Cover Page
Cover Page | 12 Months Ended |
Dec. 31, 2022 shares | |
Document Information [Line Items] | |
Document Type | 40-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Trading Symbol | OBE |
Entity Registrant Name | OBSIDIAN ENERGY LTD. |
Entity Central Index Key | 0001334388 |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Emerging Growth Company | false |
Entity Interactive Data Current | Yes |
Title of 12(b) Security | Common Shares |
Security Exchange Name | NYSEAMER |
Entity Address, State or Province | AB |
Entity Address, Country | CA |
Entity Common Stock, Shares Outstanding | 82,442,210 |
ICFR Auditor Attestation Flag | true |
Auditor Name | KPMG LLP |
Auditor Firm ID | 85 |
Auditor Location | Calgary AB |
Document Registration Statement | false |
Document Annual Report | true |
Entity File Number | 1-32895 |
Entity Address, Address Line One | Suite 200, 207 – 9th Avenue SW |
Entity Address, City or Town | Calgary |
Entity Address, Postal Zip Code | T2P 1K3 |
City Area Code | 403 |
Local Phone Number | 777-2500 |
Audited Annual Financial Statements | true |
Annual Information Form | true |
Entity Incorporation, State or Country Code | A0 |
Business Contact [Member] | |
Document Information [Line Items] | |
Entity Address, State or Province | WA |
Contact Personnel Name | DL Services Inc. |
Entity Address, Address Line One | Columbia Center |
Entity Address, Address Line Two | 701 Fifth Avenue, Suite 6100 |
Entity Address, City or Town | Seattle |
Entity Address, Postal Zip Code | 98104-7043 |
City Area Code | 206 |
Local Phone Number | 903-5448 |
Consolidated Balance Sheets
Consolidated Balance Sheets - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Current | ||
Cash | $ 0.8 | $ 7.3 |
Accounts receivable | 82.6 | 68.9 |
Risk management | 6.2 | 1.8 |
Prepaid expenses and other | 10.7 | 9.1 |
Total current assets | 100.3 | 87.1 |
Non-current | ||
Property, plant and equipment | 1,857.6 | 1,342.1 |
Deferred income tax | 246.4 | 0 |
Total non-current assets | 2,104 | 1,342.1 |
Total assets | 2,204.3 | 1,429.2 |
Current | ||
Accounts payable and accrued liabilities | 185.6 | 107.8 |
Current portion of long-term debt | 0 | 391 |
Current portion of lease liabilities | 3.2 | 4.1 |
Current portion of provisions | 34.1 | 23.4 |
Risk management | 0 | 4.2 |
Total current liabilities | 222.9 | 530.5 |
Non-current | ||
Long-term debt | 225.3 | 0 |
Lease liabilities | 2.8 | 4.6 |
Provisions | 165.7 | 123.8 |
Other non-current liabilities | 7.9 | 6.8 |
Total liabilities | 624.6 | 665.7 |
Shareholders' equity | ||
Shareholders' capital | 2,221.9 | 2,213.8 |
Other reserves | 101.2 | 103.2 |
Deficit | (743.4) | (1,553.5) |
Total shareholders' equity | 1,579.7 | 763.5 |
Total liabilities and shareholders' equity | $ 2,204.3 | $ 1,429.2 |
Consolidated Statements of Inco
Consolidated Statements of Income - CAD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement [LineItems] | ||
Production revenues | $ 897.3 | $ 477.5 |
Processing fees | 8.4 | 6.4 |
Royalties | (148.3) | (48.6) |
Sales of commodities purchased from third parties | 14.3 | 13.6 |
Gross Revenue | 771.7 | 448.9 |
Other income | 6.9 | 6 |
Government decommissioning assistance | 15.7 | 11 |
Risk management loss | (23.3) | (14.6) |
Total revenue | 771 | 451.3 |
Expenses | ||
Operating | 175.3 | 129.5 |
Transportation | 35.1 | 18.7 |
Commodities purchased from third parties | 12.2 | 12.6 |
General and administrative | 18.4 | 15.3 |
Restructuring | 2.5 | (1.8) |
Share-based compensation | 28.1 | 19.4 |
Depletion, depreciation and impairment (reversal) | (111.5) | (198.6) |
Provisions loss (gain) | (0.3) | 1.2 |
Foreign exchange loss (gain) | 0.7 | (0.2) |
Financing | 44.9 | 45.4 |
Transaction costs | 0.1 | 3.5 |
Other | 1.8 | (7.7) |
Total expenses | 207.3 | 37.3 |
Income before taxes | 563.7 | 414 |
Deferred income tax (recovery) | (246.4) | 0 |
Net and comprehensive income | $ 810.1 | $ 414 |
Net income per share | ||
Basic | $ 9.88 | $ 5.52 |
Diluted | $ 9.6 | $ 5.34 |
Weighted average shares outstanding (millions) | ||
Basic | 82 | 75.1 |
Diluted | 84.4 | 77.6 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | ||
Net income | $ 810.1 | $ 414 |
Government decommissioning assistance | (15.7) | (11) |
Depletion, depreciation and impairment (reversal) | (111.5) | (198.6) |
Provisions loss (gain) | (0.3) | 1.2 |
Financing | 15.8 | 15.4 |
Share-based compensation | 4.7 | 2.3 |
Unrealized risk management loss (gain) | (8.6) | 2.6 |
Foreign exchange loss (gain) | 0.7 | (0.2) |
Deferred income tax recovery | (246.4) | 0 |
Decommissioning expenditures | (18.8) | (8.1) |
Onerous office lease settlements | (9.2) | (9.1) |
Financing fees paid | 0 | (4.7) |
Other | 1.2 | 0 |
Change in non-cash working capital | 34.8 | (5.1) |
Cash flows from (used in) operating activities | 456.8 | 198.7 |
Investing activities | ||
Capital expenditures | (314.8) | (140.9) |
Business acquisition | 0 | (33.7) |
Property acquisitions | (4.6) | (0.1) |
Change in non-cash working capital | 28.6 | 18.1 |
Cash flows from (used in) investing activities | (290.8) | (156.6) |
Financing activities | ||
Decrease in long-term debt | (216.5) | (73.5) |
Issuance of senior unsecured notes, net of discount | 125 | 0 |
Advance of PROP limited recourse loan | 0 | 16.3 |
Repayment of senior secured notes/PROP limited recourse loan | (71.6) | (5.4) |
Financing fees paid | (6.5) | 0 |
Lease liabilities settlements | (4.3) | (4.4) |
Exercised compensation plans | 1.4 | (0.1) |
Issuance of common shares, net of costs | 0 | 24.2 |
Cash flows from (used in) financing activities | (172.5) | (42.9) |
Change in cash and cash equivalents | (6.5) | (0.8) |
Cash and cash equivalents, beginning of year | 7.3 | 8.1 |
Cash and cash equivalents, end of year | $ 0.8 | $ 7.3 |
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, 2020 | $ 323.1 | $ 2,187 | $ 103.6 | $ (1,967.5) |
Statement [LineItems] | ||||
Net and comprehensive income | 414 | 414 | ||
Equity offering, net of costs | 24.2 | 24.2 | ||
Share-based compensation | 2.3 | 2.3 | ||
Issued on exercise of equity compensation plans | (0.1) | 2.6 | (2.7) | |
Ending balance at Dec. 31, 2021 | 763.5 | 2,213.8 | 103.2 | (1,553.5) |
Statement [LineItems] | ||||
Net and comprehensive income | 810.1 | 810.1 | ||
Share-based compensation | 4.7 | 4.7 | ||
Issued on exercise of equity compensation plans | 1.4 | 8.1 | (6.7) | |
Ending balance at Dec. 31, 2022 | $ 1,579.7 | $ 2,221.9 | $ 101.2 | $ (743.4) |
Structure of Obsidian Energy
Structure of Obsidian Energy | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Structure of Obsidian Energy | 1. Structure of Obsidian Energy Obsidian Energy Ltd. (“Obsidian Energy”, the “Company”, “we”, “us” or “our”) is an exploration and production company and is governed by the laws of the Province of Alberta, Canada. The Company’s registered office is located at Suite 200, 207 - 9th Avenue S.W. Calgary, Alberta, Canada T2P 1K3. . d the Peace River Oil Partnership (“PROP”) from November 24, 2021 to December 31, 2022 (on which date PROP was dissolved). |
Basis of presentation and state
Basis of presentation and statement of compliance | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Basis of presentation and statement of compliance | 2. Basis of presentation and statement of compliance a) Basis of Presentation The annual consolidated financial statements include the accounts of Obsidian Energy and our wholly owned subsidiaries. Prior to November 24, 2021, the consolidated financial statements include our proportionate interest in certain partnerships (we acquired the remaining 45 percent interest to own 100 percent of PROP on November 24, 2021). 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. b) 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 8 These annual consolidated financial statements of the Company for the year ended December 31, 2022 were approved for issuance by the Board of Directors on February 2 2 |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Significant accounting policies | 3. Significant accounting policies a) Critical accounting judgments and key estimates and other accounting 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. Estimates are more difficult to determine, and the range of potential outcomes can be wider, in periods of higher volatility and uncertainty. The impacts of the COVID-19 pandemic and the economic recovery from this combined with several factors including higher levels of uncertainty due to the Russian/Ukraine conflict and its impact on energy markets, rising interest and inflation rates, and a constrained supply chain market have created a higher level of volatility and uncertainty. Management has, to the extent reasonable, incorporated known facts and circumstances into the estimates made, however, actual results could differ from those estimates and those differences 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. Additionally, management has performed an assessment of the Company’s ability to comply with liquidity requirements for the 12-month 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 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 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 oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a 50 percent degree of 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 and the impairment test and hence the recorded amount of oil and gas assets. The estimate of the cash flows associated with proved and probable reserves are a key component in the impairment test for property, plant and equipment and the measurement of the deferred income tax asset. Obsidian Energy cautions users of this information that the process of estimating 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 our 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 of disposal 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 non-lease v) Fair value calculation on share-based payments The fair value of option 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 the estimated future cash flows from proved and probable reserves, 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. 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. If the consideration for the acquisition given up is less than the fair value of the net assets received, the difference is recognized immediately in the Consolidated Statement of Income (Loss). If the consideration for the acquisition given up is greater than the fair value of the net assets received, the difference is recognized as goodwill on the balance sheet. 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 Obsidian Energy generally recognizes 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 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 Obsidian Energy may purchase commodity products from third parties to utilize in blending activities and then subsequently sell these products to our customers. These transactions are presented as separate revenue and expense items in the Consolidated Statements of Income (Loss). The Company enters into agreements for other services such as processing third party production, road usage, and other miscellaneous services. Revenue from these arrangements are recorded as processing fees or other income when control passes to the customer, which is generally when the service is provided. d) Joint arrangements The consolidated financial statements include Obsidian Energy’s proportionate interest of jointly controlled assets and liabilities and our proportionate interest of the revenue, royalties and operating expenses. A significant portion of Obsidian Energy’s development and exploration activities are conducted jointly with others and involve joint operations. Under such arrangements, Obsidian Energy has the exclusive rights to our proportionate interest in the assets and the economic benefits generated from our share of the assets. Income from the sale or use of Obsidian Energy’s interest in joint operations and our 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. e) Transportation expense Transportation costs are paid by Obsidian Energy for the shipping of natural gas, oil and natural gas liquids from the wellhead to the point where title transfers to buyers. These costs are recognized as services are received. f) Foreign currency translation Obsidian Energy and each of our 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 or reversals. 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 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 Obsidian Energy includes estimated future costs to develop proved plus probable reserves. Changes to reserve estimates are included in the depletion calculation prospectively. Components of PP&E that are not depleted using the unit-of-production three 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 our assets may be impaired (or that prior impairments can be reversed) 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 or impairment reversal 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 of disposal 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 The fair value less costs of disposal values used to determine the recoverable amounts of the Company’s CGUs are classified as Level 3 fair value measures as certain key assumptions are not based on observable market data but rather management’s best estimates. 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 an 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 restricted share units granted under the Restricted and Performance Share Unit Plan (“RPSU” plan) follows the equity method and recognizes 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”), the Non-Treasury 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 amount of the liability at the time, are charged to the liability as the costs are incurred. Amounts capitalized to the related assets are depleted to income consistent with the depletion or depreciation of the underlying asset. iii) Office lease provision The office lease provision is the net present value of future lease payments that the Company is obligated to make under non-cancellable non-lease j) Leases At the inception of entering into a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company considers the following: ● the contract involves the use of an identified asset; ● the Company has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and ● the Company has the right to direct the use of the asset, which occurs if either; ● the Company has the right to operate the asset; or ● the Company designed the asset in a way that predetermines how and for what purpose it will be used. Obsidian Energy recognizes a right-of-use right-of-use The right-of-use right-of-use right-of-use The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company’s incremental borrowing rate. The consideration used to measure the lease liability includes all fixed payments and variable lease payments that depend on an index or rate under the arrangement. Subsequently, the lease liability is measured at amortized cost using the effective interest method and is re-measured The Company recognizes the lease payments associated with leases under IFRS 16 as an expense on a straight-line basis over the lease term. k) Share capital Common shares are classified as equity. Share issue costs are recorded in shareholder’s equity, net of applicable taxes. Dividends, if paid, are 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 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 operations 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 (which includes cash and bank overdrafts), accounts receivable, accounts payable and accrued liabilities, lease 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 and are subsequently measured at fair value with changes in fair value immediately charged to earnings in 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 using an expected credit loss (“ECL”) model. The ECL model applies to financial assets measured at amortized cost, a lease receivable, a contract asset or a loan commitment and a financial guarantee. o) Embedded derivatives An embedded derivative is a component of a contract that affects the terms of another factor. 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) Government Grants Obsidian Energy recognizes government grants as they are received or if there is reasonable assurance that the Company is in compliance with all associated conditions. The grant is recognized within the Consolidated Statements of Income (Loss) in the period in which the income is earned or the related expenditures are incurred. If the grant relates to an asset, it is recognized as a reduction to the carrying value of the asset and amortized into income over the expected useful life of the asset through lower depletion and depreciation. r) New Accounting Standards Various amendments to existing standards and new accounting requirements have been released that are effective as of January 1, 2023. The Company does not anticipate the new requirements to have a material impact on the financial statements. