6-K - OBE - Equibles

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________ Form 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of November 2023 Commission File Number 1-32895 ___________________ Obsidian Energy Ltd. (Translation of registrant's name into English) Suite 200, 207 – 9th Avenue SW Calgary, Alberta T2P 1K3 Canada (Address of principal executive offices) ___________________ Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F  Form 40-F ☑ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)  Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)  .

DOCUMENTS INCLUDED AS PART OF THIS FORM 6-K

See the Exhibit Index hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 9, 2023.

OBSIDIAN ENERGY LTD.

OBSIDIAN ENERGY LTD.
By:	/s/ Stephen Loukas
Name:	Stephen Loukas
Title:	President and Chief Executive Officer

EXHIBIT INDEX

Exhibit	Description
99.1	News Release, dated November 9, 2023
99.2	Management’s Discussion and Analysis for the three and nine months ended September 30, 2023
99.3<br><br>99.4<br><br>99.5	Financial Statements for the three and nine months ended September 30, 2023<br><br>Quarterly Certification of the Chief Executive Officer under Canadian law<br><br>Quarterly Certification of the Chief Financial Officer under Canadian law

EX-99.1

Exhibit 99.1

Obsidian Energy Announces Third Quarter 2023 Results

• Increased average production by 10 percent over the third quarter of 2022 due to the strong performance of our development program

• Generated funds flow from operations of $98.9 million during the quarter, resulting in free cash flow of $47.7 million and net debt reduction to $294.3 million

• Commenced second half 2023 development program while completing major facility debottlenecking project subsequent to the quarter

• Continued return of capital to shareholders via the repurchase of ~4.4 percent of our outstanding shares through our buyback program in 2023

CALGARY, November 9, 2023 - OBSIDIAN ENERGY LTD. (TSX / NYSE American – OBE) (“Obsidian Energy”, the “Company”, “we”, “us” or “our”) is pleased to report solid operating and financial results for the third quarter of 2023.

				Nine months ended<br><br>September 30
		2022		2023		2022
FINANCIAL1 (millions, except per share amounts)
Cash flow from operating activities	95.3		121.4		235.0		330.3
Basic per share (/share)2	1.18		1.48		2.89		4.03
Diluted per share (/share)2	1.15		1.44		2.82		3.92
Funds flow from operations3	98.9		104.6		280.6		340.2
Basic per share (/share)4	1.22		1.27		3.45		4.16
Diluted per share (/share)4	1.19		1.24		3.37		4.04
Net income	24.8		40.7		73.7		178.4
Basic per share (/share)	0.31		0.50		0.91		2.18
Diluted per share (/share)	0.30		0.48		0.89		2.12
Capital expenditures	45.9		74.0		192.5		217.7
Decommissioning expenditures	5.3		3.5		18.9		15.8
Long-term debt	230.7		253.7		230.7		253.7
Net debt3	294.3		323.1		294.3		323.1
OPERATIONS
Daily Production
Light oil (bbl/d)	12,452		11,062		12,590		11,480
Heavy oil (bbl/d)	6,260		5,854		5,952		5,940
NGL (bbl/d)	2,708		2,379		2,606		2,405
Natural gas (mmcf/d)	69		64		67		63
Total production5 (boe/d)	32,937		29,985		32,376		30,324
Average sales price2,6
Light oil (/bbl)	109.56		118.66		102.67		125.99
Heavy oil (/bbl)	80.14		81.78		62.44		91.19
NGL (/bbl)	49.71		69.12		53.21		73.38
Natural gas (/mcf)	2.65		5.31		3.09		5.90

All values are in US Dollars.

Netback (/boe)
Sales price	76.58		62.13		83.64
Risk management gain (loss)	(0.59	)	1.25		(3.92	)
Net sales price	75.99		63.38		79.72
Royalties	(14.06	)	(8.23	)	(13.71	)
Net operating costs3	(14.57	)	(14.40	)	(14.17	)
Transportation	(3.18	)	(3.41	)	(3.08	)
Netback3 (/boe)	44.18		37.34		48.76

All values are in US Dollars.

(1) We adhere to generally accepted accounting principles (“GAAP”); however, we also employ certain non-GAAP measures to analyze financial performance, financial position, and cash flow, including funds flow from operations (“FFO”), net debt, netback and net operating costs. Additionally, other financial measures are also used to analyze performance. These non-GAAP and other financial measures do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and therefore may not be comparable to similar measures provided by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income and cash flow from operating activities, as indicators of our performance.

(2) Supplementary financial measure. See "Non-GAAP and Other Financial Measures".

(3) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

(4) Non-GAAP financial ratio. See "Non-GAAP and Other Financial Measures".

(5) Please refer to the "Oil and Gas Information Advisory" section below for information regarding the term "boe".

(6) Before realized risk management gains/(losses).

Detailed information can be found in Obsidian Energy's unaudited interim consolidated financial statements and management's discussion and analysis ("MD&A") as at and for the three and nine-month periods ended September 30, 2023 on our website at www.obsidianenergy.com, which will also be filed on SEDAR+ and EDGAR in due course.

KEY THIRD quarter 2023 RESULTS

During the third quarter of 2023, we announced our three-year growth plan to increase our production to 50,000 boe/d in 2026, which is anchored by expanded development of our Peace River asset. In conjunction with this announcement, we also increased our 2023 capital program by $40 million due to higher WTI prices, resulting in additional development in our Viking and Pembina assets over the balance of this year. Our team was active across our core areas over the quarter with our second half development program commencing in late July, and work proceeding on our debottlenecking project and facility maintenance turnarounds. Third quarter production increased 10 percent to 32,937 boe/d over the same period in 2022 due to the strong performance of our first half 2023 development program.

Compared to the third quarter of 2022, lower commodity prices and the increase in stock-based compensation (non-cash, and driven by a 44 percent gain in our share price during the quarter) offset higher production, resulting in a five percent decrease in FFO from the 2022 period. Netbacks decreased slightly as lower commodity prices were partially offset by a corresponding decrease in royalties as well as lower net operating costs and realized hedging gains. During the quarter, the Company reduced our net debt, and repurchased and cancelled additional shares through our share buyback program.

2023 Third Quarter Financial Highlights

• Solid Funds Flow – FFO was $98.9 million ($1.22 per basic share) in the third quarter of 2023 compared to $104.6 million ($1.27 per basic share) for the same period in 2022. Lower commodity prices primarily drove the decrease, partially offset by higher production, realized hedging gains (including $5.0 million on natural gas hedges), improvements in heavy oil differentials and lower royalty and net operating costs in 2023.

o The Company’s significant share price increase during the quarter ($11.18 per share on September 30, 2023, compared to $7.75 on June 30, 2023) impacted FFO, resulting in a higher share-based compensation expense of $13.1 million during the period. None of the share-based awards vested during the third quarter of 2023, so did not impact available cash.

• Additional Debt Reduction – Strong free cash flow (“FCF”) generation resulted in a decrease in net debt to $294.3 million at September 30, 2023, from $323.1 million at September 30, 2022.

• Continued Share Buyback Program – In the third quarter of 2023, a total of approximately 1.6 million shares were repurchased and cancelled under the Company’s normal course issuer bid (“NCIB”) for $14.4 million ($9.17 per share). In total, we repurchased and cancelled 3.6 million shares as at November 8, 2023, for approximately $32.9 million ($9.13 per share) for the year.

• Repurchased Senior Unsecured Notes – During the third quarter of 2023, the Company completed our semi-annual repurchase offer of senior unsecured notes (“Notes”) for $5.0 million at a mandated price of $1,030 per $1,000 principal amount. In addition, Obsidian Energy repurchased for cancellation an additional $0.7 million of Notes on the open market during the third quarter at an average price of $993 per $1,000 principal amount.

o Subsequent to September 30, 2023, a further $1.0 million of Notes were repurchased on the open market at an average price of $1,005 per $1,000, resulting in $117.4 million of Notes currently outstanding.

• Reduced Net Operating Costs – Net operating costs were lower at $13.60/boe in the third quarter of 2023 compared to $14.57/boe in the third quarter of 2022 due to the Company’s higher production base and lower power prices in 2023.

• Lower G&A Costs – General and administrative (“G&A”) costs were $1.51/boe in the third quarter of 2023 compared to $1.73/boe in the third quarter of 2022; the decrease in 2023 is primarily attributable to our higher production base.

• Positive Net Income – Positive operational results contributed to net income of $24.8 million ($0.31 per basic share) for the third quarter of 2023 compared to net income of $40.7 million ($0.50 per basic share) in the comparable period of 2022.

2023 Third Quarter Operational Highlights

• Increased Production Levels – Average production was 32,937 boe/d, a 10 percent increase from 29,985 boe/d in the third quarter of 2022 due to the strong performance of our development program with 35 (34.6 net) wells brought on production during the first nine months of 2023.

• Commenced Second Half Program – Our third quarter capital program largely focused on development activities with the construction of new pads and the start of new drilling with seven (6.7 net) wells rig released and two (2.0 net) wells placed on production. Capital expenditures were $45.9 million (2022 – $74.0 million) with decommissioning expenditures of $5.3 million (2022 – $3.5 million); our second half capital program spend is planned to be higher in the fourth quarter of 2023.

• Completed Turnaround and Facility Maintenance – We completed major turnarounds at our Peace River Seal 9-15 and Pembina 9-17 gas plants to ensure optimal operations. Also in the quarter, we completed maintenance and infrastructure projects across our properties, including a 37-kilometre road upgrade in Peace River at the Dawson area, providing all season access for new exploration/appraisal activity.

2023 Highlights Subsequent to the Quarter

• Completed Willesden Green Facility Debottlenecking Project – In late October, we successfully completed a major facility debottlenecking project at Willesden Green. The project expanded field compression, which lowers field pressures and allows for future development in this area and is expected to bring an additional ~1,000 boe/d of net initial production online once volumes stabilize.

THREE-YEAR GROWTH PLAN

In September, we announced our three-year corporate plan (2024 – 2026), focused primarily on growth from the Peace River asset. Our strategy for the three-year corporate growth plan is to maintain production levels in our Willesden Green and Pembina (Cardium), and Viking light oil business, and use the significant FCF from these assets to fund growth in our heavy oil business at Peace River. While our plan anticipates continued development in both the Bluesky and Clearwater formations, the largest growth is expected from Bluesky production given the significant inventory adjacent to existing fields and our new Walrus development area.

Key highlights of the three-year growth plan include:

• Annualized production growth rate of 16 percent – We expect our production to grow steadily over the three-year period, reaching 50,000 boe/d in 2026, while maintaining 25 percent flat annual corporate decline rate. Our light oil production will remain stable at approximately 26,000 boe/d while the Peace River asset grows substantially from 6,600 boe/d to 24,000 boe/d.

• Significant inventory remains for growth post 2026 – In total, our plan anticipates drilling 346 (318.3 net) development and appraisal/exploration wells over the three-years:

o Peace River: 199 (199 net) wells of the 869 un-risked locations as at year-end 2023; and

o Light oil business: 147 (119.3 net) wells in our light oil business (Willesden Green/Pembina and Viking, including non-operated wells), leaving 43 percent of the proved plus probable locations remaining from the total identified in our year-end 2022 reserve report (post 2023 drilling locations).

• Increased FFO – With year-over-year production growth and an increasing liquids weighting, we expect our FFO to grow from $440 million in 2024 to $655 million in 2026 at US$75.00/bbl WTI,

representing $8.19 per share in 2026 (based on our issued and outstanding share amount of 80.0 million as at August 31, 2023).

• Higher FCF generation – Our three-year growth plan calls for capital expenditures of $380 million, $445 million and $420 million in 2024, 2025 and 2026, respectively, which is expected to generate FCF of $53 million, $36 million and $213 million in each year.

• Substantial flexibility and optionality – With full ownership of our Peace River land, we control the pace of development and can quickly respond to changes in commodity prices.

Additional details concerning our three-year growth plan can be found in the September news release and associated presentation and webcast.

2023 SECOND half development program

With an expanded second half 2023 capital program, Obsidian Energy’s drilling preparation and execution began in July and continued through the third quarter, accelerating in October with four rigs in operation across our Peace River, Willesden Green, Pembina and Viking areas. We are pleased with the start of our second half development program with seven (6.7 net) wells drilled and two (2.0 net) wells placed on production during the third quarter. In addition, Obsidian Energy participated in six non-operated development wells (2.7 net) in the Pembina area during the quarter, one of which was a water injector well.

Most of our second half development drilling results are expected in the fourth quarter and early 2024. The third quarter focused on construction of new pads, spudding new wells, completing planned facility turnaround maintenance and progressing the Willesden Green facility debottleneck project.

As WTI prices continued to strengthen during the third quarter, as previously announced, we elected to increase our 2023 capital expenditures by approximately $40 million and add 12 (12.0 net) wells (Viking – eight (8.0 net) wells; Pembina – four (4.0 net) wells) to our program with production expected in early 2024.

The following operated wells are expected to be rig released during the year:

	H1 Gross (Net) Wells	H2 Gross (Net) Wells	Total Gross (Net) Wells
Heavy Oil Assets
Peace River (Bluesky)	6 (6.0)1	6 (6.0)	12 (12.0)
Peace River (Clearwater)	1 (1.0)	3 (3.0)	4 (4.0)
Light Oil Assets
Willesden Green (Cardium)	5 (5.0)	8 (7.7)	13 (12.7)
Pembina (Cardium / Devonian)	2 (1.8)	6 (6.0)	8 (7.8)
Viking	11 (11.0)	8 (8.0)	19 (19.0)
	25 (24.8)	31 (30.7)	56 (55.5)2
Peace River (OSE)	4 (4.0)	-	4 (4.0)
TOTAL OPERATED WELLS	29 (28.8)	31 (30.7)	60 (59.5)2,3
(1)<br>Two of the six wells are exploration/appraisal wells to further delineate the Bluesky play.<br><br>(2)<br>36 (35.5 net) wells rig released in 2023 are expected to be brought on production by the end of 2023 with the remaining 18 (18.0 net) wells expected to be on production in early 2024.<br><br>(3)<br>In addition, Obsidian Energy is planning to participate in a total of 20 non-operated (7.2 net) wells in 2023, three of which are water injection wells.
---

With rigs active in all areas, we are focused on completing the drilling of the remainder of the 31 well (30.7 net) second half program by year-end. In total, we expect 60 operated wells (59.5 net) will be rig-released in 2023 (including the four oilsands exploration (“OSE”) wells), of which 36 wells (35.5 net) are expected to be on production by the end of the year and the remaining 18 (18.0 net) wells on production in the first quarter of 2024.

Peace River

The third quarter of 2023 was extremely busy for the Peace River team as we analyzed the results from our first half exploration/appraisal drilling program and finalized our three-year growth plan, which is largely focused on development in the Bluesky and Clearwater formations in Peace River. At the same time, the Company focused on planned facility turnaround maintenance, continued construction of pads and road infrastructure, and began second half Bluesky development drilling.

In the third quarter, we completed a major turnaround at our Peace River Seal 9-15 gas plant to enable continued optimized operations. A key asset within our advantaged infrastructure position, the plant has approximately 10 mmcf/d of capacity with ample room for our future growth in the area. Also in the quarter, we completed maintenance and infrastructure projects across our properties, including a recently acquired 37-kilometre road upgrade in Peace River at the Dawson area, providing all season access for new exploration/appraisal activity.

Bluesky Development

We are encouraged with the initial results of our second half development program at Peace River, which follow up on previous success in Harmon Valley South (“HVS”), Cadotte and our new development area at Walrus. In the third quarter of 2023, we began drilling six (6.0 net) wells targeting the Bluesky formation in our second half 2023 development program with five (5.0 net) wells rig released during the period. Two (2.0 net) wells were drilled from existing pads at the HVS 4-32 Pad and Cadotte 2-05 Pad; both wells were completed and on production in August with the following initial results:

• 4-32 Pad - One (1.0 net) well is on production with an average 30-day initial production (“IP”) rate of 239 boe/d (99 percent oil) and peak rate of 419 boe/d (100 percent oil).

• 2-05 Pad - One (1.0 net) well is on production at an average 30-day IP rate of 366 boe/d (100 percent oil), and peak rate of 461 boe/d (100 percent oil).

After establishing Walrus as a new development area in the first half of 2023, we drilled four (4.0 net) wells in the field over the quarter with all wells rig released by mid-October. Following up on the success of the Walrus 13-19 Pad well that achieved peak production rate of 303 bbl/d (100 percent oil), initial results are encouraging with all wells drilled quickly in in the high-quality targeted Bluesky zone. One (1.0 net) well at the Walrus 13-19 Pad is also testing a lower Bluesky zone, which could add significant future well inventory and further expand this play. These four (4.0 net) wells are expected to come on production by the end of November 2023 through permanent production facilities.

