Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

    UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
___________________
Form 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER 
PURSUANT TO RULE 13a-16 OR 15d-16 
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of October 2024
 
Commission File Number 1-32895
___________________
 
Obsidian Energy Ltd.
(Translation of registrant's name into English) 
 
Suite 200, 207 – 9th Avenue SW
Calgary, Alberta T2P 1K3
Canada
(Address of principal executive offices)
___________________
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F 			Form 40-F ☑
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)  
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)  
 
                         .
 

   

DOCUMENTS INCLUDED AS PART OF THIS FORM 6-K

See the Exhibit Index hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on October 31, 2024.



	OBSIDIAN ENERGY LTD.


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

EXHIBIT INDEX


Exhibit	Description

99.1	News Release, dated October 31, 2024
99.2	Management’s Discussion and Analysis for the three and nine months ended September 30, 2024
99.3 99.4 99.5	Financial Statements for the three and nine months ended September 30, 2024 Quarterly Certification of the Chief Executive Officer under Canadian law Quarterly Certification of the Chief Financial Officer under Canadian law

Exhibit 99.1

Obsidian Energy Announces Third Quarter 2024 Results

• Higher third quarter funds flow from operations of $124.7 million ($1.64 per share)
– a 34 percent increase over the third quarter of 2023 on a per share basis

• 2024 average production expected to be at the top end of guidance range

• Robust Clearwater exploration/appraisal drilling results at West Dawson establishes new development field

CALGARY, October 31, 2024 - OBSIDIAN ENERGY LTD. (TSX / NYSE American – OBE) (“Obsidian Energy”, the “Company”, “we”, “us” or “our”) is pleased to report our operating and financial results for the third quarter of 2024.


	Three months ended September 30				Nine months ended September 30
	2024		2023		2024		2023
FINANCIAL1 (millions, except per share amounts)
Cash flow from operating activities		110.3		95.3		246.9		235.0
Basic per share ($/share)2		1.45		1.18		3.23		2.89
Diluted per share ($/share)2		1.40		1.15		3.10		2.82
Funds flow from operations3		124.7		98.9		324.3		280.6
Basic per share ($/share)4		1.64		1.22		4.24		3.45
Diluted per share ($/share)4		1.58		1.19		4.07		3.37
Net income		33.2		24.8		82.2		73.7
Basic per share ($/share)		0.44		0.31		1.07		0.91
Diluted per share ($/share)		0.42		0.30		1.03		0.89
Capital expenditures		85.5		45.9		259.0		192.5
Property acquisitions, net		-		0.5		84.9		0.6
Decommissioning expenditures		6.3		5.3		20.4		18.9
Long-term debt		342.1		230.7		342.1		230.7
Net debt3		413.6		294.3		413.6		294.3

OPERATIONS
Daily Production
Light oil (bbl/d)		13,722		12,452		13,528		12,590
Heavy oil (bbl/d)		10,624		6,260		8,142		5,952
NGL (bbl/d)		3,148		2,708		3,043		2,606
Natural gas (mmcf/d)		73		69		71		67
Total production5 (boe/d)		39,714		32,937		36,587		32,376
Average sales price2,6
Light oil ($/bbl)		100.09		109.56		100.94		102.67
Heavy oil ($/bbl)		73.73		80.14		71.78		62.44
NGLs ($/bbl)		48.92		49.71		49.38		53.21
Natural gas ($/mcf)		0.86		2.65		1.51		3.09


Netback ($/boe)
Sales price	59.77	66.29	60.34	62.13
Risk management gain	2.16	0.96	1.56	1.25
Net sales price	61.93	67.25	61.90	63.38
Royalties	(7.77)	(8.93)	(7.73)	(8.23)
Net operating costs4	(13.74)	(13.60)	(13.82)	(14.40)
Transportation	(4.19)	(3.69)	(4.10)	(3.41)
Netback4 ($/boe)	36.23	41.03	36.25	37.34

(1)

We adhere to generally accepted accounting principles (“GAAP”); however, we also employ certain non-GAAP measures to analyze financial performance, financial position, and cash flow, including funds flow from operations (“FFO”), net debt, netback and net operating costs. Additionally, other financial measures are also used to analyze performance. These non-GAAP and other financial measures do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and therefore may not be comparable to similar measures provided by other issuers. Readers should not consider non-GAAP and other financial measures to be more meaningful than GAAP measures, which are determined in accordance with IFRS, such as net income and cash flow from operating activities, as indicators of our performance.

(2)

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

(3)

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

(4)

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

(5)

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

(6)

Before realized risk management gains/(losses).

Detailed information can be found in Obsidian Energy's interim consolidated financial statements and management's discussion and analysis ("MD&A") as at and for the three and nine-month periods ended September 30, 2024 on our website at www.obsidianenergy.com, which will also be filed on SEDAR+ and EDGAR in due course.

THIRD quarter 2024 overview

Obsidian Energy continued to increase average production quarter-over-quarter as we successfully executed on our growth plan in 2024. Third quarter average production grew by 21 percent to 39,714 boe/d from 32,937 boe/d in the third quarter of 2023 due to the Company's active development program and strong drilling results. In September, average production reached over 40,000 boe/d, of which our Peace River area comprised approximately 12,000 boe/d. The production increase was mainly driven by the 64 (52.0 net) wells brought on production during the first nine months of 2024: 47 (46.3 net) operated wells and 17 (5.6 net) non-operated wells.

The growth in production lead to higher revenues, and FFO of $124.7 million ($1.64 per share basic), a 26 percent increase (34 percent on a per share basis) compared to $98.9 million ($1.22 per share basic) in 2023. Third quarter 2024 revenues were partially offset by a 10 percent reduction in our average sales price (prior to hedging gains) from lower commodity prices. Obsidian Energy also continued our share buyback program with the normal course issuer bid (“NCIB”) during the third quarter, resulting in the repurchase and cancellation of 1.0 million shares for $9.3 million (at an average of $9.18 per share). In total, the Company has repurchased and cancelled a total of 8.0 million common shares for total consideration of $75.9 million from the inception of the NCIB in 2023 to the end of the third quarter of 2024. Obsidian Energy has since repurchased and cancelled an additional 0.8 million shares for consideration of $6.5 million from October 1 to 30, 2024.

“We’re excited with the strong results realized in 2024 from our development programs in our heavy and light oil assets,” commented Stephen Loukas, Obsidian Energy’s President and CEO. “New development volumes continue to be at or above our expectations, allowing us to reach a milestone for the Company of over 40,000 boe/d in average production in September. Given the success with our Clearwater and Bluesky formation drilling, we anticipate our heavy oil assets to exit 2024 at over 13,000 boe/d with further growth expected through to spring break-up in 2025. Additionally, our progress in delineating our Peace River asset continues as shown by our exceptional Bluesky well results at Harmon Valley South (“HVS”) and the discovery of a new Clearwater development area at West Dawson. Our activities at West Dawson provided strong initial production rates and numerous follow-up locations that we intend to develop in 2025. At this juncture, we are comfortably ahead of our initial 3-year plan forecast. Lastly, during the fourth quarter we will commence the appraisal of our recently acquired Peavine and Gift Lake properties in Peace River.”

2024 THIRD Quarter Corporate Highlights

•

Strong Funds Flow – The Company generated FFO of $124.7 million ($1.64 per share basic) compared to $98.9 million ($1.22 per share basic) in the third quarter of 2023, primarily due to higher production revenues with increased production levels from our active development program and strong drilling results. Lower commodity prices partially offset FFO in 2024.

•

Capital Development Growth – Third quarter 2024 capital expenditures were $85.5 million (2023 – $45.9 million), while decommissioning expenditures totaled $6.3 million (2023 – $5.3 million). Capital expenditures largely focused on accelerated development drilling activities in Peace River and drilling and completing wells in Pembina (Cardium).

•

Maintained Operating Costs – Net operating costs were inline on a boe basis at $13.74 per boe in the third quarter of 2024 compared to $13.60 per boe in 2023 and $13.83 per boe in the second quarter of 2024. On an absolute basis, total operating costs increased on both a quarterly and year-to-date basis in 2024 due to the impact of higher production levels and increased trucking costs from our expanded Peace River operations.

•

Lower G&A Costs – General and administrative (“G&A”) costs decreased to $1.37 per boe in the third quarter of 2024 compared to $1.51 per boe in 2023. Increased staffing levels to execute our growth plan in 2024 was more than offset by production additions, which led to the decrease on a per boe basis.

•

Net Debt – Net debt levels increased to $413.6 million at September 30, 2024, compared to $330.2 million at December 31, 2023, but decreased from $432.5 million at June 30, 2024. The increase in 2024 was mainly due to the funding of our Peace River acquisition that closed in June.

In October, we increased our syndicated credit facility (the “Credit Facility”) to $300.0 million from $260.0 million with the addition of a new lender to the Company’s banking syndicate. We used the increase in our Credit Facility to reduce the amount outstanding on our Term Loan to $10 million.

•

Active Share Buyback Program – In the third quarter of 2024, a total of 1.0 million shares were repurchased and cancelled under the Company’s NCIB for $9.3 million (at an average of $9.18 per share).

From October 1 to 30, we repurchased and cancelled an additional 0.8 million common shares at an average price of $8.28 per share for total consideration of approximately $6.5 million.

•

Net Income – Net income for the third quarter of 2024 was $33.2 million ($0.44 per share basic) compared to $24.8 million ($0.31 per share basic) for the same period in 2023 due to the Company's higher revenues from increased production in 2024.

2024 THIRD QUARTER CAPITAL program & HIGHLIGHTS

The Company remained active during the third quarter of 2024 with several initiatives to further develop and explore/appraise new and existing fields in our portfolio, further solidifying the growth potential and future value of our assets, particularly in our Peace River area. With four drilling rigs in operation, we had a strong start to our second half capital program that yielded results generally at or above expectations. Third quarter 2024 focused on accelerated development at both our Peace River Bluesky and Clearwater development fields, drilling in our Pembina (Cardium) area, successfully testing new drilling plans in our Bluesky HVS and facility designs in our Walrus fields in Peace River. Capital program highlights for the third quarter of 2024 were as follows:

•

Optimized Fourth Quarter 2024 Capital Program – The Company optimized our fourth quarter 2024 drilling program with the addition of three Clearwater development wells in the Peavine area and two exploration/appraisal wells at Gift Lake in Peace River, and an initial delineation well targeting the Belly River formation in Willesden Green. Considering the volatility in commodity prices and market uncertainty due to global factors, we adjusted our 2024 capital program by postponing our fourth quarter

light oil program (excluding the accelerated Willesden Green Belly River well) to reallocate a portion of capital to incremental share buybacks and further debt reduction.

•

Achieved Encouraging Initial Well Results – New wells on production over the third quarter of 2024 continued to provide strong initial production (“IP”) results above our internal expectations, including:

Peace River (Clearwater):

▪

Dawson – The Dawson Clearwater field continues to provide robust production results above our expectations, averaging ~2,200 boe/d (100 percent oil) during the quarter as new production was brought online:

•

The two (2.0 net) wells at the Dawson 12-33 Pad were placed onstream in early September and produced at a gross average 30-day IP rate of 217 boe/d (100 percent oil) per well.

▪

West Dawson – We drilled two (2.0 net) exploration/appraisal wells at the Dawson
9-21 Pad as a western step-out to our current producing Dawson development field. On production in early October, the wells exceeded production expectations with a gross average 24-day IP rate of 269 boe/d (100 percent oil) per well. With a higher-quality oil (API of approximately 16O), the West Dawson trend is expected to generate a higher netback compared to our existing Bluesky and Clearwater fields. We have initially identified over 25 follow-up locations in proximity to the 9-21 Pad to further develop this new Clearwater development field.

▪

Peavine and Gift Lake (Acquired Lands) – We begun our first development activity on the lands acquired as part of our June 2024 acquisition.

•

Peavine: Two of three (3.0 net) 2024 Clearwater development wells at the Peavine 8-13 Pad in the Peavine Metis Settlement area were rig-released and the third well spud by the end of October. All wells are expected on production in late November.

•

Gift Lake: We began construction on the Gift Lake 4-15 and 13-33 Pads within the Gift Lake Metis Settlement area in October in preparation to drill two (2.0 net) exploration/appraisal wells in late 2024.

Peace River (Bluesky):

▪

HVS – Our HVS field continued to provide production results at the top end of our expectations.

•

HVS 13-18 Pad – The one (1.0 net) well produced at a gross average 30-day IP rate of 503 boe/d (100 percent oil) during the quarter.

•

HVS 13-08 Pad – One of the two (2.0 net) wells planned for the pad was placed onstream and produced at a gross average 30-day IP rate of 448 boe/d (100 percent oil). The second well is expected to be spud in December 2024.

•

HVS 8-28 Pad – The two (2.0 net) wells drilled in our second half 2024 program at this four-well pad were rig released during the quarter and are now on production. Initial results are encouraging as the wells continue to clean up.

▪

Walrus – As we develop and further appraise our Walrus field, we continue to refine our technical knowledge of the area, giving us the ability to better delineate the thickest pay and more productive areas in preparation for follow-up locations from existing and future pads.

