Cover Page
Cover Page | 12 Months Ended |
Dec. 31, 2021shares | |
Document Information [Line Items] | |
Document Type | 40-F/A |
Amendment Flag | true |
Amendment Description | This Amendment No. 1 (this “Amendment”) amends the Annual Report on Form 40-F of Obsidian Energy Ltd. (the “Company”) originally filed with the Securities and Exchange Commission (“SEC”) on February 24, 2022 (the “Original Annual Report”) in order to file amended audited consolidated financial statements of the Company for the year ended December 31, 2021 for the purpose of changing the signature on the former auditors’ opinion of the document from “signed E&Y LLP” to “signed Ernst & Young LLP”. Additionally, pursuant to the rules of the SEC, this Amendment also contains (i) new certifications required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) new certifications required by Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act, and (iii) new consents from the Company’s current and former independent registered public accounting firms. Other than as discussed above and expressly set forth herein, this Amendment does not, and does not purport to, amend or restate any other information contained in the Original Annual Report nor does this Amendment reflect any events that have occurred after the Original Annual Report was filed. Accordingly, this Amendment should be read in conjunction with the Original Annual Report. |
Document Period End Date | Dec. 31, 2021 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Trading Symbol | OBE |
Entity Registrant Name | OBSIDIAN ENERGY LTD. |
Entity Central Index Key | 0001334388 |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Emerging Growth Company | false |
Entity Interactive Data Current | Yes |
Title of 12(b) Security | Common Shares |
Security Exchange Name | NYSEAMER |
Entity Address, State or Province | AB |
Entity Address, Country | CA |
Entity Common Stock, Shares Outstanding | 80,753,516 |
ICFR Auditor Attestation Flag | true |
Auditor Name | KPMG LLP |
Auditor Firm ID | 85 |
Auditor Location | Calgary AB |
Document Registration Statement | false |
Document Annual Report | true |
Entity File Number | 1-32895 |
Entity Address, Address Line One | Suite 200, 207 – 9th Avenue SW |
Entity Address, City or Town | Calgary |
Entity Address, Postal Zip Code | T2P 1K3 |
City Area Code | 403 |
Local Phone Number | 777-2500 |
Audited Annual Financial Statements | true |
Annual Information Form | true |
Entity Incorporation, State or Country Code | A0 |
Business Contact [Member] | |
Document Information [Line Items] | |
Entity Address, State or Province | WA |
Contact Personnel Name | DL Services Inc. |
Entity Address, Address Line One | Columbia Center |
Entity Address, Address Line Two | 701 Fifth Avenue, Suite 6100 |
Entity Address, City or Town | Seattle |
Entity Address, Postal Zip Code | 98104-7043 |
City Area Code | 206 |
Local Phone Number | 903-5448 |
Consolidated Balance Sheets
Consolidated Balance Sheets - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Current | ||
Cash | $ 7.3 | $ 8.1 |
Accounts receivable | 68.9 | 40.8 |
Risk management | 1.8 | 0.8 |
Prepaid expenses and other | 9.1 | 9.2 |
Total current assets | 87.1 | 58.9 |
Non-current | ||
Property, plant and equipment | 1,342.1 | 905.2 |
Total non-current assets | 1,342.1 | 905.2 |
Total assets | 1,429.2 | 964.1 |
Current | ||
Accounts payable and accrued liabilities | 107.8 | 74.1 |
Current portion of long-term debt | 391 | 451.8 |
Current portion of lease liabilities | 4.1 | 4.8 |
Current portion of provisions | 23.4 | 16.3 |
Risk management | 4.2 | 0.6 |
Total current liabilities | 530.5 | 547.6 |
Non-current | ||
Lease liabilities | 4.6 | 5.6 |
Provisions | 123.8 | 87.7 |
Other non-current liabilities | 6.8 | 0.1 |
Total liabilities | 665.7 | 641 |
Shareholders' equity | ||
Shareholders' capital | 2,213.8 | 2,187 |
Other reserves | 103.2 | 103.6 |
Deficit | (1,553.5) | (1,967.5) |
Total shareholders' equity | 763.5 | 323.1 |
Total liabilities and shareholders' equity | $ 1,429.2 | $ 964.1 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - CAD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement [LineItems] | ||
Production revenues | $ 477.5 | $ 275.4 |
Processing fees | 6.4 | 6.3 |
Royalties | (48.6) | (13.7) |
Sales of commodities purchased from third parties | 13.6 | 4.8 |
Gross Revenue | 448.9 | 272.8 |
Other income | 6 | 13 |
Government decommissioning assistance | 11 | 2.2 |
Risk management gain (loss) | (14.6) | 21.7 |
Total revenue | 451.3 | 309.7 |
Expenses | ||
Operating | 129.5 | 115.4 |
Transportation | 18.7 | 17.7 |
Commodities purchased from third parties | 12.6 | 4.6 |
General and administrative | 15.3 | 13.9 |
Restructuring | (1.8) | 0.6 |
Share-based compensation | 19.4 | 3.4 |
Depletion, depreciation, impairment and accretion | (190.6) | 902.9 |
Provisions | 1.2 | (22.6) |
Foreign exchange gain | (0.2) | (1.4) |
Financing | 37.4 | 37.2 |
Transaction Costs | 3.5 | 3.5 |
Other | (7.7) | 6.2 |
Total expenses | 37.3 | 1,081.4 |
Net income (loss) before taxes | 414 | (771.7) |
Deferred tax recovery | 0 | 0 |
Net and comprehensive income (loss) | $ 414 | $ (771.7) |
Net income (loss) per share | ||
Basic | $ 5.52 | $ (10.53) |
Diluted | $ 5.34 | $ (10.53) |
Weighted average shares outstanding (millions) | ||
Basic | 75.1 | 73.3 |
Diluted | 77.6 | 73.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | ||
Net income (loss) | $ 414 | $ (771.7) |
Government decommissioning assistance | (11) | (2.2) |
Other income | (0.3) | |
Depletion, depreciation, impairment and accretion | (190.6) | 902.9 |
Provisions | 1.2 | (22.6) |
Financing | 1.9 | 1.5 |
Share-based compensation | 2.3 | 2.1 |
Unrealized risk management loss (gain) | 2.6 | (0.8) |
Foreign exchange gain | (0.2) | (1.4) |
Other | 2.1 | |
Decommissioning expenditures | (8.1) | (11.1) |
Onerous office lease settlements | (9.1) | (9.7) |
Deferred financing costs | 5.5 | 2.8 |
Financing Fees Paid | (4.7) | (5.6) |
Change in non-cash working capital | (5.1) | (6.6) |
Cash flows from (used in) operating activities | 198.7 | 79.4 |
Investing activities | ||
Capital expenditures | (140.9) | (57.2) |
Business acquisition | (33.7) | |
Property dispositions (acquisitions), net | (0.1) | 0.1 |
Change in non-cash working capital | 18.1 | (9.1) |
Cash flows from (used in) investing activities | (156.6) | (66.2) |
Financing activities | ||
Lease receivable receipts | 2.2 | |
Lease liabilities settlements | (4.4) | (6.3) |
Increase (decrease) in long-term debt | (73.5) | (4) |
Advance of PROP limited recourse loan | 16.3 | |
Repayments of senior notes/PROP limited recourse loan | (5.4) | |
Exercised compensation plans | (0.1) | |
Issuance of common shares, net of costs | 24.2 | |
Cash flows from (used in) financing activities | (42.9) | (8.1) |
Change in cash and cash equivalents | (0.8) | 5.1 |
Cash and cash equivalents, beginning of year | 8.1 | 3 |
Cash and cash equivalents, end of year | $ 7.3 | $ 8.1 |
Statements of Changes in Shareh
Statements of Changes in Shareholders' Equity - CAD ($) $ in Millions | Total | Shareholders' Capital [member] | Other Reserves [member] | Deficit [member] |
Beginning balance at Dec. 31, 2019 | $ 1,092.7 | $ 2,186.7 | $ 101.8 | $ (1,195.8) |
Statement [LineItems] | ||||
Net and comprehensive income (loss) | (771.7) | (771.7) | ||
Share-based compensation | 2.1 | 2.1 | ||
Issued pursuant to equity compensation plans | 0.3 | (0.3) | ||
Ending balance at Dec. 31, 2020 | 323.1 | 2,187 | 103.6 | (1,967.5) |
Statement [LineItems] | ||||
Net and comprehensive income (loss) | 414 | 414 | ||
Equity offering, net of costs | 24.2 | 24.2 | ||
Share-based compensation | 2.3 | 2.3 | ||
Issued pursuant to equity compensation plans | (0.1) | 2.6 | (2.7) | |
Ending balance at Dec. 31, 2021 | $ 763.5 | $ 2,213.8 | $ 103.2 | $ (1,553.5) |
Structure of Obsidian Energy
Structure of Obsidian Energy | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Structure of Obsidian Energy | 1. Structure of Obsidian Energy Obsidian Energy Ltd. (“Obsidian Energy”, the “Company”, “we”, “us” or “our”) is an exploration and production company and is governed by the laws of the Province of Alberta, Canada. The Company operates in one segment, to explore for, develop and hold interests in oil and natural gas properties and related production infrastructure in the Western Canada Sedimentary Basin directly and through investments in securities of subsidiaries holding such interests. Obsidian Energy’s portfolio of assets is managed at an enterprise level, rather than by separate operating segments or business units. The Company assesses our financial performance at the enterprise level and resource allocation decisions are made on a project basis across our portfolio of assets, without regard to the geographic location of projects . percent of the equity, directly or indirectly, of the entities that carry on the remainder of the oil and natural gas business of Obsidian Energy which includes 100 percent |
Basis of presentation and state
Basis of presentation and statement of compliance | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Basis of presentation and statement of compliance | 2. Basis of presentation and statement of compliance a) Basis of Presentation The annual consolidated financial statements include the accounts of Obsidian Energy, our wholly owned subsidiaries. Prior to November 24, 2021, the consolidated financial statements include our proportionate interest in certain partnerships (acquired 100 percent of PROP in November 2021). Results from acquired properties are included in Obsidian Energy’s reported results subsequent to the closing date and results from properties sold are included until the closing date. All intercompany balances, transactions, income and expenses are eliminated on consolidation. Certain comparative figures have been reclassified to correspond with current period presentation. b) Statement of Compliance These annual consolidated financial statements are prepared in compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The annual consolidated financial statements have been prepared on a historical cost basis, except risk management assets and liabilities which are recorded at fair value as discussed in Note 9 These annual consolidated financial statements of the Company for the year ended December 31, 2021 were approved for issuance by the Board of Directors on February 23, 2022. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Significant accounting policies | 3. Significant accounting policies a) Critical accounting judgments and key estimates The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the recorded amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period. These and other estimates are subject to measurement uncertainty and the effect on the consolidated financial statements of changes in these estimates could be material. Management also makes judgments while applying accounting policies that could affect amounts recorded in its consolidated financial statements. Significant judgments include the identification of cash generating units (“CGUs”) for impairment testing purposes and determining whether a CGU has an impairment indicator. Additionally, management has performed an assessment of the Company’s ability to comply with liquidity requirements for the 12-month The following are the estimates that management has made in applying the Company’s accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements. i) Reserve and resource estimates Commercial petroleum reserves are determined based on estimates of petroleum-in-place, year-end. Reserve adjustments are made annually based on actual oil and natural gas volumes produced, the results from capital programs, revisions to previous estimates, new discoveries and acquisitions and dispositions made during the year and the effect of changes in forecast future oil and natural gas prices. There are a number of estimates and assumptions that affect the process of evaluating reserves. Proved reserves are the estimated quantities of oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a high degree of certainty (at least 90 percent) those quantities will be exceeded. Proved plus probable reserves are the estimated quantities of oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a 50 percent degree of certainty those quantities will be exceeded. Obsidian Energy reports production and reserve quantities in accordance with Canadian practices and specifically in accordance with “Standards of Disclosure for Oil and Gas Activities” (“NI 51-101”). The estimate of proved plus probable reserves is an essential part of the depletion calculation and the impairment test and hence the recorded amount of oil and gas assets. Obsidian Energy cautions users of this information that the process of estimating oil and natural gas reserves is subject to a level of uncertainty. The reserves are based on current and forecast economic and operating conditions; therefore, changes can be made to future assessments as a result of a number of factors, which can include commodity prices, new technology, changing economic conditions, future reservoir performance and forecast development activity. ii) Recoverability of asset carrying values Obsidian Energy assesses our property, plant and equipment (“PP&E”) for impairment by comparing the carrying amount to the recoverable amount of the underlying assets. The determination of the recoverable amount involves estimating the higher of an asset’s fair value less costs of disposal or its value-in-use, iii) Decommissioning liability Obsidian Energy recognizes a provision for future abandonment activities in the consolidated financial statements at the net present value of the estimated future expenditures required to settle the estimated obligation at the balance sheet date. The measurement of the decommissioning liability involves the use of estimates and assumptions including the discount rate, the amount and expected timing of future abandonment costs and the inflation rate related thereto. The estimates were made by management and external consultants considering current costs, technology and enacted legislation. iv) Office lease liability Obsidian Energy recognizes a provision for certain onerous office lease commitments in the consolidated financial statements at the net present value of future lease payments the Company is obligated to make under non-cancellable non-lease v) Fair value calculation on share-based payments The fair value of share-based payments is calculated using a Black-Scholes model. There are a number of estimates used in the calculation such as the expected future forfeiture rate, the expected period the share-based compensation is outstanding and the future price volatility of the underlying security all of which can vary from expectations. The factors applied in the calculation are management’s estimates based on historical information and future forecasts. vi) Fair value of risk management contracts Obsidian Energy records risk management contracts at fair value with changes in fair value recognized in income. The fair values are determined using external counterparty information which is compared to observable market data. vii) Taxation The calculation of deferred income taxes is based on a number of assumptions including estimating the future periods in which temporary differences and other tax credits will reverse and the general assumption that substantively enacted future tax rates at the balance sheet date will be in effect when differences reverse. viii) Litigation Obsidian Energy records provisions related to legal matters if it is probable that the Company will not be successful in defending the claim and if an amount can be reasonably estimated. Determining the probability of a claim being defended is subject to considerable judgment. Additionally, the potential claim is generally a wide range of figures and a single estimate must be made when recording a provision. The assessment of contingencies involves significant judgment and estimates of the potential outcome of future events. b) Business combinations Obsidian Energy uses the acquisition method to account for business combinations. The net identifiable assets and liabilities acquired in transactions are generally measured at their fair value on the acquisition date. The acquisition date is the closing date of the business combination. Acquisition costs incurred by Obsidian Energy to complete a business combination are expensed in the period incurred except for costs related to the issue of any debt or equity securities, which are recognized based on the nature of the related financing instrument. If the consideration for the acquisition given up is less than the fair value of the net assets received, the difference is recognized immediately in the consolidated statement of income (loss). If the consideration for the acquisition given up is greater than the fair value of the net assets received, the difference is recognized as goodwill on the balance sheet. Revisions may be made to the initial recognized amounts determined during the measurement period, which shall not exceed one year after the closing date of the acquisition. c) Revenue Obsidian Energy generally recognizes oil, natural gas and natural gas liquids (“NGLs”) revenue when title passes from Obsidian Energy to the purchaser or, in the case of services, as contracted services are performed. Production revenues are determined pursuant to the terms outlined in contractual agreements and are based on fixed or variable price components. The transaction price for oil, natural gas and NGLs is based on the commodity price in the month of production, adjusted for various factors including product quality and location. Commodity prices are based on monthly or daily market indices. Performance obligations in the contract are fulfilled on the last day of the month with payment typically on the 25 th Obsidian Energy may purchase commodity products from third parties to utilize in blending activities and then subsequently sell these products to our customers. These transactions are presented as separate revenue and expense items in the Consolidated Statements of Income (Loss). The Company enters into agreements for other services such as processing third party production, road usage fees, and other miscellaneous services. Revenue from these arrangements are recorded as processing fees or other income when control passes to the customer, which is generally when the service is provided. d) Joint arrangements The consolidated financial statements include Obsidian Energy’s proportionate interest of jointly controlled assets and liabilities and our proportionate interest of the revenue, royalties and operating expenses. A significant portion of Obsidian Energy’s exploration and development activities are conducted jointly with others and involve joint operations. Under such arrangements, Obsidian Energy has the exclusive rights to our proportionate interest in the assets and the economic benefits generated from our share of the assets. Income from the sale or use of Obsidian Energy’s interest in joint operations and our share of expenses is recognized when it is probable that the economic benefits associated with the transactions will flow to/from Obsidian Energy and the amounts can be reliably measured. e) Transportation expense Transportation costs are paid by Obsidian Energy for the shipping of natural gas, oil and natural gas liquids from the wellhead to the point where title transfers to buyers. These costs are recognized as services are received. f) Foreign currency translation Obsidian Energy and each of our subsidiaries use the Canadian dollar as their functional currency. Monetary items, such as accounts receivable and long-term debt, are translated to Canadian dollars at the rate of exchange in effect at the balance sheet date. Non-monetary g) PP&E i) Measurement and recognition Oil and gas properties are included in PP&E at cost, less accumulated depletion and depreciation and any impairment losses or reversals. The cost of PP&E includes costs incurred initially to acquire or construct the item and betterment costs. Capital expenditures are recognized as PP&E when it is probable that future economic benefits associated with the investment will flow to Obsidian Energy and the cost can be reliably measured. PP&E includes capital expenditures incurred in the development phases, acquisition of PP&E and additions to the decommissioning liability. ii) Depletion and Depreciation Except for components with a useful life shorter than the reserve life of the associated property, resource properties are depleted using the unit-of-production determining our depletion base, Obsidian Energy includes estimated future costs to develop proved plus probable reserves. Changes to reserve estimates are included in the depletion calculation prospectively. Components of PP&E that are not depleted using the unit-of-production three five years and corporate assets have an estimated useful life iii) Derecognition The carrying amount of an item of PP&E is derecognized when no future economic benefits are expected from its use or upon sale to a third party. The gain or loss arising from derecognition is included in income and is measured as the difference between the net proceeds, if any, and the carrying amount of the asset. iv) Major maintenance and repairs Ongoing costs to maintain properties are generally expensed as incurred. These costs include the cost of labour, consumables and small parts. The costs of material replacement parts, turnarounds and major inspections are capitalized provided it is probable that future economic benefits in excess of cost will be realized and such benefits are expected to extend beyond the current operating period. The carrying amount of a replaced part is derecognized in accordance with Obsidian Energy’s derecognition policies. v) Impairment of oil and natural gas properties Obsidian Energy reviews oil and gas properties for circumstances that indicate our assets may be impaired (or that prior impairments can be reversed) at the end of each reporting period. These indicators can be internal (i.e. reserve changes) or external (i.e. market conditions) in nature. If an indication of impairment or impairment reversal exists, Obsidian Energy completes an impairment test, which compares the estimated recoverable amount to the carrying value. The estimated recoverable amount is defined under IAS 36 (“Impairment of Assets”) as the higher of an asset’s or CGU’s fair value less costs of disposal and its value-in-use. Where the recoverable amount is less than the carrying amount, the CGU is considered to be impaired. Impairment losses identified for a CGU are allocated on a pro rata basis to the asset categories within the CGU. The impairment loss is recognized as an expense in income. Value-in-use after-tax