Clearwater Exploration/Appraisal

The core data analyzed from the OSE wells in the first half of the year helped to further delineate our land position in Peace River, providing detailed subsurface data for both Bluesky and Clearwater formations. In parallel with the Bluesky, our Clearwater acreage offers a compelling opportunity for significant exploration and development upside with identified drilling opportunities.

Acting on the solid data and results from the first half OSE wells, we drilled and rig released the first of three (3.0 net) exploration/appraisal wells targeting the Clearwater formation in the Dawson area. The 7-13 Pad well (1.0 net) is expected to be on production in November, while the two (2.0 net) wells at the 13-23 Pad will commence drilling in November.

Willesden Green

During the third quarter, Obsidian Energy drilled three (3.0 net) wells targeting the Cardium formation and placed one (0.7 net) well on production. The well at the Open Creek 9-17 Pad surpassed internal expectations, despite being wellsite facility constrained, with strong initial peak rates and an average IP 30-day rate of 491 boe/d (86 percent oil). Given the strong performance of this well we will be returning the eastern part of our Willesden Green asset in early 2024 with several follow up locations. We expect to complete the drilling of an additional five (5.0 net) wells in our Willesden Green area during the remainder of 2023 with most of the production coming on stream in early 2024.

We continued our work on the major debottlenecking project in the East Crimson part of our Willesden Green area to both lower field pressures and expand facility capacity during the quarter. The project was completed in late October and is estimated to bring on an additional ~1,000 boe/d net production once volumes stabilize. In addition to increasing base production, the facility will allow for higher onstream rates at lower wellhead pressures for new wells, increase recoveries and reserves from existing wells, expand capacity and provide opportunities to accelerate new development locations.

Pembina

We completed several planned turnaround maintenance projects in the Pembina area during the third quarter, including our Pembina 9-17 gas plant, methane emission reduction work and pipeline expansions, which will aid future operations and development. At the same time, we completed construction to begin drilling at the Paddy North 10-28 Pad in October. The two (2.0 net) wells were rig released in late October and early November and are expected to be onstream in December. Added to the second half 2023 development program in September, the four-well 7-36 Pad was constructed in the quarter with drilling commencing at the first (1.0 net) well in November. The remaining three (3.0 net) wells will be completed and rig released prior to year-end; production from all four wells is expected to be onstream in early 2024.

Viking

Following up on the success of our first half drilling on the western side of the play, we added an eight (8.0 net) well second half development program at Viking. During the third quarter, Obsidian Energy began construction of the 2-22 Pad with drilling commencing in October. In total, four wells were rig released in October with the rest expected to be released in November. Production additions from the program is anticipated to come onstream in January 2024, providing additional cash flow from this shallow, low-risk, highly economic resource play.

UPDATed 2023 GUIDANCE

With both our recent strong well performance and financial results, we have further revised our 2023 guidance from the update announced in September with an increase in the bottom end of our production range to 32,000, which has increased the midpoint of our 2023 production. In addition, accounting for the non-cash impact of higher third quarter 2023 share-based compensation expense due to our higher share price and share repurchases, our FFO, FCF and net debt have also been revised slightly as applicable, while maintaining our WTI forecast of US$85/bbl for the balance of 2023. Our formal 2024 guidance is expected to be provided in mid-January 2024.

		September 2023E Guidance	Revised 2023E Guidance
Production1	boe/d	31,750 – 32,500	32,000 – 32,500
% oil and NGLs	%	66%	66%
Capital expenditures2	$ millions	300	300
Decommissioning expenditures	$ millions	26 – 28	26 – 28
Net operating costs	$/boe	14.25 – 14.75	14.25 – 14.75
General & administrative	$/boe	1.60 – 1.70	1.60 – 1.70
Based on midpoint of above guidance
WTI3	US$/bbl	85.00	85.00
WCS differential3	US$/bbl	15.00	15.00
AECO3	$/GJ	3.00	3.00
FFO4	$ millions	~395	~390
FFO per share (basic) 4	$/share	~4.90	~4.80
FCF4	$ millions	~65	~60
Net debt5	$ millions	~290	~310
Net debt to FFO5	Times	0.7	0.8

(1) Approximate mid-point of September 2023E guidance range: 12,700 bbl/d light oil, 5,800 bbl/d heavy oil, 2,600 bbl/d NGLs and 66.2 mmcf/d natural gas with a minimal amount of forecasted production associated with exploratory capital expenditures. Approximate mid-point of Revised 2023E guidance range: 12,500 bbl/d light oil, 6,000 bbl/d heavy oil, 2,600 bbl/d NGLs and 66.9 mmcf/d natural gas with a minimal amount of forecasted production associated with exploratory capital expenditures.

(2) Capital expenditures include approximately $25 million for exploration/appraisal well activity with minimal impact on forecasted production volumes.

(3) Pricing assumptions of September 2023E guidance were forecasted for October 1, 2023, to December 31, 2023. Full year pricing assumptions, including actuals realized at that time, resulting in WTI US$79.18/bbl, AECO $2.66/mcf, WCS differentials of US$16.87/bbl and FX of 1.34x CAD/USD.

Pricing assumptions of Revised 2023 guidance are forecasted for November 1, 2023, to December 31, 2023. Full year pricing assumptions, including actuals realized thus far, result in WTI US$79.34/bbl, AECO $2.78/mcf, WCS differentials of US$17.15/bbl and FX of 1.35x CAD/USD.

(4) September 2023E guidance FFO and FCF included risk management (hedging) adjustments up to September 18, 2023, and includes approximately $5 million of estimated charges for full year 2023 related to the deferred share units, performance share units and non-treasury incentive plan cash compensation amounts, which are based on a share price of $10.00 per share. FFO per share was based on a total estimated average of 81.2 million shares outstanding for 2023.

Revised 2023E guidance FFO and FCF include risk management (hedging) adjustments up to October 31, 2023, and includes approximately $17 million of estimated charges for full year 2023 related to the deferred share units, performance share units and non-treasury incentive plan cash compensation amounts which are based on a share price of $12.00 per share. FFO per share was based on a total estimated average of 81.0 million shares outstanding for 2023.

(5) September 2023E guidance net debt figures estimated as at December 31, 2023, and included the impact of approximately $21.2 million of share purchases under the NCIB to August 31, 2023. Revised 2023E guidance net debt figures estimated as at December 31, 2023, and includes the impact of approximately $33.0 million of share purchases under the NCIB to November 8, 2023. Due to changes in the timing of our capital program, our expected working capital deficiency at December 31, 2023, increased by $20 million in our Revised 2023E guidance.

Guidance Sensitivity Table1
	Range	Change in 2023 FFO ($ millions)
WTI (US$/bbl)	+/- $1.00/bbl	~1.4
MSW light oil differential (US$/bbl)	+/- $1.00/bbl	~0.8
WCS heavy oil differential (US$/bbl)	+/- $1.00/bbl	~0.4
Change in AECO ($/GJ)	+/- $0.25/GJ	~0.5

(1) Includes risk management (hedging) adjustments up to October 31, 2023.

HEDGING UPDATE

We have added to our WTI hedge positions through a combination of WTI near months swaps and collars as well as to our power hedge position. For the first nine months of 2023, Obsidian Energy realized $12.8 million in positive hedge gains with natural gas and a loss of $1.8 million with oil. Currently, the following contracts are in place on a weighted average basis:

Oil Contracts

Type	Remaining Term	Volume<br>(bbl/d)	Swap <br>Price ($/bbl)
WTI Swap	October 2023	1,781 bbl/d	US$87.96
WTI Swap	November 2023	1,083 bbl/d	US$80.77
Oil Collars	October 2023	8,500 bbl/d	$115.70 – $124.05
Oil Collars	November 2023	3,917 bbl/d	$112.24 – $117.74
WCS Differential	October – December 2023	1,500 bbl/d	($21.20)

AECO Natural Gas Contracts

Type	Term	Volume<br>(mcf/d)		Percentage Hedged1	Swap Price ($/mcf)
AECO Swap	October 2023		49,929	75%	3.48
AECO Swap	November 2023 – March 2024		26,588	41%	3.47

(1) Percentage calculated based on annual expected pre-royalty natural gas production of 66.9 mmcf/d (midpoint of Revised 2023E guidance).

Electricity Contracts

Type	Remaining Term	Volume<br>(MWh/d)		Swap Price (/MWh)
Power Swap	January - December 2024		144 MWh/d

All values are in US Dollars.

UPDATED CORPORATE PRESENTATION

For further information on these and other matters, Obsidian Energy will post an updated corporate presentation later today on our website, www.obsidianenergy.com.

ADDITIONAL READER ADVISORIES

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 equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

TEST RESULTS AND INITIAL PRODUCTION RATES

Test results and initial production rates disclosed herein, particularly those short in duration, may not necessarily be indicative of long-term performance or of ultimate recovery. Readers are cautioned that short-term rates should not be relied upon as indicators of future performance of these wells and therefore should not be relied upon for investment or other purposes. A pressure transient analysis or well-test interpretation has not been carried out and thus certain of the test results provided herein should be considered preliminary until such analysis or interpretation has been completed.

DRILLING LOCATIONS

This news release discloses drilling locations or inventory in three categories: (i) proved locations; (ii) probable locations; and (iii) unbooked locations. Proved locations and probable locations are derived from the reserves report prepared by GLJ Ltd. effective as of December 31, 2022, and dated January 20, 2023 (the “Reserves Report”) and account for drilling locations that have associated proved and/or probable reserves, as applicable. Unbooked drilling locations are internal estimates based on our prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources.

Unbooked locations have been identified by management as an estimation of our multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that we will drill all unbooked locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which we actually drill wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been de-risked by drilling existing wells in relative close proximity to such unbooked drilling locations, other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves or production.

The Company has an aggregate of 284 (233 net) booked proved locations and 372 (311 net) booked probable locations as set forth in the Reserves Report.

Of the 869 (869 net) un-risked locations in Peace River as at year-end 2023 based on our current internal estimates, 8 (8 net) are proved locations, 9 (9 net) are probable locations, and 852 (852 net) are unbooked locations.

Of the 670 (670 net) un-risked locations in Peace River that we anticipate remaining at the end of 2026, 0 (0 net) are proved locations, 0 (0 net) are probable locations, and 670 (670 net) are unbooked locations.

Of the 199 (199 net) development and appraisal/exploration locations we plan to drill in Peace River over the course of our three-year plan, 8 (8 net) are proved locations, 9 (9 net) are probable locations, and 182 (182 net) are unbooked locations.

Of the 147 (119.3 net) development locations we plan to drill in Willesden Green/Pembina and Viking) over the course of our three-year plan, 103 (80.9 net) are proved locations, 15 (11.2 net) are probable locations, and 29 (27.2 net) are unbooked locations (based on the Reserves Report).

NON-GAAP AND OTHER FINANCIAL MEASURES

Throughout this news release and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position, and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures provided by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income (loss) and cash flow from operating activities as indicators of our performance. The Company's unaudited consolidated financial statements and MD&A as at and for the three and nine months ended September 30, 2023 are available on the Company's website at www.obsidianenergy.com and under our SEDAR+ profile at www.sedarplus.ca and EDGAR profile at www.sec.gov. The disclosure under the section "Non-GAAP and Other Financial Measures" in the MD&A is incorporated by reference into this news release.

Non-GAAP Financial Measures

The following measures are non-GAAP financial measures: FFO; net debt; net operating costs; netback; and FCF. These non-GAAP financial measures are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See the disclosure under the section "Non-GAAP and Other Financial Measures" in our MD&A for the three and nine months ended September 30, 2023, for an explanation of the composition of these measures, how these measures provide useful information to an investor, and the additional purposes, if any, for which management uses these measures.

For a reconciliation of FFO to cash flow from operating activities, being our nearest measure prescribed by IFRS, see “Non-GAAP Measures Reconciliations” below.

For a reconciliation of net debt to long-term debt, being our nearest measure prescribed by IFRS, see “Non-GAAP Measures Reconciliations” below.

For a reconciliation of net operating costs to operating costs, being our nearest measure prescribed by IFRS, see “Non-GAAP Measures Reconciliations” below.

For a reconciliation of netback to sales price, being our nearest measure prescribed by IFRS, see “Non-GAAP Measures Reconciliations” below.

For a reconciliation of FCF to cash flow from operating activities, being our nearest measure prescribed by IFRS, see “Non-GAAP Measures Reconciliations” below.

Non-GAAP Ratios

The following measures are non-GAAP ratios: FFO (basic per share ($/share) and diluted per share ($/share)), which use FFO as a component; net operating costs ($/boe), which uses net operating costs as a component; netback ($/boe), which uses netback as a component; and net debt to FFO, which uses net debt and FFO as components. These non-GAAP ratios are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See the disclosure under the section "Non-GAAP and Other Financial Measures" in our MD&A for the three and nine months ended September 30, 2023, for an explanation of the composition of these non-GAAP ratios, how these non-GAAP ratios provide useful information to an investor, and the additional purposes, if any, for which management uses these non-GAAP ratios.

Supplementary Financial Measures

The following measures are supplementary financial measures: average sales price; cash flow from operating activities (basic per share and diluted per share); and G&A costs ($/boe). See the disclosure under the section "Non-GAAP and Other Financial Measures" in our MD&A for the three and nine months ended September 30, 2023, for an explanation of the composition of these measures.

Non-GAAP Measures Reconciliations

Cash Flow from Operating Activities, FFO and FCF

	Three months ended September 30						Nine months ended<br> September 30
(millions)	2023			2022			2023			2022
Cash flow from operating activities	$	95.3		$	121.4		$	235.0		$	330.3
Change in non-cash working capital		(3.6	)		(21.9	)		16.7			(13.9	)
Decommissioning expenditures		5.3			3.5			18.9			15.8
Onerous office lease settlements		2.2			2.3			6.7			6.9
Settlement of restricted share units		0.1			-			4.7			-
Deferred financing costs		(0.6	)		(0.7	)		(1.7	)		(2.1	)
Restructuring charges1		-			-			-			2.5
Transaction costs		-			-			-			0.1
Other expenses1		0.2			-			0.3			0.6
Funds flow from operations		98.9			104.6			280.6			340.2
Capital expenditures		(45.9	)		(74.0	)		(192.5	)		(217.7	)
Decommissioning expenditures		(5.3	)		(3.5	)		(18.9	)		(15.8	)
Free Cash Flow	$	47.7		$	27.1		$	69.2		$	106.7

(1) Excludes the non-cash portion of restructuring and other expenses.

Netback to Sales Price

	Three months ended September 30						Nine months ended<br> September 30
(millions)	2023			2022			2023			2022
Sales price	$	200.9		$	211.1		$	549.2		$	692.4
Risk management gain (loss)		2.9			(1.6	)		11.0			(32.4	)
Net sales price		203.8			209.5			560.2			660.0
Royalties		(27.1	)		(38.8	)		(72.8	)		(113.5	)
Net operating costs		(41.2	)		(40.1	)		(127.2	)		(117.3	)
Transportation		(11.2	)		(8.7	)		(30.2	)		(25.5	)
Netback	$	124.3		$	121.9		$	330.0		$	403.7

Net Operating Costs to Operating Costs

	Three months ended September 30						Nine months ended<br> September 30
(millions)	2023			2022			2023			2022
Operating costs	$	46.7		$	43.5		$	143.1		$	127.7
Less processing fees		(3.4	)		(1.6	)		(10.7	)		(5.5	)
Less road use recoveries		(2.1	)		(1.8	)		(5.2	)		(4.9	)
Net operating costs	$	41.2		$	40.1		$	127.2		$	117.3

Net Debt to Long-Term Debt

	As at
	September 30
(millions)	2023				2022
Long-term debt
Syndicated credit facility		$	118.0			$	134.0
Senior unsecured notes			118.4				127.6
Unamortized discount of senior unsecured notes			(1.8	)			(2.4	)
Deferred financing costs			(3.9	)			(5.5	)
Total			230.7				253.7
Working capital deficiency
Cash			(0.9	)			-
Accounts receivable			(82.7	)			(79.6	)
Prepaid expenses and other			(16.3	)			(14.7	)
Accounts payable and accrued liabilities			163.5				163.7
Total			63.6				69.4
Net debt		$	294.3			$	323.1

ABBREVIATIONS

Oil		Natural Gas
API	American Petroleum Institute	mcf	thousand cubic feet
bbl	barrel or barrels	mcf/d	Thousand cubic feet per day
bbl/d	barrels per day	mmcf	million cubic feet
boe	barrel of oil equivalent	mmcf/d	Million cubic feet per day
boe/d	barrels of oil equivalent per day	bcf	billion cubic feet
mmbbls	million barrels	NGL	natural gas liquids
mmboe	million barrels of oil equivalent	GJ	gigajoule
MSW	Mixed Sweet Blend	AECO	Alberta benchmark price for natural gas
WTI	West Texas Intermediate
WCS	Western Canadian Select

FUTURE-ORIENTED FINANCIAL INFORMATION

This release contains future-oriented financial information (“FOFI”) and financial outlook information relating to the Company's prospective results of operations, operating costs, expenditures, production, FFO, FCF, net operating costs, and net debt, which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth below under "Forward-Looking Statements". The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, such FOFI, or if any of them do so, what benefits the Company will derive therefrom. The Company has included this FOFI to provide readers with a more complete perspective on the Company's business as of the date hereof and such information may not be appropriate for other purposes.

