Summary Obsidian can grow steadily within cash flows. Debt level remains high but will slowly fall. Obsidian has good leverage to higher oil prices. Obsidian Energy (NYSE: OBE ) has published guidance for 2019 that shows modest growth. All figures in this article are Canadian funds. Source: Obsidian website Obsidian expects to achieve capital efficiencies less than $20,000 per boe per day on its development capital. I have used $19,000 to model the outlook for Obsidian. Based on those parameters, my OBE model shows the company able to turn in steady growth while retiring debt. I see production rising faster than Obsidian projects if the capital efficiencies the company estimates are realized. I presume management’s projection is simply conservative. Source: Author analysis based on Obsidian data I have based my model on a Canadian oil price of $45 per barrel and a natural gas price of $2.00 per Mcf ($12.20 per barrel equivalent). I have not included any hedging gains or losses since I understand Obsidian has decided against any material amount of hedging in 2019. I have used Obsidian’s $120 million planned capital program but recognize that the company may expand that program if commodity prices permit it […]