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Property, plant and equipment | 4. Property, plant and equipment Oil and Gas assets/ Facilities, Corporate assets Cost Oil and gas Corporate assets Total Balance at January 1, 2021 $ 10,662.5 $ 175.8 $ 10,838.3 Capital expenditures 140.2 0.7 140.9 Business acquisition 32.9 - 32.9 Dispositions 0.1 - 0.1 Change in decommissioning liability (1) 62.3 - 62.3 Derecognition on acquisition (545.8 ) - (545.8 ) Balance at December 31, 2021 $ 10,352.2 $ 176.5 $ 10,528.7 Capital expenditures 313.9 0.9 314.8 Property acquisitions 4.6 - 4.6 Change in decommissioning liability (1) 83.6 - 83.6 Balance at December 31, 2022 $ 10,754.3 $ 177.4 $ 10,931.7 (1) Includes additions from drilling activity, facility capital spending, disposals from net property dispositions and changes in estimates as outlined in Note 7 Accumulated depletion, depreciation and impairment Oil and gas Corporate assets Total Balance at January 1, 2021 $ 9,766.8 $ 175.8 $ 9,942.6 Depletion and depreciation 115.6 0.7 116.3 Impairments 19.5 - 19.5 Impairment reversal (338.0 ) - (338.0 ) Derecognition on acquisition (545.8 ) - (545.8 ) Balance at December 31, 2021 $ 9,018.1 $ 176.5 $ 9,194.6 Depletion and depreciation 170.3 0.1 170.4 Impairment 36.4 - 36.4 Impairment reversal (322.0 ) - (322.0 ) Balance at December 31, 2022 $ 8,902.8 $ 176.6 $ 9,079.4 Net book value As at December 31 2022 2021 Total $ 1,852.3 $ 1,334.1 At December 31, 2022, future development costs of $1,254.8 million were included within the depletable base in the depletion and depreciation calculation (2021 - $735.6 million). Right-of-use The following table includes a break-down of the categories for right-of-use Cost Transportation Vehicle Surface Total Balance, January 1, 2021 $ 14.9 $ 5.7 $ 2.1 $ 22.7 Additions 1.4 0.7 - 2.1 Balance, December 31, 2021 16.3 6.4 2.1 24.8 Additions - 1.0 - 1.0 Balance, December 31, 2022 $ 16.3 $ 7.4 $ 2.1 $ 25.8 Accumulated depletion, depreciation and impairment Transportation Vehicle Surface Total Balance, January 1, 2021 $ 10.5 $ 2.6 $ 0.1 $ 13.2 Depreciation 2.1 1.4 0.1 3.6 Balance, December 31, 2021 12.6 4.0 0.2 16.8 Depreciation 2.2 1.4 0.1 3.7 Balance, December 31, 2022 $ 14.8 $ 5.4 $ 0.3 $ 20.5 Net book value As at December 31 2022 2021 Total $ 5.3 $ 8.0 Total PP&E Total PP&E including Oil and Gas assets, Facilities, Corporate assets and Right-of-use As at December 31 PP&E 2022 2021 Oil and Gas assets, Facilities, Corporate assets $ 1,852.3 $ 1,334.1 Right-of-use 5.3 8.0 Total $ 1,857.6 $ 1,342.1 The Company recorded non-cash non-cash non-cash non-cash Cardium CGU At December 31, 2022, the Company completed an assessment to determine if indicators of impairment or an impairment reversal were present. The Company identified indicators of impairment reversal in our Cardium CGU mainly due to improved forecasted commodity prices and our expanded capital program which increased reserve volumes. This led to an impairment reversal test being completed following the fair value less costs of disposal method. The after-tax discount rate applied within the test was 12.5 percent. Upon completion of the impairment test a $315.3 million impairment reversal was recorded within our Cardium CGU. The following table outlines benchmark prices and assumptions, based on an average of four independent reserve evaluators’ forecasts (GLJ Ltd., Sproule Associates Limited, McDaniel & Associates Consultants and Deloitte Resource Evaluation & Advisory), used in completing the impairment test as at December 31, 2022. WTI ($US/bbl) AECO ($CAD/MMbtu) Exchange rate ($US equals $1 Inflation rate 2023 $ 80.25 $ 4.44 $ 0.74 0.00 % 2024 78.19 4.54 0.76 2.50 % 2025 76.10 4.37 0.76 2.00 % 2026 76.96 4.44 0.77 2.00 % 2027 78.50 4.52 0.77 2.00 % 2028 – 2033 $ 84.18 $ 4.84 $ 0.77 2.00 % Thereafter (inflation percentage) 2.00 % 2.00 % - 2.00 % The following table outlines the sensitivity to possible changes of the estimated recoverable amount on the Cardium CGU that had an impairment test completed on December 31, 2022. Recoverable amount 1% change in 5% change in Cardium $ 1,652.6 $ 93.0 $ 119.9 Peace River/Viking/Legacy CGU’s During 2022, we recorded a net impairment of $29.7 million (includes $36.4 million of impairment and $6.7 million of impairment reversal) in our Legacy CGU due to accelerated decommissioning spending in the area. The Legacy CGU has no recoverable amount, as such changes in our decommissioning liability are expensed each period. In 2022, no indicators of impairment were noted for the Peace River and Viking CGUs. Prior year impairments At December 31, 2021, the Company completed an assessment to determine if indicators of impairment or an impairment reversal were present. The Company identified an indicator of impairment reversal in our Cardium CGU due to improved forecasted commodity prices. This led to an impairment test being completed following the fair value less costs of disposal method. The after-tax In the second quarter of 2021, the Company recorded a $311.5 million non-cash CGU The following table outlines benchmark prices and assumptions, based on an average of four independent reserve evaluators’ forecasts (GLJ Ltd., Sproule Associates Limited, McDaniel & Associates Consultants and Deloitte Resource Evaluation & Advisory), used in completing the impairment tests as at December 31, 202 1 WTI AECO Exchange rate Inflation rate 2022 $ 71.88 $ 3.58 $ 0.80 0.00 % 2023 67.91 3.22 0.80 2.25 % 2024 65.42 3.07 0.80 2.00 % 2025 66.72 3.14 0.80 2.00 % 2026 68.05 3.20 0.80 2.00 % 2027 – 2032 $ 72.98 $ 3.43 $ 0.80 2.00 % Thereafter (inflation percentage) 2.00 % 2.00 % - 2.00 % The following table outlines the sensitivity to possible changes of the estimated recoverable amount on the Cardium CGU that had an impairment test completed on December 31, 2021. Recoverable 1% change in 5% change in Cardium $ 1,237.4 $ 73.1 $ 84.8 In 2021, we recorded a $21.0 million impairment reversal in our Peace River CGU largely as a result of the Company entering into an agreement to purchase the 45 percent interest of our partner in PROP. The estimated recoverable amount was based on the amount paid to acquire the interest held by the partner. As a result of the PROP acquisition, the Peace River CGU was re-valued During 2021, we recorded $14.0 million of impairment in our Legacy CGU due to accelerated decommissioning spending in the area. The Legacy CGU has no recoverable amount, as such changes in our decommissioning liability are expensed each period. In 2021, no indicators of impairment were noted for the Viking CGU. Impairments and impairment reversals have been recorded as Depletion, depreciation, impairment (reversal) on the Consolidated Statements of Income. |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Long-term debt | 5. Long-term debt As at December 31 2022 2021 Syndicated credit facility $ 105.0 $ 321.5 Senior unsecured notes - 2022 11.95% $127.6 million, maturing July 27, 2027 127.6 - PROP limited recourse loan - 10.50% - 16.0 Senior secured notes – 2008 Notes - 9.37% - 4.7 Senior secured notes – 2010 Q1 Notes - 8.82% - 11.3 Senior secured notes – 2010 Q4 Notes - 7.91% - 24.7 Senior secured notes – 2011 Notes - 7.76% - 14.2 Total 232.6 392.4 Deferred interest - 1.3 Unamortized discount of senior unsecured notes (2.3 ) - Deferred financing costs (5.0 ) (2.7 ) Total long-term debt $ 225.3 $ 391.0 Current portion $ - $ 391.0 Non-current $ 225.3 $ - At December 31, 2021, the term-out In July 2022, the Company completed a refinancing and issued five-year senior unsecured notes for an aggregate principal amount of $127.6 million (the “New Notes) as well as entered into new syndicated credit facilities with borrowing capacity of $205.0 million (the “New Credit Facilities“). The Company used the net proceeds from the New Notes, together with initial draws on the New Credit Facilities, to repay all of our existing senior secured notes due November 30, 2022, repay the outstanding balances under our existing credit facilities due November 30, 2022, and repay the PROP limited recourse loan due on December 31, 2022. The New Credit Facilities were entered into with a group of lenders providing the Company with a $175.0 million revolving credit facility and a $30.0 million non-revolving - period non-revolving The senior unsecured notes have an interest rate of 11.95 percent and mature on July 27, 2027 and were issued at a price of $980.00 per $1,000.00 principal amount resulting in aggregate gross proceeds of $125.0 million. The senior unsecured notes are direct senior unsecured obligations of Obsidian Energy ranking equal with all other present and future senior unsecured indebtedness of the Company. As part of the terms of the senior unsecured notes , the Company is required to provide a repurchase offer (the “Repurchase Offer”), which can be exercised at the option of the noteholders, to an aggregate amount of $63.8 million. The Repurchase Offer is based on free cash flow available, as defined in the senior unsecured notes agreement (EBITDA less both capital expenditures and decommissioning expenditures), whereby 75 percent of free cash flow is required to be offered towards redeeming a portion of the senior unsecured notes on or before July 27, 2024, and senior unsecured notes to be redeemed plus accrued and unpaid interest. The redemption dates are semi-annual based on free cash flow for the six months ended June 30 (typically offered in August) and based on free cash flow for the six months ended December 31 (typically offered in March). Minimum available liquidity thresholds under the Company’s New Credit Facilities are also required to be met in order to proceed with a Repurchase Offer. The free cash flow available for a Repurchase Offer for the six months ended December 31, 2022 was $33.0 million, however the Company does not meet the minimum liquidity threshold under our syndicated credit facility thus a Repurchase Offer will not be made for this period. At December 31, 2022, letters of credit totaling $5.1 million were outstanding (December 31, 2021 – $5.0 million) that reduce the amount otherwise available to be drawn on the New Credit Facilities. Financing expense consists of the following: Year ended December 31 2022 2021 Interest $ 26.8 $ 27.1 Interest on PROP limited recourse loan 1.7 0.2 Advisor fees 0.6 2.7 Accretion on decommissioning liability 11.6 5.8 Accretion on office lease provision 1.4 1.9 Accretion on other non-current 0.3 0.3 Accretion on discount of senior unsecured notes 0.2 - Accretion on lease liabilities 0.6 0.6 Deferred financing costs 2.5 5.5 Debt modification (0.8 ) 1.3 Financing $ 44.9 $ 45.4 |
Lease Liabilities
Lease Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Lease liabilities [abstract] | |
Lease Liabilities | 6. Lease liabilities Total lease liabilities included in the Consolidated Balance Sheets are as follows: Year ended December 31 2022 2021 Balance, beginning of year $ 8.7 $ 10.4 Additions 1.0 2.1 Accretion charges 0.6 0.6 Lease payments (4.3 ) (4.4 ) Balance, end of year $ 6.0 $ 8.7 Current portion $ 3.2 $ 4.1 Non-current $ 2.8 $ 4.6 The following table sets out a maturity analysis of lease payments, disclosing the undiscounted balance after December 31, 2022: 2023 2024 2025 2026 2027 Thereafter Total Transportation $ 1.8 $ - $ - $ - $ - $ - $ 1.8 Vehicle 1.4 0.8 0.2 - - - 2.4 Surface 0.1 0.1 0.1 0.1 0.1 4.9 5.4 Total $ 3.3 $ 0.9 $ 0.3 $ 0.1 $ 0.1 $ 4.9 $ 9.6 |
Provisions
Provisions | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Provisions | 7. Provisions As at December 31 2022 2021 Decommissioning liability $ 182.3 $ 121.6 Office lease provision 17.5 25.6 Total $ 199.8 $ 147.2 Current portion $ 34.1 $ 23.4 Non-current $ 165.7 $ 123.8 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 our wells, facilities and pipelines. These estimates were made by management using information obtained from government estimates, internal analysis and external consultants assuming current costs, technology and enacted legislation. At December 31, 2022, the decommissioning liability was determined by applying an inflation factor of 2.0 percent (December 31, 2021 - 2.0 percent) and the inflated amount was discounted using a credit-adjusted rate of 10.0 percent (December 31, 2021 – 9.0 percent) over the expected useful life of the underlying assets, currently extending over 50 years into the future. At December 31, 2022, the total decommissioning liability on an undiscounted, uninflated basis was $582.7 million (December 31, 2021 - $594.6 million). Changes to the decommissioning liability were as follows: Year ended December 31 2022 2021 Balance, beginning of year $ 121.6 $ 70.5 Net liabilities added (1) 0.3 0.1 Acquisition - 2.1 Increase due to changes in estimates 83.3 62.2 Liabilities settled (18.8 ) (8.1 ) Government decommissioning assistance (15.7 ) (11.0 ) Accretion charges 11.6 5.8 Balance, end of year $ 182.3 $ 121.6 Current portion $ 25.4 $ 14.5 Non-current $ 156.9 $ 107.1 (1) Includes additions from drilling activity, facility capital spending and disposals related to net property dispositions. In August 2022, the Alberta Energy Regulator announced a further increase in the minimum mandatory spending requirement for all oil and gas companies’ inactive decommissioning liabilities starting in 2023. The AER spending requirements largely contributed to the Company’s increase due to changes in estimates in our decommissioning liability. Office lease provision The office lease provision represents the net present value of non-lease Changes to the office lease provision were as follows: Year ended December 31 2022 2021 Balance, beginning of year $ 25.6 $ 33.5 Decrease due to changes in estimates (0.3 ) (0.7 ) Settlements (9.2 ) (9.1 ) Accretion charges 1.4 1.9 Balance, end of year $ 17.5 $ 25.6 Current portion $ 8.7 $ 8.9 Non-current $ 8.8 $ 16.7 |
Risk management
Risk management | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Risk management | 8. Risk management Financial instruments consist of cash, accounts receivable, fair values of derivative financial instruments, accounts payable and accrued liabilities and long-term debt. At December 31, 2022, the fair values of these financial instruments approximate their carrying amounts. The fair values of all outstanding financial commodity related contracts are reflected on the Consolidated Balance Sheets with the changes during the period recorded in income as unrealized gains or losses. At December 31, 2022 and 2021, 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) 2022 2021 Balance, beginning of year $ (2.4 ) $ 0.2 Unrealized gain (loss) on financial instruments: Oil 4.0 (3.4 ) Natural gas 4.6 0.8 Total fair value, end of year $ 6.2 $ (2.4 ) Current asset portion $ 6.2 $ 1.8 Current liability portion $ - $ (4.2 ) Obsidian Energy records our risk management assets and liabilities on a net basis in the Consolidated Balance Sheets. At December 31, 2022 and 2021, there were no differences between the gross and net amounts. Obsidian Energy had the following financial instruments outstanding as at December 31, 2022. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits our credit risk by executing counterparty risk procedures which include transacting only with institutions within our syndicated credit facility or companies with high credit ratings and by obtaining financial security in certain circumstances. Notional Remaining Swap Fair value AECO AECO Swap 14,976 mcf/d February 2023 - March 2023 $ 6.18/mcf $ 1.4 AECO Swap 27,487 mcf/d April 2023 - October 2023 $ 4.07/mcf 4.8 Total $ 6.2 Based on commodity prices and contracts in place at December 31, 2022 a change in the price per mcf of natural gas would change pre-tax Subsequent to December 31, 2022, the Company entered into the following additional financial hedges: Notional Remaining Swap AECO AECO Swap 16,587 mcf/d March 2023 $ 3.13 /mcf AECO Swap 19,904 mcf/d April 2023 - October 2023 $ 2.85/mcf AECO Swap 16,587 mcf/d November 2023 - March 2024 $ 3.57/mcf The components of risk management on the Consolidated Statements of Income are as follows: Year ended December 31 2022 2021 Realized Settlement of oil contracts $ (25.5 ) $ (7.8 ) Settlement of natural gas contracts (6.4 ) (4.2 ) Total realized risk management loss $ (31.9 ) $ (12.0 ) Unrealized Oil contracts $ 4.0 $ (3.4 ) Natural gas 4.6 0.8 Total unrealized risk management gain (loss) 8.6 (2.6 ) Risk management loss $ (23.3 ) $ (14.6 ) In July 2022, in conjunction with our refinancing, we closed out the existing hedges put in place by our wholly owned subsidiary PROP Energy 45 Limited Partnership for a realized risk management loss of US$3.4 million. Market Risks Obsidian Energy is exposed to normal market risks inherent in the oil and natural gas business, including, but not limited to, commodity price risk, foreign currency rate risk, credit risk, interest rate risk, liquidity risk and climate change risk. The Company seeks to mitigate these risks through various business processes and management controls and from time to time by using financial instruments. Commodity Price Risk Commodity price fluctuations are among the Company’s most significant exposures. Oil prices are influenced by worldwide factors, including, but not limited to, pandemics and their impact on economic activity, 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. In the prompt three months, the Company can hedge up to a maximum of 80% of production, net of royalties. Risk management limits included in Obsidian Energy’s policies may be exceeded with specific approval from the Board of Directors. The Board of Directors has recently approved the following changes to our hedging policy as follows: • Hedge up to 50% of oil volumes net of royalties on a rolling 15 month period commencing January 1, 2023; • Hedge up to 50% of gas volumes net of royalties on a rolling 15 month period commencing January 1, 2023; • Allow for hedges up to 80% of natural gas volumes, net of royalties for the “summer gas months”, being the months of April to and including October 2023; and • Allow for hedges of up to 70% of natural gas volumes, net of royalties for the “winter gas months”, being the months of November 2023 to and including March 2024, commencing immediately. Foreign Currency Rate Risk Prices received for oil are referenced in US dollars, thus Obsidian Energy’s realized oil prices are impacted by Canadian dollar to US dollar 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 oil revenues. Credit Risk Credit risk is the risk of loss if purchasers or counterparties do not fulfill their contractual obligations. As at December 31, 2022, the Company’s maximum exposure to credit risk was $88.8 million (2021 – $70.7 million) which was comprised of $82.6 million (2021 - $68.9 million) being the carrying value of the accounts receivable and $6.2 million (2021 – $1.8 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 our 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, 2022, $1.0 million of accounts receivable are past due (90+ days) but are considered to be collectible (2021 - $1.8 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 years ended December 31, 2022 and 2021. As at December 31, the following accounts receivable amounts were outstanding: Current 30-90 days 90+ days Total 2022 $ 76.5 $ 5.1 $ 1.0 $ 82.6 2021 $ 62.0 $ 5.1 $ 1.8 $ 68.9 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. From time to time, Obsidian Energy may increase the certainty of our 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, 2022, 45 percent of the Company’s long-term debt instruments were exposed to changes in short-term interest rates (2021 – 82 percent). As at December 31, 2022, a total of $127.6 million (2021– $70.9 million) of fixed interest rate debt instruments was outstanding with a 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. 