FrontFour Capital Group LLC together with its affiliates, a significant shareholder of Obsidian Energy Ltd. (TSX/NYSE: OBE), today issued an open letter to the Company's stockholders. The full text of the letter follows:

March 20, 2018

Dear Fellow Shareholders,

As previously disclosed, FrontFour Capital Group LLC (together with its affiliates, "FrontFour" or "we") and its principals are significant long-term shareholders of Obsidian, collectively beneficially owning over 31 million shares, representing approximately 6.2% of Obsidian's outstanding shares. Since issuing our first public letter to shareholders on January 17, 2018, Obsidian's shareholders have expressed a common theme of frustration with Obsidian's inconsistent and unsound strategic plan, flawed hedging strategy and poor leadership team. Accordingly, we are announcing our intention to nominate four highly qualified directors for election at Obsidian's 2018 annual general meeting.We intend to formally nominate our highly qualified candidates once the meeting has been called.

In the weeks to come, FrontFour will release its detailed value creation strategy at Obsidian, initially centered on streamlining the Company's organizational profile via:

• the disposition of the Company's remaining non-core legacy gas-weighted production; and
• the divestiture of Obsidian's operations in the Alberta Viking and Peace River.

Obsidian has the ability to aggressively shift the drilling program to the higher return Cardium, where the Company has a deep and enviable inventory. Given the size and resources of Obsidian it is very important to bring focus to the portfolio. While the Alberta Viking and Peace River are both attractive assets, for Obsidian they are non-core and should be monetized. Given that multiple parties have expressed interest to FrontFour in such assets, should they become available, we strongly believe this is an executable course of action.

We believe the monetization of the Alberta Viking, Peace River and the remaining non-core legacy assets would result in:

• the ability to significantly reduce Obsidian's corporate general & administrative expense which is bloated, even when adjusting for their off-market legacy office lease expense;
• the removal of the negative drag on funds flow from operations ("FFO") from the legacy gas-weighted production, thereby improving Obsidian's performance metrics, while also reducing asset retirement obligations; and
• allowing the Company to continue to delineate its acreage in the Mannville should condensate pricing remain strong.

In turn, FrontFour's value creation strategy would focus on re-deploying the proceeds from the divestitures of the Alberta Viking and Peace River in the following manner:

• pay down enough debt to keep Obsidian's leverage ratio constant on a forward 12-month basis at strip;
• immediately expedite the Company's primary drilling program within the Cardium, specifically within the bioturbated zone within Willesden Green, with a focus on aggressively growing the Company's light oil-weighted production and by extension drive reserve and FFO growth and which would further deleverage the Company while displaying the true potential of its asset base; and
• initiate a share buyback program designed to take advantage of the significant discount at which the Company's shares currently trade relative to their intrinsic value, while also increasing shareholders' ownership exposure to the Company's dominant position in the Cardium which is highly coveted by potential strategic acquirers.

On March 12, 2018, Obsidian announced a proposed 1:3 reverse stock split to be voted on at its 2018 annual general meeting. This proposal is in response to a notification from the New York Stock Exchange ("NYSE") that the Company was no longer in compliance with one of the NYSE's continued listing standards because the average closing price of Obsidian was less than US$1.00 per share over a consecutive 30 trading day period. FrontFour will be voting against the reverse stock split proposal.The historic track record of subsequent stock price performance by companies that execute reverse stock splits from perceived positions of weakness is very poor. Furthermore, the proposal by management and the board of directors (the "Board") signals to us that they themselves may lack confidence in their operating and strategic plan to catalyze the stock price sustainably aboveUS$1.00.

In contrast, it is our strong belief that our plan would result in a value proposition for investors that would be valued significantly higher by the public equity markets and would quickly result in Obsidian being back in compliance with NYSE listing standards. We believe our nominees' strong collective technical and operational expertise within the energy industry, coupled with significant financial and strategic experience across numerous complex situations, will bring a fresh perspective to the Board and will help drive the necessary decisions needed to close the significant value gap between Obsidian's current stock price relative to its intrinsic value.

Biographies of FrontFour's Nominees:

Steven P. Evans

Mr. Evans had a 31-year career with Chevron / Texaco until his retirement in 2012. Most recently held the position of general manager, North America exploration at Chevron.

• In this role, Mr. Evans was responsible for leading exploration activities in the Gulf of Mexico(both shelf and deepwater), onshore United States, onshore Canada, offshore the Atlantic Coast in Canada, and Alaska with annual budgets ranging from US$500 million to US$1.2 billion;
• Asked by CEO of Texaco to participate on the Chevron/Texaco merger team. Served in this capacity from November 2000 through December 2001 and helped generate over US$300 million in expense savings for the new organization;
• Previously, Mr. Evans started with Texaco as manager of finance, planning and portfolio for E&P technology in 1989 and assumed various leadership roles in strategy and planning;
• Prior to 1989, Mr. Evans completed assignments in reservoir engineering, operations research and planning. He started his career with Pennzoil in 1980; and
• Currently a director of Venari Resources, a private-equity backed deepwater Gulf of Mexico start-up.

Michael J. Faust

Mr. Faust has 34 years of industry, financial and leadership experience within the oil and gas sector, including diverse geological, geophysical and technical reservoir experience spanning many different basins and formations throughout the world.

