Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The MD&A is intended to provide a narrative description of the Company’s business from management’s perspective, which includes an overview of Ovintiv’s condensed consolidated results for the three and six months ended June 30, 2026, and period-over-period comparison. This MD&A should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and accompanying notes for the period ended June 30, 2026 (“Consolidated Financial Statements”), which are included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and accompanying notes and MD&A for the year ended December 31, 2025, which are included in Items 8 and 7, respectively, of the 2025 Annual Report on Form 10‑K.
Common industry terms and abbreviations are used throughout this MD&A and are defined in the Definitions, Conversions and Conventions sections of this Quarterly Report on Form 10-Q. This MD&A includes the following sections:
Strategy
Ovintiv aims to be a leading North American energy producer and is focused on developing its high-quality multi-basin portfolio of oil and natural gas producing plays. Ovintiv is committed to delivering quality returns from its capital investment, generating significant cash flows and providing durable cash returns to its shareholders through the commodity price cycle. The Company aims to achieve its strategic priorities through execution excellence, disciplined capital allocation, and commercial acumen and risk management. In addition, the Company is dedicated to driving progress in the area of sustainability, aligning with its commitment to corporate responsibility.
In support of the Company’s commitment to enhancing shareholder value, Ovintiv utilizes its shareholder return framework to provide competitive returns to shareholders while strengthening its balance sheet.
Ovintiv continually monitors and evaluates changing market conditions to maximize cash flows, mitigate risks and renew its premium well inventory. The Company’s high-quality assets, located in the United States and Canada, form a multi-basin, multi-product portfolio which enables flexible and efficient investment of capital that supports the Company’s strategy.
Ovintiv seeks to deliver results in a socially and environmentally responsible manner. Best practices are deployed across its assets, allowing the Company to capitalize on operational efficiencies and decrease emissions intensity. The Company’s sustainability reporting, which outlines its key metrics, targets and relative progress achieved, can be found in the Company Outlook section of this MD&A and on the Company’s website.
Underpinning Ovintiv’s strategy are core values of one, agile, innovative and driven, which guide the organization to be collaborative, responsive, flexible and determined. The Company is committed to excellence with a passion to drive corporate financial performance and shareholder value.
For additional information on Ovintiv’s strategy, its reporting segments and the plays in which the Company operates, refer to Items 1 and 2 of the 2025 Annual Report on Form 10-K.
In evaluating its operations and assessing its leverage, Ovintiv reviews performance-based measures such as Non‑GAAP Cash Flow and debt-based metrics such as Debt to Adjusted Capitalization, Debt to EBITDA and Debt to Adjusted EBITDA, which are non-GAAP measures and do not have any standardized meaning under U.S. GAAP. These measures may not be similar to measures presented by other issuers and should not be viewed as a substitute for measures reported under U.S. GAAP. Additional information regarding these measures, including reconciliations to the closest GAAP measure, can be found in the Non-GAAP Measures section of this MD&A.
Highlights
During the first six months of 2026, the Company focused on executing its 2026 capital investment plan aimed at maximizing profitability through operational and capital efficiencies, and delivering cash from operating activities. In conjunction with closing the NuVista Acquisition, as discussed below, the Company was also focused on integrating the new assets into its existing operations.
Higher upstream product revenues in the first six months of 2026 compared to 2025, primarily resulted from higher average realized oil and plant condensate prices, excluding the impact of risk management activities, and higher plant condensate and natural gas production volumes, partially offset by lower oil production volumes. Average oil and plant condensate prices increased 26 percent and 29 percent, respectively, primarily due to higher benchmark prices. Plant condensate and natural gas production volumes increased primarily due to the NuVista Acquisition in the first quarter of 2026. Oil production volumes decreased primarily due to the sale of the Company’s Anadarko assets in the second quarter of 2026. Ovintiv continues to focus on optimizing realized prices from the diversification of the Company’s downstream markets.
Significant Developments
•On April 9, 2026, the Company closed the previously announced divestiture of its Anadarko assets, comprising approximately 360,000 net acres in the Anadarko Basin of Oklahoma, for proceeds of approximately $2.8 billion, after preliminary closing adjustments and transaction costs. The transaction had an effective date of January 1, 2026. Following the closing of the divestiture, Ovintiv repaid the balance under its Term Credit Agreement and the facility was terminated. The Term Credit Agreement is defined in the Liquidity and Capital Resources section of this MD&A.
•On April 9, 2026, Ovintiv issued a notice to the trustee to redeem the Company’s $700 million, 5.65 percent senior notes due May 15, 2028. The senior notes were redeemed on April 20, 2026, using proceeds from the divestiture of the Company’s Anadarko assets, and is expected to result in annualized interest savings of approximately $40 million.
•On February 23, 2026, Ovintiv announced an update to its shareholder return framework in support of the Company’s commitment to enhancing shareholder value. The new framework commits to returning between 50 percent and 100 percent of annual Non-GAAP Cash Flow in excess of capital expenditures through base dividends and share buybacks.
•On February 3, 2026, the Company closed its previously announced acquisition of all the issued and outstanding common shares of NuVista Energy Ltd. (“NuVista”) in a cash and stock transaction valued at approximately $2.8 billion (C$3.8 billion) (“NuVista Acquisition”), including Ovintiv’s previous purchase of 18.5 million common shares of NuVista. The Company issued approximately 30.1 million shares of Ovintiv common stock and paid cash consideration of approximately $1.2 billion (C$1.6 billion). Additionally, Ovintiv assumed and subsequently repaid NuVista’s debt, totaling approximately $282 million (C$385 million). The assets acquired are strategically located adjacent to Ovintiv’s current operations in the oil-rich Alberta Montney and add approximately 930 net well locations to Ovintiv’s existing Montney inventory and approximately 140,000 net acres.
Financial Results
Three months ended June 30, 2026
•Reported net earnings of $456 million, or $1.62 per share diluted.
•Recognized a loss on the divestiture of the Company’s Anadarko assets of $337 million, before tax, and allocated goodwill of $502 million to the transaction.
•Recognized a net gain on risk management in revenues of $122 million, before tax.
•Generated cash from operating activities of $1,632 million and Non-GAAP Cash Flow of $1,256 million.
•Purchased for cancellation, approximately 6.1 million shares of common stock for total consideration of approximately $345 million.
•Paid dividends of $0.30 per share of common stock totaling $84 million.
Six months ended June 30, 2026
•Reported a net loss of $174 million, or $0.63 per share diluted, including non-cash ceiling test impairments of $1,154 million, after tax, or $4.21 per share diluted.
•Recognized a loss on the divestiture of the Company’s Anadarko assets of $337 million, before tax, and allocated goodwill of $502 million to the transaction.
•Recognized a net gain on risk management in revenues of $59 million, before tax.
•Generated cash from operating activities of $2,688 million and Non-GAAP Cash Flow of $2,495 million.
•Purchased for cancellation, approximately 7.6 million shares of common stock for total consideration of approximately $429 million.
•Paid dividends of $0.60 per share of common stock totaling $169 million.
•Had approximately $4.4 billion in total liquidity as at June 30, 2026, which included available credit facilities of $3.5 billion, available uncommitted demand lines of $159 million, and cash and cash equivalents of $700 million.
•Reported Debt to EBITDA of 1.3 times and Non-GAAP Debt to Adjusted EBITDA of 0.8 times.
Capital Investment
During the six months ended June 30, 2026
•Executed the Company’s 2026 capital plan with expenditures totaling $1,179 million.
Production
During the six months ended June 30, 2026
•Produced average liquids volumes of 306.4 Mbbls/d, which accounted for 47 percent of total production volumes. Average oil and plant condensate volumes of 215.5 Mbbls/d, represented 70 percent of total liquids production volumes.
•Produced average natural gas volumes of 2,041 MMcf/d, which accounted for 53 percent of total production volumes.
•Produced average total volumes of 646.6 MBOE/d.
Operating Expenses
During the six months ended June 30, 2026
•Incurred upstream transportation and processing expenses of $989 million or $8.45 per BOE, an increase of $172 million compared to 2025, primarily due to increased production volumes related to the NuVista Acquisition in the first quarter of 2026.
•Incurred upstream operating expenses of $408 million or $3.49 per BOE, a decrease of $12 million compared to 2025, primarily due to the sale of the Company’s Anadarko assets in the second quarter of 2026, partially offset by increased activity related to the NuVista Acquisition in the first quarter of 2026.
•Incurred total production, mineral and other taxes of $160 million, which represents approximately 3.55 percent of upstream product revenues. Total production, mineral and other taxes were in line with 2025.
Additional information on the items above and other expenses can be found in the Results of Operations section of this MD&A.
2026 Outlook
Industry Outlook
Oil and Natural Gas Markets
The oil and gas industry is cyclical and commodity prices are inherently volatile. Oil prices reflect global supply and demand dynamics as well as the geopolitical and macroeconomic environment. Natural gas prices are primarily impacted by structural changes in supply and demand, deviations from seasonally normal weather, as well as volatility in regional markets.
Oil prices for the remainder of 2026 are expected to be impacted by the conflict in the Middle East, the interplay among the pace of global economic growth, global oil demand, OPEC+ and non-OPEC+ production, other geopolitical events, and macroeconomic uncertainties.
Natural gas prices for the remainder of 2026 are expected to be impacted by the interplay among natural gas production and associated natural gas from oil production, changes in demand from the power generation sector, changes in export levels of U.S. and Canadian liquefied natural gas, impacts from seasonal weather, as well as supply chain constraints or other disruptions resulting from geopolitical events.
Political developments, including trade disputes and policy changes, continue to elevate global uncertainty and financial market volatility. U.S. sanctions and tariffs on select products may disrupt global supply and demand, leading to commodity price volatility. These actions can provoke retaliatory measures from other countries, further increasing economic volatility and the risk of a global recession.
Company Outlook
The Company will continue to exercise discretion and discipline, and intends to optimize capital allocation through the remainder of 2026 as the commodity price environment evolves.