The fair value less costs of disposal values used to determine the recoverable amounts of the Company’s CGUs are classified as Level 3 fair value measures as certain key assumptions are not based on observable market data but rather management’s best estimates. Impairment losses related to PP&E can be reversed in future periods if the estimated recoverable amount of the asset exceeds the carrying value. The impairment recovery is limited to a maximum of the estimated depleted historical cost if the impairment had not been recognized. The reversal of an impairment loss is recognized in depletion, depreciation and impairment. vi) Other Property, Plant and Equipment Obsidian Energy’s corporate assets include computer hardware and software, office furniture, buildings and leasehold improvements and are depreciated on a straight-line basis over their useful lives. Corporate assets are tested for impairment separately from oil and gas assets. h) Share-based payments The fair value of restricted share units granted under the Restricted and Performance Share Unit Plan (“RPSU” plan) follows the equity method and recognizes compensation expense with a corresponding increase to other reserves in shareholders’ equity over the term of the units based on a graded vesting schedule. Obsidian Energy measures the fair value of units granted under this plan at the grant date using the share price from the Toronto Stock Exchange (“TSX”). The fair value is based on market prices and considers the terms and conditions of the units granted. The fair value of options granted under the Stock Option Plan (the “Option Plan”) is recognized as compensation expense with a corresponding increase to other reserves in shareholders’ equity over the term of the options based on a graded vesting schedule. Obsidian Energy measures the fair value of options granted under these plans at the grant date using the Black-Scholes option-pricing model. The fair value is based on market prices and considers the terms and conditions of the share options granted. The fair value of awards granted under the Deferred Share Unit Plan (“DSU”), the Non-Treasury i) Provisions i) General Provisions are recognized based on an estimate of expenditures required to settle present obligations at the end of the reporting period. The provision is risk adjusted to take into account any uncertainties. When the effect of the time value of money is material, the amount of a provision is calculated as the present value of the future expenditures required to settle the obligations. The discount rate reflects the current assessment of the time value of money and risks specific to the liability when those risks have not already been reflected as an adjustment to future cash flows. ii) Decommissioning liability The decommissioning liability is the present value of Obsidian Energy’s future costs of obligations for property, facility and pipeline abandonment and site restoration. The liability is recognized on the balance sheet with a corresponding increase to the carrying amount of the related asset. The recorded liability increases over time to its future amount through accretion charges to income. Revisions to the estimated amount or timing of the obligations are reflected prospectively as increases or decreases to the recorded liability and the related asset. Actual decommissioning expenditures, up to the recorded amount of the liability at the time, are charged to the liability as the costs are incurred. Amounts capitalized to the related assets are depleted to income consistent with the depletion or depreciation of the underlying asset. iii) Office lease provision The office lease provision is the net present value of future lease payments that the Company is obligated to make under non-cancellable non-lease j) Leases At the inception of entering into a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company considers the following: • the contract involves the use of an identified asset; • the Company has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and • the Company has the right to direct the use of the asset, which occurs if either; • the Company has the right to operate the asset; or • the Company designed the asset in a way that predetermines how and for what purpose it will be used. Obsidian Energy recognizes a right-of-use right-of-use The right-of-use right-of-use right-of-use The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company’s incremental borrowing rate. The consideration used to measure the lease liability includes all fixed payments and variable lease payments that depend on an index or rate under the arrangement. Subsequently, the lease liability is measured at amortized cost using the effective interest method and is re-measured The Company recognizes the lease payments associated with leases under IFRS 16 as an expense on a straight-line basis over the lease term. k) Share capital Common shares are classified as equity. Share issue costs are recorded in shareholder’s equity, net of applicable taxes. Dividends, if paid, are at the discretion of the Board of Directors and are deducted from retained earnings. If issued, preferred shares would be classified as equity and could be issued in one or more series. l) Earnings per share Earnings per share is calculated by dividing net income or loss attributable to the shareholders by the weighted average number of common shares outstanding during the period. Obsidian Energy computes the dilutive impact of equity instruments other than common shares assuming the proceeds received from the exercise of in-the-money m) Taxation Income taxes are based on taxable income in a taxation year. Taxable income normally differs from income reported in the Consolidated Statements of Income (Loss) as it excludes items of income or expense that are taxable or deductible in other years or are not taxable or deductible for income tax purposes. Obsidian Energy uses the liability method of accounting for deferred income taxes. Temporary differences are calculated assuming that the financial assets and liabilities will be settled at their carrying amount. Deferred income taxes are computed on temporary differences using substantively enacted income tax rates expected to apply when deferred income tax assets and liabilities are realized or settled. A deferred income tax asset is recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences can be utilized. Deferred income tax assets are reviewed at each reporting date and are not recognized until such time that it is probable that the related tax benefit will be realized. n) Financial instruments Obsidian Energy recognizes financial assets and financial liabilities, including derivatives, on the Consolidated Balance Sheets when the Company becomes a party to the contract. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or when the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized from the consolidated financial statements when the liability is extinguished either through settlement of or release from the obligation of the underlying liability. Classification and Measurement of Financial Instruments The classification of financial assets is determined by their context in Obsidian Energy’s operations and by the characteristics of the financial asset’s contractual cash flows. Financial assets and financial liabilities are measured at fair value on initial recognition, which is typically the transaction price unless a financial instrument contains a significant financing component. Subsequent measurement is dependent on the financial instrument’s classification, as described below: • Cash and cash equivalents (which includes cash and bank overdrafts), accounts receivable, accounts payable and accrued liabilities, lease liabilities and long-term debt are measured at amortized cost. • Risk management contracts, all of which are derivatives, are measured initially at fair value through profit or loss and are subsequently measured at fair value with changes in fair value immediately charged to earnings in the Consolidated Statements of Income (Loss). Financial assets and liabilities are offset and the net amount is reported on the balance sheet when there is a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. Impairment of Financial Assets Financial assets are assessed using an expected credit loss (“ECL”) model. The ECL model applies to financial assets measured at amortized cost, a lease receivable, a contract asset or a loan commitment and a financial guarantee. o) Embedded derivatives An embedded derivative is a component of a contract that affects the terms of another factor. These “hybrid” contracts are considered to consist of a “host” contract plus an embedded derivative. The embedded derivative is separated from the host contract and accounted for as a derivative if the following conditions are met: • The economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; • The embedded item, itself, meets the definition of a derivative; and • The hybrid contract is not measured at fair value or designated as held for trading. p) Classification of debt or equity Obsidian Energy classifies financial liabilities and equity instruments in accordance with the substance of the contractual arrangement and the definitions of a financial liability or an equity instrument. Obsidian Energy’s debt instruments currently have requirements to deliver cash at the end of the term thus are classified as liabilities. q) Government Grants Obsidian Energy recognizes government grants as they are received or if there is reasonable assurance that the Company is in compliance with all associated conditions. The grant is recognized within the Consolidated Statements of Income (Loss) in the period in which the income is earned or the related expenditures are incurred. If the grant relates to an asset, it is recognized as a reduction to the carrying value of the asset and amortized into income over the expected useful life of the asset through lower depletion and depreciation. r) New Accounting Standards Various amendments to existing standards and new accounting requirements have been released that are effective as of January 1, 2022. The Company does not anticipate the new requirements to have a material impact on the financial statements. |
PROP acquisition
PROP acquisition | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure of detailed information about business combination [abstract] | |
PROP acquisition | 4. PROP acquisition On November 24, 2021 the Company acquired the remaining 45 percent partnership interest from our joint venture partner through a wholly owned subsidiary. As a result, the Company’s interest in PROP increased to 100 percent resulting in full control. The cash consideration for the acquisition was $35.2 million which was funded by the Company through an equity offering (as described in Note $16.3 million limited-recourse amortizing loan secured by the newly acquired percent partnership interest in PROP (as described in Note The total consideration paid and the final purchase price allocation over the fair value of assets and liabilities acquired at the date of acquisition are as follows: Total consideration $ 35.2 Fair value of assets acquired and liabilities assumed Working capital (1) $ 4.4 Property, plant and equipment 32.9 Decommissioning liability (2.1 ) Net assets $ 35.2 (1) Includes cash of $1.6 million. The acquisition has contributed production revenues and operating income of $4.5 million and $2.4 million, respectively, to the financial results of the Company between the closing date and December 31, 2021. If the acquisition of the 45 percent partnership interest in PROP had occurred on January 1, 2021, the Company’s results for the year ended December 31, 2021, would have included additional production revenues of $43.2 million and operating income of million. Transaction costs associated with the acquisition totaled $3.5 million and were expensed. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Property, plant and equipment | 5. Property, plant and equipment Oil and Gas assets/Facilities, Corporate assets Cost Oil and gas Corporate Total Balance at January 1, 2020 $ 10,211.6 $ 175.6 $ 10,387.2 Capital expenditures 57.0 0.2 57.2 Dispositions (0.1 ) — (0.1 ) Transfer to assets held for sale 423.0 — 423.0 Change in decommissioning liability (1) (29.0 ) — (29.0 ) Balance at December 31, 2020 $ 10,662.5 $ 175.8 $ 10,838.3 Capital expenditures 140.2 0.7 140.9 Business acquisition ( Note 32.9 — 32.9 Dispositions 0.1 — 0.1 Change in decommissioning liability (1) 62.3 — 62.3 Derecognition on acquisition (545.8 ) — (545.8 ) Balance at December 31, 2021 $ 10,352.2 $ 176.5 $ 10,528.7 (1) Includes additions from drilling activity, facility capital spending, disposals from net property dispositions and changes in estimates as outlined in Note 8. Accumulated depletion, depreciation and impairment Oil and gas Corporate Total Balance at January 1, 2020 $ 8,558.2 $ 150.1 $ 8,708.3 Depletion and depreciation 115.1 7.0 122.1 Impairments 747.5 18.7 766.2 Transfers to assets held for sale 346.0 — 346.0 Balance at December 31, 2020 $ 9,766.8 $ 175.8 $ 9,942.6 Depletion and depreciation 115.6 0.7 116.3 Impairments 19.5 — 19.5 Impairment reversal (338.0 ) — (338.0 ) Derecognition on acquisition (545.8 ) — (545.8 ) Balance at December 31, 2021 $ 9,018.1 $ 176.5 $ 9,194.6 Net book value As at December 31 2021 2020 Total $ 1,334.1 $ 895.7 At December 31, 2021, future development costs of $735.6 million were included within the depletable base in the depletion and depreciation calculation (2020 - $636.1 million). Right-of-use The following table includes a break-down of the categories for right-of-use Cost Office Transportation Vehicle Surface Total Balance, January 1, 2020 $ 12.6 $ 16.7 $ 4.1 $ 2.1 $ 35.5 Additions (Terminations) (12.6 ) (1.8 ) 1.6 — (12.8 ) Balance, December 31, 2020 $ — $ 14.9 $ 5.7 $ 2.1 $ 22.7 Additions (Terminations) — 1.4 0.7 — 2.1 Balance, December 31, 2021 $ — $ 16.3 $ 6.4 $ 2.1 $ 24.8 Accumulated amortization Office Transportation Vehicle Surface Total Balance, January 1, 2020 $ 2.4 $ 6.0 $ 1.3 $ 0.1 $ 9.8 Amortization 0.5 4.5 1.3 — 6.3 Termination (2.9 ) — — — (2.9 ) Balance, December 31, 2020 $ — $ 10.5 $ 2.6 $ 0.1 $ 13.2 Amortization — 2.1 1.4 0.1 3.6 Balance, December 31, 2021 $ — $ 12.6 $ 4.0 $ 0.2 $ 16.8 As at December 31 2021 2020 Total $ 8.0 $ 9.5 In 2020, the Company entered into an amending agreement with our building landlord which resulted in renewed lease terms for our Calgary office space. Under the revised agreement, the office lease no longer meets the criteria to be classified as a right-of-use Total PP&E Total PP&E including Oil and Gas assets, Facilities, Corporate assets and Right-of-use As at December 31 PP&E 2021 2020 Oil and Gas assets, Facilities, Corporate assets $ 1,334.1 $ 895.7 Right-of-use 8.0 9.5 Total $ 1,342.1 $ 905.2 The Company recorded non-cash non-cash non-cash Cardium CGU At December 31, 2021, the Company completed an assessment to determine if indicators of impairment or an impairment reversal were present. The Company identified an indicator of impairment reversal in our Cardium CGU due to improved forecasted commodity prices. This led to an impairment test being completed following the fair value less costs of disposal method. The after-tax 11 percent. Upon completion of the impairment test, no additional impairment or impairment reversal was recorded within our Cardium CGU. In the second quarter of 2021, the Company recorded a $311.5 million non-cash impairment reversal within our Cardium CGU mainly due to the improved commodity price environment and strong drilling results in the area. The following table outlines benchmark prices and assumptions, based on an average of four independent reserve evaluators’ forecasts (Sproule Associates Limited, GLJ Ltd., McDaniel & Associates Consultants and Deloitte Resource Evaluation & Advisory), used in completing the impairment tests as at December 31, 2021. WTI AECO Exchange rate Inflation rate 2022 $ 71.88 $ 3.58 $ 0.80 0 % 2023 67.91 3.22 0.80 2.25 % 2024 65.42 3.07 0.80 2.0 % 2025 66.72 3.14 0.80 2.0 % 2026 68.05 3.20 0.80 2.0 % 2027 – 20 32 $ 72.98 $ 3.43 $ 0.80 2.0 % Thereafter (inflation percentage) 2 % 2 % — 2.0 % The following table outlines the sensitivity to possible changes of the estimated recoverable amount on the Cardium CGU that had an impairment test completed on December 31, 2021. Recoverable 1% change in 5% change in Cardium $ 1,237.4 $ 73.1 $ 84.8 Peace River/Viking/Legacy CGU’s In 2021, we recorded a $21.0 million impairment reversal in our Peace River CGU largely as a result of the Company entering into an agreement to purchase the 45 percent interest of our partner in PROP. The estimated recoverable amount was based on the amount paid to acquire the interest held by the partner. As a result of the PROP acquisition, the Peace River CGU was re-valued upon close and as such any historical impairments can no longer be reversed. During 2021, we recorded $14.0 million of impairment in our Legacy CGU due to accelerated decommissioning spending in the area. The Legacy CGU has no recoverable amount, as such changes in our decommissioning liability are expensed each period. In 2021, no indicators of impairment were noted for the Viking CGU. Prior year impairments In 2020, the Company recorded $766.2 million of non-cash net impairments across multiple CGU’s, primarily as a result of the low commodity price environment due to the impact of the COVID-19 pandemic. At December 31, 2020, the Company completed an assessment to determine if indicators of impairment or an impairment reversal were present. As a result of recent improvements in near term commodity prices and positive reserve revisions, the Company concluded that an impairment reversal indicator was present resulting in impairment tests being completed within our Cardium and Peace River CGUs. The Company followed the value-in use method for our Cardium CGU and the fair value less costs of disposal method for our Peace River CGU using proved plus probable reserves. Additionally, the Company identified an indicator of impairment for our Legacy CGU as a result of the planned acceleration of decommissioning spending in the area. This led to an impairment test being completed following the fair value less costs of disposal method. The after-tax discount rates applied within the tests were between 9.5 – 15 percent. No indicator of impairment was noted for our Viking CGU; thus, no test was performed. Upon completion of the impairment tests, a n The following table outlines benchmark prices and assumptions, based on an average of four independent reserve evaluators’ forecasts (Sproule Associates Limited, GLJ Ltd., McDaniel & Associates Consultants and Deloitte Resource Evaluation & Advisory), used in completing the impairment tests as at December 31, 2020. WTI AECO Exchange rate Inflation rate 2021 $ 46.88 $ 2.74 $ 0.77 0 % 2022 51.14 2.70 0.77 1.5 % 2023 54.83 2.65 0.77 2.0 % 2024 56.48 2.69 0.77 2.0 % 2025 57.62 2.74 0.77 2.0 % 2026 – 2030 $ 61.16 $ 2.91 $ 0.77 2.0 % Thereafter (inflation percentage) 2 % 2 % — 2.0 % The following table outlines the sensitivity to possible changes of the estimated recoverable amounts on the Company’s CGUs that had impairment tests completed on December 31, 2020. Recoverable Impairment/ 1% change in 5% change in Cardium $ 849.2 $ Nil $ 66.9 $ 66.2 Peace River 28.5 (18.0 ) 1.3 2.8 Legac y $ Nil $ 21.8 $ Nil $ Nil Impairments and impairment reversals have been recorded as Depletion, depreciation, impairment and accretion expense on the Consolidated Statements of Income (Loss). |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Long-term debt | 6. Long-term debt As at December 31 2021 2020 Syndicated credit facility $ 321.5 $ 395.0 PROP Limited 16.0 — Senior secured notes – 2008 Notes 9.37%, US$3.7 million, maturing November 30, 2022 4.7 5.2 Senior secured notes – 2010 Q1 Notes 8.82%, US$8.9 million, maturing November 30, 2022 11.3 12.4 Senior secured notes – 2010 Q4 Notes 7.85%, US$12.1 million, maturing November 30, 2022 15.4 16.9 7.95%, US$5.3 million, maturing November 30, 2022 6.8 7.4 8.20%, US$2.0 million, maturing November 30, 2022 2.5 2.7 Senior secured notes – 2011 Q4 Notes 7.76%, US$11.3 million, maturing November 30, 2022 14.2 15.7 Total credit facility and senior secured notes $ 392.4 $ 455.3 Deferred interest 1.3 — Deferred financing costs (2.7 ) (3.5 ) Total long-term debt 391.0 451.8 Current portion $ 391.0 $ 451.8 At December 31, 2021 and 2020, the term-out In the fourth quarter of 2021, as part of the 45 percent interest acquisition in PROP, a portion of the cash consideration was obtained through a new $16.3 million limited recourse amortizing loan. The maturity date of the loan is percent. In 2021, $0.3 million was repaid on the loan. The Company made repayments of US$4.1 million ($ one-time . Additional information on Obsidian Energy’s senior secured notes was as follows: As at December 31 2021 2020 Weighted average remaining life (years) 0.9 0.9 Weighted average interest rate 8.2 % 5.2 % The estimated fair values of the principal and interest obligations of the outstanding senior secured notes were as follows: As at December 31 2021 2020 2008 Notes $ 4.7 $ 4.3 2010 Q1 Notes 11.3 10.2 2010 Q4 Notes 24.3 22.0 2011 Notes 14.1 12.8 Total $ 54.4 $ 49.3 The Company has a reserve-based syndicated credit facility which is subject to a semi-annual borrowing base redetermination typically in May and November of each year. The aggregate amount available under the syndicated credit facility is million which consists of a million revolving syndicated credit facility and a million non-revolving with the maturity date of both the syndicated credit facility and non-revolving Drawings on the Company’s syndicated credit facility are subject to fluctuations in short-term money market rates as they are generally held as short-term borrowings. As at December 31, 2021, 82 percent (2020 – 87 percent) of Obsidian Energy’s long-term debt instruments were exposed to changes in short-term interest rates. At December 31, 2021, letters of credit totaling $5.0 million were outstanding (2020 – $5.0 million) that reduce the amount otherwise available to be drawn on the syndicated credit facility. The aggregate amount available under our syndicated credit facility is scheduled for review on a semi-annual basis and is based on our lender’s assessment of the Company’s reserves, forecasted commodity prices, decommissioning obligations and other factors. The recent commodity price volatility and the economic impact of COVID-19 re-determined Financing expense consists of the following: Year ended December 31 2021 2020 Interest on bank debt and senior notes $ 27.1 $ 22.8 PROP limited recourse loan 0.2 — Advisor fees 2.7 10.1 Deferred financing costs 5.5 2.8 Unwinding discount on lease liabilities 0.6 1.5 Debt modification 1.3 — Financing $ 37.4 $ 37.2 The senior note amending agreements entered into during the first quarter of 2021 resulted in a debt modification under IFRS 9 (“Financial Instruments”) and the recognition of a non-cash The Company is subject to Senior debt and Total debt to Capitalization financial covenants with a maximum ratio of 75 percent, as more specifically defined in the applicable lending agreements. At December 31, 2021, the Company was in compliance with our financial covenants under such lending agreements. In 2015, as part of entering into amending agreements with our lenders and noteholders, the Company agreed to grant floating charge security over all of our property in favour of the lenders and the noteholders on a pari passu basis, which security will be fully released on such date when both (a) no default or event of default is continuing under the Company’s syndicated bank facility or senior notes and (b) the Company has achieved both (i) a Senior Debt to EBITDA ratio of 3:1 or less for four consecutive quarters, and (ii) an investment grade rating on its senior secured debt. The security remained in place at December 31, 2021. The security granted does not extend to the acquired 45 percent partnership interest in PROP, which secures the limited recourse amortizing loan. |
