By Susan V. Thompson
An agreement has been reached between the Woodland Cree First Nation and Obsidian Energy (TSX: OBE) (NYSE American: OBE) after a dispute that saw oil production shut down by a traditional indigenous camp near Peace River.
As of Tuesday June 11, the traditional camp has been disbanded. Production has resumed in the South Harmon Valley field, where Obsidian is planning to put in another 200 wells. The field was producing at an approximate rate of 4,500 net boe per day before production was first shut down on May 12.
Obsidian immediately responded to the establishment of the camp with a court injunction, and a further direction to the courts to arrest WCFN Chief Isaac Laboucan-Avirom. In response, Chief Laboucan-Avirom burned the injunction in the camp fire, saying he was filing the legal paperwork, “with the great Spirit.” Chiefs of Treaty 8 First Nations from across the prairie provinces including Grand Chief Arthur Noskey then came together to announce they were backing WCFN leadership.
A third party mediator was used to come to the new agreement, which has a term lasting until the end of 2025.
“We look forward to a strong, collaborative and respectful relationship with the WCFN,” says Stephen Loukas, Obsidian Energy’s President and Chief Executive Officer, in a statement released by the energy company. “The Company and the WCFN engaged in extensive discussions with the help of a mediator to arrive at a fair and equitable agreement that is beneficial to both parties.”
Local oilfield contractors such as Ruel Concrete, Weaver Welding, and MDP Oilfield Services had also supported the WCFN camp by parking their heavy equipment along the Walrus Road.
Michel Pelchat, owner of MDP Oilfield Services, says, “I’m thinking it’s very good that WCFN has an agreement with Obsidian. Obsidian [will] hopefully use local contractors to do the work out there too.”
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