•

6-20 and 7-21 Pads – Two (2.0 net) wells from the second half 2024 program were brought onstream in the third quarter from the new future multi-well pads at the 6-20 and 7-21 locations and produced at gross average 30-day IP rates of 225 boe/d (100 percent oil) and 86 boe/d (100 percent oil), respectively.

The 7-21 well produced at 132 boe/d over the last 30 days after the pump size was increased during cleanup operations. Both wells were equipped with additional surface facility tanks to accommodate increased total fluid production, resulting in increased production rates after installation.

•

15-01 Pad – We are currently drilling the four (4.0 net) wells at this pad, which was equipped with increased fluid handling facilities.

▪

Cadotte – All three (3.0 net) wells at the Cadotte 13-15 Pad have now been rig released (two in the third quarter) with production expected onstream in November.

Pembina (Cardium):

▪

16-36 Pad – Two (2.0 net) were drilled and placed on production with a gross average 30-day IP rate of 468 boe/d (80 percent oil) per well.

▪

8-01 Pad – Two (2.0 net) wells were placed on production in late September and are producing at a gross average 30-day IP rate of 347 boe/d (91 percent oil) per well.

▪

12-19 Pad – We rig released the remaining two (2.0 net) wells in our second half program at this pad, which is expected to be brought on stream in November.

▪

Pembina Cardium Unit 11 (~45 percent working interest) – All nine (4.0 net) producing wells in this non-operated program were on production in the quarter and achieved a gross average 30-day IP rate of 350 boe/d per well.

Willesden Green (Belly River) – We began drilling our initial delineation well targeting the Belly River formation in October. Added as part of our optimized fourth quarter 2024 capital program, the well is expected to be on production by the end of 2024.

•

Completed Turnaround Maintenance Activities – We completed six planned facility turnaround projects in addition to waterflood, optimization and integrity projects across our properties during the third quarter, which will aid future operations and development. As a major part of this activity, we completed the Bigoray 6-28 battery, gas plant and field battery turnarounds in our Pembina (Cardium) area in September, completing our 2024 turnaround program.

2024 WELLS RIG RELEASED AND ON PRODUCTION

A total of 52 (51.4 net) operated wells were rig released (including five oilsands exploration wells) and 47 (46.4 net) wells were brought on production since the beginning of 2024. Of this, 18 (18.0 net) wells were rig released and 14 (14.0 net) wells were placed on production during the third quarter. The breakdown of our operated capital program wells for the first nine months of 2024 as well as our planned wells to be rig released in the fourth quarter 2024 are as follows:


	Q1 – Q3 Gross (Net) Wells		Rig Released Gross (Net) Wells
	Rig Released	On Production	Q4E	2024E
DEVELOPMENT WELLS
Heavy Oil Assets
Peace River (Bluesky)	16 (16.0)	13 (13.0)	8 (8.0)	24 (24.0)
Peace River (Clearwater)	10 (10.0)	10 (10.0)	3 (3.0)	13 (13.0)
Light Oil Assets
Willesden Green (Cardium/Belly River)	8 (7.7)	11 (10.7)	1 (1.0)	9 (8.7)
Pembina (Cardium)	9 (8.7)	11 (10.7)	1 (1.0)2	10 (9.7)
	43 (42.4)	45 (44.4)1	13 (13.0)	56 (55.4)
EXPLORATION/APPRAISAL WELLS
Peace River (Clearwater)	4 (4.0)	2 (2.0)	2 (2.0)	6 (6.0)
Peace River (OSE)	5 (5.0)	-	-	5 (5.0)
	9 (9.0)	2 (2.0)	2 (2.0)	11 (11.0)

TOTAL OPERATED WELLS	52 (51.4)	47 (46.4)1	15 (15.0)	67 (66.4)

    (1)Excluding injection or disposal wells. Wells on production in 2024 include seven (7.0 net) wells rig released in 2023 that came on production in the first quarter of 2024. In total, Obsidian Energy expects to have 61 (60.4 net) wells on production by the end of 2024.
(2)Pembina well spud in the third quarter prior to the postponement of the fourth quarter 2024 light oil capital program.

Obsidian Energy also participated in 18 non-operated (6.3 net) wells in 2024, two (0.9 net) of which were water injection wells. At present, Obsidian Energy has three drilling rigs operating in our Peace River area and one in our Willesden Green area to complete the remainder of our 2024 capital program.

HEDGING UPDATE

Our hedging strategy led to a realized gain of $15.6 million in the first nine months of 2024, primarily related to our natural gas contracts. The following contracts are currently in place on a weighted average basis:

Oil Contracts


Type	Remaining Term	Volume (bbl/d)	Swap Price ($/bbl)
WTI Swap	October 2024	11,500	US$74.85
WCS Differential	January – December 2025	5,250	($19.48)

AECO Natural Gas Contracts


Type	Remaining Term	Volume (mcf/d)		Percentage Hedged1	Swap Price ($/mcf)
AECO Swap	October 2024		43,365	61%	$2.52
AECO Swap	November 2024 – March 2025		14,929	21%	$3.74
AECO Swap	April – October 2025		11,374	16%	$2.24
AECO Collars	November 2024 – March 2025		4,976	7%	$3.43 - $4.11
AECO Collars	April – October 2025		1,896	3%	$2.11 - $2.64

(1)

Based on 2024E natural gas production of 70.6 mmcf/d.

Electricity Contracts


Type	Remaining Term	Volume (MWh/d)	Swap Price ($/MWh)
Power Swaps	October - December 2024	144 MWh/d	$92.83

UPDATED CORPORATE PRESENTATION

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

ADDITIONAL READER ADVISORIES

OIL AND GAS INFORMATION ADVISORY

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

TEST RESULTS AND INITIAL PRODUCTION RATES

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

NON-GAAP AND OTHER FINANCIAL MEASURES

Throughout this news release and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position, and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures provided by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income and cash flow from operating activities as indicators of our performance. The Company's interim consolidated financial statements and MD&A as at and for three and nine months ended September 30, 2024, will be available in due course on the Company's website at www.obsidianenergy.com and under our SEDAR+ profile at www.sedarplus.ca and EDGAR profile at www.sec.gov. The disclosure under the section "Non-GAAP and Other Financial Measures" in the MD&A is incorporated by reference into this news release.

Non-GAAP Financial Measures

The following measures are non-GAAP financial measures: FFO; net debt; net operating costs; netback; and free cash flow (“FCF”). These non-GAAP financial measures are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See the disclosure under the section "Non-GAAP and Other Financial Measures" in our MD&A for the three and nine months ended September 30, 2024, for an explanation of the composition of these measures, how these measures provide useful information to an investor, and the additional purposes, if any, for which management uses these measures.

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

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

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

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

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

Non-GAAP Financial Ratios

The following measures are non-GAAP ratios: FFO (basic per share ($/share) and diluted per share ($/share)), which use FFO as a component; net operating costs ($/boe), which uses net operating costs as a component; netback ($/boe), which uses netback as a component; and net debt to FFO, which uses net debt and FFO as components. These non-GAAP ratios are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See the disclosure under the section "Non-GAAP and Other Financial Measures" in our MD&A for three and nine months ended September 30, 2024, for an explanation of the composition of these non-GAAP ratios, how these non-GAAP ratios provide useful information to an investor, and the additional purposes, if any, for which management uses these non-GAAP ratios.

Supplementary Financial Measures

The following measures are supplementary financial measures: average sales price; cash flow from operating activities (basic per share and diluted per share); and G&A costs ($/boe). See the disclosure

under the section "Non-GAAP and Other Financial Measures" in our MD&A for the three and nine months ended September 30, 2024, for an explanation of the composition of these measures.

Non-GAAP Measures Reconciliations

Cash Flow from Operating Activities, FFO and FCF


	Three months ended September 30						Nine months ended September 30
(millions)	2024			2023			2024			2023
Cash flow from operating activities	$	110.3		$	95.3		$	246.9		$	235.0
Change in non-cash working capital		6.1			(3.6	)		49.2			16.7
Decommissioning expenditures		6.3			5.3			20.4			18.9
Onerous office lease settlements		2.2			2.2			6.7			6.7
Settlement of restricted share units		-			0.1			-			4.7
Deferred financing costs		(0.6	)		(0.6	)		(1.8	)		(1.7	)
Transaction costs		-			-			1.4			-
Other expenses1		0.4			0.2			1.5			0.3
Funds flow from operations		124.7			98.9			324.3			280.6
Capital expenditures		(85.5	)		(45.9	)		(259.0	)		(192.5	)
Decommissioning expenditures		(6.3	)		(5.3	)		(20.4	)		(18.9	)
Free cash flow	$	32.9		$	47.7		$	44.9		$	69.2

(1)

Excludes the non-cash portion of restructuring and other expenses.

Netback to Sales Price


	Three months ended September 30						Nine months ended September 30
(millions)	2024			2023			2024			2023
Sales price	$	218.5		$	200.9		$	605.0		$	549.2
Risk management gain (loss)		7.8			2.9			15.6			11.0
Net sales price		226.3			203.8			620.6			560.2
Royalties		(28.4	)		(27.1	)		(77.5	)		(72.8)
Net operating costs		(49.8	)		(41.2	)		(41.1	)		(127.2)
Transportation		(15.3	)		(11.2	)		(138.1	)		(30.2)
Netback	$	132.8		$	124.3		$	363.9		$	330.0

Net Operating Costs to Operating Costs


	Three months ended September 30						Nine months ended September 30
(millions)	2024			2023			2024			2023
Operating costs	$	54.3		$	46.7		$	152.7		$	143.1
Less processing fees		(2.7	)		(3.4	)		(9.5	)		(10.7)
Less road use recoveries		(2.3	)		(2.1	)		(6.1	)		(5.2)
Realized power risk management loss		0.5			-			1.0			-
Net operating costs	$	49.8		$	41.2		$	138.1		$	127.2

Net Debt to Long-Term Debt


	As at
	September 30
(millions)	2024				2023
Long-term debt
Syndicated credit facility		$	189.5			$	118.0
Senior unsecured notes			114.2				118.4
Term loan			42.5				-
Unamortized discount of senior unsecured notes			(1.2	)			(1.8)
Deferred financing costs			(2.9	)			(3.9	)
Total			342.1				230.7

Working capital deficiency
Cash			(0.9	)			(0.9)
Accounts receivable			(87.8	)			(82.7)
Prepaid expenses and other			(17.3	)			(16.3)
Accounts payable and accrued liabilities			177.5				163.5
Total			71.5				63.6

Net debt		$	413.6			$	294.3

ABBREVIATIONS


Oil		Natural Gas
API	American Petroleum Institute	AECO	Alberta benchmark price for natural gas
bbl	barrel or barrels	GJ	gigajoule
bbl/d	barrels per day	mcf	thousand cubic feet
boe	barrel of oil equivalent	mcf/d	thousand cubic feet per day
boe/d	barrels of oil equivalent per day	mmcf/d	million cubic feet per day
MSW	Mixed Sweet Blend
WTI	West Texas Intermediate	Electricity
WCS	Western Canadian Select	MWh	Megawatt hour
		MWh/d	Megawatt hour per day

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute forward-looking statements or information (collectively “forward-looking statements”) within the meaning of the "safe harbour" provisions of applicable securities legislation. Forward-looking statements are typically identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “budget”, “may”, “will”, “project”, “could”, “plan”, “intend”, “should”, “believe”, “outlook”, “objective”, “aim”, “potential”, “target” and similar words suggesting future events or future performance. In addition, statements relating to “reserves” or “resources” are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this document contains forward-looking statements pertaining to, without limitation, the following: that we will file the interim consolidated financial statements and MD&A on our website, SEDAR+ and EDGAR in due course; our intention to commence the appraisal of acquired properties in Peace River in the fourth quarter; that we expect our guidance to be at the top end of our guidance range; our expected heavy oil production exit rate for 2024 and further growth to 2025 spring break-up; our expected fourth quarter capital program and intended use of cash flow generated for debt repayment and NCIB purchases; our expectations for netbacks in certain fields; our

development locations and potential follow-up locations; our expectations for timing for drilling, rig release and on-production and onstream dates; our expectations in the Walrus field; how we expect our turnaround project to aid future operations and development; our hedges; and our expectations for an updated corporate presentation.

