Canadian First Nation agrees with Obsidian Energy's drilling expansion plans

(Reuters) - Canada's Woodland Cree First Nation said on Tuesday it has ended its dispute with oil and gas producer Obsidian Energy to expand drilling operations on its traditional territory.

"After mediated negotiations, we have come to terms on an agreement in principle that balances the rights and interests of the Nation and Obsidian Energy Ltd." Woodland Cree Chief Isaac Laboucan-Avirom said in a statement.

Obsidian Energy was forced to shut production at two of its sites last month amid an ongoing dispute with the Indigenous community.

Woodland Cree First Nation first criticized Obsidian Energy in February for failing to address concerns about its operations after regulators said the Canadian oil and gas producer was responsible for a series of earthquakes.

Calgary-based Obsidian produces roughly 31,000 barrels of oil equivalent per day (boepd). Around 20% of output comes from the company's Peace River assets in northern Alberta, some of which are located within Woodland Cree territory.

(Reporting by Shivani Tanna in Bengaluru; Editing by Alan Barona)