Creating the Cardium Champion The Proposed Combination of Obsidian Energy and Bonterra September 8, 2020
Obsidian Energy Corporate Overview Market Summary OBE (TSX)/ OBELF Ticker Symbol (OTCQX) Shares Outstanding MM 73 Peace River 2,132 boe/d Q2 2020 Market Capitalization MM 42 Cold flow heavy oil Manage base production Net Debt MM…
Key Characteristics of Obsidian Energy & Bonterra Combination The newly combined Cardium Champion will deliver significantly superior operational and financial performance than either company could achieve on a standalone basis Improved…
Transaction Considerations WTI 2021 break-even price of US37/bbl to keep production flat while maintaining Creates the best-in class, free-cash flow neutrality with further improvement in subsequent years due to lower Cardium focused…
The Cardium Champion At a Glance Obsidian Energy is proposing an exchange of 2.0 OBE shares for every 1 share of BNE; Bonterra shareholders will own 48% of the Pro Forma Companys equity Corporate Summary Obsidian Bonterra Combined…
Obsidian Energy Strategic Priorities A new Senior Management Team has overseen transformational improvement in operational and financial performance with a Cardium focused strategy H2 H2 Senior Management Team Superior Shareholder…
Demonstrated Strong Track Record Obsidian Energy has demonstrated the ability, over the last year, to reduce costs and rapidly adapt to the challenging environment Change in Cash Costs(1) Demonstrated Year Over Year (Through to Q2…
Potential to Realize Meaningful Synergies Synergies achieved from G&A and operating expense reductions, capital cost savings, and reinvesting cash flow into Obsidian Energys higher-return Willesden Green inventory Synergies Summary…
Significantly Improved Financial Resilience The Pro Forma Company will be a best-in-class company on break-even costs, and meaningfully more resilient to a downturn in commodity prices US WTI/bbl Projected Breakeven Price Future…
High Grade Development to Top Assets Our business plan will use the free cash flow from low decline Pembina assets to reduce debt, while directing the combined development capital to Willesden Green 2021 - 2024 Capex by Company and…
Pro Forma Company Production Performance The Pro Forma Company will focus capital into Obsidian Energys higher return drilling inventory resulting in improved financial metrics PDP and Development Production at US50 WTI/bbl (1) OBE…
Illustrative Business Model Outlook The Pro Forma Company will have a substantially improved ability to maintain production while generating excess free cash flow to pay down debt resulting in significantly improved credit metrics…
Public Trading Comparables Bonterra trades at an unsustainable premium to relevant comparables across all metrics Based on FactSet Median Consensus Estimates Capitalization As at September 4, 2020 Share Price EV / 2020E EV /…
Bonterra Outlook Meaningfully Improved BDC financing would fail to structurally improve Bonterra; a transaction Bonterra Standalone with Obsidian Energy creates a Cardium Champion with improved metrics Bonterra w/ BDC 4.0x Pro…
Potential for Meaningful BNE Share Price Increase At 4.5x Enterprise Value / 2021 EBITDA (US50 WTI/bbl), consistent with peer multiples, Bonterras common shares would appreciate by 375% to over 6.40 per share Pro Forma Company Value…
Regaining Market Relevance Pro Forma Company is poised to deliver a compelling overall investment thesis and to maximize value for all stakeholders of both Bonterra and Obsidian Energy Why Is This Transaction Compelling For Both…
Appendix
Successfully Reducing Decommissioning Liability Commentary Demonstrated Reduction in Well Abandonment Costs Obsidian Energy has delivered a multi-year trend of Wa inwright 2019 C a rdium 2019 decommissioning liability reduction - Q2…
Pro Forma Company Capitalization and Ownership The transaction results in Bonterra shareholders owning approximately 48% of the Pro Forma Company Capitalization and Ownership Obsidian Bonterra Pro Forma Bank Debt MM 420 278…
Illustrative Business Model Outlook US45 WTI/bbl Pro Forma Company Outlook at US45 WTI/bbl(1) Production Cash Flow and Capital Expenditures Oil and Liquids Natural Gas Cash Flow Capex 300 40,000 250 30,000 200 (boe/d)…
Bonterra Outlook Meaningfully Improved at US45 WTI/bbl Bonterra Standalone Bonterra w/ BDC 4.0x Pro Forma 3.0x Bonterra Standalone vs. Pro Forma Company Outlook at US45 WTI/bbl(1) (x) 2.0x 1.0x 0.0x Production per Debt…
Illustrative Business Model Outlook US55 WTI/bbl Pro Forma Company Outlook at US55 WTI/bbl(1) Production Cash Flow and Capital Expenditures Oil and Liquids Natural Gas Cash Flow Capex 450 40,000 400 350 30,000 300 (boe/d)…
Bonterra Outlook Meaningfully Improved at US55 WTI/bbl Bonterra Standalone Bonterra w/ BDC 4.0x Pro Forma 3.0x Bonterra Standalone vs. Pro Forma Company Outlook at US55 WTI/bbl(1) (x) 2.0x 1.0x 0.0x Production per Debt…
Potential for Meaningful BNE Share Price Increase Pro Forma Company Equity Value Trading Summary - EV/EBITDA Multiple Sensitivity(1) Pro Forma Trading Summary - EV / EBITDA Multiple and Commodity Price Sensitivity YE 2021 YE…
End Notes
End Notes Slide 3: Obsidian Energy Corporate Overview Slide 14: Financial and Operational Metrics Contribution Market Capitalization and Enterprise Value was determined at the close of business on September 4th, Bonterra forecast based…
Details on Intention to Make an Offer Other than in certain circumstances described below, Obsidian Energy intends to commence the Offer as soon as practicable. Once the Offer is formally launched, it will be open for acceptance by…
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…
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