With respect to forward-looking statements contained in this document, the Company has made assumptions regarding, among other things: that the Company does not dispose of or acquire material producing properties or royalties or other interests therein other than stated herein (provided that, except where otherwise stated, the forward-looking statements contained herein do not assume the completion of any transaction); that regional and/or global health related events will not have any adverse impact on energy demand and commodity prices in the future; global energy policies going forward, including the continued ability of members of OPEC, Russia and other nations to agree on and adhere to production quotas from time to time; Obsidian Energy's views with respect to its financial condition and prospects, the stability of general economic and market conditions, currency exchange rates and interest rates, and our ability to comply with applicable terms and conditions under the Company’s debt agreements, the existence of alternative uses for Obsidian Energy's cash resources and compliance with applicable laws; our ability to execute our plans as described herein and in our other disclosure documents, including our three year growth plan, and the impact that the successful execution of such plans will have on our Company and our stakeholders including our ability to return capital to shareholders and/or further reduce debt levels; expectations and assumptions concerning applicable laws and regulations, including with respect to environmental, safety and tax matters; future capital expenditure and decommissioning expenditure levels; future net operating costs and G&A costs; future crude oil, natural gas liquids and natural gas prices and differentials between light, medium and heavy oil prices and Canadian, WTI and world oil and natural gas prices; future hedging activities; future crude oil, natural gas liquids and natural gas production levels, including that we will not be required to shut-in production due to low commodity prices or the further deterioration of commodity prices; future exchange rates and interest rates; future debt levels; our ability to execute our capital programs as planned without significant adverse impacts from various factors beyond our control, including extreme weather events, wild fires, infrastructure access (including the potential for blockades or other activism) and delays in obtaining regulatory approvals and third party consents; the ability of the Company's contractual counterparties to perform their contractual obligations; our ability to obtain equipment in a timely manner to carry out development activities and the costs thereof; our ability to market our oil and natural gas successfully to current and new customers; our ability to obtain financing on acceptable terms, including our ability (if necessary) to continue to extend the revolving period and term out period of our credit facility, our ability to maintain the existing borrowing base under our credit facility, our ability (if necessary) to replace our syndicated bank facility and our ability (if necessary) to finance the repayment of our term loan and senior unsecured notes on maturity or pursuant to the terms of the underlying agreements; the accuracy of our estimated reserve volumes; and our ability to add production and reserves through our development and exploitation activities.

in full (including our 3-year growth plan), and the possibility that some or all of the benefits that the Company anticipates will accrue to our Company and our stakeholders as a result of the successful execution of such plans and strategies do not materialize (such as our inability to return capital to shareholder and/or reduce our debt levels to the extent anticipated or at all); the possibility that the Company is unable to complete one or more of the potential transactions being pursued, on favorable terms or at all; the possibility that the Company ceases to qualify for, or does not qualify for, one or more existing or new government assistance programs implemented in connection regional and/or global health related events or otherwise, that the impact of such programs falls below our expectations, that the benefits under one or more of such programs is decreased, or that one or more of such programs is discontinued; the impact on energy demand and commodity prices of regional and/or global health related events (such as the COVID-19 pandemic), and the responses of governments and the public to any pandemic, including the risk of energy demand destruction; the risk that there is another significant decrease in the valuation of oil and natural gas companies and their securities and the decrease in confidence in the oil and natural gas industry generally whether caused by regional and/or global health related events, the worldwide transition towards less reliance on fossil fuels and/or other factors; the risk that the financial capacity of the Company's contractual counterparties is adversely affected and potentially their ability to perform their contractual obligations; the possibility that the revolving period and/or term out period of our credit facility and the maturity date of our term loan and/or senior unsecured notes is not further extended (if necessary), that the borrowing base under our credit facility is reduced, that the Company is unable to renew or refinance our credit facilities on acceptable terms or at all and/or finance the repayment of our term loan and/or senior unsecured notes when they mature on acceptable terms or at all and/or obtain new debt and/or equity financing to replace one or all of our credit facilities, term loan and/or senior unsecured notes; the possibility that we breach one or more of the financial covenants pursuant to our agreements with our lenders and the holders of our senior unsecured notes; the possibility that we are unable to complete the repurchase offer with our noteholders; the possibility that we are forced to shut-in production, whether due to commodity prices failing to rise or other factors; the risk that OPEC and other nations fail to agree on and/or adhere to production quotas from time to time that are sufficient to balance supply and demand fundamentals for crude oil; general economic and political conditions in Canada, the U.S. and globally, and in particular, the effect that those conditions have on commodity prices and our access to capital; the risk that wars and other armed conflicts adversely affect world economies and the demand for oil and natural gas, including the ongoing war between Russian and Ukraine and/or hostilities in the Middle East; industry conditions, including fluctuations in the price of crude oil, natural gas liquids and natural gas, price differentials for crude oil and natural gas produced in Canada as compared to other markets, and transportation restrictions, including pipeline and railway capacity constraints; fluctuations in foreign exchange or interest rates; unanticipated operating events or environmental events that can reduce production or cause production to be shut-in or delayed (including extreme cold during winter months, wild fires and flooding, drought (which could limit our access to the water we require for our operations or extreme warm weather in the spring or summer); the inability to access our properties due to blockades or other activism; the possibility that fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to hydrocarbons and technological advances in fuel economy and renewable energy generation systems could permanently reduce the demand for oil and natural gas and/or permanently impair the Company's ability to obtain financing on acceptable terms or at all, and the possibility that some or all of these risks are heightened as a result of the response of governments and consumers to a regional and/or global pandemic and/or the influence of public opinion and/or special interest groups. Additional information on these and other factors that could affect Obsidian Energy, or its operations or financial results, are included in the Company's Annual Information Form (See "Risk Factors" and "Forward-Looking Statements" therein) which may be accessed through the SEDAR+ website (www.sedarplus.ca), EDGAR website (www.sec.gov) or Obsidian Energy's website. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

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

Obsidian Energy shares are listed on both the Toronto Stock Exchange in Canada and the NYSE American in the United States under the symbol "OBE".

All figures are in Canadian dollars unless otherwise stated.

contact

OBSIDIAN ENERGY

Suite 200, 207 - 9th Avenue SW, Calgary, Alberta T2P 1K3

Phone: 403-777-2500

Toll Free: 1-866-693-2707

Website: www.obsidianenergy.com;

Investor Relations:

Toll Free: 1-888-770-2633

E-mail: investor.relations@obsidianenergy.com

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2024

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) of Obsidian Energy Ltd. (“Obsidian Energy”, the “Company”, “we”, “us”, “our”) should be read in conjunction with the Company's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2024 and the Company’s audited consolidated financial statements and MD&A for the year ended December 31, 2023. The date of this MD&A is October 30, 2024. All dollar amounts contained in this MD&A are expressed in millions of Canadian dollars unless noted otherwise.

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

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

Quarterly Financial Summary

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


	Sep. 30		Jun. 30		Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31		Dec. 31
Three months ended	2024		2024		2024		2023		2023		2023		2023		2022
Production revenues	$	218.2	$	208.4	$	177.3	$	173.3	$	200.4	$	166.0	$	180.9	$	206.5
Cash flow from operating activities		110.3		77.9		58.7		117.7		95.3		67.1		72.6		126.5
Basic per share (1)		1.45		1.02		0.76		1.49		1.18		0.82		0.89		1.54
Diluted per share (1)		1.40		0.98		0.73		1.44		1.15		0.79		0.87		1.50
Funds flow from operations (2)		124.7		115.2		84.4		97.0		98.9		87.4		94.3		110.5
Basic per share (3)		1.64		1.51		1.09		1.23		1.22		1.07		1.15		1.34
Diluted per share (3)		1.58		1.44		1.05		1.18		1.19		1.03		1.12		1.31
Net income		33.2		37.1		11.9		34.3		24.8		18.4		30.5		631.7
Basic per share		0.44		0.48		0.15		0.44		0.31		0.22		0.37		7.69
Diluted per share	$	0.42	$	0.46	$	0.15	$	0.42	$	0.30	$	0.22	$	0.36	$	7.47
Production
Light oil (bbl/d)		13,722		13,782		13,079		12,176		12,452		12,512		12,809		12,105
Heavy oil (bbl/d)		10,624		7,026		6,748		5,851		6,260		5,356		6,241		5,983
NGLs (bbl/d)		3,148		3,193		2,783		2,614		2,708		2,432		2,678		2,520
Natural gas (mmcf/d)		73		71		70		68		69		64		69		67
Total (boe/d)(4)		39,714		35,773		34,238		31,974		32,937		31,042		33,153		31,742

(1)

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

(2)

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

(3)

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

(4)

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


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 1

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


	Three months ended September 30						Nine months ended September 30
(millions, except per share amounts)	2024			2023			2024			2023
Cash flow from operating activities	$	110.3		$	95.3		$	246.9		$	235.0
Change in non-cash working capital		6.1			(3.6	)		49.2			16.7
Decommissioning expenditures		6.3			5.3			20.4			18.9
Onerous office lease settlements		2.2			2.2			6.7			6.7
Settlement of restricted share units		-			0.1			-			4.7
Deferred financing costs		(0.6	)		(0.6	)		(1.8	)		(1.7	)
Transaction costs		-			-			1.4			-
Other expenses (1)		0.4			0.2			1.5			0.3
Funds flow from operations (2)		124.7			98.9			324.3			280.6
Capital expenditures		(85.5	)		(45.9	)		(259.0	)		(192.5	)
Decommissioning expenditures		(6.3	)		(5.3	)		(20.4	)		(18.9	)
Free Cash Flow (2)	$	32.9		$	47.7		$	44.9		$	69.2

Per share – funds flow from operations (3)
Basic per share	$	1.64		$	1.22		$	4.24		$	3.45
Diluted per share	$	1.58		$	1.19		$	4.07		$	3.37

(1)

Excludes the non-cash portion of other expenses.

(2)

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

(3)

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

Cash flow from operating activities and funds flow from operations increased in the 2024 periods compared to the 2023 periods primarily due to higher production revenues, as a result of increased production levels from our active development program and strong drilling results. This was partially offset lower commodity prices and higher transportation costs, as we continue to increase development and production in our Peace River area as part of our 2024-26 growth plan.

Business Strategy

In September 2023, the Company announced a 2024-2026 growth plan with production expected to exceed 50,000 boe/d in 2026. The increase is expected to be driven primarily by the development of our Peace River assets, which are forecasted to more than triple production to 24,000 boe/d in 2026.

Our three-year corporate growth plan forecasts production levels to be maintained in our light oil assets (Willesden Green and Pembina (Cardium) and Viking) and use the significant free cash flow expected to be generated from these assets to fund growth in our heavy oil business at Peace River until it becomes self-sustaining which, subject to commodity prices, is anticipated to be by 2026. Our plan anticipates continued development in both the Bluesky and Clearwater heavy oil formations, with Bluesky production providing the majority of the growth.

In June 2024, the Company closed an asset acquisition ("Peace River Acquisition") to acquire approximately 1,700 boe/d (100 percent oil) of Clearwater production and 148 net sections of land in the Peace River area. Total consideration paid was $80.5 million, inclusive of closing adjustments. This acquisition complemented our existing lands, adding a number of drilling locations and further supports our growth strategy in the Peace River area. The three-year plan allows the Company to focus on growing Peace River production and per share metrics, with potential options to return capital to shareholders and/or reduce debt levels.

In 2023, we began our share buyback program under our normal course issuer bid ("NCIB") and continue to be active in 2024. We have re-purchased and cancelled a total of approximately 8.7 million common shares for total consideration of approximately $82.4 million from the inception of the NCIB in 2023. Purchases under the NCIB are subject to having $65 million of liquidity and complying with the terms of our current credit facilities.


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 2

The Company continues progress on our environmental remediation efforts in 2024 by abandoning and reclaiming inactive fields. Currently, we anticipate spending between $23 - $24 million on our decommissioning expenditures in 2024. In the coming years, the Company will continue to abandon and reclaim inactive fields across our portfolio.

Business Environment

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


	Q3 2024			Q2 2024			Q1 2024			Q4 2023			Q3 2023			Q2 2023			Q1 2023			Q4 2022
Benchmark prices
WTI oil ($US/bbl)	$	75.09		$	80.57		$	76.96		$	78.32		$	82.26		$	73.78		$	76.13		$	82.65
Edm mixed sweet par price (CAD$/bbl)		97.60			105.41			92.21			99.46			107.89			95.12			99.06			110.03
Western Canada Select (CAD$/bbl)		83.80			91.82			77.80			76.76			93.07			78.89			69.44			77.38
NYMEX Henry Hub ($US/mmbtu)		2.16			1.89			2.24			2.88			2.55			2.10			3.42			6.26
AECO 5A Index (CAD$/mcf)		0.69			1.18			2.50			2.30			2.60			2.45			3.22			5.11
Foreign exchange rate ($US/CAD$)		1.37			1.37			1.35			1.36			1.34			1.34			1.35			1.35

Benchmark differentials
WTI - Edm Light Sweet ($US/bbl)		(3.35	)		(3.63	)		(8.65	)		(5.19	)		(1.86	)		(2.96	)		(2.86	)		(1.61	)
WTI - Western Canadian Select Heavy ($US/bbl)		(13.51	)		(13.55	)		(19.33	)		(21.88	)		(12.89	)		(15.04	)		(24.77	)		(25.66	)

Average sales price (1) (2)
Light oil (CAD$/bbl)		100.09			107.61			94.82			100.38			109.56			96.92			101.51			110.45
Heavy oil (CAD$/bbl)		73.73			79.73			60.39			58.53			80.14			61.63			44.98			62.19
NGLs (CAD$/bbl)		48.92			48.92			50.43			55.65			49.71			50.45			59.37			64.33
Total liquids (CAD$/bbl)		84.04			91.64			79.08			82.85			93.40			82.04			80.08			90.80
Natural gas (CAD$/mcf)	$	0.86		$	1.33		$	2.38		$	2.63		$	2.65		$	2.56		$	4.06		$	5.66

(1)

Excludes the impact of realized hedging gains or losses.

