Canadian First Nation rejects Obsidian Energy drilling expansion plans

Obsidian Energy

06/05/2024 22:52

May 6 (Reuters) - Canada's Woodland Cree First Nation
has rejected oil and gas producer Obsidian Energy's  OBE.TO 
proposal to expand drilling operations on its traditional
territory, the Indigenous community said in a statement on
Monday.
    
    WHY IT'S IMPORTANT
    The formal notice that Woodland Cree's chief and council
have rejected Obsidian's drilling plans mark a further breakdown
in relations, after the First Nation initially raised concerns
about the company's activities on their territory in northern
Alberta in February.
    The community urged Obsidian to address their concerns about
a series of earthquakes in their territory in late 2022 and
early 2023, that regulators said Obsidian were responsible for. 
  
    
    CONTEXT
    Calgary-based Obsidian produces around 6,500 barrels of oil
equivalent per day (boepd), or 20% of its total production, from
assets in the Peace River region, some of which are within
Woodland Cree territory.
    
    MARKET REACTION
    Obsidian shares were last down 0.4% at C$10.90 on the
Toronto Stock Exchange.
    Analysts at brokerage Stifel said that while the rejection
would not have a meaningful impact on Obsidian's short-term
outlook, because the company already had well licenses in hand,
it was not ideal for longer-term plans in the region.
    
    THE REACTION
    Obsidian did not immediately respond to a request for
comment.


 (Reporting by Nia Williams in British Columbia; Editing by
Stephen Coates)
 ((nia.williams@thomsonreuters.com; +1 403 531 1624; Reuters
Messaging: nia.williams.thomsonreuters.com@reuters.net))