Markets for oil and natural gas are exposed to different price risks and are inherently volatile. The Company enters into derivative financial instruments to mitigate price volatility and provide more certainty around cash flows. As at June 30, 2026, the Company has hedged approximately 51.0 Mbbls/d of expected oil and condensate production and 757 MMcf/d of expected natural gas production for the remainder of the year. In addition, Ovintiv proactively utilizes commodity derivatives and transportation contracts to diversify the Company’s sales markets, thereby reducing significant exposure to any given market and regional pricing.
Additional information on Ovintiv’s hedging program can be found in Note 20 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Capital Investment
The Company continues to execute its 2026 capital investment program, focusing on maximizing returns from high-margin oil and condensate, and generating cash flows in excess of capital expenditures.
During the second quarter of 2026, the Company invested $574 million, which was in line with its second quarter guidance range of $550 million to $600 million. The Company expects to meet its full year 2026 capital investment guidance range of $2,250 million to $2,350 million.
Ovintiv continually strives to improve well performance and lower costs through innovative techniques. Ovintiv’s large-scale cube development model utilizes multi-well pads and advanced completion designs to maximize returns and resource recovery from its reservoirs. Ovintiv’s disciplined capital program and continuous innovation create flexibility to allocate capital in changing commodity markets to maximize cash flows while preserving the long-term value of the Company’s multi-basin portfolio.
Production
During the second quarter of 2026, total average production volumes were 614.6 MBOE/d, which was in line with the second quarter guidance range of 610.0 MBOE/d to 635.0 MBOE/d. Average oil and plant condensate production volumes were 205.8 Mbbls/d and average other NGL production volumes were 82.4 Mbbls/d, which exceeded their second quarter guidance ranges of 200.0 Mbbls/d to 205.0 Mbbls/d and 75.0 Mbbls/d to 80.0 Mbbls/d, respectively. Average natural gas production volumes were 1,959 MMcf/d, which was lower than the second quarter guidance range of 2,000 MMcf/d to 2,100 MMcf/d primarily due to higher third-party plant downtime and the prioritization of liquids production volumes over natural gas production volumes.
In July 2026, the Company updated its full year 2026 production guidance ranges to reflect strong well performance in Permian. The Company expects to meet its updated full year 2026 total production guidance range of 630.0 MBOE/d to 645.0 MBOE/d, including oil and plant condensate production volumes of approximately 210.0 Mbbls/d to 212.0 Mbbls/d, other NGLs production volumes of approximately 83.0 Mbbls/d to 85.0 Mbbls/d and natural gas production volumes of approximately 2,025 MMcf/d to 2,075 MMcf/d.
Operating Expenses
Ovintiv promotes a collaborative culture that values knowledge exchange, open communication, continuous improvement and learning. This culture stimulates innovation and fosters the creation of best practices resulting in efficiency improvements and enhanced operational performance for the Company.
The Company is on track to incur upstream transportation and processing costs of approximately $8.75 per BOE to $9.25 per BOE, upstream operating expenses of approximately $3.00 per BOE to $3.50 per BOE, and total production, mineral and other taxes of approximately 3.25 to 3.75 percent of upstream product revenues for the remainder of the year.
Additional information on Ovintiv’s third quarter and updated full year 2026 Corporate Guidance can be accessed on the Company’s website at www.ovintiv.com.
Sustainability
Ovintiv recognizes the importance of implementing and maintaining sustainable practices to manage its environmental footprint. The Company participates in emission reduction programs and has adopted a range of strategies to help reduce emissions from its operations. These strategies include incorporating new and proven technologies, optimizing processes in its operations and working closely with third-party providers to develop best practices. The Company continues to look for innovative techniques and efficiencies in support of its commitment to emission reductions.
In May 2026, Ovintiv published its 2025 Sustainability Report. The report highlights the Company’s 2025 sustainability results, and its progress in emissions intensity reductions with the goal to meet its Scope 1&2 GHG emissions target by 2030. As at the end of 2025, the Company had achieved 85 percent of its Scope 1&2 GHG emissions intensity reduction target of 50 percent by 2030, measured against the 2019 baseline. Ovintiv remains committed to its GHG emissions reduction target and has tied the target to the Company’s annual compensation program for all employees. In addition, Ovintiv continues to work towards eliminating routine flaring in its operations.
In conjunction with the Company’s strategy, Ovintiv may acquire assets to strengthen its portfolio. Acquisitions are assessed and evaluated for environmental impacts and alignment with the Company’s GHG emissions intensity target. Ovintiv continues to work to integrate sustainable practices within acquired operations to support company-wide sustainability objectives, while maintaining its 2030 GHG emissions intensity target.
The Company’s social commitment framework, which is rooted in the Company’s foundational values of integrity, safety, sustainability, trust and respect, reflects Ovintiv’s positive contributions to the communities where it operates and highlights the Company’s approach to enabling an inclusive culture.
Ovintiv remains committed to protecting the health and safety of its workforce. Safety is a foundational value at Ovintiv and plays a critical role in the Company’s belief that a safe workplace is a strong indicator of a well-managed business. This safety-oriented mindset enables the Company to quickly respond to emergencies and minimize impacts to employees and business continuity. Safety performance goals are incorporated into the Company’s annual compensation program. Additional information on talent management and employee safety can be found in the Human Capital section of Items 1 and 2 of the 2025 Annual Report on Form 10-K.
Additional information on Ovintiv’s sustainable business practices are included in its most recent Sustainability Report on the Company’s website at www.ovintiv.com.
Selected Financial Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product and Service Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream product revenues |
|
$ |
2,293 |
|
|
$ |
1,755 |
|
|
|
|
$ |
4,507 |
|
|
$ |
3,717 |
|
Service revenues (1) |
|
|
4 |
|
|
|
9 |
|
|
|
|
|
11 |
|
|
|
12 |
|
Total Product and Service Revenues |
|
|
2,297 |
|
|
|
1,764 |
|
|
|
|
|
4,518 |
|
|
|
3,729 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Purchased Product |
|
|
575 |
|
|
|
450 |
|
|
|
|
|
931 |
|
|
|
860 |
|
Gains (Losses) on Risk Management, Net |
|
|
122 |
|
|
|
87 |
|
|
|
|
|
59 |
|
|
|
71 |
|
Sublease Revenues |
|
|
19 |
|
|
|
17 |
|
|
|
|
|
37 |
|
|
|
35 |
|
Total Revenues |
|
|
3,013 |
|
|
|
2,318 |
|
|
|
|
|
5,545 |
|
|
|
4,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses (2) |
|
|
2,019 |
|
|
|
1,807 |
|
|
|
|
|
5,305 |
|
|
|
4,273 |
|
Operating Income (Loss) |
|
|
994 |
|
|
|
511 |
|
|
|
|
|
240 |
|
|
|
422 |
|
Total Other (Income) Expenses (3) |
|
|
455 |
|
|
|
112 |
|
|
|
|
|
528 |
|
|
|
216 |
|
Net Earnings (Loss) Before Income Tax |
|
|
539 |
|
|
|
399 |
|
|
|
|
|
(288 |
) |
|
|
206 |
|
Income Tax Expense (Recovery) |
|
|
83 |
|
|
|
92 |
|
|
|
|
|
(114 |
) |
|
|
58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings (Loss) |
|
$ |
456 |
|
|
$ |
307 |
|
|
|
|
$ |
(174 |
) |
|
$ |
148 |
|
(1)Service revenues comprise third-party gathering and processing fees, and other revenues.
(2)Total Operating Expenses include non-cash items such as DD&A, impairments, accretion of asset retirement obligations and long-term incentive costs. The three and six months ended June 30, 2026, include non-cash ceiling test impairments of nil and $1,485 million, respectively (2025 ‑ nil and $730 million, respectively).
(3)The three and six months ended June 30, 2026, include a loss on the divestiture of the Company’s Anadarko assets of $337 million, respectively.
Revenues
Ovintiv’s revenues are substantially derived from sales of oil, NGLs and natural gas production. Increases or decreases in Ovintiv’s revenue, profitability and future production are highly dependent on the commodity prices the Company receives. Prices are market driven and fluctuate due to factors beyond the Company’s control, such as supply and demand, seasonality and geopolitical and economic factors. The Company’s realized prices generally reflect WTI, NYMEX, Edmonton Condensate and AECO benchmark prices, as well as other downstream benchmarks, including Houston and Dawn. The Company proactively mitigates price risk and optimizes margins by entering into firm transportation contracts to diversify market access to different sales points. Realized prices, excluding the impact of risk management activities, may differ from the benchmarks for many reasons, including quality, location, or production being sold at different market hubs.
Benchmark prices relevant to the Company are shown in the table below.
