In a move to focus on light oil in the Alberta Cardium play, Obsidian Energy says it is considering selling its assets in the Alberta Viking, as well as exiting a partnership with China Investment Corporation at Peace River.
Over the past three years, Obsidian Energy – formerly Penn West Petroleum – has divested approximately $2.3 billion of assets in an effort to “unlock shareholder value” and position itself for growth.
Obsidian currently has production of approximately 2,500 boe/d in the Alberta Viking, a mix of light oil and natural gas and a large land position.
The Peace River Oil Partnership is a joint venture between Obsidian Energy and CIC that was announced in 2010.
It currently has net production to Obsidian Energy of approximately 5,000 boe/d and a large position in a crude oil resource amenable to conventional cold-flow production.
Obsidian expects to conclude a sale of the Alberta Viking assets by the end of the second quarter of 2018. Discussions with CIC are expected to continue into the fall before a formal process is started.
“In addition to exploring the sale of our Alberta Viking and Peace River assets, we are actively reviewing industry consolidation opportunities with significant synergies and a focus on creating a company with best-in-class operating performance, financial discipline and industry-leading growth prospects,” Obsidian CEO David French said in a statement.