Western Canada’s key petroleum producer Penn West formally changed its name to Obsidian Energy in June 2017. As the CEO, Dave French pointed out; they chose the name as an indication of its commitment to the pursuit of excellence and accountability in its services to customers, investors, and the community. However, the name change is only part of a major transformation process in the company.
Lesson from crisis
Penn West had thrived in the evolving sector for years since it began operations. The number of shareholders had risen to nearly 200 million, and its daily production stood at 135,000 barrels. Unfortunately, it experienced a financial crisis and accountability issues which almost caused an untimely death to the mid-size petroleum products producer. Instead of giving up, the stakeholders noted their lessons and began to redefine the firm’s operations and limits.
Between 2014 and 2016, the company took time handling its external issues. It reduced debts from $3 billion at the beginning of the period to $384 million in 2016. It also cleared the investors’ lawsuits that resulted from its integrity issues. At the beginning of 2017, the management began in-house reorganization. It culminated the process by game-changing resolutions which it shared with the shareholders. Refer to This Page.
Creation of Obsidian Energy
The proposal had five resolutions that would redefine the firm’s, management, share capital, executive compensation, accountability and scope of operations. Changing the name of the company from Penn West Petroleum Ltd to Obsidian Energy was also one of the resolutions. The management considered the change necessary as an indication of the organization’s paradigm shift. In June 2017, the shareholders voted in favor of all the recommendations.
Leaner but stronger
Obsidian critical focus is providing quality to its clients, shareholders, and investors. To achieve this, they narrowed the scope of their production from 30 areas to four. Consequently, daily production reduced by nearly 80% to 28,000 barrels. The number of employees and share capital was also cut down significantly. Obsidian has several subsidiaries including Canetic Resources Trust, Endev Resources Partnership, and Sifton Energy Inc. Currently, the company has approximately 300 employees on staff. According to, Obsidian Energy’s CEO, the company has reemerged leaner but stronger and more capable of handling the dynamics of the industry.