• Mr. Faust was most recently the Vice President of Exploration and Land at ConocoPhillips Alaska, Inc. where he oversaw and managed the company's exploration organization and strategy in Alaska;
• Mr. Faust previously served as the Vice President of Exploration and Land at ConocoPhillips Canada Resources Ltd. where he was responsible for Conoco's Canadian exploration activities with significant experience within the Deep Basin and various formations within the Western Canadian Sedimentary Basin;
• Joined Arco Alaska, Inc. in 1997 where he held multiple senior positions up to and following Phillips Petroleum Co.'s acquisition of Arco Alaska in 2000 and the subsequent merger between Phillips and Conoco Inc., which created ConocoPhillips Alaska, Inc. in 2002;
• Positions of increasing responsibility at Arco Alaska included Chief Geophysicist, Development Geoscience Manager, Technology and Operations Manager, and Offshore Exploration Manager;
• Prior to Arco Alaska, Mr. Faust held various positions with Exxon Exploration Company and Esso Norge A.S. after beginning his career with Exxon Co. USA in 1983; and
• Mr. Faust is currently the lead independent director at SAEploration, an oilfield service company.

Matthew ("Matt") Goldfarb

Mr. Goldfarb has over 20 years of diverse experience as an investor, senior management roles at companies undergoing financial restructurings, legal counsel, and board director across numerous industries where he has helped drive successful outcomes for shareholders.

• Mr. Goldfarb is a founding partner and managing member of Southport Midstream Partners LLC, a private-equity backed investment vehicle focused on energy infrastructure projects in North America;
• Mr. Goldfarb also serves as Chief Restructuring Officer and Acting Chief Executive Officer of Cline Mining Corporation;
• Mr. Goldfarb previously served as Chief Executive Officer of Xinergy Ltd., having previously served as its Vice Chairman and lead independent director since its IPO in December 2009 through November 2013;
• Mr. Goldfarb previously was an attorney at Icahn Associates Corp. and Schulte Roth & Zabel LLP; and
• Mr. Goldfarb has served on the Boards of Sevcon, Inc., Midway Gold Corporation, The Pep Boys – Manny, Moe & Jack, Huntingdon Capital Corp., Fisher Communications, Inc., CKE Restaurants, Inc., and James River Coal Company.

Stephen E. Loukas

Mr. Loukas has nearly 20 years of experience as an investor, investment banker, and financial restructuring consultant with significant experience across a broad-based number of industries.

• Mr. Loukas has been a Managing Member and Portfolio Manager of FrontFour Capital Group LLC since February 2009 where he helps oversee the firm's investment portfolio;
• Previously, Mr. Loukas held roles including Director at Credit Suisse Securities where he was a Portfolio Manager and Head of Investment Research of the Multi-Product Event Proprietary Trading Group and at Pirate Capital where he was a senior investment analyst;
• Mr. Loukas has also worked within the Corporate Finance & Distribution Group of Scotia Capital where he focused on the structuring and syndication of leveraged loans and high yield debt;
• Mr. Loukas started his career at financial restructuring firm Zolfo Cooper where he assisted corporate clients in the development and implementation of operational and financial restructuring plans; and
• Mr. Loukas has previously served as a director of Xinergy Ltd.

As stated in our January 17th letter to Obsidian's shareholders, we worked tirelessly to come to an amicable agreement with Obsidian's Board on the addition to the Board of one mutually agreed upon independent nominee proposed by FrontFour, as part of an effort to work constructively with the Company to maximize shareholder value. In response, Obsidian's Board issued a defensive and inaccurate press release stating that it had negotiated in good faith, but that FrontFour had refused to sign the same agreement executed by Edward (Ed) H. Kerneghan in connection with his appointment to the Board. The time has come for FrontFour to set the record straight. Some of the settlement terms proposed by Obsidian at various times were as follows:

• Obsidian refused to be transparent as to the composition of the Board slate for the 2018 annual general meeting and insisted upon retaining the ability to replace undisclosed incumbent directors with new (and also undisclosed) director candidates at the meeting – an outcome which had the potential to more than offset the positive board influence that FrontFour is looking to effectuate through its Board nominees;
• Nevertheless, Obsidian wanted FrontFour to agree to vote in accordance with all of management's future recommendations on all matters of business through January 1, 2019; and
• FrontFour was initially denied a standard replacement right in the event that their mutually agreed upon director became unable to serve in the future, and was then asked to agree to only have the right to recommend a replacement that would be considered (and potentially rejected) at the Board's sole discretion.

These and other terms proposed by Obsidian were off-market in the context of a settlement agreement of this nature. Neither FrontFour nor any sophisticated institutional shareholder would, consistent with their fiduciary obligations to their investors, effectively hand over blank proxies to Obsidian's management and existing Board. However, most importantly, we believe agreeing to these terms would have further entrenched this Board and resulted in an extension of the value destructive status quo at Obsidian.

We are committed, long-term investors with a strong track record of alignment and value creation in situations where we have sought change. We believe that significant upside exists in Obsidian's shares from current levels. The current Board has had ample time and opportunity to identify and unlock that value, but has failed. The time for change at Obsidian has come.

Sincerely,

FRONTFOUR CAPITAL GROUP LLC

FrontFour Capital Group LLC, located in the United States at 35 Mason Street, Greenwich, CT 06830, was formed in December 2006. FrontFour Capital Group LLC is registered with the Securities & Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended.