13D Filing: FrontFour Capital Group and Penn West Petroleum Ltd. (PWE)

UNITED STATES

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED
IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 3)¹

Obsidian Energy Ltd.

(Name
of Issuer)

Common Shares

(Title of Class of Securities)

674482 10 4

(CUSIP Number)

David
A. lorber

FRONTFOUR CAPITAL GROUP LLC
35 Mason Street, 4^th Floor
Greenwich, Connecticut 06830
(203) 274-9050 

STEVE
WOLOSKY, ESQ.

OLSHAN
FROME WOLOSKY LLP

1325
Avenue of the Americas

New
York, New York 10019

(212)
451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices
and Communications)

March 20, 2018

(Date of Event Which Requires
Filing of This Statement)

If
the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule
13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following
box ¨.

Note:  Schedules
filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See
§ 240.13d-7 for other parties to whom copies are to be sent.

1
The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided
in a prior cover page.

The information required
on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities
Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).

The following constitutes
Amendment No. 3 to the Schedule 13D filed by the undersigned (“Amendment No. 3”). This Amendment No. 3 amends the Schedule
13D as specifically set forth herein.

Item 2 is hereby amended
and restated as follows:

(a)       This
statement is filed by:

Each of the foregoing
is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” The Reporting Persons
are hereby filing a joint Schedule 13D.

(b)       The
principal business address of each of FrontFour Capital, FrontFour Corp., the Canadian Fund and Messrs. Loukas, Lorber and George
is 35 Mason Street, 4^th Floor, Greenwich, Connecticut 06830. The principal business address of the Master Fund is c/o
Intertrust Cayman, 190 Elgin Avenue, George Town, Grand Cayman KY1-9007, Cayman Islands. The principal business address of each
of the Energy Fund and Energy Fund GP is 200 Bay Street, Suite 3800, Toronto, Ontario, M5J 2Z4 Canada. The principal business address
of Mr. Goldfarb is c/o Southport Midstream Partners, LLC, 191 Post Road West, Westport, Connecticut 06880. The principal business
address of Mr. Evans is 380 Lake Shore Drive, Coldspring, Texas 77331. The principal business address of Mr. Faust is 10608 Alethas
Mountain Way, Anchorage, Alaska 99507. The directors, executive officers and principals of each of FrontFour Capital, the Master
Fund, the Canadian Fund, FrontFour Corp. and Energy Fund GP and their principal occupations and business addresses are set forth
on Schedule A attached to the initial Schedule 13D (“Schedule A”) and are incorporated by reference in
this Item 2. To the best of the Reporting Persons’ knowledge, except as otherwise set forth herein, none of the persons listed
on Schedule A beneficially owns any securities of the Issuer or is a party to any contract, agreement or understanding required
to be disclosed herein.

(c)       The
principal business of each of the Master Fund, the Canadian Fund and the Energy Fund is investing in securities. The principal
business of FrontFour Capital is serving as the investment manager of the Master Fund and of accounts it separately manages (the
“Separately Managed Accounts”). The principal occupation of each of Messrs. Loukas, Lorber and George is serving as
a managing member and principal owner of FrontFour Capital. By virtue of these relationships, each of FrontFour Capital and Messrs.
Loukas, Lorber and George may be deemed to beneficially own the Shares directly beneficially owned by the Master Fund and the Separately
Managed Accounts.

The principal business
of FrontFour Corp. is serving as the investment manager of the Canadian Fund. Messrs. Loukas, Lorber and George are the principal
owners and the directors of FrontFour Corp. By virtue of these relationships, each of FrontFour Corp. and Messrs. Loukas, Lorber
and George may be deemed to beneficially own the Shares directly beneficially owned by the Canadian Fund.

The principal business
of Energy Fund GP is serving as the general partner of the Energy Fund. Messrs. Loukas, Lorber and George are the principal owners
and directors of Energy Fund GP. By virtue of these relationships, each of Energy Fund GP and Messrs. Loukas, Lorber and George
may be deemed to beneficially own the Shares directly owned by the Energy Fund.

The principal occupation
of Mr. Goldfarb is serving as a managing member of Southport Midstream Partners, LLC, a private equity backed investment vehicle
focused on energy infrastructure projects in North America. Mr. Evans is retired and currently serves as a director of Venari Resources,
a deepwater Gulf of Mexico exploration and production start-up. The principal occupation of Mr. Faust is serving as the lead independent
director of SAExploration Holdings, Inc., an oilfield service company.

(d)       No
Reporting Person, nor any person listed on Schedule A, has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).

(e)       No
Reporting Person, nor any person listed on Schedule A, has, during the last five years, been party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.

(f)       Messrs.
Loukas, Lorber, George, Goldfarb, Evans and Faust are citizens of the United States of America. The citizenship of the persons
listed on Schedule A is set forth therein.