Without limitation of the foregoing, this news release contains information regarding our growth plans through 2026, including estimates of our 2023 to 2026 capital expenditures, production levels, FFO, FFO per share, FCF, FCF per share, net operating costs, net debt and net debt to FFO ratio, which are based on various factors and assumptions that are subject to change including regarding production levels, commodity prices, operating and other costs and capital expenditure levels, and in the case of the years other than 2023, such estimates are provided for illustration purposes only and are based on budgets and plans that have not been finalized and are subject to a variety of contingencies including prior years' results. To the extent that such estimates constitute FOFI or a financial outlook, they were approved by

management of the Company on November 8, 2023, and are included to provide readers with an understanding of the Company's anticipated plans and financial results based on the capital expenditures and other assumptions described and readers are cautioned that the information may not be appropriate for other purposes.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute forward-looking statements or information (collectively “forward-looking statements”) within the meaning of the "safe harbour" provisions of applicable securities legislation. Forward-looking statements are typically identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “budget”, “may”, “will”, “project”, “could”, “plan”, “intend”, “should”, “believe”, “outlook”, “objective”, “aim”, “potential”, “target” and similar words suggesting future events or future performance. In addition, statements relating to “reserves” or “resources” are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this document contains forward-looking statements pertaining to, without limitation, the following: that we will file the unaudited interim consolidated financial statements and MD&A on our website, SEDAR+ and EDGAR in due course; our expectations for our three-year growth plan including but not limited to production, development, inventory and locations, growth and decline rates, liquids weighting, FFO, FCF, capital expenditures and optionality as prices change; expectations in connection with the debottlenecking project; expected timing for drilling, rig releases, on-production dates; our expectations in connection with our Bluesky and Clearwater acreage; our expectations for development program completion and future development; our pricing assumptions; our updated guidance for production, production percentages, capital and decommissioning expenditures, net operating costs, G&A costs, FFO, FCF, net debt and net debt to FFO; our guidance sensitivities; our expected release timing for 2024 guidance; our hedges; and our expectations for an updated corporate presentation.

With respect to forward-looking statements and FOFI contained in this document, the Company has made assumptions regarding, among other things: that the Company does not dispose of or acquire material producing properties or royalties or other interests therein other than stated herein (provided that, except where otherwise stated, the forward-looking statements and FOFI contained herein do not assume the completion of any transaction); that regional and/or global health related events will not have any adverse impact on energy demand and commodity prices in the future; that the Company's operations and production will not be disrupted by circumstances attributable to the COVID-19 pandemic and the responses of governments and the public to any resurgence of the pandemic; global energy policies going forward, including the continued ability of members of OPEC, Russia and other nations to agree on and adhere to production quotas from time to time; our ability to qualify for (or continue to qualify for) new or existing government programs created as a result of the COVID-19 pandemic or otherwise, and obtain financial assistance therefrom, and the impact of those programs on our financial condition; Obsidian Energy's views with respect to its financial condition and prospects, the stability of general economic and market conditions, currency exchange rates and interest rates, the availability of cash or other financing sources to fund for repurchases of common shares under the NCIB and our ability to comply with applicable terms and conditions under the Company’s debt agreements, the existence of alternative uses for Obsidian Energy's cash resources and compliance with applicable laws and regulations (including Canadian and U.S. securities laws and Canadian corporate law) pertaining to the NCIB; our ability to execute our plans as described herein and in our other disclosure documents, including our three-year growth plan, and the impact that the successful execution of such plans will have on our Company and our stakeholders; future capital expenditure and decommissioning expenditure levels; future net operating costs and G&A costs; future crude oil, natural gas liquids and natural gas prices and differentials between light, medium and heavy oil prices and Canadian, WTI and world oil and natural gas prices; future hedging activities; future crude oil, natural gas liquids and natural gas production levels, including that we will not be required to shut-in production due to low commodity prices or the further deterioration of commodity prices; future exchange rates and interest rates; future debt levels; our ability to execute our capital programs as planned without significant adverse impacts from various factors beyond our control, including extreme weather events, wild fires, infrastructure access and delays in obtaining regulatory approvals and third party consents; our ability

to obtain equipment in a timely manner to carry out development activities and the costs thereof; our ability to market our oil and natural gas successfully to current and new customers; our ability to obtain financing on acceptable terms, including our ability (if necessary) to continue to extend the revolving period and term out period of our credit facility, our ability to maintain the existing borrowing base under our credit facility, our ability (if necessary) to replace our syndicated bank facility and our ability (if necessary) to finance the repayment of our senior unsecured notes on maturity or pursuant to the terms of the underlying agreement; and our ability to add production and reserves through our development and exploitation activities.

Although the Company believes that the expectations reflected in the forward-looking statements and FOFI contained in this document, and the assumptions on which such forward-looking statements and FOFI are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements and FOFI included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements and FOFI involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the forward-looking statements and FOFI contained herein will not be correct, which may cause our actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements and FOFI. These risks and uncertainties include, among other things: our inability to repurchase common shares under the NCIB in the amounts permitted or at all due to a lack of financial resources, the inability to comply with our debt agreements, legal restrictions on share repurchases, competing demands for our financial resources, or other factors; the anticipated benefits of repurchasing our shares under the NCIB do not materialize; Obsidian Energy’s future capital requirements; general economic and market conditions; demand for Obsidian Energy’s products; and unforeseen legal or regulatory developments and other risk factors detailed from time to time in Obsidian Energy reports filed with the Canadian securities regulatory authorities and the United States Securities and Exchange Commission; the possibility that we change our 2023 budget in response to internal and external factors, including those described herein; the possibility that the Company will not be able to continue to successfully execute our business plans and strategies in part or in full (including our recent announced three-year growth plan), and the possibility that some or all of the benefits that the Company anticipates will accrue to our Company and our stakeholders as a result of the successful execution of such plans and strategies do not materialize; the possibility that the Company is unable to complete one or more of the potential transactions being pursued, on favorable terms or at all; the possibility that the Company ceases to qualify for, or does not qualify for, one or more existing or new government assistance programs implemented in connection regional and/or global health related events or otherwise, that the impact of such programs falls below our expectations, that the benefits under one or more of such programs is decreased, or that one or more of such programs is discontinued; the impact on energy demand and commodity prices of regional and/or global health related events, and the responses of governments and the public to any pandemic, including the risk that the amount of energy demand destruction and/or the length of the decreased demand exceeds our expectations; the risk that there is another significant decrease in the valuation of oil and natural gas companies and their securities and the decrease in confidence in the oil and natural gas industry generally whether caused by a resurgence of the COVID-19 pandemic, the worldwide transition towards less reliance on fossil fuels and/or other factors; the risk that the financial capacity of the Company's contractual counterparties is adversely affected and potentially their ability to perform their contractual obligations; the possibility that the revolving period and/or term out period of our credit facility and the maturity date of our senior unsecured notes is not further extended (if necessary), that the borrowing base under our credit facility is reduced, that the Company is unable to renew or refinance our credit facilities on acceptable terms or at all and/or finance the repayment of our senior unsecured notes when they mature on acceptable terms or at all and/or obtain new debt and/or equity financing to replace one or all of our credit facilities and senior unsecured notes; the possibility that we breach one or more of the financial covenants pursuant to our agreements with our lenders and the holders of our senior unsecured notes; the possibility that we are unable to complete the Offer with our noteholders; the possibility that we are forced to shut-in production, whether due to commodity prices failing to rise or other factors; the risk that OPEC and other nations fail to agree on and/or adhere to production quotas from time to time that are sufficient to balance supply and demand fundamentals for crude oil; general economic and political conditions in Canada, the U.S. and globally, and in particular, the effect that those conditions have on commodity prices and our access to capital; the risk that wars and other armed

conflicts adversely affect world economies and the demand for oil and natural gas, including the ongoing war between Russian and Ukraine and/or hostilities in the Middle East; industry conditions, including fluctuations in the price of crude oil, natural gas liquids and natural gas, price differentials for crude oil and natural gas produced in Canada as compared to other markets, and transportation restrictions, including pipeline and railway capacity constraints; fluctuations in foreign exchange or interest rates; unanticipated operating events or environmental events that can reduce production or cause production to be shut-in or delayed (including extreme cold during winter months, wild fires and flooding); the possibility that fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to hydrocarbons and technological advances in fuel economy and renewable energy generation systems could permanently reduce the demand for oil and natural gas and/or permanently impair the Company's ability to obtain financing on acceptable terms or at all, and the possibility that some or all of these risks are heightened as a result of the response of governments and consumers to public opinion and/or special interest groups. Additional information on these and other factors that could affect Obsidian Energy, or its operations or financial results, are included in the Company's Annual Information Form (See "Risk Factors" and "Forward-Looking Statements" therein) which may be accessed through the SEDAR+ website (www.sedarplus.ca), EDGAR website (www.sec.gov) or Obsidian Energy's website. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

Unless otherwise specified, the forward-looking statements and FOFI contained in this document speak only as of the date of this document. Except as expressly required by applicable securities laws, we do not undertake any obligation to publicly update or revise any forward-looking statements. The forward-looking statements and FOFI contained in this document are expressly qualified by this cautionary statement.

Obsidian Energy shares are listed on both the Toronto Stock Exchange in Canada and the NYSE American in the United States under the symbol "OBE".

All figures are in Canadian dollars unless otherwise stated.

contact

OBSIDIAN ENERGY

Suite 200, 207 - 9th Avenue SW, Calgary, Alberta T2P 1K3

Phone: 403-777-2500

Toll Free: 1-866-693-2707

Website: www.obsidianenergy.com;

Investor Relations:

Toll Free: 1-888-770-2633

E-mail: investor.relations@obsidianenergy.com

EX-99.2

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2023

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) of Obsidian Energy Ltd. (“Obsidian Energy”, the “Company”, “we”, “us”, “our”) should be read in conjunction with the Company's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2023 and the Company’s audited consolidated financial statements and MD&A for the year ended December 31, 2022. The date of this MD&A is November 8, 2023. All dollar amounts contained in this MD&A are expressed in millions of Canadian dollars unless noted otherwise.

Throughout this MD&A and in other materials disclosed by the Company, we adhere to generally accepted accounting principles ("GAAP"), however the Company also employs certain non-GAAP measures to analyze financial performance, financial position, and cash flow, including funds flow from operations, netback, sales, gross revenues, net operating costs, net debt and free cash flow. Additionally, other financial measures are also used to analyze performance. These non-GAAP and other financial measures do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and therefore may not be comparable to similar measures provided by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income and cash flow from operating activities, as indicators of our performance.

This MD&A also contains oil and natural gas information and forward-looking statements. Please see the Company's disclosure under the headings "Non-GAAP and Other Financial Measures", "Oil and Natural Gas Information", and "Forward-Looking Statements" included at the end of this MD&A.

Quarterly Financial Summary

(millions, except per share and production amounts) (unaudited)

	Sep. 30		Jun. 30		Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31		Dec. 31
Three months ended	2023		2023		2023		2022		2022		2022		2022		2021
Production revenues	$	200.4	$	166.0	$	180.9	$	206.5	$	210.6	$	276.5	$	203.7	$	149.8
Cash flow from operating activities		95.3		67.1		72.6		126.5		121.4		125.0		83.9		62.6
Basic per share (1)		1.18		0.82		0.89		1.54		1.48		1.52		1.03		0.81
Diluted per share (1)		1.15		0.79		0.87		1.50		1.44		1.48		1.00		0.78
Funds flow from operations (2)		98.9		87.4		94.3		110.5		104.6		157.0		78.6		80.0
Basic per share (3)		1.22		1.07		1.15		1.34		1.27		1.91		0.97		1.04
Diluted per share (3)		1.19		1.03		1.12		1.31		1.24		1.86		0.94		1.00
Net income		24.8		18.4		30.5		631.7		40.7		113.9		23.8		21.7
Basic per share		0.31		0.22		0.37		7.69		0.50		1.39		0.29		0.28
Diluted per share	$	0.30	$	0.22	$	0.36	$	7.47	$	0.48	$	1.35	$	0.28	$	0.27
Production
Light oil (bbl/d)		12,452		12,512		12,809		12,105		11,062		12,261		11,114		11,155
Heavy oil (bbl/d)		6,260		5,356		6,241		5,983		5,854		6,174		5,789		3,237
NGLs (bbl/d)		2,708		2,432		2,678		2,520		2,379		2,406		2,432		2,310
Natural gas (mmcf/d)		69		64		69		67		64		64		60		58
Total (boe/d)(4)		32,937		31,042		33,153		31,742		29,985		31,575		29,407		26,352

(1) Supplementary financial measure. See "Non-GAAP and Other Financial Measures".

(2) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

(3) Non-GAAP financial ratio. See "Non-GAAP and Other Financial Measures".

(4) Disclosure of production on a per boe basis in this MD&A consists of the constituent product types and their respective quantities. See also "Supplemental Production Disclosure" and "Oil and Natural Gas Information".

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 1

Cash flow from Operating Activities, Funds Flow from Operations and Free Cash Flow

	Three months ended<br>September 30						Nine months ended<br>September 30
(millions, except per share amounts)	2023			2022			2023			2022
Cash flow from operating activities	$	95.3		$	121.4		$	235.0		$	330.3
Change in non-cash working capital		(3.6	)		(21.9	)		16.7			(13.9	)
Decommissioning expenditures		5.3			3.5			18.9			15.8
Onerous office lease settlements		2.2			2.3			6.7			6.9
Settlement of restricted share units		0.1			-			4.7			-
Deferred financing costs		(0.6	)		(0.7	)		(1.7	)		(2.1	)
Restructuring charges (1)		-			-			-			2.5
Transaction costs		-			-			-			0.1
Other expenses (1)		0.2			-			0.3			0.6
Funds flow from operations (2)		98.9			104.6			280.6			340.2
Capital expenditures		(45.9	)		(74.0	)		(192.5	)		(217.7	)
Decommissioning expenditures		(5.3	)		(3.5	)		(18.9	)		(15.8	)
Free Cash Flow (2)	$	47.7		$	27.1		$	69.2		$	106.7
Per share – funds flow from operations (3)
Basic per share	$	1.22		$	1.27		$	3.45		$	4.16
Diluted per share	$	1.19		$	1.24		$	3.37		$	4.04

(1) Excludes the non-cash portion of restructuring and other expenses.

(2) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

(3) Non-GAAP financial ratio. See "Non-GAAP and Other Financial Measures".

Cash flow from operating activities and funds flow from operations decreased in both periods in 2023 from 2022 primarily due to lower commodity prices which resulted in lower production revenues. This was partially offset by higher average production in the first nine months of 2023 compared to 2022 and realized hedging gains in the first nine months of 2023 compared to realized hedging losses in 2022.

In Q3 2023, both cash flow from operating activities and funds flow from operations were impacted by higher share-based compensation charges of $13.1 million related to certain cash settled share-based incentive plans. None of these share-based awards fully vested requiring payment to staff during the period. The expense was primarily due to the significant increase in the Company’s share price and resultant mark-to-market charge (September 30, 2023 per share price close on the Toronto Stock Exchange of $11.18 compared to June 30, 2023 per share price close of $7.75).

During Q2 2023, production volumes were reduced by approximately 2,100 boe/d due to temporary shut-ins throughout May as a result of the wildfires in Alberta. These fires impacted our Cardium and Peace River operations and resulted in a reduction in funds flow from operations of approximately $6 million in Q2 2023. All production was restored by early June.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 2

Business Strategy

The Company recently announced a three-year plan with expected production growth to 50,000 boe/d in 2026. The increase is expected to be driven primarily by the development of our Peace River assets, which are forecasted to more than triple production to 24,000 boe/d in 2026.