Lease Liabilities
Lease Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Lease liabilities [abstract] | |
Lease Liabilities | 7. Lease liabilities Total lease liabilities included in the Consolidated Balance Sheets are as follows: Year ended December 31 2021 2020 Balance, beginning of year $ 10.4 $ 113.8 Additions (terminations) 2.1 (98.6 ) Unwinding of discount on lease liabilities 0.6 1.5 Lease payments (4.4 ) (6.3 ) Balance, end of year $ 8.7 $ 10.4 Current portion $ 4.1 $ 4.8 Long-term portion $ 4.6 $ 5.6 The following table sets out a maturity analysis of lease payments, disclosing the undiscounted balance after December 31, 2021: 2022 2023 2024 2025 2026 Thereafter Total Transportation $ 2.6 $ 1.8 $ — $ — $ — $ — $ 4.4 Vehicle 1.4 1.0 0.3 — — — 2.7 Surface 0.1 0.1 0.1 0.1 0.1 5.1 5.6 Total $ 4.1 $ 2.9 $ 0.4 $ 0.1 $ 0.1 $ 5.1 $ 12.7 |
Provisions
Provisions | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Provisions | 8. Provisions As at December 31 2021 2020 Decommissioning liability $ 121.6 $ 70.5 Office lease provision 25.6 33.5 Total $ 147.2 $ 104.0 Current portion $ 23.4 $ 16.3 Long-term portion 123.8 87.7 Total $ 147.2 $ 104.0 Decommissioning liability The decommissioning liability is based on the present value of Obsidian Energy’s net share of estimated future costs of obligations to abandon and reclaim all our wells, facilities and pipelines. These estimates were made by management using information obtained from government estimates, internal analysis and external consultants assuming current costs, technology and enacted legislation. At December 31, 2021, the decommissioning liability was determined by applying an inflation factor of 2.0 percent (2020 - 2.0 percent) and the inflated amount was discounted using a credit-adjusted rate of 9.0 percent (2020 – 9.0 percent) over the expected useful life of the underlying assets, currently extending over 50 years into the future. At December 31, 2021, the total decommissioning liability on an undiscounted, uninflated basis was $594.6 million (2020 - $596.6 million). Changes to the decommissioning liability were as follows: Year ended December 31 2021 2020 Balance, beginning of year $ 70.5 $ 100.1 Net liabilities added (disposed) (1) 0.1 (0.4 ) Acquisition ( Note 2.1 — Increase (decrease) due to changes in estimates 62.2 (28.6 ) Liabilities settled (8.1 ) (11.1 ) Government decommissioning assistance (11.0 ) (2.2 ) Transfers (to) from liabilities for assets held for sale — 7.0 Accretion charges 5.8 5.7 Balance, end of year $ 121.6 $ 70.5 Current portion $ 14.5 $ 7.3 Long-term portion $ 107.1 $ 63.2 (1) Includes additions from drilling activity, facility capital spending and disposals related to net property dispositions. As a result of the Company’s continued focus on abandoning our inactive well, facilities and pipelines and the AER’s new spending requirements under Directive 88 starting in 2022, this led to changes in the Company’s near-term spending profile causing a change in estimate of our decommissioning liability. Office lease provision The office lease provision represents the net present value of non-lease Changes to the office lease provision were as follows: Year ended December 31 2021 2020 Balance, beginning of year $ 33.5 $ 12.7 Net additions (dispositions) — 27.0 Increase (decrease) due to changes in estimates (0.7 ) 1.0 Settlements (9.1 ) (9.7 ) Accretion charges 1.9 2.5 Balance, end of year $ 25.6 $ 33.5 Current portion $ 8.9 $ 9.0 Long-term portion $ 16.7 $ 24.5 |
Risk management
Risk management | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Risk management | 9. Risk management Financial instruments consist of cash and cash equivalents, accounts receivable, fair values of derivative financial instruments, accounts payable and accrued liabilities and long-term debt. At December 31, 2021, except for the senior notes described in Note 6 with a carrying value of $54.9 million (2020 – $60.3 million) and a fair value of $54.4 million (2020 - $49.3 million), the fair values of these financial instruments approximate their carrying amounts due to the short-term maturity of the instruments. The fair values of all outstanding financial and commodity contracts are reflected on the Consolidated Balance Sheets with the changes during the period recorded in income as unrealized gains or losses. At December 31, 2021 and 2020, the only asset or liability measured at fair value on a recurring basis was the risk management asset and liability, which was valued based on “Level 2 inputs” being quoted prices in markets that are not active or based on prices that are observable for the asset or liability. The following table reconciles the changes in the fair value of financial instruments outstanding: Year ended December 31 Risk management asset (liability) 2021 2020 Balance, beginning of year $ 0.2 $ (0.6 ) Unrealized gain (loss) on financial instruments: Commodity collars and swaps (2.6 ) 0.8 Total fair value, end of year $ (2.4 ) $ 0.2 Current asset portion $ 1.8 $ 0.8 Current liability portion $ (4.2 ) $ (0.6 ) Obsidian Energy records our risk management assets and liabilities on a net basis in the Consolidated Balance Sheets. At December 31, 2021 and 2020, there were no differences between the gross and net amounts. Obsidian Energy had the following financial instruments outstanding as at December 31, 2021. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits our credit risk by executing counterparty risk procedures which include transacting only with institutions within our syndicated credit facility or companies with high credit ratings and by obtaining financial security in certain circumstances. Notional volume Remaining term Pricing Fair value Oil WTI Swaps 2,000 bbl/d January 2022 $ 97.25/bbl $ 0.2 WTI Swaps (1) 1,502 bbl/d Q1 2022 US$ 66.24/bbl (1.5 ) WTI Swaps (1) 1,121 bbl/d Q2 2022 US$ 65.11/bbl (1.0 ) WTI Swaps (1) 593 bbl/d Q3 2022 US$ 63.26/bbl (0.7 ) WTI Swaps (1) 606 bbl/d Q4 2022 US$ 62.30/bbl (0.5 ) Heavy Oil Differential (1) 939 bbl/d Q1 2022 US$ (17.45 )/bbl (0.3 ) Heavy Oil Differential (1) 801 bbl/d Q2 2022 US$ (15.43 )/bbl (0.2 ) AECO Swaps AECO Swaps 25,591 mcf/d Q1 2022 $ 4.63/mcf 1.6 Total $ (2.4 ) (1) PROP Energy 45 Limited Partnership, our wholly owned subsidiary that purchased percent of the PROP units from a third party on November 24, 2021, entered into the financial hedges in conjunction with the limited recourse acquisition financing. Based on commodity prices and contracts in place at December 31, 2021, a $1.00 change in the price per barrel of liquids of WTI would change pre-tax pre-tax Subsequent to December 31, 2021, the Company entered into the following additional financial hedges on a weighted average Notional volume Term Pricing Oil WTI Swaps 6,016 bbl/d January 2022 $ 99.34/bbl WTI Swaps 8,634 February 2022 $ 102.50/bbl WTI Swaps 7,500 bbl/d March 2022 $ 108.72/bbl WTI Swaps 500 bbl/d April 2022 $ 115.00/bbl AECO Swaps AECO Swaps 11,848 mcf/d April 2022 – October 2022 $ 4.31/mcf The components of risk management on the Consolidated Statements of Income (Loss) are as follows: Year ended December 31 2021 2020 Realized Settlement of commodity contracts $ (12.0 ) $ 20.9 Total realized risk management gain (loss) $ (12.0 ) $ 20.9 Unrealized Commodity contracts $ (2.6 ) $ 0.8 Total unrealized risk management gain (loss) (2.6 ) 0.8 Risk management gain (loss) $ (14.6 ) $ 21.7 COVID-19 In March 2020, the World Health Organization declared COVID-19 rolling-out Market Risks Obsidian Energy is exposed to normal market risks inherent in the oil and natural gas business, including, but not limited to, commodity price risk, foreign currency rate risk, credit risk, interest rate risk and liquidity risk. The Company seeks to mitigate these risks through various business processes and management controls and from time to time by using financial instruments. Commodity Price Risk Commodity price fluctuations are among the Company’s most significant exposures. Oil prices are influenced by worldwide factors, including, but not limited to, pandemics and their impact on economic activity, OPEC actions, world supply and demand fundamentals, pipeline capacity availability and geopolitical events. Natural gas prices are influenced by, including, but not limited to, the price of alternative fuel sources such as oil or coal and by North American natural gas supply and demand fundamentals including the levels of industrial activity, weather, storage levels and liquefied natural gas activity. In accordance with policies approved by Obsidian Energy’s Board of Directors, the Company may, from time to time, manage these risks through the use of swaps or other financial instruments up to a maximum of 50 percent of forecast sales volumes, net of royalties, for the balance of any current year plus one additional year forward and up to a maximum of 25 percent, net of royalties, for one additional year thereafter. Risk management limits included in Obsidian Energy’s policies may be exceeded with specific approval from the Board of Directors. The Board of Directors has approved an increase to the maximum percentage of production that may be hedged in the prompt three months on a rolling average as follows: i) gas volumes, net of royalties, may be hedged up to a maximum of 80 percent and ii) oil volumes, net of royalties, may be hedged up to a maximum of Foreign Currency Rate Risk Prices received for oil are referenced in US dollars, thus Obsidian Energy’s realized oil prices are impacted by Canadian dollar to US dollar exchange rates. A portion of the Company’s debt is denominated in US dollars, thus the principal and interest payments in Canadian dollar terms are also impacted by exchange rates. When considered appropriate, the Company may use financial instruments to fix or collar future exchange rates to fix the Canadian dollar equivalent of oil revenues or to fix US denominated long-term debt principal repayments. Credit Risk Credit risk is the risk of loss if purchasers or counterparties do not fulfill their contractual obligations. As at December 31, 202 1 The Company’s accounts receivable are principally with customers in the oil and natural gas industry and are generally subject to normal industry credit risk, which includes the ability to recover unpaid receivables by retaining the partner’s share of production when Obsidian Energy is the operator or the potential to net offsetting payables to mitigate exposure. Obsidian Energy continuously monitors credit risk and maintains credit policies to ensure collection risk is limited. For oil and natural gas sales and financial derivatives, a counterparty risk procedure is followed whereby each counterparty is reviewed on a regular basis for the purpose of assigning a credit limit and may be requested to provide security if determined to be prudent. For financial derivatives, the Company normally transacts with counterparties who are members of our banking syndicate or counterparties that have investment grade bond ratings. Credit events related to all counterparties are monitored and credit exposures are reassessed on a regular basis. At December 31, 2021, $1.8 million of accounts receivable are past due (90+ days) but are considered to be collectible (2020 - $5.7 million). The lifetime ECL allowances related to Obsidian Energy’s commodity product sales receivables and joint venture receivables recognized in accounts receivable was nominal as at and for the years ended December 31, 2021 and 2020. As at December 31, the following accounts receivable amounts were outstanding: Current 30-90 days 90+ days Total 2021 $ 62.0 $ 5.1 $ 1.8 $ 68.9 2020 $ 29.5 $ 5.6 $ 5.7 $ 40.8 Interest Rate Risk A portion of the Company’s debt capital can be held in floating-rate bank facilities, which results in exposure to fluctuations in short-term interest rates, which remain at lower levels than longer-term rates. From time to time, Obsidian Energy may increase the certainty of our future interest rates by entering fixed interest rate debt instruments or by using financial instruments to swap floating interest rates for fixed rates or to collar interest rates. As at December 31, 202 1 As at December 31, 2021, a total of $70.9 million (2020 – $60.3 million) of fixed interest rate debt instruments was outstanding with an average remaining term of 0.9 years (2020 – 0.9 years) and an average interest rate of 8.7 percent (2020 – 5.2 percent). Liquidity Risk Liquidity risk is the risk that the Company will be unable to meet its financial liabilities as they come due. Management utilizes short and long-term financial and capital forecasting programs to ensure credit facilities are sufficient relative to forecast debt levels and capital program levels are appropriate, and that financial covenants will be met. Management also regularly reviews capital markets to identify opportunities to optimize the debt capital structure on a cost-effective basis. In the short term, liquidity is managed through daily cash management activities, short-term financing strategies and the use of swaps and other financial instruments to increase the predictability of cash flow from operating activities. The following table outlines estimated future obligations for non-derivative 2 Long-term debt (1) Accounts payable Share-based Total 2022 $ 391.0 $ 95.5 $ 12.3 $ 498.8 2023 — 1.5 3.1 4.6 2024 — — 2.2 2.2 2025 — — — — 2026 — — — — Thereafter $ — $ — $ — $ — (1) The 2022 figure includes $321.5 million related to the syndicated credit facility, which at the balance sheet date was due for renewal in 2022. Climate Change Risk The Company has considered the impact of climate change and risks on the amounts recorded in the financial statements for the year ended December 31, 2021. This includes, but is not limited to, the Company’s impairment assessment, current assets and liabilities, bank facility, capital expenditures and property, plant and equipment. At December 31, 2021, in the Company’s impairment assessment a specific adjustment to the recoverable amount to incorporate the potential risk of the evolving demand for energy was not considered necessary. The recoverable amount is based on an estimated period of cash flows that indirectly reflects changing energy demands (in that a large portion of proved and probable reserves will be realized in less than 20 years) and the discount rate applied in the impairment test incorporates the current cost of capital in the energy industry which indirectly reflects current market trends and uncertainty around the evolving demand for energy and climate change. The Company’s financial results for 2021 were not directly impacted from a climate event. In 2021, the Company did not incur material weather related damages to our property, plant and equipment. Management is not aware of a material disruption in our supply chain or the marketers of the Company’s product related to climate events. The Company will continue to monitor climate change and the potential impacts. |
Revenue and Other Income
Revenue and Other Income | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Revenue and Other Income | 10. Revenue and Other Income The Company’s significant revenue streams consist of the following: Year ended December 31 2021 2020 Oil $ 362.9 $ 213.1 NGLs 38.2 16.3 Natural gas 76.4 46.0 Production revenues 477.5 275.4 Processing fees 6.4 6.3 Oil and natural gas sales 483.9 281.7 Sales of commodities purchased from third parties 13.6 4.8 Other income 6.0 13.0 Oil and natural gas sales and other income $ 503.5 $ 299.5 Other income includes $6.0 million in road use recoveries for 2021 (2020 - $5.4 million). In 2020, the remainder of other income primarily relates to curtailment sales, whereby the Company sold unused production limit capacity under the Alberta Government Curtailment production limits. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Income taxes | 11. Income taxes The provision for income taxes reflects an effective tax rate that differs from the combined federal and provincial statutory tax rate as follows: Year ended December 31 2021 2020 Income (loss) before taxes $ 414.0 $ (771.7 ) Combined statutory tax rate (1) 23.0 % 24.0 % Computed income tax expense (recovery) $ 95.2 $ (185.2 ) Increase (decrease) resulting from: Share-based compensation 0.5 0.5 Non-taxable (0.1 ) (0.3 ) Unrecognized deferred tax asset (69.9 ) 178.2 Adjustments related to prior years (27.1 ) (0.9 ) Tax rate reductions — 7.6 Other 1.4 0.1 Deferred tax recovery $ — $ — (1) The tax rate represents the combined federal and provincial statutory tax rates for the Company and our subsidiaries for the years ended December 31, 2021 and December 31, 2020. Effective July 1, 2020, the Alberta corporate income tax rate was reduced from 10% to 8%. For 2021, the combined statutory rate of 23% represents the fully reduced Alberta rate of 8% being effective for the entire year. The net deferred income tax liability is comprised of the following: Balance Provision (Recovery) Balance December 31, 2021 Deferred tax liabilities (assets) PP&E $ 86.5 $ 67.0 $ 153.5 Leases (10.1 ) 2.2 (7.9 ) Risk Management — (0.5 ) (0.5 ) Decommissioning liability (16.6 ) (11.3 ) (27.9 ) Share-based compensation (0.4 ) (3.6 ) (4.0 ) Non-capital (59.4 ) (53.8 ) (113.2 ) Net deferred tax liability $ — $ — $ — Balance Provision (Recovery) Balance December 31, 2020 Deferred tax liabilities (assets) PP&E $ 282.5 $ (196.0 ) $ 86.5 Leases (20.0 ) 9.9 (10.1 ) Decommissioning liability (24.6 ) 8.0 (16.6 ) Share-based compensation (0.2 ) (0.2 ) (0.4 ) Non-capital (237.7 ) 178.3 (59.4 ) Net deferred tax liability $ — $ — $ — As at December 31, 2021, Obsidian Energy had approximately $2.5 billion (2020 – $2.5 billion) in total tax pools, including non-capital non-capital non-capital utilization. The Company also had approximately $61.3 million of Federal Scientific Research and Experimental Development (SR&ED) credits which expire in the years 2029 through 2036. At December 31, 2021, Obsidian Energy had realized and unrealized net capital losses of $591.5 million (2020 - $595.0 million). A deferred tax asset has not been recognized in respect of these losses as they may only be applied against future capital gains. The Company has income tax filings that are subject to audit by taxation authorities, which may impact our deferred income tax position or amount. The Company does not anticipate adjustments arising from these audits and believes we have adequately provided for income taxes based on available information, however, adjustments that arise could be material. |
Shareholders' equity
