Obsidian Energy Ltd., Calgary, expects to spend $143-149 million in 2022 to continue drilling in the Cardium while further expanding activity in Peace River. An additional $14 million in decommissioning expenditures is expected.
We currently have four drilling rigs active in our 2022 drilling program, which includes 19 wells (18.0 net) in our Willesden Green and Pembina assets and an additional ten net wells in the Peace River asset, including four appraisal wells into the Clearwater formation.
At forecasted pricing, the company’s program is expected to grow average production by 13% in 2022 (prior to the inclusion of its Peace River Oil Partnership (PROP) acquisition late-2021).
2022 guidance, development
The company expects to grow average production to 29,100-30,100 boe/d this year, through the drilling of 29 wells (28.0 net).
Net operating expenses per boe are expected to be lower than 2021 levels largely due to increased production volumes and continued operational cost controls, despite current inflationary pressures on the industry, the company said.
Currently utilizing four rigs, the development program is first-half weighted with the drilling of 20 of 29 planned high working interest wells across the Willesden Green, Pembina, and Peace River areas.
In Willesden Green, the development program extends the 2021 horizontal drilling campaign in the Crimson and Faraway assets with the drilling of 12 net wells. The company is utilizing two drilling rigs in the area.
In Pembina, the company returned to development drilling in second-half 2021. The 2022 program adds additional locations that offset recent 2021 wells. The one-rig program also includes two vertical wells.
In the Peace River, the company resumed development drilling in November 2021 targeting the Bluesky formation, in conjunction with its acquisition of PROP's remaining 45% interest. An additional six Bluesky locations are expected to be drilled this year.
In first-quarter 2022, Obsidian will begin appraisal drilling of its 473 sections of Clearwater formation rights within the Peace River asset.
Obsidian Energy exited 2021 with average production of 24,605 boe/d, within guidance.