Benchmark Prices
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|
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|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
(average for the period) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & NGLs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI ($/bbl) |
|
$ |
92.79 |
|
|
$ |
63.74 |
|
|
|
|
$ |
82.36 |
|
|
$ |
67.58 |
|
Houston ($/bbl) |
|
|
95.76 |
|
|
|
64.91 |
|
|
|
|
|
84.32 |
|
|
|
68.80 |
|
Edmonton Condensate (C$/bbl) |
|
|
132.32 |
|
|
|
88.21 |
|
|
|
|
|
115.27 |
|
|
|
94.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NYMEX ($/MMBtu) |
|
$ |
2.90 |
|
|
$ |
3.44 |
|
|
|
|
$ |
3.97 |
|
|
$ |
3.55 |
|
AECO (C$/Mcf) |
|
|
1.51 |
|
|
|
2.07 |
|
|
|
|
|
2.00 |
|
|
|
2.05 |
|
Dawn (C$/MMBtu) |
|
|
3.53 |
|
|
|
3.97 |
|
|
|
|
|
4.79 |
|
|
|
4.82 |
|
Production Volumes and Realized Prices
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|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
Production Volumes (1) |
|
|
|
Realized Prices (2) |
|
|
Production Volumes (1) |
|
|
|
Realized Prices (2) |
|
|
2026 |
|
|
2025 |
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (Mbbls/d, $/bbl) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
122.6 |
|
|
|
141.6 |
|
|
|
$ |
100.78 |
|
|
$ |
64.50 |
|
|
|
131.8 |
|
|
|
146.0 |
|
|
|
$ |
85.78 |
|
|
$ |
68.24 |
|
Canadian Operations |
|
0.4 |
|
|
|
0.4 |
|
|
|
|
75.39 |
|
|
|
63.42 |
|
|
|
0.6 |
|
|
|
0.3 |
|
|
|
|
73.30 |
|
|
|
66.40 |
|
Total |
|
123.0 |
|
|
|
142.0 |
|
|
|
|
100.69 |
|
|
|
64.50 |
|
|
|
132.4 |
|
|
|
146.3 |
|
|
|
|
85.74 |
|
|
|
68.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NGLs - Plant Condensate (Mbbls/d, $/bbl) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
7.2 |
|
|
|
11.4 |
|
|
|
|
77.39 |
|
|
|
50.76 |
|
|
|
9.2 |
|
|
|
10.8 |
|
|
|
|
65.03 |
|
|
|
54.34 |
|
Canadian Operations |
|
75.6 |
|
|
|
57.8 |
|
|
|
|
94.20 |
|
|
|
62.76 |
|
|
|
73.9 |
|
|
|
51.4 |
|
|
|
|
83.25 |
|
|
|
65.05 |
|
Total |
|
82.8 |
|
|
|
69.2 |
|
|
|
|
92.75 |
|
|
|
60.79 |
|
|
|
83.1 |
|
|
|
62.2 |
|
|
|
|
81.24 |
|
|
|
63.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NGLs - Other (Mbbls/d, $/bbl) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
55.6 |
|
|
|
76.8 |
|
|
|
|
18.19 |
|
|
|
17.52 |
|
|
|
65.1 |
|
|
|
73.6 |
|
|
|
|
16.68 |
|
|
|
19.52 |
|
Canadian Operations |
|
26.8 |
|
|
|
18.7 |
|
|
|
|
28.90 |
|
|
|
21.44 |
|
|
|
25.8 |
|
|
|
18.5 |
|
|
|
|
27.46 |
|
|
|
25.12 |
|
Total |
|
82.4 |
|
|
|
95.5 |
|
|
|
|
21.67 |
|
|
|
18.28 |
|
|
|
90.9 |
|
|
|
92.1 |
|
|
|
|
19.73 |
|
|
|
20.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Oil & NGLs (Mbbls/d, $/bbl) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
185.4 |
|
|
|
229.8 |
|
|
|
|
75.10 |
|
|
|
48.11 |
|
|
|
206.1 |
|
|
|
230.4 |
|
|
|
|
63.02 |
|
|
|
52.03 |
|
Canadian Operations |
|
102.8 |
|
|
|
76.9 |
|
|
|
|
77.14 |
|
|
|
52.73 |
|
|
|
100.3 |
|
|
|
70.2 |
|
|
|
|
68.86 |
|
|
|
54.54 |
|
Total |
|
288.2 |
|
|
|
306.7 |
|
|
|
|
75.83 |
|
|
|
49.27 |
|
|
|
306.4 |
|
|
|
300.6 |
|
|
|
|
64.93 |
|
|
|
52.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas (MMcf/d, $/Mcf) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
329 |
|
|
|
508 |
|
|
|
|
0.03 |
|
|
|
2.26 |
|
|
|
424 |
|
|
|
509 |
|
|
|
|
1.86 |
|
|
|
2.70 |
|
Canadian Operations |
|
1,630 |
|
|
|
1,343 |
|
|
|
|
2.05 |
|
|
|
2.24 |
|
|
|
1,617 |
|
|
|
1,298 |
|
|
|
|
2.61 |
|
|
|
2.56 |
|
Total |
|
1,959 |
|
|
|
1,851 |
|
|
|
|
1.71 |
|
|
|
2.24 |
|
|
|
2,041 |
|
|
|
1,807 |
|
|
|
|
2.45 |
|
|
|
2.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Production (MBOE/d, $/BOE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
240.2 |
|
|
|
314.7 |
|
|
|
|
58.01 |
|
|
|
38.81 |
|
|
|
276.9 |
|
|
|
315.3 |
|
|
|
|
49.78 |
|
|
|
42.40 |
|
Canadian Operations |
|
374.4 |
|
|
|
300.6 |
|
|
|
|
30.10 |
|
|
|
23.47 |
|
|
|
369.7 |
|
|
|
286.6 |
|
|
|
|
30.08 |
|
|
|
24.95 |
|
Total |
|
614.6 |
|
|
|
615.3 |
|
|
|
|
41.00 |
|
|
|
31.32 |
|
|
|
646.6 |
|
|
|
601.9 |
|
|
|
|
38.51 |
|
|
|
34.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Mix (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Plant Condensate |
|
34 |
|
|
|
34 |
|
|
|
|
|
|
|
|
|
|
33 |
|
|
|
35 |
|
|
|
|
|
|
|
|
NGLs - Other |
|
13 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
14 |
|
|
|
15 |
|
|
|
|
|
|
|
|
Total Oil & NGLs |
|
47 |
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
47 |
|
|
|
50 |
|
|
|
|
|
|
|
|
Natural Gas |
|
53 |
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
53 |
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Over Period (%) (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Oil & NGLs |
|
(6 |
) |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
- |
|
|
|
|
|
|
|
|
Natural Gas |
|
6 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
13 |
|
|
|
7 |
|
|
|
|
|
|
|
|
Total Production |
|
- |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
7 |
|
|
|
3 |
|
|
|
|
|
|
|
|
(2)Average per-unit prices, excluding the impact of risk management activities.
(3)Includes production impacts of acquisitions and divestitures.
Upstream Product Revenues, Excluding Realized Gains (Losses) on Risk Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions) |
Oil |
|
|
NGLs - Plant Condensate |
|
|
NGLs - Other |
|
|
Natural Gas |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2025 Upstream Product Revenues |
$ |
833 |
|
|
$ |
384 |
|
|
$ |
160 |
|
|
$ |
378 |
|
|
$ |
1,755 |
|
Increase (decrease) due to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales prices |
|
405 |
|
|
|
232 |
|
|
|
22 |
|
|
|
(94 |
) |
|
|
565 |
|
Production volumes |
|
(112 |
) |
|
|
82 |
|
|
|
(18 |
) |
|
|
21 |
|
|
|
(27 |
) |
2026 Upstream Product Revenues |
$ |
1,126 |
|
|
$ |
698 |
|
|
$ |
164 |
|
|
$ |
305 |
|
|
$ |
2,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions) |
Oil |
|
|
NGLs - Plant Condensate |
|
|
NGLs - Other |
|
|
Natural Gas |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2025 Upstream Product Revenues |
$ |
1,810 |
|
|
$ |
712 |
|
|
$ |
345 |
|
|
$ |
850 |
|
|
$ |
3,717 |
|
Increase (decrease) due to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales prices |
|
415 |
|
|
|
261 |
|
|
|
(24 |
) |
|
|
(50 |
) |
|
|
602 |
|
Production volumes |
|
(171 |
) |
|
|
249 |
|
|
|
4 |
|
|
|
106 |
|
|
|
188 |
|
2026 Upstream Product Revenues |
$ |
2,054 |
|
|
$ |
1,222 |
|
|
$ |
325 |
|
|
$ |
906 |
|
|
$ |
4,507 |
|
Oil Revenues
Three months ended June 30, 2026, versus June 30, 2025
Oil revenues were higher by $293 million compared to the second quarter of 2025 primarily due to:
•An increase of $36.19 per bbl, or 56 percent, in the average realized oil prices which increased revenues by $405 million. The increase reflected higher Houston and WTI benchmark prices which were up 48 percent and 46 percent, respectively, and higher regional pricing relative to benchmark prices; and
•Lower average oil production volumes of 19.0 Mbbls/d decreased revenues by $112 million. Lower production volumes were primarily due to the sale of the Anadarko assets in the second quarter of 2026 (21.2 Mbbls/d), partially offset by successful drilling in Permian (1.4 Mbbls/d).
Six months ended June 30, 2026, versus June 30, 2025
Oil revenues were higher by $244 million compared to the first six months of 2025 primarily due to:
•An increase of $17.50 per bbl, or 26 percent, in the average realized oil prices which increased revenues by $415 million. The increase reflected higher Houston and WTI benchmark prices which were up 23 percent and 22 percent, respectively, and higher regional pricing relative to benchmark prices; and
•Lower average oil production volumes of 13.9 Mbbls/d decreased revenues by $171 million. Lower production volumes were primarily due to the sale of the Anadarko assets in the second quarter of 2026 (9.4 Mbbls/d) and the sale of the Uinta assets in the first quarter of 2025 (3.0 Mbbls/d).
NGL Revenues
Three months ended June 30, 2026, versus June 30, 2025
NGL revenues were higher by $318 million compared to the second quarter of 2025 primarily due to:
•An increase of $31.96 per bbl, or 53 percent, in the average realized plant condensate prices which increased revenues by $232 million. The increase primarily reflected the higher Edmonton Condensate benchmark price which was up 50 percent and higher regional pricing relative to benchmark prices; and
•Higher average plant condensate production volumes of 13.6 Mbbls/d increased revenues by $82 million. Higher production volumes were primarily due to the NuVista Acquisition in the first quarter of 2026 (27.2 Mbbls/d), partially offset by the sale of the Anadarko assets in the second quarter of 2026 (4.8 Mbbls/d), higher effective royalty rates in Montney (3.2 Mbbls/d), natural declines in Montney (3.2 Mbbls/d) and lower production volumes in Montney due to increased third-party plant downtime and pipeline restrictions (2.8 Mbbls/d).