Shareholders' equity | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Shareholders' equity | 12. Shareholders’ equity a) Authorized i) An unlimited number of Common Shares. ii) 90,000,000 preferred shares issuable in one or more series. If issued, preferred shares of each series would rank on parity with the preferred shares of other series with respect to accumulated dividends and return on capital. Preferred shares would have priority over the common shares with respect to the payment of dividends or the distribution of assets. b) Issued Shareholders’ capital Common Shares Amount Balance, January 1, 2020 73,011,488 $ 2,186.7 Issued pursuant to equity compensation plans (1) 504,737 0.3 Balance, December 31, 2020 73,516,225 $ 2,187.0 Issued pursuant to equity compensation plans (1) 1,356,610 2.6 Equity issue 5,880,681 25.9 Share issue costs — (1.7 ) Balance, December 31, 2021 80,753,516 $ 2,213.8 (1) Upon vesting or exercise of equity awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. In conjunction with the business acquisition described in Note 4, during the fourth quarter of 2021, the Company completed a public equity offering of 5,880,681 subscription receipts at a price of p $25.9 million with million in share issue costs incurred, including the full over-allotment being executed. Year ended December 31 Other Reserves 2021 2020 Balance, beginning of year $ 103.6 $ 101.8 Share-based compensation expense 2.3 2.1 Net benefit on options exercised (1) (2.7 ) (0.3 ) Balance, end of year $ 103.2 $ 103.6 (1) Upon exercise of awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. Preferred Shares No Preferred Shares were issued or outstanding. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Share-based compensation | 13. Share-based compensation Restricted and Performance Share Unit plan (“RPSU plan”) Restricted Share Unit (“RSU”) grants under the RPSU plan Obsidian Energy awards RSU grants under the RPSU plan whereby employees receive consideration that fluctuates based on the Company’s share price on the TSX. Consideration can be in the form of cash or shares purchased on the open market or issued from treasury. Year ended December 31 RSUs (number of shares equivalent) 2021 2020 Outstanding, beginning of year 2,355,408 1,100,278 Granted 190,500 1,818,840 Vested (1,344,672 ) (510,738 ) Forfeited (33,885 ) (52,972 ) Outstanding, end of year 1,167,351 2,355,408 The fair value and weighted average assumptions of the RSUs granted during the year were as follows: Year ended December 31 2021 2020 Average fair value of units granted (per unit) $ 1.99 $ 0.55 Expected life of units (years) 1.0 3.0 Expected forfeiture rate nil 0.6 % Performance Share Unit (“PSU”) grants under the RPSU plan The RPSU plan allows Obsidian Energy to grant PSUs to employees of the Company. Members of the Board of Directors are not eligible for grants under the RPSU plan. The PSU obligation is classified as a liability due to the cash settlement feature and could be settled in cash or shares purchased on the open market or issued from treasury. Year ended December 31 PSUs (number of shares equivalent) 2021 2020 Outstanding, beginning of year 453,845 92,424 Granted 684,620 376,310 Vested — (10,716 ) Forfeited — (4,173 ) Outstanding, end of year 1,138,465 453,845 The liability associated with the PSUs under the RPSU plan was $4.4 million at December 31, 2021 (2020 - $0.1 million) including $0.2 million recorded as a current liability and $4.2 million as a non-current Stock Option Plan Obsidian Energy has an Option Plan that allows the Company to issue options to acquire common shares to officers, employees, directors and other service providers. Year ended December 31 2021 2020 Options Number of Options Weighted Exercise Price Number of Weighted Outstanding, beginning of year 961,954 $ 0.94 89,178 $ 10.41 Granted 2,116,120 1.99 917,490 0.56 Exercised (11,938 ) 0.56 — — Forfeited (44,464 ) 8.74 (44,714 ) 12.06 Outstanding, end of year 3,021,672 $ 1.56 961,954 $ 0.94 Exercisable, end of year 748,438 $ 1.29 44,464 $ 8.74 The fair value and weighted average assumptions of the options granted during the year were as follows: Year ended December 31 2021 2020 Average fair value of options granted (per option) $ 1.11 $ 0.29 Expected volatility 86.9 % 83.6 % Expected life of options (years) 3.4 3.25 Expected forfeiture rate 0.5 % 0.6 % Non-Treasury In 2021, Obsidian Energy implemented the NTIP that allows the Company to issue restricted awards whereby employees receive consideration that fluctuates based on the Company’s share price on the TSX. The Company currently anticipates that the consideration will be in the form of cash, however, we do have the option to provide the consideration in the form of shares purchased on the open market. Year ended December 31 NTIP Restricted Awards 2021 2020 Outstanding, beginning of year — — Granted 1,120,660 — Forfeited (26,860 ) — Outstanding, end of year 1,093,800 — The liability associated with the NTIP was $2.5 million at December 31, 2021 (2020 – nil), including $1.4 million recorded as a current liability and $1.1 million as a non-current Deferred Share Unit (“DSU”) plan The DSU plan allows the Company to grant DSUs in lieu of cash fees to non-employee Year ended December 31 Deferred Share Units 2021 2020 Outstanding, beginning of year 2,087,580 847,100 Granted 239,754 1,297,669 Exercised (308,835 ) (57,189 ) Outstanding, end of year 2,018,499 2,087,580 At December 31, 2021, the liability associated with the DSUs was $10.7 million (2020 – $1.9 million) and was recorded as a current liability. Share-based compensation Share-based compensation consisted of the following: Year ended December 31 2021 2020 RSU grants $ 1.1 $ 2.0 PSU grants 4.3 0.1 Options 1.2 0.1 NTIP 2.5 — DSU plan 10.3 1.2 Share-based compensation $ 19.4 $ 3.4 The share price used in the fair value calculation of the DSU, NTIP and RPSU plan obligations at December 31, 2021 was $5.21 per share (2020 – $0.87). Employee retirement savings plan Obsidian Energy has an employee retirement savings plan (the “savings plan”) for the benefit of all employees. Under the savings plan, employees may elect to contribute up to 10 percent of their salary and Obsidian Energy matches these contributions at a rate of $1.00 for each $1.00 of employee contribution. Both the employee’s and Obsidian Energy’s contributions are used to acquire Obsidian Energy common shares or are placed in low-risk Effective May 1, 2020, due to the low commodity price environment, the Company temporarily suspended the employer match portion of the savings plan. This was partially reinstated reinstated towards the acquisition of |
Per share amounts
Per share amounts | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Per share amounts | 14. Per share amounts The number of incremental shares included in diluted earnings per share is computed using the average volume-weighted market price of shares for the period. In addition, contracts that could be settled in cash or shares are assumed to be settled in shares if share settlement is more dilutive. Year ended December 31 2021 2020 Net income (loss) – basic and diluted $ 414.0 $ (771.7 ) The weighted average number of shares used to calculate per share amounts is as follows: Year ended December 31 Average shares outstanding (millions) 2021 2020 Basic 75.1 73.3 Dilutive impact of stock option/ RSUs 2.5 — Diluted 77.6 73.3 For 2021, the re SUs outstanding under the RPSU plan that were considered anti-dilutive and/or not in the money and that have been excluded. |
Changes in non-cash working cap
Changes in non-cash working capital increase (decrease) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Changes in non-cash working capital increase (decrease) | 15. Changes in non-cash Year ended December 31 2021 2020 Restricted cash $ — $ 2.4 Accounts receivable (28.1 ) 22.6 Prepaid expenses and other (1.7 ) 0.6 Accounts payable and accrued liabilities (1) 40.0 (41.3 ) Acquisition (Note 4) 2.8 — 13.0 (15.7 ) Operating activities (5.1 ) (6.6 ) Investing activities 18.1 (9.1 ) $ 13.0 $ (15.7 ) Interest paid in cash $ 30.1 $ 25.5 Income taxes paid (recovered) in cash $ — $ — (1) Includes share-based compensation plans. |
Capital management
Capital management | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Capital management | 16. Capital management Obsidian Energy manages our capital to provide a flexible structure to support capital programs, production maintenance and other operational strategies. Attaining a strong financial position enables the capture of business opportunities and supports Obsidian Energy’s business strategy of providing strong shareholder returns. Obsidian Energy defines capital as the sum of shareholders’ equity and debt. Shareholders’ equity includes shareholders’ capital, other reserves and retained earnings (deficit). Debt includes bank loans, senior notes and the PROP limited recourse amortizing loan. Management reviews Obsidian Energy’s capital structure to allow our objectives and strategies to be met. The capital structure is reviewed based on a number of key factors including, but not limited to, current market conditions, hedging positions, trailing and forecast debt to capitalization ratios, debt to Adjusted EBITDA and other economic risk factors. The Company is subject to certain quarterly financial covenants under its secured, syndicated credit facility and the senior secured notes. These financial covenants include Senior debt and Total debt to capitalization as defined in Obsidian Energy’s lending agreements (see Note 6). As at December 31, 2021, the Company was in compliance with all of our financial covenants under such lending agreements. The Company intends to continue to identify and evaluate hedging opportunities in order to reduce our exposure to fluctuations in commodity prices and protect our future cash flows and capital programs. As at December 31 (millions, except ratio amounts) 2021 2020 Components of capital Shareholders’ equity $ 763.5 $ 323.1 Credit facility, term loan and senior secured notes $ 392.4 $ 455.3 Ratios Senior debt to capitalization (1) 33 % 59 % Total debt to capitalization (1) 33 % 59 % Priority debt to consolidated tangible assets (2) — — Credit facility and senior secured notes (3) $ 376.4 $ 455.3 Letters of credit (4) 4.6 4.9 Senior debt and total debt 381.0 460.2 Total shareholders’ equity for covenants (3) 769.4 323.1 Total capitalization $ 1,150.4 $ 783.3 (1) Not to exceed 75 (2) Priority debt not to exceed 15% of consolidated tangible assets. (3) The PROP limited recourse amortizing loan and associated net income on the 45 percent PROP partnership interested acquired in November 2021 is not included in the debt to capitalization calculations. (4) Letters of credit defined as financial under the lending agreements are included in the calculation. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Commitments and contingencies | 17. Commitments and contingencies Obsidian Energy is committed to certain payments over the next five calendar years and thereafter as follows: 2022 2023 2024 2025 2026 Thereafter Total Long-term debt (1) $ 391.0 $ — $ — $ — $ — $ — $ 391.0 Transportation 3.6 3.5 2.7 2.2 1.7 4.2 17.9 Interest obligations 22.1 — — — — — 22.1 Office lease 10.0 10.0 10.0 0.8 — — 30.8 Lease liability 4.1 2.9 0.4 0.1 0.1 5.1 12.7 Decommissioning liability 14.5 12.6 11.8 11.1 10.4 61.2 121.6 Total $ 445.3 $ 29.0 $ 24.9 $ 14.2 $ 12.2 $ 70.5 $ 596.1 (1) The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving are and $16.0 the PROP limited recourse amortizing loan tha t both Obsidian Energy’s commitments relate to the following: • Transportation commitments relate to costs for future pipeline access. • Interest obligations are the estimated future interest payments related to Obsidian Energy’s debt instruments. • Office leases pertain to total leased office space. • Lease liabilities pertain to various transportation, vehicle and surface lease commitments that meet the definition of a lease under IFRS 16. • The decommissioning liability represents the inflated, discounted future reclamation and abandonment costs that are expected to be incurred over the life of the properties. The Company is involved in various litigation and claims in the normal course of business and records provisions for claims as required. In 2018, the Company fully utilized available insurance coverage relating to ongoing claims against former Penn West employees arising from the Company’s 2014 restatement of certain financial results when we were known as Penn West. A claim brought by the United States Securities and Exchange Commission (“SEC”) against Penn West was previously settled. The Company had been indemnifying two former employees pursuant to indemnity agreements in connection with the claims brought by the SEC arising out of the same restatement. In 2020, the SEC reached a settlement with the two former employees. The Company continued to accrue for, but not pay, defense costs incurred on behalf of the two former employees and in the first quarter of 2021 agreed 30-month |
Related-party transactions
Related-party transactions | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Related-party transactions | 18. Related-party transactions Operating entities The consolidated financial statements include the results of Obsidian Energy Ltd. and our wholly owned subsidiaries, including the Obsidian Energy Partnership and, as of November 24, 2021, the 100 percent interest in PROP. Transactions and balances between Obsidian Energy Ltd. and all of our subsidiaries are eliminated upon consolidation. Compensation of key management personnel In 2021, key management personnel included the Interim President and Chief Executive Officer, Chief Financial Officer, Senior Vice-Presidents, Vice Presidents and the Board of Directors. The Human Resources, Governance & Compensation Committee makes recommendations to the Board of Directors who approves the appropriate remuneration levels for management based on performance and current market trends. Compensation levels of the Board of Directors are also recommended by the Human Resources, Governance & Compensation Committee of the Board. The remuneration of the directors and key management personnel of Obsidian Energy during the year is below. Year ended December 31 2021 2020 Salary and employee benefits $ 4.5 $ 4.5 Share-based payments (1) 15.1 1.7 $ 19.6 $ 6.2 (1) Includes changes in the fair value of PSUs, DSUs and non-cash |
Supplemental Items
Supplemental Items | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Supplemental Items | 19. Supplemental Items In the consolidated financial statements, compensation costs are included in both operating and general and administrative expenses. For 2021, employee compensation costs of $13.5 million (2020 - $13.0 million) were included in operating expenses and $18.4 million (2020 - $15.7 million) were included in general and administrative expenses on a gross basis. |
Government grants
Government grants | 12 Months Ended |
Dec. 31, 2021 | |
Government Grants [Abstract] | |
Government grants | 20. Government grants The Company received payments as part of the Canadian Emergency Wage Subsidy program (“CEWS”) in 2020 and in early 2021. CEWS allows eligible companies to receive a subsidy of employee wages, subject to a maximum. For 2021, this resulted in a benefit to the Company of approximately $0.5 million (2020 – $3.5 million) which resulted in a $0.3 million reduction to operating costs, a $0.1 million reduction to general and administrative costs and a $0.1 million reduction to capital expenditures. The Company also have allowed |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Critical accounting judgments and key estimates | a) Critical accounting judgments and key estimates The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the recorded amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period. These and other estimates are subject to measurement uncertainty and the effect on the consolidated financial statements of changes in these estimates could be material. Management also makes judgments while applying accounting policies that could affect amounts recorded in its consolidated financial statements. Significant judgments include the identification of cash generating units (“CGUs”) for impairment testing purposes and determining whether a CGU has an impairment indicator. Additionally, management has performed an assessment of the Company’s ability to comply with liquidity requirements for the 12-month The following are the estimates that management has made in applying the Company’s accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements. i) Reserve and resource estimates Commercial petroleum reserves are determined based on estimates of petroleum-in-place, year-end. Reserve adjustments are made annually based on actual oil and natural gas volumes produced, the results from capital programs, revisions to previous estimates, new discoveries and acquisitions and dispositions made during the year and the effect of changes in forecast future oil and natural gas prices. There are a number of estimates and assumptions that affect the process of evaluating reserves. Proved reserves are the estimated quantities of oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a high degree of certainty (at least 90 percent) those quantities will be exceeded. Proved plus probable reserves are the estimated quantities of oil, natural gas and natural gas liquids determined to be economically recoverable under existing economic and operating conditions with a 50 percent degree of certainty those quantities will be exceeded. Obsidian Energy reports production and reserve quantities in accordance with Canadian practices and specifically in accordance with “Standards of Disclosure for Oil and Gas Activities” (“NI 51-101”). The estimate of proved plus probable reserves is an essential part of the depletion calculation and the impairment test and hence the recorded amount of oil and gas assets. Obsidian Energy cautions users of this information that the process of estimating oil and natural gas reserves is subject to a level of uncertainty. The reserves are based on current and forecast economic and operating conditions; therefore, changes can be made to future assessments as a result of a number of factors, which can include commodity prices, new technology, changing economic conditions, future reservoir performance and forecast development activity. ii) Recoverability of asset carrying values Obsidian Energy assesses our property, plant and equipment (“PP&E”) for impairment by comparing the carrying amount to the recoverable amount of the underlying assets. The determination of the recoverable amount involves estimating the higher of an asset’s fair value less costs of disposal or its value-in-use, iii) Decommissioning liability Obsidian Energy recognizes a provision for future abandonment activities in the consolidated financial statements at the net present value of the estimated future expenditures required to settle the estimated obligation at the balance sheet date. The measurement of the decommissioning liability involves the use of estimates and assumptions including the discount rate, the amount and expected timing of future abandonment costs and the inflation rate related thereto. The estimates were made by management and external consultants considering current costs, technology and enacted legislation. iv) Office lease liability Obsidian Energy recognizes a provision for certain onerous office lease commitments in the consolidated financial statements at the net present value of future lease payments the Company is obligated to make under non-cancellable non-lease v) Fair value calculation on share-based payments The fair value of share-based payments is calculated using a Black-Scholes model. There are a number of estimates used in the calculation such as the expected future forfeiture rate, the expected period the share-based compensation is outstanding and the future price volatility of the underlying security all of which can vary from expectations. The factors applied in the calculation are management’s estimates based on historical information and future forecasts. vi) Fair value of risk management contracts Obsidian Energy records risk management contracts at fair value with changes in fair value recognized in income. The fair values are determined using external counterparty information which is compared to observable market data. vii) Taxation The calculation of deferred income taxes is based on a number of assumptions including estimating the future periods in which temporary differences and other tax credits will reverse and the general assumption that substantively enacted future tax rates at the balance sheet date will be in effect when differences reverse. viii) Litigation Obsidian Energy records provisions related to legal matters if it is probable that the Company will not be successful in defending the claim and if an amount can be reasonably estimated. Determining the probability of a claim being defended is subject to considerable judgment. Additionally, the potential claim is generally a wide range of figures and a single estimate must be made when recording a provision. The assessment of contingencies involves significant judgment and estimates of the potential outcome of future events. |
Business combinations | b) Business combinations Obsidian Energy uses the acquisition method to account for business combinations. The net identifiable assets and liabilities acquired in transactions are generally measured at their fair value on the acquisition date. The acquisition date is the closing date of the business combination. Acquisition costs incurred by Obsidian Energy to complete a business combination are expensed in the period incurred except for costs related to the issue of any debt or equity securities, which are recognized based on the nature of the related financing instrument. If the consideration for the acquisition given up is less than the fair value of the net assets received, the difference is recognized immediately in the consolidated statement of income (loss). If the consideration for the acquisition given up is greater than the fair value of the net assets received, the difference is recognized as goodwill on the balance sheet. Revisions may be made to the initial recognized amounts determined during the measurement period, which shall not exceed one year after the closing date of the acquisition. |
Revenue | c) Revenue Obsidian Energy generally recognizes oil, natural gas and natural gas liquids (“NGLs”) revenue when title passes from Obsidian Energy to the purchaser or, in the case of services, as contracted services are performed. Production revenues are determined pursuant to the terms outlined in contractual agreements and are based on fixed or variable price components. The transaction price for oil, natural gas and NGLs is based on the commodity price in the month of production, adjusted for various factors including product quality and location. Commodity prices are based on monthly or daily market indices. Performance obligations in the contract are fulfilled on the last day of the month with payment typically on the 25 th Obsidian Energy may purchase commodity products from third parties to utilize in blending activities and then subsequently sell these products to our customers. These transactions are presented as separate revenue and expense items in the Consolidated Statements of Income (Loss). The Company enters into agreements for other services such as processing third party production, road usage fees, and other miscellaneous services. Revenue from these arrangements are recorded as processing fees or other income when control passes to the customer, which is generally when the service is provided. |
Joint arrangements | d) Joint arrangements The consolidated financial statements include Obsidian Energy’s proportionate interest of jointly controlled assets and liabilities and our proportionate interest of the revenue, royalties and operating expenses. A significant portion of Obsidian Energy’s exploration and development activities are conducted jointly with others and involve joint operations. Under such arrangements, Obsidian Energy has the exclusive rights to our proportionate interest in the assets and the economic benefits generated from our share of the assets. Income from the sale or use of Obsidian Energy’s interest in joint operations and our share of expenses is recognized when it is probable that the economic benefits associated with the transactions will flow to/from Obsidian Energy and the amounts can be reliably measured. |
Transportation expense | e) Transportation expense Transportation costs are paid by Obsidian Energy for the shipping of natural gas, oil and natural gas liquids from the wellhead to the point where title transfers to buyers. These costs are recognized as services are received. |
Foreign currency translation | f) Foreign currency translation Obsidian Energy and each of our subsidiaries use the Canadian dollar as their functional currency. Monetary items, such as accounts receivable and long-term debt, are translated to Canadian dollars at the rate of exchange in effect at the balance sheet date. Non-monetary |