Our strategy for the three-year corporate growth plan is to maintain production levels in our light oil assets (Willesden Green and Pembina (Cardium) and Viking) and use the significant free cash flow expected to be generated from these assets to fund growth in our heavy oil business at Peace River until it becomes self-sustaining which, subject to commodity prices, is anticipated to be by 2026. Our plan anticipates continued development in both the Bluesky and Clearwater heavy oil formations, with Bluesky production providing the primary growth given the significant inventory adjacent to existing fields and our new Walrus development area.

The three-year plan allows the Company to focus on growing Peace River production and per share metrics, with potential options to return capital to shareholders and/or further reduce debt levels. In 2023, we began our share buyback program under our normal course issuer bid (“NCIB”) and have re-purchased and cancelled 3,603,635 common shares for total consideration of approximately $32.9 million to-date in 2023. Purchases under the NCIB are subject to having $65 million of liquidity and complying with the terms of our current credit facilities.

The Company continues to focus on our Environmental, Social & Governance ("ESG") initiatives and progressed on our environmental remediation efforts in 2023, with a focus on abandoning and reclaiming inactive fields in Northern Alberta. Currently, we anticipate spending between $26 - $28 million on our decommissioning expenditures in 2023. In the coming years, the Company will continue to focus on abandoning and reclaiming inactive fields across our portfolio while making a positive difference to the environment, stakeholders and communities where we live and work.

Business Environment

The following table outlines quarterly averages for benchmark prices and Obsidian Energy’s realized prices for the previous eight quarters.

			Q2 2023			Q1 2023			Q4 2022			Q3 2022			Q2 2022			Q1 2022			Q4 2021
Benchmark prices
WTI oil (US/bbl)	82.26		$	73.78		$	76.13		$	82.65		$	91.55		$	108.41		$	94.29		$	77.19
Edm mixed sweet par price (CAD/bbl)	107.89			95.12			99.06			110.03			116.88			137.76			115.64			93.36
Western Canada Select (CAD/bbl)	93.07			78.89			69.44			77.38			93.62			122.06			100.99			78.82
NYMEX Henry Hub (US/mmbtu)	2.55			2.10			3.42			6.26			8.20			7.17			4.95			5.83
AECO 5A Index (CAD/mcf)	2.60			2.45			3.22			5.11			4.16			7.24			4.74			4.66
Foreign exchange rate (US/CAD)	1.34			1.34			1.35			1.35			1.31			1.28			1.27			1.26
Benchmark differentials
WTI - Edm Light Sweet (US/bbl)	(1.86	)		(2.96	)		(2.86	)		(1.61	)		(2.05	)		(0.50	)		(2.96	)		(3.10	)
WTI - Western Canadian Select Heavy (US/bbl)	(12.89	)		(15.04	)		(24.77	)		(25.66	)		(19.86	)		(12.80	)		(14.53	)		(14.64	)
Average sales price (1) (2)
Light oil (CAD/bbl)	109.56			96.92			101.51			110.45			118.66			139.88			117.91			92.55
Heavy oil (CAD/bbl)	80.14			61.63			44.98			62.19			81.78			106.18			84.77			51.76
NGLs (CAD/bbl)	49.71			50.45			59.37			64.33			69.12			82.93			68.09			59.46
Total liquids (CAD/bbl)	93.40			82.04			80.08			90.80			101.36			123.32			101.72			80.07
Natural gas (CAD/mcf)	2.65		$	2.56		$	4.06		$	5.66		$	5.31		$	7.38		$	4.96		$	5.05

All values are in US Dollars.

(1) Excludes the impact of realized hedging gains or losses.

(2) Supplementary financial measures. See "Non-GAAP and Other Financial Measures".

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 3

Oil

WTI prices increased throughout Q3 2023 as Saudi Arabia continued their voluntary approximately 1 million boe/d production restriction for the remainder of 2023, settling close to WTI US$90 per barrel in September. For Q3, 2023, WTI averaged US$82.26 per barrel.

During Q3 2023, in addition to WTI prices increasing, WCS prices experienced strong gains due to oil sands maintenance restricting supply and seasonal demand resulting in differentials improving in Q3 2023 to average US$12.89 per barrel compared to a Q2 2023 average of US$15.04 per barrel. The MSW differential also narrowed quarter over quarter, settling at an average of US$1.86 per barrel to WTI.

The Company currently has the following oil hedging contracts in place on a weighted average basis:

Type		Remaining<br>Term	Price (/bbl)
WCS Differential Swap	1,500	November 2023 - December 2023		)
WTI Swap	1,083	November 2023
WTI Collar	3,917	November 2023	112.24 - 117.74

All values are in US Dollars.

Natural Gas

NYMEX Henry Hub gas prices daily settled in a range of US$2.48/mmbtu to US$2.96/mmbtu throughout the quarter. The average NYMEX price for Q3 2023 was US$2.55/mmbtu.

In Alberta, AECO 5A prices averaged $2.60/mcf in Q3 2023 an increase from $2.45/mcf in Q2 2023. The combination of wildfires in Alberta, which tightened supply, and warm summer temperatures led to the increase in prices.

The Company currently has the following natural gas hedging contracts in place on a weighted average basis:

Type	Volume <br>(mcf/d)		Remaining<br>Term	Price (/mcf)
AECO Swap		26,588	November 2023 - March 2024

All values are in US Dollars.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 4

RESULTS OF OPERATIONS

Average Sales Prices (1)

	Three months ended<br>September 30									Nine months ended<br>September 30
	2023			2022			% <br>change			2023			2022			% <br>change
Light oil (per bbl)	$	109.56		$	118.66			(8	)	$	102.67		$	125.99			(19	)
Heavy oil (per bbl)		80.14			81.78			(2	)		62.44			91.19			(32	)
NGL (per bbl)		49.71			69.12			(28	)		53.21			73.38			(27	)
Total liquids (per bbl)		93.40			101.36			(8	)		85.25			109.18			(22	)
Realized risk management gain (loss) (per bbl)		(1.03	)		0.54		n/a				(0.30	)		(4.83	)		(94	)
Total liquids price, net (per bbl)		92.37			101.90			(9	)		84.95			104.35			(19	)
Natural gas (per mcf)		2.65			5.31			(50	)		3.09			5.90			(48	)
Realized risk management gain (loss) (per mcf)		0.78			(0.44	)	n/a				0.69			(0.37	)	n/a
Natural gas net (per mcf)		3.43			4.87			(30	)		3.78			5.53			(32	)
Weighted average (per boe)		66.29			76.58			(13	)		62.13			83.64			(26	)
Realized risk management gain (loss) (per boe)		0.96			(0.59	)	n/a				1.25			(3.92	)	n/a
Weighted average net (per boe)	$	67.25		$	75.99			(12	)	$	63.38		$	79.72			(20	)

(1) Supplementary financial measures. See "Non-GAAP and Other Financial Measures".

Production

	Three months ended<br>September 30						Nine months ended<br>September 30
Daily production	2023		2022		% <br>change		2023		2022		% <br>change
Light oil (bbl/d)		12,452		11,062		13		12,590		11,480		10
Heavy oil (bbl/d)		6,260		5,854		7		5,952		5,940	-
NGL (bbl/d)		2,708		2,379		14		2,606		2,405		8
Natural gas (mmcf/d)		69		64		8		67		63		6
Total production (boe/d)		32,937		29,985		10		32,376		30,324		7

The Company's production levels increased in both periods in 2023 compared to 2022 as a result of our active development program and strong drilling results. During the first nine months of 2023 we brought on production 35 wells (34.6 net) across our Peace River, Cardium and Viking areas.

During Q2 2023 production levels were impacted by temporary production shut-ins associated with the Alberta wildfires which reduced our average production for Q2 2023 by approximately 2,100 boe/d.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 5

Average production within the Company’s key development areas and within the Company’s Legacy asset area were as follows:

	Three months ended<br>September 30							Nine months ended<br>September 30
Daily production (boe/d) (1)	2023		2022		%<br>change			2023		2022		%<br>change
Cardium		23,403		21,853		7			23,537		22,395		5
Peace River		6,810		6,623		3			6,538		6,686		(2	)
Viking		2,361		1,034		128			1,913		819		134
Legacy		363		475		(24	)		388		424		(8	)
Total		32,937		29,985		10			32,376		30,324		7

(1) Refer to “Supplemental Production Disclosure” for details by product type.

Netbacks

	Three months ended September 30
(per boe)	2023			2022
Netback:
Sales price (1)	$	66.29		$	76.58
Risk management gain (loss) (2)		0.96			(0.59	)
Royalties		(8.93	)		(14.06	)
Transportation		(3.69	)		(3.18	)
Net operating costs (3)		(13.60	)		(14.57	)
Netback (3)	$	41.03		$	44.18
	(boe/d)			(boe/d)
Production		32,937			29,985

(1) Includes the impact of commodities purchased and sold to/from third parties of $0.5 million (2022 – $0.5 million).

(2) Realized risk management gains and losses on commodity contracts, including the PROP Energy 45 Limited Partnership hedges in 2022.

(3) Non-GAAP financial ratios. See "Non-GAAP and Other Financial Measures".

	Nine months ended September 30
(per boe)	2023			2022
Netback:
Sales price (1)	$	62.13		$	83.64
Risk management gain (loss) (2)		1.25			(3.92	)
Royalties		(8.23	)		(13.71	)
Transportation		(3.41	)		(3.08	)
Net operating costs (3)		(14.40	)		(14.17	)
Netback (3)	$	37.34		$	48.76
	(boe/d)			(boe/d)
Production		32,376			30,324

(1) Includes the impact of commodities purchased and sold to/from third parties of $1.9 million (2022 – $1.6 million).

(2) Realized risk management gains and losses on commodity contracts, including the PROP Energy 45 Limited Partnership hedges in 2022.

(3) Non-GAAP financial ratios. See "Non-GAAP and Other Financial Measures".

The Company's netback decreased in 2023 from the comparable periods in 2022 primarily due to lower commodity prices. This was partially offset by decreased royalties due to lower commodity prices and realized risk management gains on our commodity contracts in 2023.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 6
	Three months ended<br>September 30						Nine months ended<br>September 30
---	---	---	---	---	---	---	---	---	---	---	---	---
(millions)	2023			2022			2023			2022
Netback:
Sales (1) (2)	$	200.9		$	211.1		$	549.2		$	692.4
Risk management gain (loss) (3)		2.9			(1.6	)		11.0			(32.4	)
Royalties		(27.1	)		(38.8	)		(72.8	)		(113.5	)
Transportation		(11.2	)		(8.7	)		(30.2	)		(25.5	)
Net operating costs (2)		(41.2	)		(40.1	)		(127.2	)		(117.3	)
Netback (2)	$	124.3		$	121.9		$	330.0		$	403.7

(1) Includes the impact of commodities purchased and sold to/from third parties of $0.5 million (2022 – $0.5 million) for the third quarter of 2023 and $1.9 million (2022 – $1.6 million) for the first nine months of 2023.

(2) Non-GAAP financial measures. See "Non-GAAP and Other Financial Measures".

(3) Realized risk management gains and losses on commodity contracts.

Production Revenues

A reconciliation from production revenues to gross revenues is as follows:

	Three months ended<br>September 30						Nine months ended<br>September 30
(millions)	2023			2022			2023			2022
Production revenues	$	200.4		$	210.6		$	547.3		$	690.8
Sales of commodities purchased from third parties		3.4			4.0			13.3			10.8
Less: Commodities purchased from third parties		(2.9	)		(3.5	)		(11.4	)		(9.2	)
Sales (1)		200.9			211.1			549.2			692.4
Realized risk management gain (loss) (2)		2.9			(1.6	)		11.0			(32.4	)
Gross revenues (1)	$	203.8		$	209.5		$	560.2		$	660.0

(1) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

(2) Relates to realized risk management gains and losses on commodity contracts.

The Company's production revenues and gross revenues were lower in the 2023 periods compared to the comparable periods in 2022, mainly due to lower commodity prices. This was partially offset by higher production volumes from our active development program, less temporary wildfire impacts in Q2 2023, and realized risk management gains in the 2023 periods compared to realized risk management losses in the 2022 comparable periods.

Change in Gross Revenues (1)

(millions)
Gross revenues – January 1 – September 30, 2022	$	660.0
Increase in liquids production		42.2
Decrease in liquids prices		(140.9	)
Increase in natural gas production		7.0
Decrease in natural gas prices		(51.6	)
Increase in realized oil risk management gain		24.4
Increase in realized natural gas risk management gain		19.1
Gross revenues – January 1 – September 30, 2023 (2)	$	560.2

(1) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

(2) Excludes processing fees and other income.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 7

Royalties

	Three months ended<br>September 30						Nine months ended<br>September 30
	2023			2022			2023			2022
Royalties (millions)	$	27.1		$	38.8		$	72.8		$	113.5
Average royalty rate (1)		13	%		18	%		13	%		16	%

(1) Excludes effects of risk management activities and other income.

For the 2023 periods, both absolute royalties and the average royalty rate decreased from the comparable 2022 periods largely due to lower commodity prices.

Expenses

	Three months ended<br>September 30				Nine months ended<br>September 30
(millions)	2023		2022		2023		2022
Net operating (1)	$	41.2	$	40.1	$	127.2	$	117.3
Transportation		11.2		8.7		30.2		25.5
Financing		13.2		12.6		37.8		32.9
Share-based compensation	$	15.0	$	4.0	$	18.1	$	28.9

(1) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

Operating

A reconciliation of operating costs to net operating costs is as follows:

	Three months ended<br>September 30						Nine months ended<br>September 30
(millions)	2023			2022			2023			2022
Operating costs	$	46.7		$	43.5		$	143.1		$	127.7
Less processing fees		(3.4	)		(1.6	)		(10.7	)		(5.5	)
Less road use recoveries		(2.1	)		(1.8	)		(5.2	)		(4.9	)
Net operating costs (1)	$	41.2		$	40.1		$	127.2		$	117.3

(1) Non-GAAP financial measure. See “Non-GAAP and Other Financial Measures”.

Operating costs have increased in the 2023 periods compared to the 2022 periods due to higher power costs, increased power usage with a higher production base and general inflationary pressures experienced across the industry.

The Company has recently entered into power hedging contracts for 2024 to help minimize our exposure to power pricing volatility and their impact on net operating costs.

Transportation

The Company continues to utilize multiple sales points in the Peace River area to increase realized prices. New wells drilled in the Peace River area over the past year resulted in higher production and thus higher transportation costs in the first nine months of 2023 compared to the first nine months of 2022.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 8

Financing

Financing expense consists of the following:

	Three months ended September 30					Nine months ended September 30
(millions)	2023		2022			2023		2022
Interest	$	7.3	$	9.1		$	21.0	$	22.5
Accretion on decommissioning liability		4.3		2.5			13.1		7.5
Accretion on office lease provision		0.3		0.3			0.8		1.1
Accretion on other non-current liability		-		-			-		0.2
Accretion on discount of senior unsecured notes		0.2		-			0.4		-
Accretion on lease liabilities		0.1		0.1			0.3		0.3
Loss on repurchased senior unsecured notes		0.4		-			0.5		-
Deferred financing costs		0.6		0.7			1.7		2.1
Debt modification		-		(0.1	)		-		(0.8	)
Financing	$	13.2	$	12.6		$	37.8	$	32.9

Obsidian Energy’s debt structure includes short-term borrowings under our syndicated credit facility and term financing through our senior unsecured notes. Interest charges were lower in the 2023 periods compared to the 2022 periods as lower balances under our syndicated credit facility more than offset higher interest rates under the Company’s current debt agreements.

The Company has a reserve-based syndicated credit facility with an aggregate amount available of $240.0 million. The syndicated credit facility is subject to semi-annual borrowing base redeterminations typically in May and November of each year and currently has a revolving period to May 31, 2024 and a maturity date of May 31, 2025.

At September 30, 2023, the Company had senior unsecured notes outstanding totaling $118.4 million which mature on July 27, 2027. During Q3 2023, the Company re-purchased for cancellation $0.7 million principal amount of senior unsecured notes on the open market at an average price of $993 per $1,000 principal amount, in addition to the Repurchase Offer outlined below. The senior unsecured notes were initially issued at a price of $980 per $1,000 principal amount resulting in aggregate gross proceeds of $125.0 million and at an interest rate of 11.95 percent. The senior unsecured notes are direct senior unsecured obligations of Obsidian Energy ranking equal with all other present and future senior unsecured indebtedness of the Company.

