Ovintiv Reports First Quarter 2024 Financial and Operating Results
Ovintiv Inc. reported strong first quarter 2024 financial and operating results, including net earnings of $338 million, cash from operating activities of $659 million, and Non-GAAP Free Cash Flow of $444 million. Production volumes were above guidance, with plans to increase full-year production. The Company returned $328 million to shareholders through dividends and buybacks. Ovintiv maintains a strong balance sheet and investment grade rating. The release also highlighted the 2023 Sustainability Report, emphasizing environmental and social responsibility achievements.
Ovintiv reported strong financial results for the first quarter of 2024, with net earnings of $338 million and cash from operating activities of $659 million.
The Company generated Non-GAAP Free Cash Flow of $444 million after capital expenditures, demonstrating financial strength and operational efficiency.
Ovintiv exceeded production guidance in the first quarter, with average total production volumes of 574 MBOE/d, including oil, condensate, NGLs, and natural gas.
The Company raised its full year production guidance to 560-575 MBOE/d, maintaining capital guidance at $2.2-2.4 billion, showcasing growth and stability in operations.
Ovintiv returned $328 million to shareholders through dividends and buybacks, reflecting a commitment to capital allocation and value creation for investors.
The Company recorded net losses on risk management of $54 million, impacting net earnings despite overall positive financial results.
Ovintiv's average realized prices for oil, NGLs, and natural gas were influenced by hedges, affecting total average realized price per BOE.
Strong Shareholder Returns Underpinned by Continued Operational Excellence
- Generated net earnings of
$338 million $659 million $1,035 million $444 million $591 million - First quarter production was at the high-end or above the guidance range on every product with average total production volumes of 574 thousand barrels of oil equivalent per day ("MBOE/d"), including 211 thousand barrels per day ("Mbbls/d") of oil and condensate, 88 Mbbls/d of other NGLs (C2 to C4) and 1,648 million cubic feet per day ("MMcf/d") of natural gas
- Returned
$328 million - Raised full year production guidance to 560 MBOE/d to 575 MBOE/d while leaving capital guidance unchanged at
$2.2 billion $2.4 billion - Released 2023 Sustainability Report on Company website
"Our solid execution continued across the portfolio during the first quarter," said Ovintiv President and CEO, Brendan McCracken. "Our combination of strong productivity, leading capital efficiency and a stronger oil price environment have raised our expectations for 2024 Non-GAAP Free Cash Flow from
- The Company recorded net earnings of
$338 million $1.24 $54 million - Cash from operating activities was
$659 million $1,035 million $591 million $444 million - First quarter average total production volumes were approximately 574 MBOE/d, including 211 Mbbls/d of oil and condensate, 88 Mbbls/d of other NGLs and 1,648 MMcf/d of natural gas.
- Upstream operating expense was
$4.52 $7.25 $1.60 4.3% of upstream revenue. These costs were at the low-end of guidance on a combined basis. - Excluding the impact of hedges, first quarter average realized prices were
$74.62 97% of WTI),$21.03 $2.21 99% of NYMEX) resulting in a total average realized price of$36.97 - Including the impact of hedges, the average realized prices for oil and condensate was
$74.20 96% of WTI),$21.16 $2.56 114% of NYMEX) resulting in a total average realized price of$37.84
The Company issued its second quarter 2024 guidance and raised its full year production guidance while leaving full year capital guidance unchanged. Full year production volumes are expected to average 560 to 575 MBOE/d, with full year capital investment of
Guidance Updates | 2Q 2024 | Full Year 2024 | ||
Total Production (MBOE/d) | 560 – 575 | 560 – 575 | ||
Oil & Condensate (Mbbls/d) | 205 – 209 | 204 – 208 | ||
NGLs (C2 - C4) (Mbbls/d) | 89 – 92 | 88 – 92 | ||
Natural Gas (MMcf/d) | 1,600 – 1,650 | 1,600 – 1,650 | ||
Capital Investment ($ Millions) | |
Ovintiv remains committed to its capital allocation framework, which returns at least
In the first quarter of 2024, the Company returned
Ovintiv had approximately
Ovintiv reported Non-GAAP Debt to EBITDA of 1.3 times and Non-GAAP Debt to Adjusted EBITDA of 1.3 times.
The Company remains committed to maintaining a strong balance sheet and is currently rated investment grade by four credit rating agencies. Ovintiv maintains a long-term leverage target of 1.0 times Non-GAAP Debt to Adjusted EBITDA at mid-cycle prices, with an associated long-term total debt target of
On May 7, 2024, Ovintiv's Board declared a quarterly dividend of
Permian production averaged 206 MBOE/d (
Montney production averaged 226 MBOE/d (
Uinta production averaged 28 MBOE/d (
Anadarko production averaged 108 MBOE/d (
Today, the Company released its 2023 Sustainability Report, highlighting its progress and performance on several key initiatives related to the environment, social responsibility and corporate governance.