Six months ended June 30, 2026, versus June 30, 2025
NGL revenues were higher by $490 million compared to the first six months of 2025 primarily due to:
•An increase of $18.06 per bbl, or 29 percent, in the average realized plant condensate prices which increased revenues by $261 million. The increase primarily reflected the higher Edmonton Condensate benchmark price which was up 22 percent, higher regional pricing relative to benchmark prices and a lower U.S./Canadian dollar foreign exchange rate; and
•Higher average plant condensate production volumes of 20.9 Mbbls/d increased revenues by $249 million. Higher production volumes were primarily due to the NuVista Acquisition in the first quarter of 2026 (22.3 Mbbls/d) and the Montney assets acquired in the first quarter of 2025 (3.7 Mbbls/d), partially offset by lower production volumes in Montney due to increased third-party plant downtime and pipeline restrictions (2.4 Mbbls/d) and the sale of the Anadarko assets in the second quarter of 2026 (2.2 Mbbls/d).
Natural Gas Revenues
Three months ended June 30, 2026, versus June 30, 2025
Natural gas revenues were lower by $73 million compared to the second quarter of 2025 primarily due to:
•A decrease of $0.53 per Mcf, or 24 percent, in the average realized natural gas prices which decreased revenues by $94 million. The decrease reflected lower regional pricing relative to benchmark prices in the USA Operations and the lower AECO and NYMEX benchmark prices which were down 27 percent and 16 percent, respectively, partially offset by higher regional pricing relative to benchmark prices in the Canadian Operations; and
•Higher average natural gas production volumes of 108 MMcf/d increased revenues by $21 million. Higher production volumes were primarily due to the NuVista Acquisition in the first quarter of 2026 (423 MMcf/d), partially offset by the sale of the Anadarko assets in the second quarter of 2026 (223 MMcf/d) and natural declines in Montney (88 MMcf/d).
Six months ended June 30, 2026, versus June 30, 2025
Natural gas revenues were higher by $56 million compared to the first six months of 2025 primarily due to:
•Higher average natural gas production volumes of 234 MMcf/d increased revenues by $106 million. Higher production volumes were primarily due to the NuVista Acquisition in the first quarter of 2026 (348 MMcf/d) and the Montney assets acquired in the first quarter of 2025 (34 MMcf/d), partially offset by the sale of the Anadarko assets in the second quarter of 2026 (117 MMcf/d); and
•A decrease of $0.15 per Mcf, or six percent, in the average realized natural gas prices which decreased revenues by $50 million. The decrease reflected lower regional pricing relative to benchmark prices in the USA Operations, partially offset by the higher NYMEX benchmark price which was up 12 percent and higher regional pricing relative to benchmark prices in the Canadian Operations.
Sales of Purchased Product
Revenues from the sale of purchased product relate to activities that provide operational flexibility and cost mitigation for transportation commitments, product type, delivery points and customer diversification within the USA and Canadian Operations segments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Purchased Product |
|
$ |
575 |
|
|
$ |
450 |
|
|
|
|
$ |
931 |
|
|
$ |
860 |
|
Three months ended June 30, 2026, versus June 30, 2025
Sales of purchased product revenues increased $125 million compared to the second quarter of 2025 primarily due to:
•Higher realized third-party liquids pricing ($208 million) and higher sales of third-party purchased natural gas volumes ($29 million);
partially offset by:
•Lower sales of third-party purchased liquids volumes ($100 million) and lower realized third-party natural gas pricing ($13 million).
Six months ended June 30, 2026, versus June 30, 2025
Sales of purchased product revenues increased $71 million compared to the first six months of 2025 primarily due to:
•Higher realized third-party liquids and natural gas pricing ($214 million and $12 million, respectively), and higher sales of third-party purchased natural gas volumes ($32 million);
partially offset by:
•Lower sales of third-party purchased liquids volumes ($187 million).
Gains (Losses) on Risk Management, Net
As a means of managing commodity price volatility, Ovintiv enters into commodity derivative financial instruments on a portion of its expected oil, NGLs and natural gas production volumes. Additional information on the Company’s commodity price positions as at June 30, 2026, can be found in Note 20 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
The following tables provide the effects of the Company’s risk management activities on revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Gains (Losses) on Risk Management |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity Price |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
(103 |
) |
|
$ |
9 |
|
|
|
|
$ |
(126 |
) |
|
$ |
9 |
|
NGLs - Plant Condensate |
|
|
(15 |
) |
|
|
- |
|
|
|
|
|
(20 |
) |
|
|
- |
|
Natural Gas |
|
|
50 |
|
|
|
24 |
|
|
|
|
|
68 |
|
|
|
54 |
|
Total |
|
|
(68 |
) |
|
|
33 |
|
|
|
|
|
(78 |
) |
|
|
63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Gains (Losses) on Risk Management |
|
|
190 |
|
|
|
54 |
|
|
|
|
|
137 |
|
|
|
8 |
|
Total Gains (Losses) on Risk Management, Net |
|
$ |
122 |
|
|
$ |
87 |
|
|
|
|
$ |
59 |
|
|
$ |
71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
(Per-unit) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Gains (Losses) on Risk Management |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity Price |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil ($/bbl) |
|
$ |
(9.16 |
) |
|
$ |
0.73 |
|
|
|
|
$ |
(5.26 |
) |
|
$ |
0.35 |
|
NGLs - Plant Condensate ($/bbl) |
|
$ |
(2.01 |
) |
|
$ |
- |
|
|
|
|
$ |
(1.32 |
) |
|
$ |
- |
|
Natural Gas ($/Mcf) |
|
$ |
0.28 |
|
|
$ |
0.14 |
|
|
|
|
$ |
0.18 |
|
|
$ |
0.16 |
|
Total ($/BOE) |
|
$ |
(1.21 |
) |
|
$ |
0.59 |
|
|
|
|
$ |
(0.67 |
) |
|
$ |
0.57 |
|
Ovintiv recognizes fair value changes from its risk management activities each reporting period. The changes in fair value result from new positions and settlements that occur during each period, as well as the relationship between contract prices and the associated forward curves. Realized gains or losses on risk management activities related to commodity price mitigation are included in the USA and Canadian Operations’ revenues as the contracts are cash settled. Unrealized gains or losses on fair value changes of unsettled contracts are included in the Corporate and Other segment.
Additional information on fair value changes can be found in Note 19 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Sublease Revenues
Sublease revenues primarily include amounts related to the sublease of office space in The Bow office building recorded in the Corporate and Other segment. Additional information on office sublease income can be found in Note 11 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Operating Expenses
Production, Mineral and Other Taxes
Production, mineral and other taxes include production and property taxes. Production taxes are generally assessed as a percentage of oil, NGLs and natural gas production revenues. Property taxes are generally assessed based on the value of the underlying assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
$ |
71 |
|
|
$ |
67 |
|
|
|
|
$ |
142 |
|
|
$ |
150 |
|
Canadian Operations |
|
|
10 |
|
|
|
6 |
|
|
|
|
|
18 |
|
|
|
10 |
|
Total |
|
$ |
81 |
|
|
$ |
73 |
|
|
|
|
$ |
160 |
|
|
$ |
160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($/BOE) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
$ |
3.22 |
|
|
$ |
2.36 |
|
|
|
|
$ |
2.83 |
|
|
$ |
2.64 |
|
Canadian Operations |
|
$ |
0.28 |
|
|
$ |
0.21 |
|
|
|
|
$ |
0.26 |
|
|
$ |
0.19 |
|
Production, Mineral and Other Taxes |
|
$ |
1.43 |
|
|
$ |
1.31 |
|
|
|
|
$ |
1.36 |
|
|
$ |
1.47 |
|
Three months ended June 30, 2026, versus June 30, 2025
Production, mineral and other taxes increased $8 million compared to the second quarter of 2025 primarily due to:
•Higher oil commodity prices ($18 million) and higher property taxes due to the NuVista Acquisition in the first quarter of 2026 ($4 million);
partially offset by:
•The sale of the Anadarko assets in the second quarter of 2026 ($14 million).
Six months ended June 30, 2026, versus June 30, 2025
Production, mineral and other taxes were in line with the first six months of 2025 primarily due to:
•Higher oil commodity prices ($19 million) and higher property taxes due to the NuVista Acquisition in the first quarter of 2026 ($7 million);
partially offset by:
•The sales of the Anadarko assets in the second quarter of 2026 and the Uinta assets in the first quarter of 2025 ($14 million and $5 million, respectively) and lower effective production tax rates ($4 million).
Transportation and Processing
Transportation and processing expense includes transportation costs incurred to move product from production points to sales points including gathering, compression, pipeline tariffs, trucking and storage costs. Ovintiv also incurs costs related to processing provided by third parties or through ownership interests in processing facilities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
$ |
90 |
|
|
$ |
114 |
|
|
|
|
$ |
205 |
|
|
$ |
226 |
|
Canadian Operations |
|
|
439 |
|
|
|
312 |
|
|
|
|
|
784 |
|
|
|
591 |
|
Upstream Transportation and Processing |
|
|
529 |
|
|
|
426 |
|
|
|
|
|
989 |
|
|
|
817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (1) |
|
|
11 |
|
|
|
9 |
|
|
|
|
|
22 |
|
|
|
16 |
|
Total |
|
$ |
540 |
|
|
$ |
435 |
|
|
|
|
$ |
1,011 |
|
|
$ |
833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($/BOE) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
$ |
4.12 |
|
|
$ |
4.01 |
|
|
|
|
$ |
4.10 |
|
|
$ |
3.96 |
|
Canadian Operations |
|
$ |
12.89 |
|
|
$ |
11.40 |
|
|
|
|
$ |
11.71 |
|
|
$ |
11.38 |
|
Upstream Transportation and Processing |
|
$ |
9.47 |
|
|
$ |
7.62 |
|
|
|
|
$ |
8.45 |
|
|
$ |
7.50 |
|
(1)The second quarter and first six months of 2026 include pipeline transportation fees associated with previously divested assets in the USA Operations of nil, respectively (2025 - $1 million, respectively) and other third-party transportation and processing fees with no associated volumes in the Canadian Operations of approximately $11 million and $22 million, respectively (2025 ‑ $8 million and $15 million, respectively).
