Now Entering Russ's World
Calgary based Obsidian Energy, formerly known as Penn West Petroleum, is well underway in its plans to completely restructure itself into a potent player in the Canadian energy markets.
With crude oil prices dropping sharply in 2014, Obsidian began implementing a multi-year plan to streamline the company’s operations and increase overall profit. One of the first major steps was taken in October of 2016 by appointing David French to succeed David Roberts as CEO.
Mr. French had previously helmed Bankers Petroleum and managed its sale to a Chinese firm for $575 million.
The following June, shareholders voted 92% in support of changing the companies name from Penn West Petroleum, which it carried since its inception in 1979, to its current name Obsidian Energy. David French commented, “This year marks a new beginning for us, and we are excited to turn the page on a new chapter.”
At the same time, Obsidian successfully sold a number of assets totaling over $1 billion, which included a $975 million price tag for all of its properties in Saskatchewan. This allowed the company to bring its debt down from a recent high of $2.1 billion in 2015, to under $600 million the following year. By early 2018, net debt had been consolidated even further to under $400 million. See Related Link for more information.
While stock prices have not rebounded, the company’s financial statements indicate Obsidian Energy has taken great strides in rehabilitating its fiscal health. Net debt continues to drop and the ratio of cash flow to debt is now at 50% for 2017, up from 36% the year before.
In conjunction with the high-value asset sales, Obsidian has also refocused its production areas from 30 down to four and trimmed its workforce from 1,400 to 300. The result is a much leaner and efficient company with increasingly strong quarterly reports under the skillful guidance of CEO David French.
Check out their profile on https://www.facebook.com/pages/Obsidian-Energy-Ltd/686118968246981