Increasing Share Buybacks; Full Year Production Guidance Raised; Capital Guidance Unchanged
Highlights:
-- Generated second quarter cash from operating activities of $1.6 billion,
Non-GAAP Cash Flow of approximately $1.3 billion and Non-GAAP Free Cash
Flow of $682 million after capital expenditures of $574 million
-- Produced average second quarter volumes of 615 thousand barrels of oil
equivalent per day ("MBOE/d"), including oil and condensate volumes of
206 thousand barrels per day ("Mbbls/d"), above the high end of company
guidance, along with 82 Mbbls/d of other NGLs (C2 to C4) and 1,959
million cubic feet per day ("MMcf/d") of natural gas
-- Closed the sale of the Company's Anadarko assets for total cash proceeds
of approximately $2.82 billion after preliminary closing adjustments and
transaction costs
-- Net Debt of $2.995 billion as of June 30, 2026, Net Debt to Adjusted
EBITDA of 0.6x
-- Returned approximately 63% of second quarter Non-GAAP Free Cash Flow to
shareholders via share repurchases of approximately $345 million (6.1
million shares) and dividend payments of $84 million
-- Full year 2026 shareholder returns expected to exceed 60% of Non-GAAP
Free Cash Flow, up from 45% year-to-date
-- Revised full year 2026 guidance to reflect higher expected oil and
condensate production for the same capital investment; representing 4%
production per share growth
DENVER, July 23, 2026 /PRNewswire/ -- Ovintiv Inc. (NYSE: OVV) (TSX: OVV) ("Ovintiv" or the "Company") today announced its second quarter 2026 financial and operating results. The Company plans to hold a conference call and webcast at 9:00 a.m. MT (11:00 a.m. ET) on July 24, 2026. Please see dial-in details within this release, as well as additional details on the Company's website at www.ovintiv.com under Presentations and Events -- Ovintiv.
"Our second quarter results continued to demonstrate industry-leading performance across the board driven by our stacked innovation approach," said Ovintiv President and CEO, Brendan McCracken. "Our company is positioned with a deep inventory of superior-return drilling locations, a fortified balance sheet, and leading edge well costs and oil productivity performance. The outcomes of our strategic execution are reflected in our results. Halfway through the year, we've generated more than $1.3 billion of Free Cash Flow, organically replaced our full-year 2026 drilling locations in both the Permian and the Montney, and are set to grow oil production per share by 4% with no increase to activity or capital expenditure."
Second Quarter 2026 Financial and Operating Results
-- Reported second quarter net earnings of $456 million, or $1.62 per share
diluted, which included a loss on the divestiture of the Company's
Anadarko assets of $337 million, before tax
-- Recognized a net gain on risk management in revenues of $122 million,
before tax
-- Generated cash from operating activities of $1.6 billion and Non-GAAP
Cash Flow of approximately $1.3 billion
-- Second quarter average total production volumes were approximately 615
MBOE/d, including 206 Mbbls/d of oil and condensate, 82 Mbbls/d of other
NGLs (C2 to C4) and 1,959 MMcf/d of natural gas
-- Second quarter capital investment of $574 million was at the midpoint of
the guidance range of $550 million to $600 million
-- Reported second quarter upstream operating expense of $3.25 per BOE,
upstream transportation and processing costs of $9.47 per BOE, production,
mineral and other taxes of $1.43 per BOE, or 3.5% of upstream product
revenue
-- Excluding the impact of hedges, second quarter average realized price for
oil and condensate was $97.50 per barrel (105% of WTI), $21.67 per barrel
for other NGLs, and $1.71 per Mcf (59% of NYMEX) for natural gas,
resulting in a total average realized price of $41.00 per BOE
-- Including the impact of hedges, second quarter average realized price for
oil and condensate was $91.22 per barrel (98% of WTI), $21.67 per barrel
for other NGLs, and $1.99 per Mcf (69% of NYMEX) for natural gas,
resulting in a total average realized price of $39.79 per BOE
2026 Guidance
The Company issued its third quarter 2026 guidance and revised its full year guidance. Full year production volumes are expected to average 630 MBOE/d to 645 MBOE/d, driven by increases in oil and condensate and NGL volumes. Full year expected capital investment is unchanged at $2.25 billion to $2.35 billion.