PP&E | g) PP&E i) Measurement and recognition Oil and gas properties are included in PP&E at cost, less accumulated depletion and depreciation and any impairment losses or reversals. The cost of PP&E includes costs incurred initially to acquire or construct the item and betterment costs. Capital expenditures are recognized as PP&E when it is probable that future economic benefits associated with the investment will flow to Obsidian Energy and the cost can be reliably measured. PP&E includes capital expenditures incurred in the development phases, acquisition of PP&E and additions to the decommissioning liability. ii) Depletion and Depreciation Except for components with a useful life shorter than the reserve life of the associated property, resource properties are depleted using the unit-of-production determining our depletion base, Obsidian Energy includes estimated future costs to develop proved plus probable reserves. Changes to reserve estimates are included in the depletion calculation prospectively. Components of PP&E that are not depleted using the unit-of-production three five years and corporate assets have an estimated useful life iii) Derecognition The carrying amount of an item of PP&E is derecognized when no future economic benefits are expected from its use or upon sale to a third party. The gain or loss arising from derecognition is included in income and is measured as the difference between the net proceeds, if any, and the carrying amount of the asset. iv) Major maintenance and repairs Ongoing costs to maintain properties are generally expensed as incurred. These costs include the cost of labour, consumables and small parts. The costs of material replacement parts, turnarounds and major inspections are capitalized provided it is probable that future economic benefits in excess of cost will be realized and such benefits are expected to extend beyond the current operating period. The carrying amount of a replaced part is derecognized in accordance with Obsidian Energy’s derecognition policies. v) Impairment of oil and natural gas properties Obsidian Energy reviews oil and gas properties for circumstances that indicate our assets may be impaired (or that prior impairments can be reversed) at the end of each reporting period. These indicators can be internal (i.e. reserve changes) or external (i.e. market conditions) in nature. If an indication of impairment or impairment reversal exists, Obsidian Energy completes an impairment test, which compares the estimated recoverable amount to the carrying value. The estimated recoverable amount is defined under IAS 36 (“Impairment of Assets”) as the higher of an asset’s or CGU’s fair value less costs of disposal and its value-in-use. Where the recoverable amount is less than the carrying amount, the CGU is considered to be impaired. Impairment losses identified for a CGU are allocated on a pro rata basis to the asset categories within the CGU. The impairment loss is recognized as an expense in income. Value-in-use after-tax The fair value less costs of disposal values used to determine the recoverable amounts of the Company’s CGUs are classified as Level 3 fair value measures as certain key assumptions are not based on observable market data but rather management’s best estimates. Impairment losses related to PP&E can be reversed in future periods if the estimated recoverable amount of the asset exceeds the carrying value. The impairment recovery is limited to a maximum of the estimated depleted historical cost if the impairment had not been recognized. The reversal of an impairment loss is recognized in depletion, depreciation and impairment. vi) Other Property, Plant and Equipment Obsidian Energy’s corporate assets include computer hardware and software, office furniture, buildings and leasehold improvements and are depreciated on a straight-line basis over their useful lives. Corporate assets are tested for impairment separately from oil and gas assets. |
Share-based payments | h) Share-based payments The fair value of restricted share units granted under the Restricted and Performance Share Unit Plan (“RPSU” plan) follows the equity method and recognizes compensation expense with a corresponding increase to other reserves in shareholders’ equity over the term of the units based on a graded vesting schedule. Obsidian Energy measures the fair value of units granted under this plan at the grant date using the share price from the Toronto Stock Exchange (“TSX”). The fair value is based on market prices and considers the terms and conditions of the units granted. The fair value of options granted under the Stock Option Plan (the “Option Plan”) is recognized as compensation expense with a corresponding increase to other reserves in shareholders’ equity over the term of the options based on a graded vesting schedule. Obsidian Energy measures the fair value of options granted under these plans at the grant date using the Black-Scholes option-pricing model. The fair value is based on market prices and considers the terms and conditions of the share options granted. Non-Treasury |
Provisions | i) Provisions i) General Provisions are recognized based on an estimate of expenditures required to settle present obligations at the end of the reporting period. The provision is risk adjusted to take into account any uncertainties. When the effect of the time value of money is material, the amount of a provision is calculated as the present value of the future expenditures required to settle the obligations. The discount rate reflects the current assessment of the time value of money and risks specific to the liability when those risks have not already been reflected as an adjustment to future cash flows. ii) Decommissioning liability The decommissioning liability is the present value of Obsidian Energy’s future costs of obligations for property, facility and pipeline abandonment and site restoration. The liability is recognized on the balance sheet with a corresponding increase to the carrying amount of the related asset. The recorded liability increases over time to its future amount through accretion charges to income. Revisions to the estimated amount or timing of the obligations are reflected prospectively as increases or decreases to the recorded liability and the related asset. Actual decommissioning expenditures, up to the recorded amount of the liability at the time, are charged to the liability as the costs are incurred. Amounts capitalized to the related assets are depleted to income consistent with the depletion or depreciation of the underlying asset. iii) Office lease provision The office lease provision is the net present value of future lease payments that the Company is obligated to make under non-cancellable non-lease |
Leases | j) Leases At the inception of entering into a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company considers the following: • the contract involves the use of an identified asset; • the Company has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and • the Company has the right to direct the use of the asset, which occurs if either; • the Company has the right to operate the asset; or • the Company designed the asset in a way that predetermines how and for what purpose it will be used. Obsidian Energy recognizes a right-of-use right-of-use The right-of-use right-of-use right-of-use The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company’s incremental borrowing rate. The consideration used to measure the lease liability includes all fixed payments and variable lease payments that depend on an index or rate under the arrangement. Subsequently, the lease liability is measured at amortized cost using the effective interest method and is re-measured The Company recognizes the lease payments associated with leases under IFRS 16 as an expense on a straight-line basis over the lease term. |
Share capital | k) Share capital Common shares are classified as equity. Share issue costs are recorded in shareholder’s equity, net of applicable taxes. Dividends, if paid, are at the discretion of the Board of Directors and are deducted from retained earnings. If issued, preferred shares would be classified as equity and could be issued in one or more series. |
Earnings per share | l) Earnings per share Earnings per share is calculated by dividing net income or loss attributable to the shareholders by the weighted average number of common shares outstanding during the period. Obsidian Energy computes the dilutive impact of equity instruments other than common shares assuming the proceeds received from the exercise of in-the-money |
Taxation | m) Taxation Income taxes are based on taxable income in a taxation year. Taxable income normally differs from income reported in the Consolidated Statements of Income (Loss) as it excludes items of income or expense that are taxable or deductible in other years or are not taxable or deductible for income tax purposes. Obsidian Energy uses the liability method of accounting for deferred income taxes. Temporary differences are calculated assuming that the financial assets and liabilities will be settled at their carrying amount. Deferred income taxes are computed on temporary differences using substantively enacted income tax rates expected to apply when deferred income tax assets and liabilities are realized or settled. A deferred income tax asset is recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences can be utilized. Deferred income tax assets are reviewed at each reporting date and are not recognized until such time that it is probable that the related tax benefit will be realized. |
Financial instruments | n) Financial instruments Obsidian Energy recognizes financial assets and financial liabilities, including derivatives, on the Consolidated Balance Sheets when the Company becomes a party to the contract. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or when the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized from the consolidated financial statements when the liability is extinguished either through settlement of or release from the obligation of the underlying liability. Classification and Measurement of Financial Instruments The classification of financial assets is determined by their context in Obsidian Energy’s operations and by the characteristics of the financial asset’s contractual cash flows. Financial assets and financial liabilities are measured at fair value on initial recognition, which is typically the transaction price unless a financial instrument contains a significant financing component. Subsequent measurement is dependent on the financial instrument’s classification, as described below: • Cash and cash equivalents (which includes cash and bank overdrafts), accounts receivable, accounts payable and accrued liabilities, lease liabilities and long-term debt are measured at amortized cost. • Risk management contracts, all of which are derivatives, are measured initially at fair value through profit or loss and are subsequently measured at fair value with changes in fair value immediately charged to earnings in the Consolidated Statements of Income (Loss). Financial assets and liabilities are offset and the net amount is reported on the balance sheet when there is a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. Impairment of Financial Assets Financial assets are assessed using an expected credit loss (“ECL”) model. The ECL model applies to financial assets measured at amortized cost, a lease receivable, a contract asset or a loan commitment and a financial guarantee. |
Embedded derivatives | o) Embedded derivatives An embedded derivative is a component of a contract that affects the terms of another factor. These “hybrid” contracts are considered to consist of a “host” contract plus an embedded derivative. The embedded derivative is separated from the host contract and accounted for as a derivative if the following conditions are met: • The economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; • The embedded item, itself, meets the definition of a derivative; and • The hybrid contract is not measured at fair value or designated as held for trading. |
Classification of debt or equity | p) Classification of debt or equity Obsidian Energy classifies financial liabilities and equity instruments in accordance with the substance of the contractual arrangement and the definitions of a financial liability or an equity instrument. Obsidian Energy’s debt instruments currently have requirements to deliver cash at the end of the term thus are classified as liabilities. |
Government Grants | q) Government Grants Obsidian Energy recognizes government grants as they are received or if there is reasonable assurance that the Company is in compliance with all associated conditions. The grant is recognized within the Consolidated Statements of Income (Loss) in the period in which the income is earned or the related expenditures are incurred. If the grant relates to an asset, it is recognized as a reduction to the carrying value of the asset and amortized into income over the expected useful life of the asset through lower depletion and depreciation. |
New Accounting Standards | r) New Accounting Standards Various amendments to existing standards and new accounting requirements have been released that are effective as of January 1, 2022. The Company does not anticipate the new requirements to have a material impact on the financial statements. |
PROP acquisition (Tables)
PROP acquisition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure of detailed information about business combination [abstract] | |
Summary of Business Combination | The total consideration paid and the final purchase price allocation over the fair value of assets and liabilities acquired at the date of acquisition are as follows: Total consideration $ 35.2 Fair value of assets acquired and liabilities assumed Working capital (1) $ 4.4 Property, plant and equipment 32.9 Decommissioning liability (2.1 ) Net assets $ 35.2 (1) Includes cash of $1.6 million. |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Disclosure of Property Plant and Equipment | Oil and Gas assets/Facilities, Corporate assets Cost Oil and gas Corporate Total Balance at January 1, 2020 $ 10,211.6 $ 175.6 $ 10,387.2 Capital expenditures 57.0 0.2 57.2 Dispositions (0.1 ) — (0.1 ) Transfer to assets held for sale 423.0 — 423.0 Change in decommissioning liability (1) (29.0 ) — (29.0 ) Balance at December 31, 2020 $ 10,662.5 $ 175.8 $ 10,838.3 Capital expenditures 140.2 0.7 140.9 Business acquisition ( Note 32.9 — 32.9 Dispositions 0.1 — 0.1 Change in decommissioning liability (1) 62.3 — 62.3 Derecognition on acquisition (545.8 ) — (545.8 ) Balance at December 31, 2021 $ 10,352.2 $ 176.5 $ 10,528.7 (1) Includes additions from drilling activity, facility capital spending, disposals from net property dispositions and changes in estimates as outlined in Note 8. Accumulated depletion, depreciation and impairment Oil and gas Corporate Total Balance at January 1, 2020 $ 8,558.2 $ 150.1 $ 8,708.3 Depletion and depreciation 115.1 7.0 122.1 Impairments 747.5 18.7 766.2 Transfers to assets held for sale 346.0 — 346.0 Balance at December 31, 2020 $ 9,766.8 $ 175.8 $ 9,942.6 Depletion and depreciation 115.6 0.7 116.3 Impairments 19.5 — 19.5 Impairment reversal (338.0 ) — (338.0 ) Derecognition on acquisition (545.8 ) — (545.8 ) Balance at December 31, 2021 $ 9,018.1 $ 176.5 $ 9,194.6 Net book value As at December 31 2021 2020 Total $ 1,334.1 $ 895.7 |
Summary of Right of Use Assets | The following table includes a break-down of the categories for right-of-use Cost Office Transportation Vehicle Surface Total Balance, January 1, 2020 $ 12.6 $ 16.7 $ 4.1 $ 2.1 $ 35.5 Additions (Terminations) (12.6 ) (1.8 ) 1.6 — (12.8 ) Balance, December 31, 2020 $ — $ 14.9 $ 5.7 $ 2.1 $ 22.7 Additions (Terminations) — 1.4 0.7 — 2.1 Balance, December 31, 2021 $ — $ 16.3 $ 6.4 $ 2.1 $ 24.8 Accumulated amortization Office Transportation Vehicle Surface Total Balance, January 1, 2020 $ 2.4 $ 6.0 $ 1.3 $ 0.1 $ 9.8 Amortization 0.5 4.5 1.3 — 6.3 Termination (2.9 ) — — — (2.9 ) Balance, December 31, 2020 $ — $ 10.5 $ 2.6 $ 0.1 $ 13.2 Amortization — 2.1 1.4 0.1 3.6 Balance, December 31, 2021 $ — $ 12.6 $ 4.0 $ 0.2 $ 16.8 As at December 31 2021 2020 Total $ 8.0 $ 9.5 |
Summary of Property Plant Equipment And Right Of Use Assets | Total PP&E including Oil and Gas assets, Facilities, Corporate assets and Right-of-use As at December 31 PP&E 2021 2020 Oil and Gas assets, Facilities, Corporate assets $ 1,334.1 $ 895.7 Right-of-use 8.0 9.5 Total $ 1,342.1 $ 905.2 |
Disclosure of Benchmark Prices Used in Impairment Tests | The following table outlines benchmark prices and assumptions, based on an average of four independent reserve evaluators’ forecasts (Sproule Associates Limited, GLJ Ltd., McDaniel & Associates Consultants and Deloitte Resource Evaluation & Advisory), used in completing the impairment tests as at December 31, 2021. WTI AECO Exchange rate Inflation rate 2022 $ 71.88 $ 3.58 $ 0.80 0 % 2023 67.91 3.22 0.80 2.25 % 2024 65.42 3.07 0.80 2.0 % 2025 66.72 3.14 0.80 2.0 % 2026 68.05 3.20 0.80 2.0 % 2027 – 20 32 $ 72.98 $ 3.43 $ 0.80 2.0 % Thereafter (inflation percentage) 2 % 2 % — 2.0 % The following table outlines benchmark prices and assumptions, based on an average of four independent reserve evaluators’ forecasts (Sproule Associates Limited, GLJ Ltd., McDaniel & Associates Consultants and Deloitte Resource Evaluation & Advisory), used in completing the impairment tests as at December 31, 2020. WTI AECO Exchange rate Inflation rate 2021 $ 46.88 $ 2.74 $ 0.77 0 % 2022 51.14 2.70 0.77 1.5 % 2023 54.83 2.65 0.77 2.0 % 2024 56.48 2.69 0.77 2.0 % 2025 57.62 2.74 0.77 2.0 % 2026 – 2030 $ 61.16 $ 2.91 $ 0.77 2.0 % Thereafter (inflation percentage) 2 % 2 % — 2.0 % |
Disclosure of Estimated Recoverable Amount on Impairment Test | The following table outlines the sensitivity to possible changes of the estimated recoverable amounts on the Company’s CGUs that had impairment tests completed on December 31, 2020. Recoverable Impairment/ 1% change in 5% change in Cardium $ 849.2 $ Nil $ 66.9 $ 66.2 Peace River 28.5 (18.0 ) 1.3 2.8 Legac y $ Nil $ 21.8 $ Nil $ Nil The following table outlines the sensitivity to possible changes of the estimated recoverable amount on the Cardium CGU that had an impairment test completed on December 31, 2021. Recoverable 1% change in 5% change in Cardium $ 1,237.4 $ 73.1 $ 84.8 |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Schedule of Long-term Debt | As at December 31 2021 2020 Syndicated credit facility $ 321.5 $ 395.0 PROP Limited 16.0 — Senior secured notes – 2008 Notes 9.37%, US$3.7 million, maturing November 30, 2022 4.7 5.2 Senior secured notes – 2010 Q1 Notes 8.82%, US$8.9 million, maturing November 30, 2022 11.3 12.4 Senior secured notes – 2010 Q4 Notes 7.85%, US$12.1 million, maturing November 30, 2022 15.4 16.9 7.95%, US$5.3 million, maturing November 30, 2022 6.8 7.4 8.20%, US$2.0 million, maturing November 30, 2022 2.5 2.7 Senior secured notes – 2011 Q4 Notes 7.76%, US$11.3 million, maturing November 30, 2022 14.2 15.7 Total credit facility and senior secured notes $ 392.4 $ 455.3 Deferred interest 1.3 — Deferred financing costs (2.7 ) (3.5 ) Total long-term debt 391.0 451.8 Current portion $ 391.0 $ 451.8 Additional information on Obsidian Energy’s senior secured notes was as follows: As at December 31 2021 2020 Weighted average remaining life (years) 0.9 0.9 Weighted average interest rate 8.2 % 5.2 % |
Estimated Fair Values of Principal and Interest Obligations of Outstanding Senior Secured Notes | The estimated fair values of the principal and interest obligations of the outstanding senior secured notes were as follows: As at December 31 2021 2020 2008 Notes $ 4.7 $ 4.3 2010 Q1 Notes 11.3 10.2 2010 Q4 Notes 24.3 22.0 2011 Notes 14.1 12.8 Total $ 54.4 $ 49.3 |
Detailed Information About In Financing Expense | Financing expense consists of the following: Year ended December 31 2021 2020 Interest on bank debt and senior notes $ 27.1 $ 22.8 PROP limited recourse loan 0.2 — Advisor fees 2.7 10.1 Deferred financing costs 5.5 2.8 Unwinding discount on lease liabilities 0.6 1.5 Debt modification 1.3 — Financing $ 37.4 $ 37.2 |
Lease Liabilities (Tables)
Lease Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Lease liabilities [abstract] | |
Detailed Information About In Lease Liabilities Included In Consolidated Balance Sheet | Total lease liabilities included in the Consolidated Balance Sheets are as follows: Year ended December 31 2021 2020 Balance, beginning of year $ 10.4 $ 113.8 Additions (terminations) 2.1 (98.6 ) Unwinding of discount on lease liabilities 0.6 1.5 Lease payments (4.4 ) (6.3 ) Balance, end of year $ 8.7 $ 10.4 Current portion $ 4.1 $ 4.8 Long-term portion $ 4.6 $ 5.6 |
Detailed information About In Maturity Lease Payments | The following table sets out a maturity analysis of lease payments, disclosing the undiscounted balance after December 31, 2021: 2022 2023 2024 2025 2026 Thereafter Total Transportation $ 2.6 $ 1.8 $ — $ — $ — $ — $ 4.4 Vehicle 1.4 1.0 0.3 — — — 2.7 Surface 0.1 0.1 0.1 0.1 0.1 5.1 5.6 Total $ 4.1 $ 2.9 $ 0.4 $ 0.1 $ 0.1 $ 5.1 $ 12.7 |
Provisions (Tables)
Provisions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Summary of Provisions | As at December 31 2021 2020 Decommissioning liability $ 121.6 $ 70.5 Office lease provision 25.6 33.5 Total $ 147.2 $ 104.0 Current portion $ 23.4 $ 16.3 Long-term portion 123.8 87.7 Total $ 147.2 $ 104.0 |
Summary of Changes to Decommissioning Liability | Changes to the decommissioning liability were as follows: Year ended December 31 2021 2020 Balance, beginning of year $ 70.5 $ 100.1 Net liabilities added (disposed) (1) 0.1 (0.4 ) Acquisition ( Note 2.1 — Increase (decrease) due to changes in estimates 62.2 (28.6 ) Liabilities settled (8.1 ) (11.1 ) Government decommissioning assistance (11.0 ) (2.2 ) Transfers (to) from liabilities for assets held for sale — 7.0 Accretion charges 5.8 5.7 Balance, end of year $ 121.6 $ 70.5 Current portion $ 14.5 $ 7.3 Long-term portion $ 107.1 $ 63.2 (1) Includes additions from drilling activity, facility capital spending and disposals related to net property dispositions. |
Summary of Changes to Office Lease Provision | Changes to the office lease provision were as follows: Year ended December 31 2021 2020 Balance, beginning of year $ 33.5 $ 12.7 Net additions (dispositions) — 27.0 Increase (decrease) due to changes in estimates (0.7 ) 1.0 Settlements (9.1 ) (9.7 ) Accretion charges 1.9 2.5 Balance, end of year $ 25.6 $ 33.5 Current portion $ 8.9 $ 9.0 Long-term portion $ 16.7 $ 24.5 |
Risk management (Tables)
Risk management (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Summary of Reconcilation of Change in Fair Value of Financial Instruments Outstanding | The following table reconciles the changes in the fair value of financial instruments outstanding: Year ended December 31 Risk management asset (liability) 2021 2020 Balance, beginning of year $ 0.2 $ (0.6 ) Unrealized gain (loss) on financial instruments: Commodity collars and swaps (2.6 ) 0.8 Total fair value, end of year $ (2.4 ) $ 0.2 Current asset portion $ 1.8 $ 0.8 Current liability portion $ (4.2 ) $ (0.6 ) |
