Yahoo Finance Obsidian (OBE) Resumes Production at Harmon Valley South Field
Obsidian Energy Ltd. OBE, a Calgary-based exploration and production firm, has resolved its dispute with Woodland Cree First Nation (“WCFN”). The company is reportedly resuming production in its Harmon Valley South field, located in the Peace River area. Obsidian had landed in a dispute with WCFN in February because the latter suspected OBE of not informing it about its expansion plans within its traditional territory. WCFN was also concerned about seismic activity in the region related to Obsidian’s operations.
Following the dispute with Woodland Cree, the company had to halt production at two of its sites last month. Obsidian went ahead and obtained a court injunction to remove the blockade. However, despite being granted the injunction, the local RMCP did not take the necessary steps to enforce it. OBE commented that it was being pressurised into giving First Nation a monopoly on its work sites.
The upstream player has now resolved the dispute and entered into an agreement in principle with WCFN, following which the blockade has been removed. The two parties had engaged in long and detailed discussions before arriving at an equitable agreement that would be fair and beneficial to both. The extensive discussions were facilitated via a mediator. While it was disclosed that the aforementioned agreement had a term till 2025-end, the other conditions were kept confidential.
Obsidian’s production is estimated to be 31,000 barrels of oil equivalent per day (boe/d). The Harmon Valley South Field was producing 4,500 net boe/d prior to halting production due to the blockade.
Zacks Rank and Key Picks
Currently, OBE carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy sector are Archrock Inc. AROC, SM Energy SM and Hess Midstream Partners LP HESM. Archrock presently sports a Zacks Rank #1 (Strong Buy), while SM Energy and Hess Midstream carry a Zacks Rank of #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
SM Energy is an upstream energy firm operating in the prolific Midland Basin region and the South Texas region. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
Hess Midstream owns, operates, develops and acquires a wide range of midstream assets, providing services to Hess Corporation and other third-party customers. The partnership has a stable fee-based revenue model secured via long-term commercial contracts. Since Hess Midstream operates through 100% fee-based contracts, it is exposed to minimal commodity price risks.
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