OBE Obsidian Energy Ltd

The following constitutes Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”). This Amendment No. 1 amends the Schedule 13D as specifically set forth herein.

Item 3 is hereby amended and restated as follows:

The Shares and call options purchased by each of the Master Fund and the Canadian Fund, the Shares and call options held in the Separately Managed Accounts and the Shares purchased by the Energy Fund, were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business). The aggregate purchase price of the 19,620,457 Shares owned directly by the Master Fund is approximately $22,380,757, including brokerage commissions. The aggregate purchase price of the call options exercisable into 2,432,800 Shares owned directly by the Master Fund is approximately $511,259, including brokerage commissions. The aggregate purchase price of the 460,000 Shares owned directly by the Canadian Fund is approximately CAD$1,028,683, including brokerage commissions. The aggregate purchase price of the call options exercisable into 58,900 Shares owned directly by the Canadian Fund is approximately $12,352, including brokerage commissions. The aggregate purchase price of the 4,749,189 Shares held in the Separately Managed Accounts is approximately $9,032,156, including brokerage commissions. The aggregate purchase price of the call options exercisable into 508,300 Shares held in the Separately Managed Accounts is approximately $107,035, including brokerage commissions. The aggregate purchase price of the 588,000 Shares owned directly by the Energy Fund is approximately CAD$974,526, including brokerage commissions. The aggregate purchase price of the 210,000 Shares owned directly by Mr. Loukas is approximately $254,890, including brokerage commissions. The aggregate purchase price of the 450,000 Shares owned directly by Mr. Lorber is approximately $694,348, including brokerage commissions.

Item 4 is hereby amended to add the following:

On January 17, 2018, FrontFour Capital issued a press release expressing significant concerns with the Issuer’s capital plan, strategic direction and value proposition to investors. Due to these concerns and in light of its significant long-term shareholdings in the Issuer, FrontFour Capital also requested Board representation. Despite FrontFour Capital’s tireless efforts over the last three months to come to an amicable agreement with the Issuer’s management team and Board on the addition to the Board of one mutually agreed upon independent nominee proposed by FrontFour Capital, FrontFour Capital has been unable to come to an agreement that would avoid a needlessly costly and distracting proxy fight. FrontFour Capital is currently considering all available options, including seeking changes to the composition of the Board at the Issuer’s 2018 Annual Meeting. A copy of the press release is attached as an exhibit hereto and is incorporated herein by reference.

Items 5(a)-(c) are hereby amended and restated as follows:

(a)                 The aggregate percentage of Shares reported owned by each person named herein is based upon 504,328,913 Shares outstanding as of November 9, 2017, which is the total number of Shares outstanding as reported in the Issuer’s Form 6-K filed with the Securities and Exchange Commission on November 13, 2017.

As of the close of business on the date hereof, the Master Fund beneficially owned directly 22,053,257 Shares (including 2,432,800 Shares underlying certain call options exercisable within 60 days of the date hereof), the Canadian Fund beneficially owned directly 518,900 Shares (including 58,900 Shares underlying certain call options exercisable within 60 days of the date hereof), 5,257,489 Shares (including 508,300 Shares underlying certain call options exercisable within 60 days of the date hereof) were held in the Separately Managed Accounts, the Energy Fund directly owned 588,000 Shares, Mr. Loukas directly owned 210,000 Shares and Mr. Lorber directly owned 450,000 Shares, constituting approximately 4.4%, less than 1%, approximately 1.0%, less than 1%, less than 1% and less than 1%, respectively, of the Shares outstanding.

FrontFour Capital, as the investment manager of the Master Fund and the Separately Managed Accounts, may be deemed to beneficially own the 27,310,746 Shares directly beneficially owned by the Master Fund and held in the Separately Managed Accounts, constituting approximately 5.4% of the Shares outstanding.

FrontFour Corp., as the investment manager of the Canadian Fund, may be deemed to beneficially own the 518,900 Shares directly beneficially owned by the Canadian Fund, constituting less than 1% of the Shares outstanding.

Energy Fund GP, as the general partner of the Energy Fund, may be deemed to beneficially own the 588,000 Shares directly owned by the Energy Fund, constituting less than 1% of the Shares outstanding.

Mr. Loukas, as a managing member and principal owner of FrontFour Capital, a principal owner of FrontFour Corp. and a principal owner and director of Energy Fund GP, may be deemed to beneficially own the 28,417,646 Shares directly beneficially owned in the aggregate by the Master Fund, the Canadian Fund and the Energy Fund and held in the Separately Managed Accounts, which, together with the 210,000 Shares he directly owns, constitute approximately 5.7% of the Shares outstanding.

