Ovintiv Inc. (de) · NYSE:OVV
Ovintiv Inc. (de) — Merger or Acquisition (April 2023)
19 slides from Ovintiv Inc. (de)'s merger presentation, Apr 3, 2023
Slide 1: Reinforcing Our Strategy: Core Midland Basin Acquisition & Bakken Divestiture
Exhibit 99.2 Reinforcing Our Strategy Core Midland Basin Acquisition & Bakken Divestiture April 3, 2023 1
Slide 2: Cautionary Statements
Cautionary Statements 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 the assets, acti
Slide 3: 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 4: Taking Strategic Action
Taking Strategic Action Acquiring Core Midland Basin + $4.275B headline purchase price (Sources: Cash, Equity & Bakken Proceeds) Divesting Bakken – $0.825B all cash consideration Immediately Accretive at Strip: ŦŦ 1 Next Twelve Months “NTM” Accretion: 14% CF /share / >30% FCF /share / >25% Sharehold
Slide 5: Core Midland Basin Transaction Overview
Core Midland Basin Transaction Overview Substantial Pro Forma Scale Acquired Asset Profile • ~75 MBOE/d estimated at close (~80% Oil & condensate) Dawson Gaines Borden ŦŦ 1 • ~$1.5B NTM EBITDA at strip (+/- $5/bbl WTI = ~$115 MM EBITDA ) • 7 active rigs & 3 frac crews currently running • Maximizing
Slide 6: Delivering on Durable Returns Strategy
Delivering on Durable Returns Strategy ŦŦ CF /share, FCF /share, shareholder returns/share, NAV/share, oil mix Immediately ŦŦ Attractively valued at 2.8x NTM EBITDA and 19% NTM Free Cash Flow Yield at P Accretive strip 1 ~1,050 net Permian 10k locations added (~800 Premium locations) Extends Permian
Slide 7: Achieves Key Financial Targets
Achieves Key Financial Targets Key Accretion Metrics at Strip NTM 2024 Per Share Accretion • Attractive Acquisition Valuation: P ŦŦ 2.8x NTM EBITDA & 19% NTM FCF Yield at strip Ŧ Cash Flow +14% +12% Immediately • +20% per share base dividend increase Ŧ supported through incremental cash flow Free Ca
Slide 8: Acquired Acreage Aligns with Core Permian Wells
Acquired Acreage Aligns with Core Permian 1 Wells Consistent with Legacy OVV Strong and Repeatable Well Results Permian: 12 Month Cumulative Oil Mbbls / 1,000 ft • Multi-zone development across up to 6 benches today • Further delineating additional promising horizons across our acreage 18 • Substant
Slide 9: Encouraging Upside From Offset OVV Wells
Encouraging Upside From Offset OVV Wells 1 Strong 1Q23 Results 1Q23 OVV Sugarloaf Development in Northern Martin 2023 OVV Permian Average 22 • 7 well pad development across 4 benches (MSB, JM, UL SPRBY, Dean) 1Q23 OVV Sugarloaf Actuals • Optimized completion design with increased sand to water ratio
Slide 10: Proven Offset Industry Performance
Proven Offset Industry Performance Map Highlights Select Recent Industry Well Results Reliance Blue Beauty 15- FANG Vineyard ENCAP Biff / McFly ENCAP Chopper / Goocher 22 IP30 Bo/d: 1,235 IP30 Bo/d: 790 IP30 Bo/d: 960 IP30 Bo/d: 1,275 >130 Gaines Dawson FANG Chablis Pinion Chocolate Lab 40-33 Wells
Slide 11: Enhances '23 Program with a Strong '24 Outlook
Enhances ’23 Program with a Strong ’24 Outlook Updated 2024 Streamlined and enhanced portfolio supports 2023 2023 Scale through-cycle durable return strategy Total Production 500 – 525 520 – 545 (MBOE/d) >200 ~3-5% reduction in LOE & T&P per BOE post close Crude & Condensate • Detailed cost guidance
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Slide 13: Appendix
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Slide 14: Optimized Portfolio
Optimized Portfolio High-Quality Multi-Basin Portfolio P • Four high return assets each with deep Premium inventory Montney • Innovation and best practices distributed across the portfolio Strong production across all products & advantaged costs Operational Excellence Drives Efficiencies P • In-basi
Slide 15: Acquisition Adds to Well Positioned Permian Ops
Acquisition Adds to Well Positioned Permian Ops Midland Basin Wet Sand Mine Combined Permian Scale Provides Efficiencies • Cross-basin economies of scale driven by extended footprint • Increased operational flexibility and reduced rig moves • Improves utilization of existing facilities, contracts an
Slide 16: Quarterly 2023 Guidance Cadence
Quarterly 2023 Guidance Cadence Capex ($ MM) Achieving Normalized Run-Rate Operations by 4Q23 $1,000 • Substantial seller activity in 2H22 & 1H23 normalizing by 4Q23 Narrowed 1Q23 Guide $750 • Higher 3Q23 capital due to winding down wells in progress at close $610 - $620 $500 Strong Pro Forma 2H23 a
Slide 17: Bakken Divestiture Details
Bakken Divestiture Details Calhoun Pad Development Lowers Required Debt All Cash $825 & Equity Funding Proceeds ($MM) Asset @YE22 46k Footprint (Net Acres) 1Q23 Estimated Production ~37 Production Profile (60% Oil & Condensate) MBOE/d Effective Date: January 1, 2023 Estimated Close: Before the end o
Slide 18: Committed to Capital Allocation Framework
Committed to Capital Allocation Framework Our Proven Ŧ ~$4B pro forma mid-cycle EBITDA Framework Ŧ 1x Mid-Cycle +$1B from previous level ($3B was old mid-cycle EBITDA ) Leverage Target Post Base Dividend Ŧ Substantial increase in operational scale Reaffirmed Free Cash Flow >200 Mbbls/d 2024 oil & co
Slide 19: Thoughtful Balance Sheet Management
Thoughtful Balance Sheet Management Proven & Consistent Debt Reduction Profile ($B) Well Positioned Go Forward Committed to ongoing debt reduction $7.3 $7.1 Substantial FCF earmarked for Balance Sheet $6.9 $6.9 $6.4 $6.0 - $6.5 Focused on Free Cash Flow generation Thoughtful & flexible capital progr