Thanks to its recent success in the Willesden Green play fairway, Obsidian Energy, will be moving forward with an incremental $50 million development of the Cardium. The development will include 13 wells in the eastern part of Willesden Green, both inside and along the halo flank of the area.
The company said that $4 million of the $50 million will be dedicated to infrastructure along the eastern side of the play that will be leveraged for future development opportunities. The development will begin in the third quarter of 2018 and will finish in the fourth with most of the production and cash flow arriving at the end of 2018.
Obsidian said that the “wells will be brought on production with an estimated 12-month capital efficiency of $20,000 per boe per day, averaging over 80 percent rate of return at strip prices.” The company said it expects to see monthly production of approximately 3,500 BOE/day by early 2019.
To fund the project, Obsidian drew $310 million of its 440 million credit facility, which will also be supplemented with minor royalty deals of underutilized acreage. Obsidian also remains in discussion with China Investment Corporation regarding the potential sale of the company’s Peace River assets. According to Obsidian this transaction would take place at the end of the year.