Three months ended June 30, 2026, versus June 30, 2025
Transportation and processing expense increased $105 million compared to the second quarter of 2025 primarily due to:
•Higher production volumes due to the NuVista Acquisition in the first quarter of 2026 ($91 million), higher midstream transportation costs in Montney ($31 million) and higher transportation costs in Permian due to increased gas production volumes ($7 million);
partially offset by:
•The sale of the Anadarko assets in the second quarter of 2026 ($36 million).
Six months ended June 30, 2026, versus June 30, 2025
Transportation and processing expense increased $178 million compared to the first six months of 2025 primarily due to:
•Higher production volumes due to the NuVista Acquisition in the first quarter of 2026 ($159 million), higher midstream transportation costs in Montney ($49 million), higher transportation costs in Permian due to increased gas production volumes ($13 million) and a lower U.S./Canadian dollar exchange rate ($13 million);
partially offset by:
•The sale of the Anadarko assets in the second quarter of 2026 ($36 million), a settlement related to a downstream transportation contract in the Canadian Operations ($19 million) and lower downstream transportation costs in Montney due to a third-party adjustment ($6 million).
Operating
Operating expense includes costs paid by the Company, net of amounts capitalized, on oil and natural gas properties in which Ovintiv has a working interest. These costs primarily include labor, service contract fees, chemicals, fuel, water hauling, electricity and workovers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
$ |
133 |
|
|
$ |
173 |
|
|
|
|
$ |
309 |
|
|
$ |
342 |
|
Canadian Operations |
|
|
48 |
|
|
|
42 |
|
|
|
|
|
99 |
|
|
|
78 |
|
Upstream Operating Expense |
|
|
181 |
|
|
|
215 |
|
|
|
|
|
408 |
|
|
|
420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
2 |
|
|
|
4 |
|
|
|
|
|
2 |
|
|
|
4 |
|
Total |
|
$ |
183 |
|
|
$ |
219 |
|
|
|
|
$ |
410 |
|
|
$ |
424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($/BOE) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
$ |
6.09 |
|
|
$ |
6.03 |
|
|
|
|
$ |
6.15 |
|
|
$ |
5.99 |
|
Canadian Operations |
|
$ |
1.42 |
|
|
$ |
1.56 |
|
|
|
|
$ |
1.49 |
|
|
$ |
1.52 |
|
Upstream Operating Expense |
|
$ |
3.25 |
|
|
$ |
3.84 |
|
|
|
|
$ |
3.49 |
|
|
$ |
3.86 |
|
Three months ended June 30, 2026, versus June 30, 2025
Operating expense decreased $36 million compared to the second quarter of 2025 primarily due to:
•The sale of the Anadarko assets in the second quarter of 2026 ($35 million) and lower salaries and benefits resulting from the corporate reorganization during the quarter ($11 million);
partially offset by:
•Higher activity due to the NuVista Acquisition in the first quarter of 2026 ($9 million).
Six months ended June 30, 2026, versus June 30, 2025
Operating expense decreased $14 million compared to the first six months of 2025 primarily due to:
•The sales of the Anadarko assets in the second quarter of 2026 ($35 million) and lower salaries and benefits resulting from the corporate reorganization during the quarter ($11 million);
partially offset by:
•Higher activity due to the NuVista Acquisition in the first quarter of 2026 ($17 million), and increased workover activity in Montney and Permian ($9 million).
Purchased Product
Purchased product expense includes purchases of oil, NGLs and natural gas from third parties that are used to provide operational flexibility and cost mitigation for transportation commitments, product type, delivery points and customer diversification within the USA and Canadian Operations segments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased Product |
|
$ |
563 |
|
|
$ |
440 |
|
|
|
|
$ |
907 |
|
|
$ |
842 |
|
Three months ended June 30, 2026, versus June 30, 2025
Purchased product expense increased $123 million compared to the second quarter of 2025 primarily due to:
•Higher third-party liquids purchase prices ($205 million) and higher third-party purchased natural gas volumes ($22 million);
partially offset by:
•Lower third-party purchased liquids volumes ($99 million) and lower third-party natural gas purchase prices ($7 million).
Six months ended June 30, 2026, versus June 30, 2025
Purchased product expense increased $65 million compared to the first six months of 2025 primarily due to:
•Higher third-party liquids and natural gas purchase prices ($211 million and $14 million, respectively), and higher third-party purchased natural gas volumes ($26 million);
partially offset by:
•Lower third-party purchased liquids volumes ($186 million).
Depreciation, Depletion & Amortization
Proved properties within each country cost center are depleted using the unit-of-production method based on proved reserves as discussed in Note 1 to the Consolidated Financial Statements included in Item 8 of the 2025 Annual Report on Form 10-K. Depletion rates are impacted by impairments, acquisitions, divestitures and foreign exchange rates, as well as fluctuations in 12-month average trailing prices which affect proved reserves volumes. Corporate assets are carried at cost and depreciated on a straight-line basis over the estimated service lives of the assets.
Additional information can be found under Upstream Assets and Reserve Estimates in the Critical Accounting Estimates section of the MD&A included in Item 7 of the 2025 Annual Report on Form 10-K.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
$ |
282 |
|
|
$ |
370 |
|
|
|
|
$ |
618 |
|
|
$ |
745 |
|
Canadian Operations |
|
|
233 |
|
|
|
180 |
|
|
|
|
|
453 |
|
|
|
345 |
|
Upstream DD&A |
|
|
515 |
|
|
|
550 |
|
|
|
|
|
1,071 |
|
|
|
1,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate & Other |
|
|
4 |
|
|
|
6 |
|
|
|
|
|
9 |
|
|
|
11 |
|
Total |
|
$ |
519 |
|
|
$ |
556 |
|
|
|
|
$ |
1,080 |
|
|
$ |
1,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($/BOE) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA Operations |
|
$ |
12.93 |
|
|
$ |
12.91 |
|
|
|
|
$ |
12.34 |
|
|
$ |
13.04 |
|
Canadian Operations |
|
$ |
6.82 |
|
|
$ |
6.56 |
|
|
|
|
$ |
6.76 |
|
|
$ |
6.64 |
|
Upstream DD&A |
|
$ |
9.20 |
|
|
$ |
9.81 |
|
|
|
|
$ |
9.15 |
|
|
$ |
10.00 |
|
Three months ended June 30, 2026, versus June 30, 2025
DD&A decreased $37 million compared to the second quarter of 2025 primarily due to:
•Lower production volumes in the USA Operations primarily due to the sale of the Anadarko assets in the second quarter of 2026 ($88 million);
partially offset by:
•Higher production volumes in the Canadian Operations primarily due to the NuVista Acquisition in the first quarter of 2026 ($43 million) and a higher depletion rate in the Canadian Operations ($9 million).
The upstream depletion rate in the USA Operations increased $0.02 per BOE primarily due to lower reserve volumes from the sale of the Anadarko assets in the second quarter of 2026, partially offset by a decrease in the depletable base resulting from the ceiling test impairment recognized in the first quarter of 2026. The upstream depletion rate in the Canadian Operations increased $0.26 per BOE primarily due to a higher depletable base resulting from the NuVista Acquisition in the first quarter of 2026, partially offset by the ceiling test impairments recognized in the first quarter of 2026 and the third quarter of 2025.
Six months ended June 30, 2026, versus June 30, 2025
DD&A decreased $21 million compared to the first six months of 2025 primarily due to:
•Lower production volumes in the USA Operations primarily due to the sale of the Anadarko assets in the second quarter of 2026 ($91 million), and a lower depletion rate in the USA Operations ($35 million);
partially offset by:
•Higher production volumes in the Canadian Operations primarily due to the NuVista Acquisition in the first quarter of 2026 ($102 million) and a lower U.S./Canadian dollar foreign exchange rate ($8 million).
The upstream depletion rate in the USA Operations decreased $0.70 per BOE primarily due to a lower depletable base resulting from the ceiling test impairment recognized in the first quarter of 2026, partially offset by the lower reserve volumes resulting from the sale of the Anadarko assets in the second quarter of 2026. The upstream depletion rate in the Canadian Operations increased $0.12 per BOE primarily due to a higher depletable base resulting from the NuVista Acquisition in the first quarter of 2026, partially offset by the ceiling test impairments recognized in the first quarter of 2026 and the third quarter of 2025.
Ceiling Test Impairment
Under full cost accounting, the carrying amount of Ovintiv’s oil and natural gas properties within each country cost center is subject to a ceiling test performed quarterly. Ceiling test impairments are recognized when the capitalized costs, net of accumulated depletion and the related deferred income taxes, exceed the sum of the estimated after-tax future net cash flows from proved reserves as calculated under SEC requirements using the 12-month average trailing prices and discounted at 10 percent. The 12‑month average trailing price is calculated as the average of the price on the first day of each month within the trailing 12‑month period.
In the second quarter of 2026, the Company did not recognize ceiling test impairments in the USA and Canadian Operations. In the first six months of 2026, the Company recognized before-tax non-cash ceiling test impairments of $1,485 million, comprising $1,111 million in the USA Operations and $374 million in the Canadian Operations. The non-cash ceiling test impairments recognized in the first quarter of 2026 primarily resulted from declines in the 12-month average trailing prices which reduced proved reserves in the USA Operations, and the 12-month average trailing prices used in the ceiling test at March 31, 2026, which were lower than the market prices used for the NuVista Acquisition on February 3, 2026, in the Canadian Operations.
The 12-month average trailing prices used in the ceiling test calculations were based on the benchmark prices below. The benchmark prices were adjusted for basis differentials to determine local reference prices, transportation costs and tariffs, heat content and quality.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & NGLs |
|
|
Natural Gas |
|
|
|
WTI
($/bbl) |
|
|
Edmonton
Condensate
(C$/bbl) |
|
|
Henry Hub
($/MMBtu) |
|
|
AECO
(C$/MMBtu) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12-Month Average Trailing Reserves Pricing (1) |
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
$ |
71.90 |
|
|
$ |
98.72 |
|
|
$ |
3.64 |
|
|
$ |
1.73 |
|
March 31, 2026 |
|
|
63.31 |
|
|
|
86.26 |
|
|
|
3.72 |
|
|
|
1.80 |
|
December 31, 2025 |
|
|
65.34 |
|
|
|
90.09 |
|
|
|
3.39 |
|
|
|
1.76 |
|
June 30, 2025 |
|
|
70.48 |
|
|
|
97.10 |
|
|
|
2.86 |
|
|
|
1.48 |
|
(1)All prices were held constant in all future years when estimating net revenues and reserves.
