Obsidian Energy Buys Belly River Oil Assets for $96M Net, To Acquire Wilson Creek Assets in Deal Valued at $105M

OBSIDIAN ENERGY LTD. (TSX:OBE) (NYSE:OBE) ("Obsidian Energy", the "Company", "we", "us" or "our") announced today the acquisition of high-return Belly River light oil assets in the Wilson Creek area of Willesden Green (the "Acquisition"), consolidating the Company's position as the largest Belly River producer and deepening our core light oil development platform. The transaction is immediately accretive to funds flow from operations and strengthens the Company's multi-year Willesden Green growth program.

Highlights:

Acquires approximately 2,500 boe/d of high-quality Belly River light oil production (76% oil) and 35 net sections of land in the Wilson Creek area of Willesden Green

Unadjusted purchase price of $105 million in cash ($96 million net of closing adjustments), initially funded through existing cash and credit facilities; anticipated closing on or about June 30, 2026

Transaction implies approximately $38,400 per flowing boe/d and 3.2x net operating income ("NOI", net of closing adjustments) at US$80.00/bbl WTI for 2026, and $32,000 per flowing boe/d and 2.1x NOI at US$72.50/bbl WTI for 2027

2027 six-well development program expected to grow acquired production to ~3,000 boe/d, generating approximately $45 million NOI and $15 million of free cash flow ("FCF") at WTI US$72.50/bbl for 2027

Increases our total Belly River drilling inventory to over 100 net locations to date, including 36 identified 2P development locations on the acquired lands

2P reserves of 13.6 MMboe ($17.20/boe including FDC) and a 15-year Reserve Life Index; PDP reserves of 3.4 MMboe ($27.71/boe)

Net debt to FFO projected to be approximately 1.1x at year-end 2026, maintaining our strong balance sheet position post transaction

"This transaction is highly accretive and a natural extension of our existing Belly River position in Willesden Green," said Stephen Loukas, President and CEO of Obsidian Energy. "The contiguous land and production we are acquiring deepens our operating footprint and scale in the area. Obsidian Energy is uniquely positioned to grow the assets and unlock their full potential where historical development has been constrained by natural gas egress, a limitation we are best positioned to address through our existing field infrastructure which we intend to expand."

Mr. Loukas continued, "We plan to begin development of the acquired lands in 2027 with a six-well program, building on the operational momentum from our recent Belly River activity and our expanded second half 2026 capital program. The Belly River is a long-term growth platform for the Company, underpinned by a deep inventory capable of generating attractive returns. We believe the expanded Willesden Green asset can grow toward a sustained ~20,000 boe/d in a supportive oil price environment, delivering significant FCF to our shareholders."

TRANSACTION DETAILS

Obsidian Energy has entered into a purchase and sale agreement with Highwood Asset Management Ltd. (the "Vendor") to acquire 35 net sections of land in the heart of the Belly River play and approximately 2,500 boe/d of production (based on May 2026 field estimates) in the Wilson Creek area of Willesden Green. The transaction has an effective date of April 1, 2026, and is anticipated to close on or about June 30, 2026, initially funded through the Company's existing cash and credit facilities. Following close, the Company's total Willesden Green land holdings will increase to ~290 net sections, with pro forma corporate production increasing to approximately 31,400 boe/d (based on the mid-point of our 2026 guidance).

On a pro forma basis, the transaction increases Willesden Green liquids weighting from 49% to 55%, with reserves across all categories carrying an approximate 71% liquids weighting. Based on 2027 forecast production of approximately 3,000 boe/d on the acquired assets, the transaction implies an acquisition cost of approximately $32,000 per flowing boe/d. We are currently estimating the acquired assets generate an operating netback of approximately $42.25/boe at US$72.50/bbl WTI in 2027. Reserve estimates are based on Obsidian Energy's internal review effective July 1, 2026.

The total cash consideration payable at close is approximately $96 million, reflecting an initial unadjusted purchase price of $105 million less estimated closing adjustments of approximately $9 million. In addition, a contingent value payment ("CVP") of up to $7 million may be payable in quarterly installments of up to $1.75 million from Q3 2026 through Q2 2027, subject to a range of average WTI prices in the applicable quarter. If the applicable WTI threshold is achieved, the quarterly CVP is calculated at $116,667 for each US$1/bbl increase based on average WTI above the threshold price, up to a maximum payment of $1.75 million. The applicable WTI thresholds and maximums are as follow:

TRANSACTION SUMMARY

(1) Purchase price of $105 million less estimated closing adjustments of $9 million.
(2) All reserves data presented herein in respect of the Acquisition was based on Obsidian Energy's internal analysis, effective July 1, 2026, using Q1 2026 IC3 Forecast Pricing.
(3) Decommissioning liability presented on an undiscounted, uninflated basis.

PRO FORMA BELLY RIVER LAND POSITION

ADVISORS

BMO Capital Markets is acting as financial advisor and Burnet, Duckworth & Palmer LLP are acting as legal counsel to Obsidian Energy on the Acquisition.

REVISED 2026 GUIDANCE

Following the closing of the Acquisition, the Company expects to provide updated 2026 guidance that incorporates the acquired assets and associated transaction impacts.