Ovintiv Inc. (de) · NYSE:OVV
Ovintiv Inc. (de) — Q1 2024 Earnings Presentation
23 slides from Ovintiv Inc. (de)'s earnings presentation, May 8, 2024
Slide 1: 1Q24 Results Conference Call
1Q24 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: Strong Start to 2024
Strong Start to 2024 211 Mbbls/d oil & condensate & 574 MBOE/d of total production Operational Both above 1Q24 guidance midpoint Excellence in $591 MM of capex Below 1Q24 guidance midpoint 1Q24 $444 MM in Free Cash FlowŦ ~13% Free Cash Flow Yield Ŧ1 Raising FY24 Now 204-208 Mbbls/d oil & condensate
Slide 5: Operational Excellence in 1Q24
Operational Excellence in 1Q24 1Q24 Operational Performance Beat Midpoint of Production Expectations Oil & condensate above guidance midpoint Guidance Actuals Gas, NGL and BOE production at or above high-end of range Total Production (MBOE/d) 560 - 575 P 574 1Q24 Production Impacts Resolved Oil & Co
Slide 6: Track Record of Shareholder Returns
Track Record of Shareholder Returns 2Q24 Shareholder Returns 2Q24 Balance Sheet Allocation $80 MM Base Div. $182 MM $182 MM P 50% of post-base dividend Free Cash FlowŦ Buybacks P Reaffirming commitment to 1.0x mid-cycle leverage ratioŦ target (~$4B debt) $262 MM Total Return ~8%Cash Return Yield Ŧ1
Slide 7: 2Q24 & FY24 Guidance
2Q24 & FY24 Guidance 2024 Production and Capital 2Q24 FY24 ~$750 MM More Free Cash FlowŦ y/y Total Production 560 – 575 560 - 575 (MBOE/d) >60% increase in FY24 Free Cash FlowŦ expected vs. FY23 Oil & Condensate from capital efficiencies and higher oil prices 205 - 209 204 - 208 (Mbbls/d) NGLs C2 –
Slide 8: Permian Well Performance
Permian Well Performance Permian Well Performance Well performance in-line with expectations 20 • 4Q23 & 1Q24 TILs performing in-line with ‘24 type curve (80 wells) 2024 OVV Type Curve 4Q23 & 1Q24 (80 wells) • 21 net TILs in 1Q24, expect 120-130 net TILs in FY24 18 • 130 Mbbls/d Permian oil & conden
Slide 9: Driving D&C Efficiencies in the Permian
Driving D&C Efficiencies in the Permian Drilled Ft/Day Drilling P 1Q24 ~5% faster than ‘23 program ~1,700 ~1,785 P 6 active rigs today (up from 5 in 1Q24) ~1,600 P Continue to push the envelope on speed 2022 2023 1Q24 Completed Ft/Day Completion Method Completions ~4,200 P 1Q24 ~30% faster than ’23
Slide 10: Montney Continues to Impress
Montney Continues to Impress Drilled Ft/Day Completed Ft/Day Accelerated Drilling and Completions ~1,700 ~1,725 ~1,750 ~3,300 ~4,100 ~4,100 2022 2023 1Q24 2022 2023 1Q24 P Program fully targeting condensate $ Strong Returns Driven by Condensate >60% P P ‘24 Program IRR (at $75 WTI & $2.50 NYMEX) Low
Slide 11: Leveraging the Multi-Basin Portfolio
Leveraging the Multi-Basin Portfolio 21 Mbbls/d oil & condensate production in 1Q24 Salt Lake City refinery turnarounds completed in 1Q24 Core OVV Uinta Position Scale & Running Room ~137k Duchesne Uintah High quality oil resource & well results Multiple benches & ~1k ft of pay with >80% oil & conde
Slide 12: OVV's Keys to Success
