Ovintiv's Twin Deals: What Are the Key Takeaways for Investors?

Zacks11-18

Ovintiv Inc. OVV has announced two major deals on Nov. 14, 2024 — one for the acquisition of premium Montney assets from Paramount Resources Ltd. for about $2.4 billion and the other for the sale of ...

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The acquired assets also display leading well performance, which can lead to high volume growth and solidify the company’s position as the premier operator in the oil and gas sector.Investors interested in the energy sector might look at some better-ranked stocks like Mach Natural Resources LPMNR, Enerflex Ltd.EFXT and Flotek Industries, Inc.FTK. While Mach currently sports a Zacks Rank #1 , Enerflex and Flot","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FTK":"Flotek工业","BK4211":"区域性银行","BK4109":"特种化学制品","MNR":"Mach Natural Resources L.P.","OVV":"Ovintiv Inc.","BK4179":"石油天然气设备与服务","ISBC":"投资者银行","EFXT":"Enerflex Ltd","BK4213":"石油与天然气的勘探与生产","BK4171":"工业房地产投资信托"},"translate_title":"Ovintiv的双胞胎交易：投资者的关键收获是什么？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FTK":1,"ISBC":1,"MNR":1,"OVV":1,"EFXT":0.9},"content_text":"Ovintiv Inc. OVV has announced two major deals on Nov. 14, 2024 — one for the acquisition of premium Montney assets from Paramount Resources Ltd. for about $2.4 billion and the other for the sale of almost all its Uinta Basin assets to FourPoint Resources, LLC, for about $2.0 billion.\nAn Insight Into OVV’s Purchase Agreement\nOVV, per the terms of the purchase agreement, will acquire 109,000 net acres, 70,000 barrels of oil equivalent per day and 900 total net well locations in the oil-rich Alberta Montney.\nThe $2.4-billion deal, which is expected to be closed by the first quarter of 2025, will be funded through cash and the ownership transfer of certain properties in the Horn River Basin, British Columbia, to Paramount Resources.\nThe acquired assets have been identified as the undeveloped oil resource that can deliver the highest value and returns. The acquired assets also display leading well performance, which can lead to high volume growth and solidify the company’s position as the premier operator in the oil and gas sector.\nOVV’s Sale Agreement for Uinta Basin Assets\nAs part of its strategic move, OVV has also decided to sell 126,000 net acres of the Uinta Basin in Utah to FourPoint Resources for a consideration of about $2.0 billion in cash. The said divestiture supports Ovintiv’s strategy to streamline its portfolio, wherein the company can focus on its core operations in the high-valued Montney and Permian basins.\nImpact of Combined Transaction on OVV\nThe combined buy and sell transactions are expected to be accretive across all key financial metrics and expand the company’s premium oil inventory to around 15 years. The combined transactions are also likely to generate cost synergies of around $125 million per year. The transactions should enable OVV to maintain a strong investment-grade balance sheet by decreasing its debt. Therefore, the company can expect a high rating from the investment firms.\nFinancial Gains and Outlook\nThe transactions should boost OVV’s cash flow by approximately $300 million in 2025. After the transactions, the company will allocate around 85-90% of its 2025 capital to its core Permian and Montney basins. OVV's average oil production is expected to reach 205,000 barrels per day. The deal is also expected to provide strong financial returns, growth in production volumes and long-term shareholder value.\nOVV’s Zacks Rank and Key Picks\nOvintiv is an independent energy producer that explores and churns out oil and natural gas from diverse assets located in the United States and Canada. Currently, OVV has a Zacks Rank #3 (Hold).\nInvestors interested in the energy sector might look at some better-ranked stocks like Mach Natural Resources LP MNR, Enerflex Ltd. EFXT and Flotek Industries, Inc. FTK. While Mach currently sports a Zacks Rank #1 (Strong Buy), Enerflex and Flotek Industries carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.\nMach Natural Resources LP is an independent upstream oil and gas company that focuses on the acquisition, development and production of oil, natural gas and natural gas liquids reserves. The Zacks Consensus Estimate for MNR’s 2024 earnings indicates 200% year-over-year growth.\nCanada-based Enerflex Ltd. provides oilfield services for natural gas and petroleum producers. EFXT’s expected EPS (earnings per share) growth rate for the next quarter is 188.89%, which compares favorably with the industry loss of 22.45%.\nFlotek Industries develops and delivers prescriptive chemistry-based technology, including specialty chemicals, to clients in the energy, consumer industrials and food & beverage industries. The Zacks Consensus Estimate for FTK’s 2024 earnings indicates 125% year-over-year growth.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nFlotek Industries, Inc. (FTK) : Free Stock Analysis Report\nMach Natural Resources LP (MNR) : Free Stock Analysis Report\nOvintiv Inc. (OVV) : Free Stock Analysis Report\nEnerflex Ltd. (EFXT) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2484867644"}