Ovintiv closes Midland Basin asset sale, updates capital invesment view

Ovintiv closed the previously announced acquisition of core Midland Basin assets, adding approximately 1,050 net 10,000 foot well locations and approximately 65,000 net acres of largely undeveloped land adjacent to Ovintiv’s existing Permian operations. The Company has acquired substantially all the leasehold interest and related assets of Black Swan Oil & Gas, PetroLegacy Energy and Piedra Resources, which are portfolio companies of funds managed by EnCap Investments L.P., in a cash and stock transaction valued at $4.275 billion. The Company also closed the previously announced all cash sale of its Bakken assets, located in the Williston Basin of North Dakota to Grayson Mill Bakken, LLC, a portfolio company of funds managed by EnCap for $825 million. The sale represents the entirety of Ovintiv’s Bakken position. The combined transactions are expected to enhance capital efficiency by 15% and durably increase cash returns per share by more than 25%. The company also raised its FY23 capital investment outlook to $2.68B-$2.98B from $2.6B-$2.9B and its production view to 521-546 MBOE/d from 520-545 MBOE/d. In 2024, Ovintiv expects to deliver total company oil and condensate production of greater than 200 thousand barrels per day with total capital investment of $2.1B to $2.5B. The Company’s production profile is expected to normalize by mid-year 2024 with second-half 2024 oil and condensate production stabilizing at 200 Mbbls/d.