Ovintiv Inc. (de) · NYSE:OVV
Ovintiv Inc. (de) — Corporate Update (September 2022)
50 slides from Ovintiv Inc. (de)'s corporate update, Sep 19, 2022
Slide 1: Montney Webcast September 19, 2022
Exhibit 99.2 Montney Webcast September 19, 2022 1
Slide 2: Today's Agenda & Speakers
Today’s Agenda & Speakers Agenda 1 Introduction Corporate Review 2 Cash Returns & Debt Reduction OVV’s Advantaged Montney Position 3 Type curves, economics, & undeveloped resource Ovintiv Edge 4 OVV’s approach to differentiated operations Canadian Midstream and Marketing 5 Commodity fundamentals & O
Slide 3: Introduction
Introduction Brendan McCracken – President & CEO
Slide 4: Executing Our Business Plan
I N TR O DU C TI O N Executing Our Business Plan Returns Based Strategy Industry-Leading Value Proposition Delivering Value to our P Superior ROIC and return of cash to our shareholders Shareholders 1 Returning Material Cash to Shareholders P 2 ~$1B of shareholder returns in ‘22 & expected to more t
Slide 5: High Quality Balanced Multi-Product Portfolio
I N TR O DU C TI O N High Quality Balanced Multi-Product Portfolio Premium Portfolio P Ŧ • Each asset generates substantial Free Cash Flow • Provides risk mitigation against single basin headwinds Multi-Basin Advantage P 2Q22 • Cross-basin learnings reinforce innovative culture Production • Operatio
Slide 6: Corporate Values
I N TR O DU C TI O N Corporate Values One • We achieve strong results working together, we use collaboration to advance our common goals • Transparency and information sharing across the organization “We aim to be the leading North Agile American E&P by generating free cash • We are proactive in ide
Slide 7: Corporate Review
Corporate Review Corey Code – CFO
Slide 8: Shareholder Return Projections
CORPORATE REVIEW Shareholder Return Projections 2 Returning Substantial Cash Growing Cash Returns 1 • ~$1B through base dividends and buybacks in FY22 Additional Shareholder Returns (Buyback or Variable Dividend) • Repurchased 6.7 MM shares since June 30, 2022 for $325 MM Base Dividend Ŧ Cash Return
Slide 9: Balance Sheet Supports Higher Returns
2041 2040 2039 2038 2037 2036 2035 2034 2033 2032 2031 2030 2029 2028 2027 2026 2025 2024 2023 2022 CORPORATE REVIEW Balance Sheet Supports Higher Returns Ŧ Continued Net Debt Reduction ($B) Proactive Absolute Debt Management • Redeemed $1B of notes in June (~$55 MM/yr int. exp. savings) $7.3 • ~$34
Slide 10: OVV's Advantaged Montney Position
OVV’s Advantaged Montney Position Greg Givens – EVP & COO Tony Baffa – Sr. Manager Canadian Development
Slide 11: The Montney's Role in Our Portfolio
OVV’S ADVANTAGED MONTNEY POSITION The Montney’s Role in Our Portfolio The Montney Basin Ŧ1 Substantial Free Cash Generation – >$2B Upstream Op FCF P British Alberta • Free cash flow driven by strong well results and advantaged midstream & marketing Columbia Fort St. John Premium Returns – #1 Capital
Slide 12: Montney Well Positioned Today & Go-Forward
OVV’S ADVANTAGED MONTNEY POSITION Montney Well Positioned Today & Go-Forward • Free Cash Flow >$2B Today Ŧ1 • Strong Commodity Optionality Upstream Operating FCF in FY22 • Modest growth optionality with current midstream infrastructure Near-Term 0% – 5% Growth Option • Efficiency gains and enhanced
Slide 13: OVV's Premium Acreage Position
