supplementary Oil and Gas Information - (Unaudited) - Standardized Measure of Discounted Future Net Cash Flow Changes (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | ||
Standardized measure of discounted future net cash flows at beginning of year | $ 796 | $ 631 |
Oil and gas sales during period net of production costs and royalties | (193) | (213) |
Changes due to prices | 82 | 481 |
Development costs during the period | 168 | 141 |
Changes in forecast development costs | (309) | (202) |
Changes resulting from extensions, infills and improved recovery | 8 | 73 |
Changes resulting from discoveries | 1 | |
Changes resulting from acquisitions of reserves | 0 | 0 |
Changes resulting from dispositions of reserves | (5) | (71) |
Accretion of discount | 80 | 63 |
Net change in income tax | 0 | 0 |
Changes resulting from other changes and technical reserves revisions plus effects on timing | 201 | (109) |
Standardized measure of discounted future net cash flows at end of year | $ 826 | $ 796 |