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 2 Long-term debt Accounts payable & Share-based Total 2023 $ - $ 161.2 $ 24.4 $ 185.6 2024 105.0 - 7.2 112.2 2025 - - 0.7 0.7 2026 - - - - 2027 127.6 - - 127.6 Thereafter $ - $ - $ - $ - Climate Change Risk The Company has considered the impact of climate change and re lated At December 31, 2022, in the Company’s impairment assessment a specific adjustment to the recoverable amount to incorporate the potential risk of the evolving demand for energy was not considered necessary. The recoverable amount is based on an estimated period of cash flows that indirectly reflects changing energy demands (in that a large portion of proved and probable reserves will be realized in less than 20 years) and the discount rate applied in the impairment test incorporates the current cost of capital in the energy industry which indirectly reflects current market trends and uncertainty around the evolving demand for energy and climate change. The Company’s financial results for 2022 were not directly impacted from a climate event. In 2022, the Company did not incur material weather related damages to our property, plant and equipment. Management is not aware of a material disruption in our supply chain or the marketers of the Company’s product related to climate events. The Company will continue to monitor climate change and the potential impacts. |
Revenue and Other Income
Revenue and Other Income | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Revenue and Other Income | 9. Revenue and Other Income The Company’s significant revenue streams consist of the following: Year ended December 31 2022 2021 Oil $ 697.9 $ 362.9 NGLs 63.1 38.2 Natural gas 136.3 76.4 Production revenues 897.3 477.5 Processing fees 8.4 6.4 Oil and natural gas sales 905.7 483.9 Other income 6.9 6.0 Oil and natural gas sales and other income $ 912.6 $ 489.9 Other income includes $6.9 million in road use recoveries for 2022 (2021 - $6.0 million). |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Income taxes | 10. Income taxes The provision for income taxes reflects an effective tax rate that differs from the combined federal and provincial statutory tax rate as follows: 2022 2021 Income before taxes $ 563.7 $ 414.0 Combined statutory tax rate (1) 23.0 % 23.0 % Computed income tax expense $ 129.7 $ 95.2 Increase (decrease) resulting from: Share-based compensation 1.1 0.5 Non-taxable 0.2 (0.1 ) Unrecognized deferred tax asset - (69.9 ) Recognition of deferred tax asset (378.6 ) - Adjustments related to prior years (0.4 ) (27.1 ) Other 1.6 1.4 Deferred income tax recovery $ (246.4 ) $ - (1) The tax rate represents the combined federal and provincial statutory tax rates for the Company and our subsidiaries for the years ended December 31, 2022 and December 31, 2021. The net deferred income tax asset is comprised of the following: Balance Provision (Recovery) Balance Deferred tax liabilities (assets) PP&E $ 153.5 $ 96.0 $ 249.5 Leases (7.9 ) 2.4 (5.5 ) Risk Management (0.5 ) 1.9 1.4 Decommissioning liability (27.9 ) (14.0 ) (41.9 ) Share-based compensation (4.0 ) (3.3 ) (7.3 ) Non-capital (113.2 ) (329.4 ) (442.6 ) Net deferred tax liability (asset) $ - $ (246.4 ) $ (246.4 ) Balance Provision (Recovery) Balance Deferred tax liabilities (assets) PP&E $ 86.5 $ 67.0 $ 153.5 Leases (10.1 ) 2.2 (7.9 ) Risk Management - (0.5 ) (0.5 ) Decommissioning liability (16.6 ) (11.3 ) (27.9 ) Share-based compensation (0.4 ) (3.6 ) (4.0 ) Non-capital (59.4 ) (53.8 ) (113.2 ) Net deferred tax liability (asset) $ - $ - $ - As at December 31, 2022, Obsidian Energy had approximately $2.4 billion (2021 – $2.5 billion) in total tax pools, including non-capital non-capital 2036. Deferred income tax assets may only be recognized to the extent that it is probable that future taxable profits will be available against which unused tax losses and deductible temporary differences can be utilized. At December 31, 2021, the Company had an unrecognized income tax asset of $378.6 million in respect of $1,646.2 million of non-capital losses. Given the significant increase in commodity prices, the Company fully recognized the previously unrecognized deferred tax asset in 2022. The Company expects to have sufficient taxable profits in future years in order to fully utilize the remaining deferred tax asset balance of $246.4 million at December 31, 2022. At December 31, 2022, Obsidian Energy had realized and unrealized net capital losses of $711.2 million (2021 - $591.5 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 our deferred income tax position or amount. The Company does not anticipate adjustments arising from these audits and believes we have 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, 2022 | |
Statement [LineItems] | |
Shareholders' equity | 11. 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 Shares Amount Balance, December 31, 2020 73,516,225 $ 2,187.0 Issued pursuant to equity compensation plans (1) 1,356,610 2.6 Equity issue 5,880,681 25.9 Share issue costs - (1.7 ) Balance, December 31, 2021 80,753,516 $ 2,213.8 Issued pursuant to equity compensation plans (1) 1,688,694 8.1 Balance, December 31, 2022 82,442,210 $ 2,221.9 (1) Upon vesting or exercise of equity awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. In conjunction with a over-allotment option being exercised. Year ended December 31 Other Reserves 2022 2021 Balance, beginning of year $ 103.2 $ 103.6 Share-based compensation expense 4.7 2.3 Net benefit on options exercised (1) (6.7 ) (2.7 ) Balance, end of year $ 101.2 $ 103.2 (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, 2022 | |
Statement [LineItems] | |
Share-based compensation | 12. Share-based compensation Restricted and Performance Share Unit plan (“RPSU plan”) Restricted Share Unit (“RSU”) grants under the RPSU plan Obsidian Energy awards RSU grants under the RPSU plan whereby employees receive consideration that fluctuates based on the Company’s share price on the Toronto Stock Exchange (“TSX”). Consideration can be in the form of cash or shares purchased on the open market or issued from treasury. Year ended December 31 RSUs (number of shares equivalent) 2022 2021 Outstanding, beginning of year 1,167,351 2,355,408 Granted 537,225 190,500 Vested (784,514 ) (1,344,672 ) Forfeited (45,932 ) (33,885 ) Outstanding, end of year 874,130 1,167,351 The fair value and weighted average assumptions of the RSUs granted during the yea rs Year ended December 31 2022 2021 Average fair value of RSUs granted (per RSU) $ 10.59 $ 1.99 Expected life of RSUs (years) 2.9 1.0 Expected forfeiture rate 0.5 % nil Performance Share Unit (“PSU”) grants under the RPSU plan The RPSU plan allows Obsidian Energy to grant PSUs to employees of the Company. The PSU obligation is classified as a liability due to the cash settlement feature and could be settled in cash, shares purchased on the open market or shares issued from treasury. Year ended December 31 PSUs (number of shares equivalent) 2022 2021 Outstanding, beginning of year 1,138,465 453,845 Granted 124,610 684,620 Vested (181,018 ) - Forfeited (133,017 ) - Outstanding, end of year 949,040 1,138,465 As at December 31 PSU liability 2022 2021 Current $ 5.2 $ 0.2 Non-current 6.1 4.2 Total $ 11.3 $ 4.4 Stock Option Plan Obsidian Energy has a Stock Option Plan that allows the Company to issue options to acquire common shares (“Options”) to officers, employees, directors and other service providers. Year ended December 31 2022 2021 Options Number of Weighted Number of Weighted Outstanding, beginning of year 3,021,672 $ 1.56 961,954 $ 0.94 Granted 156,400 10.64 2,116,120 1.99 Exercised (903,400 ) 1.27 (11,938 ) 0.56 Forfeited - - (44,464 ) 8.74 Outstanding, end of year 2,274,672 $ 2.30 3,021,672 $ 1.56 Exercisable, end of year 749,498 $ 1.69 748,438 $ 1.29 The fair value and weighted average assumptions of the Options granted during the years Year ended December 31 2022 2021 Average fair value of Options granted (per Option) $ 6.56 $ 1.11 Expected volatility 87.0 % 86.9 % Expected life of Options (years) 3.9 3.4 Expected forfeiture rate 0.3 % 0.5 % Non-Treasury In 2021, Obsidian Energy implemented the NTIP that allows the Company to issue restricted awards whereby employees receive consideration that fluctuates based on the Company’s share price on the TSX. The Company has the option to provide the consideration in the form of cash or shares purchased on the open market. Year ended December 31 NTIP Restricted Awards 2022 2021 Outstanding, beginning of year 1,093,800 - Granted 3,400 1,120,660 Vested (363,871 ) - Forfeited (44,101 ) (26,860 ) Outstanding, end of year 689,228 1,093,800 As at December 31 NTIP liability 2022 2021 Current $ 2.6 $ 1.4 Non-current 1.8 1.1 Total $ 4.4 $ 2.5 Deferred Share Unit (“DSU”) plan The DSU plan allows the Company to grant DSUs in lieu of cash fees to non-employee Year ended December 31 Deferred Share Units 2022 2021 Outstanding, beginning of year 2,018,499 2,087,580 Granted 42,509 239,754 Exercised (249,763 ) (308,835 ) Outstanding, end of year 1,811,245 2,018,499 As at December 31 DSU Liability 2022 2021 Current $ 16.6 $ 10.7 Non-current - - Total $ 16.6 $ 10.7 In 2022, $3.6 million (2021 - $1.5 million) of DSUs were redeemed. At December 31, 2022, the Company had no outstanding DSUs that were redeemable. Share-based compensation Share-based compensation consisted of the following: Year ended December 31 2022 2021 DSUs $ 9.5 $ 10.3 PSUs 8.0 4.3 NTIP 5.9 2.5 Cash settled share-based incentive plans $ 23.4 $ 17.1 RSUs $ 3.4 $ 1.1 Options 1.3 1.2 Equity settled share-based incentive plans 4.7 2.3 Share-based compensation $ 28.1 $ 19.4 The share price used in the fair value calculation of the DSU, NTIP and PSU obligations at December 31, 2022 was $8.98 per share (2021 – $5.21). 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 $1.00 for each $1.00 of employee contribution ; provided that in order for an employee to receive the full matching contribution they must allocate at least low-risk |
Per share amounts
Per share amounts | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Per share amounts | 13. 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 year. Year ended December 31 2022 2021 Net income basic and diluted $ 810.1 $ 414.0 The weighted average number of shares used to calculate per share amounts was as follows Year ended December 31 Average shares outstanding (millions) 2022 2021 Basic 82.0 75.1 Dilutive impact (1) 2.4 2.5 Diluted 84.4 77.6 (1) Includes impact of stock options and RSUs. For 2022, there were 0.2 million |
Changes in non-cash working cap
Changes in non-cash working capital increase (decrease) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Changes in non-cash working capital increase (decrease) | 14. Changes in non-cash Year ended December 31 2022 2021 Accounts receivable $ (13.7 ) $ (28.1) Prepaid expenses and other (1.6 ) (1.7 ) Accounts payable and accrued liabilities (1) 78.7 40.0 Acquisition - 2.8 $ 63.4 $ 13.0 Operating activities 34.8 (5.1 ) Investing activities 28.6 18.1 $ 63.4 $ 13.0 Interest paid in cash $ 29.2 $ 30.1 Income taxes paid (recovered) in cash $ - $ - (1) Includes share-based compensation plans. |
Capital management
Capital management | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Capital management | 15. Capital management Obsidian Energy manages our capital to provide a flexible structure to support capital programs, production maintenance Obsidian Energy defines capital as the sum of shareholders’ equity and debt. Shareholders’ equity includes shareholders’ capital, other reserves and retained earnings (deficit). Debt includes drawings under our syndicated credit facility and our senior unsecured notes. Management reviews Obsidian Energy’s capital structure to allow our objectives and strategies to be 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 funds flow ratios and other economic risk factors. The Company intends to continue to identify and evaluate hedging opportunities in order to reduce our exposure to fluctuations in commodity prices and protect our future cash flows and capital programs. As at December 31 2022 2021 Components of capital Shareholders’ equity $ 1,579.7 $ 763.5 Long-term debt $ 232.6 $ 392.4 |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Commitments and contingencies | 16. Commitments and contingencies Obsidian Energy is committed to certain payments over the next five calendar years and thereafter as follows: 2023 2024 2025 2026 2027 Thereafter Total Long-term debt (1) $ - $ 105.0 $ - $ - $ 127.6 $ - $ 232.6 Transportation 7.4 3.9 2.2 1.8 1.4 2.8 19.5 Interest obligations 23.8 20.1 15.2 15.2 15.2 - 89.5 Office lease 10.0 10.0 0.8 - - - 20.8 Lease liability 3.3 0.9 0.3 0.1 0.1 4.9 9.6 Decommissioning liability 25.4 23.6 21.9 20.3 18.9 72.2 182.3 Total $ 69.9 $ 163.5 $ 40.4 $ 37.4 $ 163.2 $ 79.9 $ 554.3 (1) The 2024 figure term-out Obsidian Energy’s commitments relate to the following: • Transportation commitments relate to costs for future pipeline access. • Interest obligations are the estimated future interest payments related to Obsidian Energy’s debt instruments. • Office leases pertain to total leased office space. • Lease liabilities pertain to various transportation, vehicle and surface lease commitments that meet the definition of a lease under IFRS 16. • The decommissioning liability represents the inflated, discounted future reclamation and abandonment costs that are expected to be incurred over the life of our 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, 2022 | |
Statement [LineItems] | |
Related-party transactions | 17. Related-party transactions Operating entities The consolidated financial statements include the results of Obsidian Energy Ltd. and our wholly owned subsidiaries, including the Obsidian Energy Partnership and, as of November 24, 2021, a interest in PROP (which was subsequently dissolved on December 31, 2022). Transactions and balances between Obsidian Energy Ltd. and all of our subsidiaries are eliminated upon consolidation. Compensation of key management personnel In 2022, key management personnel included the Interim President and Chief Executive Officer, Chief Financial Officer, Senior Vice-Presidents, 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 2022 2021 Salary and employee benefits $ 4.2 $ 4.5 Termination benefits 0.9 - Share-based payments (1) 18.1 15.1 $ 23.2 $ 19.6 (1) Includes changes in the fair value of PSUs, DSUs and non-cash charges related to the Option Plan and RSUs outstanding under the RPSU plan (equity method) for key management personnel. |
Supplemental Items
Supplemental Items | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Supplemental Items | 18. Supplemental Items In the consolidated financial statements, compensation costs are included in both operating and general and administrative expenses. For 2022, employee compensation costs of $14.2 million (2021 - $13.5 million) were included in operating expenses and $20.8 million (2021 - $18.4 million) were included in general and administrative expenses on a gross basis. |
Government grants
Government grants | 12 Months Ended |
Dec. 31, 2022 | |
Government Grants [Abstract] | |
Government grants | 19. Government grants The Company received grant allocations under the Alberta Site Rehabilitation Program beginning in 2020. These awards have allowed the Company to expand our abandonment activities for wells, pipelines, facilities, and related site reclamation and thus reduce our decommissioning liability. The Company utilized $15.7 million of net grants during 2022 (2021 – $11.0 million). |
PROP acquisition
PROP acquisition | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about business combination [abstract] | |
PROP acquisition | 20. PROP acquisition On November 24, 2021 the Company acquired the remaining 45 percent partnership interest in PROP The cash consideration for the acquisition was $35.2 million which was funded by the Company through an equity offering (as described in Note 11) and a $16.3 million limited-recourse amortizing loan secured by the acquired 45 percent partnership interest in PROP. This transaction was accounted for as a business combination in accordance with IFRS 3. The total consideration paid and the purchase price allocation over the fair value of assets and liabilities acquired at the date of acquisition were Total consideration $ 35.2 Fair value of assets acquired and liabilities assumed Working capital (1) $ 4.4 Property, plant and equipment 32.9 Decommissioning liability (2.1 ) Net assets $ 35.2 (1) Includes cash of $1.6 million. The acquisition contributed production revenues and operating income of $4.5 million and $2.4 million, respectively, to the financial results of the Company between the closing date and December 31, 2021. If the acquisition of the 45 percent partnership interest in PROP had occurred on January 1, 2021, the Company’s revenues for the year ended December 31, 2021, would have included additional production revenues of $43.2 million and operating income of $26.6 million. Transaction costs associated with the acquisition totaled $3.5 million and were expensed. |
