Obsidian Energy Updates 2026 Production Guidance Due to Delays
News related to:Obsidian Energy Ltd · 3 min read
Obsidian Energy, an intermediate-sized oil and gas producer, has provided an update on its second-half 2026 capital program and 2026 guidance. The company is advancing its development program with two rigs active in both the Peace River and Willesden Green areas. Stephen Loukas, the company’s President and CEO, commented on the progress and challenges faced during the second half of the year.
According to Loukas, the Peace River program has been active since July, with two drilling rigs progressing development at Dawson and Harmon Valley South (HVS). The company has also expanded Clearwater waterflood infrastructure in the Dawson field and reactivated the Nampa 07-34 Clearwater pad. The 2026 capital program for the area remains approximately $110 million, supporting an average annual production of about 12,250 barrels of oil equivalent per day (boe/d).
The company’s Dawson field has shown strong performance, with the first three producing wells on the seven-well integrated waterflood Dawson 08-24 Clearwater pad currently producing around 700 boe/d. The second rig is advancing the program, with two of the three wells on the HVS 16-18 Bluesky pad now on production and cleaning up.
In the Willesden Green area, Obsidian Energy is adding an integrated waterflood pattern into the Bluesky formation at the 6-20 Pad in Walrus. The pattern is designed to follow the success seen in mature areas of Peace River with waterflooding the Bluesky. The pad is planned to commence drilling in late 2026.
Light oil development in the area is also advancing, with two rigs currently operating and expected to remain active through the remainder of the year. This sustained drilling program is supporting average annual production of approximately 16,750 boe/d. The company has completed the drilling and completion of both wells on the 01-05 Belly River pad, which were brought onstream at the end of August. Additionally, the second light oil rig has commenced drilling a five-well pad at 11-28, targeting both the Belly River and Cardium formations to enhance capital efficiencies.
Despite these developments, Obsidian Energy has revised its 2026 full-year production guidance to 28,500 to 29,500 boe/d. The company attributes this change to weather-related development delays and third-party facility downtime at the recently acquired Belly River assets, which have now been restored to approximately 2,400 boe/d. The company expects a December exit rate of around 31,000 boe/d, with accelerating production growth over the course of the first quarter of 2027 as wells drilled during the fourth quarter of 2026 are brought online.
Obsidian Energy remains on track to deliver more than 15% year-over-year production growth in 2027. The company anticipates executing its previously announced six-well Belly River development program on the acquired lands in early 2027, with optionality for additional growth at sustained higher oil prices. The company plans to release its 2027 guidance in mid-January.
The company’s capital and operating program for 2026 includes the rig release of operated wells, with the last well of the 2025 program rig released on January 2, 2026. Obsidian Energy also expects to participate in a 9 (4.0 net) non-operated well.
In terms of guidance, the company has updated its 2026 operational guidance, primarily reflecting the weather-related development delays and third-party compressor issue. The revised production range primarily reflects these factors, with certain per-boe guidance metrics adjusted. The lower liquids weighting in the Light Oil assets reflects the weather-related delay in production additions.
Obsidian Energy is an intermediate-sized oil and gas producer with a well-balanced portfolio of high-quality assets, primarily in the Peace River, Willesden Green, and Viking areas in Alberta. The company’s business is to explore for, develop, and hold interests in oil and natural gas properties and related production infrastructure in the Western Canada Sedimentary Basin.