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Obsidian mulls strategic alternatives

Canadian independent considering potential asset sales or corporate merger

Canadian independent Obsidian Energy is considering strategic alternatives, including potential asset sales or corporate merger,in an effort to boost shareholder value.

The company announcement comes two weeks after Highwood Energy cancelled its planned acquisition of Obsidian's Alberta heavy oil assets.

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On Tuesday, Obsidian said it had hired Tudor Pickering Holt as its financial advisor in the strategic review process.

"Such strategic alternatives may include, but are not limited to, a corporate sale, merger or other business combination, a disposition of all or a portion of the company's assets, a recapitalisation, refinancing of its capital structure, or any combination of the foregoing," Obsidian said.

The company has struggled in the downturn and in July posted its eighth straight quarter of losses.

Obsidian has focused on its Cardium light oil play in Alberta and said it believed the review process would "allow for consideration of consolidation within the Cardium play in Alberta". Such consolidation "may allow for the creation of additional scale, efficiency and financial strength", the company added.

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