"We are proud of another year of strong performance in 2023," said McCracken. "Our results demonstrate our commitment to developing our resource efficiently and responsibly, while also generating durable returns for our shareholders. We believe that fostering a culture of innovation, engaging with our external stakeholders and workforce, adhering to the highest standards of conduct, and setting measurable near-term targets strengthens our business and drives better corporate outcomes."
- Achieved a
41% reduction in Scope 1 & 2 greenhouse gas (GHG) emissions intensity since 2019, continuing progress toward the Company's goal of a50% reduction by 2030
- Committed
$10 million - Developed new and updated existing safety programs and processes under the guidance of the Company's Safety Advisory Task Force to drive and sustain improved safety performance
- Received an award for LINK, Ovintiv's inclusive employee resource group, for its efforts toward driving a just, equitable, diverse, and inclusive culture in the workplace
- Added a Board of Directors Overboarding and Change in Circumstance Policy, setting high standards for strong corporate governance
- Welcomed a new independent director in January 2024, adding deep technical accounting and energy industry expertise as well as further diversity to the Board
Ovintiv's sustainability report can be found on the Company's website at Home – Ovintiv.
For additional information on the Company's quarterly results, please refer to the First Quarter 2024 Results Presentation available on Ovintiv's website, www.ovintiv.com under Presentations and Events – Ovintiv. Supplemental Information, and Non-GAAP Definitions and Reconciliations, are available on Ovintiv's website under Financial Documents Library.
A conference call and webcast to discuss the Company's first quarter results will be held at 9:00 a.m. MT (11:00 a.m. ET) on May 8, 2024.
To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/3tPPnb2 to receive an instant automated call back. You can also dial direct to be entered to the call by an Operator. Please dial 888-664-6383 (toll-free in
The live audio webcast of the conference call, including slides and financial statements, will be available on Ovintiv's website, www.ovintiv.com under Investors/Presentations and Events. The webcast will be archived for approximately 90 days.
Refer to Note 1 Non-GAAP measures and the tables in this release for reconciliation to comparable GAAP financial measures.
(for the period ended March 31) | 1Q 2024 | 1Q 2023 |
Capital Expenditures (1) ($ millions) | 591 | 610 |
Oil (Mbbls/d) | 170.4 | 127.3 |
NGLs – Plant Condensate (Mbbls/d) | 40.5 | 38.7 |
Oil & Plant Condensate (Mbbls/d) | 210.9 | 166.0 |
NGLs – Other (Mbbls/d) | 88.4 | 86.2 |
Total Liquids (Mbbls/d) | 299.3 | 252.2 |
Natural gas (MMcf/d) | 1,648 | 1,555 |
Total production (MBOE/d) | 573.8 | 511.4 |
(1) Including capitalized directly attributable internal costs. |
(for the period ended March 31) ($ millions) | 1Q 2024 | 1Q 2023 |
Cash From (Used In) Operating Activities Deduct (Add Back): Net change in other assets and liabilities Net change in non-cash working capital | 659
(12) (364) | 1,068
(5) 222 |
Non-GAAP Cash Flow (1) | 1,035 | 851 |
Non-GAAP Cash Flow (1) | 1,035 | 851 |
Less: Capital Expenditures (2) | 591 | 610 |
Non-GAAP Free Cash Flow (1) | 444 | 241 |
Net Earnings (Loss) Before Income Tax Before-tax (Addition) Deduction: Unrealized gain (loss) on risk management Non-operating foreign exchange gain (loss) | 428
(100) 25 | 613
18 5 |
Adjusted Earnings (Loss) Before Income Tax Income tax expense (recovery) | 503 114 | 590 140 |
Non-GAAP Adjusted Earnings (1) | 389 | 450 |