2026 Guidance 3Q 2026 Full Year 2026 -------------------------------- -------------- ---------------- Total Production (MBOE/d) 615 -- 640 630 -- 645 Oil & Condensate (Mbbls/d) 205 -- 210 210 -- 212 NGLs (C2 to C4) (Mbbls/d) 75 -- 80 83 -- 85 Natural Gas (MMcf/d) 2,000 -- 2,100 2,025 -- 2,075 Capital Investment ($ Millions) $550 -- $600 $2,250 -- $2,350 -------------------------------- -------------- ----------------
Shareholder Returns
Ovintiv's shareholder return framework commits to returning 50% to 100% of annual Non-GAAP Free Cash Flow to shareholders via the combination of base dividend payments and share buybacks.
Second quarter shareholder returns totaled approximately $429 million, or approximately 63% of Non-GAAP Free Cash Flow, consisting of share buybacks of approximately $345 million, or approximately 6.1 million shares of common stock, and base dividend payments of approximately $84 million.
As of June 30, 2026, year-to-date shareholder returns totaled approximately $598 million, or approximately 45% of Non-GAAP Free Cash Flow, consisting of share buybacks of approximately $429 million, or approximately 7.6 million shares of common stock, and base dividend payments of approximately $169 million. Ovintiv expects full year 2026 shareholder returns to total more than 60% of Non-GAAP Free Cash Flow.
Continued Balance Sheet Focus
As of June 30, 2026, Ovintiv's Net Debt was $2.995 billion and Net Debt to Adjusted EBITDA was approximately 0.6 times. The Company had approximately $4.4 billion in total liquidity, which included available credit facilities of $3.5 billion, available uncommitted demand lines of $159 million, and cash and cash equivalents of $700 million.
Ovintiv redeemed its $700 million, 5.65% senior notes due May 15, 2028, on April 20, 2026. Annualized interest savings from the note redemption are expected to total approximately $40 million.
Dividend Declared
On July 23, 2026, Ovintiv's Board declared a quarterly dividend of $0.30 per share of common stock payable on September 29, 2026, to shareholders of record as of September 15, 2026.
Asset Highlights
Permian
Permian production averaged 231 MBOE/d (78% liquids) in the second quarter with 38 net wells turned in line ("TIL"). Full year 2026 capital investment is expected to total approximately $1.325 billion to $1.375 billion in the play to run approximately 5 rigs and bring on an expected 125 to 135 net wells. For the second half of the year, oil and condensate production is expected to average approximately 125 Mbbls/d and natural gas production is expected to average 280 to 305 MMcf/d.
Montney
Montney production averaged 374 MBOE/d (27% liquids) in the second quarter with 40 net wells TIL. Full year 2026 capital investment is expected to total approximately $875 million to $925 million in the play to run approximately 6 rigs and bring on an expected 130 to 140 net wells. For the second half of the year, oil and condensate production is expected to average 80 to 85 Mbbls/d and natural gas production is expected to average 1.7 to 1.8 Bcf/d.
For additional information, please refer to the Second Quarter 2026 Results Presentation available on Ovintiv's website, www.ovintiv.com under Presentations and Events -- Ovintiv. Supplemental Information, and Non-GAAP Definitions and Reconciliations, are available on Ovintiv's website under Financial Document Library -- Ovintiv.
Conference Call Information
A conference call and webcast to discuss the Company's second quarter 2026 results will be held at 9:00 a.m. MT (11:00 a.m. ET) on July 24, 2026.
To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/4jChG1W to receive an instant automated call back. You can also dial direct to be entered to the call by an Operator. Please dial 888-510-2154 (toll-free in North America) or 437-900-0527 (international) approximately 15 minutes prior to the call.
The live audio webcast of the conference call, including slides and financial statements, will be available on Ovintiv's website, www.ovintiv.com under Investors/Presentations and Events. The webcast will be archived for approximately 90 days.
Refer to Note 1 Non-GAAP measures and the tables in this release for reconciliation to comparable GAAP financial measures.
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