The Company believes that the discounted after-tax future net cash flows from proved reserves required to be used in the ceiling test calculation are not indicative of the fair market value of Ovintiv’s oil and natural gas properties or the future net cash flows expected to be generated from such properties. The discounted after-tax future net cash flows do not consider the fair market value of unamortized unproved properties, or probable or possible liquids and natural gas reserves. In addition, there is no consideration given to the effect of future changes in commodity prices. Ovintiv manages its business using estimates of reserves and resources based on forecast prices and costs. Additional information on the ceiling test calculation can be found in Note 10 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q.
Administrative
Administrative expense represents costs associated with corporate functions provided by Ovintiv staff. These expenses primarily include salaries and benefits, operating leases, office, information technology, transaction, restructuring and long-term incentive costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative, excluding Long-Term Incentive Costs, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring Costs, and Transaction and Legal Costs (1) |
|
$ |
71 |
|
|
$ |
67 |
|
|
|
|
$ |
151 |
|
|
$ |
139 |
|
Long-term incentive costs |
|
|
10 |
|
|
|
8 |
|
|
|
|
|
22 |
|
|
|
18 |
|
Restructuring costs |
|
|
45 |
|
|
|
1 |
|
|
|
|
|
45 |
|
|
|
11 |
|
Transaction and legal costs |
|
|
- |
|
|
|
- |
|
|
|
|
|
20 |
|
|
|
1 |
|
Total Administrative |
|
$ |
126 |
|
|
$ |
76 |
|
|
|
|
$ |
238 |
|
|
$ |
169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($/BOE) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative, excluding Long-Term Incentive Costs, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring Costs, and Transaction and Legal Costs (1) |
|
$ |
1.28 |
|
|
$ |
1.19 |
|
|
|
|
$ |
1.29 |
|
|
$ |
1.28 |
|
Long-term incentive costs |
|
|
0.17 |
|
|
|
0.15 |
|
|
|
|
|
0.18 |
|
|
|
0.17 |
|
Restructuring costs |
|
|
0.80 |
|
|
|
0.03 |
|
|
|
|
|
0.39 |
|
|
|
0.10 |
|
Transaction and legal costs |
|
|
- |
|
|
|
- |
|
|
|
|
|
0.17 |
|
|
|
0.01 |
|
Total Administrative |
|
$ |
2.25 |
|
|
$ |
1.37 |
|
|
|
|
$ |
2.03 |
|
|
$ |
1.56 |
|
(1)The second quarter and first six months of 2026 includes costs related to The Bow office lease of $28 million and $57 million, respectively (2025 - $26 million and $54 million, respectively), half of which is recovered from sublease revenues.
Three months ended June 30, 2026, versus June 30, 2025
Administrative expense increased $50 million compared to the second quarter of 2025 primarily due to:
•Higher restructuring costs ($44 million).
Six months ended June 30, 2026, versus June 30, 2025
Administrative expense increased $69 million compared to the first six months of 2025 primarily due to:
•Higher restructuring costs ($34 million) and transaction costs incurred related to the NuVista Acquisition ($23 million).
In 2024, Ovintiv undertook a plan, which extended into 2025, to reduce its workforce by approximately 10 percent as part of a corporate reorganization. In 2026, the Company completed further workforce reductions as part of a company-wide reorganization to better align staffing levels and organizational structure with the Company’s transformed portfolio following the sale of the Anadarko assets. Additional information on the NuVista Acquisition, restructuring charges and long-term incentive costs can be found in Notes 9, 17 and 18, respectively, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q.
Other (Income) Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
$ |
100 |
|
|
$ |
95 |
|
|
|
|
$ |
204 |
|
|
$ |
192 |
|
Foreign Exchange (Gain) Loss, Net |
|
|
23 |
|
|
|
22 |
|
|
|
|
|
21 |
|
|
|
32 |
|
(Gain) Loss on Divestitures, Net |
|
|
337 |
|
|
|
- |
|
|
|
|
|
337 |
|
|
|
- |
|
Other (Gains) Losses, Net |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
|
|
(34 |
) |
|
|
(8 |
) |
Total Other (Income) Expenses |
|
$ |
455 |
|
|
$ |
112 |
|
|
|
|
$ |
528 |
|
|
$ |
216 |
|
Interest
Interest expense primarily includes interest on Ovintiv’s short-term and long-term debt. Additional information on changes in interest and long-term debt can be found in Notes 5 and 12, respectively, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Three months ended June 30, 2026, versus June 30, 2025
Interest expense increased $5 million compared to the second quarter of 2025 primarily due to:
•A one-time make-whole interest payment resulting from the early redemption of the Company’s $700 million senior notes during the quarter ($20 million);
partially offset by:
•Interest savings related to the repayment of the Company’s $700 million senior notes during the quarter, its $459 million senior notes in the first quarter of 2026 and its $600 million senior notes in the second quarter of 2025 ($18 million).
Six months ended June 30, 2026, versus June 30, 2025
Interest expense increased $12 million compared to the first six months of 2025 primarily due to:
•A one-time make-whole interest payment resulting from the early redemption of the Company’s $700 million senior notes during the quarter ($20 million), higher interest expense on short-term borrowings and the Term Credit Agreement ($11 million) and higher interest expense on finance leases ($4 million);
partially offset by:
•Interest savings related to the repayment of the Company’s $700 million senior notes during the quarter, its $459 million senior notes in the first quarter of 2026 and its $600 million senior notes in the second quarter of 2025 ($33 million).
Foreign Exchange (Gain) Loss, Net
Foreign exchange gains and losses primarily result from the impact of fluctuations in the Canadian to U.S. dollar exchange rate. Additional information on changes in foreign exchange gains or losses can be found in Note 6 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Additional information on foreign exchange rates and the effects of foreign exchange rate changes can be found in Part I, Item 3 of this Quarterly Report on Form 10-Q.
Three months ended June 30, 2026, versus June 30, 2025
Net foreign exchange loss increased $1 million compared to the second quarter of 2025 primarily due to:
•Unrealized foreign exchange losses on the translation of intercompany notes in 2026 ($30 million);
partially offset by:
•Gains on other monetary revaluations compared to losses in 2025 ($27 million).
Six months ended June 30, 2026, versus June 30, 2025
Net foreign exchange loss decreased $11 million compared to the first six months of 2025 primarily due to:
•Realized foreign exchange losses on the settlement of U.S. dollar risk management contracts issued from Canada in 2025 ($98 million), gains on other monetary revaluations compared to losses in 2025 ($26 million) and lower unrealized foreign exchange losses on the translation of intercompany notes ($12 million);
partially offset by:
•Lower unrealized foreign exchange gains on the translation of U.S. dollar risk management contracts issued from Canada ($83 million) and realized foreign exchange losses on the settlement of intercompany notes compared to gains in 2025 ($42 million).
(Gain) Loss on Divestitures, Net
During the second quarter and first six months of 2026, the Company recognized a before-tax loss on the sale of the Company’s Anadarko assets of $337 million, respectively, as discussed in the Significant Developments section of this MD&A.
Amounts received from the Company’s divestiture transactions are deducted from the respective U.S. and Canadian full cost pools, except for divestitures that result in a significant alteration between capitalized costs and proved reserves in a country cost center, in which case a gain or loss is recognized. Additional information on the loss on divestiture can be found in Note 8 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Other (Gains) Losses, Net
Other (gains) losses, net, primarily includes other non-recurring revenues or expenses and may also include items such as interest income and adjustments related to other assets.
In the first quarter of 2026, the Company recognized a gain of approximately $25 million resulting from the fair value remeasurement of the previously acquired 18.5 million NuVista common shares in conjunction with the closing of the NuVista Acquisition.
Income Tax
During the first six months of 2026, the current income tax expense of $35 million was lower than 2025 primarily due to recently enacted Canadian legislation that accelerates capital cost recovery and favorable changes in the calculation of Corporate Alternative Minimum Tax in the U.S.
During the first six months of 2026, the deferred income tax recovery of $149 million was higher than 2025, primarily due to the impact of the non-cash ceiling test impairment recognized in the U.S. in the first quarter of 2026.
The determination of income and other tax liabilities of the Company and its subsidiaries requires interpretation of complex domestic and foreign tax laws and regulations, that are subject to change. The Company’s interpretation of tax laws may differ from the interpretation of the tax authorities. As a result, there are tax matters under review for which the timing of resolution is uncertain. The Company believes that the provision for income taxes is adequate.
Additional information on income taxes can be found in Note 7 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
|
Liquidity and Capital Resources |
Sources of Liquidity
The Company has the flexibility to access cash equivalents and a range of funding alternatives at competitive rates through committed revolving credit facilities as well as debt and equity capital markets. Ovintiv closely monitors the accessibility of cost-effective credit and ensures that sufficient liquidity is in place to fund capital expenditures and dividend payments. In addition, the Company may use cash and cash equivalents, cash from operating activities, or proceeds from asset divestitures to fund its operations and shareholder return framework or to manage its capital structure as discussed below. As at June 30, 2026, $476 million in cash and cash equivalents was held by Canadian subsidiaries. The cash held by Canadian subsidiaries is accessible and may be subject to additional U.S. income taxes and Canadian withholding taxes if repatriated.
