07:23 AM EDT, 05/29/2024 (MT Newswires) -- Obsidian Energy ( OBE ) announced its latest acquisition of oil assets and also increased production guidance.

The company will acquire 1,700 boe/d (100% oil, based on April 2024 actual production) of Clearwater production and 148 net sections of land in the Peace River area from a third-party, for $76 million (net of closing adjustments). The total includes $46 million for base production and $30 million for undeveloped land value. The acquisition will be funded through debt financing and expected to close by July 14. Adding to the smaller acquisitions completed in 2024, Obsidian has over 680 net sections of land with Clearwater and/or Bluesky heavy oil rights.

The company also updated its 2024 guidance, with production expected to average 36,400 boe/d, a 13% increase from 32,275 boe/d in 2023. Funds flow from operations has been increased by $5 million to $405 million.

The 2024 capital program will continue to focus on developing new and existing fields and further delineating its Peace River asset, the company said. Capital expenditures are reduced to $330-$340 million.

"The strategic value of this acquisition represents a compelling opportunity - one that is highly synergistic to our existing Peace River land base and offers significant potential for future growth," said Stephen Loukas, president and CEO of Obsidian Energy ( OBE ). "A substantial portion of the acquired lands at Peavine are adjacent to and extends our Clearwater Dawson field, which is providing robust production results above our expectations. Post-closing, we anticipate a broader development area that will yield the opportunity for operational synergies, as well as improved capital efficiencies."