Schedule of Financial Instruments Outstanding | Obsidian Energy had the following financial instruments outstanding as at December 31, 2021. Fair values are determined using external counterparty information, which is compared to observable market data. The Company limits our credit risk by executing counterparty risk procedures which include transacting only with institutions within our syndicated credit facility or companies with high credit ratings and by obtaining financial security in certain circumstances. Notional volume Remaining term Pricing Fair value Oil WTI Swaps 2,000 bbl/d January 2022 $ 97.25/bbl $ 0.2 WTI Swaps (1) 1,502 bbl/d Q1 2022 US$ 66.24/bbl (1.5 ) WTI Swaps (1) 1,121 bbl/d Q2 2022 US$ 65.11/bbl (1.0 ) WTI Swaps (1) 593 bbl/d Q3 2022 US$ 63.26/bbl (0.7 ) WTI Swaps (1) 606 bbl/d Q4 2022 US$ 62.30/bbl (0.5 ) Heavy Oil Differential (1) 939 bbl/d Q1 2022 US$ (17.45 )/bbl (0.3 ) Heavy Oil Differential (1) 801 bbl/d Q2 2022 US$ (15.43 )/bbl (0.2 ) AECO Swaps AECO Swaps 25,591 mcf/d Q1 2022 $ 4.63/mcf 1.6 Total $ (2.4 ) (1) PROP Energy 45 Limited Partnership, our wholly owned subsidiary that purchased percent of the PROP units from a third party on November 24, 2021, entered into the financial hedges in conjunction with the limited recourse acquisition financing. |
Disclosure Details Of Financial Contracts One | Subsequent to December 31, 2021, the Company entered into the following additional financial hedges on a weighted average Notional volume Term Pricing Oil WTI Swaps 6,016 bbl/d January 2022 $ 99.34/bbl WTI Swaps 8,634 February 2022 $ 102.50/bbl WTI Swaps 7,500 bbl/d March 2022 $ 108.72/bbl WTI Swaps 500 bbl/d April 2022 $ 115.00/bbl AECO Swaps AECO Swaps 11,848 mcf/d April 2022 – October 2022 $ 4.31/mcf |
Components of Risk Management on Consolidated Statements of Income (Loss) | The components of risk management on the Consolidated Statements of Income (Loss) are as follows: Year ended December 31 2021 2020 Realized Settlement of commodity contracts $ (12.0 ) $ 20.9 Total realized risk management gain (loss) $ (12.0 ) $ 20.9 Unrealized Commodity contracts $ (2.6 ) $ 0.8 Total unrealized risk management gain (loss) (2.6 ) 0.8 Risk management gain (loss) $ (14.6 ) $ 21.7 |
Disclosure of Detailed Information about Accounts Receivable | As at December 31, the following accounts receivable amounts were outstanding: Current 30-90 days 90+ days Total 2021 $ 62.0 $ 5.1 $ 1.8 $ 68.9 2020 $ 29.5 $ 5.6 $ 5.7 $ 40.8 |
Summary of Estimated Future Obligations for Non-Derivative Financial Liabilities | The following table outlines estimated future obligations for non-derivative 2 Long-term debt (1) Accounts payable Share-based Total 2022 $ 391.0 $ 95.5 $ 12.3 $ 498.8 2023 — 1.5 3.1 4.6 2024 — — 2.2 2.2 2025 — — — — 2026 — — — — Thereafter $ — $ — $ — $ — (1) The 2022 figure includes $321.5 million related to the syndicated credit facility, which at the balance sheet date was due for renewal in 2022. |
Revenue and Other Income (Table
Revenue and Other Income (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Disclosure of Significant Revenue | The Company’s significant revenue streams consist of the following: Year ended December 31 2021 2020 Oil $ 362.9 $ 213.1 NGLs 38.2 16.3 Natural gas 76.4 46.0 Production revenues 477.5 275.4 Processing fees 6.4 6.3 Oil and natural gas sales 483.9 281.7 Sales of commodities purchased from third parties 13.6 4.8 Other income 6.0 13.0 Oil and natural gas sales and other income $ 503.5 $ 299.5 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Summary of Provision for Income Taxes Reflects Effective Tax Rate | The provision for income taxes reflects an effective tax rate that differs from the combined federal and provincial statutory tax rate as follows: Year ended December 31 2021 2020 Income (loss) before taxes $ 414.0 $ (771.7 ) Combined statutory tax rate (1) 23.0 % 24.0 % Computed income tax expense (recovery) $ 95.2 $ (185.2 ) Increase (decrease) resulting from: Share-based compensation 0.5 0.5 Non-taxable (0.1 ) (0.3 ) Unrecognized deferred tax asset (69.9 ) 178.2 Adjustments related to prior years (27.1 ) (0.9 ) Tax rate reductions — 7.6 Other 1.4 0.1 Deferred tax recovery $ — $ — (1) The tax rate represents the combined federal and provincial statutory tax rates for the Company and our subsidiaries for the years ended December 31, 2021 and December 31, 2020. Effective July 1, 2020, the Alberta corporate income tax rate was reduced from 10% to 8%. For 2021, the combined statutory rate of 23% represents the fully reduced Alberta rate of 8% being effective for the entire year. |
Summary of Net Deferred Income Tax Liability | The net deferred income tax liability is comprised of the following: Balance Provision (Recovery) Balance December 31, 2021 Deferred tax liabilities (assets) PP&E $ 86.5 $ 67.0 $ 153.5 Leases (10.1 ) 2.2 (7.9 ) Risk Management — (0.5 ) (0.5 ) Decommissioning liability (16.6 ) (11.3 ) (27.9 ) Share-based compensation (0.4 ) (3.6 ) (4.0 ) Non-capital (59.4 ) (53.8 ) (113.2 ) Net deferred tax liability $ — $ — $ — Balance Provision (Recovery) Balance December 31, 2020 Deferred tax liabilities (assets) PP&E $ 282.5 $ (196.0 ) $ 86.5 Leases (20.0 ) 9.9 (10.1 ) Decommissioning liability (24.6 ) 8.0 (16.6 ) Share-based compensation (0.2 ) (0.2 ) (0.4 ) Non-capital (237.7 ) 178.3 (59.4 ) Net deferred tax liability $ — $ — $ — |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Summary of Issued Capital | b) Issued Shareholders’ capital Common Shares Amount Balance, January 1, 2020 73,011,488 $ 2,186.7 Issued pursuant to equity compensation plans (1) 504,737 0.3 Balance, December 31, 2020 73,516,225 $ 2,187.0 Issued pursuant to equity compensation plans (1) 1,356,610 2.6 Equity issue 5,880,681 25.9 Share issue costs — (1.7 ) Balance, December 31, 2021 80,753,516 $ 2,213.8 (1) Upon vesting or exercise of equity awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. |
Summary of Other Reserves | Year ended December 31 Other Reserves 2021 2020 Balance, beginning of year $ 103.6 $ 101.8 Share-based compensation expense 2.3 2.1 Net benefit on options exercised (1) (2.7 ) (0.3 ) Balance, end of year $ 103.2 $ 103.6 (1) Upon exercise of awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Summary of Stock Option Activity and Related Information | Year ended December 31 2021 2020 Options Number of Options Weighted Exercise Price Number of Weighted Outstanding, beginning of year 961,954 $ 0.94 89,178 $ 10.41 Granted 2,116,120 1.99 917,490 0.56 Exercised (11,938 ) 0.56 — — Forfeited (44,464 ) 8.74 (44,714 ) 12.06 Outstanding, end of year 3,021,672 $ 1.56 961,954 $ 0.94 Exercisable, end of year 748,438 $ 1.29 44,464 $ 8.74 |
Summary of Fair Value and Weighted Average Assumptions of the Options Granted | The fair value and weighted average assumptions of the options granted during the year were as follows: Year ended December 31 2021 2020 Average fair value of options granted (per option) $ 1.11 $ 0.29 Expected volatility 86.9 % 83.6 % Expected life of options (years) 3.4 3.25 Expected forfeiture rate 0.5 % 0.6 % |
Summary of Share-Based Compensation | Share-based compensation consisted of the following: Year ended December 31 2021 2020 RSU grants $ 1.1 $ 2.0 PSU grants 4.3 0.1 Options 1.2 0.1 NTIP 2.5 — DSU plan 10.3 1.2 Share-based compensation $ 19.4 $ 3.4 |
Restricted share unit plan [member] | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Year ended December 31 RSUs (number of shares equivalent) 2021 2020 Outstanding, beginning of year 2,355,408 1,100,278 Granted 190,500 1,818,840 Vested (1,344,672 ) (510,738 ) Forfeited (33,885 ) (52,972 ) Outstanding, end of year 1,167,351 2,355,408 |
Summary of Weighted Average Assumptions of RPSU Plan Units Under Equity Method | The fair value and weighted average assumptions of the RSUs granted during the year were as follows: Year ended December 31 2021 2020 Average fair value of units granted (per unit) $ 1.99 $ 0.55 Expected life of units (years) 1.0 3.0 Expected forfeiture rate nil 0.6 % |
PSU Plan [member] | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Year ended December 31 PSUs (number of shares equivalent) 2021 2020 Outstanding, beginning of year 453,845 92,424 Granted 684,620 376,310 Vested — (10,716 ) Forfeited — (4,173 ) Outstanding, end of year 1,138,465 453,845 |
Non-Treasury Incentive Awards Plan [member] | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Year ended December 31 NTIP Restricted Awards 2021 2020 Outstanding, beginning of year — — Granted 1,120,660 — Forfeited (26,860 ) — Outstanding, end of year 1,093,800 — |
Deferred Share Units Plan | |
Statement [LineItems] | |
Summary of Restricted and Performance Share Unit plan ("RPSU plan") | Year ended December 31 Deferred Share Units 2021 2020 Outstanding, beginning of year 2,087,580 847,100 Granted 239,754 1,297,669 Exercised (308,835 ) (57,189 ) Outstanding, end of year 2,018,499 2,087,580 |
Per share amounts (Tables)
Per share amounts (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Disclosure of Detailed Information about Net Loss Basic and Diluted | The number of incremental shares included in diluted earnings per share is computed using the average volume-weighted market price of shares for the period. In addition, contracts that could be settled in cash or shares are assumed to be settled in shares if share settlement is more dilutive. Year ended December 31 2021 2020 Net income (loss) – basic and diluted $ 414.0 $ (771.7 ) |
Disclosure of Detailed Information about Weighted Average Number of Shares Per Share | The weighted average number of shares used to calculate per share amounts is as follows: Year ended December 31 Average shares outstanding (millions) 2021 2020 Basic 75.1 73.3 Dilutive impact of stock option/ RSUs 2.5 — Diluted 77.6 73.3 |
Changes in non-cash working c_2
Changes in non-cash working capital increase (decrease) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Summary of Changes in Non-cash Working Capital (Increase) Decrease | Year ended December 31 2021 2020 Restricted cash $ — $ 2.4 Accounts receivable (28.1 ) 22.6 Prepaid expenses and other (1.7 ) 0.6 Accounts payable and accrued liabilities (1) 40.0 (41.3 ) Acquisition (Note 4) 2.8 — 13.0 (15.7 ) Operating activities (5.1 ) (6.6 ) Investing activities 18.1 (9.1 ) $ 13.0 $ (15.7 ) Interest paid in cash $ 30.1 $ 25.5 Income taxes paid (recovered) in cash $ — $ — (1) Includes share-based compensation plans. |
Capital management (Tables)
Capital management (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Summary of Financial Covenants Under Lending Agreements | As at December 31 (millions, except ratio amounts) 2021 2020 Components of capital Shareholders’ equity $ 763.5 $ 323.1 Credit facility, term loan and senior secured notes $ 392.4 $ 455.3 Ratios Senior debt to capitalization (1) 33 % 59 % Total debt to capitalization (1) 33 % 59 % Priority debt to consolidated tangible assets (2) — — Credit facility and senior secured notes (3) $ 376.4 $ 455.3 Letters of credit (4) 4.6 4.9 Senior debt and total debt 381.0 460.2 Total shareholders’ equity for covenants (3) 769.4 323.1 Total capitalization $ 1,150.4 $ 783.3 (1) Not to exceed 75 (2) Priority debt not to exceed 15% of consolidated tangible assets. (3) The PROP limited recourse amortizing loan and associated net income on the 45 percent PROP partnership interested acquired in November 2021 is not included in the debt to capitalization calculations. (4) Letters of credit defined as financial under the lending agreements are included in the calculation. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Summary of Certain Payments Over the Next Five Years | Obsidian Energy is committed to certain payments over the next five calendar years and thereafter as follows: 2022 2023 2024 2025 2026 Thereafter Total Long-term debt (1) $ 391.0 $ — $ — $ — $ — $ — $ 391.0 Transportation 3.6 3.5 2.7 2.2 1.7 4.2 17.9 Interest obligations 22.1 — — — — — 22.1 Office lease 10.0 10.0 10.0 0.8 — — 30.8 Lease liability 4.1 2.9 0.4 0.1 0.1 5.1 12.7 Decommissioning liability 14.5 12.6 11.8 11.1 10.4 61.2 121.6 Total $ 445.3 $ 29.0 $ 24.9 $ 14.2 $ 12.2 $ 70.5 $ 596.1 (1) The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving are and $16.0 the PROP limited recourse amortizing loan tha t both |
Related-party transactions (Tab
Related-party transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [LineItems] | |
Summary of Compensation of key Management Personnel | The remuneration of the directors and key management personnel of Obsidian Energy during the year is below. Year ended December 31 2021 2020 Salary and employee benefits $ 4.5 $ 4.5 Share-based payments (1) 15.1 1.7 $ 19.6 $ 6.2 (1) Includes changes in the fair value of PSUs, DSUs and non-cash |
Structure of Obsidian Energy -
Structure of Obsidian Energy - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2021Segment | |
Disclosure of operating segments [line items] | |
Number of operating segment | 1 |
Percentage of ownership in petroleum and natural gas assets | 100.00% |
Proportion of ownership interest in joint arrangement | 100.00% |
Basis of presentation and sta_2
Basis of presentation and statement of compliance - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2021 | |
Statement [Line Items] | |
Proportion of ownership interest in joint arrangement | 100.00% |
Peace River Oil Partnership [member] | |
Statement [Line Items] | |
Proportion of ownership interest in joint arrangement | 100.00% |
Significant accounting polici_3
Significant accounting policies - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2019 | |
Summary Of Significant Accounting Policies [Line items] | ||
Description of conversion of oil and gas products | Natural gas volumes are converted to equivalent oil volumes based upon the relative energy content of six thousand cubic feet of natural gas to one barrel of oil. | |
Corporate asset component [member] | ||
Summary Of Significant Accounting Policies [Line items] | ||
Estimated useful life | 10 years | |
Bottom of range [member] | ||
Summary Of Significant Accounting Policies [Line items] | ||
Percentage of economically recoverable proved reserves | 90.00% | |
Bottom of range [member] | Turnaround component [member] | ||
Summary Of Significant Accounting Policies [Line items] | ||
Estimated useful life | 3 years | |
Top of range [member] | Turnaround component [member] | ||
Summary Of Significant Accounting Policies [Line items] | ||
Estimated useful life | 5 years |
PROP acquisition - Summary of B
PROP acquisition - Summary of Business Combination (Detail) - Peace River Oil Partnership [member] - CAD ($) $ in Millions | Dec. 31, 2021 | Nov. 24, 2021 | |
Consideration | |||
Total consideration | $ 25.9 | $ 35.2 | |
Fair value of assets acquired and liabilities assumed | |||
Working capital | [1] | 4.4 | |
Property, plant and equipment | 32.9 | ||
Decommissioning liability | (2.1) | ||
Net assets | $ 35.2 | ||
[1] | Includes cash of $1.6 million. |
PROP acquisition - Summary of_2
PROP acquisition - Summary of Business Combination (Detail) (Parenthitical) - CAD ($) $ in Millions | Dec. 31, 2021 | Nov. 24, 2021 |
Peace River Oil Partnership [member] | ||
Statement [Line Items] | ||
Cash consideration | $ 1.6 | $ 35.2 |
PROP acquisition - Additional I
PROP acquisition - Additional Information (Detail) - CAD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2021 | Nov. 24, 2021 | Dec. 31, 2020 | |||
Disclosure Of Business Combinations [LineItems] | ||||||
Business combination, percentage of inetrest acquired | 45.00% | 45.00% | ||||
Borrowings | $ 391 | [1] | $ 391 | [1] | $ 451.8 | |
Limited Recourse Loan [member] | ||||||
Disclosure Of Business Combinations [LineItems] | ||||||
Borrowings | $ 16 | $ 16 | ||||
Peace River Oil Partnership [member] | ||||||
Disclosure Of Business Combinations [LineItems] | ||||||
Business combination, percentage of inetrest acquired | 100.00% | 100.00% | 45.00% | |||
Consideration in cash | $ 1.6 | $ 1.6 | $ 35.2 | |||
Borrowings | 16.3 | |||||
Revenue since acquisition | 4.5 | |||||
Net income since acquisition | 2.4 | |||||
Revenue if acquisition at beginning of period | 43.2 | |||||
Net income if acquisition at beginning of period | 26.6 | |||||
Business combination, transaction costs | $ 1.7 | $ 3.5 | ||||
Peace River Oil Partnership [member] | Limited Recourse Loan [member] | ||||||
Disclosure Of Business Combinations [LineItems] | ||||||
Borrowings | $ 16.3 | |||||
[1] | The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving term loan that are due for renewal in 2022 and $54.9 million of senior notes and $16.0 million related to the PROP limited recourse amortizing loan that both mature in 2022. Refer to Note 6 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Property, plant and equipment -
Property, plant and equipment - Disclosure of Property Plant and Equipment (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | $ 905.2 | ||
Ending balance | 1,342.1 | $ 905.2 | |
Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | 10,838.3 | 10,387.2 | |
Capital expenditures | 140.9 | 57.2 | |
Business acquisition | 32.9 | ||
Dispositions | 0.1 | (0.1) | |
Transfer to assets held for sale | 423 | ||
Change in decommissioning liability | [1] | 62.3 | (29) |
Derecognition on acquisition | (545.8) | ||
Ending balance | 10,528.7 | 10,838.3 | |
Accumulated depletion, depreciation and impairment [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | (9,942.6) | (8,708.3) | |
Depletion and depreciation | 116.3 | 122.1 | |
Impairments | 19.5 | 766.2 | |
Transfer to assets held for sale | 346 | ||
Impairment reversal | (338) | ||
Derecognition on acquisition | (545.8) | ||
Ending balance | (9,194.6) | (9,942.6) | |
Oil and gas assets/Facilities [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | 895.7 | ||
Ending balance | 1,334.1 | 895.7 | |
Oil and gas assets/Facilities [member] | Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | 10,662.5 | 10,211.6 | |
Capital expenditures | 140.2 | 57 | |
Business acquisition | 32.9 | ||
Dispositions | 0.1 | (0.1) | |
Transfer to assets held for sale | 423 | ||
Change in decommissioning liability | [1] | 62.3 | (29) |
Derecognition on acquisition | (545.8) | ||
Ending balance | 10,352.2 | 10,662.5 | |
Oil and gas assets/Facilities [member] | Accumulated depletion, depreciation and impairment [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | (9,766.8) | (8,558.2) | |
Depletion and depreciation | 115.6 | 115.1 | |
Impairments | 19.5 | 747.5 | |
Transfer to assets held for sale | 346 | ||
Impairment reversal | (338) | ||
Derecognition on acquisition | (545.8) | ||
Ending balance | (9,018.1) | (9,766.8) | |
Corporate assets [member] | Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | 175.8 | 175.6 | |
Capital expenditures | 0.7 | 0.2 | |
Ending balance | 176.5 | 175.8 | |
Corporate assets [member] | Accumulated depletion, depreciation and impairment [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning balance | (175.8) | (150.1) | |
Depletion and depreciation | 0.7 | 7 | |
Impairments | 18.7 | ||
Ending balance | $ (176.5) | $ (175.8) | |
[1] | Includes additions from drilling activity, facility capital spending, disposals from net property dispositions and changes in estimates as outlined in Note 8. |
Property, plant and equipment_2
Property, plant and equipment - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Nov. 24, 2021 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Reversal of non cash impairment charge | $ 338 | ||
Non cash impairment charge | 19.5 | $ 766.2 | |
Future development costs | $ 735.6 | $ 636.1 | |
Business combination, percentage of inetrest acquired | 45.00% | ||
Peace River Oil Partnership [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Reversal of non cash impairment charge | $ 21 | ||
Business combination, percentage of inetrest acquired | 100.00% | 45.00% | |
Bottom of range [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
After tax discount rates applied | 9.50% | ||
Top of range [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
After tax discount rates applied | 15.00% | ||
Top of range [member] | Peace River Oil Partnership [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Business combination, percentage of inetrest acquired | 100.00% | ||
Cardium [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Reversal of non cash impairment charge | $ 311.5 | $ 0 | |
Peace River CGU [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Reversal of non cash impairment charge | 18 | ||
Non cash impairment charge | 21.8 | ||
Legacy CGU [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Reversal of non cash impairment charge | $ 0 | ||
Impairment | $ 14 |
Property, plant and equipment_3
Property, plant and equipment - Summary of Right of Use Assets (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | $ 9.5 | |
Ending balance | 8 | $ 9.5 |
Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (13.2) | (9.8) |
Amortization | 3.6 | 6.3 |
Additions (Terminations) | (2.9) | |
Ending balance | (16.8) | (13.2) |
Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 22.7 | 35.5 |
Additions (Terminations) | 2.1 | (12.8) |
Ending balance | 24.8 | 22.7 |
Office | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (2.4) | |
Amortization | 0.5 | |
Additions (Terminations) | (2.9) | |
Office | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 12.6 | |
Additions (Terminations) | (12.6) | |
Transportation | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (10.5) | (6) |
Amortization | 2.1 | 4.5 |
Ending balance | (12.6) | (10.5) |
Transportation | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 14.9 | 16.7 |
Additions (Terminations) | 1.4 | (1.8) |
Ending balance | 16.3 | 14.9 |
Vehicles | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (2.6) | (1.3) |
Amortization | 1.4 | 1.3 |
Ending balance | (4) | (2.6) |
Vehicles | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 5.7 | 4.1 |
Additions (Terminations) | 0.7 | 1.6 |
Ending balance | 6.4 | 5.7 |
Surface | Accumulated depletion, depreciation and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (0.1) | (0.1) |
Amortization | 0.1 | |
Ending balance | (0.2) | (0.1) |
Surface | Cost [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 2.1 | 2.1 |
Ending balance | $ 2.1 | $ 2.1 |
Property, plant and equipment_4
Property, plant and equipment - Summary of Property Plant Equipment And Right Of Use Assets (Detail) - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Oil and Gas assets, Facilities, Corporate assets | $ 1,334.1 | $ 895.7 |
Right-of-use assets | 8 | 9.5 |
Total | $ 1,342.1 | $ 905.2 |
Property, plant and equipment_5
Property, plant and equipment - Disclosure of Benchmark Prices Used in Impairment Tests (Detail) | Dec. 31, 2021$ / CAD$ / bbl$ / MMBTU | Dec. 31, 2020$ / MMBTU$ / CAD$ / bbl |
Disclosure of detailed information about property, plant and equipment [line items] | ||
2021 | $ / CAD | 0.80 | 0.77 |
2022 | $ / CAD | 0.80 | 0.77 |
2023 | $ / CAD | 0.80 | 0.77 |
2024 | $ / CAD | 0.80 | 0.77 |
2025 | $ / CAD | 0.80 | 0.77 |
2027 – 2032 | $ / CAD | 0.80 | 0.77 |
2021 | 0.00% | 0.00% |
2022 | 2.25% | 1.50% |
2023 | 2.00% | 2.00% |
2024 | 2.00% | 2.00% |
2025 | 2.00% | 2.00% |
2027 – 2032 | 2.00% | 2.00% |