The Company’s capital structure consists of total shareholders’ equity plus long-term debt, including any current portion. The Company’s objectives when managing its capital structure are to maintain financial flexibility to preserve Ovintiv’s access to capital markets and its ability to meet financial obligations and finance internally generated growth, as well as potential acquisitions. Ovintiv has a practice of maintaining capital discipline and strategically managing its capital structure by adjusting capital spending, adjusting dividends paid to shareholders, issuing new shares of common stock, purchasing shares of common stock for cancellation or return to treasury, issuing new debt and repaying or repurchasing existing debt.
|
|
|
|
|
|
|
|
|
|
|
As at June 30, |
|
($ millions, except as indicated) |
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
700 |
|
|
$ |
20 |
|
Available Credit Facilities |
|
|
3,500 |
|
|
|
3,350 |
|
Available Uncommitted Demand Lines (1) |
|
|
159 |
|
|
|
132 |
|
Issuance of U.S. Commercial Paper |
|
|
- |
|
|
|
(331 |
) |
Total Liquidity |
|
$ |
4,359 |
|
|
$ |
3,171 |
|
|
|
|
|
|
|
|
Long-Term Debt, including current portion |
|
$ |
3,695 |
|
|
$ |
5,333 |
|
Total Shareholders’ Equity |
|
$ |
11,499 |
|
|
$ |
10,377 |
|
|
|
|
|
|
|
|
Debt to Capitalization (%) (2) |
|
|
24 |
|
|
|
34 |
|
Debt to Adjusted Capitalization (%) (2) |
|
|
16 |
|
|
|
23 |
|
(1)Includes four uncommitted demand lines totaling $349 million, net of $190 million in related undrawn letters of credit (2025 - $312 million and $180 million, respectively).
(2)These measures are defined in the Non-GAAP Measures section of this MD&A.
The Company has full access to two committed revolving U.S. dollar denominated credit facilities totaling $3.5 billion, which include a $2.2 billion revolving credit facility for Ovintiv Inc. and a $1.3 billion revolving credit facility for a Canadian subsidiary (collectively, the “Credit Facilities”). The Credit Facilities, which mature in December 2029, provide financial flexibility and allow the Company to fund its operations or capital investment program. As at June 30, 2026, there were no outstanding amounts under the revolving Credit Facilities.
Depending on the Company’s credit rating and market demand, the Company may issue from its two U.S. Commercial Paper (“CP”) programs, which include a $1.5 billion program for Ovintiv Inc. and a $1.0 billion program for a Canadian subsidiary. As at June 30, 2026, the Company had no balance outstanding under its U.S. CP program. All of Ovintiv’s credit ratings are investment grade as at June 30, 2026.
On November 25, 2025, the Company entered into a $1.2 billion Two-Year Term Credit Agreement (“Term Credit Agreement”) to fund the cash component of its previously announced NuVista Acquisition. On February 3, 2026, the Company closed the NuVista Acquisition, whereby it issued approximately 30.1 million shares of Ovintiv common stock and paid cash consideration of approximately $1.2 billion (C$1.6 billion), which was primarily funded with proceeds from the Term Credit Agreement. On April 10, 2026, following the closing of the divestiture of its Anadarko assets, the Company repaid the balance under the Term Credit Agreement and the facility was terminated.
Additional information on the Anadarko divestiture, the NuVista Acquisition and the Term Credit Agreement can be found in Notes 8, 9 and 12, respectively, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
The available Credit Facilities, uncommitted demand lines, and cash and cash equivalents, provide Ovintiv with total liquidity of approximately $4.4 billion as at June 30, 2026. As at June 30, 2026, Ovintiv also had approximately $190 million in undrawn letters of credit issued in the normal course of business as collateral security.
Ovintiv has a U.S. shelf registration statement under which the Company may issue from time to time, debt securities, common stock, preferred stock, warrants, units, share purchase contracts and share purchase units in the U.S. The U.S. shelf registration statement was renewed in March 2026 and expires in March 2029.
The obligations under the Company’s existing debt securities are fully and unconditionally guaranteed on a senior unsecured basis by Ovintiv Canada ULC, an indirect wholly-owned subsidiary of the Company. Additional information on the Company’s Canadian Operations segment and the Bow office lease can be found in the Results of Operations section in this MD&A and in the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, and the MD&A and audited Consolidated Financial Statements and accompanying notes for the year ended December 31, 2025, which are included in Items 7 and 8, respectively, of the 2025 Annual Report on Form 10-K.
Ovintiv is currently in compliance with all financial covenants under the Credit Facilities. Management monitors Debt to Adjusted Capitalization, which is a non-GAAP measure defined in the Non-GAAP Measures section of this MD&A, as a proxy for Ovintiv’s financial covenant under the Credit Facilities, which requires Debt to Adjusted Capitalization to be less than 60 percent. As at June 30, 2026, the Company’s Debt to Adjusted Capitalization was 16 percent. The definitions used in the covenant under the Credit Facilities adjust capitalization for cumulative historical ceiling test impairments recorded in conjunction with the Company’s January 1, 2012, adoption of U.S. GAAP. Additional information on financial covenants can be found in Note 15 to the Consolidated Financial Statements included in Item 8 of the 2025 Annual Report on Form 10‑K.
Sources and Uses of Cash
The following table summarizes the sources and uses of the Company’s cash and cash equivalents.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
Activity Type |
|
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sources of Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from operating activities |
|
Operating |
|
|
$ |
1,632 |
|
|
$ |
1,013 |
|
|
|
|
$ |
2,688 |
|
|
$ |
1,886 |
|
Proceeds from divestitures |
|
Investing |
|
|
|
2,822 |
|
|
|
12 |
|
|
|
|
|
2,829 |
|
|
|
1,896 |
|
Net issuance of revolving debt |
|
Financing |
|
|
|
- |
|
|
|
396 |
|
|
|
|
|
- |
|
|
|
481 |
|
Issuance of debt under the Term Credit Agreement |
Financing |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
1,151 |
|
|
|
- |
|
Other |
Investing/Financing |
|
|
|
1 |
|
|
|
- |
|
|
|
|
|
44 |
|
|
|
102 |
|
|
|
|
|
|
|
4,455 |
|
|
|
1,421 |
|
|
|
|
|
6,712 |
|
|
|
4,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uses of Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
Investing |
|
|
|
574 |
|
|
|
521 |
|
|
|
|
|
1,179 |
|
|
|
1,138 |
|
Acquisitions |
|
Investing |
|
|
|
14 |
|
|
|
3 |
|
|
|
|
|
21 |
|
|
|
2,313 |
|
Corporate acquisition, net of cash acquired |
|
Investing |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
1,192 |
|
|
|
- |
|
Net repayment of revolving debt |
|
Financing |
|
|
|
877 |
|
|
|
- |
|
|
|
|
|
580 |
|
|
|
- |
|
Repayment of debt under the Term Credit Agreement |
Financing |
|
|
|
1,151 |
|
|
|
- |
|
|
|
|
|
1,151 |
|
|
|
- |
|
Repayment of long-term debt |
|
Financing |
|
|
|
720 |
|
|
|
600 |
|
|
|
|
|
1,179 |
|
|
|
600 |
|
Purchase of shares of common stock |
|
Financing |
|
|
|
345 |
|
|
|
147 |
|
|
|
|
|
429 |
|
|
|
147 |
|
Dividends on shares of common stock |
|
Financing |
|
|
|
84 |
|
|
|
77 |
|
|
|
|
|
169 |
|
|
|
155 |
|
Other |
Investing/Financing |
|
|
|
15 |
|
|
|
48 |
|
|
|
|
|
147 |
|
|
|
21 |
|
|
|
|
|
|
|
3,780 |
|
|
|
1,396 |
|
|
|
|
|
6,047 |
|
|
|
4,374 |
|
Foreign Exchange Gain (Loss) on Cash, Cash Equivalents
and Restricted Cash Held in Foreign Currency |
|
|
|
(1 |
) |
|
|
(13 |
) |
|
|
|
|
- |
|
|
|
(13 |
) |
Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash |
|
|
$ |
674 |
|
|
$ |
12 |
|
|
|
|
$ |
665 |
|
|
$ |
(22 |
) |
Operating Activities
Net cash from operating activities in the second quarter and first six months of 2026 was $1,632 million and $2,688 million, respectively, and was primarily a reflection of the impacts from production volumes, average realized commodity prices, realized gains/losses on risk management and changes in non‑cash working capital.
Additional detail on changes in non-cash working capital can be found in Note 21 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Ovintiv expects it will continue to meet the payment terms of its suppliers.
Non-GAAP Cash Flow in the second quarter and first six months of 2026 was $1,256 million and $2,495 million, respectively, and was primarily impacted by the items affecting cash from operating activities which are discussed below and in the Results of Operations section of this MD&A.
Three months ended June 30, 2026, versus June 30, 2025
Net cash from operating activities increased $619 million compared to the second quarter of 2025 primarily due to:
•Higher realized liquids commodity prices ($659 million), changes in non-cash working capital ($269 million), higher plant condensate and natural gas production volumes ($103 million), and lower operating expense, excluding non-cash long-term incentive costs ($31 million);
partially offset by:
•Lower oil and other NGLs production volumes ($130 million), higher transportation and processing expense ($105 million), realized losses on risk management in revenues compared to gains in 2025 ($101 million), lower realized natural gas commodity prices ($94 million) and higher administrative expense, excluding non-cash long-term incentive costs ($49 million).
Six months ended June 30, 2026, versus June 30, 2025
Net cash from operating activities increased $802 million compared to the first six months of 2025 primarily due to:
•Higher realized oil and plant condensate commodity prices ($676 million), higher NGLs and natural gas production volumes ($359 million), changes in non-cash working capital ($220 million), realized foreign exchange losses on risk management contracts issued from Canada in 2025 ($98 million), lower current income tax expense ($34 million) and lower operating expense, excluding non-cash long-term incentive costs ($11 million);
partially offset by:
•Higher transportation and processing expense ($178 million), lower oil production volumes ($171 million), realized losses on risk management in revenues compared to gains in 2025 ($141 million), lower realized natural gas and other NGLs commodity prices ($74 million), and higher administrative expense, excluding non-cash long-term incentive costs ($68 million).
Investing Activities
Cash from investing activities in the first six months of 2026 was $481 million primarily due to the sale of the Company’s Anadarko assets, partially offset by the NuVista Acquisition in the first quarter of 2026 and capital expenditures.
