Following the survival of several devastating setbacks that included an internal accounting scandal, crisis surrounding company debt, and a crash in the price of commodities Penn West Commodities, LTD. sought to change their image and name when becoming known to the world as Obsidian Energy LTD.
David French, the man entrusted to be the company Chief Executive Officer as it undergoes the needed transformation, explains that the Calgary based oil company only executed the name change after receiving approval from shareholders of the company. French feels that this was an important gesture in order to make it known that the company would no longer be operating as if there is no shareholder or public accountability.
The problems for Penn West began in 2014 when the company went public with the information that an accounting error had resulted in the misclassification of hundreds of millions of dollars’ worth of expenses. The mistake made it necessary for Penn West to provide new financial reports for a three-year period beginning 2012. Go To This Page for additional information.
A class action lawsuit was also settled with shareholders
Now Obsidian Energy has made a number of shrewd moves to restore the health of the company. Sales of assets made it possible for the company to lower their debt from a high of $3 billion to $384 million.
The company has also adopted a sleeker method of operations as the number of employees working from the company is down to 300 from a high of 1,400. The company also reports that it will now focus on four vital production areas where it once conducted business in 30 areas. The company has also reduced its production of oil by nearly 80% and now produces 28,000 barrels per day.
French says the name Obsidian was chosen to reflect the company’s ability to be sharpened and honed in a way similar to the volcanic glass that is now its namesake.
The company was at the apex of its success and was even among the sixty most prominent firms in the Toronto stock Exchange and was also a Canadian Royalty Trust (CANROY).