O'Reilly, who is currently holding out with the Colorado Avalanche because he has not come to a financial agreement with the franchise, is a centre who had 18 goals and 37 assists last season for Colorado and has 39 career goals and 68 assists for 107 points in 236 career games.
The Avalanche now have seven days to match the Flames' offer on O'Reilly. If they decide not to sign O'Reilly, they will receive the Flames' first and third round draft picks in the 2013 National Hockey League Entry Draft.
Under the current terms of the Flames' offer, O'Reilly will earn $3.5 million this season (which includes the signing bonus) and $6.5 million next season.
The Flames play the Avalanche tonight in Denver.
It will be interesting to see if the local public agrees with Flames' General Manager Jay Feaster's decision in offering a contract to O'Reilly.