As part of the terms of the senior unsecured notes, the Company is required, in certain circumstances, to make a repurchase offer at a price of $1,030 per $1,000 principal amount to an aggregate amount of $63.8 million (the "Repurchase Offer"), based on free cash flow for the six months ended June 30 (typically offered in August) and based on free cash flow for the six months ended December 31 (typically offered in March). Minimum available liquidity thresholds and projected leverage ratios under the Company's syndicated credit facilities are also required to be met in order to proceed with a Repurchase Offer. The Company completed a Repurchase Offer for $5.0 million in August 2023.

Subsequent to September 30, 2023, the Company re-purchased for cancellation an additional $1.0 million principal amount of senior unsecured notes on the open market at an average price of $1,005 per $1,000 principal amount, resulting in a total of $117.4 million senior unsecured notes currently outstanding.

At September 30, 2023, letters of credit totaling $4.9 million were outstanding (December 31, 2022 – $5.1 million) that reduce the amount otherwise available to be drawn on our syndicated credit facility.

Share-Based Compensation

Share-based compensation expense relates to the Company's Stock Option Plan (the “Option Plan”), restricted shares units (“RSUs") granted under the Restricted and Performance Share Unit Plan (“RPSU plan”), restricted awards granted under the Non-Treasury Incentive Award Plan (“NTIP”), Deferred Share Unit Plan (“DSU plan”) and performance share units (“PSUs”) granted under the RPSU plan.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 9

Share-based compensation expense consisted of the following:

	Three months ended<br>September 30				Nine months ended<br>September 30
(millions)	2023		2022		2023		2022
DSUs	$	6.6	$	0.2	$	4.5	$	11.1
PSUs		5.3		2.0		5.8		8.6
NTIP		1.2		0.6		1.8		5.6
Cash settled share-based incentive plans	$	13.1	$	2.8	$	12.1	$	25.3
RSUs	$	1.6	$	0.9	$	5.1	$	2.5
Options		0.3		0.3		0.9		1.1
Equity settled share-based incentive plans		1.9		1.2		6.0		3.6
Share-based compensation	$	15.0	$	4.0	$	18.1	$	28.9

The change in share price at the balance sheet date results in a mark-to-market valuation which is used to calculate the PSU, DSU and NTIP future obligations.

On September 30, 2023, the Company's share price closed at $11.18 per share compared to $7.75 per share at June 30, 2023, which resulted in the higher expense for the cash settled share-based incentive plans during Q3 2023 compared to Q3 2022, when our share price was relatively unchanged during the period. None of the share-based awards for these plans vested to staff during Q3 2023, resulting in no cash outlay. A summary of our historical share price is as follows:

							As at
	September 30			June 30			December 31
2023	$	11.18	2023	$	7.75	2022	$	8.98
2022	$	9.93	2022	$	9.94	2021	$	5.21

General and Administrative Expenses ("G&A")

	Three months ended<br>September 30				Nine months ended<br>September 30
(millions, except per boe amounts)	2023		2022		2023		2022
Gross	$	9.1	$	8.6	$	28.1	$	24.8
Per boe (1)		3.00		3.12		3.18		3.00
Net		4.6		4.7		14.6		13.6
Per boe (1)	$	1.51	$	1.73	$	1.65	$	1.64

(1) Supplementary financial measure. See “Non-GAAP and Other Financial Measures”.

The Company increased staffing levels in 2022 to align with our higher activity level and expanded capital program which has contributed to higher absolute G&A costs in the first nine months of 2023 compared to 2022. Additionally, in 2023, general inflationary pressures have continued to impact G&A.

The higher production levels resulted in lower per boe G&A metrics in Q3 2023 compared to Q3 2022.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 10

Restructuring and other expenses

	Three months ended<br>September 30				Nine months ended<br>September 30
(millions)	2023		2022		2023		2022
Restructuring	$	-	$	-	$	-	$	2.5
Other	$	0.2	$	1.2	$	0.3	$	1.8

Restructuring expenses in 2022 included severance charges as well as the acceleration of certain expenses under the RPSU plan due to staff changes.

Depletion, Depreciation and Impairment

	Three months ended<br>September 30				Nine months ended<br>September 30
(millions)	2023		2022		2023		2022
Depletion and depreciation (“D&D”)	$	54.7	$	46.0	$	157.2	$	128.8
PP&E Impairment (reversal)	$	0.3	$	25.1	$	0.8	$	35.8

The Company’s D&D expense increased in the 2023 periods from the 2022 periods, primarily due to higher production levels and non-cash impairment reversal charges recorded in 2022 in our Cardium cash generating unit (“CGU”), which increased the depletable base. These impairment reversals were recorded mainly due to the improved commodity price environment and our expanded capital program which increased reserve volumes.

For the first nine months of 2023, we recorded a $0.8 million impairment in our Legacy CGU due to decommissioning spending in the area. The Legacy CGU has no recoverable amount, as such changes in our decommissioning liability are expensed each period.

Taxes

	Three months ended<br>September 30				Nine months ended<br>September 30
(millions)	2023		2022		2023		2022
Deferred income tax expense	$	7.9	$	-	$	23.8	$	-

In 2022, the Company recorded a $246.4 million deferred income tax asset as we determined that it was probable that the asset would be utilized. For the first nine months of 2023, the Company generated income and utilized $23.8 million of the deferred income tax asset which led to the deferred income tax expense.

Net Income

	Three months ended<br>September 30				Nine months ended<br>September 30
(millions, except per share amounts)	2023		2022		2023		2022
Net income	$	24.8	$	40.7	$	73.7	$	178.4
Basic per share		0.31		0.50		0.91		2.18
Diluted per share	$	0.30	$	0.48	$	0.89	$	2.12

In the 2023 periods, net income was the result of the Company's higher production and positive operating results. This was partially offset by lower commodity prices which reduced production revenue compared to 2022. The Company also recorded a non-cash deferred income tax expense in the 2023 periods due to the recognition of a deferred income tax asset at year end 2022 in conjunction with our significant tax pool position.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 11

In the 2022 periods, net income benefited from impairment reversals due to increased commodity prices from the prior year and positive results from our capital program and was partially offset by higher share-based compensation charges as a result of the Company's significant share price appreciation during the first nine months of 2022.

Capital Expenditures

	Three months ended<br>September 30					Nine months ended<br>September 30
(millions)	2023			2022		2023		2022
Drilling and completions	$	25.4		$	54.7	$	114.2	$	142.5
Well equipping and facilities		20.9			18.4		75.5		60.1
Land and geological/geophysical		-			0.7		1.9		14.4
Corporate		(0.4	)		0.2		0.9		0.7
Capital expenditures		45.9			74.0		192.5		217.7
Property acquisitions, net		0.5			4.3		0.6		4.6
Total	$	46.4		$	78.3	$	193.1	$	222.3

In Q3 2023, the Company began our active second half 2023 development program with rigs running in our Peace River and Cardium plays.

In the first nine months of 2023, we continued our development program with five rigs utilized across our Cardium, Peace River and Viking plays. During the first nine months of 2023, we brought on 35 (34.6 net) wells which included 12 (11.6 net) wells in the Cardium, 12 (12.0 net) wells in Peace River, and 11 (11.0 net) wells in the Viking.

Drilling

	Nine months ended September 30
	2023				2022
(number of wells)	Gross		Net		Gross		Net
Oil		44		36		49		42
Gas		-		-		1		1
Injectors, stratigraphic and service		6		5		1		-
Total		50		41		51		43

The Company drilled 36 (35.5 net) operated wells during the first nine months of 2023. In addition, the Company had a minor non-operated working interest on 14 (5.1 net) wells that were drilled by various partners during the period.

Environmental and Climate Change

The oil and natural gas industry has a number of environmental risks and hazards and is subject to regulation by all levels of government. Environmental legislation includes, but is not limited to, operational controls, site rehabilitation requirements and restrictions on emissions of various substances produced in association with oil and natural gas operations. Compliance with such legislation is expected to require additional expenditures and a failure to comply may result in fines and penalties which could, in the aggregate and under certain assumptions, become material.

Obsidian Energy is dedicated to our ESG initiatives to manage the environmental impact from our operations through our environmental programs which include resource conservation, water management and site abandonment/ reclamation/ remediation. Operations are continuously monitored to minimize our environmental impact and allocate sufficient capital to reclamation and other activities to mitigate the impact on the areas in which the Company operates. Obsidian Energy voluntarily entered into the Government of Alberta’s Area Based Closure program (the "ABC program") which allowed the Company to accelerate abandonment activities, specifically on inactive properties, in a more cost-effective manner through 2020 and 2021. Beginning in 2022, the Company follows the new Alberta Energy Regulator ("AER") guidance under Directive 088 where a minimum amount of spending is required to abandon inactive sites. In August 2022, our minimum spending targets for 2023 were increased by the Alberta Government.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 12

The Company received Alberta Site Rehabilitation Program ("ASRP") grants and allocations of $30.2 million on a gross basis to the end of 2022 when the ASRP ended, a portion of which was received in allocation eligibility as an ABC program participant. Total grant support was determined once all project costs were finalized in 2023. These awards allowed the Company to expand our abandonment activities for wells, pipelines, facilities, and related site reclamation and thus reduced our decommissioning liability.

Liquidity and Capital Resources

Net Debt

Net debt is the total of long-term debt and working capital deficiency as follows:

	As at
(millions)	September 30, 2023			December 31, 2022
Long-term debt
Syndicated credit facility	$	118.0		$	105.0
Senior unsecured notes		118.4			127.6
Unamortized discount of senior unsecured notes		(1.8	)		(2.3	)
Deferred financing costs		(3.9	)		(5.0	)
Total		230.7			225.3
Working capital deficiency
Cash		(0.9	)		(0.8	)
Accounts receivable		(82.7	)		(82.6	)
Prepaid expenses and other		(16.3	)		(10.7	)
Accounts payable and accrued liabilities		163.5			185.6
Total		63.6			91.5
Net debt (1)	$	294.3		$	316.8

(1) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".

Net debt decreased compared to December 31, 2022, as a result of the repurchase and cancellation of our senior unsecured notes during the period and a lower working capital deficiency. This was partially offset by higher drawings under our syndicated credit facility due to our active development program in 2023 and return of capital initiatives.

Liquidity

The Company currently has a reserve-based syndicated credit facility with a borrowing limit of $240.0 million and senior unsecured notes due in 2027. For further details on the Company’s debt instruments please refer to the “Financing” section of this MD&A.

The Company actively manages our debt portfolio and considers opportunities to reduce or diversify our debt capital structure. Management contemplates both operating and financial risks and takes action as appropriate to limit the Company’s exposure to certain risks. Management maintains close relationships with the Company’s lenders and agents to monitor credit market developments. These actions and plans aim to increase the likelihood of maintaining the Company’s financial flexibility and appropriate capital program, supporting the Company’s ongoing operations and ability to execute longer-term business strategies.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 13

Financial Instruments

Obsidian Energy had the following financial instruments outstanding as at September 30, 2023. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits our credit risk by executing counterparty risk procedures which include transacting only with institutions within our syndicated credit facility or companies with high credit ratings, and by obtaining financial security in certain circumstances.

	Notional<br>Volume	Remaining<br>Term	Price
Oil
WCS Differential Swap	1,500 bbl/d	October 2023 - December 2023	(21.20)/bbl	0.5
WTI Swap	500 bbl/d	October 2023	121.85/bbl	-
WTI Collar	8,500 bbl/d	October 2023	115.70/bbl - 124.05/bbl	(0.5	)
AECO
AECO Swap	49,929 mcf/d	October 2023	3.48/mcf	1.6
AECO Swap	26,588 mcf/d	November 2023 - March 2024	3.47/mcf	1.7
Electricity
Power Swap	120 MWh/d	January - December 2024	93.95/MWh	(0.4	)
Total				2.9

All values are in US Dollars.

Refer to the Business Environment section above for a full list of hedges currently outstanding including contracts that were entered into subsequent to September 30, 2023.

Based on commodity prices and contracts in place at September 30, 2023, a $1.00 change in the price per barrel of liquids would change pre-tax unrealized risk management by $0.4 million and a $0.10 change in the price per mcf of natural gas would change pre-tax unrealized risk management by $0.6 million.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 14

The components of risk management within Income on the Consolidated Statements of Income are as follows:

	Three months ended September 30						Nine months ended September 30
(millions)	2023			2022			2023			2022
Realized
Settlement of oil contracts gain (loss)	$	(2.1	)	$	1.0		$	(1.8	)	$	(26.1	)
Settlement of natural gas contracts gain (loss)		5.0			(2.6	)		12.8			(6.3	)
Total realized risk management gain (loss)	$	2.9		$	(1.6	)	$	11.0		$	(32.4	)
Unrealized
Oil contracts gain	$	0.9		$	6.3		$	-		$	5.8
Natural gas contracts gain (loss)		(4.1	)		1.5			(2.9	)		(1.6	)
Total unrealized risk management gain (loss)		(3.2	)		7.8			(2.9	)		4.2
Risk management gain (loss)	$	(0.3	)	$	6.2		$	8.1		$	(28.2	)

The components of risk management within Expenses on the Consolidated Statements of Income are as follows:

	Three months ended September 30					Nine months ended September 30
(millions)	2023			2022		2023			2022
Unrealized
Electricity contracts loss	$	(0.4	)	$	-	$	(0.4	)	$	-
Total unrealized risk management loss		(0.4	)		-		(0.4	)		-
Risk management loss	$	(0.4	)	$	-	$	(0.4	)	$	-

Sensitivity Analysis

Estimated sensitivities to selected key assumptions on funds flow from operations for the 12 months subsequent to the date of this MD&A, including risk management contracts entered into to date, are based on forecasted results.

			Impact on funds flow from operations (1)
Change of:	Change		millions	/share
Price per barrel of liquids	WTI US1.00
Liquids production	1,000 bbl/day
Price per mcf of natural gas	AECO 0.10
Natural gas production	1 mmcf/day
Effective interest rate		%
Exchange rate ($US per $CAD)

All values are in US Dollars.

(1) Non-GAAP financial measure or non-GAAP financial ratio. See “Non-GAAP and Other Financial Measures”.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 15

Contractual Obligations and Commitments

Obsidian Energy is committed to certain payments over the next five calendar years and thereafter as follows:

	2023		2024		2025		2026		2027		Thereafter		Total
Long-term debt (1)	$	-	$	-	$	118.0	$	-	$	118.4	$	-	$	236.4
Transportation		2.8		9.5		7.3		6.1		4.6		11.5		41.8
Interest obligations		2.5		24.2		18.3		14.2		14.2		-		73.4
Office lease		2.5		10.0		0.8		-		-		-		13.3
Lease liability		0.6		1.9		1.3		0.5		0.1		4.8		9.2
Decommissioning liability (2)		7.5		23.6		21.9		20.3		18.9		83.2		175.4
Total	$	15.9	$	69.2	$	167.6	$	41.1	$	156.2	$	99.5	$	549.5

(1) The 2025 figure includes our syndicated credit facility which has a term-out date of May 2025. The 2027 figure includes our senior unsecured notes due in July 2027. Refer to the Financing section above for further details. Historically, the Company has successfully renewed our syndicated credit facility.

(2) These amounts represent the inflated, discounted future reclamation and abandonment costs that are expected to be incurred over the life of the Company’s properties.

At September 30, 2023, the Company had an aggregate of $118.4 million in senior unsecured notes maturing in July 2027. Also, the revolving period of our syndicated credit facility is May 31, 2024, with a term out period to May 31, 2025. In the future, if the Company is unsuccessful in renewing or replacing the syndicated credit facility or obtaining alternate funding for some or all of the maturing amounts of the senior unsecured notes, it is possible that we could be required to seek other sources of financing, including other forms of debt or equity arrangements if available. Please see the Financing section of this MD&A for further details regarding our outstanding debt instruments.

The Company is involved in various litigation and claims in the normal course of business and records provisions for claims as required.

Equity Instruments

Common shares issued:
As at September 30, 2023	79,756,538
Issuance under Stock option plan	24,500
Repurchase and cancellation of common shares	(712,500	)
As at November 8, 2023	79,068,538
Options outstanding:
As at September 30, 2023	2,257,989
Granted	72,000
Exercised	(24,500	)
As at November 8, 2023	2,305,489
RSUs outstanding:
As at September 30, 2023	1,250,083
Granted	51,870
Vested	(4,392	)
Forfeited	(4,413	)
As at November 8, 2023	1,293,148
OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 16
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Supplemental Production Disclosure

Outlined below is production by product type for each area and in total for the three and nine months ended September 30, 2023 and 2022.