(1) Non-GAAP Cash Flow, Non-GAAP Free Cash Flow and Non-GAAP Adjusted Earnings are non-GAAP measures as defined in Note 1. |
(2) Including capitalized directly attributable internal costs. |
(for the period ended March 31) | 1Q 2024 | 1Q 2023 |
Liquids ($/bbl) | ||
WTI | 76.96 | 76.13 |
Realized Liquids Prices | ||
Oil | 75.66 | 74.06 |
NGLs – Plant Condensate | 68.10 | 73.01 |
Oil & Plant Condensate | 74.20 | 73.81 |
NGLs – Other | 21.16 | 21.11 |
Total NGLs | 35.91 | 37.19 |
Natural Gas | ||
NYMEX ($/MMBtu) | 2.24 | 3.42 |
Realized Natural Gas Price ($/Mcf) | 2.56 | 3.80 |
(for the period ended March 31) ($/BOE) | 1Q 2024 | 1Q 2023 |
Production, mineral and other taxes | 1.60 | 1.83 |
Upstream transportation and processing | 7.25 | 9.00 |
Upstream operating | 4.52 | 4.33 |
Administrative, excluding long-term incentive and legal costs | 1.43 | 1.52 |
($ millions, except as indicated) | March 31, 2024 | December 31, 2023 |
Long-Term Debt, including Current Portion | 6,198 | 5,737 |
Net Earnings (Loss) | 1,936 | 2,085 |
Add back (Deduct): | ||
Depreciation, depletion and amortization | 2,027 | 1,825 |
Interest | 382 | 355 |
Income tax expense (recovery) | 389 | 425 |
EBITDA | 4,734 | 4,690 |
Debt to EBITDA (times) | 1.3 | 1.2 |
($ millions, except as indicated) | March 31, 2024 | December 31, 2023 |
Long-Term Debt, including Current Portion | 6,198 | 5,737 |
Net Earnings (Loss) | 1,936 | 2,085 |
Add back (Deduct): | ||
Depreciation, depletion and amortization | 2,027 | 1,825 |
Accretion of asset retirement obligation | 19 | 19 |
Interest | 382 | 355 |
Unrealized (gains) losses on risk management | (76) | (194) |
Foreign exchange (gain) loss, net | (6) | 19 |
Other (gains) losses, net | (21) | (20) |
Income tax expense (recovery) | 389 | 425 |
Adjusted EBITDA | 4,650 | 4,514 |
Debt to Adjusted EBITDA (times) | 1.3 | 1.3 |
1) Debt to EBITDA and Debt to Adjusted EBITDA are non-GAAP measures as defined in Note 1. |
Oil and Condensate Hedges ($/bbl) | 2Q 2024 | 3Q 2024 | 4Q 2024 | 1Q 2025 | 2Q 2025 | 3Q 2025 | 4Q 2025 |
WTI Swaps | 25 Mbbls/d | 0 - | 0 - | 0 - | 0 - | 0 - | 0 - |
WTI Collars Call Strike Put Strike | 75 Mbbls/d | 10 Mbbls/d | 0 - - | 0 - - | 0 - - | 0 - - | 0 - - |
WTI 3-Way Options Long Put Short Put | 0 - - - | 40 Mbbls/d | 50 Mbbls/d | 40 Mbbls/d | 6 Mbbls/d | 0 - - - | 0 - - - |
Natural Gas Hedges ($/Mcf) | 2Q 2024 | 3Q 2024 | 4Q 2024 | 1Q 2025 | 2Q 2025 | 3Q 2025 | 4Q 2025 |
NYMEX Swaps | 200 MMcf/d | 200 MMcf/d | 200 MMcf/d | 0 - | 0 - | 0 - | 0 - |
NYMEX Collars Call Strike Put Strike | 400 MMcf/d | 400 MMcf/d | 400 MMcf/d | 0 - - | 0 - - | 0 - - | 0 - - |
NYMEX 3-Way Options Put Strike Sold Put Strike | 200 MMcf/d | 200 MMcf/d | 200 MMcf/d | 500 MMcf/d | 380 MMcf/d | 380 MMcf/d | 380 MMcf/d |
Waha % of NYMEX Swaps | 50 MMcf/d | 50 MMcf/d | 50 MMcf/d | 0 - | 0 - | 0 - | 0 - |
AECO Nominal Basis Swaps | 190 MMcf/d ( | 190 MMcf/d ( | 190 MMcf/d ( | 190 MMcf/d ( | 190 MMcf/d ( | 190 MMcf/d ( | 190 MMcf/d ( |
AECO % of NYMEX Swaps | 100 MMcf/d | 100 MMcf/d | 100 MMcf/d | 100 MMcf/d | 100 MMcf/d | 100 MMcf/d | 100 MMcf/d |
Ovintiv reports in
Please visit Ovintiv's website and Investor Relations page at www.ovintiv.com and investor.ovintiv.com, where Ovintiv often discloses important information about the Company, its business, and its results of operations.
The Canadian securities regulatory authorities have issued a decision document (the "Decision") granting Ovintiv exemptive relief from the requirements contained in
Certain measures in this news release do not have any standardized meaning as prescribed by
- Non-GAAP Cash Flow is a non-GAAP measure defined as cash from (used in) operating activities excluding net change in other assets and liabilities, and net change in non-cash working capital.
