Ovintiv Inc. (de) · NYSE:OVV
Ovintiv Inc. (de) — Q1 2023 Earnings Presentation
19 slides from Ovintiv Inc. (de)'s earnings presentation, May 10, 2023
Slide 1: 1Q23 Results Conference Call
1Q23 Results Conference Call 1
Slide 2: 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 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: Strong Start to 2023
Strong Start to 2023 $241 MM Non-GAAP Free Cash FlowŦ Robust ~$1.1B cash from operating activities & returned ~$300 MM to shareholders (base dividends and buybacks) Business 511 MBOE/d Total Production 166 Mbbls/d oil & condensate, 1,555 MMcf/d natural gas, 86 Mbbls/d NGLs1 Performance +20% Base Div
Slide 5: 1Q23 Beat Across the Board
1Q23 Beat Across the Board Strong Production Performance Across the Portfolio Substantial Volume Increase • Outperformance driven by strong well performance 1Q23 Crude & Condensate (Mbbls/d) 166 • Continuously optimizing completions and targeting • Proven track record of learnings transfer across th
Slide 6: Strong Permian Well Performance Continues
Strong Permian Well Performance Continues Strong 1Q23 Performance Across Acreage Footprint 1Q23 Pads Exceeding Expectations1 • Builds on 2H22 Permian well performance momentum 22 2023 OVV Permian Updated Type Curve • Proven track-record of cube development (co-development) 1Q23 OVV Actuals (17 wells
Slide 7: Proven Permian Operational Excellence
Proven Permian Operational Excellence 4.0 000’s Feet / day Setting the Efficient Frontier +25% 3.0 Completions 2.0 Innovative culture driving results Speed Faster Completions 1.0 Track record of continuous improvement (YTD23 vs. ’20 – ‘22 avg) 0.0 2017 2018 2019 2020 2021 2022 YTD23 Reduces operatin
Slide 8: All Assets Contributing to Performance
All Assets Contributing to Performance Strong 1Q23 Well Strong Program Economics driven by Oil & C5+ & Gas volumes Results Returns at Strip Prices Montney >100% Montney condensate realized >101% of WTI in 1Q23 Lower Montney Well IP30 >5,300 BOE/d Program returns resilient to lower gas prices >1,150
Slide 9: Announced Strategic Acquisition in April
DEAL GUIDANCE & METRICS UNCHANGED Announced Strategic Acquisition in April Transaction Overview • $4.275B Core Midland Basin acquisition & $825 MM Bakken divestiture Substantial Permian Scale • Immediately Accretive at strip: Gaines Dawson Borden • NTM Accretion per share: 14% Cash FlowŦ / >30% FCFŦ
Slide 10: Guidance Details
Guidance Details No change to guide Pre-Transactions Post Transactions 2024 2Q23 FY 2023 Scale Expected ~3-5% reduction in LOE & T&P / BOE post close Total Production 515 – 535 520 – 545 (MBOE/d) >200 Crude & Condensate Adjusted hedge execution to incorporate Oil & Condensate (Mbbls/d) step-up in po
Slide 11: Optimized Pro Forma Portfolio
Optimized Pro Forma Portfolio High-Quality Multi-Basin Portfolio • Four high return assets each with deep Premium inventory Montney • Innovation and best practices distributed across the portfolio Strong production across all products & advantaged costs Operational Excellence Drives Efficiencies
Slide 12: Int
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Slide 13: Appendix
Appendix
Slide 14: Additional Pre-Transaction Guidance
Additional Pre-Transaction Guidance Operating Expenses Corporate Items (QTR Run Rate) 1Q23A FY23 ($MM unless otherwise noted) 1Q23A FY23 PMOT Market Optimization3 $33 $30 - $35 4.5% 4-5% Corporate G&A (ex LTI) $774 $64 - $68 (% of Upstream Revenue1) Less Sublease Revenue $17 ~$18 Upstream T&P2 $9.00
Slide 15: Hedge Positions as of April 30, 2023
Hedge Positions as of April 30, 2023 Oil and Condensate Hedge Positions1 Natural Gas Hedge Positions1 Oil and Condensate 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 Natural Gas 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 Volume Mbbls/d 0 35 35 25 25 0 0 Volume MMcf/d 0 0 0 100 100 100 100 WTI Swaps NYMEX Swaps Price
Slide 16: Proactive AECO & Waha Risk Management
Proactive AECO & Waha Risk Management Successfully Managing ~100% transport to market secured Gas Flow & Price Risk Minimal exposure to local market prices 2023-2025 Montney Price Exposures1 2023 Permian Price Exposures1 ~65% ~75% Physical Transport Outside AECO Physical Transport Outside Waha Chi
Slide 17: Track Record of ESG Leadership
Track Record of ESG Leadership 50% Scope 1&2 Achieved >30% Reduction Through YE22 GHG Intensity Reduction Target Intensity Reduction1 (from ‘19 – ‘30) Tied to Compensation For All Employees >50% Methane Intensity Reduction2 (‘22 vs. ’19) Inclusion in ’23 Bloomberg Gender Achieved 33% Reductio
Slide 18: Transparent Cash Return Framework
Transparent Cash Return Framework 2Q23 Cash Returns ($ MM) Cumulative Shareholder Returns ($ MM)1 1Q23 Results $1,800 $851 Non-GAAP Cash FlowŦ Since 3Q21 ($610) Capex $1,158 Buybacks $1,600 $241 Non-GAAP Free Cash FlowŦ $456 Base Dividends ($61) 1Q23 Base Dividend $1,400 $1,614 Total Returns2 $180 A
Slide 19: Cost Savings Momentum Continues
Cost Savings Momentum Continues Declining Legacy Costs Legacy Cost Profile ($ MM) • Non-GAAP Cash FlowŦ tailwind Declining Legacy Rex Costs • No execution risk, only subject to time $147 $147 • REX commitment declines ~$100 MM from FY23 – FY24, commitment ends May ‘24 ~$250 MM Estimated Cumulative L