CALGARY - Obsidian Energy Ltd. extended its hostile takeover bid for rival Bonterra Energy Corp. on Monday and lowered its minimum tender condition.

“Since we made our original offer, industry consolidation has accelerated over the past few months as boards seize opportunities to build increased scale, efficiency and resilience,” said Stephen Loukas, Obsidian's interim CEO, in a statement.

“We expect this trend to continue ... Together, we can make a stronger entity that can make meaningful improvements to cash flow and inroads to lower debt levels, which we believe has a clear path to a higher share price.”

The minimum tender condition has been lowered to 50 per cent from two-thirds of Bonterra's outstanding shares, Obsidian said.

The offer of two Obsidian shares for each Bonterra share tendered also has been extended to Jan. 25 from an earlier deadline of Jan. 4.

In November, Obsidian shareholders voted to approve the issuance of up to 72.3 million shares to buy Bonterra despite strong resistance from the target company, which has dubbed the offer a “take-under bid” based on relative stock prices.

Shareholder advisory firm Glass Lewis recommended Obsidian investors support management in pursuing Bonterra because it would create a company with a stronger balance sheet and the ability to grow through acquisitions.

But it added in a report the deal has “almost no practical likelihood of being successful” because of opposition by the Bonterra board and from more than 30 per cent of Bonterra shareholders.

In its statement, Obsidian cited Cenovus Energy Inc.'s friendly takeover of Husky Energy Inc. and transactions announced by Whitecap Resources Inc., Tamarack Valley Energy Ltd. and Tourmaline Oil Corp. as examples of an industry consolidation trend that it wants to follow.

It said a combined Obsidian-Bonterra entity could save $50 million in the first year and a total of $100 million in the first three years.

Bonterra shares were at $1.74 in early afternoon trading Monday on the Toronto Stock Exchange, while Obsidian shares were at 83 cents.