	Three months ended<br>September 30				Nine months ended<br>September 30
Daily production (boe/d)	2023		2022		2023		2022
Cardium
Light oil (bbl/d)		10,798		10,572		11,299		11,168
Heavy oil (bbl/d)		38		41		32		46
NGLs (bbl/d)		2,623		2,301		2,524		2,330
Natural gas (mmcf/d)		60		54		58		53
Total production (boe/d)		23,403		21,853		23,537		22,395
Peace River
Light oil (bbl/d)		-		-		-		-
Heavy oil (bbl/d)		6,070		5,648		5,770		5,751
NGLs (bbl/d)		7		5		10		5
Natural gas (mmcf/d)		4		6		5		6
Total production (boe/d)		6,810		6,623		6,538		6,686
Viking
Light oil (bbl/d)		1,564		389		1,195		224
Heavy oil (bbl/d)		113		116		110		108
NGLs (bbl/d)		71		43		54		34
Natural gas (mmcf/d)		4		3		3		3
Total production (boe/d)		2,361		1,034		1,913		819
Legacy
Light oil (bbl/d)		90		101		96		88
Heavy oil (bbl/d)		39		49		40		35
NGLs (bbl/d)		7		30		18		36
Natural gas (mmcf/d)		1		1		1		1
Total production (boe/d)		363		475		388		424
Total
Light oil (bbl/d)		12,452		11,062		12,590		11,480
Heavy oil (bbl/d)		6,260		5,854		5,952		5,940
NGLs (bbl/d)		2,708		2,379		2,606		2,405
Natural gas (mmcf/d)		69		64		67		63
Total production (boe/d)		32,937		29,985		32,376		30,324
OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 17
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Reconciliation of Cash flow from Operating Activities to Funds flow from Operations

	Sep. 30			Jun. 30			Mar. 31			Dec. 31			Sep. 30			Jun. 30			Mar. 31			Dec. 31
Three months ended	2023			2023			2023			2022			2022			2022			2022			2021
Cash flow from operating activities	$	95.3		$	67.1		$	72.6		$	126.5		$	121.4		$	125.0		$	83.9		$	62.6
Change in non-cash working capital		(3.6	)		13.7			6.6			(20.9	)		(21.9	)		26.0			(18.0	)		6.2
Decommissioning expenditures		5.3			4.9			8.7			3.0			3.5			3.8			8.5			2.7
Onerous office lease settlements		2.2			2.2			2.3			2.3			2.3			2.3			2.3			2.1
Settlement of restricted share units		0.1			-			4.6			-			-			-			-			-
Deferred financing costs		(0.6	)		(0.6	)		(0.5	)		(0.4	)		(0.7	)		(0.7	)		(0.7	)		(1.1	)
Financing fees paid		-			-			-			-			-			-			-			0.3
Restructuring charges (1)		-			-			-			-			-			-			2.5			-
Transaction costs		-			-			-			-			-			-			0.1			3.4
Other expenses (1)		0.2			0.1			-			-			-			0.6			-			0.1
Commodities purchased from third parties		-			-			-			-			-			-			-			3.7
Funds flow from operations	$	98.9		$	87.4		$	94.3		$	110.5		$	104.6		$	157.0		$	78.6		$	80.0

(1) Excludes the non-cash portion of restructuring and other expenses.

Changes in Internal Control Over Financial Reporting (“ICFR”)

Obsidian Energy’s senior management has evaluated whether there were any changes in the Company's ICFR that occurred during the period beginning on July 1, 2023 and ending on September 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Company's ICFR. No changes to the Company’s ICFR were made during the quarter.

Off-Balance-Sheet Financing

Obsidian Energy has off-balance-sheet financing arrangements consisting of operating leases. The operating lease payments are summarized in the Contractual Obligations and Commitments section.

Non-GAAP and Other Financial Measures

Throughout this MD&A and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position, and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures provided by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income and cash flow from operating activities, as indicators of our performance.

Non-GAAP Financial Measures

“Free cash flow” is funds flow from operations less both capital and decommissioning expenditures and the Company believes it is a useful measure to determine and indicate the funding available to Obsidian Energy for investing and financing activities, including the repayment of debt, reallocation to existing areas of operation, deployment into new ventures and return of capital to shareholders. See “Cash flow from Operating Activities, Funds Flow from Operations and Free Cash Flow” above for a reconciliation of free cash flow to cash flow from operating activities, being our nearest measure prescribed by IFRS.

“Funds flow from operations” is cash flow from operating activities before changes in non-cash working capital, decommissioning expenditures, onerous office lease settlements, settlement of RSUs, the effects of financing related transactions from foreign exchange contracts and debt repayments, restructuring charges, transaction costs and certain other expenses and is representative of cash related to continuing operations. Funds flow from operations is used to assess the Company’s ability to fund our planned capital programs. See “Cash flow from Operating Activities, Funds Flow from Operations and Free Cash Flow” and "Reconciliation of Cash flow from operating activities to Funds flow from operations" above for reconciliations of funds flow from operations to cash flow from operating activities, being our nearest measure prescribed by IFRS.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 18

“Gross revenues” are production revenues including realized risk management gains and losses on commodity contracts and adjusted for commodities purchased from third parties and sales of commodities purchased from third parties and is used to assess the cash realizations on commodity sales. See “Results of Operations – Production Revenues” above for a reconciliation of gross revenues to production revenues, being our nearest measure prescribed by IFRS.

"Sales” are production revenues plus sales of commodities purchased from third parties less commodities purchased from third parties and is used to assess the cash realizations on commodity sales before realized risk management gains and losses. See “Results of Operations – Production Revenues” above for a reconciliation of sales to production revenues, being our nearest measure prescribed by IFRS.

“Net debt” is the total of long-term debt and working capital deficiency and is used by the Company to assess our liquidity. See “Liquidity and Capital Resources – Net Debt” above for a reconciliation of net debt to long-term debt, being our nearest measure prescribed by IFRS.

“Net operating costs” are calculated by deducting processing income and road use recoveries from operating costs and is used to assess the Company’s cost position. Processing fees are primarily generated by processing third party volumes at the Company’s facilities. In situations where the Company has excess capacity at a facility, it may agree with third parties to process their volumes to reduce the cost of operating/owning the facility. Road use recoveries are a cost recovery for the Company as we operate and maintain roads that are also used by third parties. See “Results of Operations – Expenses – Operating” above for a reconciliation of net operating costs to operating costs, being our nearest measure prescribed by IFRS.

“Netback” is production revenues plus sales of commodities purchased from third parties less commodities purchased from third parties (sales), less royalties, net operating costs, transportation expenses and realized risk management gains and losses, and is used in capital allocation decisions and to economically rank projects. See "Results of Operations – Netbacks" above for a reconciliation of netbacks to sales and "Results of Operations – Production Revenues" above for a reconciliation of sales to production revenues being our nearest measure prescribed by IFRS.

Non-GAAP Financial Ratios

“Funds flow from operations – basic per share” is comprised of funds flow from operations divided by basic weighted average common shares outstanding. Funds flow from operations is a non-GAAP financial measure. See “Cash flow from Operating Activities, Funds Flow from Operations and Free Cash Flow” and “Reconciliation of Cash flow from operating activities to Funds flow from operations” above.

“Funds flow from operations – diluted per share” is comprised of funds flow from operations divided by diluted weighted average common shares outstanding. Funds flow from operations is a non-GAAP financial measure. See “Cash flow from Operating Activities, Funds Flow from Operations and Free Cash Flow” and “Reconciliation of Cash flow from operating activities to Funds flow from operations” above.

“Net operating costs per bbl”, “Net operating costs per mcf” and “Net operating costs per boe” are net operating costs divided by weighted average daily production on a per bbl, per mcf or per boe basis, as applicable. Net operating costs is a non-GAAP financial measure. See “Results of Operations – Expenses – Operating" above.

“Netback per bbl”, “Netback per mcf” and “Netback per boe” are netbacks divided by weighted average daily production on a per bbl, per mcf or per boe basis, as applicable. Management believes that netback per boe is a key industry performance measure of operational efficiency and provides investors with information that is also commonly presented by other oil and natural gas producers. Netback is a non-GAAP financial measure. See “Results of Operations – Netbacks” above.

Supplementary Financial Measures

Average sales prices for light oil, heavy oil, NGLs, total liquids and natural gas are supplementary financial measures calculated by dividing each of these components of production revenues by their respective production volumes for the periods.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 19

“Cash flow from operating activities – basic per share” is comprised of cash flow from operating activities, as determined in accordance with IFRS, divided by basic weighted average common shares outstanding.

“Cash flow from operating activities – diluted per share" is comprised of cash flow from operating activities, as determined in accordance with IFRS, divided by diluted weighted average common shares outstanding.

"G&A gross – per boe" is comprised of general and administrative expenses on a gross basis, as determined in accordance with IFRS, divided by boe for the period.

"G&A net – per boe" is comprised of general and administrative expenses on a net basis, as determined in accordance with IFRS, divided by boe for the period.

Oil and Natural Gas Information

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 oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

Abbreviations

Oil		Natural Gas
bbl	barrel or barrels	mcf	thousand cubic feet
bbl/d	barrels per day	mcf/d	thousand cubic feet per day
boe	barrel of oil equivalent	mmcf	million cubic feet
boe/d	barrels of oil equivalent per day	mmcf/d	million cubic feet per day
MSW	Mixed Sweet Blend	mmbtu	Million British thermal unit
WTI	West Texas Intermediate	AECO	Alberta benchmark price for natural gas
WCS	Western Canadian Select	NGL	natural gas liquids
		LNG	liquefied natural gas
		NYMEX	New York Mercantile Exchange price for natural gas

References to Q1, Q2, Q3 and Q4 are to the three-month periods ended March 31, June 30, September 30 and December 31, respectively.

Forward-Looking Statements

Certain statements contained in this document constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of the "safe harbour" provisions of applicable securities legislation. In particular, this document contains forward-looking statements pertaining to, without limitation, the following: our three-year plan will expected production, development locations and formations, use of free cash flow and when we expect certain assets to become self-sustaining, based on certain pricing assumptions; our expectations for Bluesky and Clearwater production; our expectations for Peace River production growth and per share metrics, with potential options to return capital to shareholders and/or further reduce debt levels; our commitment to ESG matters and expected decommissioning expenditures in 2023; our hedges; the terms and conditions under our syndicated credit facility and senior unsecured notes; our expectations in connection with compliance with environmental legislation; that we are dedicated to managing our ESG initiatives to manage the environmental impact from our operations through the environmental programs which include resource conservation, water management and site abandonment / reclamation / remediation; how we plan to manage our debt portfolio; all information disclosed under "Sensitivity Analysis; our future payment obligations as disclosed under "Contractual Obligations and Commitments"; that management contemplates both operating and financial risks and takes action as appropriate to limit the Company’s exposure to certain risks and that management maintains close relationships with the

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 20

Company's lenders and agents to monitor credit market developments, and these actions and plans aim to increase the likelihood of maintaining the Company's financial flexibility and capital program.

With respect to forward-looking statements contained in this document, the Company has made assumptions regarding, among other things: that the Company does not dispose of or acquire material producing properties or royalties or other interests therein; the regional and/or global health related events will not have any adverse impact on energy demand and commodity prices in the future; that the Company's operations and production will not be disrupted by circumstances attributable to the COVID-19 pandemic and the responses of governments and the public to any resurgence of the pandemic; global energy policies going forward, including the continued ability and willingness of members of OPEC and other nations to agree on and adhere to production quotas from time to time; our ability to qualify for (or continue to qualify for) new or existing government programs, and obtain financial assistance therefrom, and the impact of those programs on our financial condition; our ability to execute our plans as described herein and in our other disclosure documents, including our three-year growth plan, and the impact that the successful execution of such plans will have on our Company and our stakeholders; future capital expenditure and decommissioning expenditure levels; future operating costs and G&A costs and the impact of inflation thereon; future oil, natural gas liquids and natural gas prices and differentials between light, medium and heavy oil prices and Canadian, WTI and world oil and natural gas prices; future hedging activities; future oil, natural gas liquids and natural gas production levels; future exchange rates, interest rates and inflation rates; future debt levels; our ability to execute our capital programs as planned without significant adverse impacts from various factors beyond our control, including extreme weather events such as wild fires and flooding, infrastructure access and delays in obtaining regulatory approvals and third party consents; our ability to obtain equipment in a timely manner to carry out development activities and the costs thereof; our ability to market our oil and natural gas successfully to current and new customers; our ability to obtain financing on acceptable terms, including our ability (if necessary) to extend the revolving period and term out period of our credit facility, our ability to maintain the existing borrowing base under our credit facility, our ability (if necessary) to replace our syndicated bank facility and our ability (if necessary) to finance the repayment of our senior unsecured notes on maturity or pursuant to the terms of the underlying agreement; and our ability to add production and reserves through our development and exploitation activities.

Although the Company believes that the expectations reflected in the forward-looking statements contained in this document, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the forward-looking statements contained herein will not be correct, which may cause our actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things: the possibility that we change our budgets (including our capital expenditure budgets) in response to internal and external factors, including those described herein; the possibility that the Company will not be able to continue to successfully execute our business plans and strategies in part or in full (including our recently announced three-year growth plan), and the possibility that some or all of the benefits that the Company anticipates will accrue to our Company and our stakeholders as a result of the successful execution of such plans and strategies do not materialize; the possibility that the Company ceases to qualify for, or does not qualify for, one or more existing or new government assistance programs, that the impact of such programs falls below our expectations, that the benefits under one or more of such programs is decreased, or that one or more of such programs is discontinued; the impact on energy demand and commodity prices of regional and/or global health related events, including any resurgence of the COVID-19 pandemic, and the responses of governments and the public thereto, including the risk that the amount of energy demand destruction and/or the length of the decreased demand exceeds our expectations; the risk that there is another significant decrease in the valuation of oil and natural gas companies and their securities and in confidence in the oil and natural gas industry generally, whether caused by a resurgence of the COVID-19 pandemic, the worldwide transition towards less reliance on fossil fuels and/or other factors; the risk that the financial capacity of the Company's contractual counterparties is adversely affected and potentially their ability to perform their contractual obligations; the possibility that the revolving period and/or term out period of our credit facility and the maturity date of our senior unsecured notes is not extended (if necessary), that the borrowing base under our credit facility is reduced, that the Company is unable to renew or refinance our credit facilities on acceptable terms or at all and/or finance the repayment of our senior unsecured

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 21

notes when they mature on acceptable terms or at all and/or obtain new debt and/or equity financing to replace our credit facilities and/or senior unsecured notes or to fund other activities; the possibility that we are unable to complete one or more the Repurchase Offers when otherwise required to do so; the possibility that we are forced to shut-in production, whether due to commodity prices decreasing, extreme weather events such as the wild fires experienced in Alberta in Q2 2023 or other factors; the risk that OPEC and other nations fail to agree on and/or adhere to production quotas from time to time that are sufficient to balance supply and demand fundamentals for oil; general economic and political conditions in Canada, the U.S. and globally, and in particular, the effect that those conditions have on commodity prices and our access to capital; industry conditions, including fluctuations in the price of oil, natural gas liquids and natural gas, price differentials for oil and natural gas produced in Canada as compared to other markets, and transportation restrictions, including pipeline and railway capacity constraints; fluctuations in foreign exchange, including the impact of the Canadian/U.S. dollar exchange rate on our revenues and expenses; fluctuations in interest rates, including the effects of increased interest rates on our borrowing costs and on economic activity, and including the risk that higher interest rates cause or contribute to the onset of a recession; the risk that our costs increase significantly due to ongoing high levels of inflation, supply chain disruptions, scarcity of labour and/or other factors, adversely affecting our profitability; unanticipated operating events or environmental events that can reduce production or cause production to be shut-in or delayed (including extreme cold during winter months, wild fires and flooding); the risk that wars and other armed conflicts adversely affect world economies and the demand for oil and natural gas, including the ongoing war between Russian and Ukraine and/or hostilities in the Middle East; the possibility that fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to hydrocarbons, government mandates requiring the sale of electric vehicles and/or electrification of the power grid, and technological advances in fuel economy and renewable energy generation systems could permanently reduce the demand for oil and natural gas and/or permanently impair the Company's ability to obtain financing and/or insurance on acceptable terms or at all, and the possibility that some or all of these risks are heightened as a result of the response of governments, financial institutions and consumers to the COVID-19 pandemic and/or public opinion and/or special interest groups; and the other factors described under "Risk Factors" in our Annual Information Form and described in our public filings, available in Canada at www.sedarplus.ca and in the United States at www.sec.gov. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this document speak only as of the date of this document. Except as expressly required by applicable securities laws, the Company does not undertake any obligation to publicly update any forward-looking statements. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Additional Information

Additional information relating to Obsidian Energy, including Obsidian Energy’s Annual Information Form, is available on the Company’s website at www.obsidianenergy.com, on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.

