Obsidian Energy (OBE.TO) Buy, Sell or Hold

Obsidian Energy (OBE.TO)

14.52

-1.99 (12.05%)

as of Nov 2, 2026, 9:00:00 pm Market Closed.

128 watching

DON'T BUY

Reserve life is probably the single most important impact on the stock. Oil/gas royalty trusts can no longer tap capital markets for secondary rounds of financing and are now saddled with pretty marginal assets and weak balance sheets. Would prefer Vermilion Energy (VET.UN-T) or Royal Dutch Shell (RDS.A-N), which pays 7%.

SELL

(Market Call Minute.) Too expensive on its forward earnings. Better opportunities elsewhere such as Fort Chicago (FCE.UN-T).

COMMENT

Has a great land spread but management has never shown it is able to take advantage of it. He is holding this basically for yield. All the oil/gas income trusts will run up if the price of oil runs up.

DON'T BUY

Have continued to show disappointing operational performance. Overvalued.

DON'T BUY

In the past 5 years they have been a very active acquirer. His concern is their fairly high debt level. Depleting reserves by about 40,000 barrels per day and to replace will be expensive.

DON'T BUY

One of the larger producers with an equal weighting in gas and oil. It requires a lot of Cap X to keep its production flat. Not a sustaining producer. Have good sheltering ability when the tax horizon meets them in 2011. There are others he prefers.

DON'T BUY

(Market Call Minute.) Coming out of a trust structure is facing a lot of headwinds. Doesn't like this one.

SELL

(Market Call Minute.) It has never hit its production numbers. Very complicated asset base. There are simpler alternatives in energy.

DON'T BUY

(Market Call Minute) Hold or you are better off buying some one like a Crescent Point.

SELL

Could be more oil weighted. Caller is talking about selling this and buying NAL Oil & Gas (NAE.UN-T). A reasonable call but he would prefer buying Baytex (BTE.UN-T).

BUY

(Market Call Minute.) Likes it. They've done the distribution cut. Pays while you wait.

HOLD

(Market Call Minute.) One of the larger trusts at 160,000 BOEs per day. Think they will have problems going forward but will probably make some very astute acquisitions.

WEAK BUY

Just cut distributions and the price got hit. Has had some operating issues and he would prefer other names.

COMMENT

Trust space is in a funk. You have to know which ones are going to survive to the conversion date of 2011 and also, which ones are going to cut and how many times. Expect more distribution cuts in the energy space. This one has a 28.8% yield.

DON'T BUY

One of the bigger energy trusts. Biggest issue they had was not getting good enough returns on capital they were spending. Better names such as Crescent Point (CPG.UN-T), Vermilion (VET.UN-T), Arc (AET.UN-T) and Enerplus (ERF.UN-T).

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Obsidian Energy (OBE.TO)