Subsequent event
Subsequent event | 12 Months Ended |
Dec. 31, 2022 | |
TextBlock1 [Abstract] | |
Subsequent Event | 21. Subsequent event In January 2023, the Board of Directors authorized a normal course issuer bid (“NCIB”) to provide a return of capital to shareholders. In February, the Company’s application to the Toronto Stock Exchange (“TSX”) for the NCIB was approved. This has allowed the Company to initiate a share buyback program over the next 12 months beginning February 27, 2023 on the TSX, NYSE American and other marketplaces, of up to percent of the Company’s “public float”, as defined by the TSX (a maximum of common shares, with a daily purchase limit on the TSX of 85,192 common shares, subject to certain exceptions for block purchases). Purchases under the NCIB are subject to maintaining at least million of liquidity and otherwise complying with our debt agreements. |
Supplementary Oil and Gas Infor
Supplementary Oil and Gas Information - (Unaudited) | 12 Months Ended |
Dec. 31, 2022 | |
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 For the years ended December 31, 2022 and 2021, Obsidian Energy has filed our 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 oil and natural gas reserves for SEC requirements as at December 31, 2022 and 2021, Obsidian Energy used the 12-month day-of-the-month 12-month NET PROVED OIL AND NATURAL GAS RESERVES Obsidian Energy engaged independent qualified reserve evaluator, GLJ Ltd. (“GLJ”), to evaluate Obsidian Energy’s proved developed and proved undeveloped oil and natural gas reserves as at December 31, 2022 and Sproule Associates Ltd. (“Sproule”) to evaluate Obsidian Energy’s proved developed and proved undeveloped oil and natural gas reserves as at December 31, 2021. As at December 31, 2022 and 2021, 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 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 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 YEAR ENDED DECEMBER 31, 2022 CONSTANT PRICES AND COSTS Light and (mmbbl) Heavy Oil Natural (bcf) Coal bed (bcf) Natural Gas Barrels of Oil Equivalent (mmboe) Net Proved Developed and Proved Undeveloped Reserves (1) December 31, 2021 52 10 220 - 9 108 Extensions & Discoveries 5 1 39 - 1 13 Improved Recovery & Infill Drilling 2 - 5 1 - 3 Technical Revisions (4 ) - 31 - 1 2 Acquisitions - - - - - - Dispositions - - - - - - Production (4 ) (2 ) (23 ) - (1 ) (11 ) Change for the year (2 ) (1 ) 52 1 1 7 December 31, 2022 50 9 272 1 10 115 Developed 28 7 173 1 6 71 Undeveloped 22 2 99 - 4 44 Total (2) 50 9 272 1 10 115 (1) Columns may not add due to rounding. (2) Obsidian Energy does not file any estimates of total net proved oil or natural gas reserves with any U.S. federal authority or agency other than the SEC. YEAR ENDED DECEMBER 31, 2021 CONSTANT PRICES AND COSTS Light and (mmbbl) Heavy Oil Natural (bcf) Natural Gas Barrels of Oil Net Proved Developed and Proved Undeveloped Reserves (1) December 31, 2020 40 2 140 6 70 Extensions & Discoveries - - - - 1 Improved Recovery & Infill Drilling 2 1 26 1 8 Technical Revisions 14 7 71 2 35 Acquisitions - 2 2 0 2 Dispositions - - - - - Production (4 ) (1 ) (20 ) (1 ) (9 ) Change for the year 13 9 81 3 37 December 31, 2021 52 10 220 9 108 Developed 32 7 147 5 69 Undeveloped 21 3 73 3 39 Total (2) 52 10 220 9 108 (1) Columns may not add due to rounding. (2) Obsidian Energy does not file any estimates of total net proved oil or natural gas reserves with any U.S. federal authority or agency other than the SEC. In 2022, the Company expanded our development activities with drilling completed across all our areas including the Cardium, Peace River and Viking. In 2021, the Company’s development activities were primarily focused in the Cardium, with drilling occurring in the Willesden Green area throughout the year as well as in Pembina in the second half of 2021. In conjunction with our acquisition of the remaining 45 percent interest in the Peace River Oil Partnership (“PROP”) in the fourth quarter of 2021, the Company also resumed development drilling in Peace River in late 2021. In the first half of 2022, WTI oil prices reached highs over US$100.00 as concerns regarding supply and the ongoing sanctions on Russia due to the impact of the Russia/Ukraine conflict impacted prices. In the second half of 2022, oil prices were volatile as a result of COVID-19 In 2021, oil prices recovered from the lows that occurred in 2020 as COVID-19 CAPITALIZED COSTS As at December 31, ($CAD millions) 2022 2021 Proved oil and gas properties $ 10,931.7 $ 10,528.7 Unproved oil and gas properties - - Total capitalized costs 10,931.7 10,528.7 Accumulated depletion and depreciation (9,079.4) (9,194.6) Net capitalized costs $ 1,852.3 $ 1,334.1 COSTS INCURRED For the years ended December 31, ($CAD millions) 2022 2021 Property acquisition (disposition) costs (1) Proved oil and gas properties – acquisitions $ 4.6 $ 33.8 Proved oil and gas properties – dispositions - - Unproved oil and gas properties - - Exploration costs (2) - 0.4 Development costs (3) 313.9 139.8 Change in decommissioning liability estimate 83.6 62.3 Capital expenditures $ 402.1 $ 236.3 (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 GLJ for 2022 and Sproule for 2021 of net proved reserves. Future cash inflows are computed based on constant prices and cost assumptions from annual future production of proved 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 oil and natural gas reserves are neither an indication of the fair market value of our oil and natural 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 natural gas reserves, nor is consideration given to the effect of anticipated future changes in 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) 2022 2021 Future cash inflows $ 10,679 $ 6,105 Future production costs (4,150 ) (2,486 ) Future development/ abandonment costs (1,379 ) (813 ) Undiscounted pre-tax 5,149 2,806 Deferred income taxes (577 ) (72 ) Future net cash flows 4,573 2,734 Less 10% annual discount factor (1,819 ) (1,304 ) Standardized measure of discounted future net cash flows $ 2,754 $ 1,430 STANDARD MEASURE OF DISCOUNTED FUTURE NET CASH FLOW For the years ended December 31, ($CAD millions) 2022 2021 Standardized measure of discounted future net cash flows at beginning of year $ 1,430 $ 411 Oil and gas sales during period net of production costs and royalties (1) (564 ) (294 ) Changes due to prices and royalties (2) 1,296 975 Actual development costs during the period (3) 314 141 Changes in future development costs (4) (81 ) (412 ) Changes resulting from extensions, infills and improved recovery (5) 601 40 Changes resulting from discoveries (5) - - Changes resulting from acquisitions of reserves (5) - 70 Changes resulting from dispositions of reserves (5) - - Accretion of discount (6) 122 41 Net change in income tax (7) (200 ) 7 Changes resulting from other changes and technical reserves revisions plus effects on timing (5) (185 ) 451 All other changes (8) 20 - Standardized measure of discounted future net cash flows at end of year $ 2,754 $ 1,430 (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 and the period forecast before tax cashflow 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, 2022 | |
Statement [LineItems] | |
Critical accounting judgments and key estimates and other accounting estimates | a) Critical accounting judgments and key estimates and other accounting 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. Estimates are more difficult to determine, and the range of potential outcomes can be wider, in periods of higher volatility and uncertainty. The impacts of the COVID-19 pandemic and the economic recovery from this combined with several factors including higher levels of uncertainty due to the Russian/Ukraine conflict and its impact on energy markets, rising interest and inflation rates, and a constrained supply chain market have created a higher level of volatility and uncertainty. Management has, to the extent reasonable, incorporated known facts and circumstances into the estimates made, however, actual results could differ from those estimates and those differences 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. Additionally, management has performed an assessment of the Company’s ability to comply with liquidity requirements for the 12-month 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 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 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 oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a 50 percent degree of 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 and the impairment test and hence the recorded amount of oil and gas assets. The estimate of the cash flows associated with proved and probable reserves are a key component in the impairment test for property, plant and equipment and the measurement of the deferred income tax asset. Obsidian Energy cautions users of this information that the process of estimating 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 our 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 of disposal 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 non-lease v) Fair value calculation on share-based payments The fair value of option 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 the estimated future cash flows from proved and probable reserves, 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. 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. If the consideration for the acquisition given up is less than the fair value of the net assets received, the difference is recognized immediately in the Consolidated Statement of Income (Loss). If the consideration for the acquisition given up is greater than the fair value of the net assets received, the difference is recognized as goodwill on the balance sheet. 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 Obsidian Energy generally recognizes 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 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 Obsidian Energy may purchase commodity products from third parties to utilize in blending activities and then subsequently sell these products to our customers. These transactions are presented as separate revenue and expense items in the Consolidated Statements of Income (Loss). The Company enters into agreements for other services such as processing third party production, road usage, and other miscellaneous services. Revenue from these arrangements are recorded as processing fees or other income when control passes to the customer, which is generally when the service is provided. |
Joint arrangements | d) Joint arrangements The consolidated financial statements include Obsidian Energy’s proportionate interest of jointly controlled assets and liabilities and our proportionate interest of the revenue, royalties and operating expenses. A significant portion of Obsidian Energy’s development and exploration activities are conducted jointly with others and involve joint operations. Under such arrangements, Obsidian Energy has the exclusive rights to our proportionate interest in the assets and the economic benefits generated from our share of the assets. Income from the sale or use of Obsidian Energy’s interest in joint operations and our 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. |
Transportation expense | e) Transportation expense Transportation costs are paid by Obsidian Energy for the shipping of natural gas, oil and natural gas liquids from the wellhead to the point where title transfers to buyers. These costs are recognized as services are received. |
Foreign currency translation | f) Foreign currency translation Obsidian Energy and each of our 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 or reversals. 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 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 Obsidian Energy includes estimated future costs to develop proved plus probable reserves. Changes to reserve estimates are included in the depletion calculation prospectively. Components of PP&E that are not depleted using the unit-of-production three 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 our assets may be impaired (or that prior impairments can be reversed) 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 or impairment reversal 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 of disposal 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 The fair value less costs of disposal values used to determine the recoverable amounts of the Company’s CGUs are classified as Level 3 fair value measures as certain key assumptions are not based on observable market data but rather management’s best estimates. 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 an 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 restricted share units granted under the Restricted and Performance Share Unit Plan (“RPSU” plan) follows the equity method and recognizes 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”), the Non-Treasury |
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 amount of the liability at the time, are charged to the liability as the costs are incurred. Amounts capitalized to the related assets are depleted to income consistent with the depletion or depreciation of the underlying asset. iii) Office lease provision The office lease provision is the net present value of future lease payments that the Company is obligated to make under non-cancellable non-lease |
Leases | j) Leases At the inception of entering into a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company considers the following: ● the contract involves the use of an identified asset; ● the Company has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and ● the Company has the right to direct the use of the asset, which occurs if either; ● the Company has the right to operate the asset; or ● the Company designed the asset in a way that predetermines how and for what purpose it will be used. Obsidian Energy recognizes a right-of-use right-of-use The right-of-use right-of-use right-of-use The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company’s incremental borrowing rate. The consideration used to measure the lease liability includes all fixed payments and variable lease payments that depend on an index or rate under the arrangement. Subsequently, the lease liability is measured at amortized cost using the effective interest method and is re-measured The Company recognizes the lease payments associated with leases under IFRS 16 as an expense on a straight-line basis over the lease term. |
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, if paid, are 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 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 operations 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 (which includes cash and bank overdrafts), accounts receivable, accounts payable and accrued liabilities, lease 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 and are subsequently measured at fair value with changes in fair value immediately charged to earnings in 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 using an expected credit loss (“ECL”) model. The ECL model applies to financial assets measured at amortized cost, a lease receivable, a contract asset or a loan commitment and a financial guarantee. |
Embedded derivatives | o) Embedded derivatives An embedded derivative is a component of a contract that affects the terms of another factor. 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. |
Government Grants | q) Government Grants Obsidian Energy recognizes government grants as they are received or if there is reasonable assurance that the Company is in compliance with all associated conditions. The grant is recognized within the Consolidated Statements of Income (Loss) in the period in which the income is earned or the related expenditures are incurred. If the grant relates to an asset, it is recognized as a reduction to the carrying value of the asset and amortized into income over the expected useful life of the asset through lower depletion and depreciation. |
New Accounting Standards | r) New Accounting Standards Various amendments to existing standards and new accounting requirements have been released that are effective as of January 1, 2023. The Company does not anticipate the new requirements to have a material impact on the financial statements. |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Disclosure of Property Plant and Equipment | Oil and Gas assets/ Facilities, Corporate assets Cost Oil and gas Corporate assets Total Balance at January 1, 2021 $ 10,662.5 $ 175.8 $ 10,838.3 Capital expenditures 140.2 0.7 140.9 Business acquisition 32.9 - 32.9 Dispositions 0.1 - 0.1 Change in decommissioning liability (1) 62.3 - 62.3 Derecognition on acquisition (545.8 ) - (545.8 ) Balance at December 31, 2021 $ 10,352.2 $ 176.5 $ 10,528.7 Capital expenditures 313.9 0.9 314.8 Property acquisitions 4.6 - 4.6 Change in decommissioning liability (1) 83.6 - 83.6 Balance at December 31, 2022 $ 10,754.3 $ 177.4 $ 10,931.7 (1) Includes additions from drilling activity, facility capital spending, disposals from net property dispositions and changes in estimates as outlined in Note 7 Accumulated depletion, depreciation and impairment Oil and gas Corporate assets Total Balance at January 1, 2021 $ 9,766.8 $ 175.8 $ 9,942.6 Depletion and depreciation 115.6 0.7 116.3 Impairments 19.5 - 19.5 Impairment reversal (338.0 ) - (338.0 ) Derecognition on acquisition (545.8 ) - (545.8 ) Balance at December 31, 2021 $ 9,018.1 $ 176.5 $ 9,194.6 Depletion and depreciation 170.3 0.1 170.4 Impairment 36.4 - 36.4 Impairment reversal (322.0 ) - (322.0 ) Balance at December 31, 2022 $ 8,902.8 $ 176.6 $ 9,079.4 Net book value As at December 31 2022 2021 Total $ 1,852.3 $ 1,334.1 |