OBSIDIAN ENERGY THIRD QUARTER 2023	MANAGEMENT’S DISCUSSION AND ANALYSIS 22

EX-99.3

Exhibit 99.3

Obsidian Energy Ltd.

Consolidated Balance Sheets

		As at
(CAD millions, unaudited)	Note	September 30, 2023			December 31, 2022
Assets
Current
Cash		$	0.9		$	0.8
Accounts receivable			82.7			82.6
Risk management	7		3.8			6.2
Prepaid expenses and other			16.3			10.7
			103.7			100.3
Non-current
Property, plant and equipment	3		1,893.8			1,857.6
Deferred income tax	11		222.6			246.4
			2,116.4			2,104.0
Total assets		$	2,220.1		$	2,204.3
Liabilities and Shareholders’ Equity
Current
Accounts payable and accrued liabilities		$	163.5		$	185.6
Current portion of lease liabilities	5		1.9			3.2
Current portion of provisions	6		33.9			34.1
Risk management	7		0.8			-
			200.1			222.9
Non-current
Long-term debt	4		230.7			225.3
Lease liabilities	5		3.7			2.8
Provisions	6		153.1			165.7
Other non-current liabilities			2.3			7.9
Risk management	7		0.1			-
			590.0			624.6
Shareholders’ equity
Shareholders’ capital	9		2,197.5			2,221.9
Other reserves			102.3			101.2
Deficit			(669.7	)		(743.4	)
			1,630.1			1,579.7
Total liabilities and shareholders’ equity		$	2,220.1		$	2,204.3

Subsequent event (Note 4, 7 and 9)

Commitments and contingencies (Note 12)

See accompanying notes to the unaudited interim consolidated financial statements.

OBSIDIAN ENERGY THIRD QUARTER 2023	INTERIM CONSOLIDATED FINANCIAL STATEMENTS 1

Obsidian Energy Ltd.

Consolidated Statements of Income

		Three months ended<br>September 30						Nine months ended<br>September 30
(CAD millions, except per share amounts, unaudited)	Note	2023			2022			2023			2022
Production revenues	8	$	200.4		$	210.6		$	547.3		$	690.8
Processing fees	8		3.4			1.6			10.7			5.5
Royalties			(27.1	)		(38.8	)		(72.8	)		(113.5	)
Sales of commodities purchased from third parties			3.4			4.0			13.3			10.8
			180.1			177.4			498.5			593.6
Other income	8		2.1			1.8			5.2			4.9
Government decommissioning assistance	13		-			4.5			(0.4	)		15.6
Risk management gain (loss)	7		(0.3	)		6.2			8.1			(28.2	)
			181.9			189.9			511.4			585.9
Expenses
Operating			46.7			43.5			143.1			127.7
Transportation			11.2			8.7			30.2			25.5
Commodities purchased from third parties			2.9			3.5			11.4			9.2
General and administrative			4.6			4.7			14.6			13.6
Share-based compensation	10		15.0			4.0			18.1			28.9
Depletion, depreciation and impairment	3		55.0			71.1			158.0			164.6
Financing	4		13.2			12.6			37.8			32.9
Risk management loss	7		0.4			-			0.4			-
Foreign exchange loss (gain)			-			(0.1	)		-			0.7
Restructuring			-			-			-			2.5
Transaction costs			-			-			-			0.1
Other			0.2			1.2			0.3			1.8
			149.2			149.2			413.9			407.5
Income before taxes			32.7			40.7			97.5			178.4
Deferred income tax expense	11		7.9			-			23.8			-
Net and comprehensive income		$	24.8		$	40.7		$	73.7		$	178.4
Net income per share
Basic		$	0.31		$	0.50		$	0.91		$	2.18
Diluted		$	0.30		$	0.48		$	0.89		$	2.12
Weighted average shares outstanding (millions)
Basic	9		80.9			82.2			81.2			81.9
Diluted	9		83.0			84.5			83.3			84.2

See accompanying notes to the unaudited interim consolidated financial statements.

OBSIDIAN ENERGY THIRD QUARTER 2023	INTERIM CONSOLIDATED FINANCIAL STATEMENTS 2

Obsidian Energy Ltd.

Consolidated Statements of Cash Flows

		Three months ended<br>September 30						Nine months ended<br>September 30
(CAD millions, unaudited)	Note	2023			2022			2023			2022
Operating activities
Net income		$	24.8		$	40.7		$	73.7		$	178.4
Depletion, depreciation and impairment	3		55.0			71.1			158.0			164.6
Financing	4		6.1			3.5			16.8			10.4
Share-based compensation	10		1.9			1.2			6.0			3.6
Unrealized risk management loss (gain)	7		3.6			(7.8	)		3.3			(4.2	)
Deferred income tax expense	11		7.9			-			23.8			-
Foreign exchange loss (gain)			-			(0.1	)		-			0.7
Government decommissioning assistance	13		-			(4.5	)		0.4			(15.6	)
Decommissioning expenditures	6		(5.3	)		(3.5	)		(18.9	)		(15.8	)
Onerous office lease settlements	6		(2.2	)		(2.3	)		(6.7	)		(6.9	)
Other			-			1.2			-			1.2
Settlement of RSUs			(0.1	)		-			(4.7	)		-
Change in non-cash working capital			3.6			21.9			(16.7	)		13.9
			95.3			121.4			235.0			330.3
Investing activities
Capital expenditures	3		(45.9	)		(74.0	)		(192.5	)		(217.7	)
Property acquisitions	3		(0.5	)		(4.3	)		(0.6	)		(4.6	)
Change in non-cash working capital			12.8			31.4			(16.8	)		27.1
			(33.6	)		(46.9	)		(209.9	)		(195.2	)
Financing activities
Increase (decrease) in long-term debt	4		(40.0	)		(148.1	)		13.0			(187.5	)
Issuance of senior unsecured notes, net of discount	4		-			125.0			-			125.0
Repayment of senior unsecured notes			(5.7	)		-			(9.3	)		-
Repayment of senior secured notes/PROP limited recourse loan			-			(53.1	)		-			(71.6	)
Financing fees paid			-			(6.5	)		(0.8	)		(6.5	)
Lease liabilities settlements	5		(1.1	)		(1.2	)		(3.3	)		(3.2	)
Exercised compensation plans			0.3			0.2			0.3			1.4
Repurchase of common shares	9		(14.4	)		-			(24.9	)		-
			(60.9	)		(83.7	)		(25.0	)		(142.4	)
Change in cash and cash equivalents			0.8			(9.2	)		0.1			(7.3	)
Cash and cash equivalents, beginning of period			0.1			9.2			0.8			7.3
Cash and cash equivalents, end of period		$	0.9		$	-		$	0.9		$	-

See accompanying notes to the unaudited interim consolidated financial statements.

OBSIDIAN ENERGY THIRD QUARTER 2023	INTERIM CONSOLIDATED FINANCIAL STATEMENTS 3

Obsidian Energy Ltd.

Statements of Changes in Shareholders’ Equity

(CAD millions, unaudited)	Note	Shareholders’ Capital			Other <br>Reserves			Deficit			Total
Balance at January 1, 2023		$	2,221.9		$	101.2		$	(743.4	)	$	1,579.7
Net and comprehensive income			-			-			73.7			73.7
Share-based compensation	10		-			6.0			-			6.0
Issued on exercise of equity compensation plans	9		0.5			(4.9	)		-			(4.4	)
Repurchase of shares for cancellation	9		(24.9	)		-			-			(24.9	)
Balance at September 30, 2023		$	2,197.5		$	102.3		$	(669.7	)	$	1,630.1
(CAD millions, unaudited)	Note	Shareholders’ Capital		Other <br>Reserves			Deficit			Total
---	---	---	---	---	---	---	---	---	---	---	---
Balance at January 1, 2022		$	2,213.8	$	103.2		$	(1,553.5	)	$	763.5
Net and comprehensive income			-		-			178.4			178.4
Share-based compensation	10		-		3.6			-			3.6
Issued on exercise of equity compensation plans	9		8.1		(6.7	)		-			1.4
Balance at September 30, 2022		$	2,221.9	$	100.1		$	(1,375.1	)	$	946.9

See accompanying notes to the unaudited interim consolidated financial statements.

OBSIDIAN ENERGY THIRD QUARTER 2023	INTERIM CONSOLIDATED FINANCIAL STATEMENTS 4

Notes to the Unaudited Interim Consolidated Financial Statements

(All tabular amounts are in CAD millions except numbers of common shares, per share amounts, percentages and various figures in Note 7)

Structure of Obsidian Energy

Obsidian Energy Ltd. (“Obsidian Energy”, the “Company”, “we”, “us” or “our”) is an exploration and production company and is governed by the laws of the Province of Alberta, Canada. The Company's registered office is located at Suite 200, 207 - 9th Avenue S.W. Calgary, Alberta, Canada T2P 1K3. The Company operates in one segment, to explore for, develop and hold interests in oil and natural gas properties and related production infrastructure in the Western Canada Sedimentary Basin directly and through investments in securities of subsidiaries holding such interests. Obsidian Energy’s portfolio of assets is managed at an enterprise level, rather than by separate operating segments or business units. The Company assesses our financial performance at the enterprise level and resource allocation decisions are made on a project basis across our portfolio of assets, without regard to the geographic location of projects. Obsidian Energy owns the petroleum and natural gas assets or 100 percent of the equity, directly or indirectly, of the entities that carry on the remainder of the oil and natural gas business of Obsidian Energy.

Basis of presentation and statement of compliance

a) Basis of Presentation

The unaudited condensed interim consolidated financial statements ("interim consolidated financial statements") include the accounts of Obsidian Energy and our wholly owned subsidiaries. Results from acquired properties are included in Obsidian Energy’s reported results subsequent to the closing date and results from properties sold are included until the closing date.

All intercompany balances, transactions, income and expenses are eliminated on consolidation.

Certain comparative figures have been reclassified to correspond with current period presentation.

b) Statement of Compliance

These interim consolidated financial statements are prepared in compliance with IAS 34 “Interim Financial Reporting” and accordingly do not contain all of the disclosures included in Obsidian Energy’s annual audited consolidated financial statements. These financial statements should be read in conjunction with Obsidian Energy’s audited annual consolidated financial statements as at and for the year ended December 31, 2022. Additionally, these interim consolidated financial statements were prepared using the same accounting policies, with the addition of the policy described in note 2(c), as in the annual consolidated financial statements as at and for the year ended December 31, 2022.

All tabular amounts are in millions of Canadian dollars, except numbers of common shares, per share amounts, percentages and other figures as noted.

These interim consolidated financial statements were approved for issuance by the Board of Directors on November 8, 2023.

c) Accounting policy

Share capital

In the first quarter of 2023, the Company received approval from the Toronto Stock Exchange for a normal course issuer bid ("NCIB") and began utilizing the NCIB during the second quarter of 2023. Common shares repurchased and cancelled are accounted for as a reduction in Shareholders' Capital based on the total consideration paid. The total consideration paid includes any commissions or fees paid as part of the transaction.

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 5

Property, plant and equipment ("PP&E")

Oil and Gas assets/ Facilities, Corporate assets

Cost	Nine months ended<br>September 30, 2023			Year ended<br>December 31, 2022
Balance, beginning of period	$	10,931.7		$	10,528.7
Capital expenditures		192.5			314.8
Property acquisitions		0.6			4.6
Net decommissioning changes		(1.5	)		83.6
Balance, end of period	$	11,123.3		$	10,931.7
Accumulated depletion and depreciation	Nine months ended<br>September 30, 2023		Year ended<br>December 31, 2022
---	---	---	---	---	---
Balance, beginning of period	$	9,079.4	$	9,194.6
Depletion and depreciation		154.3		170.4
Impairment		0.8		36.4
Impairment reversal		-		(322.0	)
Balance, end of period	$	9,234.5	$	9,079.4
			As at
---	---	---	---	---
Net book value	September 30, 2023		December 31, 2022
Total	$	1,888.8	$	1,852.3

Right-of-use assets

The following table includes a break-down of the categories for right-of-use assets.

Cost	Nine months ended<br>September 30, 2023		Year ended<br>December 31, 2022
Balance, beginning of period	$	25.8	$	24.8
Additions		2.6		1.0
Balance, end of period	$	28.4	$	25.8
Accumulated amortization	Nine months ended<br>September 30, 2023		Year ended<br>December 31, 2022
---	---	---	---	---
Balance, beginning of period	$	20.5	$	16.8
Amortization		2.9		3.7
Balance, end of period	$	23.4	$	20.5
			As at
---	---	---	---	---
Net book value	September 30, 2023		December 31, 2022
Total	$	5.0	$	5.3

Total PP&E

Total PP&E including Oil and Gas assets/Facilities, Corporate assets and Right-of-use assets is as follows:

			As at
PP&E	September 30, 2023		December 31, 2022
Oil and Gas assets/Facilities, Corporate assets	$	1,888.8	$	1,852.3
Right-of-use assets		5.0		5.3
Total	$	1,893.8	$	1,857.6
OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 6
---	---

At September 30, 2023, the Company completed an assessment to determine if indicators of impairment or an impairment reversal were present. No indicators were noted for our Cardium, Peace River and Viking cash generating units ("CGUs").

During the first nine months of 2023, we recorded a $0.8 million impairment in our Legacy CGU due to decommissioning spending in the area. The Legacy CGU has no recoverable amount, as such changes in our decommissioning liability are expensed each period.

Long-term debt

			As at
			December 31, 2022
Syndicated credit facility	118.0		$	105.0
Senior unsecured notes
11.95% 118.4 million, maturing July 27, 2027	118.4			127.6
Total	236.4			232.6
Unamortized discount of senior unsecured notes	(1.8	)		(2.3	)
Deferred financing costs	(3.9	)		(5.0	)
Total long-term debt	230.7		$	225.3
Non-current portion	230.7		$	225.3

All values are in US Dollars.

At September 30, 2023, the Company had senior unsecured notes outstanding totaling $118.4 million which mature on July 27, 2027. During the third quarter of 2023, the Company re-purchased for cancellation $0.7 million principal amount of senior unsecured notes on the open market at an average price of $993 per $1,000 principal amount, in addition to the Repurchase Offer outlined below. The senior unsecured notes were initially issued at a price of $980 per $1,000 principal amount resulting in aggregate gross proceeds of $125.0 million and at an interest rate of 11.95 percent. The senior unsecured notes are direct senior unsecured obligations of Obsidian Energy ranking equal with all other present and future senior unsecured indebtedness of the Company.

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 7

Financing expense consists of the following:

	Three months ended September 30					Nine months ended September 30
	2023		2022			2023		2022
Interest	$	7.3	$	9.1		$	21.0	$	22.5
Accretion on decommissioning liability		4.3		2.5			13.1		7.5
Accretion on office lease provision		0.3		0.3			0.8		1.1
Accretion on other non-current liability		-		-			-		0.2
Accretion on discount of senior unsecured notes		0.2		-			0.4		-
Accretion on lease liabilities		0.1		0.1			0.3		0.3
Loss on repurchased senior unsecured notes		0.4		-			0.5		-
Deferred financing costs		0.6		0.7			1.7		2.1
Debt modification		-		(0.1	)		-		(0.8	)
Financing	$	13.2	$	12.6		$	37.8	$	32.9

Lease liabilities

Total lease liabilities included in the Consolidated Balance Sheets are as follows:

	Nine months ended<br>September 30, 2023			Year ended<br>December 31, 2022
Balance, beginning of period	$	6.0		$	8.7
Additions		2.6			1.0
Accretion charges		0.3			0.6
Lease payments		(3.3	)		(4.3	)
Balance, end of period	$	5.6		$	6.0
Current portion	$	1.9		$	3.2
Non-current portion	$	3.7		$	2.8

Provisions

	As at
	September 30, 2023		December 31, 2022
Decommissioning liability	$	175.4	$	182.3
Office lease provision		11.6		17.5
Total	$	187.0	$	199.8
Current portion	$	33.9	$	34.1
Non-current portion	$	153.1	$	165.7

Decommissioning liability

At September 30, 2023, the decommissioning liability was determined by applying an inflation factor of 2.0 percent (December 31, 2022 - 2.0 percent) and the inflated amount was discounted using a credit-adjusted rate of 10.0 percent (December 31, 2022 – 10.0 percent) over the expected useful life of the underlying assets, currently extending over 50 years into the future. At September 30, 2023, the total decommissioning liability on an undiscounted, uninflated basis was $580.2 million (December 31, 2022 - $582.7 million).