OVV’S ADVANTAGED MONTNEY POSITION OVV’s Premium Acreage Position OVV’s Montney Position Substantial Premium Acreage Position with Proven Development British Alberta 1 Columbia • Largest Montney operator today • Multi-decade development history started in the early 2000’s Advantaged Development with
Slide 14: World Class Resource
OVV’S ADVANTAGED MONTNEY POSITION World Class Resource Successfully Maximizing Resource Through Cube Development • Accessing up to ~1,000 foot productive pay thickness during development • Customize every cube with precise well placement to maximize resource extraction Developing Multi-Well Pads at
Slide 15: Montney Oil & Condensate Window Profile
OVV’S ADVANTAGED MONTNEY POSITION Montney Oil & Condensate Window Profile Volatile Oil Wells Drive OVV’s Condensate Production BC AB 2 OVV Premium OVV Upside • Strong well results & quick cycle capital provide rapid payouts and >200% IRR at strip OVV • Condensate realizes prices at parity with WTI (
Slide 16: Montney Gas Window Profile
OVV’S ADVANTAGED MONTNEY POSITION Montney Gas Window Profile Dry Gas Wells Drive OVV’s Natural Gas Exposure & Optionality BC AB 2 OVV Premium OVV Upside • Strong well results & quick cycle capital provide rapid payouts and >200% IRR at strip OVV • Gas economics supported by our active management of
Slide 17: Leading Capital Efficiency & Well Results
OVV’S ADVANTAGED MONTNEY POSITION Leading Capital Efficiency & Well Results Crude & Condensate Economic BOE (20:1) Traditional BOE (6:1) 70 12 7 70% Better 60% Better 55% Better 60 6 10 #1 Montney vs. Peer Avg vs. Peer Avg vs. Peer Avg 50 5 8 40 4 Capital Efficiency… 6 30 3 ’22 Capex ($MM USD) / 4 2
Slide 18: Strong Wells Across the Commodity Mix
OVV’S ADVANTAGED MONTNEY POSITION Strong Wells Across the Commodity Mix OVV 16-27 Pad Oil & Condensate Production Bbls/d NRI Production (Mid Montney Average) 1,500 >1,000 Bbl/d Strong 1 Oil Wells Provide Exposure to Prices at 1,000 or Near WTI and a Prolific Oil & C5+ 500 Return Profile Per Well Ave
Slide 19: Royalty Structure Supports Returns
OVV’S ADVANTAGED MONTNEY POSITION Royalty Structure Supports Returns 1 Royalty Sensitivity Royalty Rates Vary Based on Commodity Prices 24 – 26% • OVV Reports “NRI” volumes after royalties across its US and Canadian assets US Basin Average (20 – 25%) • Changes in royalty rates seen in changes to rep
Slide 20: Permitting & Regulatory Landscape in BC
OVV’S ADVANTAGED MONTNEY POSITION Permitting & Regulatory Landscape in BC OVV has majority of its 2023 permits in-hand today P with additional permits continuing to be released Flexible Operations Provide Certainty Regardless of permit activity OVV can execute its plan & P achieve strategic objectiv
Slide 21: Ovintiv Edge
Ovintiv Edge Aaron Felton – Chief Operations Engineering Tony Baffa – Sr. Manager Canadian Development
Slide 22: Unmatched Operations
OVINTIV EDGE Unmatched Operations Drilling Completions Faster Spud to Rig Release More Proppant Pumped per 35% vs. Montney Peers 90% Day vs. Montney Peers Prudent Development Stacked Innovation Faster Cycle Time Lower Scope 1&2 GHG 1 40% For Recent 15 Well Pad 60% Emissions vs Peers P Note: Montney
Slide 23: Proven Industry Leadership
OVINTIV EDGE Proven Industry Leadership Drilling Completion Driving Faster Drilling Speed Demonstrating Sand Efficiencies Spud to Rig Release (days) Proppant Pumped (tons/day) 30 5,000 4,000 20 3,000 35% 90% 2,000 OVV 10 Faster Spud to Rig Release Better Sand Efficiency 1,000 OVV Peer Avg YTD22 vs.