Thereafter (inflation percentage) | 2.00% | 2.00% |
WTI [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
2021 | $ / bbl | 71.88 | 46.88 |
2022 | $ / bbl | 67.91 | 51.14 |
2023 | $ / bbl | 65.42 | 54.83 |
2024 | $ / bbl | 66.72 | 56.48 |
2025 | $ / bbl | 68.05 | 57.62 |
2027 – 2032 | $ / bbl | 72.98 | 61.16 |
Thereafter (inflation percentage) | 2.00% | 2.00% |
AECO [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
2021 | $ / MMBTU | 3.58 | 2.74 |
2022 | $ / MMBTU | 3.22 | 2.70 |
2023 | $ / MMBTU | 3.07 | 2.65 |
2024 | $ / MMBTU | 3.14 | 2.69 |
2025 | $ / MMBTU | 3.20 | 2.74 |
2027 – 2032 | $ / MMBTU | 3.43 | 2.91 |
Thereafter (inflation percentage) | 2.00% | 2.00% |
Property, plant and equipment_6
Property, plant and equipment - Details of Estimated Recoverable Amount on Impairment Test (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Legacy [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | $ 14 | |
1% change in discount rate | Cardium [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 73.1 | $ 66.9 |
1% change in discount rate | Peace River [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 1.3 | |
1% change in discount rate | Legacy [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 0 | |
5% change in cash flows | Cardium [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 84.8 | 66.2 |
5% change in cash flows | Peace River [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 2.8 | |
5% change in cash flows | Legacy [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 0 | |
Recoverable amount | Cardium [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | $ 1,237.4 | 849.2 |
Recoverable amount | Peace River [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 28.5 | |
Recoverable amount | Legacy [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 0 | |
Impairment/ (Impairment reversal) | Cardium [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | 0 | |
Impairment/ (Impairment reversal) | Peace River [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | (18) | |
Impairment/ (Impairment reversal) | Legacy [member] | ||
Disclosure of estimated recoverable amount on impairment test [Line Items] | ||
Impairment | $ 21.8 |
Long-term debt - Schedule of Lo
Long-term debt - Schedule of Long-term Debt (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | $ 391 | [1] | $ 451.8 |
Notional amount | 392.4 | 455.3 | |
Deferred interest | 1.3 | ||
Deferred financing costs | (2.7) | (3.5) | |
Current portion | $ 391 | $ 451.8 | |
Weighted average remaining life (years) | 10 months 24 days | 10 months 24 days | |
Weighted average interest rate | 8.20% | 5.20% | |
Syndicated Credit Facility [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | $ 321.5 | $ 395 | |
Limited Recourse Loan [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 16 | ||
9.37%, US$3.7 million, maturing November 30, 2022 [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 4.7 | 5.2 | |
8.82%, US$8.9 million, maturing November 30, 2022 [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 11.3 | 12.4 | |
7.85%, US$12.1 million, maturing November 30, 2022[member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 15.4 | 16.9 | |
7.95%, US$5.3 million, maturing November 30, 2022 [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 6.8 | 7.4 | |
8.20%, US$2.0 million, maturing November 30, 2022 [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | 2.5 | 2.7 | |
7.76%, US$11.3 million, maturing November 30, 2022 [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Borrowings | $ 14.2 | $ 15.7 | |
[1] | The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving term loan that are due for renewal in 2022 and $54.9 million of senior notes and $16.0 million related to the PROP limited recourse amortizing loan that both mature in 2022. Refer to Note 6 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Long-term debt - Schedule of _2
Long-term debt - Schedule of Long-term Debt (Parenthetical) (Detail) - Loan Maturity Date Extension [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
9.37%, US$3.7 million, maturing November 30, 2022 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 9.37% | 9.37% |
Debt | $ 3.7 | $ 3.7 |
Debt, maturity date | November 30, 2022 | November 30, 2022 |
8.82%, US$8.9 million, maturing November 30, 2022 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 8.82% | 8.82% |
Debt | $ 8.9 | $ 8.9 |
Debt, maturity date | November 30, 2022 | November 30, 2022 |
7.85%, US$12.1 million, maturing November 30, 2022[member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 7.85% | 7.85% |
Debt | $ 12.1 | $ 12.1 |
Debt, maturity date | November 30, 2022 | November 30, 2022 |
7.95%, US$5.3 million, maturing November 30, 2022 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 7.95% | 7.95% |
Debt | $ 5.3 | $ 5.3 |
Debt, maturity date | November 30, 2022 | November 30, 2022 |
8.20%, US$2.0 million, maturing November 30, 2022 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 8.20% | 8.20% |
Debt | $ 2 | $ 2 |
Debt, maturity date | November 30, 2022 | November 30, 2022 |
7.76%, US$11.3 million, maturing November 30, 2022 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Debt, interest rate | 7.76% | 7.76% |
Debt | $ 11.3 | $ 11.3 |
Debt, maturity date | November 30, 2022 | November 30, 2022 |
Long-term debt - Additional Inf
Long-term debt - Additional Information (Detail) $ in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021CAD ($) | Mar. 31, 2021CAD ($) | Dec. 31, 2021CAD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020CAD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Nov. 24, 2021CAD ($) | |||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Percentage of long-term debt instruments exposed to changes in short-term interest rates | 82.00% | 82.00% | 87.00% | 87.00% | ||||||
Total long term debt | $ 391 | [1] | $ 391 | [1] | $ 451.8 | |||||
Business combination, percentage of inetrest acquired | 45.00% | 45.00% | 45.00% | |||||||
Letters of credit outstanding | $ 5 | $ 5 | 5 | |||||||
Senior Secured Notes [member] | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Repayment of senior notes | 5.1 | $ 4.1 | 0 | $ 5.7 | ||||||
Letters of credit outstanding | $ 0 | $ 0 | $ 0 | $ 37.7 | ||||||
Non cash loss on financial instruments | $ 2.3 | |||||||||
Peace River Oil Partnership [member] | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Total long term debt | $ 16.3 | |||||||||
Business combination, percentage of inetrest acquired | 100.00% | 100.00% | 100.00% | 45.00% | ||||||
Repayment Of Loans | $ 0.3 | |||||||||
Limited Recourse Loan [member] | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Credit facilities maturity | December 31, 2022 | |||||||||
Interest rate | 10.50% | 10.50% | 10.50% | |||||||
Revolving Credit Facility [Member] | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Available borrowing facilities | $ 260 | $ 260 | ||||||||
Non Revolving Credit Facility [Member] | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Available borrowing facilities | 106.8 | 106.8 | ||||||||
Syndicated credit facility [member] | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Available borrowing facilities | $ 366.8 | $ 366.8 | ||||||||
Syndicated credit facility [member] | Amendement Syndicated Credit Facilities Maturity Date And Revolving Date [Member] | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Credit facilitites revolving date | May 31, 2022 | May 31, 2022 | ||||||||
Credit facilities maturity | November 30, 2022 | November 30, 2022 | ||||||||
[1] | The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving term loan that are due for renewal in 2022 and $54.9 million of senior notes and $16.0 million related to the PROP limited recourse amortizing loan that both mature in 2022. Refer to Note 6 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Long-term debt - Estimated Fair
Long-term debt - Estimated Fair Values of Principal and Interest Obligations of Outstanding Senior Secured Notes (Detail) - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | $ 54.4 | $ 49.3 |
2008 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | 4.7 | 4.3 |
2010 Q1 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | 11.3 | 10.2 |
2010 Q4 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | 24.3 | 22 |
2011 notes [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Senior notes | $ 14.1 | $ 12.8 |
Long-term debt - Detailed Infor
Long-term debt - Detailed Information About In Financing Expense (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement [Line Items] | ||
Interest on bank debt and senior notes | $ 27.1 | $ 22.8 |
PROP limited recourse loan | 0.2 | |
Advisor fees | 2.7 | 10.1 |
Deferred financing costs | 5.5 | 2.8 |
Unwinding discount on lease liabilities | 0.6 | 1.5 |
Debt modification | 1.3 | 0 |
Finance costs | $ 37.4 | $ 37.2 |
Lease Liabilities - Detailed In
Lease Liabilities - Detailed Information About In Lease Liabilities Included In Consolidated Balance Sheet (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lease liabilities [abstract] | ||
Balance, beginning of year | $ 10.4 | $ 113.8 |
Additions (terminations) | 2.1 | (98.6) |
Unwinding of discount on lease liabilities | 0.6 | 1.5 |
Lease payments | (4.4) | (6.3) |
Balance, end of year | 8.7 | 10.4 |
Current portion | 4.1 | 4.8 |
Long-term portion | $ 4.6 | $ 5.6 |
Lease Liabilities - Detailed _2
Lease Liabilities - Detailed Information About In Maturity Lease Payments (Detail) $ in Millions | Dec. 31, 2021CAD ($) |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | $ 12.7 |
2021 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 4.1 |
2022 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 2.9 |
2023 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.4 |
2024 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
2025 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Thereafter [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 5.1 |
Transportation [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 4.4 |
Transportation [member] | 2021 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 2.6 |
Transportation [member] | 2022 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 1.8 |
Transportation [member] | 2023 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Transportation [member] | 2024 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Transportation [member] | 2025 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Transportation [member] | Thereafter [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Vehicles [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 2.7 |
Vehicles [member] | 2021 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 1.4 |
Vehicles [member] | 2022 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 1 |
Vehicles [member] | 2023 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.3 |
Vehicles [member] | 2024 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Vehicles [member] | 2025 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Vehicles [member] | Thereafter [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0 |
Surface [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 5.6 |
Surface [member] | 2021 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | 2022 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | 2023 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | 2024 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | 2025 [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | 0.1 |
Surface [member] | Thereafter [member] | |
Statement [Line Items] | |
Undiscounted Finance lease payments to be paid | $ 5.1 |
Provisions - Summary of Provisi
Provisions - Summary of Provisions (Detail) - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of Provisions [line items] | |||
Decommissioning liability | $ 121.6 | $ 70.5 | $ 100.1 |
Office lease provision | 25.6 | 33.5 | $ 12.7 |
Total | 147.2 | 104 | |
Current portion | 23.4 | 16.3 | |
Long-term portion | 123.8 | 87.7 | |
Total | $ 147.2 | $ 104 |
Provisions - Additional Informa
Provisions - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021CAD ($)yr | Dec. 31, 2020CAD ($) | Dec. 31, 2019CAD ($) | |
Disclosure of provision matrix [line items] | |||
Decommissioning liability, inflation factor rate | 2.00% | 2.00% | |
Decommissioning liability, credit-adjusted rate | 9.00% | 9.00% | |
Decommissioning liability, expected useful life | yr | 50 | ||
Decommissioning liability | $ 121.6 | $ 70.5 | $ 100.1 |
Office lease provision, credit-adjusted discount rate | 6.50% | 6.50% | |
Decommissioning liability on undiscounted uninflated basis [member] | |||
Disclosure of provision matrix [line items] | |||
Decommissioning liability | $ 594.6 | $ 596.6 |
Provisions - Summary of Changes
Provisions - Summary of Changes to Decommissioning Liability (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of Provisions [line items] | ||
Balance, beginning of year | $ 70.5 | $ 100.1 |
Net liabilities added (disposed) | 0.1 | (0.4) |
Acquisition (Note 4) | 2.1 | |
Increase (decrease) due to changes in estimates | 62.2 | (28.6) |
Liabilities settled | (8.1) | (11.1) |
Government decommissioning assistance | (11) | (2.2) |
Transfers (to) from liabilities for assets held for sale | 7 | |
Accretion charges | 5.8 | 5.7 |
Balance, end of year | 121.6 | 70.5 |
Current portion | 14.5 | 7.3 |
Long-term portion | $ 107.1 | $ 63.2 |
Provisions - Summary of Chang_2
Provisions - Summary of Changes to Office Lease Provision (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of Provisions [line items] | ||
Balance, beginning of year | $ 33.5 | $ 12.7 |
Net additions (dispositions) | 27 | |
Increase (decrease) due to changes in estimates | (0.7) | 1 |
Settlements | (9.1) | (9.7) |
Accretion charges | 1.9 | 2.5 |
Balance, end of year | 25.6 | 33.5 |
Current portion | 8.9 | 9 |
Long-term portion | $ 16.7 | $ 24.5 |
Risk management - Additional In
Risk management - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021CAD ($)bblMcf | Dec. 31, 2020CAD ($) | ||
Disclosure of risk management strategy [line items] | |||
Senior notes | [1] | $ 376.4 | $ 455.3 |
Senior notes | $ 54.4 | 49.3 | |
Risk management, description | the Company may, from time to time, manage these risks through the use of swaps or other financial instruments up to a maximum of 50 percent of forecast sales volumes, net of royalties, for the balance of any current year plus one additional year forward and up to a maximum of 25 percent, net of royalties, for one additional year thereafter. | ||
Maximum exposure to credit risk | $ 70.7 | 41.6 | |
Accounts receivable, carrying value | 68.9 | 40.8 | |
Derivative financial assets, fair value | $ 1.8 | $ 0.8 | |
Percentage of long term debt instruments exposed to changes in short term interest rates | 82.00% | 87.00% | |
Fixed interest rate debt instruments outstanding | $ 70.9 | $ 60.3 | |
Fixed interest rate debt instruments average remaining term | 10 months 24 days | 10 months 24 days | |
Average interest rate | 8.70% | 5.20% | |
Later than three months [member] | |||
Disclosure of risk management strategy [line items] | |||
Accounts receivable, carrying value | $ 1.8 | $ 5.7 | |
Natural gas [member] | |||
Disclosure of risk management strategy [line items] | |||
Pre-tax unrealized risk management, change in price per unit | Mcf | 0.50 | ||
Maximum percentage of volumes to be hedged net of royalties | 80.00% | ||
CrudeOil [Member] | |||
Disclosure of risk management strategy [line items] | |||
Pre-tax unrealized risk management, change in price per unit | bbl | 1 | ||
Maximum percentage of volumes to be hedged net of royalties | 80.00% | ||
barrels of OIL [Member] | |||
Disclosure of risk management strategy [line items] | |||
Pre-tax unrealized risk management, change in price, amount | $ 0.4 | ||
MCF Of Gas [Member] | |||
Disclosure of risk management strategy [line items] | |||
Pre-tax unrealized risk management, change in price, amount | 1.2 | ||
Senior notes [member] | |||
Disclosure of risk management strategy [line items] | |||
Senior notes | $ 54.9 | $ 60.3 | |
[1] | The PROP limited recourse amortizing loan and associated net income on the 45 percent PROP partnership interested acquired in November 2021 is not included in the debt to capitalization calculations. |
Risk management - Summary of Re
Risk management - Summary of Reconciliation of Change in Fair Value of Financial Instruments Outstanding (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total fair value consists of the following: | ||
Current asset portion | $ 1.8 | $ 0.8 |
Current liability portion | (4.2) | (0.6) |
At fair value [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Balance, beginning of year | 0.2 | (0.6) |
Unrealized gain (loss) on financial instruments: | ||
Commodity collars and swaps | (2.6) | 0.8 |
Total fair value, end of year | (2.4) | 0.2 |
Total fair value consists of the following: | ||
Current asset portion | 1.8 | 0.8 |
Current liability portion | $ (4.2) | $ (0.6) |
Risk management - Schedule of F
Risk management - Schedule of Financial Instruments Outstanding (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2021CAD ($)bblMcf | |
Disclosure of detailed information about financial instruments [line items] | |
Financial Assets, at fair value | $ | $ (2.4) |
Q1 2022 [member] | AECO Swaps [Member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | Mcf | 25,591 |
Financial instruments, remaining term, description | Q1 2022 |
Financial instruments, benchmark pricing per unit | Mcf | 4.63 |
Financial Assets, at fair value | $ | $ 1.6 |
April 2022 – October 2022 | AECO Swaps [Member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 11,848 |
Financial instruments, remaining term, description | April 2022 – October 2022 |
Financial instruments, benchmark pricing per unit | 4.31 |
Oil [member] | W T I swaps [member] | Q1 2022 [member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 1,502 |
Financial instruments, remaining term, description | Q1 2022 |
Financial instruments, benchmark pricing per unit | 66.24 |
Financial Assets, at fair value | $ | $ (1.5) |
Oil [member] | W T I swaps [member] | Q2 2022 [member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 1,121 |
Financial instruments, remaining term, description | Q2 2022 |
Financial instruments, benchmark pricing per unit | 65.11 |
Financial Assets, at fair value | $ | $ (1) |
Oil [member] | W T I swaps [member] | Q3 2022 [member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 593 |
Financial instruments, remaining term, description | Q3 2022 |
Financial instruments, benchmark pricing per unit | 63.26 |
Financial Assets, at fair value | $ | $ (0.7) |
Oil [member] | W T I swaps [member] | Q4 2022 [member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 606 |
Financial instruments, remaining term, description | Q4 2022 |
Financial instruments, benchmark pricing per unit | 62.30 |
Financial Assets, at fair value | $ | $ (0.5) |
Oil [member] | W T I swaps [member] | January 2022 | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 2,000 |
Financial instruments, remaining term, description | January 2022 |
Financial instruments, benchmark pricing per unit | 97.25 |
Financial Assets, at fair value | $ | $ 0.2 |
Oil [member] | W T I swaps [member] | February 2022 | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 8,634 |
Financial instruments, remaining term, description | February 2022 |
Financial instruments, benchmark pricing per unit | 102.50 |
Oil [member] | W T I swaps [member] | March 2022 | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 7,500 |
Financial instruments, remaining term, description | March 2022 |
Financial instruments, benchmark pricing per unit | 108.72 |
Oil [member] | W T I Swaps [member] | January 2022 | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 6,016 |
Financial instruments, remaining term, description | January 2022 |
Financial instruments, benchmark pricing per unit | 99.34 |
Oil [member] | W T I Swaps [member] | April 2022 | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 500 |
Financial instruments, remaining term, description | April 2022 |
Financial instruments, benchmark pricing per unit | 115 |
Oil [member] | Heavy Oil Differential [member] | Q1 2022 [member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 939 |
Financial instruments, remaining term, description | Q1 2022 |
Financial instruments, benchmark pricing per unit | (17.45) |
Financial Assets, at fair value | $ | $ (0.3) |
Oil [member] | Heavy Oil Differential [member] | Q2 2022 [member] | |
Disclosure of detailed information about financial instruments [line items] | |
Financial instruments, notional volume | 801 |
Financial instruments, remaining term, description | Q2 2022 |
Financial instruments, benchmark pricing per unit | (15.43) |
Financial Assets, at fair value | $ | $ (0.2) |
Risk management - Schedule of_2
Risk management - Schedule of Financial Instruments Outstanding (Parenthetical) (Detail) | Dec. 31, 2021 | Nov. 24, 2021 |
Disclosure of detailed information about financial instruments [line items] | ||
Business combination, percentage of inetrest acquired | 45.00% | |
Peace River Oil Partnership [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Business combination, percentage of inetrest acquired | 100.00% | 45.00% |
Risk management - Components of
Risk management - Components of Risk Management on Consolidated Statements of Income (Loss) (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Realized risk management gain/loss on settlement of commodity contracts/assignment | $ (12) | $ 20.9 |
Total realized risk management gain (loss) | (12) | 20.9 |
Unrealized risk management gain/loss on commodity contracts | (2.6) | 0.8 |
Total unrealized risk management gain (loss) | (2.6) | 0.8 |
Risk management gain (loss) | $ (14.6) | $ 21.7 |
Risk management - Disclosure of
Risk management - Disclosure of Detailed Information about Accounts Receivable (Detail) - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of accounts receivables [line items] | ||
Accounts receivables | $ 68.9 | $ 40.8 |
Current [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | 62 | 29.5 |
Later than one month and not later than three months [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | 5.1 | 5.6 |
Later than three months [member] | ||
Disclosure of accounts receivables [line items] | ||
Accounts receivables | $ 1.8 | $ 5.7 |
Risk management - Summary of Es
Risk management - Summary of Estimated Future Obligations for Non-Derivative Financial Liabilities (Detail) - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of financial liabilities [line items] | |||
Long-term debt | $ 391 | [1] | $ 451.8 |
2022 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 391 | ||
Accounts payable & accrued liabilities | 95.5 | ||
Share-based compensation accrual | 12.3 | ||
Total | 498.8 | ||
2023 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 0 | ||
Accounts payable & accrued liabilities | 1.5 | ||