Mr. Lorber, as a managing member and principal owner of FrontFour Capital, a principal owner of FrontFour Corp. and a principal owner and director of Energy Fund GP, may be deemed to beneficially own the 28,417,646 Shares directly beneficially owned in the aggregate by the Master Fund, the Canadian Fund and the Energy Fund and held in the Separately Managed Accounts, which, together with the 450,000 Shares he directly owns, constitute approximately 5.7% of the Shares outstanding.

Mr. George, as a managing member and principal owner of FrontFour Capital, a principal owner of FrontFour Corp. and a principal owner and director of Energy Fund GP, may be deemed to beneficially own the 28,417,646 Shares directly beneficially owned in the aggregate by the Master Fund, the Canadian Fund and the Energy Fund and held in the Separately Managed Accounts, which constitute approximately 5.6% of the Shares outstanding.

Each of the Reporting Persons, as a member of a “group” with the other Reporting Persons for purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), may be deemed to beneficially own the securities of the Issuer owned by the other Reporting Persons. The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any securities of the Issuer he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that he or it does not directly own.

(b)                Each of the Master Fund, FrontFour Capital and Messrs. Loukas, Lorber and George have shared power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares owned directly by the Master Fund.

Each of FrontFour Capital and Messrs. Loukas, Lorber and George have shared power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares held in the Separately Managed Accounts.

Each of the Canadian Fund, FrontFour Corp. and Messrs. Loukas, Lorber and George have shared power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares owned directly by the Canadian Fund.

Each of the Energy Fund, Energy Fund GP and Messrs. Loukas, Lorber and George have shared power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares owned directly by the Energy Fund.

Mr. Loukas has the sole power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares owned directly by him.

Mr. Lorber has the sole power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares owned directly by him.

(c)                 The transactions in the securities of the Issuer effected by the Reporting Persons since the filing of the initial Schedule 13D are set forth on Schedule B attached hereto. All of such transactions were effected in the open market except as otherwise set forth therein.

The second, third and fourth paragraphs of Item 6 are hereby amended and restated as follows:

The Master Fund has (a) purchased call options (i) referencing an aggregate of 811,600 Shares, which have an exercise price of $1.10 per Share and expire on May 18, 2018, (ii) referencing an aggregate of 811,300 Shares, which have an exercise price of $1.15 per Share and expire on May 18, 2018, and (iii) referencing an aggregate of 809,900 Shares, which have an exercise price of $1.20 per Share and expire on May 18, 2018, and (b) sold short put options (i) referencing an aggregate of 1,622,900 Shares, which have an exercise price of $0.85 per Share and expire on May 18, 2018, and (ii) referencing an aggregate of 809,900 Shares, which have an exercise price of $1.05 per Share and expire on May 18, 2018.

The Canadian Fund has (a) purchased call options (i) referencing an aggregate of 19,500 Shares, which have an exercise price of $1.10 per Share and expire on May 18, 2018, (ii) referencing an aggregate of 19,800 Shares, which have an exercise price of $1.15 per Share and expire on May 18, 2018, and (iii) referencing an aggregate of 19,600 Shares, which have an exercise price of $1.20 per Share and expire on May 18, 2018, and (b) sold short put options (i) referencing an aggregate of 39,300 Shares, which have an exercise price of $0.85 per Share and expire on May 18, 2018, and (ii) referencing an aggregate of 19,600 Shares, which have an exercise price of $1.05 per Share and expire on May 18, 2018.

The Separately Managed Accounts have (a) purchased call options (i) referencing an aggregate of 168,900 Shares, which have an exercise price of $1.10 per Share and expire on May 18, 2018, (ii) referencing an aggregate of 168,900 Shares, which have an exercise price of $1.15 per Share and expire on May 18, 2018, and (iii) referencing an aggregate of 170,500 Shares, which have an exercise price of $1.20 per Share and expire on May 18, 2018, and (b) sold short put options (i) referencing an aggregate of 337,800 Shares, which have an exercise price of $0.85 per Share and expire on May 18, 2018, and (ii) referencing an aggregate of 170,500 Shares, which have an exercise price of $1.05 per Share and expire on May 18, 2018.

Item 7 is hereby amended to add the following exhibit:

Exhibit No. Description

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

SCHEDULE B

Transactions in the Securities of the Issuer Since the Filing of the Initial Schedule 13D

FRONTFOUR MASTER FUND, LTD.

FRONTFOUR OPPORTUNITY FUND ^***

FRONTFOUR CAPITAL GROUP LLC

(Through Separately Managed Accounts)

FRONTFOUR ENERGY FUND ^***

^* Represents a short sale.

^*** All prices for transactions in Common Shares are in Canadian Dollars and all prices for transactions in options are in U.S. Dollars.