Slide 24: Leading Edge Drilling Performance
OVINTIV EDGE Leading Edge Drilling Performance 1 Extending Laterals (Ft) Operational Execution Driving Montney Performance • Leading longer-lateral length evolution in the basin 10,700 10,300 • Continuously innovating to push past mechanical limits & set new standards 9,700 Counterbalancing Inflatio
Slide 25: Demonstrated Completions Execution
OVINTIV EDGE Demonstrated Completions Execution Completion Efficiencies Maximizing Operational Up-Time • Eliminating critical path bottlenecks Sand Pumped (MMLBS / Day) • Driving record completed lateral and sand pumped per day Completed Lateral Length (Feet / Day) 14-13 Pad Set Multiple Pacesetter
Slide 26: Stacked Innovation Approach
OVINTIV EDGE Stacked Innovation Approach CASE STUDY – OVV Pipestone 14-13 Pad (15 well pad, on-line 3Q22) Drilling Completions Production Innovation Initiatives: Innovation Initiatives: Innovation Initiatives: 1 Multi-coil Tubing 1 Redesigned Drill Bits 1 Real Time Frac Optimization 2 Integrated Ser
Slide 27: Strategic Utilization of Next Gen Frac Crews
OVINTIV EDGE Strategic Utilization of Next Gen Frac Crews Establishing First 100% Natural Gas Fleet In Canada • Extensive development benefits from the thoughtful integration of 100% natural gas frac fleets • Reinforces leading edge operational execution Drives Efficiency & Flexibility – A Cornersto
Slide 28: Leading TRIF Affirms Operational Excellence
OVINTIV EDGE Leading TRIF Affirms Operational Excellence P 1 2021 TRIF Performance Driving Leading Safety Performance Year-over-Year • Safety is a top priority across the organization • Continue to advance and ingrain safety culture throughout the organization Continuously Improving Safety Performan
Slide 29: Top Tier Emissions Performance Continues
OVINTIV EDGE Top Tier Emissions Performance Continues P 1 2021 GHG Scope 1&2 Intensity Regulatory Framework Supports Improvement Initiatives Tons CO e/MBOE 2 • Access Government incentives to improve emissions profile at low costs • All projects completed to date have also been economically successf
Slide 30: Canadian Midstream and Marketing
Canadian Midstream and Marketing Jim Zadvorny – VP Marketing
Slide 31: Montney Natural Gas and the AECO Market
CANADIAN MIDSTREAM AND MARKETING Montney Natural Gas and the AECO Market Very Liquid Natural Gas Market ~17 Bcf/d physical supply & substantial daily trading volume P AECO Natural Gas Strong In-Basin Demand Growth ~3% 5-yr growth CAGR or ~1 Bcf/d additional demand by ’27 P Marketing “101” Multiple &
Slide 32: Western Canadian Natural Gas Dynamics
CANADIAN MIDSTREAM AND MARKETING Western Canadian Natural Gas Dynamics 2 Western Canadian Gas Supply & Demand (Bcf/d) Growth Basin Gas Prices ($/MMBtu) In-Basin Natural Gas Demand Other LNG Waha Pipeline Export Capacity Production Dominion Appalachia LNG Canada AECO 25 Additional Proposed LNG Fixed-
Slide 33: Diversifying & Managing AECO Exposure
CANADIAN MIDSTREAM AND MARKETING Diversifying & Managing AECO Exposure Montney / WCSB Gas Export Infrastructure NGTL Legend System Station 2 (AECO) Added Capacity on Kitimat TC Energy Alliance to Chicago Northern Border (begins Nov 1, 2022) Empress Alliance GTN Emerson Westcoast Sumas Coastal GasLin
Slide 34: OVV Montney is Delinked from AECO
CANADIAN MIDSTREAM AND MARKETING OVV Montney is Delinked from ’23-’25 AECO 1 2 2023-2025 Montney Price Exposures 2023-2025 AECO Sensitivity AECO Sensitivity Assumption ~50% % of NYMEX ~65% Pre-Hedge Realization Physical Transport Outside AECO ~80% Chicago Montney % of NYMEX Post-Hedge Realization ~9
Slide 35: Canadian West Coast LNG Export Potential
CANADIAN MIDSTREAM AND MARKETING Canadian West Coast LNG Export Potential 3 Proposed Export Facilities (Bcf/d) FID taken on ~2 Bcf/d & >6 Bcf/d possible by 2030+ • LNG Canada Phase 1, ramp-up expected to begin ~1Q25 (>60% 6.5 1 complete) Ksi Lisims LNG • First feeder pipeline (Coastal GasLink) compl