Item 3 is hereby amended
and restated as follows:

The Shares and call
options purchased by each of the Master Fund and the Canadian Fund, the Shares and call options held in the Separately Managed
Accounts and the Shares purchased by the Energy Fund, were purchased with working capital (which may, at any given time, include
margin loans made by brokerage firms in the ordinary course of business). The aggregate purchase price of the 21,217,195 Shares
owned directly by the Master Fund is approximately $23,948,654, including brokerage commissions. The aggregate purchase price of
the call options exercisable into 2,724,800 Shares owned directly by the Master Fund is approximately $548,267, including brokerage
commissions. The aggregate purchase price of the 533,500 Shares owned directly by the Canadian Fund is approximately CAD$1,123,633,
including brokerage commissions. The aggregate purchase price of the call options exercisable into 67,900 Shares owned directly
by the Canadian Fund is approximately $13,654, including brokerage commissions. The aggregate purchase price of the 4,764,357 Shares
held in the Separately Managed Accounts is approximately $8,788,687, including brokerage commissions. The aggregate purchase price
of the call options exercisable into 607,300 Shares held in the Separately Managed Accounts is approximately $125,588, including
brokerage commissions. The aggregate purchase price of the 588,000 Shares owned directly by the Energy Fund is approximately CAD$974,526,
including brokerage commissions. The aggregate purchase price of the 254,650 Shares owned directly by Mr. Loukas is approximately
$298,226, including brokerage commissions, and were purchased with personal funds. The aggregate purchase price of the 600,000
Shares owned directly by Mr. Lorber is approximately $836,705, including brokerage commissions, and were purchased with personal
funds. The aggregate purchase price of the 124,500 Shares owned directly by Mr. Goldfarb is approximately $342,375, including brokerage
commissions, and were purchased with personal funds.

Item 4 is hereby amended
to add the following:

On March 20, 2018,
the Master Fund issued a press release announcing its intent to nominate Messrs. Loukas, Goldfarb, Evans and Faust for election
to the Board of Directors of the Issuer at its 2018 annual meeting of stockholders (the “2018 Annual Meeting”). A copy
of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Items 5(a)-(c) are
hereby amended and restated as follows:

(a)
The aggregate percentage of Shares reported owned by each person named herein is based upon 504,340,988 Shares outstanding
as of December 31, 2017, which is the total number of Shares outstanding as reported in the Issuer’s Form 40-F filed with
the Securities and Exchange Commission on March 8, 2018.

As of the close of
business on the date hereof, the Master Fund beneficially owned directly 23,941,995 Shares (including 2,724,800 Shares underlying
certain call options exercisable within 60 days of the date hereof), the Canadian Fund beneficially owned directly 601,400 Shares
(including 67,900 Shares underlying certain call options exercisable within 60 days of the date hereof), 5,371,657 Shares (including
607,300 Shares underlying certain call options exercisable within 60 days of the date hereof) were held in the Separately Managed
Accounts, the Energy Fund directly owned 588,000 Shares, Mr. Loukas directly owned 254,650 Shares, Mr. Lorber directly owned 600,000
Shares and Mr. Goldfarb directly owned 124,500 Shares, constituting approximately 4.7%, less than 1%, approximately 1.1%, less
than 1%, less than 1%, less than 1% and less than 1%, respectively, of the Shares outstanding.

FrontFour Capital,
as the investment manager of the Master Fund and the Separately Managed Accounts, may be deemed to beneficially own the 29,313,652
Shares directly beneficially owned by the Master Fund and held in the Separately Managed Accounts, constituting approximately 5.8%
of the Shares outstanding.

FrontFour Corp., as
the investment manager of the Canadian Fund, may be deemed to beneficially own the 601,400 Shares directly beneficially owned by
the Canadian Fund, constituting less than 1% of the Shares outstanding.

Energy Fund GP, as
the general partner of the Energy Fund, may be deemed to beneficially own the 588,000 Shares directly owned by the Energy Fund,
constituting less than 1% of the Shares outstanding.

Mr. Loukas, as a managing
member and principal owner of FrontFour Capital, a principal owner of FrontFour Corp. and a principal owner and director of Energy
Fund GP, may be deemed to beneficially own the 30,503,052 Shares directly beneficially owned in the aggregate by the Master Fund,
the Canadian Fund and the Energy Fund and held in the Separately Managed Accounts, which, together with the 254,650 Shares he directly
owns, constitute approximately 6.1% of the Shares outstanding.

Mr. Lorber, as a managing
member and principal owner of FrontFour Capital, a principal owner of FrontFour Corp. and a principal owner and director of Energy
Fund GP, may be deemed to beneficially own the 30,503,052 Shares directly beneficially owned in the aggregate by the Master Fund,
the Canadian Fund and the Energy Fund and held in the Separately Managed Accounts, which, together with the 600,000 Shares he directly
owns, constitute approximately 6.2% of the Shares outstanding.