(2)

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

Oil

WTI prices averaged US$75.09 per bbl in Q3 2024, with WTI prices starting the quarter just over US$80.00 per bbl in July before decreasing to below US$70.00 per bbl in September. The decline in pricing was mainly due to concerns over slow demand growth in China combined with continued supply availability.

In Q3 2024, WCS differentials averaged US$13.51 per bbl compared to US$13.55 per bbl in Q2 2024. Planned oil sands facility maintenance and inventory declines with the start-up of the TMX pipeline expansion kept differentials relatively consistent quarter-over-quarter. MSW differentials averaged US$3.35 per bbl for Q3 2024 and closed the quarter at US$2.70, the strongest levels experienced in 2024.


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 3

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


Type	Volume (bbls/d)		Remaining Term	Price ($/bbl)
WTI Swap		11,500	October 2024		101.13
WCS Differential		5,250	January 2025 - December 2025		(19.48	)

Natural Gas

In Alberta, AECO 5A prices for Q3 2024 averaged $0.69 per mcf, which was lower than $1.18 per mcf in Q2 2024. High inventory levels exiting the winter heating season at the end of March and strong production continued to increase inventory to record levels and impacted prices throughout the quarter, with AECO 5A settling at an average price of $0.45 per mcf in September. The Company had approximately 67 percent of our production hedged after royalties at a price of $2.52 per mcf to help mitigate against lower prices.

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


Type	Volume (mcf/d)		Remaining Term	Price ($/mcf)
AECO Swap		43,365	October 2024		2.52
AECO Swap		14,929	November 2024 - March 2025		3.74
AECO Collar		4,976	November 2024 - March 2025	3.43 - 4.11
AECO Swap		11,374	April 2025 - October 2025		2.24
AECO Collar		1,896	April 2025 - October 2025	2.11 - 2.64

RESULTS OF OPERATIONS

Average Sales Prices (1)


	Three months ended September 30								Nine months ended September 30
	2024		2023			% change			2024		2023			% change
Light oil (per bbl)	$	100.09	$	109.56			(9	)	$	100.94	$	102.67			(2	)
Heavy oil (per bbl)		73.73		80.14			(8	)		71.78		62.44			15
NGL (per bbl)		48.92		49.71			(2	)		49.38		53.21			(7	)
Total liquids (per bbl)		84.04		93.40			(10	)		84.98		85.25		-
Realized risk management gain (loss) (per bbl)		0.42		(1.03	)	N/A				0.09		(0.30	)	N/A
Total liquids, net (per bbl)		84.46		92.37			(9	)		85.07		84.95		-

Natural gas (per mcf)		0.86		2.65			(68	)		1.51		3.09			(51	)
Realized risk management gain (per mcf)		1.01		0.78			29			0.77		0.69			12
Natural gas net (per mcf)		1.87		3.43			(45	)		2.28		3.78			(40	)

Weighted average (per boe)		59.77		66.29			(10	)		60.34		62.13			(3	)
Realized risk management gain (per boe)		2.16		0.96			125			1.56		1.25			25
Weighted average net (per boe)	$	61.93	$	67.25			(8	)	$	61.90	$	63.38			(2	)

(1)

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


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 4

Production


	Three months ended September 30						Nine months ended September 30
Daily production	2024		2023		% change		2024		2023		% change
Light oil (bbl/d)		13,722		12,452		10		13,528		12,590		7
Heavy oil (bbl/d)		10,624		6,260		70		8,142		5,952		37
NGL (bbl/d)		3,148		2,708		16		3,043		2,606		17
Natural gas (mmcf/d)		73		69		6		71		67		6
Total production (boe/d)		39,714		32,937		21		36,587		32,376		13

In Q3 2024, production levels increased compared to Q3 2023 due to the Company's active development program, strong drilling results and the recent Peace River Acquisition.

During the first nine months of 2024, 64 wells (52.0 net) were brought on production, through operated and non-operated activities, across our Peace River and Cardium areas.

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


	Three months ended September 30							Nine months ended September 30
Daily production (boe/d) (1)	2024		2023		% change			2024		2023		% change
Cardium		25,889		23,403		11			25,219		23,537		7
Peace River		11,175		6,810		64			8,571		6,538		31
Viking		2,345		2,361		(1	)		2,462		1,913		29
Legacy		305		363		(16	)		335		388		(14	)
Total		39,714		32,937		21			36,587		32,376		13

(1)

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

Netbacks


	Three months ended September 30						Nine months ended September 30
(per boe)	2024			2023			2024			2023
Netback:
Sales price (1)	$	59.77		$	66.29		$	60.34		$	62.13
Risk management gain (2)		2.16			0.96			1.56			1.25
Royalties		(7.77	)		(8.93	)		(7.73	)		(8.23	)
Transportation		(4.19	)		(3.69	)		(4.10	)		(3.41	)
Net operating costs (3)		(13.74	)		(13.60	)		(13.82	)		(14.40	)
Netback (3)	$	36.23		$	41.03		$	36.25		$	37.34

	(boe/d)			(boe/d)			(boe/d)			(boe/d)
Production		39,714			32,937			36,587			32,376

(1)

For the three months ended September 30, includes the impact of commodities purchased from and sold to third parties of $0.3 million (2023 – $0.5 million). For the nine months ended September 30, includes the impact of commodities purchased from and sold to third parties of $1.1 million (2023 – $1.9 million). See "Production Revenues" below for a reconciliation of "Sales" to "Production revenues".

(2)

Realized risk management gains on commodity contracts.

(3)

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


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 5

The Company's netback decreased in 2024 from the comparable periods in 2023 primarily due to lower realized oil prices and higher transportation costs associated with our increasing Peace River production. This was partially offset by decreased royalties due to lower commodity prices and realized risk management gains on our commodity contracts in 2024.


	Three months ended September 30						Nine months ended September 30
(millions)	2024			2023			2024			2023
Netback:
Sales (1) (3)	$	218.5		$	200.9		$	605.0		$	549.2
Risk management gain (2)		7.8			2.9			15.6			11.0
Royalties		(28.4	)		(27.1	)		(77.5	)		(72.8	)
Transportation		(15.3	)		(11.2	)		(41.1	)		(30.2	)
Net operating costs (3)		(49.8	)		(41.2	)		(138.1	)		(127.2	)
Netback (3)	$	132.8		$	124.3		$	363.9		$	330.0

(1)

Includes the impact of commodities purchased from and sold to third parties of $0.3 million (2023 – $0.5 million) for Q3 2024 and $1.1 million (2023 - $1.9 million) for the first nine months of 2024. See "Production Revenues" below for a reconciliation of "Sales" to "Production revenues".

(2)

Realized risk management gains on commodity contracts.

(3)

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

Production Revenues

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


	Three months ended September 30						Nine months ended September 30
(millions)	2024			2023			2024			2023
Production revenues	$	218.2		$	200.4		$	603.9		$	547.3
Sales of commodities purchased from third parties		1.1			3.4			6.6			13.3
Less: Commodities purchased from third parties		(0.8	)		(2.9	)		(5.5	)		(11.4	)
Sales (1)		218.5			200.9			605.0			549.2
Realized risk management gain (2)		7.8			2.9			15.6			11.0
Gross revenues (1)	$	226.3		$	203.8		$	620.6		$	560.2

(1)

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

(2)

Relates to realized risk management gains on commodity contracts.

The Company's production revenues and gross revenues were higher in the 2024 periods compared to the 2023 periods, mainly due to higher production volumes from our active development program and Peace River Acquisition and higher realized risk management gains on our commodity contracts. This was partially offset by lower commodity prices in the 2024 periods compared to the 2023 periods.

Change in Gross Revenues (1)


(millions)
Gross revenues – January 1 – September 30, 2023	$	560.2
Increase in liquids production		74.7
Increase in liquids prices		8.5
Increase in natural gas production		3.5
Decrease in natural gas prices		(30.9	)
Increase in realized oil risk management gain		2.4
Increase in realized natural gas risk management gain		2.2
Gross revenues – January 1 – September 30, 2024 (2)	$	620.6

(1)

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

(2)

Excludes processing fees and other income.


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 6

Royalties


	Three months ended September 30						Nine months ended September 30
	2024			2023			2024			2023
Royalties (millions)	$	28.4		$	27.1		$	77.5		$	72.8
Average royalty rate (1)		13	%		13	%		13	%		13	%

(1)

Excludes effects of risk management activities and other income.

For the 2024 periods, absolute royalties increased from the comparable 2023 periods which was largely attributed to our increased production base. The average royalty rate remained flat for the first nine months of 2024 compared to the comparable 2023 period due to new production in 2024 having a lower pre-payout royalty rate.

Expenses


	Three months ended September 30					Nine months ended September 30
(millions)	2024			2023		2024		2023
Net operating (1)	$	49.8		$	41.2	$	138.1	$	127.2
Transportation		15.3			11.2		41.1		30.2
Financing		14.4			13.2		39.2		37.8
Share-based compensation	$	(4.4	)	$	15.0	$	5.5	$	18.1

(1)

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

Operating

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


	Three months ended September 30						Nine months ended September 30
(millions)	2024			2023			2024			2023
Operating costs	$	54.3		$	46.7		$	152.7		$	143.1
Less processing fees		(2.7	)		(3.4	)		(9.5	)		(10.7	)
Less road use recoveries		(2.3	)		(2.1	)		(6.1	)		(5.2	)
Realized power risk management loss		0.5			-			1.0			-
Net operating costs (1)	$	49.8		$	41.2		$	138.1		$	127.2

(1)

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

On an absolute basis, operating costs have increased compared to the 2023 periods mainly due to our higher production base as well as higher trucking costs due to expanded operations in Peace River.

The Company had previously entered into power hedging contracts for 2024 to help minimize our exposure to power pricing volatility and their impact on net operating costs. For the three and nine month periods ended September 30, 2024, the Company recorded a $0.5 million and $1.0 million realized power risk management loss, respectively.

Transportation

The Company continues to utilize multiple sales points in the Peace River area to increase realized prices. New wells drilled in the Peace River area over the past year resulted in higher production and thus higher transportation costs in the 2024 periods compared to the 2023 periods.


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 7

Financing

Financing expense consists of the following:


	Three months ended September 30				Nine months ended September 30
(millions)	2024		2023		2024		2023
Interest	$	9.4	$	7.3	$	23.8	$	21.0
Accretion on decommissioning liability		4.1		4.3		12.4		13.1
Accretion on office lease provision		-		0.3		0.3		0.8
Accretion on discount of senior unsecured notes		0.1		0.2		0.3		0.4
Accretion on lease liabilities		0.2		0.1		0.5		0.3
Loss on repurchased senior unsecured notes		-		0.4		0.1		0.5
Deferred financing costs		0.6		0.6		1.8		1.7
Financing	$	14.4	$	13.2	$	39.2	$	37.8

Obsidian Energy’s debt structure includes short-term borrowings under our syndicated credit facility and term financing through our senior unsecured notes and term loan. Interest charges increased in the 2024 periods compared to the 2023 periods mainly due to higher interest rates and higher debt balances as a result of the Peace River Acquisition.

The Company has a reserve-based syndicated credit facility which is subject to a semi-annual borrowing base redetermination (typically completed in May and November of each year). The aggregate amount available under the syndicated credit facility was $260 million at September 30, 2024 and was increased to $300.0 million in October 2024 with the addition of a new lender in our banking syndicate. The revolving period and maturity dates under the syndicated credit facility are May 31, 2025 and May 31, 2026, respectively.

In Q2 2024, the Company funded a portion of the Peace River Acquisition through a new $50.0 million term loan. The maturity date of the term loan is June 26, 2025 and was provided by certain banks within our banking syndicate. The Company repaid $7.5 million of the term loan in Q3 2024 and subsequent to September 30, 2024, with the increase to our syndicated credit facility, the Company repaid an additional $32.5 million of the term loan resulting in $10.0 million currently being outstanding.

At September 30, 2024, the Company had senior unsecured notes outstanding totaling $114.2 million which mature on July 27, 2027. The senior unsecured notes were initially issued at a price of $980 per $1,000 principal amount resulting in aggregate gross proceeds of $125.0 million and at an interest rate of 11.95 percent. 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, in certain circumstances, to make a repurchase offer at a price of $1,030 per $1,000 principal amount to an aggregate amount, including market purchases, of $63.8 million (the "Repurchase Offer") 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 and projected leverage ratios under the Company's syndicated credit facilities are also required to be met in order to proceed with a Repurchase Offer.

At September 30, 2024, letters of credit totaling $4.4 million were outstanding (December 31, 2023 – $4.9 million) that reduce the amount otherwise available to be drawn on our syndicated credit facility.

Share-Based Compensation

Share-based compensation expense relates to options ("Options") granted under the Company's Stock Option Plan (the “Option Plan”), restricted shares units (“RSUs") granted under the Restricted and Performance Share Unit Plan (“RPSU plan”), restricted awards granted under the Non-Treasury Incentive Award Plan (“NTIP”), deferred share units ("DSUs") granted under the Deferred Share Unit Plan (“DSU plan”) and performance share units (“PSUs”) granted under the RPSU plan.


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 8

Share-based compensation expense consisted of the following:


	Three months ended September 30					Nine months ended September 30
(millions)	2024			2023		2024			2023
DSUs	$	(5.1	)	$	6.6	$	(2.5	)	$	4.5
PSUs		(1.8	)		5.3		-			5.8
NTIP		-			1.2		1.1			1.8
Liability based incentive plans	$	(6.9	)	$	13.1	$	(1.4	)	$	12.1

RSUs	$	1.9		$	1.6	$	5.3		$	5.1
Options		0.6			0.3		1.6			0.9
Equity based incentive plans		2.5			1.9		6.9			6.0
Share-based compensation	$	(4.4	)	$	15.0	$	5.5		$	18.1

The change in share price at the balance sheet date results in a mark-to-market valuation which is used to calculate the PSU, DSU and NTIP future obligations. On September 30, 2024, the Company's share price closed at $7.51 per share (2023 - $11.18 per share) on the Toronto Stock Exchange and on June 30, 2024 closed at $10.24 per share (2023 - $7.75 per share). The reduction in our share price in Q3 2024 is the primary reason for the decrease in the share based compensation expense compared to the applicable periods in 2023.

General and Administrative Expenses ("G&A")


	Three months ended September 30				Nine months ended September 30
(millions, except per boe amounts)	2024		2023		2024		2023
Gross	$	10.0	$	9.1	$	30.6	$	28.1
Per boe (1)		2.75		3.00		3.06		3.18
Net (2)		5.0		4.6		15.4		14.6
Per boe (1)	$	1.37	$	1.51	$	1.53	$	1.65

(1)

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

(2)

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

The Company increased staffing levels in 2024 to align with our higher activity level and expanded capital program under our 2024-26 growth plan which has contributed to higher absolute G&A costs in the 2024 periods compared to the 2023 periods.

The higher production levels resulted in lower per boe G&A metrics in the 2024 periods compared to the 2023 periods.

Depletion, Depreciation and Impairment


	Three months ended September 30				Nine months ended September 30
(millions)	2024		2023		2024		2023
Depletion and depreciation (“D&D”)	$	67.4	$	54.7	$	181.7	$	157.2

PP&E Impairment	$	1.7	$	0.3	$	4.2	$	0.8

The Company’s D&D expense increased in the 2024 periods from the 2023 periods, primarily due to higher production levels.

For the first nine months of 2024, we recorded a $4.2 million (2023 - $0.8 million) impairment in our Legacy cash generating unit ("CGU") due to decommissioning spending in the area. The Legacy CGU has no recoverable amount, as such changes in our decommissioning liability are expensed each period.


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 9

Taxes


	Three months ended September 30				Nine months ended September 30
(millions)	2024		2023		2024		2023
Deferred income tax expense	$	9.5	$	7.9	$	25.5	$	23.8

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

Net Income


	Three months ended September 30				Nine months ended September 30
(millions, except per share amounts)	2024		2023		2024		2023
Net income	$	33.2	$	24.8	$	82.2	$	73.7
Basic per share		0.44		0.31		1.07		0.91
Diluted per share	$	0.42	$	0.30	$	1.03	$	0.89

Net income was higher in the 2024 periods as a result of the Company's higher production revenues due to increased production and lower share-based compensation expenses. This was partially offset by our higher depletion, transportation and operating expenses.

Capital Expenditures


	Three months ended September 30					Nine months ended September 30
(millions)	2024		2023			2024		2023
Drilling and completions	$	62.8	$	25.4		$	191.8	$	114.2
Well equipping and facilities		22.6		20.9			66.5		75.5
Land and geological/geophysical		-		-			-		1.9
Corporate		0.1		(0.4	)		0.7		0.9
Capital expenditures	$	85.5	$	45.9		$	259.0	$	192.5
Property acquisitions, net		-		0.5			84.9		0.6
Total	$	85.5	$	46.4		$	343.9	$	193.1

Capital expenditures in Q3 2024 were higher than Q3 2023 as the Company began our active second half 2024 development program with rigs running in our Peace River and Cardium plays. For the first nine months of 2024, capital expenditures increased compared to 2023 as we accelerated development in our Peace River asset as part of our 2024-26 growth plan. During the first nine months of 2024, 64 (52.0 net) wells were brought on production, including operated and non-operated activities, which included 39 (27.0 net) wells in the Cardium and 25 (25.0 net) wells in Peace River.

Peace River Acquisition

In June 2024, the Company closed an asset acquisition to acquire Clearwater production of approximately 1,700 boe/d (100 percent oil, based on April 2024 production) and 148 net sections of land in the Peace River area, for total consideration of $80.5 million, including closing adjustments. The Company funded the transaction through a $50.0 million term loan with the remainder drawn on our syndicated credit facility.


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 10

Drilling


	Nine months ended September 30
	2024				2023
(number of wells)	Gross		Net		Gross		Net
Oil		59		51		44		36
Gas		4		1		-		-
Injectors, stratigraphic and service		7		6		6		5
Total		70		58		50		41

The Company drilled 52 (51.3 net) operated wells during the first nine months of 2024. In addition, the Company had non-operated working interests in 18 (6.3 net) wells that were drilled by various partners during the period.

Environmental and Climate Change

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

Obsidian Energy monitors our operations for environmental impacts and allocates capital to reclamation and other activities to help mitigate the impact on the areas in which the Company operates. The Company follows the Alberta Energy Regulator ("AER") guidance under Directive 088 where a minimum amount of spending is required to abandon inactive sites. Currently, we anticipate spending between $23 - $24 million on our decommissioning expenditures in 2024. The AER is in the process of updating their Liability Management Framework which may impact our decommissioning spending target and our decommissioning liability once finalized.

Liquidity and Capital Resources

Net Debt

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


	As at
(millions)	September 30, 2024			December 31, 2023
Long-term debt
Syndicated credit facility	$	189.5		$	107.5
Senior unsecured notes		114.2			117.4
Term loan		42.5			-
Unamortized discount of senior unsecured notes		(1.2	)		(1.6	)
Deferred financing costs		(2.9	)		(3.3	)
Total		342.1			220.0

Working capital deficiency
Cash		(0.9	)		(0.5	)
Accounts receivable		(87.8	)		(70.0	)
Prepaid expenses and other		(17.3	)		(12.8	)
Accounts payable and accrued liabilities		177.5			193.5
Total		71.5			110.2

Net debt (1)	$	413.6		$	330.2

(1)

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


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 11

Net debt increased compared to December 31, 2023, mainly due to the funding of our Peace River Acquisition through our term loan and syndicated credit facility.

Liquidity

The Company currently has a reserve-based syndicated credit facility with a borrowing limit of $300.0 million with a revolving period to May 31, 2025 and a term out period to May 31, 2026. Additionally, on September 30, 2024 a $42.5 million term loan due in June 2025 and $114.2 million senior unsecured notes due in July 2027 were outstanding. Subsequent to September 30, 2024, with the increase to our syndicated credit facility, the Company repaid an additional $32.5 million of the term loan resulting in $10.0 million currently being outstanding. For further details on the Company’s debt instruments please refer to the “Financing” section of this MD&A.

The Company actively manages our debt portfolio and considers opportunities to reduce or diversify our debt capital structure. Management contemplates both operating and financial risks and takes action as appropriate to limit the Company’s exposure to certain risks. Management maintains close relationships with the Company’s lenders and agents to monitor credit market developments. These actions and plans aim to increase the likelihood of maintaining the Company’s financial flexibility and an appropriate capital program, supporting the Company’s ongoing operations and ability to execute longer-term business strategies.

Financial Instruments

Obsidian Energy had the following financial instruments outstanding as at September 30, 2024. 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 Volume	Remaining Term	Price	Fair value (millions)
Oil
WCS Differential	3,750 bbl/d	January 2025 - December 2025	($19.83)/bbl	$	(1.5	)

AECO
AECO Swap	43,365 mcf/d	October 2024	$2.52/mcf		2.6
AECO Swap	14,929 mcf/d	November 2024 - March 2025	$3.74/mcf		3.2
AECO Collar	4,976 mcf/d	November 2024 - March 2025	$3.43/mcf - $4.11/mcf		0.9
AECO Swap	3,791 mcf/d	April 2025 - October 2025	$2.14/mcf		(0.1	)

Electricity
Power Swap	144 MWh/d	October - December 2024	$92.83/MWh		(0.6	)

Total				$	4.5

Refer to the Business Environment section above for a full list of hedges currently outstanding including contracts that were entered into subsequent to September 30, 2024.

Based on commodity prices and contracts in place at September 30, 2024, the Company notes the following sensitivities:

•

a $1.00 change in the price per barrel of liquids would change pre-tax unrealized risk management by $1.4 million;

•

a $0.10 change in the price per mcf of natural gas would change pre-tax unrealized risk management by $0.9 million; and

•

a $1.00 change in the price per MWh of electricity would have an insignificant change to pre-tax unrealized risk management.


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 12

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


	Three months ended September 30						Nine months ended September 30
(millions)	2024			2023			2024			2023
Realized
Settlement of oil contracts gain (loss)	$	1.0		$	(2.1	)	$	0.6		$	(1.8	)
Settlement of natural gas contracts gain		6.8			5.0			15.0			12.8
Total realized risk management gain	$	7.8		$	2.9		$	15.6		$	11.0

Unrealized
Oil contracts gain (loss)	$	(1.4	)	$	0.9		$	(1.5	)	$	-
Natural gas contracts loss		(4.5	)		(4.1	)		(5.7	)		(2.9	)
Total unrealized risk management loss		(5.9	)		(3.2	)		(7.2	)		(2.9	)
Risk management gain (loss)	$	1.9		$	(0.3	)	$	8.4		$	8.1

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


	Three months ended September 30						Nine months ended September 30
(millions)	2024			2023			2024			2023
Realized
Settlement of electricity contracts loss	$	(0.5	)	$	-		$	(1.0	)	$	-
Total realized risk management loss	$	(0.5	)	$	-		$	(1.0	)	$	-

Unrealized
Electricity contracts gain (loss)	$	0.3		$	(0.4	)	$	(0.1	)	$	(0.4	)
Total unrealized risk management gain (loss)		0.3			(0.4	)		(0.1	)		(0.4	)
Risk management loss	$	(0.2	)	$	(0.4	)	$	(1.1	)	$	(0.4	)

Sensitivity Analysis

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


	Impact on funds flow from operations (1)
Change of:	Change			$ millions		$/share
WTI - Price per barrel of liquids	WTI US$1.00				13.1		0.18
WCS - Price per barrel of liquids	WCS US$1.00				7.1		0.09
Liquids production	1,000 bbl/day				21.9		0.29
Price per mcf of natural gas	AECO $0.10				1.6		0.02
Natural gas production	1 mmcf/day				0.7		0.01
Effective interest rate		1	%		2.2		0.03
Exchange rate ($US per $CAD)	$	0.01			6.0		0.08

(1)

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


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 13

Contractual Obligations and Commitments

As at September 30, 2024, Obsidian Energy was committed to certain payments over the next five calendar years and thereafter as follows:


	2024		2025		2026		2027		2028		Thereafter		Total
Long-term debt (1)	$	-	$	42.5	$	189.5	$	114.2	$	-	$	-	$	346.2
Transportation		2.2		7.6		6.1		4.6		3.7		7.7		31.9
Interest obligations		4.6		30.1		19.6		13.7		-		-		68.0
Office lease (existing)		2.5		0.8		-		-		-		-		3.3
Lease liability (2)		0.5		2.3		2.0		1.4		0.7		4.8		11.7
Decommissioning liability (3)		6.3		21.8		20.2		18.7		17.4		79.2		163.6
Total	$	16.1	$	105.1	$	237.4	$	152.6	$	21.8	$	91.7	$	624.7

(1)

The 2025 figure includes our term loan balance that was outstanding on September 30, 2024 and due in June 2025 ($32.5 million of which was repaid subsequent to September 30, 2024). The 2026 figure includes our syndicated credit facility which has a term-out date of May 2026. The 2027 figure includes our senior unsecured notes due in July 2027. Refer to the Financing section above for further details. Historically, the Company has successfully renewed our syndicated credit facility.

(2)

Includes the Company's new office lease beginning in 2025.

(3)

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

At September 30, 2024, the Company had an aggregate of $114.2 million in senior unsecured notes maturing in July 2027, a $42.5 million term loan maturing in June 2025 (which was reduced to $10 million subsequent to the end of the quarter) and the revolving period of our syndicated credit facility is May 31, 2025, with a term out period to May 31, 2026. In the future, if the Company is unsuccessful in renewing or replacing the syndicated credit facility or obtaining alternate funding for some or all of the maturing amounts of the term loan and the senior unsecured notes, it is possible that we could be required to seek other sources of financing, including other forms of debt or equity arrangements if available. Please see the Financing section of this MD&A for further details regarding our outstanding debt instruments.

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

Equity Instruments


Common shares issued:
As at September 30, 2024	75,254,016
Repurchase and cancellation of common shares	(782,748	)
As at October 30, 2024	74,471,268

Options outstanding:
As at September 30, 2024 and October 30, 2024	2,283,195

RSUs outstanding:
As at September 30, 2024	1,588,583
Forfeited	(16,902	)
As at October 30, 2024	1,571,681


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 14

Supplemental Production Disclosure

Outlined below is production by product type for each area and in total for the three and nine months ended September 30, 2024 and 2023.


	Three months ended September 30				Nine months ended September 30
Daily production (boe/d)	2024		2023		2024		2023
Cardium
Light oil (bbl/d)		12,240		10,798		11,856		11,299
Heavy oil (bbl/d)		68		38		61		32
NGLs (bbl/d)		3,044		2,623		2,943		2,524
Natural gas (mmcf/d)		63		60		62		58
Total production (boe/d)		25,889		23,403		25,219		23,537

Peace River
Light oil (bbl/d)		-		-		-		-
Heavy oil (bbl/d)		10,413		6,070		7,948		5,770
NGLs (bbl/d)		10		7		11		10
Natural gas (mmcf/d)		5		4		4		5
Total production (boe/d)		11,175		6,810		8,571		6,538

Viking
Light oil (bbl/d)		1,426		1,564		1,608		1,195
Heavy oil (bbl/d)		98		113		93		110
NGLs (bbl/d)		72		71		64		54
Natural gas (mmcf/d)		4		4		4		3
Total production (boe/d)		2,345		2,361		2,462		1,913

Legacy
Light oil (bbl/d)		56		90		64		96
Heavy oil (bbl/d)		45		39		40		40
NGLs (bbl/d)		22		7		25		18
Natural gas (mmcf/d)		1		1		1		1
Total production (boe/d)		305		363		335		388

Total
Light oil (bbl/d)		13,722		12,452		13,528		12,590
Heavy oil (bbl/d)		10,624		6,260		8,142		5,952
NGLs (bbl/d)		3,148		2,708		3,043		2,606
Natural gas (mmcf/d)		73		69		71		67
Total production (boe/d)		39,714		32,937		36,587		32,376


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 15

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


	Sep. 30			Jun. 30			Mar. 31			Dec. 31			Sep. 30			Jun. 30			Mar. 31			Dec. 31
Three months ended	2024			2024			2024			2023			2023			2023			2023			2022
Cash flow from operating activities	$	110.3		$	77.9		$	58.7		$	117.7		$	95.3		$	67.1		$	72.6		$	126.5
Change in non-cash working capital		6.1			29.7			13.4			(30.3	)		(3.6	)		13.7			6.6			(20.9	)
Decommissioning expenditures		6.3			4.0			10.1			7.7			5.3			4.9			8.7			3.0
Onerous office lease settlements		2.2			2.2			2.3			2.3			2.2			2.2			2.3			2.3
Settlement of restricted share units		-			-			-			0.1			0.1			-			4.6			-
Deferred financing costs		(0.6	)		(0.6	)		(0.6	)		(0.6	)		(0.6	)		(0.6	)		(0.5	)		(0.4	)
Transaction costs		-			1.4			-			-			-			-			-			-
Other expenses (1)		0.4			0.6			0.5			0.1			0.2			0.1			-			-
Funds flow from operations	$	124.7		$	115.2		$	84.4		$	97.0		$	98.9		$	87.4		$	94.3		$	110.5

(1)

Excludes the non-cash portion of restructuring and other expenses.

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

Obsidian Energy’s senior management has evaluated whether there were any changes in the Company's ICFR that occurred during the period beginning on July 1, 2024 and ending on September 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company's ICFR. No changes to the Company’s ICFR were made during the quarter.

Off-Balance-Sheet Financing

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

Non-GAAP and Other Financial Measures

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

Non-GAAP Financial Measures

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

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

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


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 16

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

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

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

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

Non-GAAP Financial Ratios

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

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

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

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

Supplementary Financial Measures

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

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


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 17

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

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

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

Oil and Natural Gas Information

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

Abbreviations


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

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

Forward-Looking Statements

Certain statements contained in this document constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of the "safe harbour" provisions of applicable securities legislation. In particular, this document contains forward-looking statements pertaining to, without limitation, the following: our three-year growth plan, including expected production thereunder, the expected development and production increase of our Peace River assets, our plan to maintain production levels in our light oil assets and use the significant free cash flow expected to be generated from these assets to fund growth in our heavy oil business at Peace River until it becomes self-sustaining and the anticipated timing thereof, the continued development of both the Bluesky and Clearwater heavy oil formations, and options to return capital to shareholders and/or further reduce debt levels in connection therewith; our expectations for the NCIB in 2024; our environmental remediation efforts, including anticipated spending in 2024 and our continued focus on abandoning and reclaiming inactive fields across our portfolio; our hedges; our expectations for sales points in the Peace River area; our expectations in connection with taxable profits; the terms and conditions under our syndicated credit facility, term loan and senior unsecured notes and our expectations if the Company is unsuccessful in renewing or replacing them in the future; our expectations in connection with compliance with environmental legislation; how we plan to manage our debt portfolio; all information disclosed under "Sensitivity Analysis"; our future payment obligations as disclosed under "Contractual Obligations and Commitments"; that management contemplates both operating and financial risks and takes action as appropriate to limit the Company’s exposure to certain risks and that management maintains close relationships with the Company's lenders and agents to monitor credit market developments, and these actions and plans aim to increase the likelihood of maintaining the Company's financial flexibility and capital program.


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 18

royalties or other interests therein (except as disclosed herein); that regional and/or global health related events will not have any adverse impact on energy demand and commodity prices in the future; global energy policies going forward, including the continued ability and willingness of members of OPEC and other nations to agree on and adhere to production quotas from time to time; our ability to qualify for (or continue to qualify for) new or existing government programs, and obtain financial assistance therefrom, and the impact of those programs on our financial condition; our ability to execute our plans as described herein and in our other disclosure documents, including our three-year growth plan, and the impact that the successful execution of such plans will have on our Company and our stakeholders, including our ability to return capital to shareholders and/or further reduce debt levels; future capital expenditure and decommissioning expenditure levels; expectations and assumptions concerning applicable laws and regulations, including with respect to environmental, safety and tax matters; future operating costs and G&A costs and the impact of inflation thereon; future oil, natural gas liquids and natural gas prices and differentials between light, medium and heavy oil prices and Canadian, WTI and world oil and natural gas prices; future hedging activities; future oil, natural gas liquids and natural gas production levels; future exchange rates, interest rates and inflation rates; future debt levels; our ability to execute our capital programs as planned without significant adverse impacts from various factors beyond our control, including extreme weather events such as wild fires, flooding and drought, infrastructure access (including the potential for blockades or other activism) and delays in obtaining regulatory approvals and third party consents; our ability to obtain equipment in a timely manner to carry out development activities and the costs thereof; our ability to market our oil and natural gas successfully to current and new customers; our ability to obtain financing on acceptable terms, including our ability (if necessary) to extend the revolving period and term out period of our credit facility, our ability to maintain the existing borrowing base under our credit facility, our ability (if necessary) to replace our syndicated bank facility and our ability (if necessary) to finance the repayment of our term loan and senior unsecured notes on maturity or pursuant to the terms of the underlying agreements; the accuracy of our estimated reserve volumes; and our ability to add production and reserves through our development and exploitation activities.

Although the Company believes that the expectations reflected in the forward-looking statements contained in this document, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the forward-looking statements contained herein will not be correct, which may cause our actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things: the possibility that we change our budgets (including our capital expenditure budgets) in response to internal and external factors, including those described herein; the possibility that the Company will not be able to continue to successfully execute our business plans and strategies in part or in full (including our three-year growth plan), and the possibility that some or all of the benefits that the Company anticipates will accrue to our Company and our stakeholders as a result of the successful execution of such plans and strategies do not materialize (such as our inability to return capital to shareholders and/or reduce debt levels to the extent anticipated or at all); the possibility that the Company ceases to qualify for, or does not qualify for, one or more existing or new government assistance programs, that the impact of such programs falls below our expectations, that the benefits under one or more of such programs is decreased, or that one or more of such programs is discontinued; the impact on energy demand and commodity prices of regional and/or global health related events, including any resurgence of the COVID-19 pandemic, and the responses of governments and the public thereto, including the risk that the amount of energy demand destruction and/or the length of the decreased demand exceeds our expectations; the risk that there is another significant decrease in the valuation of oil and natural gas companies and their securities and in confidence in the oil and natural gas industry generally, whether caused by a resurgence of the COVID-19 pandemic or other regional and/or global pandemic, the worldwide transition towards less reliance on fossil fuels and/or other factors; the risk that the financial capacity of the Company's contractual counterparties is adversely affected and potentially their ability to perform their contractual obligations; the possibility that the revolving period and/or term out period of our credit facility and the maturity date of our term loan and/or senior unsecured notes is not extended (if necessary), that the borrowing base under our credit facility is reduced, that the Company is unable to renew or refinance our credit facilities on acceptable terms or at all and/or finance the repayment of our term loan and/or senior unsecured notes when they mature on acceptable terms or at all and/or obtain new debt and/or equity financing to replace our credit facilities, term loan and/or senior unsecured notes or to fund other activities; the possibility that we are unable to complete one or more Repurchase Offers when otherwise required to do so; the


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 19

possibility that we are forced to shut-in production, whether due to commodity prices decreasing, extreme weather events such as wild fires, inability to access our properties due to blockades or other activism, or other factors; the risk that OPEC and other nations fail to agree on and/or adhere to production quotas from time to time that are sufficient to balance supply and demand fundamentals for oil; general economic and political conditions in Canada, the U.S. and globally, and in particular, the effect that those conditions have on commodity prices and our access to capital; industry conditions, including fluctuations in the price of oil, natural gas liquids and natural gas, price differentials for oil and natural gas produced in Canada as compared to other markets, and transportation restrictions, including pipeline and railway capacity constraints; fluctuations in foreign exchange, including the impact of the Canadian/U.S. dollar exchange rate on our revenues and expenses; fluctuations in interest rates; the risk that our costs increase significantly due to high levels of inflation, supply chain disruptions, scarcity of labour and/or other factors, adversely affecting our profitability; unanticipated operating events or environmental events that can reduce production or cause production to be shut-in or delayed (including extreme cold during winter months, wild fires, flooding and droughts (which could limit our access to the water we require for our operations)); the risk that wars and other armed conflicts adversely affect world economies and the demand for oil and natural gas, including the ongoing war between Russian and Ukraine and/or hostilities in the Middle East; the possibility that fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to hydrocarbons, government mandates requiring the sale of electric vehicles and/or electrification of the power grid, and technological advances in fuel economy and renewable energy generation systems could permanently reduce the demand for oil and natural gas and/or permanently impair the Company's ability to obtain financing and/or insurance on acceptable terms or at all, and the possibility that some or all of these risks are heightened as a result of the response of governments, financial institutions and consumers to a regional and/or global pandemic and/or the influence of public opinion and/or special interest groups; and the other factors described under "Risk Factors" in our Annual Information Form and described in our public filings, available in Canada at www.sedarplus.ca and in the United States at www.sec.gov. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

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

Additional Information

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


OBSIDIAN ENERGY THIRD QUARTER 2024	MANAGEMENT’S DISCUSSION AND ANALYSIS 20

Exhibit 99.3

Obsidian Energy Ltd.

Consolidated Balance Sheets


		As at
(CAD millions, unaudited)	Note	September 30, 2024			December 31, 2023
Assets
Current
Cash		$	0.9		$	0.5
Accounts receivable			87.8			70.0
Risk management	7		6.7			11.3
Prepaid expenses and other			17.3			12.8
			112.7			94.6
Non-current
Property, plant and equipment	3		2,101.8			1,944.0
Risk management	7		-			1.0
Deferred income tax	11		185.3			210.8
			2,287.1			2,155.8
Total assets		$	2,399.8		$	2,250.4

Liabilities and Shareholders’ Equity
Current
Accounts payable and accrued liabilities		$	177.5		$	193.5
Current portion of long-term debt	4		42.5			2.0
Current portion of lease liabilities	5		2.2			1.9
Current portion of provisions	6		25.7			32.1
Risk management	7		1.8			0.5
			249.7			230.0
Non-current
Long-term debt	4		299.6			218.0
Lease liabilities	5		5.6			6.1
Provisions	6		140.9			149.9
Other non-current liabilities			0.9			2.6
Risk management	7		0.4			-
			697.1			606.6
Shareholders’ equity
Shareholders’ capital	9		2,148.6			2,175.1
Other reserves			107.3			104.1
Deficit			(553.2	)		(635.4	)
			1,702.7			1,643.8
Total liabilities and shareholders’ equity		$	2,399.8		$	2,250.4

Subsequent events (Note 4, 7 and 9)

Commitments and contingencies (Note 12)

See accompanying notes to the unaudited interim consolidated financial statements.


OBSIDIAN ENERGY THIRD QUARTER 2024	INTERIM CONSOLIDATED FINANCIAL STATEMENTS 1

Obsidian Energy Ltd.