Summary of Right of Use Assets | The following table includes a break-down of the categories for right-of-use Cost Transportation Vehicle Surface Total Balance, January 1, 2021 $ 14.9 $ 5.7 $ 2.1 $ 22.7 Additions 1.4 0.7 - 2.1 Balance, December 31, 2021 16.3 6.4 2.1 24.8 Additions - 1.0 - 1.0 Balance, December 31, 2022 $ 16.3 $ 7.4 $ 2.1 $ 25.8 Accumulated depletion, depreciation and impairment Transportation Vehicle Surface Total Balance, January 1, 2021 $ 10.5 $ 2.6 $ 0.1 $ 13.2 Depreciation 2.1 1.4 0.1 3.6 Balance, December 31, 2021 12.6 4.0 0.2 16.8 Depreciation 2.2 1.4 0.1 3.7 Balance, December 31, 2022 $ 14.8 $ 5.4 $ 0.3 $ 20.5 Net book value As at December 31 2022 2021 Total $ 5.3 $ 8.0 |
Summary of Property Plant Equipment And Right Of Use Assets | Total PP&E including Oil and Gas assets, Facilities, Corporate assets and Right-of-use As at December 31 PP&E 2022 2021 Oil and Gas assets, Facilities, Corporate assets $ 1,852.3 $ 1,334.1 Right-of-use 5.3 8.0 Total $ 1,857.6 $ 1,342.1 |
Disclosure of Benchmark Prices Used in Impairment Tests | The following table outlines benchmark prices and assumptions, based on an average of four independent reserve evaluators’ forecasts (GLJ Ltd., Sproule Associates Limited, McDaniel & Associates Consultants and Deloitte Resource Evaluation & Advisory), used in completing the impairment test as at December 31, 2022. WTI ($US/bbl) AECO ($CAD/MMbtu) Exchange rate ($US equals $1 Inflation rate 2023 $ 80.25 $ 4.44 $ 0.74 0.00 % 2024 78.19 4.54 0.76 2.50 % 2025 76.10 4.37 0.76 2.00 % 2026 76.96 4.44 0.77 2.00 % 2027 78.50 4.52 0.77 2.00 % 2028 – 2033 $ 84.18 $ 4.84 $ 0.77 2.00 % Thereafter (inflation percentage) 2.00 % 2.00 % - 2.00 % The following table outlines benchmark prices and assumptions, based on an average of four independent reserve evaluators’ forecasts (GLJ Ltd., Sproule Associates Limited, McDaniel & Associates Consultants and Deloitte Resource Evaluation & Advisory), used in completing the impairment tests as at December 31, 202 1 WTI AECO Exchange rate Inflation rate 2022 $ 71.88 $ 3.58 $ 0.80 0.00 % 2023 67.91 3.22 0.80 2.25 % 2024 65.42 3.07 0.80 2.00 % 2025 66.72 3.14 0.80 2.00 % 2026 68.05 3.20 0.80 2.00 % 2027 – 2032 $ 72.98 $ 3.43 $ 0.80 2.00 % Thereafter (inflation percentage) 2.00 % 2.00 % - 2.00 % |
Disclosure of Estimated Recoverable Amount on Impairment Test | The following table outlines the sensitivity to possible changes of the estimated recoverable amount on the Cardium CGU that had an impairment test completed on December 31, 2021. Recoverable 1% change in 5% change in Cardium $ 1,237.4 $ 73.1 $ 84.8 The following table outlines the sensitivity to possible changes of the estimated recoverable amount on the Cardium CGU that had an impairment test completed on December 31, 2022. Recoverable amount 1% change in 5% change in Cardium $ 1,652.6 $ 93.0 $ 119.9 |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Schedule of Long-term Debt | As at December 31 2022 2021 Syndicated credit facility $ 105.0 $ 321.5 Senior unsecured notes - 2022 11.95% $127.6 million, maturing July 27, 2027 127.6 - PROP limited recourse loan - 10.50% - 16.0 Senior secured notes – 2008 Notes - 9.37% - 4.7 Senior secured notes – 2010 Q1 Notes - 8.82% - 11.3 Senior secured notes – 2010 Q4 Notes - 7.91% - 24.7 Senior secured notes – 2011 Notes - 7.76% - 14.2 Total 232.6 392.4 Deferred interest - 1.3 Unamortized discount of senior unsecured notes (2.3 ) - Deferred financing costs (5.0 ) (2.7 ) Total long-term debt $ 225.3 $ 391.0 Current portion $ - $ 391.0 Non-current $ 225.3 $ - |
Detailed Information About In Financing Expense | Financing expense consists of the following: Year ended December 31 2022 2021 Interest $ 26.8 $ 27.1 Interest on PROP limited recourse loan 1.7 0.2 Advisor fees 0.6 2.7 Accretion on decommissioning liability 11.6 5.8 Accretion on office lease provision 1.4 1.9 Accretion on other non-current 0.3 0.3 Accretion on discount of senior unsecured notes 0.2 - Accretion on lease liabilities 0.6 0.6 Deferred financing costs 2.5 5.5 Debt modification (0.8 ) 1.3 Financing $ 44.9 $ 45.4 |
Lease Liabilities (Tables)
Lease Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Lease liabilities [abstract] | |
Detailed Information About In Lease Liabilities Included In Consolidated Balance Sheet | Total lease liabilities included in the Consolidated Balance Sheets are as follows: Year ended December 31 2022 2021 Balance, beginning of year $ 8.7 $ 10.4 Additions 1.0 2.1 Accretion charges 0.6 0.6 Lease payments (4.3 ) (4.4 ) Balance, end of year $ 6.0 $ 8.7 Current portion $ 3.2 $ 4.1 Non-current $ 2.8 $ 4.6 |
Detailed information About In Maturity Lease Payments | The following table sets out a maturity analysis of lease payments, disclosing the undiscounted balance after December 31, 2022: 2023 2024 2025 2026 2027 Thereafter Total Transportation $ 1.8 $ - $ - $ - $ - $ - $ 1.8 Vehicle 1.4 0.8 0.2 - - - 2.4 Surface 0.1 0.1 0.1 0.1 0.1 4.9 5.4 Total $ 3.3 $ 0.9 $ 0.3 $ 0.1 $ 0.1 $ 4.9 $ 9.6 |
Provisions (Tables)
Provisions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Summary of Provisions | As at December 31 2022 2021 Decommissioning liability $ 182.3 $ 121.6 Office lease provision 17.5 25.6 Total $ 199.8 $ 147.2 Current portion $ 34.1 $ 23.4 Non-current $ 165.7 $ 123.8 |
Summary of Changes to Decommissioning Liability | Changes to the decommissioning liability were as follows: Year ended December 31 2022 2021 Balance, beginning of year $ 121.6 $ 70.5 Net liabilities added (1) 0.3 0.1 Acquisition - 2.1 Increase due to changes in estimates 83.3 62.2 Liabilities settled (18.8 ) (8.1 ) Government decommissioning assistance (15.7 ) (11.0 ) Accretion charges 11.6 5.8 Balance, end of year $ 182.3 $ 121.6 Current portion $ 25.4 $ 14.5 Non-current $ 156.9 $ 107.1 (1) Includes additions from drilling activity, facility capital spending and disposals related to net property dispositions. |
Summary of Changes to Office Lease Provision | Changes to the office lease provision were as follows: Year ended December 31 2022 2021 Balance, beginning of year $ 25.6 $ 33.5 Decrease due to changes in estimates (0.3 ) (0.7 ) Settlements (9.2 ) (9.1 ) Accretion charges 1.4 1.9 Balance, end of year $ 17.5 $ 25.6 Current portion $ 8.7 $ 8.9 Non-current $ 8.8 $ 16.7 |
Risk management (Tables)
Risk management (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 Balance, beginning of year $ (2.4 ) $ 0.2 Unrealized gain (loss) on financial instruments: Oil 4.0 (3.4 ) Natural gas 4.6 0.8 Total fair value, end of year $ 6.2 $ (2.4 ) Current asset portion $ 6.2 $ 1.8 Current liability portion $ - $ (4.2 ) |
Schedule of Financial Instruments Outstanding | Obsidian Energy had the following financial instruments outstanding as at December 31, 2022. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits our credit risk by executing counterparty risk procedures which include transacting only with institutions within our syndicated credit facility or companies with high credit ratings and by obtaining financial security in certain circumstances. Notional Remaining Swap Fair value AECO AECO Swap 14,976 mcf/d February 2023 - March 2023 $ 6.18/mcf $ 1.4 AECO Swap 27,487 mcf/d April 2023 - October 2023 $ 4.07/mcf 4.8 Total $ 6.2 |
Disclosure Details Of Financial Contracts One | Subsequent to December 31, 2022, the Company entered into the following additional financial hedges: Notional Remaining Swap AECO AECO Swap 16,587 mcf/d March 2023 $ 3.13 /mcf AECO Swap 19,904 mcf/d April 2023 - October 2023 $ 2.85/mcf AECO Swap 16,587 mcf/d November 2023 - March 2024 $ 3.57/mcf |
Components of Risk Management on Consolidated Statements of Income | The components of risk management on the Consolidated Statements of Income are as follows: Year ended December 31 2022 2021 Realized Settlement of oil contracts $ (25.5 ) $ (7.8 ) Settlement of natural gas contracts (6.4 ) (4.2 ) Total realized risk management loss $ (31.9 ) $ (12.0 ) Unrealized Oil contracts $ 4.0 $ (3.4 ) Natural gas 4.6 0.8 Total unrealized risk management gain (loss) 8.6 (2.6 ) Risk management loss $ (23.3 ) $ (14.6 ) |
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 2022 $ 76.5 $ 5.1 $ 1.0 $ 82.6 2021 $ 62.0 $ 5.1 $ 1.8 $ 68.9 |
Summary of Estimated Future Obligations for Non-Derivative Financial Liabilities | The following table outlines estimated future obligations for non-derivative 2 Long-term debt Accounts payable & Share-based Total 2023 $ - $ 161.2 $ 24.4 $ 185.6 2024 105.0 - 7.2 112.2 2025 - - 0.7 0.7 2026 - - - - 2027 127.6 - - 127.6 Thereafter $ - $ - $ - $ - |
Revenue and Other Income (Table
Revenue and Other Income (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Disclosure of Significant Revenue | The Company’s significant revenue streams consist of the following: Year ended December 31 2022 2021 Oil $ 697.9 $ 362.9 NGLs 63.1 38.2 Natural gas 136.3 76.4 Production revenues 897.3 477.5 Processing fees 8.4 6.4 Oil and natural gas sales 905.7 483.9 Other income 6.9 6.0 Oil and natural gas sales and other income $ 912.6 $ 489.9 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
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: 2022 2021 Income before taxes $ 563.7 $ 414.0 Combined statutory tax rate (1) 23.0 % 23.0 % Computed income tax expense $ 129.7 $ 95.2 Increase (decrease) resulting from: Share-based compensation 1.1 0.5 Non-taxable 0.2 (0.1 ) Unrecognized deferred tax asset - (69.9 ) Recognition of deferred tax asset (378.6 ) - Adjustments related to prior years (0.4 ) (27.1 ) Other 1.6 1.4 Deferred income tax recovery $ (246.4 ) $ - (1) The tax rate represents the combined federal and provincial statutory tax rates for the Company and our subsidiaries for the years ended December 31, 2022 and December 31, 2021. |
Summary of Net Deferred Income Tax Asset | The net deferred income tax asset is comprised of the following: Balance Provision (Recovery) Balance Deferred tax liabilities (assets) PP&E $ 153.5 $ 96.0 $ 249.5 Leases (7.9 ) 2.4 (5.5 ) Risk Management (0.5 ) 1.9 1.4 Decommissioning liability (27.9 ) (14.0 ) (41.9 ) Share-based compensation (4.0 ) (3.3 ) (7.3 ) Non-capital (113.2 ) (329.4 ) (442.6 ) Net deferred tax liability (asset) $ - $ (246.4 ) $ (246.4 ) Balance Provision (Recovery) Balance Deferred tax liabilities (assets) PP&E $ 86.5 $ 67.0 $ 153.5 Leases (10.1 ) 2.2 (7.9 ) Risk Management - (0.5 ) (0.5 ) Decommissioning liability (16.6 ) (11.3 ) (27.9 ) Share-based compensation (0.4 ) (3.6 ) (4.0 ) Non-capital (59.4 ) (53.8 ) (113.2 ) Net deferred tax liability (asset) $ - $ - $ - |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Summary of Issued Capital | b) Issued Shareholders’ capital Common Shares Amount Balance, December 31, 2020 73,516,225 $ 2,187.0 Issued pursuant to equity compensation plans (1) 1,356,610 2.6 Equity issue 5,880,681 25.9 Share issue costs - (1.7 ) Balance, December 31, 2021 80,753,516 $ 2,213.8 Issued pursuant to equity compensation plans (1) 1,688,694 8.1 Balance, December 31, 2022 82,442,210 $ 2,221.9 (1) Upon vesting or exercise of equity awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. |
Summary of Other Reserves | Year ended December 31 Other Reserves 2022 2021 Balance, beginning of year $ 103.2 $ 103.6 Share-based compensation expense 4.7 2.3 Net benefit on options exercised (1) (6.7 ) (2.7 ) Balance, end of year $ 101.2 $ 103.2 (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, 2022 | |
Statement [LineItems] | |
Summary of Stock Option Activity and Related Information | Year ended December 31 2022 2021 Options Number of Weighted Number of Weighted Outstanding, beginning of year 3,021,672 $ 1.56 961,954 $ 0.94 Granted 156,400 10.64 2,116,120 1.99 Exercised (903,400 ) 1.27 (11,938 ) 0.56 Forfeited - - (44,464 ) 8.74 Outstanding, end of year 2,274,672 $ 2.30 3,021,672 $ 1.56 Exercisable, end of year 749,498 $ 1.69 748,438 $ 1.29 |
Summary of Fair Value and Weighted Average Assumptions of the Options Granted | Year ended December 31 2022 2021 Average fair value of Options granted (per Option) $ 6.56 $ 1.11 Expected volatility 87.0 % 86.9 % Expected life of Options (years) 3.9 3.4 Expected forfeiture rate 0.3 % 0.5 % |
Summary of Share-Based Compensation | Year ended December 31 2022 2021 DSUs $ 9.5 $ 10.3 PSUs 8.0 4.3 NTIP 5.9 2.5 Cash settled share-based incentive plans $ 23.4 $ 17.1 RSUs $ 3.4 $ 1.1 Options 1.3 1.2 Equity settled share-based incentive plans 4.7 2.3 Share-based compensation $ 28.1 $ 19.4 |
Restricted share unit plan [member] | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Obsidian Energy awards RSU grants under the RPSU plan whereby employees receive consideration that fluctuates based on the Company’s share price on the Toronto Stock Exchange (“TSX”). Consideration can be in the form of cash or shares purchased on the open market or issued from treasury. Year ended December 31 RSUs (number of shares equivalent) 2022 2021 Outstanding, beginning of year 1,167,351 2,355,408 Granted 537,225 190,500 Vested (784,514 ) (1,344,672 ) Forfeited (45,932 ) (33,885 ) Outstanding, end of year 874,130 1,167,351 |
Summary of Weighted Average Assumptions of RPSU Plan Units Under Equity Method | The fair value and weighted average assumptions of the RSUs granted during the yea rs Year ended December 31 2022 2021 Average fair value of RSUs granted (per RSU) $ 10.59 $ 1.99 Expected life of RSUs (years) 2.9 1.0 Expected forfeiture rate 0.5 % nil |
PSU Plan [member] | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Year ended December 31 PSUs (number of shares equivalent) 2022 2021 Outstanding, beginning of year 1,138,465 453,845 Granted 124,610 684,620 Vested (181,018 ) - Forfeited (133,017 ) - Outstanding, end of year 949,040 1,138,465 |
Summary of Share Based Compensation Recognized Liabilities | As at December 31 PSU liability 2022 2021 Current $ 5.2 $ 0.2 Non-current 6.1 4.2 Total $ 11.3 $ 4.4 |
Non-Treasury Incentive Awards Plan [member] | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Year ended December 31 NTIP Restricted Awards 2022 2021 Outstanding, beginning of year 1,093,800 - Granted 3,400 1,120,660 Vested (363,871 ) - Forfeited (44,101 ) (26,860 ) Outstanding, end of year 689,228 1,093,800 |
Summary of Share Based Compensation Recognized Liabilities | As at December 31 NTIP liability 2022 2021 Current $ 2.6 $ 1.4 Non-current 1.8 1.1 Total $ 4.4 $ 2.5 |
Deferred Share Units Plan | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Year ended December 31 Deferred Share Units 2022 2021 Outstanding, beginning of year 2,018,499 2,087,580 Granted 42,509 239,754 Exercised (249,763 ) (308,835 ) Outstanding, end of year 1,811,245 2,018,499 |
Summary of Share Based Compensation Recognized Liabilities | As at December 31 DSU Liability 2022 2021 Current $ 16.6 $ 10.7 Non-current - - Total $ 16.6 $ 10.7 |
Per share amounts (Tables)
Per share amounts (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Disclosure of Detailed Information about Net Loss Basic and Diluted | Year ended December 31 2022 2021 Net income basic and diluted $ 810.1 $ 414.0 |
Disclosure of Detailed Information about Weighted Average Number of Shares Per Share | The weighted average number of shares used to calculate per share amounts was as follows Year ended December 31 Average shares outstanding (millions) 2022 2021 Basic 82.0 75.1 Dilutive impact (1) 2.4 2.5 Diluted 84.4 77.6 (1) Includes impact of stock options and RSUs. |
Changes in non-cash working c_2
Changes in non-cash working capital increase (decrease) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Summary of Changes in Non-cash Working Capital (Increase) Decrease | Year ended December 31 2022 2021 Accounts receivable $ (13.7 ) $ (28.1) Prepaid expenses and other (1.6 ) (1.7 ) Accounts payable and accrued liabilities (1) 78.7 40.0 Acquisition - 2.8 $ 63.4 $ 13.0 Operating activities 34.8 (5.1 ) Investing activities 28.6 18.1 $ 63.4 $ 13.0 Interest paid in cash $ 29.2 $ 30.1 Income taxes paid (recovered) in cash $ - $ - (1) Includes share-based compensation plans. |
Capital management (Tables)
Capital management (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Summary of Financial Covenants Under Lending Agreements | As at December 31 2022 2021 Components of capital Shareholders’ equity $ 1,579.7 $ 763.5 Long-term debt $ 232.6 $ 392.4 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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: 2023 2024 2025 2026 2027 Thereafter Total Long-term debt (1) $ - $ 105.0 $ - $ - $ 127.6 $ - $ 232.6 Transportation 7.4 3.9 2.2 1.8 1.4 2.8 19.5 Interest obligations 23.8 20.1 15.2 15.2 15.2 - 89.5 Office lease 10.0 10.0 0.8 - - - 20.8 Lease liability 3.3 0.9 0.3 0.1 0.1 4.9 9.6 Decommissioning liability 25.4 23.6 21.9 20.3 18.9 72.2 182.3 Total $ 69.9 $ 163.5 $ 40.4 $ 37.4 $ 163.2 $ 79.9 $ 554.3 (1) The 2024 figure term-out |
Related-party transactions (Tab
Related-party transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 2022 2021 Salary and employee benefits $ 4.2 $ 4.5 Termination benefits 0.9 - Share-based payments (1) 18.1 15.1 $ 23.2 $ 19.6 (1) Includes changes in the fair value of PSUs, DSUs and non-cash charges related to the Option Plan and RSUs outstanding under the RPSU plan (equity method) for key management personnel. |
PROP acquisition (Tables)
PROP acquisition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about business combination [abstract] | |
Summary of Business Combination | The total consideration paid and the purchase price allocation over the fair value of assets and liabilities acquired at the date of acquisition were Total consideration $ 35.2 Fair value of assets acquired and liabilities assumed Working capital (1) $ 4.4 Property, plant and equipment 32.9 Decommissioning liability (2.1 ) Net assets $ 35.2 (1) Includes cash of $1.6 million. |
Supplementary Oil and Gas Inf_2
Supplementary Oil and Gas Information - (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement [LineItems] | |
Net Proved Oil and Natural Gas Reserves | YEAR ENDED DECEMBER 31, 2022 CONSTANT PRICES AND COSTS Light and (mmbbl) Heavy Oil Natural (bcf) Coal bed (bcf) Natural Gas Barrels of Oil Equivalent (mmboe) Net Proved Developed and Proved Undeveloped Reserves (1) December 31, 2021 52 10 220 - 9 108 Extensions & Discoveries 5 1 39 - 1 13 Improved Recovery & Infill Drilling 2 - 5 1 - 3 Technical Revisions (4 ) - 31 - 1 2 Acquisitions - - - - - - Dispositions - - - - - - Production (4 ) (2 ) (23 ) - (1 ) (11 ) Change for the year (2 ) (1 ) 52 1 1 7 December 31, 2022 50 9 272 1 10 115 Developed 28 7 173 1 6 71 Undeveloped 22 2 99 - 4 44 Total (2) 50 9 272 1 10 115 (1) Columns may not add due to rounding. (2) Obsidian Energy does not file any estimates of total net proved oil or natural gas reserves with any U.S. federal authority or agency other than the SEC. YEAR ENDED DECEMBER 31, 2021 CONSTANT PRICES AND COSTS Light and (mmbbl) Heavy Oil Natural (bcf) Natural Gas Barrels of Oil Net Proved Developed and Proved Undeveloped Reserves (1) December 31, 2020 40 2 140 6 70 Extensions & Discoveries - - - - 1 Improved Recovery & Infill Drilling 2 1 26 1 8 Technical Revisions 14 7 71 2 35 Acquisitions - 2 2 0 2 Dispositions - - - - - Production (4 ) (1 ) (20 ) (1 ) (9 ) Change for the year 13 9 81 3 37 December 31, 2021 52 10 220 9 108 Developed 32 7 147 5 69 Undeveloped 21 3 73 3 39 Total (2) 52 10 220 9 108 (1) Columns may not add due to rounding. (2) Obsidian Energy does not file any estimates of total net proved oil or natural gas reserves with any U.S. federal authority or agency other than the SEC. |
Capitalized Costs | CAPITALIZED COSTS As at December 31, ($CAD millions) 2022 2021 Proved oil and gas properties $ 10,931.7 $ 10,528.7 Unproved oil and gas properties - - Total capitalized costs 10,931.7 10,528.7 Accumulated depletion and depreciation (9,079.4) (9,194.6) Net capitalized costs $ 1,852.3 $ 1,334.1 |
Costs Incurred | COSTS INCURRED For the years ended December 31, ($CAD millions) 2022 2021 Property acquisition (disposition) costs (1) Proved oil and gas properties – acquisitions $ 4.6 $ 33.8 Proved oil and gas properties – dispositions - - Unproved oil and gas properties - - Exploration costs (2) - 0.4 Development costs (3) 313.9 139.8 Change in decommissioning liability estimate 83.6 62.3 Capital expenditures $ 402.1 $ 236.3 (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) 2022 2021 Future cash inflows $ 10,679 $ 6,105 Future production costs (4,150 ) (2,486 ) Future development/ abandonment costs (1,379 ) (813 ) Undiscounted pre-tax 5,149 2,806 Deferred income taxes (577 ) (72 ) Future net cash flows 4,573 2,734 Less 10% annual discount factor (1,819 ) (1,304 ) Standardized measure of discounted future net cash flows $ 2,754 $ 1,430 |
Standardized Measure of Discounted Future Net Cash Flow Changes | STANDARD MEASURE OF DISCOUNTED FUTURE NET CASH FLOW For the years ended December 31, ($CAD millions) 2022 2021 Standardized measure of discounted future net cash flows at beginning of year $ 1,430 $ 411 Oil and gas sales during period net of production costs and royalties (1) (564 ) (294 ) Changes due to prices and royalties (2) 1,296 975 Actual development costs during the period (3) 314 141 Changes in future development costs (4) (81 ) (412 ) Changes resulting from extensions, infills and improved recovery (5) 601 40 Changes resulting from discoveries (5) - - Changes resulting from acquisitions of reserves (5) - 70 Changes resulting from dispositions of reserves (5) - - Accretion of discount (6) 122 41 Net change in income tax (7) (200 ) 7 Changes resulting from other changes and technical reserves revisions plus effects on timing (5) (185 ) 451 All other changes (8) 20 - Standardized measure of discounted future net cash flows at end of year $ 2,754 $ 1,430 (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 and the period forecast before tax cashflow 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 Obsidian Energy -
Structure of Obsidian Energy - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2022 Segment | |
Disclosure of operating segments [line items] | |
Number of operating segment | 1 |
Percentage of ownership in petroleum and natural gas assets | 100% |
Proportion of ownership interest in joint arrangement | 100% |
Basis of presentation and sta_2
Basis of presentation and statement of compliance - Additional Information (Detail) | 12 Months Ended | |
Nov. 24, 2021 | Dec. 31, 2022 | |
Statement [Line Items] | ||
Proportion of ownership interest in joint arrangement | 100% | |
Peace River Oil Partnership [member] | ||
Statement [Line Items] | ||
Proportion of ownership interest in joint arrangement | 45% | 100% |
Significant accounting polici_3
Significant accounting policies - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2019 | |
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 | |
Bottom of range [member] | ||
Summary Of Significant Accounting Policies [Line items] | ||
Percentage of economically recoverable proved reserves | 90% | |
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 | five years |
Property, plant and equipment -
Property, plant and equipment - Disclosure of Property Plant and Equipment (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | $ 1,342.1 | ||
Ending balance | 1,857.6 | $ 1,342.1 | |
Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | 10,528.7 | 10,838.3 | |
Capital expenditures | 314.8 | 140.9 | |
Business acquisition | 32.9 | ||
Dispositions/Property acquisitions | 4.6 | 0.1 | |
Change in decommissioning liability | [1] | 83.6 | 62.3 |
Derecognition on acquisition | (545.8) | ||
Ending balance | 10,931.7 | 10,528.7 | |
Accumulated depletion, depreciation and impairment [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | (9,194.6) | (9,942.6) | |
Depletion and depreciation | 170.4 | 116.3 | |
Impairments | 36.4 | 19.5 | |
Impairment reversal | (322) | (338) | |
Derecognition on acquisition | (545.8) | ||
Ending balance | 9,079.4 | (9,194.6) | |
Oil and gas assets/Facilities [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | 1,334.1 | ||
Ending balance | 1,852.3 | 1,334.1 | |
Oil and gas assets/Facilities [member] | Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | 10,352.2 | 10,662.5 | |
Capital expenditures | 313.9 | 140.2 | |
Business acquisition | 32.9 | ||
Dispositions/Property acquisitions | 4.6 | 0.1 | |
Change in decommissioning liability | [1] | 83.6 | 62.3 |
Derecognition on acquisition | (545.8) | ||
Ending balance | 10,754.3 | 10,352.2 | |
Oil and gas assets/Facilities [member] | Accumulated depletion, depreciation and impairment [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | (9,018.1) | (9,766.8) | |
Depletion and depreciation | 170.3 | 115.6 | |
Impairments | 36.4 | 19.5 | |
Impairment reversal | (322) | (338) | |
Derecognition on acquisition | (545.8) | ||
Ending balance | 8,902.8 | (9,018.1) | |
Corporate assets [member] | Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | 176.5 | 175.8 | |
Capital expenditures | 0.9 | 0.7 | |
Ending balance | 177.4 | 176.5 | |
Corporate assets [member] | Accumulated depletion, depreciation and impairment [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | (176.5) | (175.8) | |
Depletion and depreciation | 0.1 | 0.7 | |
Ending balance | $ 176.6 | $ (176.5) | |
[1]Includes additions from drilling activity, facility capital spending, disposals from net property dispositions and changes in estimates as outlined in Note 8. |
Property, plant and equipment_2
Property, plant and equipment - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Nov. 24, 2021 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Reversal of non cash impairment charge | $ 322 | $ 338 | |
Non cash impairment charge | 36.4 | 19.5 | |
Future development costs | $ 1,254.8 | $ 735.6 | |
Business combination, percentage of inetrest acquired | 45% | ||
Peace River Oil Partnership [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Reversal of non cash impairment charge | $ 21 | ||
Business combination, percentage of inetrest acquired | 100% | 45% | |
Cardium [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Reversal of non cash impairment charge | $ 315.3 | 311.5 | |
Legacy CGU [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Reversal of non cash impairment charge | 6.7 | ||
Impairment | 29.7 | $ 14 | |
Non cash impairment charge | $ 36.4 |
Property, plant and equipment
Property, plant and equipment - Summary of Right of Use Assets (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | $ 8 | |
Ending balance | 5.3 | $ 8 |
Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 16.8 | 13.2 |
Depreciation | 3.7 | 3.6 |
Ending balance | 20.5 | 16.8 |
Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 24.8 | 22.7 |
Additions | 1 | 2.1 |
Ending balance | 25.8 | 24.8 |
Transportation | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 12.6 | 10.5 |
Depreciation | 2.2 | 2.1 |
Ending balance | 14.8 | 12.6 |
Transportation | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 16.3 | 14.9 |
Additions | 1.4 | |
Ending balance | 16.3 | 16.3 |
Vehicles | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 4 | 2.6 |
Depreciation | 1.4 | 1.4 |
Ending balance | 5.4 | 4 |
Vehicles | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 6.4 | 5.7 |
Additions | 1 | 0.7 |
Ending balance | 7.4 | 6.4 |
Surface | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 0.2 | 0.1 |
Depreciation | 0.1 | 0.1 |
Ending balance | 0.3 | 0.2 |
Surface | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 2.1 | 2.1 |
Ending balance | $ 2.1 | $ 2.1 |
Property, plant and equipment_3
Property, plant and equipment - Summary of Property Plant Equipment And Right Of Use Assets (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Oil and Gas assets, Facilities, Corporate assets | $ 1,852.3 | $ 1,334.1 |
Right-of-use assets | 5.3 | 8 |
Total | $ 1,857.6 | $ 1,342.1 |
Property, plant and equipment_4
Property, plant and equipment - Disclosure of Benchmark Prices Used in Impairment Tests (Detail) | Dec. 31, 2022 $ / bbl $ / MMBTU $ / CAD | Dec. 31, 2021 $ / CAD $ / bbl $ / MMBTU |
Disclosure of detailed information about property, plant and equipment [line items] | ||
2023 | $ / CAD | 0.74 | 0.8 |
2024 | $ / CAD | 0.76 | 0.8 |
2025 | $ / CAD | 0.76 | 0.8 |
2026 | $ / CAD | 0.77 | 0.8 |
2027 | $ / CAD | 0.77 | 0.8 |
2028 – 2033 | $ / CAD | 0.77 | 0.8 |
2023 | 0% | 0% |
2024 | 2.50% | 2.25% |
2025 | 2% | 2% |
2026 | 2% | 2% |
2027 | 2% | 2% |
2028 – 2033 | 2% | 2% |
Thereafter (inflation percentage) | 2% | 2% |
WTI [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
2023 | $ / bbl | 80.25 | 71.88 |
2024 | $ / bbl | 78.19 | 67.91 |
2025 | $ / bbl | 76.1 | 65.42 |
2026 | $ / bbl | 76.96 | 66.72 |
2027 | $ / bbl | 78.5 | 68.05 |
2028 – 2033 | $ / bbl | 84.18 | 72.98 |
Thereafter (inflation percentage) | 2% | 2% |
AECO [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
2023 | $ / MMBTU | 4.44 | 3.58 |
2024 | $ / MMBTU | 4.54 | 3.22 |
2025 | $ / MMBTU | 4.37 | 3.07 |
2026 | $ / MMBTU | 4.44 | 3.14 |
2027 | $ / MMBTU | 4.52 | 3.2 |
2028 – 2033 | $ / MMBTU | 4.84 | 3.43 |
Thereafter (inflation percentage) | 2% | 2% |
Property, plant and equipment_5
Property, plant and equipment - Details of Estimated Recoverable Amount on Impairment Test (Detail) - Cardium [member] - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
1% change in discount rate | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | $ 93 | $ 73.1 |
5% change in cash flows | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 119.9 | 84.8 |
Recoverable amount | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | $ 1,652.6 | $ 1,237.4 |
Long-term debt - Schedule of Lo
Long-term debt - Schedule of Long-term Debt (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | $ 232.6 | [1] | $ 392.4 |
Notional amount | 232.6 | 392.4 | |
Deferred interest | 1.3 | ||
Unamortized discount of senior unsecured notes | (2.3) | ||
Deferred financing costs | (5) | (2.7) | |
Total long-term debt | 225.3 | 391 | |
Current portion | 0 | 391 | |
Non-current portion | 225.3 | 0 | |
Syndicated Credit Facility [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 105 | 321.5 | |
11.95% $127.6 million, maturing July 27, 2027 [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | $ 127.6 | ||
PROP limited recourse loan - 10.50% [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 16 | ||
Senior secured notes – 2008 Notes - 9.37% [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 4.7 | ||
Senior secured notes – 2010 Q1 Notes - 8.82% [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 11.3 | ||
Senior secured notes – 2010 Q4 Notes - 7.91% [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 24.7 | ||
Senior secured notes – 2011 Notes - 7.76% [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | $ 14.2 | ||
[1]The 2024 figure includes our syndicated credit facility which has a term-out date of July 2024. The 2027 figure includes our senior unsecured notes due in July 2027. Refer to Note 5 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Long-term debt - Schedule of _2
Long-term debt - Schedule of Long-term Debt (Parenthetical) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
11.95% $127.6 million, maturing July 27, 2027 [member] | Loan Maturity Date Extension [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 11.95% | |
Debt | $ 127.6 | |
Debt, maturity date | July 27, 2027 | July 27, 2027 |
PROP limited recourse loan - 10.50% [member] | Loan Maturity Date Extension [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 10.50% | |
Senior secured notes – 2008 Notes - 9.37% [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 9.37% | |
Senior secured notes – 2010 Q1 Notes - 8.82% [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 8.82% | |
Senior secured notes – 2010 Q4 Notes - 7.91% [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 7.91% | |
Senior secured notes – 2011 Notes - 7.76% [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 7.76% |
Long-term debt - Additional Inf
Long-term debt - Additional Information (Detail) - CAD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of detailed information about borrowings [line items] | |||
Letters of credit outstanding | $ 5.1 | $ 5 | |
Cash and cash equivalents | 0.8 | 7.3 | $ 8.1 |
Notional amount | 232.6 | $ 392.4 | |
Senior Secured Notes [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Cash and cash equivalents | $ 33 | ||
Senior Unsecured Notes [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Credit facilities maturity | July 27, 2027 | ||
Interest rate | 11.95% | ||
Borrowings, maturity year | 5 years | ||
Notional amount | $ 127.6 | ||
Discounted price per note | $ 980 | ||
Principal price per note | $ 1,000 | ||
Proceeds from borrowings | 125 | ||
Borrowings repurchase offering amount | $ 63.8 | ||
Percentage of principal amount Including accrued and unpaid interest redeemed | 103% | ||
Senior Unsecured Notes [Member] | On or Before July 27, 2024 [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Percentage of free cash flow to be maintained | 75% | ||
Senior Unsecured Notes [Member] | After July 27, 2024 [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Percentage of free cash flow to be maintained | 50% | ||
New Credit Facilities [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Available borrowing facilities | $ 205 | ||
Revolving Credit Facility [Member] | New Credit Facilities [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Available borrowing facilities | $ 175 | ||
Credit facilities maturity | July 27, 2024 | ||
Credit facility term date | Jul. 27, 2023 | ||
Non Revolving Credit Facility [Member] | New Credit Facilities [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Available borrowing facilities | $ 30 | ||
Credit facilities maturity | September 2022 |
Long-term debt - Detailed Infor
Long-term debt - Detailed Information About In Financing Expense (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement [Line Items] | ||
Interest | $ 26.8 | $ 27.1 |
Interest on PROP limited recourse loan | 1.7 | 0.2 |
Advisor fees | 0.6 | 2.7 |
Accretion on decommissioning liability | 11.6 | 5.8 |
Accretion on office lease provision | 1.4 | 1.9 |
Accretion on other non-current liability | 0.3 | 0.3 |
Accretion on lease liabilities | 0.6 | 0.6 |
Accretion on discount of senior unsecured notes | 0.2 | 0 |
Deferred financing costs | 2.5 | 5.5 |
Debt modification | (0.8) | 1.3 |
Finance costs | $ 44.9 | $ 45.4 |
Lease Liabilities - Detailed In
Lease Liabilities - Detailed Information About In Lease Liabilities Included In Consolidated Balance Sheet (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lease liabilities [abstract] | ||
Balance, beginning of year | $ 8.7 | $ 10.4 |
Additions | 1 | 2.1 |
Accretion charges | 0.6 | 0.6 |
Lease payments | (4.3) | (4.4) |
Balance, end of year | 6 | 8.7 |
Current portion | 3.2 | 4.1 |
Non-current portion | $ 2.8 | $ 4.6 |
Lease Liabilities - Detailed _2
Lease Liabilities - Detailed Information About In Maturity Lease Payments (Detail) $ in Millions | Dec. 31, 2022 CAD ($) |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | $ 9.6 |