Mr. George, as a managing
member and principal owner of FrontFour Capital, a principal owner of FrontFour Corp. and a principal owner and director of Energy
Fund GP, may be deemed to beneficially own the 30,503,052 Shares directly beneficially owned in the aggregate by the Master Fund,
the Canadian Fund and the Energy Fund and held in the Separately Managed Accounts, which constitute approximately 6.0% of the Shares
outstanding.

As of the close of
business on the date hereof, Messrs. Evans and Faust did not beneficially own any Shares.

Each of the Reporting
Persons, as a member of a “group” with the other Reporting Persons for purposes of Rule 13d-5(b)(1) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), may be deemed to beneficially own the securities of the Issuer
owned by the other Reporting Persons. The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons
are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any securities of the Issuer he or it does not
directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that
he or it does not directly own.

(b)
Each of the Master Fund, FrontFour Capital and Messrs. Loukas, Lorber and George have shared power to vote or direct the
vote of, and to dispose or direct the disposition of, the Shares owned directly by the Master Fund.

Each of FrontFour
Capital and Messrs. Loukas, Lorber and George have shared power to vote or direct the vote of, and to dispose or direct the disposition
of, the Shares held in the Separately Managed Accounts.

Each of the Canadian
Fund, FrontFour Corp. and Messrs. Loukas, Lorber and George have shared power to vote or direct the vote of, and to dispose or
direct the disposition of, the Shares owned directly by the Canadian Fund.

Each of the Energy
Fund, Energy Fund GP and Messrs. Loukas, Lorber and George have shared power to vote or direct the vote of, and to dispose or direct
the disposition of, the Shares owned directly by the Energy Fund.

Mr. Loukas has the
sole power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares owned directly by him.

Mr. Lorber has the
sole power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares owned directly by him.

Mr. Goldfarb has the
sole power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares owned directly by him.

(c)
The transactions in the securities of the Issuer effected by the Reporting Persons during the past 60 days are set forth
on Schedule B attached hereto. All of such transactions were effected in the open market except as otherwise set forth therein.

The second, third
and fourth paragraphs of Item 6 are hereby amended and restated as follows:

The Master Fund has
(a) purchased call options (i) referencing an aggregate of 1,322,500 Shares, which have an exercise price of $1.00 per Share and
expire on July 20, 2018, and (ii) referencing an aggregate of 1,402,300 Shares, which have an exercise price of $1.05 per Share
and expire on July 20, 2018, and (b) sold short put options (i) referencing an aggregate of 791,300 Shares, which have an exercise
price of $1.05 per Share and expire on July 20, 2018, and (ii) referencing an aggregate of 1,723,200 Shares, which have an exercise
price of $0.85 per Share and expire on July 20, 2018.

The Canadian Fund
has (a) purchased call options (i) referencing an aggregate of 33,000 Shares, which have an exercise price of $1.00 per Share and
expire on July 20, 2018, and (ii) referencing an aggregate of 34,900 Shares, which have an exercise price of $1.05 per Share and
expire on July 20, 2018, and (b) sold short put options (i) referencing an aggregate of 19,800 Shares, which have an exercise price
of $1.05 per Share and expire on July 20, 2018, and (ii) referencing an aggregate of 43,000 Shares, which have an exercise price
of $0.85 per Share and expire on July 20, 2018.

The Separately Managed
Accounts have (a) purchased call options (i) referencing an aggregate of 294,500 Shares, which have an exercise price of $1.00
per Share and expire on July 20, 2018, and (ii) referencing an aggregate of 312,800 Shares, which have an exercise price of $1.05
per Share and expire on July 20, 2018, and (b) sold short put options (i) referencing an aggregate of 188,900 Shares, which have
an exercise price of $1.05 per Share and expire on July 20, 2018, and (ii) referencing an aggregate of 383,800 Shares, which have
an exercise price of $0.85 per Share and expire on July 20, 2018.

Item 6 is hereby amended
to add the following as the final paragraph thereof:

Pursuant to letter
agreements, the Master Fund and certain of its affiliates have agreed to indemnify each of Messrs. Goldfarb, Evans and Faust against
any and all claims of any nature arising from the solicitation of proxies at the 2018 Annual Meeting and any related transactions,
actions or failures to act. A form of such indemnification letter agreements is attached hereto as Exhibit 99.2 and is incorporated
herein by reference.

Item 7 is hereby amended
to add the following exhibits:

SIGNATURES

After reasonable inquiry
and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement
is true, complete and correct.

SCHEDULE B

Transactions in the Securities
of the Issuer During the Past Sixty Days

FRONTFOUR MASTER FUND, LTD.

FRONTFOUR OPPORTUNITY FUND^***

FRONTFOUR CAPITAL GROUP LLC

(Through Separately Managed Accounts)

David Lorber

Stephen Loukas

^* Represents a short sale.

^** Represents a purchase to
cover short position.

^*** All prices for transactions
in Common Shares are in Canadian Dollars and all prices for transactions in options are in U.S. Dollars.