Ovintiv will take over NuVista Energy, in which it is already a shareholder, in a deal worth $2.7 billion including debt. NuVista operates in the Montney shale play in Canada.
The deal would add some 100,000 barrels daily of oil equivalent to Ovintiv’s total production, the buyer said in a news release. The company added that the NuVista acquisition will also provide it with a basis for further expansion in the Montney shale by giving it access to “strategic processing infrastructure and downstream capacity.”
A year ago, Ovintiv bought a number of assets I the Montney shale play from Paramount Resources, paying some $2.4 billion for them. That acquisition added over 100,000 barrels of oil equivalent to Ovintiv’s daily total. The deal was part of what analysts saw as an M&A wave in Canada, driven by opportunistic – rather than necessary – deals. At the time, analysts predicted many of these deals would likely be focused on non-oil sands assets such as the Duvernay Shale or Williston Basin. Likely buyers include U.S. firms seeking inventory at lower valuations compared to the top U.S. shale plays.
In the meantime, however, Ovintiv was also expanding in the Permian, paying some $4.3 billion for untapped oil and gas assets previously owned by EnCap Investments back in 2023.
Ovintiv reported average daily production of 630,000 barrels of oil equivalent daily for the third quarter of the year, with oil and condensate output at some 212,000 barrels daily and natural gas production at 1.925 billion cu ft daily. For the full year, Ovintiv expects to produce a daily average of 610,000 barrels of oil equivalent daily.
The company booked cash flow from operations of $812 million over the period and free cash flow of $351 million. Shareholder returns in the period totaled $235 million and debt was cut by $126 million to some $5.187 billion.
By Irina Slav for Oilprice.com
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