Share-based compensation accrual | 3.1 | ||
Total | 4.6 | ||
2024 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 0 | ||
Accounts payable & accrued liabilities | 0 | ||
Share-based compensation accrual | 2.2 | ||
Total | 2.2 | ||
2025 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 0 | ||
Accounts payable & accrued liabilities | 0 | ||
Share-based compensation accrual | 0 | ||
Total | 0 | ||
2026 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 0 | ||
Accounts payable & accrued liabilities | 0 | ||
Share-based compensation accrual | 0 | ||
Total | 0 | ||
Thereafter [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 0 | ||
Accounts payable & accrued liabilities | 0 | ||
Share-based compensation accrual | 0 | ||
Total | $ 0 | ||
[1] | The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving term loan that are due for renewal in 2022 and $54.9 million of senior notes and $16.0 million related to the PROP limited recourse amortizing loan that both mature in 2022. Refer to Note 6 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Risk management - Summary of _2
Risk management - Summary of Estimated Future Obligations for Non-Derivative Financial Liabilities (Parenthetical) (Detail) - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of financial liabilities [line items] | |||
Long-term debt | $ 391 | [1] | $ 451.8 |
2022 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 391 | ||
Syndicated credit facility [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | 321.5 | $ 395 | |
Syndicated credit facility [member] | 2022 [member] | |||
Disclosure of financial liabilities [line items] | |||
Long-term debt | $ 321.5 | ||
[1] | The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving term loan that are due for renewal in 2022 and $54.9 million of senior notes and $16.0 million related to the PROP limited recourse amortizing loan that both mature in 2022. Refer to Note 6 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Revenue and Other Income - Disc
Revenue and Other Income - Disclosure of Significant Revenue (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | $ 477.5 | $ 275.4 |
Processing fees | 6.4 | 6.3 |
Sales of commodities purchased from third parties | 13.6 | 4.8 |
Other income | 6 | 13 |
Oil and natural gas sales and other income | 503.5 | 299.5 |
Crude oil [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | 362.9 | 213.1 |
Natural gas liquids [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | 38.2 | 16.3 |
Natural gas [member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Production revenues | 76.4 | 46 |
Oil and natural gas sales [Member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Other income | $ 483.9 | $ 281.7 |
Revenue and Other Income - Addi
Revenue and Other Income - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Other income | $ 0.3 | |
Road Use Recoveries [Member] | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Other income | $ 6 | $ 5.4 |
Income taxes - Summary of Provi
Income taxes - Summary of Provision for Income Taxes Reflects Effective Tax Rate (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure representing major components of tax expense income [line items] | ||
Income (loss) before taxes | $ 414 | $ (771.7) |
Combined statutory tax rate | 23.00% | 24.00% |
Computed income tax expense (recovery) | $ 95.2 | $ (185.2) |
Increase (decrease) resulting from: | ||
Share-based compensation | 0.5 | 0.5 |
Non-taxable foreign exchange (gain) loss | (0.1) | (0.3) |
Unrecognized deferred tax asset | (69.9) | 178.2 |
Adjustments related to prior years | (27.1) | (0.9) |
Tax rate reductions | 0 | 7.6 |
Other | 1.4 | 0.1 |
Deferred tax recovery | $ 0 | $ 0 |
Income taxes - Summary of Net D
Income taxes - Summary of Net Deferred Income Tax Liability (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | $ 0 | $ 0 |
Provision (Recovery) in Income | 0 | 0 |
Ending Balance | 0 | 0 |
PP&E [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | 86.5 | 282.5 |
Provision (Recovery) in Income | 67 | (196) |
Ending Balance | 153.5 | 86.5 |
Risk Management [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | 0 | |
Provision (Recovery) in Income | (0.5) | |
Ending Balance | (0.5) | 0 |
Leases [Member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (10.1) | (20) |
Provision (Recovery) in Income | 2.2 | 9.9 |
Ending Balance | (7.9) | (10.1) |
Decommissioning liability [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (16.6) | (24.6) |
Provision (Recovery) in Income | (11.3) | 8 |
Ending Balance | (27.9) | (16.6) |
Share-based Compensation [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (0.4) | (0.2) |
Provision (Recovery) in Income | (3.6) | (0.2) |
Ending Balance | (4) | (0.4) |
Non-capital Losses [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Beginning Balance | (59.4) | (237.7) |
Provision (Recovery) in Income | (53.8) | 178.3 |
Ending Balance | $ (113.2) | $ (59.4) |
Income taxes - Additional Infor
Income taxes - Additional Information (Detail) - CAD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Jul. 31, 2020 | Jun. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||||
Tax pool | $ 2,500 | $ 2,500 | ||
Non-capital losses | 2,100 | 2,200 | ||
Non-capital losses for which deferred tax asset has not been recognized | 1,646.2 | 1,950.4 | ||
Realized and unrealized net capital losses | $ 591.5 | $ 595 | ||
Provincial Corporate Income Tax Rate | 8.00% | 10.00% | ||
Combined statutory tax rate | 23.00% | |||
Tax benefit arising from federal scientific research and development | $ 61.3 |
Shareholders' equity - Addition
Shareholders' equity - Additional Information (Detail) - CAD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2021 | Nov. 24, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Common shares [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Number of authorized common shares | An unlimited number of Common Shares. | ||||
Number of shares issued | 80,753,516 | 80,753,516 | 73,516,225 | 73,011,488 | |
Preferred shares [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Number of authorized preferred shares | 90,000,000 | 90,000,000 | |||
Number of authorized common shares | shares issuable in one or more series. | ||||
Number of shares issued | 0 | 0 | |||
Number of shares outstanding | 0 | 0 | |||
Peace River Oil Partnership [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Numer of shares issued in business combination | 5,880,681 | 5,880,681 | |||
Business acquisition share price | $ 4.40 | ||||
Gross proceeds from business combination | $ 25.9 | $ 25.9 | $ 35.2 | ||
Share issuance costs in business combination | $ 1.7 | $ 3.5 |
Shareholders' equity - Summary
Shareholders' equity - Summary of Issued Capital (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Disclosure of classes of share capital [line items] | |||
Balance, beginning of year | $ 2,187 | ||
Issued pursuant to equity compensation plans | (0.1) | ||
Balance, end of year | 2,213.8 | $ 2,187 | |
Common shares [member] | |||
Disclosure of classes of share capital [line items] | |||
Balance, beginning of year | 2,187 | 2,186.7 | |
Issued pursuant to equity compensation plans | [1] | 2.6 | 0.3 |
Equity issue | 25.9 | ||
Share issue costs | (1.7) | ||
Balance, end of year | $ 2,213.8 | $ 2,187 | |
Balance, beginning of year | 73,516,225 | 73,011,488 | |
Issued pursuant to equity compensation plans | [1] | 1,356,610 | 504,737 |
Equity issue | 5,880,681 | ||
Share issue costs, net of deferred tax ($nil) | 0 | ||
Balance, end of year | 80,753,516 | 73,516,225 | |
[1] | Upon vesting or exercise of equity awards, the net benefit is recorded as a reduction of other reserves and an increase to shareholders’ capital. |
Shareholders' equity - Summar_2
Shareholders' equity - Summary of Other Reserves (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of reserves within equity [line items] | ||
Balance, beginning of year | $ 103.6 | $ 101.8 |
Share-based compensation expense | 2.3 | 2.1 |
Net benefit on options exercised | (2.7) | (0.3) |
Balance, end of year | $ 103.2 | $ 103.6 |
Share-based compensation - Summ
Share-based compensation - Summary of Restricted Share Units Plan (Detail) - Restricted share unit plan [member] | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Outstanding, beginning of year | 2,355,408 | 1,100,278 |
Granted | 190,500 | 1,818,840 |
Vested | (1,344,672) | (510,738) |
Forfeited | (33,885) | (52,972) |
Outstanding, end of year | 1,167,351 | 2,355,408 |
Share-based compensation - Su_2
Share-based compensation - Summary of Weighted Average Assumptions of RSU Plan Units Under Equity Method (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Expected forfeiture rate | 0.50% | 0.60% |
Restricted share unit plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Average fair value of units granted (per unit) | $ 1.99 | $ 0.55 |
Expected life of units (years) | 1.0 | 3.0 |
Expected forfeiture rate | 0.60% |
Share-based compensation - Su_3
Share-based compensation - Summary of Performance Share Unit Plan (Detail) - PSU Plan [member] - Options granted from June 2017 [member] | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Outstanding, beginning of year | 453,845 | 92,424 |
Granted | 684,620 | 376,310 |
Vested | (10,716) | |
Forfeited | (4,173) | |
Outstanding, end of year | 1,138,465 | 453,845 |
Share-based compensation - Su_4
Share-based compensation - Summary of Stock Option Activity and Related Information (Detail) - Options [member] | 12 Months Ended | |
Dec. 31, 2021$ / shares | Dec. 31, 2020$ / shares | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of Options Outstanding, beginning of year | 961,954 | 89,178 |
Number of Options, Granted | 2,116,120 | 917,490 |
Number of Options, Exercised | (11,938) | |
Number of Options, Forfeited | (44,464) | (44,714) |
Number of Options Outstanding, end of year | 3,021,672 | 961,954 |
Number of Options Exercisable, end of year | 748,438 | 44,464 |
Weighted Average Exercise Price Outstanding, beginning of year | $ 0.94 | $ 10.41 |
Weighted Average Exercise Price, Granted | 1.99 | 0.56 |
Weighted Average Exercise Price, Exercised | 0.56 | |
Weighted Average Exercise Price, Forfeited | 8.74 | 12.06 |
Weighted Average Exercise Price, Outstanding, end of year | 1.56 | 0.94 |
Weighted Average Exercise Price, Exercisable, end of year | $ 1.29 | $ 8.74 |
Share-based compensation - Su_5
Share-based compensation - Summary of Non Treasury Incentive Award Plan and Deferred Share Unit (Detail) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Non-Treasury Incentive Awards Plan [member] | ||
Statement [Line Items] | ||
Outstanding, beginning of year | ||
Granted | 1,120,660 | |
Forfeited | (26,860) | |
Outstanding, end of year | 1,093,800 | |
Deferred Share Units Plan | ||
Statement [Line Items] | ||
Outstanding, beginning of year | 2,087,580 | 847,100 |
Granted | 239,754 | 1,297,669 |
Exercised | (308,835) | (57,189) |
Outstanding, end of year | 2,018,499 | 2,087,580 |
Share-based compensation - Addi
Share-based compensation - Additional Information (Detail) - CAD ($) $ / shares in Units, $ in Millions | Aug. 01, 2021 | May 01, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of classes of share capital [line items] | ||||
Weighted average share price | $ 5.21 | $ 0.87 | ||
Employer contributions to employee retirement savings plan percentage of employee contribution | $1.00 for each $1.00 of employee contribution | |||
Percentage of employees contribution | 10.00% | |||
Employer contribution per share | $ 0.50 | $ 0.50 | ||
Employee [Member] | ||||
Disclosure of classes of share capital [line items] | ||||
Employer contribution per share | $ 1 | $ 1 | ||
Employee [Member] | Bottom of range [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Percentage of employees contribution | 10.00% | |||
Employee [Member] | Top of range [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Percentage of employees contribution | 25.00% | |||
Officers [Member] | ||||
Disclosure of classes of share capital [line items] | ||||
Percentage of employees contribution | 50.00% | |||
Deferred share unit [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Share based compensation current liability | $ 10.7 | $ 1.9 | ||
Performance Share Unit Plan [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Share based compensation current liability | 0.2 | |||
Share based compensation noncurrent liability | 4.2 | |||
Share based compensation Recognized liabilities | 4.4 | 0.1 | ||
Non Treasury Incentive Awards Plan [Member] | ||||
Disclosure of classes of share capital [line items] | ||||
Share based compensation current liability | 1.4 | |||
Share based compensation noncurrent liability | 1.1 | |||
Share based compensation Recognized liabilities | $ 2.5 | $ 0 |
Share-based compensation - Su_6
Share-based compensation - Summary of Fair Value and Weighted Average Assumptions of the Options Granted (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Average fair value of options granted (per option) | $ 1.11 | $ 0.29 |
Expected volatility | 86.90% | 83.60% |
Expected life of options (years) | 3 years 4 months 24 days | 3 years 3 months |
Expected forfeiture rate | 0.50% | 0.60% |
Share-based compensation - Su_7
Share-based compensation - Summary of Share-Based Compensation (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | $ 19.4 | $ 3.4 |
RSU grants [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | 1.1 | 2 |
PSU grants [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | 4.3 | 0.1 |
Options [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | 1.2 | 0.1 |
Non-Treasury Incentive Awards Plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | 2.5 | |
DSU Plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | $ 10.3 | $ 1.2 |
Per share amounts - Disclosure
Per share amounts - Disclosure of Detailed Information about Net Loss Basic and Diluted (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings per share [line items] | ||
Net income (loss) – basic and diluted | $ 414 | $ (771.7) |
Per share amounts - Disclosur_2
Per share amounts - Disclosure of Detailed Information about Weighted Average Number of Shares Per Share (Detail) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings per share [line items] | ||
Basic | 75.1 | 73.3 |
Dilutive impact of stock option/ RSUs | 2.5 | |
Diluted | 77.6 | 73.3 |
Per share amounts - Additional
Per share amounts - Additional Information (Detail) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings per share [line items] | ||
Anti-dilutive securities issued under option plan | 0 | 3.3 |
Changes in non-cash working c_3
Changes in non-cash working capital increase (decrease) - Summary of Changes in Non-cash Working Capital (Increase) Decrease (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of Increase Decrease In Non-cash Working Capital [line items] | ||
Restricted cash | $ 2.4 | |
Accounts receivable | $ (28.1) | 22.6 |
Prepaid expenses and other | (1.7) | 0.6 |
Accounts payable and accrued liabilities | 40 | (41.3) |
Acquisition (Note 4) | 2.8 | |
Net changes in non cash working capital | 13 | (15.7) |
Operating activities | (5.1) | (6.6) |
Investing activities | 18.1 | (9.1) |
Net changes in non cash working capital | 13 | (15.7) |
Interest paid in cash | 30.1 | $ 25.5 |
Income taxes paid (recovered) in cash |
Capital management - Summary of
Capital management - Summary of Financial Covenants Under Lending Agreements (Detail) - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Components of capital | |||||
Shareholders' equity | $ 763.5 | $ 323.1 | $ 1,092.7 | ||
Credit facility, term loan and senior secured notes | $ 392.4 | $ 455.3 | |||
Ratios | |||||
Senior debt to capitalization | [1] | 33.00% | 59.00% | ||
Total debt to capitalization | [1] | 33.00% | 59.00% | ||
Credit facility and senior secured notes | [2] | $ 376.4 | $ 455.3 | ||
Long-term debt | 391 | [3] | 451.8 | ||
Total shareholders' equity for covenants | 769.4 | 323.1 | |||
Total capitalization | 1,150.4 | 783.3 | |||
Letters of credit [member] | |||||
Ratios | |||||
Long-term debt | [4] | 4.6 | 4.9 | ||
Senior debt and total debt [member] | |||||
Ratios | |||||
Long-term debt | $ 381 | $ 460.2 | |||
[1] | Not to exceed 75 percent. | ||||
[2] | The PROP limited recourse amortizing loan and associated net income on the 45 percent PROP partnership interested acquired in November 2021 is not included in the debt to capitalization calculations. | ||||
[3] | The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving term loan that are due for renewal in 2022 and $54.9 million of senior notes and $16.0 million related to the PROP limited recourse amortizing loan that both mature in 2022. Refer to Note 6 for further details. Historically, the Company has successfully renewed its syndicated credit facility. | ||||
[4] | Letters of credit defined as financial under the lending agreements are included in the calculation. |
Capital management - Summary _2
Capital management - Summary of Financial Covenants Under Lending Agreements (Parenthetical) (Detail) | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of objectives, policies and processes for managing capital [line items] | ||
Maximum senior debt to capitalization | 75.00% | |
Maximum total debt to capitalization | 75.00% | |
Maximum priority debt to consolidated tangible assets | 15.00% |
Commitments and contingencies -
Commitments and contingencies - Summary of Certain Payments Over the Next Five Years (Detail) - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | ||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | $ 391 | [1] | $ 451.8 | |
Transportation | 17.9 | |||
Interest obligations | 22.1 | |||
Office lease | 30.8 | |||
Lease liability | 12.7 | |||
Decommissioning liability | 121.6 | |||
Total | 596.1 | |||
2022 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | [1] | 391 | ||
Transportation | 3.6 | |||
Interest obligations | 22.1 | |||
Office lease | 10 | |||
Lease liability | 4.1 | |||
Decommissioning liability | 14.5 | |||
Total | 445.3 | |||
2023 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Transportation | 3.5 | |||
Office lease | 10 | |||
Lease liability | 2.9 | |||
Decommissioning liability | 12.6 | |||
Total | 29 | |||
2024 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Transportation | 2.7 | |||
Office lease | 10 | |||
Lease liability | 0.4 | |||
Decommissioning liability | 11.8 | |||
Total | 24.9 | |||
2025 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Transportation | 2.2 | |||
Office lease | 0.8 | |||
Lease liability | 0.1 | |||
Decommissioning liability | 11.1 | |||
Total | 14.2 | |||
2026 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Transportation | 1.7 | |||
Lease liability | 0.1 | |||
Decommissioning liability | 10.4 | |||
Total | 12.2 | |||
Thereafter [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Transportation | 4.2 | |||
Lease liability | 5.1 | |||
Decommissioning liability | 61.2 | |||
Total | $ 70.5 | |||
[1] | The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving term loan that are due for renewal in 2022 and $54.9 million of senior notes and $16.0 million related to the PROP limited recourse amortizing loan that both mature in 2022. Refer to Note 6 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Commitments and contingencies_2
Commitments and contingencies - Summary of Certain Payments Over the Next Five Years (Parenthetical) (Detail) - CAD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | ||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | $ 391 | [1] | $ 451.8 | |
2022 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | [1] | 391 | ||
Bankers acceptances and prime rate loans [member] | 2022 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | 321.5 | |||
Senior notes [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | 54.9 | |||
PROP limited recourse | ||||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | 16 | |||
PROP limited recourse | 2022 [member] | ||||
Disclosure of commitments and contingencies [line items] | ||||
Long-term debt | $ 16 | |||
[1] | The 2022 figure includes $321.5 million related to the syndicated credit facility and non-revolving term loan that are due for renewal in 2022 and $54.9 million of senior notes and $16.0 million related to the PROP limited recourse amortizing loan that both mature in 2022. Refer to Note 6 for further details. Historically, the Company has successfully renewed its syndicated credit facility. |
Commitments and contingencies_3
Commitments and contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2021CAD ($) | |
Disclosure of commitments and contingencies [line items] | |
Defense costs | $ 6.4 |
Number of Months amortized defense cost equally over period | 30 months |
Related-party transactions - Su
Related-party transactions - Summary of Compensation of Key Management Personnel (Detail) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Disclosure of transactions between related parties [line items] | |||
Salary and employee benefits | $ 4.5 | $ 4.5 | |
Share-based payments | [1] | 15.1 | 1.7 |
Key Management Personnel Compensation | $ 19.6 | $ 6.2 | |
[1] | Includes changes in the fair value of PSUs, DSUs and non-cash charges related to the Option Plan and RPSU plan (equity method) for key management personnel. |
Related-party transactions - Ad
Related-party transactions - Additional information (Detail) | Dec. 31, 2021 | Nov. 24, 2021 |
Disclosure of transactions between related parties [line items] | ||
Business combination, percentage of inetrest acquired | 45.00% | |
Peace River Oil Partnership [member] | ||
Disclosure of transactions between related parties [line items] | ||
Business combination, percentage of inetrest acquired | 100.00% | 45.00% |
Peace River Oil Partnership [member] | Top of range [member] | ||
Disclosure of transactions between related parties [line items] | ||
Business combination, percentage of inetrest acquired | 100.00% |
Supplemental Items - Additional
Supplemental Items - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expense [member] | ||
Supplemental Information [line items] | ||
Employee compensation costs | $ 13.5 | $ 13 |
General and administrative expense [member] | ||
Supplemental Information [line items] | ||
Employee compensation costs | $ 18.4 | $ 15.7 |
Government grants - Additional
Government grants - Additional Information (Detail) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Government Grants [Line Items] | ||
Grant received from government | $ 11 | $ 2.2 |
Decrease in operating costs | 129.5 | 115.4 |
Canadian Emergency Wage Subsidy [Member] | ||
Government Grants [Line Items] | ||
Grant received from government | 0.5 | 3.5 |
Decrease in operating costs | 0.3 | |
Decrease in General and administrative costs | 0.1 | |
Decrese in Capital expenditure | 0.1 | |
Alberta Site Rehabilitation Program [Member] | ||
Government Grants [Line Items] | ||
Decrese in Capital expenditure | $ 11 | $ 2.2 |