Consolidated Statements of Income


		Three months ended September 30						Nine months ended September 30
(CAD millions, except per share amounts, unaudited)	Note	2024			2023			2024			2023

Production revenues	8	$	218.2		$	200.4		$	603.9		$	547.3
Processing fees	8		2.7			3.4			9.5			10.7
Royalties			(28.4	)		(27.1	)		(77.5	)		(72.8	)
Sales of commodities purchased from third parties			1.1			3.4			6.6			13.3
			193.6			180.1			542.5			498.5

Other income	8		2.3			2.1			6.1			5.2
Government decommissioning assistance			-			-			-			(0.4	)
Risk management gain (loss)	7		1.9			(0.3	)		8.4			8.1
			197.8			181.9			557.0			511.4

Expenses
Operating			54.3			46.7			152.7			143.1
Transportation			15.3			11.2			41.1			30.2
Commodities purchased from third parties			0.8			2.9			5.5			11.4
General and administrative			5.0			4.6			15.4			14.6
Share-based compensation	10		(4.4	)		15.0			5.5			18.1
Depletion, depreciation and impairment	3		69.1			55.0			185.9			158.0
Financing	4		14.4			13.2			39.2			37.8
Risk management loss	7		0.2			0.4			1.1			0.4
Transaction costs	3		-			-			1.4			-
Other			0.4			0.2			1.5			0.3
			155.1			149.2			449.3			413.9
Income before taxes			42.7			32.7			107.7			97.5

Deferred income tax	11		9.5			7.9			25.5			23.8

Net and comprehensive income		$	33.2		$	24.8		$	82.2		$	73.7

Net income per share
Basic		$	0.44		$	0.31		$	1.07		$	0.91
Diluted		$	0.42		$	0.30		$	1.03		$	0.89
Weighted average shares outstanding (millions)
Basic	9		75.9			80.9			76.5			81.2
Diluted	9		79.0			83.0			79.8			83.3

See accompanying notes to the unaudited interim consolidated financial statements.


OBSIDIAN ENERGY THIRD QUARTER 2024	INTERIM CONSOLIDATED FINANCIAL STATEMENTS 2

Obsidian Energy Ltd.

Consolidated Statements of Cash Flows


		Three months ended September 30						Nine months ended September 30
(CAD millions, unaudited)	Note	2024			2023			2024			2023

Operating activities
Net income		$	33.2		$	24.8		$	82.2		$	73.7
Depletion, depreciation and impairment	3		69.1			55.0			185.9			158.0
Financing	4		5.0			6.1			15.4			16.8
Share-based compensation	10		2.5			1.9			6.9			6.0
Unrealized risk management loss	7		5.6			3.6			7.3			3.3
Deferred income tax	11		9.5			7.9			25.5			23.8
Government decommissioning assistance			-			-			-			0.4
Decommissioning expenditures	6		(6.3	)		(5.3	)		(20.4	)		(18.9	)
Onerous office lease settlements	6		(2.2	)		(2.2	)		(6.7	)		(6.7	)
Settlement of RSUs			-			(0.1	)		-			(4.7	)
Change in non-cash working capital			(6.1	)		3.6			(49.2	)		(16.7	)
			110.3			95.3			246.9			235.0
Investing activities
Capital expenditures	3		(85.5	)		(45.9	)		(259.0	)		(192.5	)
Property acquisitions	3		-			(0.5	)		(84.9	)		(0.6	)
Change in non-cash working capital			21.1			12.8			8.7			(16.8	)
			(64.4	)		(33.6	)		(335.2	)		(209.9	)
Financing activities
Increase (decrease) in long-term debt	4		(28.0	)		(40.0	)		82.0			13.0
Issuance of term loan	4		-			-			50.0			-
Repayment of term loan	4		(7.5	)		-			(7.5	)		-
Repayment of senior unsecured notes	4		-			(5.7	)		(3.2	)		(9.3	)
Financing fees paid			-			-			(1.4	)		(0.8	)
Lease liabilities settlements	5		(0.5	)		(1.1	)		(1.5	)		(3.3	)
Exercised compensation plans			-			0.3			(1.2	)		0.3
Repurchase of common shares	9		(9.3	)		(14.4	)		(28.5	)		(24.9	)
			(45.3	)		(60.9	)		88.7			(25.0	)

Change in cash and cash equivalents			0.6			0.8			0.4			0.1
Cash and cash equivalents, beginning of period			0.3			0.1			0.5			0.8
Cash and cash equivalents, end of period		$	0.9		$	0.9		$	0.9		$	0.9

Supplementary information
Cash interest paid		$	12.6		$	11.1		$	27.0		$	24.9

See accompanying notes to the unaudited interim consolidated financial statements.


OBSIDIAN ENERGY THIRD QUARTER 2024	INTERIM CONSOLIDATED FINANCIAL STATEMENTS 3

Obsidian Energy Ltd.

Statements of Changes in Shareholders’ Equity


(CAD millions, unaudited)	Note	Shareholders’ Capital			Other Reserves			Deficit			Total
Balance at January 1, 2024		$	2,175.1		$	104.1		$	(635.4	)	$	1,643.8
Net and comprehensive income			-			-			82.2			82.2
Share-based compensation	10		-			6.9			-			6.9
Issued on exercise of equity compensation plans	9		2.5			(3.7	)		-			(1.2	)
Repurchase of shares for cancellation	9		(28.5	)		-			-			(28.5	)
Tax on repurchases of common shares	9		(0.5	)		-			-			(0.5	)
Balance at September 30, 2024		$	2,148.6		$	107.3		$	(553.2	)	$	1,702.7


(CAD millions, unaudited)	Note	Shareholders’ Capital			Other Reserves			Deficit			Total
Balance at January 1, 2023		$	2,221.9		$	101.2		$	(743.4	)	$	1,579.7
Net and comprehensive income			-			-			73.7			73.7
Share-based compensation	10		-			6.0			-			6.0
Issued on exercise of equity compensation plans	9		0.5			(4.9	)		-			(4.4	)
Repurchase of shares for cancellation	9		(24.9	)		-			-			(24.9	)
Balance at September 30, 2023		$	2,197.5		$	102.3		$	(669.7	)	$	1,630.1

See accompanying notes to the unaudited interim consolidated financial statements.


OBSIDIAN ENERGY THIRD QUARTER 2024	INTERIM CONSOLIDATED FINANCIAL STATEMENTS 4

Notes to the Unaudited Interim Consolidated Financial Statements

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

1. Structure of Obsidian Energy

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

2. Basis of presentation and statement of compliance

a) Basis of Presentation

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

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

b) Statement of Compliance

These interim consolidated financial statements are prepared in compliance with IAS 34 “Interim Financial Reporting” and accordingly do not contain all of the disclosures included in Obsidian Energy’s annual audited consolidated financial statements. These financial statements should be read in conjunction with Obsidian Energy’s audited annual consolidated financial statements as at and for the year ended December 31, 2023. Except as noted below, these interim consolidated financial statements were prepared using the same accounting policies as in the annual consolidated financial statements as at and for the year ended December 31, 2023. The International Accounting Standards Board issued amendments to IAS 1 "Presentation of financial statements" regarding the classification of liabilities as current or non-current which was effective for annual periods beginning on or after January 1, 2024. The amendment clarifies that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period. These amendments to IAS 1 did not have a material impact on the Company's financial statements.

All tabular amounts are in millions of Canadian dollars, except numbers of common shares, per share amounts, percentages and other figures as noted.

These interim consolidated financial statements were approved for issuance by the Board of Directors on October 30, 2024.


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 5

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

Oil and Gas assets/ Facilities, Corporate assets


Cost	Nine months ended September 30, 2024			Year ended December 31, 2023
Balance, beginning of period	$	11,223.8		$	10,931.7
Capital expenditures		259.0			292.5
Property acquisitions		84.9			0.6
Net decommissioning changes		(1.0	)		(1.0	)
Balance, end of period	$	11,566.7		$	11,223.8


Accumulated depletion and depreciation	Nine months ended September 30, 2024		Year ended December 31, 2023
Balance, beginning of period	$	9,287.0	$	9,079.4
Depletion and depreciation		180.3		204.9
Impairment		4.2		2.7
Balance, end of period	$	9,471.5	$	9,287.0


			As at
Net book value	September 30, 2024		December 31, 2023
Total	$	2,095.2	$	1,936.8

Right-of-use assets

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


Cost	Nine months ended September 30, 2024		Year ended December 31, 2023
Balance, beginning of period	$	31.1	$	25.8
Additions		0.8		5.3
Balance, end of period	$	31.9	$	31.1


Accumulated amortization	Nine months ended September 30, 2024		Year ended December 31, 2023
Balance, beginning of period	$	23.9	$	20.5
Amortization		1.4		3.4
Balance, end of period	$	25.3	$	23.9


			As at
Net book value	September 30, 2024		December 31, 2023
Total	$	6.6	$	7.2

Total PP&E

Total PP&E including Oil and Gas assets/Facilities, Corporate assets and Right-of-use assets is as follows:


			As at
PP&E	September 30, 2024		December 31, 2023
Oil and Gas assets/Facilities, Corporate assets	$	2,095.2	$	1,936.8
Right-of-use assets		6.6		7.2
Total	$	2,101.8	$	1,944.0

At September 30, 2024, the Company completed an assessment to determine if indicators of impairment or an impairment reversal were present. No indicators were noted for our Cardium, Peace River and Viking cash generating units ("CGUs").


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 6

During the first nine months of 2024, we recorded a $4.2 million impairment (2023 - $0.8 million) in our Legacy CGU due to decommissioning spending in the area. The Legacy CGU has no recoverable amount, as such changes in our decommissioning liability are expensed each period.

Peace River Acquisition

On June 26, 2024 the Company closed an asset acquisition, which included production and land in the Peace River area, for total consideration of $80.5 million, including closing adjustments (the "Peace River Acquisition"). The Company funded the transaction through a $50.0 million term loan with the remainder drawn on our syndicated credit facility.

Transaction costs associated with the acquisition totaled $1.4 million and were expensed.

4. Long-term debt


				As at
	September 30, 2024			December 31, 2023
Syndicated credit facility	$	189.5		$	107.5
Term loan		42.5			-
Senior unsecured notes
11.95% $114.2 million, maturing July 27, 2027		114.2			117.4
Total		346.2			224.9
Unamortized discount of senior unsecured notes		(1.2	)		(1.6	)
Deferred financing costs		(2.9	)		(3.3	)
Total long-term debt	$	342.1		$	220.0

Current portion	$	42.5		$	2.0
Non-current portion	$	299.6		$	218.0

The Company has a reserve-based syndicated credit facility which is subject to a semi-annual borrowing base redetermination (typically completed in May and November of each year). The aggregate amount available under the syndicated credit facility was $260.0 million at September 30, 2024 and was increased to $300.0 million in October 2024 with the addition of a new lender in our banking syndicate. The revolving period and maturity dates under the syndicated credit facility are May 31, 2025 and May 31, 2026, respectively.

In the second quarter of 2024, the Company funded a portion of the Peace River Acquisition through a new $50.0 million term loan. The maturity date of the term loan is June 26, 2025 and was provided by certain banks within our banking syndicate. The Company repaid $7.5 million of the term loan in the third quarter of 2024 and subsequent to September 30, 2024, with the increase to our syndicated credit facility, the Company repaid an additional $32.5 million of the term loan resulting in $10.0 million currently being outstanding.

As part of the terms of the senior unsecured notes, the Company is required, in certain circumstances, to make a repurchase offer at a price of $1,030 per $1,000 principal amount to an aggregate amount, including market purchases, of $63.8 million (the "Repurchase Offer"), 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 and projected leverage ratios under the Company's syndicated credit facilities are also required to be met in order to proceed with a Repurchase Offer.


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 7

Financing expense consists of the following:


	Three months ended September 30				Nine months ended September 30
	2024		2023		2024		2023
Interest	$	9.4	$	7.3	$	23.8	$	21.0
Accretion on decommissioning liability		4.1		4.3		12.4		13.1
Accretion on office lease provision		-		0.3		0.3		0.8
Accretion on discount of senior unsecured notes		0.1		0.2		0.3		0.4
Accretion on lease liabilities		0.2		0.1		0.5		0.3
Loss on repurchased senior unsecured notes		-		0.4		0.1		0.5
Deferred financing costs		0.6		0.6		1.8		1.7
Financing	$	14.4	$	13.2	$	39.2	$	37.8

5. Lease liabilities

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


	Nine months ended September 30, 2024			Year ended December 31, 2023
Balance, beginning of period	$	8.0		$	6.0
Additions		0.8			5.3
Accretion charges		0.5			0.4
Lease payments		(1.5	)		(3.7	)
Balance, end of period	$	7.8		$	8.0

Current portion	$	2.2		$	1.9
Non-current portion	$	5.6		$	6.1

6. Provisions


	As at
	September 30, 2024		December 31, 2023
Decommissioning liability	$	163.6	$	172.6
Office lease provision (existing)		3.0		9.4
Total	$	166.6	$	182.0

Current portion	$	25.7	$	32.1
Non-current portion	$	140.9	$	149.9

Decommissioning liability

At September 30, 2024, the decommissioning liability was determined by applying an inflation factor of 2.0 percent (December 31, 2023 - 2.0 percent) and the inflated amount was discounted using a credit-adjusted rate of 10.0 percent (December 31, 2023 – 10.0 percent) over the expected useful life of the underlying assets, currently extending over 50 years into the future. At September 30, 2024, the total decommissioning liability on an undiscounted, uninflated basis was $599.6 million (December 31, 2023 - $578.9 million), which increased primarily due to the Peace River Acquisition.