2023 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 3.3 |
2024 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.9 |
2025 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.3 |
2026 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
2027 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Thereafter [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 4.9 |
Transportation [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 1.8 |
Transportation [member] | 2023 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 1.8 |
Transportation [member] | 2024 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Transportation [member] | 2025 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Transportation [member] | 2026 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Transportation [member] | 2027 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Transportation [member] | Thereafter [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Vehicles [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 2.4 |
Vehicles [member] | 2023 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 1.4 |
Vehicles [member] | 2024 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.8 |
Vehicles [member] | 2025 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.2 |
Vehicles [member] | 2026 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Vehicles [member] | 2027 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Vehicles [member] | Thereafter [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Surface [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 5.4 |
Surface [member] | 2023 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | 2024 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | 2025 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | 2026 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | 2027 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | Thereafter [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | $ 4.9 |
Provisions - Summary of Provisi
Provisions - Summary of Provisions (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of Provisions [line items] | |||
Decommissioning liability | $ 182.3 | $ 121.6 | $ 70.5 |
Office lease provision | 17.5 | 25.6 | $ 33.5 |
Total | 199.8 | 147.2 | |
Current portion | 34.1 | 23.4 | |
Non-current portion | $ 165.7 | $ 123.8 |
Provisions - Additional Informa
Provisions - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 CAD ($) yr | Dec. 31, 2021 CAD ($) | Dec. 31, 2020 CAD ($) | |
Disclosure of provision matrix [line items] | |||
Decommissioning liability, inflation factor rate | 2% | 2% | |
Decommissioning liability, credit-adjusted rate | 10% | 9% | |
Decommissioning liability, expected useful life | yr | 50 | ||
Decommissioning liability | $ 182.3 | $ 121.6 | $ 70.5 |
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 | $ 582.7 | $ 594.6 |
Provisions - Summary of Changes
Provisions - Summary of Changes to Decommissioning Liability (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of Provisions [line items] | ||
Balance, beginning of year | $ 121.6 | $ 70.5 |
Net liabilities added | 0.3 | 0.1 |
Acquisition | 2.1 | |
Increase due to changes in estimates | 83.3 | 62.2 |
Liabilities settled | (18.8) | (8.1) |
Government decommissioning assistance | (15.7) | (11) |
Accretion charges | 11.6 | 5.8 |
Balance, end of year | 182.3 | 121.6 |
Current portion | 25.4 | 14.5 |
Non-current portion | $ 156.9 | $ 107.1 |
Provisions - Summary of Chang_2
Provisions - Summary of Changes to Office Lease Provision (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of Provisions [line items] | ||
Balance, beginning of year | $ 25.6 | $ 33.5 |
Decrease due to changes in estimates | (0.3) | (0.7) |
Settlements | (9.2) | (9.1) |
Accretion charges | 1.4 | 1.9 |
Balance, end of year | 17.5 | 25.6 |
Current portion | 8.7 | 8.9 |
Non-current portion | $ 8.8 | $ 16.7 |
Risk management - Additional In
Risk management - Additional Information (Detail) $ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2022 USD ($) | Dec. 31, 2022 CAD ($) Mcf | Dec. 31, 2021 CAD ($) | |
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 | $ 3.4 | $ (31.9) | $ (12) |
Maximum exposure to credit risk | 88.8 | 70.7 | |
Accounts receivable, carrying value | 82.6 | 68.9 | |
Derivative financial assets, fair value | $ 6.2 | $ 1.8 | |
Percentage of long term debt instruments exposed to changes in short term interest rates | 45% | 82% | |
Fixed interest rate debt instruments outstanding | $ 127.6 | $ 70.9 | |
Fixed interest rate debt instruments remaining term | 4 years 7 months 6 days | 10 months 24 days | |
Interest rate | 11.95% | 8.70% | |
Maximum percentage of volumes to be hedged net of royalties | 80% | ||
Later than three months [member] | |||
Disclosure of risk management strategy [line items] | |||
Accounts receivable, carrying value | $ 1 | $ 1.8 | |
Natural gas [member] | |||
Disclosure of risk management strategy [line items] | |||
Pre-tax unrealized risk management, change in price per unit | Mcf | 0.1 | ||
Maximum percentage of volumes to be hedged net of royalties | 50% | ||
Natural gas [member] | Summer Gas Months [Member] | |||
Disclosure of risk management strategy [line items] | |||
Maximum percentage of volumes to be hedged net of royalties | 80% | ||
Natural gas [member] | Winter Gas Months [Member] | |||
Disclosure of risk management strategy [line items] | |||
Maximum percentage of volumes to be hedged net of royalties | 70% | ||
CrudeOil [Member] | |||
Disclosure of risk management strategy [line items] | |||
Maximum percentage of volumes to be hedged net of royalties | 50% | ||
MCF Of Gas [Member] | |||
Disclosure of risk management strategy [line items] | |||
Pre-tax unrealized risk management, change in price, amount | $ 0.8 |
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, 2022 | Dec. 31, 2021 | |
Total fair value consists of the following: | ||
Current asset portion | $ 6.2 | $ 1.8 |
Current liability portion | 0 | (4.2) |
At fair value [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Balance, beginning of year | (2.4) | 0.2 |
Oil | 4 | (3.4) |
Natural gas | 4.6 | 0.8 |
Total fair value, end of year | 6.2 | (2.4) |
Total fair value consists of the following: | ||
Current asset portion | 6.2 | 1.8 |
Current liability portion | $ 0 | $ (4.2) |
Risk management - Schedule of F
Risk management - Schedule of Financial Instruments Outstanding (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2022 CAD ($) Mcf bbl | |
Disclosure of detailed information about financial instruments [line items] | |
Financial Assets, at fair value | $ | $ 6.2 |
February 2023 - March 2023 | AECO Swaps [Member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 14,976 |
Financial instruments, remaining term, description | February 2023 - March 2023 |
Financial instruments swap price | 6.18 |
Financial Assets, at fair value | $ | $ 1.4 |
April 2023 - October 2023 | AECO Swaps [Member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 27,487 |
Financial instruments, remaining term, description | April 2023 - October 2023 |
Financial instruments swap price | 4.07 |
Financial Assets, at fair value | $ | $ 4.8 |
Natural Gas Swaps [member] | November 2023 - March 2024 | AECO Swaps [Member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | bbl | 16,587 |
Financial instruments, remaining term, description | November 2023 - March 2024 |
Financial instruments swap price | 3.57 |
Natural Gas Swaps [member] | March 2023 | AECO Swaps [Member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | bbl | 16,587 |
Financial instruments, remaining term, description | March 2023 |
Financial instruments swap price | 3.13 |
Natural Gas Swaps [member] | April 2023 - October 2023 | AECO Swaps [Member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | bbl | 19,904 |
Financial instruments, remaining term, description | April 2023 - October 2023 |
Financial instruments swap price | 2.85 |
Risk management - Components of
Risk management - Components of Risk Management on Consolidated Statements of Income (Loss) (Detail) $ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2022 USD ($) | Dec. 31, 2022 CAD ($) | Dec. 31, 2021 CAD ($) | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | |||
Settlement of oil contracts | $ (25.5) | $ (7.8) | |
Settlement of natural gas contracts | (6.4) | (4.2) | |
Total realized risk management loss | $ 3.4 | (31.9) | (12) |
Oil contracts | 4 | (3.4) | |
Natural gas contracts | 4.6 | 0.8 | |
Total unrealized risk management gain (loss) | 8.6 | (2.6) | |
Risk management loss | $ (23.3) | $ (14.6) |
Risk management - Disclosure of
Risk management - Disclosure of Detailed Information about Accounts Receivable (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Disclosure of accounts receivables [line items] | ||
Accounts receivables | $ 82.6 | $ 68.9 |
Current [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | 76.5 | 62 |
Later than one month and not later than three months [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | 5.1 | 5.1 |
Later than three months [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | $ 1 | $ 1.8 |
Risk management - Summary of Es
Risk management - Summary of Estimated Future Obligations for Non-Derivative Financial Liabilities (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of financial liabilities [line items] | |||
Long-term debt | $ 232.6 | [1] | $ 392.4 |
2023 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 0 | ||
Accounts payable & accrued liabilities | 161.2 | ||
Share-based compensation accrual | 24.4 | ||
Total | 185.6 | ||
2024 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 105 | ||
Accounts payable & accrued liabilities | 0 | ||
Share-based compensation accrual | 7.2 | ||
Total | 112.2 | ||
2025 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 0 | ||
Accounts payable & accrued liabilities | 0 | ||
Share-based compensation accrual | 0.7 | ||
Total | 0.7 | ||
2026 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 0 | ||
Accounts payable & accrued liabilities | 0 | ||
Share-based compensation accrual | 0 | ||
Total | 0 | ||
2027 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 127.6 | ||
Accounts payable & accrued liabilities | 0 | ||
Share-based compensation accrual | 0 | ||
Total | 127.6 | ||
Thereafter [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 0 | ||
Accounts payable & accrued liabilities | 0 | ||
Share-based compensation accrual | 0 | ||
Total | $ 0 | ||
[1]The 2024 figure includes our syndicated credit facility which has a term-out date of July 2024. The 2027 figure includes our senior unsecured notes due in July 2027. Refer to Note 5 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Revenue and Other Income - Disc
Revenue and Other Income - Disclosure of Significant Revenue (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | $ 897.3 | $ 477.5 |
Processing fees | 8.4 | 6.4 |
Other income | 6.9 | 6 |
Oil and natural gas sales and other income | 912.6 | 489.9 |
Crude oil [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | 697.9 | 362.9 |
Natural gas liquids [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | 63.1 | 38.2 |
Natural gas [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | 136.3 | 76.4 |
Oil and natural gas sales [Member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Other income | $ 905.7 | $ 483.9 |
Revenue and Other Income - Addi
Revenue and Other Income - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Road Use Recoveries [Member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Other income | $ 6.9 | $ 6 |
Income taxes - Summary of Provi
Income taxes - Summary of Provision for Income Taxes Reflects Effective Tax Rate (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure representing major components of tax expense income [line items] | ||
Income before taxes | $ 563.7 | $ 414 |
Combined statutory tax rate | 23% | 23% |
Computed income tax expense | $ 129.7 | $ 95.2 |
Increase (decrease) resulting from: | ||
Share-based compensation | 1.1 | 0.5 |
Non-taxable foreign exchange (gain) loss | 0.2 | (0.1) |
Unrecognized deferred tax asset | (69.9) | |
Recognition of deferred tax asset | (378.6) | 0 |
Adjustments related to prior years | (0.4) | (27.1) |
Other | 1.6 | 1.4 |
Deferred income tax recovery | $ (246.4) | $ 0 |
Income taxes - Summary of Net D
Income taxes - Summary of Net Deferred Income Tax Asset (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | $ 0 | $ 0 |
Provision (Recovery) in Income | (246.4) | 0 |
Ending Balance | (246.4) | 0 |
PP&E [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | 153.5 | 86.5 |
Provision (Recovery) in Income | 96 | 67 |
Ending Balance | 249.5 | 153.5 |
Risk Management [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (0.5) | 0 |
Provision (Recovery) in Income | 1.9 | (0.5) |
Ending Balance | 1.4 | (0.5) |
Leases [Member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (7.9) | (10.1) |
Provision (Recovery) in Income | 2.4 | 2.2 |
Ending Balance | (5.5) | (7.9) |
Decommissioning liability [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (27.9) | (16.6) |
Provision (Recovery) in Income | (14) | (11.3) |
Ending Balance | (41.9) | (27.9) |
Share-based Compensation [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (4) | (0.4) |
Provision (Recovery) in Income | (3.3) | (3.6) |
Ending Balance | (7.3) | (4) |
Non-capital Losses [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (113.2) | (59.4) |
Provision (Recovery) in Income | (329.4) | (53.8) |
Ending Balance | $ (442.6) | $ (113.2) |
Income taxes - Additional Infor
Income taxes - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Tax pool | $ 2,400 | $ 2,500 |
Non-capital losses | 1,900 | 2,100 |
Non-capital losses for which deferred tax asset has not been recognized | 1,646.2 | |
Realized and unrealized net capital losses | 711.2 | 591.5 |
Deferred tax assets unrecognised tax credits | 378.6 | |
Tax benefit arising from federal scientific research and development | 61.3 | |
Deferred tax assets | $ 246.4 | $ 0 |
Shareholders' equity - Addition
Shareholders' equity - Additional Information (Detail) - CAD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Nov. 24, 2021 | Dec. 31, 2020 | |
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 | 82,442,210 | 80,753,516 | 73,516,225 | |
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 | |||
Peace River Oil Partnership [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Numer of shares issued in business combination | 5,880,681 | |||
Business acquisition share price | $ 4.4 | |||
Gross proceeds from business combination | $ 25.9 | $ 35.2 | ||
Share issuance costs in business combination | $ 3.5 | $ 1.7 |
Shareholders' equity - Summary
Shareholders' equity - Summary of Issued Capital (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Disclosure of classes of share capital [line items] | |||
Balance, beginning of year | $ 2,213.8 | ||
Issued pursuant to equity compensation plans | 1.4 | $ (0.1) | |
Balance, end of year | 2,221.9 | 2,213.8 | |
Common shares [member] | |||
Disclosure of classes of share capital [line items] | |||
Balance, beginning of year | 2,213.8 | 2,187 | |
Issued pursuant to equity compensation plans | [1] | 8.1 | 2.6 |
Equity issue | 25.9 | ||
Share issue costs | (1.7) | ||
Balance, end of year | $ 2,221.9 | $ 2,213.8 | |
Balance, beginning of year | 80,753,516 | 73,516,225 | |
Issued pursuant to equity compensation plans | [1] | 1,688,694 | 1,356,610 |
Equity issue | 5,880,681 | ||
Share issue costs | 0 | ||
Balance, end of year | 82,442,210 | 80,753,516 | |
[1]Upon vesting or exercise of equity awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. |
Shareholders' equity - Summar_2
Shareholders' equity - Summary of Other Reserves (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of reserves within equity [line items] | ||
Balance, beginning of year | $ 103.2 | $ 103.6 |
Share-based compensation expense | 4.7 | 2.3 |
Net benefit on options exercised | (6.7) | (2.7) |
Balance, end of year | $ 101.2 | $ 103.2 |
Share-based compensation - Summ
Share-based compensation - Summary of Restricted Share Units Plan (Detail) - Restricted share unit plan [member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Outstanding, beginning of year | 1,167,351 | 2,355,408 |
Granted | 537,225 | 190,500 |
Vested | (784,514) | (1,344,672) |
Forfeited | (45,932) | (33,885) |
Outstanding, end of year | 874,130 | 1,167,351 |
Share-based compensation - Su_2
Share-based compensation - Summary of Weighted Average Assumptions of RSU Plan Units Under Equity Method (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Expected forfeiture rate | 0.30% | 0.50% |
Restricted share unit plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Average fair value of RSUs granted (per RSU) | $ 10.59 | $ 1.99 |
Expected life of RSUs (years) | 2.9 | 1.0 |
Expected forfeiture rate | 0.50% |
Share-based compensation - Su_3
Share-based compensation - Summary of Performance Share Unit Plan (Detail) - PSU Plan [member] - Options granted from June 2017 [member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Outstanding, beginning of year | 1,138,465 | 453,845 |
Granted | 124,610 | 684,620 |
Vested | (181,018) | |
Forfeited | (133,017) | |
Outstanding, end of year | 949,040 | 1,138,465 |
Share-based compensation - Su_4
Share-based compensation - Summary of Stock Option Activity and Related Information (Detail) - Options [member] | 12 Months Ended | |
Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of Options Outstanding, beginning of year | 3,021,672 | 961,954 |
Number of Options, Granted | 156,400 | 2,116,120 |
Number of Options, Exercised | (903,400) | (11,938) |
Number of Options, Forfeited | (44,464) | |
Number of Options Outstanding, end of year | 2,274,672 | 3,021,672 |
