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. 5)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)

April 6, 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. 5 to the Schedule 13D filed by the undersigned (“Amendment No. 5”). This Amendment No. 5 amends the Schedule
13D as specifically set forth herein.

Item 2 is hereby amended to add the following:

On April 6, 2018,
FrontFour Capital, on behalf of itself and its affiliates (the “FrontFour Parties”), and the Issuer entered into a
Settlement Agreement (the “Settlement Agreement”) in connection with matters relating to the composition of the Board
of Directors of the Issuer (the “Board”) and the 2018 annual general meeting of shareholders of the Issuer (the “2018
Annual Meeting”). Accordingly, Matthew Goldfarb, Steven P. Evans and Michael J. Faust are no longer members of a Section
13(d) group with each other or with the other Reporting Persons and shall cease to be Reporting Persons immediately after the filing
of this Amendment No. 5 to Schedule 13D.

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 21,266,295 Shares
owned directly by the Master Fund is approximately $23,996,397, 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 535,500 Shares owned directly by the Canadian Fund is approximately CAD$1,126,144,
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 4,744,357 Shares
held in the Separately Managed Accounts is approximately $8,767,344, 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 259,400 Shares owned directly by Mr. Loukas is approximately
$303,208, 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 April 6, 2018,
the FrontFour Parties and the Issuer entered into the Settlement Agreement. Pursuant to the terms of the Settlement Agreement,
the Issuer agreed to: (i) include Michael J. Faust and Stephen E. Loukas (the “Directors”) as director nominees in
its management information circular for election at the 2018 Annual Meeting and solicit proxies on behalf of and recommend to its
shareholders that they vote in favor of the management nominees, including the Directors; (ii) convene and conduct the 2018 Annual
Meeting no later than May 11, 2018; and (iii) appoint the Directors as members of any committee of the Board that is formed in
respect of a review of strategic alternatives or similar matters.

The FrontFour Parties
also agreed to customary standstill restrictions during the period beginning on the date of the Settlement Agreement and ending
on the earlier of (i) 60 days prior to the 2019 annual general meeting of shareholders of the Issuer; and (b) April 30, 2019 (the
“Restricted Period”). The FrontFour Parties also agreed to vote in favor of the election of all management nominees
of the Issuer and all other matters unanimously recommended by the Board at any annual or special meeting of shareholders during
the Restricted Period.

The foregoing description
of the terms and conditions of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference
to the full text of the Settlement Agreement, which is referenced as Exhibit 99.1 hereto 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 23,991,095 Shares (including 2,724,800 Shares underlying
certain call options exercisable within 60 days of the date hereof), the Canadian Fund beneficially owned directly 603,400 Shares
(including 67,900 Shares underlying certain call options exercisable within 60 days of the date hereof), 5,351,657 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 259,400 Shares, Mr. Lorber directly owned 600,000
Shares and Mr. Goldfarb directly owned 124,500 Shares, constituting approximately 4.8%, 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 29,342,752
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 603,400 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 30,534,152 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 259,400 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 30,534,152 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 30,534,152 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 6.1% 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 FrontFour
Capital, the Master Fund, the Canadian Fund, FrontFour Corp., the Energy Fund, Energy Fund GP and Messrs. Loukas, Lorber and George,
as a member of a “group” with the other 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. The
filing of this Schedule 13D shall not be deemed an admission that FrontFour Capital, the Master Fund, the Canadian Fund, FrontFour
Corp., the Energy Fund, Energy Fund GP and Messrs. Loukas, Lorber and George 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 FrontFour Capital, the Master
Fund, the Canadian Fund, FrontFour Corp., the Energy Fund, Energy Fund GP and Messrs. Loukas, Lorber and George 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 since the filing of Amendment No. 4 to
the Schedule 13D are set forth on Schedule B attached hereto. All of such transactions were effected in the open market
except as otherwise set forth therein.

Item 6 is hereby amended to add the following:

Reference is made to the Settlement Agreement
defined and described in Items 2 and 4 above.

Item 7 is hereby
amended to add the following exhibit:

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 Since the Filing of Amendment No. 4 to the Schedule 13D

FRONTFOUR CAPITAL GROUP LLC

(Through Separately Managed Accounts)