OVV’s Keys to Success P High-Quality Portfolio • Four top-tier assets with substantial operating scale Montney • Innovations distributed across the portfolio to drive results High-return oil & deep multi- product inventory P Operational Excellence Drives Efficiencies • Proven operational flexibility
Slide 13: <3¢ Ovintiv’
oe <3¢ Ovintiv’ ra
Slide 14: Appendix
Appendix o esx Ovintiv’ ra
Slide 15: Additional 2024 Guidance & Sensitivities
Additional 2024 Guidance & Sensitivities Operating Expenses Upstream T&P2 Sensitivities 1Q24A FY24 FY24 Sensitivity Upstream T&P2 PMOT F/X Rate 4.3% 4 - 5% (CAD/USD) ~0.75 +/- 0.01 CAD/USD $0.10/BOE (% of Upstream Revenue 1) Upstream T&P2 WTI $7.25 $7.50 - $8.00 ($/bbl) ~$75 +/- $10/bbl $0.10/BOE ($
Slide 16: Asset-Level Guidance
Asset-Level Guidance 2024 Program Details Frac Capital D&C LL Rigs Crews Net TILs ($MM) ($/ft) (ft) 2Q24-4Q24 Cadence • Recently picked up 6th rig Permian 5–6 1 – 1.5 120 – 130 $1,350 - $1,450 $625 - $675 ~11.5k • TILs 2H24 weighted (~60%) • Condensate focused activity Montney 3–4 1 60 – 70 $425 - $
Slide 17: Hedge Positions as of March 31, 2024
Hedge Positions as of March 31, 2024 Oil and Condensate Hedge Positions1 Oil and Condensate 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 Volume Mbbls/d 25 0 0 0 0 0 0 WTI & NYMEX Realized Gain / WTI Swaps Price $/bbl $73.69 - - - - - - (Loss) Sensitivities ($ MM)2 Volume Mbbls/d 75 10 0 0 0 0 0 WTI Collars Ca
Slide 18: Durable Cash Return Framework
Durable Cash Return Framework Committed to Our Proven Framework 2Q24 Cash Returns ($ MM) 1Q24 Results Post Base Dividend $1,035 Non-GAAP Cash Flow Ŧ Free Cash FlowŦ ($591) Capex $444 Non-GAAP Free Cash Flow Ŧ ($80) 1Q24 Base Dividend Shareholder Returns $364 Available Capital Allocation Framework $1
Slide 19: Committed to Debt Reduction
Committed to Debt Reduction Long-Term Debt Profile ($MM) Resilient Capital Structure 1,400 $1,368 $6,198 MM 1,200 Debt @ 3.31.24 1,000 1.3x 800 $700 $850 Debt to Adjusted EBITDAŦ @ 3.31.24 $600 $600 $599 600 Investment Grade Rating $459 1.0x Mid-Cycle Leverage RatioŦ Target 400 $300 (~$4B Debt) Matu
Slide 20: 1Q24 Debt Bridge
1Q24 Debt Bridge 4Q23 to 1Q24 Debt ($MM) +$153 $6,198 +$236 $5,737 +$188 +$248 +$591 +$80 Acquired ~65 Permian locations ($1,035) (announced with 4Q23 results) 1.3x ~Flat Debt to Adjusted EBITDA Ŧ 1.3x 4Q23 Actual Cash Capital Dividend Share 1Q24 2023 Working 1Q24 Actual Flow Ŧ Buybacks A&D Canadian
Slide 21: Proactive AECO & Waha Risk Management
Proactive AECO & Waha Risk Management Successfully Managing P~100% transport to market secured Gas Flow & Price Risk PMinimal exposure to local market prices 2Q24 – 4Q25 Montney Price Exposures1 2Q24-4Q24 Permian Price Exposures1 ~65% ~50% Physical Transport Outside AECO Physical Transport Outside W
Slide 22: 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 23: Track Record of Responsible Operations
Track Record of Responsible Operations 50% P Scope 1&2 PAchieved 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 P Achieved 33% Reduction from ’19 T