Obsidian Provides Operational Update with Increased Production Guidance

OBSIDIAN ENERGY LTD. is pleased to provide an update on our continued strong second half development program with two drilling rigs active in our Cardium asset, acceleration of three drills from our 2022 program into 2021, and an increase to our 2021 production guidance. In addition, we expect third quarter production to average approximately 24,150 boe/d based on preliminary estimates.

"With ten new wells on production from late September to the end of October, we are well on our way to achieving our strategic objective of restoring our production to pre-COVID levels by the end of 2021," commented Stephen Loukas, Obsidian Energy's Interim President and CEO. "This significant number of new wells added to our program in the second half of 2021 displays our team's ability to quickly scale our program and access our deep and diverse inventory across our land base with improved commodity prices."

We have increased our full-year 2021 production guidance to between 24,300 and 24,500 boe/d due to strong results from our development program and continued outperformance of our base production. Continuing strong commodity prices combined with our drilling performance has allowed the Company to accelerate its development program with the addition of three 2022 Cardium development wells into December 2021. The early start to our 2022 program allows for continuous and cost-efficient drilling through late 2021 into 2022. With these wells, we anticipate capital spending to be at the upper end of our guidance range.

2021 DEVELOPMENT PROGRAM UPDATE
We are on track to successfully drill our second half development program, including the addition of the three wells (2.8 net) in December, which will be brought on production early in 2022. Accelerating the drilling of these three wells into 2021 will allow our activity to continue uninterrupted into 2022, securing access to the drilling rigs and minimizing mobilization costs. As a result of this additional late year activity, 12 wells (9.8 net) are expected to come on stream in early 2022. Updates to our recent drilling results and planned activity are as follows:

Willesden Green: Since the beginning of our second-half program, we have rig-released eight Cardium wells (8.0 net) and, in order to capitalize on strong AECO natural gas pricing, one liquids-rich Spirit River gas well (1.0 net). Five of the eight Cardium wells along with the Spirit River well are now on production. After cleanup, these five Cardium wells averaged 400 boe/d (81 percent light oil) over their first ten days of production. The Spirit River well flowed at an average rate of 937 boe/d (including 168 bbl/d field condensate) for its first ten days. This rate increased to 1,144 boe/d (including 212 bbl/d field condensate) on its twelfth producing day upon removal of its downhole choke.

The ninth Cardium drill in this program is the final of four wells at the Faraway 6-22 Pad. This pad is expected to be fractured and on stream by the end of 2021. Drilling will continue through December with two gross/net additional wells at our Faraway 4-17 Pad, which are expected to be brought on production in late January 2022, and one accelerated 2022 well in Crimson Lake.

Pembina: We rig-released four gross Cardium wells (3.6 net) as part of our second half program, with the first three 7-17 Pad wells now on production. The first well produced at 256 boe/d (80 percent light oil) over the past six days after a brief cleanup period. The other two wells are not yet producing at their capability due to minor pump issues; updated production results will be provided as part of our third quarter release as the wells continue cleanup. Additionally, we drilled and completed two low-cost vertical wells as part of a focused opportunity that leverages our knowledge of deeper formations. Both wells are on production: the first well averaged 326 boe/d (96 percent light oil) over its first ten days of production; and the second well produced 206 boe/d (94 percent light oil) on its third day and is improving as cleanup continues. The four remaining Cardium wells from the 2021 program are expected to be completed and brought on production in January 2022. In December 2021, we will begin the drilling of two wells from our 2022 development program.

ALBERTA SITE REHABILITATION PROGRAM
The additional $6.9 million of Alberta Site Rehabilitation Program ("ASRP") support we received through Periods 7 and 8 allocations brings total support from the ASRP to over $35 million of grants and allocations. Total grant support will be determined by final project costs. To date, nearly $12 million of grants and allocations have been successfully invested on decommissioning activities.

In the third quarter of 2021, we abandoned 80 wells and 27 km of pipelines (net), and we remain on pace to decommission a total of approximately 600 net wells and 700 net km of pipelines during 2021 and 2022.

2021 UPDATED GUIDANCE
With solid results from our base production and our 2021 development program to date, we are revising our 2021 production guidance. Additionally, we have added three incremental gross drills (2.8 net) in late 2021, representing an acceleration of our 2022 program to deliver continuous and cost-efficient drilling into next year. In aggregate, we believe our capital spending will be near the upper range of our guidance. Production performance to date, combined with our fourth quarter capital plan and higher commodity prices contribute to the increase in our forecasted production and funds flow from operations.

INTERIM PRESIDENT AND CEO EXTENTION
The Company is also pleased to announce that is has also extended Stephen Loukas's employment contract as Interim President and CEO to December 31, 2022, subject to the option to terminate, if mutually agreeable to both parties, on July 1, 2022.

"We are pleased to extend Stephen's contract through this phase of the Company's evolution," said Gordon Ritchie, Chair of the Obsidian Energy Board of Directors. "Steve and the entire Obsidian Energy team have done an exceptional job to transform the Company, addressing the challenges and opportunities over the last number of years. We're extremely pleased to have Steve guiding the future direction of Obsidian Energy."