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 8

Changes to the decommissioning liability were as follows:


	Nine months ended September 30, 2024			Year ended December 31, 2023
Balance, beginning of period	$	172.6		$	182.3
Net liabilities added (1)		0.6			1.3
Acquisition		0.5			-
Decrease due to changes in estimates		(2.1	)		(2.3	)
Liabilities settled		(20.4	)		(26.6	)
Government decommissioning assistance		-			0.4
Accretion charges		12.4			17.5
Balance, end of period	$	163.6		$	172.6

Current portion	$	22.7		$	23.4
Non-current portion	$	140.9		$	149.2

(1)

Includes additions from drilling activity, facility capital spending and disposals related to net property dispositions.

Office lease provision

The office lease provision represents the net present value of non-lease components for our existing office lease on future payments. The office lease provision was determined by applying an asset specific credit-adjusted discount rate of 6.5 percent (December 31, 2023– 6.5 percent) over the remaining life of the lease contracts to January 2025.

Changes to the office lease provision were as follows:


	Nine months ended September 30, 2024			Year ended December 31, 2023
Balance, beginning of period	$	9.4		$	17.5
Settlements		(6.7	)		(9.0	)
Accretion charges		0.3			0.9
Balance, end of period	$	3.0		$	9.4

Current portion	$	3.0		$	8.7
Non-current portion	$	-		$	0.7

7. 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 September 30, 2024, 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 September 30, 2024 and December 31, 2023, the only asset or liability measured at fair value on a recurring basis was the risk management asset and liability, which was valued based on “Level 2 inputs” being quoted prices in markets that are not active or based on prices that are observable for the asset or liability.


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 9

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


Risk management asset (liability)	Nine months ended September 30, 2024			Year ended December 31, 2023
Balance, beginning of period	$	11.8		$	6.2
Unrealized gain (loss) on financial instruments:
Oil		(1.5	)		-
Natural gas		(5.7	)		6.1
Electricity		(0.1	)		(0.5	)
Total fair value, end of period	$	4.5		$	11.8

Current asset portion	$	6.7		$	11.3
Current liability portion		(1.8	)		(0.5	)

Non-current asset portion		-			1.0
Non-current liability portion	$	(0.4	)	$	-

Obsidian Energy had the following financial instruments outstanding as at September 30, 2024. 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 Volume	Remaining Term	Price	Fair value (millions)
Oil
WCS Differential	3,750 bbl/d	January 2025 - December 2025	($19.83)/bbl	$	(1.5	)

AECO
AECO Swap	43,365 mcf/d	October 2024	$2.52/mcf		2.6
AECO Swap	14,929 mcf/d	November 2024 - March 2025	$3.74/mcf		3.2
AECO Collar	4,976 mcf/d	November 2024 - March 2025	$3.43/mcf - $4.11/mcf		0.9
AECO Swap	3,791 mcf/d	April 2025 - October 2025	$2.14/mcf		(0.1	)

Electricity
Power Swap	144 MWh/d	October - December 2024	$92.83/MWh		(0.6	)

Total				$	4.5

Subsequent to September 30, 2024, the Company entered into the following additional financial instruments:


	Notional Volume	Remaining Term	Price
Oil
WTI Swap	11,500 bbl/d	October 2024	$101.13/bbl
WCS Differential	1,500 bbl/d	January 2025 - December 2025	($18.61/bbl)

AECO
AECO Swap	7,583 mcf/d	April 2025 - October 2025	$2.29/mcf
AECO Collar	1,896 mcf/d	April 2025 - October 2025	$2.11/mcf - $2.64/mcf


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 10

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


	Three months ended September 30						Nine months ended September 30
	2024			2023			2024			2023
Realized
Settlement of oil contracts gain (loss)	$	1.0		$	(2.1	)	$	0.6		$	(1.8	)
Settlement of natural gas contracts gain		6.8			5.0			15.0			12.8
Total realized risk management gain	$	7.8		$	2.9		$	15.6		$	11.0

Unrealized
Oil contracts gain (loss)	$	(1.4	)	$	0.9		$	(1.5	)	$	-
Natural gas contracts loss		(4.5	)		(4.1	)		(5.7	)		(2.9	)
Total unrealized risk management loss		(5.9	)		(3.2	)		(7.2	)		(2.9	)
Risk management gain (loss)	$	1.9		$	(0.3	)	$	8.4		$	8.1

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


	Three months ended September 30						Nine months ended September 30
	2024			2023			2024			2023
Realized
Settlement of electricity contracts loss	$	(0.5	)	$	-		$	(1.0	)	$	-
Total realized risk management loss	$	(0.5	)	$	-		$	(1.0	)	$	-

Unrealized
Electricity contracts gain (loss)	$	0.3		$	(0.4	)	$	(0.1	)	$	(0.4	)
Total unrealized risk management gain (loss)		0.3			(0.4	)		(0.1	)		(0.4	)
Risk management loss	$	(0.2	)	$	(0.4	)	$	(1.1	)	$	(0.4	)

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, supply cost risks 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.

There have been no material changes to these risks from those discussed in the Company’s annual audited consolidated financial statements as at and for the year ended December 31, 2023.

8. Revenue and Other Income

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


	Three months ended September 30				Nine months ended September 30
	2024		2023		2024		2023
Oil	$	198.2	$	171.2	$	533.2	$	452.5
NGLs		14.2		12.4		41.2		37.9
Natural gas		5.8		16.8		29.5		56.9
Production revenues		218.2		200.4		603.9		547.3
Processing fees		2.7		3.4		9.5		10.7
Oil and natural gas sales		220.9		203.8		613.4		558.0
Other income		2.3		2.1		6.1		5.2
Oil and natural gas sales and other income	$	223.2	$	205.9	$	619.5	$	563.2


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 11

9. Shareholders’ equity

i) Issued


Shareholders’ capital	Common Shares			Amount
Balance, December 31, 2022		82,442,210		$	2,221.9
Issued pursuant to equity compensation plans (1)		229,963			0.6
Repurchase of common shares for cancellation		(5,083,635	)		(47.4	)
Balance, December 31, 2023		77,588,538			2,175.1
Issued pursuant to equity compensation plans (1)		534,450			2.5
Repurchase of common shares for cancellation		(2,868,972	)		(28.5	)
Tax on repurchases of common shares (2)		-			(0.5	)
Balance, September 30, 2024		75,254,016		$	2,148.6

(1)

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

(2)

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

Pursuant to our return of capital initiative to our shareholders, the Company has a normal course issuer bid ("NCIB") with the Toronto Stock Exchange. Purchases under the NCIB will be subject to having $65 million of liquidity and complying with the terms of our current credit facilities. During the first nine months of 2024, the Company utilized the NCIB which resulted in 2,868,972 common shares being repurchased and canceled at an average price of $9.94 per share for total consideration of $28.5 million. The total consideration paid includes commissions and fees and is recorded as a reduction to Shareholders' Equity.

Subsequent to September 30, 2024, the Company repurchased and cancelled an additional 782,748 common shares at an average price of $8.28 per share for total consideration of $6.5 million.

ii) Earnings per share - Basic and Diluted

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


	Three months ended September 30				Nine months ended September 30
Average shares outstanding (millions)	2024		2023		2024		2023
Basic		75.9		80.9		76.5		81.2
Dilutive impact (1)		3.1		2.1		3.3		2.1
Diluted		79.0		83.0		79.8		83.3

(1)

Includes impact of stock options and restricted share units.

10. Share-based compensation

The DSU's, PSU's and NTIP's follow the liability method of accounting where the change in share price at the balance date results in a mark-to-market valuation. Settlement of the units or awards, which can be in the form of cash or shares, only occurs when they vest. The Options and RSU's follow the equity method of accounting where the fair value of the option or unit is calculated at the grant date and expensed over the expected life because these securities are typically settled in shares.


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 12

Share-based compensation consisted of the following:


	Three months ended September 30					Nine months ended September 30
	2024			2023		2024			2023
DSUs	$	(5.1	)	$	6.6	$	(2.5	)	$	4.5
PSUs		(1.8	)		5.3		-			5.8
NTIP		-			1.2		1.1			1.8
Liability based incentive plans	$	(6.9	)	$	13.1	$	(1.4	)	$	12.1

RSUs	$	1.9		$	1.6	$	5.3		$	5.1
Options		0.6			0.3		1.6			0.9
Equity based incentive plans		2.5			1.9		6.9			6.0
Share-based compensation	$	(4.4	)	$	15.0	$	5.5		$	18.1

The share price used in the fair value calculation of the DSU, NTIP and PSU obligations at September 30, 2024 was $7.51 per share (2023 – $11.18) and at June 30, 2024 was $10.24 per share (2023 - $7.75).

Restricted and Performance Share Unit plan

Restricted Share Unit 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.


RSUs (number of shares equivalent)	Nine months ended September 30, 2024			Year ended December 31, 2023
Outstanding, beginning of period		1,290,042			874,130
Granted		705,980			991,860
Vested (1)		(356,236	)		(541,357	)
Forfeited		(51,203	)		(34,591	)
Outstanding, end of period		1,588,583			1,290,042

(1)

Vested RSUs in 2024 were settled in shares and in 2023 were settled in cash.

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


	Nine months ended September 30
	2024			2023
Average fair value of RSUs granted (per RSU)	$	9.68		$	9.77
Expected life of RSUs (years)		3.0			2.6
Expected forfeiture rate		0.1	%		0.1	%

Performance Share Unit grants under the RPSU plan

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

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


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 13


PSUs (number of shares equivalent)	Nine months ended September 30, 2024			Year ended December 31, 2023
Outstanding, beginning of period		896,690			949,040
Granted		271,940			239,360
Vested (1)		(532,720	)		(291,710	)
Outstanding, end of period		635,910			896,690

(1)

Vested PSUs settled in cash.


	As at
PSU liability	September 30, 2024		December 31, 2023
Current	$	1.7	$	9.8
Non-current		0.9		2.6
Total	$	2.6	$	12.4

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.


	Nine months ended September 30, 2024					Year ended December 31, 2023
Options	Number of Options			Weighted Average Exercise Price		Number of Options			Weighted Average Exercise Price
Outstanding, beginning of period		2,305,489		$	3.30		2,274,672		$	2.30
Granted		336,210			9.65		260,780			10.32
Exercised (1)		(358,504	)		1.45		(229,963	)		1.42
Outstanding, end of period		2,283,195		$	4.52		2,305,489		$	3.30
Exercisable, end of period		1,297,381		$	2.55		1,064,115		$	2.02

(1)

Exercised options were settled in shares.

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


	Nine months ended September 30
	2024			2023
Average fair value of Options granted (per Option)	$	9.65		$	6.34
Expected volatility		76.7	%		82.4	%
Expected life of Options (years)		4.5			3.9
Expected forfeiture rate		0.2	%		0.2	%

Non-Treasury Incentive Award Plan

The NTIP allows Obsidian Energy to grant NTIP Restricted Awards to employees of the Company.

The NTIP obligation is classified as a liability on our Consolidated Balance Sheet as the NTIP restricted awards are settled in cash. The NTIP obligation fluctuates based on the Company’s share price on the TSX at each period end date. Employees receive consideration only when the NTIP restricted awards vest.


NTIP Restricted Awards	Nine months ended September 30, 2024			Year ended December 31, 2023
Outstanding, beginning of period		328,994			689,228
Vested (1)		(317,630	)		(344,074	)
Forfeited		(3,365	)		(16,160	)
Outstanding, end of period		7,999			328,994

(1)

Vested NTIPs settled in cash.


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 14


	As at
NTIP liability	September 30, 2024		December 31, 2023
Current	$	0.1	$	2.7
Total	$	0.1	$	2.7

Deferred Share Unit plan

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

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


Deferred Share Units	Nine months ended September 30, 2024		Year ended December 31, 2023
Outstanding, beginning of period		1,893,280		1,811,245
Granted		47,887		82,035
Outstanding, end of period		1,941,167		1,893,280


	As at
DSU Liability	September 30, 2024		December 31, 2023
Current	$	14.6	$	17.1
Total	$	14.6	$	17.1

At September 30, 2024, the Company had no outstanding DSUs that were redeemable.

11. Deferred income tax asset


	Nine months ended September 30, 2024			Year ended December 31, 2023
Balance, beginning of period	$	210.8		$	246.4
Deferred income tax expense		(25.5	)		(35.6	)
Balance, end of period	$	185.3		$	210.8

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

12. Commitments and contingencies

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


OBSIDIAN ENERGY THIRD QUARTER 2024	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 15

Exhibit 99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

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

1. Review: I have reviewed the interim financial report and interim MD&A (together the “interim filings”) of Obsidian Energy Ltd. (the “issuer”) for the interim period ended September 30, 2024.

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

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

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

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

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

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

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

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

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

5.2 N/A.

5.3 N/A.

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2024 and ended on September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: October 31, 2024

(signed) “Stephen Loukas”

_______________________

Stephen Loukas

President & Chief Executive Officer

Exhibit 99.5

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

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

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Obsidian Energy Ltd. (the “issuer”) for the interim period ended September 30, 2024.

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

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

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

5.2 N/A.

5.3 N/A.

Date: October 31, 2024

(signed) “Peter Scott”

_______________________

Peter Scott

Senior Vice President and Chief Financial Officer

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