Ovintiv Inc. (de) · NYSE:OVV
Ovintiv Inc. (de) — Q2 2024 Earnings Presentation
24 slides from Ovintiv Inc. (de)'s earnings presentation, Jul 31, 2024
Slide 1: 2Q24 Results Conference Call
2Q24 Results Conference Call 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements or information (collectively, “forward-looking statements”) within the meaning of applicable securities legislation, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exc
Slide 3: Disclaimers and Non-GAAP Definitions
Disclaimers and Non-GAAP Definitions For convenience, references in this presentation to “Ovintiv”, “OVV”, the “Company”, “we”, “us” and “our” may, where applicable, refer only to or include any relevant direct and indirect subsidiary entities and partnerships (“Subsidiaries”) of Ovintiv Inc., and t
Slide 4: Durable Returns: Industry Leading Innovation & Execution
Durable Returns Industry Leading Montney High-return oil & deep multi- Innovation & Execution product inventory Built into our culture Uinta Deep inventory & high Inventory Quality & Depth margin oil 10-15 yrs of oil & condensate & >20 yrs of natural gas Premium1 inventory Disciplined Capital Anadar
Slide 5: Execution Driving Durable Returns
Execution Driving Durable Returns Free Cash FlowŦ Shareholder Returns $403 ~15% $262 MM 2Q24 Free Cash FlowŦ FY24E Free Cash Flow YieldŦ1 MM $242 MM ~$1,900 >60% 2Q24 Base div. + Buybacks 3Q24E Base div. + Buybacks3 MM FY24E Free Cash FlowŦ2 More Free Cash FlowŦ , FY24E vs. FY232 Per Share Metrics C
Slide 6: Operational Excellence in 2Q24
Operational Excellence in 2Q24 2Q24 Operational Performance Guidance Actuals Significant Production Beat Oil & Condensate 205 - 209 212 Primarily Montney (~4 Mbbls/d oil & condensate) (Mbbls/d) Permian, Uinta and Anadarko also strong Other NGLs (C2-C4) (Mbbls/d) 89 - 92 92 Below Capital Guide Mi
Slide 7: Track Record of Shareholder Returns
Track Record of Shareholder Returns Transparent Framework 3Q24E Shareholder Returns 50% of post-base dividend Free Cash FlowŦ returned to shareholders $80 MM Returns to date have been buybacks Base Div.1 $162 MM Buybacks Consistent, Repeatable & Durable In action for ~3 years $242 MM Total Return ~$
Slide 8: Committed to Debt Reduction
Committed to Debt Reduction June 30, 2024 Debt / Leverage TargetŦ $6,087 MM Debt $4,000 MM Debt $111 MM Debt reduction in 2Q24 1.2x Debt to Adjusted EBITDAŦ 1.0x Debt to Adjusted EBITDAŦ Adjusted EBITDAŦ is ~$4B at mid-cycle1 Debt Maturity Profile ($MM) $1,368 $700 $850 Investment grade rated $600
Slide 9: 3Q24 & FY24 Guidance
3Q24 & FY24 Guidance More FY24E Production for the Same Capital Raised oil & condensate and natural gas guides Reaffirmed capital guide midpoint & narrowed range 2024 Production and Capital Guidance 3Q24 FY24 Lower Costs Generating Higher Returns Total Production 565 – 580 570 – 580 (MBOE/d) Lowered
Slide 10: Permian Well Performance
Permian Well Performance Innovative Completions Design Increasing Returns Permian Well Performance • FY24E well productivity above FY23 20 2024 OVV Type Curve 4Q23, 1Q24 & 2Q24 (122 wells) Well Performance in-line with 2024 Type Curve 18 2Q24 (42 wells) • 4Q23-2Q24 TILs in-line with ‘24 type curve (
Slide 11: Leading Edge Permian Operations
Leading Edge Permian Operations Drilling Avg. Drilling Pacesetter Ft/d ~1,875 ~1,600 ~1,700 2024 YTD +10% vs. FY23 ~3,150~10.5k ft lateral ft/d Drilled in <6 days D&C Pacesetter ~$600 2022 2023 1H24 /ft ~11.5k ft lateral Completions Avg. Completions Pacesetter Faster D&C driving costs lower Ft/d ~4,
Slide 12: Demonstrated Excellence in the Montney
