Transaction to Significantly Expand Existing Montney Premium Oil Inventory

Company to Exit Uinta Basin with Asset Sale

Highlights:

Agreement reached to acquire approximately 109,000 net acres and approximately 70 thousand barrels of oil equivalent per day (“MBOE/d”) in the core of the Alberta Montney for $2.377 billion (C$3.325 billion). The acquisition will add approximately 900 total net well locations, including approximately 600 premium return well locations and approximately 300 upside locations, extending premium Montney oil and condensate inventory life to approximately 15 years. Expanded access to additional midstream and downstream infrastructure will enable future oil growth optionality. Additionally, an agreement has been reached to divest Uinta assets for proceeds of $2.0 billion. The combined transactions are expected to be immediately and long-term accretive across all key financial metrics, with Non-GAAP Free Cash Flow expected to increase by approximately $300 million at current commodity strip pricing. Annual cost synergies from the combined transactions are expected to total approximately $125 million. Ovintiv Inc. has maintained its commitment to an investment-grade balance sheet, with ratings agencies expected to affirm an investment-grade rating and stable outlook. The Company’s Non-GAAP Net Debt was approximately $5.65 billion as of October 31, 2024.

Impact on Me:

The acquisition of Montney assets and the divestment of Uinta assets by Ovintiv Inc. may have an impact on me as a consumer. The expansion of premium oil inventory in the Montney region could potentially lead to increased oil production and availability, which may influence global oil prices. This could have implications for the cost of gasoline and other oil-related products that I purchase.

Impact on the World:

On a larger scale, Ovintiv’s transactions to expand in the Montney region and exit the Uinta Basin could have significant effects on the world’s oil market. The increased oil production capacity and access to additional infrastructure may contribute to global oil supply, potentially influencing international oil prices and market dynamics. Additionally, the company’s focus on maintaining an investment-grade balance sheet and cost synergies could impact the overall stability and competitiveness of the oil industry.

Conclusion:

In conclusion, Ovintiv Inc.’s strategic transactions to acquire Montney assets and divest Uinta assets represent a significant move to expand premium oil inventory and strengthen its position in the oil market. The immediate and long-term accretive impact on key financial metrics, along with the commitment to maintaining a strong balance sheet, demonstrate the company’s focus on sustainable growth and value creation for its stakeholders.