Number of Options Exercisable, end of year | 749,498 | 748,438 |
Weighted Average Exercise Price Outstanding, beginning of year | $ 1.56 | $ 0.94 |
Weighted Average Exercise Price, Granted | 10.64 | 1.99 |
Weighted Average Exercise Price, Exercised | 1.27 | 0.56 |
Weighted Average Exercise Price, Forfeited | 8.74 | |
Weighted Average Exercise Price, Outstanding, end of year | 2.3 | 1.56 |
Weighted Average Exercise Price, Exercisable, end of year | $ 1.69 | $ 1.29 |
Share-based compensation - Su_5
Share-based compensation - Summary of Non Treasury Incentive Award Plan and Deferred Share Unit (Detail) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Non-Treasury Incentive Awards Plan [member] | ||
Statement [Line Items] | ||
Outstanding, beginning of year | 1,093,800 | 0 |
Granted | 3,400 | 1,120,660 |
Vested | (363,871) | |
Forfeited | (44,101) | (26,860) |
Outstanding, end of year | 689,228 | 1,093,800 |
Deferred Share Units Plan | ||
Statement [Line Items] | ||
Outstanding, beginning of year | 2,018,499 | 2,087,580 |
Granted | 42,509 | 239,754 |
Vested | (249,763) | (308,835) |
Outstanding, end of year | 1,811,245 | 2,018,499 |
Share-based compensation - Addi
Share-based compensation - Additional Information (Detail) - CAD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of classes of share capital [line items] | ||
Weighted average share price | $ 8.98 | $ 5.21 |
Employer contributions to employee retirement savings plan percentage of employee contribution | $1.00 for each $1.00 of employee contribution | |
Employee [Member] | Bottom of range [member] | ||
Disclosure of classes of share capital [line items] | ||
Percentage of employees contribution | 10% | |
Employee [Member] | Top of range [member] | ||
Disclosure of classes of share capital [line items] | ||
Percentage of employees contribution | 25% | |
Officers [Member] | ||
Disclosure of classes of share capital [line items] | ||
Percentage of employees contribution | 50% | |
Deferred share unit [member] | ||
Disclosure of classes of share capital [line items] | ||
Share-based payment arrangement, cash used to redeem award | $ 3.6 | $ 1.5 |
Share-based compensation - Su_6
Share-based compensation - Summary of Fair Value and Weighted Average Assumptions of the Options Granted (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Average fair value of Options granted (per Option) | $ 6.56 | $ 1.11 |
Expected volatility | 87% | 86.90% |
Expected life of Options (years) | 3 years 10 months 24 days | 3 years 4 months 24 days |
Expected forfeiture rate | 0.30% | 0.50% |
Share-based compensation - Su_7
Share-based compensation - Summary of Share Based Compensation Recognized Liabilities (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
PSU Plan [member] | ||
Disclosure of Detailed Information About Share Based Compensation Recognized Liabilities [Line Items] | ||
Current | $ 5.2 | $ 0.2 |
Non-current | 6.1 | 4.2 |
Total | 11.3 | 4.4 |
Non-Treasury Incentive Awards Plan [member] | ||
Disclosure of Detailed Information About Share Based Compensation Recognized Liabilities [Line Items] | ||
Current | 2.6 | 1.4 |
Non-current | 1.8 | 1.1 |
Total | 4.4 | 2.5 |
Deferred share unit [member] | ||
Disclosure of Detailed Information About Share Based Compensation Recognized Liabilities [Line Items] | ||
Current | 16.6 | 10.7 |
Total | $ 16.6 | $ 10.7 |
Share-based compensation - Su_8
Share-based compensation - Summary of Share-Based Compensation (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Expense from cash-settled share-based payment transactions | $ 23.4 | $ 17.1 |
Expense from equity-settled share-based payment transactions | 4.7 | 2.3 |
Share-based compensation | 28.1 | 19.4 |
RSU grants [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Expense from equity-settled share-based payment transactions | 3.4 | 1.1 |
PSU grants [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Expense from cash-settled share-based payment transactions | 8 | 4.3 |
Options [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Expense from equity-settled share-based payment transactions | 1.3 | 1.2 |
Non-Treasury Incentive Awards Plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Expense from cash-settled share-based payment transactions | 5.9 | 2.5 |
DSU Plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Expense from cash-settled share-based payment transactions | $ 9.5 | $ 10.3 |
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, 2022 | Dec. 31, 2021 | |
Earnings per share [line items] | ||
Net income basic and diluted | $ 810.1 | $ 414 |
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, 2022 | Dec. 31, 2021 | |
Earnings per share [line items] | ||
Basic | 82 | 75.1 |
Dilutive impact | 2.4 | 2.5 |
Diluted | 84.4 | 77.6 |
Per share amounts - Additional
Per share amounts - Additional Information (Detail) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings per share [line items] | ||
Anti-dilutive securities issued under option plan | 0.2 | 0 |
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, 2022 | Dec. 31, 2021 | |
Disclosure of Increase Decrease In Non-cash Working Capital [line items] | ||
Accounts receivable | $ (13.7) | $ 28.1 |
Prepaid expenses and other | (1.6) | (1.7) |
Accounts payable and accrued liabilities | 78.7 | 40 |
Acquisition | 2.8 | |
Net changes in non cash working capital | 63.4 | 13 |
Operating activities | 34.8 | (5.1) |
Investing activities | 28.6 | 18.1 |
Net changes in non cash working capital | 63.4 | 13 |
Interest paid in cash | $ 29.2 | $ 30.1 |
Capital management - Summary of
Capital management - Summary of Financial Covenants Under Lending Agreements (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of capital | ||||
Shareholders' equity | $ 1,579.7 | $ 763.5 | $ 323.1 | |
Long-term debt | $ 232.6 | [1] | $ 392.4 | |
[1]The 2024 figure includes our syndicated credit facility which has a term-out date of July 2024. The 2027 figure includes our senior unsecured notes due in July 2027. Refer to Note 5 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Commitments and contingencies -
Commitments and contingencies - Summary of Certain Payments Over the Next Five Years (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | ||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | $ 232.6 | [1] | $ 392.4 | |
Transportation | 19.5 | |||
Interest obligations | 89.5 | |||
Office lease | 20.8 | |||
Lease liability | 9.6 | |||
Decommissioning liability | 182.3 | |||
Total | 554.3 | |||
2023 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Transportation | 7.4 | |||
Interest obligations | 23.8 | |||
Office lease | 10 | |||
Lease liability | 3.3 | |||
Decommissioning liability | 25.4 | |||
Total | 69.9 | |||
2024 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | [1] | 105 | ||
Transportation | 3.9 | |||
Interest obligations | 20.1 | |||
Office lease | 10 | |||
Lease liability | 0.9 | |||
Decommissioning liability | 23.6 | |||
Total | 163.5 | |||
2025 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Transportation | 2.2 | |||
Interest obligations | 15.2 | |||
Office lease | 0.8 | |||
Lease liability | 0.3 | |||
Decommissioning liability | 21.9 | |||
Total | 40.4 | |||
2026 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Transportation | 1.8 | |||
Interest obligations | 15.2 | |||
Lease liability | 0.1 | |||
Decommissioning liability | 20.3 | |||
Total | 37.4 | |||
2027 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | [1] | 127.6 | ||
Transportation | 1.4 | |||
Interest obligations | 15.2 | |||
Lease liability | 0.1 | |||
Decommissioning liability | 18.9 | |||
Total | 163.2 | |||
Thereafter [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Transportation | 2.8 | |||
Lease liability | 4.9 | |||
Decommissioning liability | 72.2 | |||
Total | $ 79.9 | |||
[1]The 2024 figure includes our syndicated credit facility which has a term-out date of July 2024. The 2027 figure includes our senior unsecured notes due in July 2027. Refer to Note 5 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Commitments and contingencies_2
Commitments and contingencies - Summary of Certain Payments Over the Next Five Years (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Senior Unsecured Notes [Member] | |
Disclosure of commitments and contingencies [line items] | |
Borrowings maturity month year | 2027-07 |
Syndicated Credit Facility [member] | |
Disclosure of commitments and contingencies [line items] | |
Credit facility term out date | 2024-07 |
Related-party transactions - Su
Related-party transactions - Summary of Compensation of Key Management Personnel (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Disclosure of transactions between related parties [line items] | |||
Salary and employee benefits | $ 4.2 | $ 4.5 | |
Termination benefits | 0.9 | 0 | |
Share-based payments | [1] | 18.1 | 15.1 |
Key Management Personnel Compensation | $ 23.2 | $ 19.6 | |
[1]Includes changes in the fair value of PSUs, DSUs and non-cash charges related to the Option Plan and RPSU plan (equity method) for key management personnel. |
Related-party transactions - Ad
Related-party transactions - Additional information (Detail) | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 24, 2021 |
Disclosure of transactions between related parties [line items] | |||
Business combination, percentage of inetrest acquired | 45% | ||
Peace River Oil Partnership [member] | |||
Disclosure of transactions between related parties [line items] | |||
Business combination, percentage of inetrest acquired | 100% | 45% | |
Peace River Oil Partnership [member] | Top of range [member] | |||
Disclosure of transactions between related parties [line items] | |||
Business combination, percentage of inetrest acquired | 100% |
Supplemental Items - Additional
Supplemental Items - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expense [member] | ||
Supplemental Information [line items] | ||
Employee compensation costs | $ 14.2 | $ 13.5 |
General and administrative expense [member] | ||
Supplemental Information [line items] | ||
Employee compensation costs | $ 20.8 | $ 18.4 |
Government grants - Additional
Government grants - Additional Information (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Alberta Site Rehabilitation Program [Member] | ||
Government Grants [Line Items] | ||
Decrese in Capital expenditure | $ 15.7 | $ 11 |
PROP acquisition - Summary of B
PROP acquisition - Summary of Business Combination (Detail) - Peace River Oil Partnership [member] - CAD ($) $ in Millions | Dec. 31, 2021 | Nov. 24, 2021 | |
Consideration | |||
Total consideration | $ 25.9 | $ 35.2 | |
Fair value of assets acquired and liabilities assumed | |||
Working capital | [1] | 4.4 | |
Property, plant and equipment | 32.9 | ||
Decommissioning liability | (2.1) | ||
Net assets | $ 35.2 | ||
[1]Includes cash of $1.6 million. |
PROP acquisition - Summary of_2
PROP acquisition - Summary of Business Combination (Detail) (Parenthitical) - CAD ($) $ in Millions | Dec. 31, 2022 | Nov. 24, 2021 |
Peace River Oil Partnership [member] | ||
Statement [Line Items] | ||
Cash consideration | $ 1.6 | $ 35.2 |
PROP acquisition - Additional I
PROP acquisition - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Nov. 24, 2021 | ||
Disclosure Of Business Combinations [LineItems] | ||||
Business combination, percentage of inetrest acquired | 45% | |||
Borrowings | $ 232.6 | [1] | $ 392.4 | |
Peace River Oil Partnership [member] | ||||
Disclosure Of Business Combinations [LineItems] | ||||
Business combination, percentage of inetrest acquired | 100% | 45% | ||
Consideration in cash | $ 1.6 | $ 35.2 | ||
Revenue since acquisition | 4.5 | |||
Net income since acquisition | 2.4 | |||
Revenue if acquisition at beginning of period | 43.2 | |||
Net income if acquisition at beginning of period | 26.6 | |||
Business combination, transaction costs | $ 3.5 | $ 1.7 | ||
Peace River Oil Partnership [member] | Limited Recourse Loan [member] | ||||
Disclosure Of Business Combinations [LineItems] | ||||
Borrowings | $ 16.3 | |||
[1]The 2024 figure includes our syndicated credit facility which has a term-out date of July 2024. The 2027 figure includes our senior unsecured notes due in July 2027. Refer to Note 5 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Feb. 28, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of non-adjusting events after reporting period [line items] | |||
Assets | $ 2,204.3 | $ 1,429.2 | |
XTSE | Subsequent [Member] | |||
Disclosure of non-adjusting events after reporting period [line items] | |||
Purchase limit of common share | 85,192 | ||
Number of months to initiate share buyback program | 12 months | ||
Percentage of public float | 10% | ||
Number of shares issued | 8,073,847 | ||
Assets | $ 65 |
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, 2022 MMBbls Bcf | Dec. 31, 2021 MMBbls Bcf | |
Light and medium crude oil [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | 52 | 40 |
Extensions & Discoveries | 5 | 0 |
Improved Recovery & Infill Drilling | 2 | 2 |
Technical Revisions | (4) | 14 |
Acquisitions | 0 | 0 |
Dispositions | 0 | 0 |
Production | (4) | (4) |
Change for the year | (2) | 13 |
Ending balance | 50 | 52 |
Developed | 28 | 32 |
Undeveloped | 22 | 21 |
Heavy crude oil and bitumen [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | 10 | 2 |
Extensions & Discoveries | 1 | 0 |
Improved Recovery & Infill Drilling | 0 | 1 |
Technical Revisions | 0 | 7 |
Acquisitions | 0 | 2 |
Dispositions | 0 | 0 |
Production | (2) | (1) |
Change for the year | (1) | 9 |
Ending balance | 9 | 10 |
Developed | 7 | 7 |
Undeveloped | 2 | 3 |
Natural gas [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | Bcf | 220 | 140 |
Extensions & Discoveries | Bcf | 39 | 0 |
Improved Recovery & Infill Drilling | Bcf | 5 | 26 |
Technical Revisions | Bcf | 31 | 71 |
Acquisitions | Bcf | 0 | 2 |
Dispositions | Bcf | 0 | 0 |
Production | Bcf | (23) | (20) |
Change for the year | Bcf | 52 | 81 |
Ending balance | Bcf | 272 | 220 |
Developed | Bcf | 173 | 147 |
Undeveloped | Bcf | 99 | 73 |
Coal bed methane [Member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | Bcf | 0 | |
Extensions & Discoveries | Bcf | 0 | |
Improved Recovery & Infill Drilling | Bcf | 1 | |
Technical Revisions | Bcf | 0 | |
Acquisitions | Bcf | 0 | |
Dispositions | Bcf | 0 | |
Production | Bcf | 0 | |
Change for the year | Bcf | 1 | |
Ending balance | Bcf | 1 | 0 |
Developed | Bcf | 1 | |
Undeveloped | Bcf | 0 | |
Natural gas liquids [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | 9 | 6 |
Extensions & Discoveries | 1 | 0 |
Improved Recovery & Infill Drilling | 0 | 1 |
Technical Revisions | 1 | 2 |
Acquisitions | 0 | 0 |
Dispositions | 0 | 0 |
Production | (1) | (1) |
Change for the year | 1 | 3 |
Ending balance | 10 | 9 |
Developed | 6 | 5 |
Undeveloped | 4 | 3 |
Barrels of oil equivalent [member] | ||
Reserve Quantities [Line Items] | ||
Beginning balance | 108 | 70 |
Extensions & Discoveries | 13 | 1 |
Improved Recovery & Infill Drilling | 3 | 8 |
Technical Revisions | 2 | 35 |
Acquisitions | 0 | 2 |
Dispositions | 0 | 0 |
Production | (11) | (9) |
Change for the year | 7 | 37 |
Ending balance | 115 | 108 |
Developed | 71 | 69 |
Undeveloped | 44 | 39 |
Supplementary Oil and Gas Inf_4
Supplementary Oil and Gas Information - (Unaudited) - Capitalized Costs (Detail) - CAD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Capitalized Costs Relating To Oil and Gas Producing Activities By Geographic Area [line items] | ||
Proved oil and gas properties | $ 10,931.7 | $ 10,528.7 |
Unproved oil and gas properties | 0 | 0 |
Total capitalized costs | 10,931.7 | 10,528.7 |
Accumulated depletion and depreciation | (9,079.4) | (9,194.6) |
Net capitalized costs | $ 1,852.3 | $ 1,334.1 |
Supplementary Oil and Gas Inf_5
Supplementary Oil and Gas Information - (Unaudited) - Costs Incurred (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [line items] | ||
Proved oil and gas properties - acquisitions | $ 4.6 | $ 33.8 |
Proved oil and gas properties - dispositions | 0 | 0 |
Unproved oil and gas properties | 0 | 0 |
Exploration costs | 0 | 0.4 |
Development costs | 313.9 | 139.8 |
Capital expenditures | 402.1 | 236.3 |
Change in decommissioning liability estimate | $ 83.6 | $ 62.3 |
Supplementary Oil and Gas Inf_6
Supplementary Oil and Gas Information - (Unaudited) - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |
Discounted future net cash flows, annual discount factor | 10% |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |||
Future cash inflows | $ 10,679 | $ 6,105 | |
Future production costs | (4,150) | (2,486) | |
Future development/ abandonment costs | (1,379) | (813) | |
Undiscounted pre-tax cash flows | 5,149 | 2,806 | |
Deferred income taxes | (577) | (72) | |
Future net cash flows | 4,573 | 2,734 | |
Less 10% annual discount factor | (1,819) | (1,304) | |
Standardized measure of discounted future net cash flows | $ 2,754 | $ 1,430 | $ 411 |
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, 2022 | Dec. 31, 2021 | |
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 | $ 1,430 | $ 411 |
Oil and gas sales during period net of production costs and royalties | (564) | (294) |
Changes due to prices | 1,296 | 975 |
Actual development costs during the period | 314 | 141 |
Changes in forecast development costs | (81) | (412) |
Changes resulting from extensions, infills and improved recovery | 601 | 40 |
Changes resulting from discoveries | 0 | 0 |
Changes resulting from acquisitions of reserves | 0 | 70 |
Changes resulting from dispositions of reserves | 0 | 0 |
Accretion of discount | 122 | 41 |
Net change in income tax | (200) | 7 |
Changes resulting from other changes and technical reserves revisions plus effects on timing | (185) | 451 |
All other changes | 20 | 0 |
Standardized measure of discounted future net cash flows at end of year | $ 2,754 | $ 1,430 |