Demonstrated Excellence in the Montney Speed Driving D&C Efficiencies Targeting High-Value Oil Drilled Ft/Day Completed Ft/Day • >60% FY24E program IRR at $75 WTI & $2.50 NYMEX • Sales into structurally short diluent market Similar ~4,100 ~4,275 ~1,750 speed as • 2Q24 oil & condensate realization: 9
Slide 13: Leading Montney Operator
Leading Montney Operator Oil & Condensate Capital Efficiency1 Economic BOE Capital Efficiency (20:1)1 FY24E Capex / Quarterly Oil & Condensate Production FY24E Capex / Quarterly Total Production ($MM USD / Mbbls/d) ($MM USD / MBOE/d) #1 Montney 60 50 ~60% Better than Peer Avg. 12 10 ~50% Better than
Slide 14: Leveraging the Multi-Basin Portfolio
Leveraging the Multi-Basin Portfolio Competitive margins similar to the Permian Lower royalty rate and higher oil cut Core OVV Uinta Position Scale & Running Room ~137k Duchesne Uintah 28 Mbbls/d oil & condensate production in 2Q24 Salt Lake City refinery turnarounds completed in 1Q24 Core OVV Net U
Slide 15: OVV's Keys to Success
OVV’s Keys to Success High-Quality Portfolio • Four top-tier assets with substantial operating scale • Innovations distributed across the portfolio to drive results Montney High-return oil & deep multi- Operational Excellence Drives Efficiencies • Proven operational flexibility and margin enhanc
Slide 16: _ Ovintiv’
_ 636 Ovintiv’ “
Slide 17: Appendix
Trl Appendix
Slide 18: Additional 2024 Guidance & Sensitivities
Additional 2024 Guidance & Sensitivities Operating Expenses Upstream T&P2 Sensitivities 2Q24A 2H24 FY24 Sensitivity Upstream T&P2 PMOT F/X Rate 4.8% 4 - 5% (CAD/USD) ~0.75 +/- 0.01 CAD/USD $0.10/BOE (% of Upstream Revenue1) Upstream T&P2 WTI $7.15 $7.50 - $8.00 ($/bbl) ~$75 +/- $10/bbl $0.10/BOE ($/
Slide 19: Asset-Level Guidance
Asset-Level Guidance 2024 Program Details Frac Capital D&C LL Rigs Crews Net TILs ($MM) ($/ft) (ft) 2H24E Cadence • 2H24 production ~flat in 3Q24 & 4Q24 Permian 5–6 1 – 1.5 120 – 130 $1,350 - $1,450 $625 - $675 ~11.5k • 2H24 TILs ~balanced between 3Q24 & 4Q24 • Condensate focused activity Montney 3–
Slide 20: Hedge Positions as of June 30, 2024
Hedge Positions as of June 30, 2024 Oil and Condensate Hedge Positions1 Oil and Condensate 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 Volume Mbbls/d 10 0 0 0 0 0 WTI & NYMEX Realized Gain / WTI Collars Call Strike $/bbl Put Strike $/bbl $92.06 $60.00 - - - - - - - - - - (Loss) Sensitivities ($ MM)2 Volume Mbbls/
Slide 21: Durable Cash Return Framework
Durable Cash Return Framework Committed to Our Proven Framework 3Q24 Cash Returns ($ MM) 2Q24 Results Post Base Dividend $1,025 Non-GAAP Cash FlowŦ Free Cash FlowŦ ($622) Capex $403 Non-GAAP Free Cash FlowŦ ($80) 2Q24 Base Dividend Shareholder Returns $323 Available Capital Allocation Framework $162
Slide 22: Proactive AECO & Waha Risk Management
Proactive AECO & Waha Risk Management Successfully Managing ~100% transport to market secured Gas Flow & Price Risk Minimal exposure to local market prices 3Q24 – 4Q25 Montney Price Exposures1 2H24 Permian Price Exposures1 ~60% ~45% Physical Transport Outside AECO Physical Transport Outside Waha C
Slide 23: Canadian Royalty Sensitivity
Canadian Royalty Sensitivity Royalty Sensitivity1 Royalty Rates Vary Based on Commodity Prices 24 – 26% US Basin Average (20 – 25%) • OVV Reports “NRI” volumes after royalties across its US and Canadian assets • Changes in royalty rates seen in changes to reported net production Observed Montney Rat
Slide 24: Track Record of Responsible Operations
Track Record of Responsible Operations 50% Scope 1&2 Achieved 41% Reduction Through YE23 GHG Intensity Reduction Target Intensity Reduction1 (from ‘19 – ‘30) Tied to Compensation For All Employees >65% Methane Intensity Reduction2 Dedicated to Social Engagement Achieved 33% Reduction from ’19 T