- Non-GAAP Free Cash Flow is a non-GAAP measure defined as Non-GAAP Cash Flow in excess of capital expenditures, excluding net acquisitions and divestitures. Forecasted Non-GAAP Free Cash Flow assumes forecasted Non-GAAP Cash Flow based on price sensitivities of
$75 $2.50 $80 $2.25 - Non-GAAP Adjusted Earnings is a non-GAAP measure defined as net earnings (loss) excluding non-cash items that the Company's management believes reduces the comparability of the Company's financial performance between periods. These items may include, but are not limited to, unrealized gains/losses on risk management, impairments, non-operating foreign exchange gains/losses, and gains/losses on divestitures. Income taxes includes adjustments to normalize the effect of income taxes calculated using the estimated annual effective income tax rate. In addition, any valuation allowances are excluded in the calculation of income taxes.
- Adjusted EBITDA, Debt to EBITDA and Debt to Adjusted EBITDA (Leverage Target/Ratio) are non-GAAP measures. EBITDA is defined as trailing 12-month net earnings (loss) before income taxes, depreciation, depletion and amortization, and interest. Adjusted EBITDA is EBITDA adjusted for impairments, accretion of asset retirement obligation, unrealized gains/losses on risk management, foreign exchange gains/losses, gains/losses on divestitures and other gains/losses. Debt to EBITDA is calculated as long-term debt, including the current portion, divided by EBITDA. Debt to Adjusted EBITDA is calculated as long-term debt, including the current portion, divided by Adjusted EBITDA. Adjusted EBITDA, Debt to EBITDA and Debt to Adjusted EBITDA are a non-GAAP measures monitored by management as indicators of the Company's overall financial strength.
ADVISORY REGARDING OIL AND GAS INFORMATION – The conversion of natural gas volumes to barrels of oil equivalent (BOE) is on the basis of six thousand cubic feet to one barrel. BOE is based on a generic energy equivalency conversion method primarily applicable at the burner tip and does not represent economic value equivalency at the wellhead. Readers are cautioned that BOE may be misleading, particularly if used in isolation.
ADVISORY REGARDING FORWARD-LOOKING STATEMENTS – This news release 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 Exchange Act of 1934, as amended. All statements, except for statements of historical fact, that relate to the anticipated future activities, plans, strategies, objectives or expectations of the Company, including second quarter and fiscal year 2024 guidance and expected free cash flow, the expectation of delivering sustainable durable returns to shareholders in future years, plans regarding share buybacks and debt reduction, and the anticipated timing of bringing wells online, are forward-looking statements. When used in this news release, the use of words and phrases including "anticipates," "believes," "continue," "could," "estimates," "expects," "focused on," "forecast," "guidance," "intends," "maintain," "may," "opportunities," "outlook," "plans," "potential," "strategy," "targets," "will," "would" and other similar terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words or phrases. Readers are cautioned against unduly relying on forward-looking statements which, are based on current expectations and by their nature, involve numerous assumptions that are subject to both known and unknown risks and uncertainties (many of which are beyond our control) that may cause such statements not to occur, or actual results to differ materially and/or adversely from those expressed or implied. These assumptions include, without limitation: future commodity prices and basis differentials; the Company's ability to successfully integrate the Midland Basin assets; the ability of the Company to access credit facilities and capital markets; the availability of attractive commodity or financial hedges and the enforceability of risk management programs; the Company's ability to capture and maintain gains in productivity and efficiency; the ability for the Company to generate cash returns and execute on its share buyback plan; expectations of plans, strategies and objectives of the Company, including anticipated production volumes and capital investment; the Company's ability to manage cost inflation and expected cost structures, including expected operating, transportation, processing and labor expenses; the outlook of the oil and natural gas industry generally, including impacts from changes to the geopolitical environment; and projections made in light of, and generally consistent with, the Company's historical experience and its perception of historical industry trends; and the other assumptions contained herein.
Although the Company believes the expectations represented by its forward-looking statements are reasonable based on the information available to it as of the date such statements are made, forward-looking statements are only predictions and statements of our current beliefs and there can be no assurance that such expectations will prove to be correct. All forward-looking statements contained in this news release are made as of the date of this news release and, except as required by law, the Company undertakes no obligation to update publicly; revise or keep current any forward-looking statements. The forward-looking statements contained or incorporated by reference in this news release, and all subsequent forward-looking statements attributable to the Company, whether written or oral, are expressly qualified by these cautionary statements.
The reader should carefully read the risk factors described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and in other filings with the SEC or Canadian securities regulators, for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. Other unpredictable or unknown factors not discussed in this news release could also have material adverse effects on forward-looking statements.
Further information on Ovintiv Inc. is available on the Company's website, www.ovintiv.com, or by contacting:
Investor contact: (888) 525-0304 | Media contact: (403) 645-2252 |
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SOURCE Ovintiv Inc.
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