Slide 36: Strong Condensate Market Fundamentals
CANADIAN MIDSTREAM AND MARKETING Strong Condensate Market Fundamentals 1 2 Captive Demand Growth (Mbbls/d) Montney Condensate Competes with WTI ($/bbl) Required Condensate Imports to Meet Demand WTI Montney Condensate Domestic Condensate Production High & growing import ~6% 5-yr Import requirement D
Slide 37: Closing Remarks & Q&A
Closing Remarks & Q&A Brendan McCracken – President & CEO
Slide 38: Today's Key Takeaways
CLOSING REMARKS & Q&A Today’s Key Takeaways Basin has substantial resource in The Montney Basin place and commodity optionality P is World Class We hold 260K net premium acres Our Montney Position is with deep inventory runway P Best of the Best Unmatched operations and culture of Setting Leading Ed
Slide 39: 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 40: For convenience, references in this presentation to “Ovintiv”, “OVV”, the “Company”, “we”, “us” and
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, activities and initiatives
Slide 41: Executing Our Business Plan
CLOSING REMARKS & Q&A Executing Our Business Plan Returns Based Strategy Industry-Leading Value Proposition Delivering Value to our P Superior ROIC and return of cash to our shareholders Shareholders 1 Returning Material Cash to Shareholders P 2 ~$1B of shareholder returns in ‘22 & expected to more
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Slide 43: Appendix
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Slide 44: OVV Montney Type Curve Details
APPE N D I X OVV Montney Type Curve Details Type Curve Window Details Oil & Condensate Gas IRRs $55 WTI & $2.75 NYMEX 65% 64% Strip (9.13.22) >200% >200% EUR - MMBOE (% Liquids) 1.1 (30%) 2.5 (10%) Gas Shrink / Yield Shrink % 10% 10% 1 NGL Yield BBLs / MMCF 18 bbls 15 bbls 2023 DCFT Costs - $/ft ~$5
Slide 45: Ample Midstream Access & Optionality
APPE N D I X Ample Midstream Access & Optionality Ovintiv’s Montney Midstream Infrastructure Gas Midstream Running Room • 9 gas processing facilities • > 1.5 Bcf/d of inlet processing capacity (BC/AB) Legend • Allows for volume growth in the medium-to-long term TC Energy Alliance Gas Connectivity to
Slide 46: Montney Natural Gas Realizations
APPE N D I X Montney Natural Gas Realizations 1 1 Gas Unhedged % of AECO Gas Unhedged % of NYMEX 150% ~127% 150% ~95% 1Q21 – 2Q22 Average 1Q21 – 2Q22 Average 140% 140% 130% 130% 120% 120% 110% 110% 100% of AECO 100% of NYMEX 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 1Q21 2Q21 3Q21 4Q21 1Q22
Slide 47: Montney Other NGL (C2-C4) Realizations
APPE N D I X Montney Other NGL (C2-C4) Realizations 1 NGL Unhedged % of WTI Montney NGL Unhedged % of Conway 1Q21-2Q22 Montney Ethane (C ) ~160% 100% of WTI 2 100% Montney Propane (C ) ~80% 3 Montney n-Butane (nC ) ~60% 90% 4 Montney iso-Butane (iC ) ~50% 4 80% 70% ~44% 2 Montney NGL Volume by Compo
Slide 48: Montney Gas Pricing Details
APPE N D I X Montney Gas Pricing Details 3Q22 4Q22 2023 2024 2025 1 Physical Firm Transport ~70% 3Q22 Pre-hedge Montney Dawn 330 330 330 330 330 Natural Gas Sumas 21 21 21 21 21 3 Realizations ~80% Malin 113 113 113 113 113 Total Ovintiv Chicago 71 186 245 245 245 Total FT 535 650 709 709 709 2023-2
Slide 49: Track Record of Environmental Leadership
APPE N D I X Track Record of Environmental Leadership Achieved 24% Reduction Through ’21; Gross Annual Scope 1&2 P Reduction of >2 MM Metric Tons of CO e 2 GHG Intensity 50% 1 Intensity Reduction Tied to Compensation For All Employees Reduction Target P (from ‘19 – ‘30) >50% Methane Intensity 2 2022
Slide 50: OVV is the Montney's Largest Operator
APPE N D I X OVV is the Montney’s Largest Operator Top 10 Montney E&Ps By Production Gross Operated Production (BCF/d) Benefits Of Montney Scale 1.5 Capital efficient development P Effective supply chain management P Accelerated learning curve P 1 OVV Operates 0.5 Mitsubishi’s Portion of Cutbank Rid