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 8

Changes to the decommissioning liability were as follows:

	Nine months ended<br>September 30, 2023			Year ended<br>December 31, 2022
Balance, beginning of period	$	182.3		$	121.6
Net liabilities added (1)		1.0			0.3
Increase (decrease) due to changes in estimates		(2.5	)		83.3
Liabilities settled		(18.9	)		(18.8	)
Government decommissioning assistance		0.4			(15.7	)
Accretion charges		13.1			11.6
Balance, end of period	$	175.4		$	182.3
Current portion	$	25.2		$	25.4
Non-current portion	$	150.2		$	156.9

(1) Includes additions from drilling activity, facility capital spending and disposals related to net property dispositions.

Office lease provision

The office lease provision represents the net present value of non-lease components on future office lease payments. The office lease provision was determined by applying an asset specific credit-adjusted discount rate of 6.5 percent (December 31, 2022– 6.5 percent) over the remaining life of the lease contracts, extending to January 2025.

Changes to the office lease provision were as follows:

	Nine months ended<br>September 30, 2023			Year ended<br>December 31, 2022
Balance, beginning of period	$	17.5		$	25.6
Decrease due to changes in estimates		-			(0.3	)
Settlements		(6.7	)		(9.2	)
Accretion charges		0.8			1.4
Balance, end of period	$	11.6		$	17.5
Current portion	$	8.7		$	8.7
Non-current portion	$	2.9		$	8.8

Risk management

Financial instruments consist of cash, accounts receivable, fair values of derivative financial instruments, accounts payable and accrued liabilities and long-term debt. At September 30, 2023, the fair values of these financial instruments approximate their carrying amounts.

The fair values of all outstanding financial commodity related contracts are reflected on the Consolidated Balance Sheets with the changes during the period recorded in income as unrealized gains or losses.

At September 30, 2023 and December 31, 2022, the only asset or liability measured at fair value on a recurring basis was the risk management asset and liability, which was valued based on “Level 2 inputs” being quoted prices in markets that are not active or based on prices that are observable for the asset or liability.

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 9

The following table reconciles the changes in the fair value of financial instruments outstanding:

Risk management asset (liability)	Nine months ended<br>September 30, 2023			Year ended<br>December 31, 2022
Balance, beginning of period	$	6.2		$	(2.4	)
Unrealized gain (loss) on financial instruments:
Oil		-			4.0
Natural gas		(2.9	)		4.6
Electricity		(0.4	)		-
Total fair value, end of period	$	2.9		$	6.2
Current asset portion	$	3.8		$	6.2
Current liability portion		(0.8	)		-
Non-current liability portion	$	(0.1	)	$	-

Obsidian Energy had the following financial instruments outstanding as at September 30, 2023. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits our credit risk by executing counterparty risk procedures which include transacting only with institutions within our syndicated credit facility or companies with high credit ratings and by obtaining financial security in certain circumstances.

	Notional<br>Volume	Remaining<br>Term	Price
Oil
WCS Differential Swap	1,500 bbl/d	October 2023 - December 2023	(21.20)/bbl	0.5
WTI Swap	500 bbl/d	October 2023	121.85/bbl	-
WTI Collar	8,500 bbl/d	October 2023	115.70/bbl - 124.05/bbl	(0.5	)
AECO
AECO Swap	49,929 mcf/d	October 2023	3.48/mcf	1.6
AECO Swap	26,588 mcf/d	November 2023 - March 2024	3.47/mcf	1.7
Electricity
Power Swap	120 MWh/d	January - December 2024	93.95/MWh	(0.4	)
Total				2.9

All values are in US Dollars.

Subsequent to September 30, 2023, the Company entered into the following additional financial instruments:

	Notional<br>Volume	Remaining<br>Term	Price
Oil
WTI Swap	1,281 bbl/d	October 2023	$119.01/bbl
WTI Swap	1,083 bbl/d	November 2023	$110.54/bbl
WTI Collar	3,917 bbl/d	November 2023	$112.24/bbl - $117.74/bbl
Electricity
Power Swap	24 MWh/d	January - December 2024	$87.25/MWh
OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 10
---	---

The components of risk management within Income on the Consolidated Statements of Income are as follows:

	Three months ended September 30						Nine months ended September 30
	2023			2022			2023			2022
Realized
Settlement of oil contracts gain (loss)	$	(2.1	)	$	1.0		$	(1.8	)	$	(26.1	)
Settlement of natural gas contracts gain (loss)		5.0			(2.6	)		12.8			(6.3	)
Total realized risk management gain (loss)	$	2.9		$	(1.6	)	$	11.0		$	(32.4	)
Unrealized
Oil contracts gain	$	0.9		$	6.3		$	-		$	5.8
Natural gas contracts gain (loss)		(4.1	)		1.5			(2.9	)		(1.6	)
Total unrealized risk management gain (loss)		(3.2	)		7.8			(2.9	)		4.2
Risk management gain (loss)	$	(0.3	)	$	6.2		$	8.1		$	(28.2	)

The components of risk management within Expenses on the Consolidated Statements of Income are as follows:

	Three months ended September 30					Nine months ended September 30
	2023			2022		2023			2022
Unrealized
Electricity contracts loss	$	(0.4	)	$	-	$	(0.4	)	$	-
Total unrealized risk management loss		(0.4	)		-		(0.4	)		-
Risk management loss	$	(0.4	)	$	-	$	(0.4	)	$	-

Market Risks

Obsidian Energy is exposed to normal market risks inherent in the oil and natural gas business, including, but not limited to, commodity price risk, foreign currency rate risk, credit risk, interest rate risk, liquidity risk, supply cost risks and climate change risk. The Company seeks to mitigate these risks through various business processes and management controls and from time to time by using financial instruments.

There have been no material changes to these risks from those discussed in the Company’s annual audited consolidated financial statements as at and for the year ended December 31, 2022.

Alberta Wildfire impact

During the second quarter of 2023, the Company's financial results were impacted by wildfires in Northern and Central Alberta which resulted in the temporary shut-in of production during parts of May. The Company did not incur material damage to our PP&E from the wildfires.

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 11

Revenue and Other Income

The Company’s significant revenue streams consist of the following:

	Three months ended September 30				Nine months ended September 30
	2023		2022		2023		2022
Oil	$	171.2	$	164.2	$	452.5	$	541.1
NGLs		12.4		15.1		37.9		48.2
Natural gas		16.8		31.3		56.9		101.5
Production revenues		200.4		210.6		547.3		690.8
Processing fees		3.4		1.6		10.7		5.5
Oil and natural gas sales		203.8		212.2		558.0		696.3
Other income		2.1		1.8		5.2		4.9
Oil and natural gas sales and other income	$	205.9	$	214.0	$	563.2	$	701.2

Shareholders’ equity

i) Issued

Shareholders’ capital			Amount
Balance, December 31, 2021	80,753,516		$	2,213.8
Issued pursuant to equity compensation plans (1)	1,688,694			8.1
Balance, December 31, 2022	82,442,210		$	2,221.9
Issued pursuant to equity compensation plans (1)	205,463			0.5
Repurchase of common shares for cancellation	(2,891,135	)		(24.9	)
Balance, September 30, 2023	79,756,538		$	2,197.5

(1) Upon vesting or exercise of equity awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital.

Pursuant to our return of capital initiative to our shareholders, in the first quarter of 2023 we received approval from the Toronto Stock Exchange for a normal course issuer bid ("NCIB"). Purchases under the NCIB will be subject to having $65 million of liquidity and complying with the terms of our current credit facilities. During the third quarter of 2023, the Company utilized the NCIB which resulted in 1,569,999 common shares being repurchased and canceled at an average price of $9.17 per share for total consideration of $14.4 million. The total consideration paid includes commissions and fees and is recorded as a reduction to Shareholders' Equity.

Subsequent to September 30, 2023, the Company repurchased and cancelled an additional 712,500 common shares for total consideration of $8.0 million at an average price of $11.21 per share. Including these amounts, in 2023 the Company has repurchased and cancelled 3,603,635 common shares for total consideration of $32.9 million at an average price of $9.13 per share.

ii) Earnings per share - Basic and Diluted

The weighted average number of shares used to calculate per share amounts was as follows:

	Three months ended<br>September 30				Nine months ended<br>September 30
Average shares outstanding (millions)	2023		2022		2023		2022
Basic		80.9		82.2		81.2		81.9
Dilutive impact (1)		2.1		2.3		2.1		2.3
Diluted		83.0		84.5		83.3		84.2

(1) Includes impact of stock options and restricted share units.

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 12

Share-based compensation

Restricted and Performance Share Unit plan ("RPSU plan")

Restricted Share Unit ("RSU") grants under the RPSU plan

Obsidian Energy awards RSU grants under the RPSU plan whereby employees receive consideration that fluctuates based on the Company’s share price on the Toronto Stock Exchange ("TSX"). Consideration can be in the form of cash or shares purchased on the open market or issued from treasury.

RSUs (number of shares equivalent)
Outstanding, beginning of period	874,130		1,167,351
Granted	939,990		537,225
Vested (1)	(536,965	)	(784,514	)
Forfeited	(27,072	)	(45,932	)
Outstanding, end of period	1,250,083		874,130

(1) Vested RSUs in 2023 were settled in cash and in 2022 were settled in shares.

The fair value and weighted average assumptions of the RSUs granted during the periods were as follows:

	Nine months ended September 30
	2023			2022
Average fair value of RSUs granted (per RSU)	$	9.77		$	10.57
Expected life of RSUs (years)		2.6			2.9
Expected forfeiture rate		0.1	%		0.5	%

Performance Share Unit (“PSU”) grants under the RPSU plan

The RPSU plan allows Obsidian Energy to grant PSUs to employees of the Company.

The PSUs are classified as a liability on our Consolidated Balance Sheet as the PSUs are settled in cash. The PSU liability fluctuates based on the Company’s share price on the TSX at each period end date. Employees receive consideration only when the PSUs vest.

PSUs (number of shares equivalent)	Nine months ended<br>September 30, 2023			Year ended<br>December 31, 2022
Outstanding, beginning of period		949,040			1,138,465
Granted		152,760			124,610
Vested		(291,710	)		(181,018	)
Forfeited		-			(133,017	)
Outstanding, end of period		810,090			949,040
	As at
---	---	---	---	---
PSU liability	September 30, 2023		December 31, 2022
Current	$	9.7	$	5.2
Non-current		2.2		6.1
Total	$	11.9	$	11.3

Stock Option Plan

Obsidian Energy has a Stock Option Plan that allows the Company to issue options to acquire common shares (“Options”) to officers, employees, directors and other service providers.

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 13
	Nine months ended<br>September 30, 2023					Year ended<br>December 31, 2022
---	---	---	---	---	---	---	---	---	---	---
Options	Number of<br>Options			Weighted Average<br>Exercise Price		Number of<br>Options			Weighted Average<br>Exercise Price
Outstanding, beginning of period		2,274,672		$	2.30		3,021,672		$	1.56
Granted		188,780			9.81		156,400			10.64
Exercised		(205,463	)		1.35		(903,400	)		1.27
Outstanding, end of period		2,257,989		$	3.01		2,274,672		$	2.30
Exercisable, end of period		1,088,615		$	2.02		749,498		$	1.69

The fair value and weighted average assumptions of the Options granted during the periods were as follows:

	Nine months ended September 30
	2023			2022
Average fair value of Options granted (per Option)	$	6.34		$	6.56
Expected volatility		82.4	%		87.0	%
Expected life of Options (years)		3.9			3.9
Expected forfeiture rate		0.2	%		0.3	%

Non-Treasury Incentive Award Plan (“NTIP”)

The NTIP allows Obsidian Energy to grant NTIP Restricted Awards to employees of the Company.

The NTIP obligation is classified as a liability on our Consolidated Balance Sheet as the NTIP restricted awards are settled in cash. The NTIP obligation fluctuates based on the Company’s share price on the TSX at each period end date. Employees receive consideration only when the NTIP restricted awards vest.

NTIP Restricted Awards	Nine months ended<br>September 30, 2023			Year ended<br>December 31, 2022
Outstanding, beginning of period		689,228			1,093,800
Granted		-			3,400
Vested		(333,707	)		(363,871	)
Forfeited		(14,474	)		(44,101	)
Outstanding, end of period		341,047			689,228
	As at
---	---	---	---	---
NTIP liability	September 30, 2023		December 31, 2022
Current	$	3.1	$	2.6
Non-current		0.1		1.8
Total	$	3.2	$	4.4

Deferred Share Unit (“DSU”) plan

The DSU plan allows the Company to grant DSUs to non-employee directors only.

The DSU plans is classified as a liability on our Consolidated Balance Sheet as the DSUs are settled in cash. The DSU liability fluctuates based on the Company’s share price on the TSX at each period end date. Non-employee directors receive consideration only upon redemption of the DSUs following retirement from the Board of Directors, not before this date, with the consideration based on the volume-weighted-average trading price of the common shares on the TSX.

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 14
Deferred Share Units	Nine months ended<br>September 30, 2023		Year ended<br>December 31, 2022
---	---	---	---	---	---
Outstanding, beginning of period		1,811,245		2,018,499
Granted		66,815		42,509
Exercised		-		(249,763	)
Outstanding, end of period		1,878,060		1,811,245
	As at
---	---	---	---	---
DSU Liability	September 30, 2023		December 31, 2022
Current	$	21.1	$	16.6
Non-current		-		-
Total	$	21.1	$	16.6

At September 30, 2023, the Company had no outstanding DSUs that were redeemable.

Share-based compensation

Share-based compensation consisted of the following:

	Three months ended<br>September 30				Nine months ended<br>September 30
	2023		2022		2023		2022
DSUs	$	6.6	$	0.2	$	4.5	$	11.1
PSUs		5.3		2.0		5.8		8.6
NTIP		1.2		0.6		1.8		5.6
Cash settled share-based incentive plans	$	13.1	$	2.8	$	12.1	$	25.3
RSUs	$	1.6	$	0.9	$	5.1	$	2.5
Options		0.3		0.3		0.9		1.1
Equity settled share-based incentive plans		1.9		1.2		6.0		3.6
Share-based compensation	$	15.0	$	4.0	$	18.1	$	28.9

The share price used in the fair value calculation of the DSU, NTIP and PSU obligations at September 30, 2023 was $11.18 per share (2022 – $9.93).

Deferred income tax asset

	Nine months ended<br>September 30, 2023			Year ended<br>December 31, 2022
Balance, beginning of period	$	246.4		$	-
Deferred income tax expense		(23.8	)		-
Recognition of deferred income tax asset		-			246.4
Balance, end of period	$	222.6		$	246.4

The Company recorded a deferred tax asset in 2022, as we expect to have sufficient taxable profits in future years in order to fully utilize the remaining deferred tax asset balance. The deferred tax asset is reduced by net income for the period on an after-tax basis.

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 15

Commitments and contingencies

The Company is involved in various litigation and claims in the normal course of business and records provisions for claims as required.

Government grants

The Company received grant allocations under the Alberta Site Rehabilitation Program (“ASRP”) beginning in 2020. The ASRP ended on December 31, 2022, however, costs were able to be submitted into 2023. These awards allowed the Company to expand our abandonment activities for wells, pipelines, facilities, and related site reclamation and thus reduce our decommissioning liability. The Company's grants were adjusted by $0.4 million during the first nine months of 2023 (2022 – $15.6 million of grant utilization).

OBSIDIAN ENERGY THIRD QUARTER 2023	NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 16

EX-99.4

Exhibit 99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Stephen Loukas, President and Chief Executive Officer of Obsidian Energy Ltd., certify the following:

Review: I have reviewed the interim financial report and interim MD&A (together the “interim filings”) of Obsidian Energy Ltd. (the “issuer”) for the interim period ended September 30, 2023.
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2 N/A.

5.3 N/A.

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2023 and ended on September 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 9, 2023

(signed) “Stephen Loukas”

_______________________

Stephen Loukas

President & Chief Executive Officer

EX-99.5

Exhibit 99.5

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Peter Scott, Senior Vice President and Chief Financial Officer of Obsidian Energy Ltd., certify the following:

Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Obsidian Energy Ltd. (the “issuer”) for the interim period ended September 30, 2023.
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

5.2 N/A.

5.3 N/A.

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2023 and ended on September 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 9, 2023

(signed) “Peter Scott”

_______________________

Peter Scott

Senior Vice President and Chief Financial Officer