Obsidian Energy Ltd. (NYSE: OBE) reported Q2 EPS of ($0.19), $0.15 worse than the analyst estimate of ($0.04).

David French, President and CEO commented, "The second quarter of 2018 was a relatively quiet one for development, as we took advantage of seasonal breakup to prepare for our second half drilling program. Obsidian Energy's team safely completed a major turnaround at our Company's biggest facility in Willesden Green on time and on budget, monitored the non-operated gas processing facility construction in Peace River while advancing our own gathering system in the area, and kicked off lease construction for our summer drilling program.

Our corporate cash flow continues to be constrained by our hedging program in 2018. The combination of wide differentials and a fulsome hedge book hamper our corporate netback right now, but the significant cash generating potential of our field operations remains. That all translates to funds flow from operations in the quarter of $32 million, which is slightly down from the first quarter. Additional maintenance activity was reflected in the opex per boe results of $14.47 per boe, but costs will trend down in second half of the year.

The next several months will be instrumental for the Company. In the second quarter, our Board approved an incremental $50 million of capital earmarked for primary Cardium development. The increased budget sets the stage for growth as we embark on focused Willesden Green development and look to add meaningful light oil volumes into 2019. This production build will position Obsidian Energy to capitalize on strong commodity prices as we roll out of our 2018 hedge book, and see a meaningful uptick in cash flow from organic growth.

We believe the investment community is beginning to recognize that the stage is set for our underlying business to perform very well. We look forward to previewing our preliminary 2019 plans and long term inventory potential at our fall Investor Day and providing an update on our drilling activities with third quarter results."

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