June 11 (Reuters) - Canada's Woodland Cree First Nation

said on Tuesday it has ended its dispute with oil and gas

producer Obsidian Energy ( OBE ) to expand drilling operations

on its traditional territory.

"After mediated negotiations, we have come to terms on an

agreement in principle that balances the rights and interests of

the Nation and Obsidian Energy Ltd. ( OBE )" Woodland Cree Chief Isaac

Laboucan-Avirom said in a statement.

Obsidian Energy ( OBE ) was forced to shut production at two of its

sites last month amid an ongoing dispute with the Indigenous

community.

Woodland Cree First Nation first criticized Obsidian Energy ( OBE )

in February for failing to address concerns about its operations

after regulators said the Canadian oil and gas producer was

responsible for a series of earthquakes.

Calgary-based Obsidian produces roughly 31,000 barrels of

oil equivalent per day (boepd). Around 20% of output comes from

the company's Peace River assets in northern Alberta, some of

which are located within Woodland Cree territory.