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OBSIDIAN ENERGY LTD. (TSX:OBE) (NYSE:OBE) ("Obsidian Energy", the "Company", "we", "us" or "our") is pleased to announce that the Toronto Stock Exchange (the "TSX") has accepted Obsidian Energy's notice of intention to commence a normal course issuer bid (the "NCIB"). The NCIB allows Obsidian Energy to purchase up to 8,073,847 common shares (representing 10 percent of Obsidian Energy's public float, as defined by the TSX, as of February 13, 2023) over a period of twelve months commencing on February 27, 2023. On February 13, 2023, Obsidian Energy had 82,442,210 common shares outstanding and 80,738,477 common shares in its public float. The NCIB will expire no later than February 26, 2024.
Under the NCIB, common shares may be repurchased through the facilities of the TSX, the NYSE American stock exchange, other designated exchanges and/or alternative trading systems, or as otherwise permitted under applicable securities laws. Purchases under the NCIB will be made through open market purchases at market price, as well as by other means as may be permitted under applicable securities laws. The NCIB will be effected in accordance with the TSX normal course issuer bid rules and/or Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended, which contain restrictions on the number of common shares that may be purchased on a single day, subject to certain exceptions for block purchases, based on the average daily trading volumes of Obsidian Energy's common shares on the applicable exchange.
The total number of common shares Obsidian Energy is permitted to purchase on the TSX is subject to a daily purchase limit of 85,192 common shares, representing 25 percent of the average daily trading volume of 340,769 common shares on the TSX calculated for the six-month period ended January 31, 2023; however, Obsidian Energy may make one block purchase per calendar week on the TSX which exceeds such daily repurchase restrictions. Any common shares that are purchased under the NCIB will be cancelled upon their purchase by Obsidian Energy.
The actual number of common shares that may be purchased under the NCIB and the timing of any such purchases will be determined by Obsidian Energy. The Company believes that, at times, the prevailing share price does not reflect the underlying value of the common shares and the repurchase of its common shares for cancellation represents an attractive opportunity to enhance Obsidian Energy's per share metrics and thereby increase the underlying value of Obsidian Energy's common shares to its shareholders.
In connection with the NCIB, Obsidian Energy has established an automatic securities purchase plan with a designated broker whereby common shares may be repurchased at times when such purchases would otherwise be prohibited pursuant to regulatory restrictions or self-imposed blackout periods. Under the automatic securities purchase plan, before entering into a self-imposed blackout period, Obsidian Energy may, but is not required to, request that the designated broker make purchases under the NCIB. Such purchases will be made at the discretion of the designated broker, within parameters established by the Company prior to the blackout periods. Outside of the blackout periods, purchases are made at the discretion of Obsidian Energy's management. The automatic securities purchase plan constitutes an "automatic plan" for purposes of applicable Canadian securities legislation and has been pre-cleared by the TSX.
