CALGARY, Jan. 17, 2018 /PRNewswire/ - OBSIDIAN ENERGY LTD.
(TSX/NYSE – OBE) ("Obsidian Energy", the "Company",
"we", "us" or "our") confirms it is aware of a
statement by FrontFour Capital Group LLC ("FrontFour")
regarding their views on the direction of the Company.
Obsidian Energy's corporate strategy is well defined and has the
unanimous support of the Board of Directors
(the"Board"). We have been organically growing the
Company through the combination of sustaining a low decline
production base and leveraging significant development optionality.
The Company delivered strong results throughout the past year, and
provided an operational update earlier this week that confirms the
business plan is working. Those operational successes, along with
our highly capital efficient 2018 plans, are a product of
robust capital planning and a project review process with both
Management and the Board. A change of course would hinder
Obsidian Energy's progress and ability to deliver on the value
maximizing efforts already underway.
As part of our active and ongoing communications with all
stakeholders, Obsidian Energy's Board and Management appreciate
constructive shareholder input and take all views seriously. We
received a letter from FrontFour in early October, which contained
ideas we had already been pursuing for several months. In addition,
we received a second letter from FrontFour in mid-December
threatening "more aggressive public action", unless we agreed to
the addition of a mutually agreed upon Director to the Board.
In the interest of avoiding a costly and distracting proxy fight
and as part of the Board's ongoing renewal process, our Board
expressed a willingness to work with FrontFour regarding their
views on Board composition. FrontFour had previously introduced the
idea of Mr. Gordon Ritchie as a
Board member, a suggestion our Board unanimously embraced due to
the experience and credibility of Mr. Ritchie. Mr. Ritchie was
appointed to the Board in December.
Concurrently, the Board interviewed candidates proposed by
FrontFour and mutually agreed to the addition of one of those
individuals. The appointment was accompanied with the same
standstill agreement executed by our latest Board addition, Mr.
Edward (Ed) H. Kernaghan. Despite
extensive negotiations, FrontFour was unwilling to execute the
agreement. As a result, we were unable to add the mutually agreed
upon candidate to the Board.
One of the primary roles of our Board is to represent the
interests of all shareholders. As indicated by our recent
appointment of Mr. Kernaghan, our largest shareholder, we are
supportive of ownership representation on the Board. Obsidian
Energy's Board is now comprised of nine highly qualified and
experienced directors, eight of whom are independent, including the
Acting Chair. As part of our ongoing Board and governance process,
the Governance Committee will nominate directors in advance of the
Annual General Meeting that it believes will serve in the best
interests of all shareholders.
We look forward to continuing to deliver strong results on
behalf of shareholders.
Obsidian Energy shares are listed on both the Toronto Stock
Exchange and New York Stock Exchange under the symbol "OBE".
OBSIDIAN ENERGY: Suite 200, 207 - 9th Avenue SW, Calgary, Alberta T2P 1K3, Phone: 403-777-2500,
Fax: 403-777-2699, Toll Free: 1-866-693-2707, Website:
www.obsidianenergy.com; Investor Relations: Toll Free:
1-888-770-2633, E-mail: investor_relations@obsidianenergy.com
KINGSDALE ADVISORS: Ian Robertson,
Executive Vice President, Communication Strategy. Direct:
416-867-2333, Cell: 647-621-2646, E-mail:
irobertson@kingsdaleadvisors.com
Forward-Looking Statements
Certain statements contained in this document constitute
forward-looking statements or information (collectively
"forward-looking statements"). 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
particular, this document contains forward-looking statements
pertaining to, without limitation, the following: that we will have
highly capital efficient 2018 plans due to robust capital planning
and a project review process with both management and the Board;
that a change of course would hinder Obsidian Energy's progress and
ability to deliver on the value maximizing efforts already
underway; that the Governance Committee will nominate directors in
advance of the annual general meeting that it believes will serve
in the best interests of all shareholders; and that we look forward
to continuing to deliver results on behalf of all shareholders.
With respect to forward-looking statements contained in this
document, we have made assumptions regarding, among other things
that we do not dispose of any material producing properties; our
ability to execute our long-term plan as described herein and in
our other disclosure documents and the impact that the successful
execution of such plan will have on our Company and our
shareholders; that the current commodity price and foreign exchange
environment will continue or improve; future capital expenditure
levels; 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
crude oil, natural gas liquids and natural gas production levels;
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 weather, infrastructure access 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 to renew or replace our syndicated bank facility and our
ability to finance the repayment of our senior notes on maturity;
and our ability to add production and reserves through our
development and exploitation activities.
Although we believe 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 will not be able to continue to
successfully execute our long-term plan in part or in full, and the
possibility that some or all of the benefits that we anticipate
will accrue to our Company and our securityholders as a result of
the successful execution of such plans do not materialize; the
possibility that we are unable to execute some or all of our
ongoing asset disposition program on favourable terms or at all;
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 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); and the other factors described under "Risk Factors"
in our Annual Information Form and described in our public filings,
available in Canada at
www.sedar.com 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, we do 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.
SOURCE Obsidian Energy Ltd.