How much cash does Obsidian really make, and what is a share of it worth?

The words on this page

Real cash (true cash)

What was left in the bank each year after every bill, every tax payment and every well drilled. Not profit, and not "cash flow" as companies usually quote it, which leaves the drilling out. The strictest number there is.

Required return

The yearly return you insist on for taking the risk. A dollar promised in ten years is worth less than a dollar today; this rate says how much less. 9% is a common professional figure for a large Canadian producer; the reserve engineers use 10%.

Well life (reserve life)

How long the wells keep producing. After the life you choose, nothing is counted. GLJ evaluated 158.4 million boe of proved plus probable reserves at 31 December 2025 (104.8 million proved). Against 2025's average of 30,624 boe a day that is a 14.2 year 2P reserve life and 9.4 years proved; GLJ's own reserve life index on forecast production is 13.3 and 10.1 years.

What a share is worth

Every future year's cash, shrunk back to today's dollars at your required return, added up, less the debt, less the cost of cleaning up the wells, divided by the number of shares. Pay less than this and you earn more than your required return; pay more and you earn less.

Where the default growth comes from

Obsidian's June 2026 plan raises capital spending to target 15 per cent production growth in 2027 from the expanded Peace River and Willesden Green programs; 5 per cent is a tempered decade-long take on that push.

The arithmetic, step by step

1. Count the real cash each past year: cash generated by operations as reported, plus interest paid put back, minus rent on leases, minus every dollar spent on wells and plants. Buying and selling assets is shown separately.
2. Project it. The starting cash you choose (an average of the history, or the latest year) grows at your growth dial for ten years, then at the long-run rate for as long as the wells keep producing. Nothing is counted after the well life ends.
3. Bring it back to today. Each year's cash is shrunk by your required return, counted at mid-year because cash arrives through the year rather than on 31 December.
4. Turn it into a share value. Add up the shrunk cash; take off net debt of C$354M; take off the C$107M cost of cleaning up the wells if that switch is on; divide by 66.73M shares.
5. Work it backwards. "The growth today's price assumes" is the ten-year growth rate at which this start is worth exactly the share price.

Where the numbers come from

• Every history year has been hand-checked line by line against the audited annual financial statements filed with the SEC as 40-F exhibits. Operating cash flow, cash interest paid, leases, capital spending, acquisitions and dispositions, buybacks, net income and diluted weighted share counts all tie to those filings.
• This is the former Penn West Petroleum, renamed Obsidian in June 2017, and 2016 was the crisis year: $1.4 billion of asset sales (the Viking, Slave Point and more), $1.3 billion of notes repaid, operating cash flow of minus $137 million, and $124 million of cash interest including settlement costs. Production fell 42 per cent that year. The early bars are a company saving itself, not a business as it runs today.
• All per-share history is adjusted for the 1-for-7 share consolidation of June 2019. Weighted share counts are the audited diluted weighted averages for every year; 2016 and 2017 are the pre-consolidation figures divided by 7.
• Net debt is Obsidian's own measure, long-term debt plus the working capital deficiency, because the company reports it consistently across all ten years. Bare debt less cash runs lower (about $200 million versus $268 million at year-end 2025). The $353.6 million at 30 June 2026 follows the same company measure and reflects the $98 million Belly River acquisition closed in 2026.
• The 2019 lease line of $30 million is the year IFRS 16 arrived and Obsidian settled a large Calgary office lease; office lease costs before 2019 sat inside operating cash flow, so the zeros in 2016 to 2018 do not mean the cost was absent.
• Acquisitions net of sales: 2016 and 2017 are the big disposition years ($1.4 billion and $110 million of net proceeds). 2024's $83.4 million is Peace River area property purchases. 2025's minus $299.4 million combines $208.3 million of Pembina disposition proceeds and $91.4 million from selling the InPlay shares received as partial payment; the total Pembina consideration was about $320 million in cash, shares and assets.
• No dividends were paid in any of the ten years. Buybacks began in 2023; the 2025 figure of $55.6 million includes the federal buyback tax on top of the $54.9 million of repurchases the company reported.
• The latest year's true cash is negative because 2025 combined a heavy capital program with the loss of Pembina volumes mid-year; the ten-year average carries the crisis years. Read the start selector options against each other before trusting any single number.
• Interest is cash interest paid as disclosed in the audited statements; the 2016 figure is inflated by debt-settlement costs in the restructuring.
• Analyst targets: average C$17.50 across 4 analysts (stockanalysis.com analyst consensus, 28 August 2026).

For the technically minded

The method is the one used to evaluate capital projects, from Ted Lawrence, The Business Guide to Economic Evaluations: Projects, Leases, Tariffs and Acquisitions (2017). "Real cash" is the book's project cash flow (chapter 3) with depreciation, debt servicing and debt-like leases restructured out (chapters 4, 5 and 19); short operating leases stay in as a cost of producing, a chapter 19 judgment. The value per share follows the share-purchase evaluation of chapter 20: present value of the company's cash flows at the cost of capital (chapter 10), mid-year discounting (chapter 12), plus non-required assets, less net debt and the decommissioning liability. "What you gain or lose" is the bid-curve NPV of chapter 20; "when you get your money back" is the discounted payout of chapter 13; the bars follow the project profile of chapter 6. The reverse solve on growth is a plain reverse DCF.

Discount-rate anchors: 9% is a common cost-of-equity figure for a large Canadian producer and 10% is the reserve-report convention (PV10). The long-run rate defaults to 0% here: a depleting resource should not be assumed to grow forever, so anything above zero is a judgment you make with the dial.