Divestitures in the first six months of 2026 were $2,829 million, which primarily included the sale of the Anadarko assets in Oklahoma. Divestitures in the first six months of 2025 were $1,896 million, which primarily included the sale of the Uinta assets in Utah. Acquisitions in the first six months of 2025 were $2,313 million, which primarily included the Montney Acquisition.
The corporate acquisition in the first six months of 2026 was $1,192 million, which reflects the net cash paid to complete the NuVista Acquisition.
Capital expenditures increased $41 million compared to the first six months of 2025, primarily due to increased capital activity in Montney primarily due to the NuVista Acquisition in the first quarter of 2026 and increased drilling and completions costs in Permian, partially offset by decreased capital activity resulting from the sale of the Anadarko assets.
Capital expenditures are summarized in Note 3, acquisition and divestiture activities, including additional information regarding the Montney Acquisition and the sales of the Anadarko and Uinta assets, can be found in Note 8, and additional information regarding the NuVista Acquisition can be found in Note 9 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Financing Activities
Net cash used in financing activities has been impacted by Ovintiv’s strategic objective to return value to shareholders by repaying existing debt, purchasing shares of common stock and paying dividends.
Net cash used in financing activities in the first six months of 2026 increased $2,062 million compared to 2025. The increase was primarily due to a net repayment of revolving debt in 2026 of $580 million compared to a net issuance in 2025 of $481 million, increased repayment of long-term debt, including the early redemption of the Company’s May 2028 senior notes during the second quarter of 2026 ($579 million), increased purchases of shares of common stock ($282 million) and the settlement of a property acquisition payable in the first quarter of 2026 ($123 million). Additionally, during the first six months of 2026, the Company borrowed and subsequently repaid $1,151 million under the Term Credit Agreement.
In January 2026, Ovintiv redeemed its $459 million, 5.375 percent senior notes due January 1, 2026, with cash on hand and proceeds from short-term borrowings. On April 20, 2026, the Company redeemed its $700 million, 5.65 percent senior notes due May 15, 2028, with proceeds from the divestiture of its Anadarko assets, which is expected to result in annualized interest savings of approximately $40 million. The early redemption resulted in a one-time make-whole payment of $20 million.
The Company’s long-term debt totaled $3,695 million at June 30, 2026. There was no current portion of long-term debt outstanding at June 30, 2026. The Company’s long-term debt at December 31, 2025, including the current portion of $810 million, totaled $5,202 million. As at June 30, 2026, the Company has no fixed rate long-term debt due until 2030 and beyond.
From time to time, Ovintiv may seek to retire or repurchase the Company’s outstanding debt through cash purchases and/or exchanges for other debt or equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors.
In support of the Company’s commitment to enhancing shareholder value, Ovintiv utilizes its shareholder return framework to provide competitive returns to shareholders. As discussed in the Significant Developments section of this MD&A, the Company updated its shareholder return framework, which commits to returning between 50 percent and 100 percent of annual Non-GAAP Cash Flow in excess of capital expenditures through base dividends and share buybacks.
For additional information on long-term debt, refer to Note 12 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Further details on the Company’s debt-based metrics can be found in the Non-GAAP measures section of this MD&A.
Dividends
The Company pays quarterly dividends to common shareholders at the discretion of the Board of Directors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions, except as indicated) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Payments |
|
$ |
84 |
|
|
$ |
77 |
|
|
|
|
$ |
169 |
|
|
$ |
155 |
|
Dividend Payments ($/share) |
|
$ |
0.30 |
|
|
$ |
0.30 |
|
|
|
|
$ |
0.60 |
|
|
$ |
0.60 |
|
On July 23, 2026, the Board of Directors declared a dividend of $0.30 per share of common stock payable on September 29, 2026, to shareholders of record as of September 15, 2026.
Dividends paid in the first six months of 2026 increased $14 million compared to 2025 due to additional shares of common stock issued as part of the NuVista Acquisition.
Normal Course Issuer Bid
On September 29, 2025, the Company announced it had received regulatory approval for the renewal of its NCIB program, which enables the Company to purchase, for cancellation or return to treasury, up to approximately 22.3 million shares of common stock over a 12-month period from October 3, 2025, to October 2, 2026. The Company expects to continue to execute the NCIB program in conjunction with its shareholder return framework.
In the second quarter and first six months of 2026, the Company purchased, for cancellation, approximately 6.1 million and 7.6 million shares of common stock, respectively, for total consideration of approximately $345 million and $429 million, respectively. For additional information on the NCIB, refer to Note 14 to the Consolidated Financial Statements included in Part I, Item 1 and Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds” of this Quarterly Report on Form 10‑Q.
Material Cash Requirements
For information on material cash requirements, refer to the Material Cash Requirements section of the MD&A included in Item 7 of the 2025 Annual Report on Form 10-K.
Commitments and Contingencies
For information on commitments and contingencies, refer to Note 22 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Critical Accounting Estimates
There have been no significant changes to the Company’s critical accounting policies and use of estimates from the disclosures reported in the Critical Accounting Estimates section of the MD&A included in Item 7 of the 2025 Annual Report on Form 10‑K.
Certain measures in this document do not have any standardized meaning as prescribed by U.S. GAAP and, therefore, are considered non-GAAP measures. These measures may not be comparable to similar measures presented by other issuers and should not be viewed as a substitute for measures reported under U.S. GAAP. These measures are commonly used in the oil and gas industry and by Ovintiv to provide shareholders and potential investors with additional information regarding the Company’s liquidity and its ability to generate funds to finance its operations. Non-GAAP measures include: Non-GAAP Cash Flow, Debt to Adjusted Capitalization, Debt to EBITDA and Debt to Adjusted EBITDA. Management’s use of these measures is discussed further below.
Cash from Operating Activities and Non-GAAP Cash Flow
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.
Management believes this measure is useful to the Company and its investors as a measure of operating and financial performance across periods and against other companies in the industry, and is an indication of the Company’s ability to generate cash to finance capital investment programs, to service debt and to meet other financial obligations. This measure is used, along with other measures, in the calculation of certain performance targets for the Company’s management and employees.
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|
|
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|
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|
|
|
|
|
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|
|
|
Three months ended June 30, |
|
|
|
|
Six months ended June 30, |
|
($ millions) |
|
2026 |
|
|
2025 |
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash From (Used in) Operating Activities |
|
$ |
1,632 |
|
|
$ |
1,013 |
|
|
|
|
$ |
2,688 |
|
|
$ |
1,886 |
|
(Add back) deduct: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in other assets and liabilities |
|
|
(4 |
) |
|
|
(11 |
) |
|
|
|
|
(18 |
) |
|
|
(22 |
) |
Net change in non-cash working capital |
|
|
380 |
|
|
|
111 |
|
|
|
|
|
211 |
|
|
|
(9 |
) |
Non-GAAP Cash Flow |
|
$ |
1,256 |
|
|
$ |
913 |
|
|
|
|
$ |
2,495 |
|
|
$ |
1,917 |
|
Debt to Capitalization and Debt to Adjusted Capitalization
Debt to Adjusted Capitalization is a non-GAAP measure which adjusts capitalization for historical ceiling test impairments that were recorded as at December 31, 2011. Management monitors Debt to Adjusted Capitalization as a proxy for the Company’s financial covenant under the Credit Facilities which require Debt to Adjusted Capitalization to be less than 60 percent. Adjusted Capitalization includes debt, total shareholders’ equity and an equity adjustment for cumulative historical ceiling test impairments recorded as at December 31, 2011, in conjunction with the Company’s January 1, 2012, adoption of U.S. GAAP.
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|
|
|
|
|
|
|
|
($ millions, except as indicated) |
|
June 30, 2026 |
|
|
December 31, 2025 |
|
|
|
|
|
|
|
|
Debt (Long-Term Debt, including Current Portion) |
|
$ |
3,695 |
|
|
$ |
5,202 |
|
Total Shareholders’ Equity |
|
|
11,499 |
|
|
|
11,195 |
|
Capitalization |
|
$ |
15,194 |
|
|
$ |
16,397 |
|
Debt to Capitalization |
|
24% |
|
|
32% |
|
|
|
|
|
|
|
|
Debt (Long-Term Debt, including Current Portion) |
|
$ |
3,695 |
|
|
$ |
5,202 |
|
Total Shareholders’ Equity |
|
|
11,499 |
|
|
|
11,195 |
|
Equity Adjustment for Impairments at December 31, 2011 |
|
|
7,746 |
|
|
|
7,746 |
|
Adjusted Capitalization |
|
$ |
22,940 |
|
|
$ |
24,143 |
|
Debt to Adjusted Capitalization |
|
16% |
|
|
22% |
|
Debt to EBITDA and Debt to Adjusted EBITDA
Debt to EBITDA and Debt to Adjusted EBITDA 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.
Management believes these measures are useful to the Company and its investors as a measure of financial leverage and the Company’s ability to service its debt and other financial obligations. These measures are used, along with other measures, in the calculation of certain financial performance targets for the Company’s management and employees.
|
|
|
|
|
|
|
|
|
($ millions, except as indicated) |
|
June 30, 2026 |
|
|
December 31, 2025 |
|
|
|
|
|
|
|
|
Debt (Long-Term Debt, including Current Portion) |
|
$ |
3,695 |
|
|
$ |
5,202 |
|
|
|
|
|
|
|
|
Net Earnings (Loss) |
|
|
920 |
|
|
|
1,242 |
|
Add back (deduct): |
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
2,158 |
|
|
|
2,179 |
|
Interest |
|
|
388 |
|
|
|
376 |
|
Income tax expense (recovery) |
|
|
(644 |
) |
|
|
(472 |
) |
EBITDA |
|
$ |
2,822 |
|
|
$ |
3,325 |
|
Debt to EBITDA (times) |
|
|
1.3 |
|
|
|
1.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt (Long-Term Debt, including Current Portion) |
|
$ |
3,695 |
|
|
$ |
5,202 |
|
|
|
|
|
|
|
|
Net Earnings (Loss) |
|
|
920 |
|
|
|
1,242 |
|
Add back (deduct): |
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
2,158 |
|
|
|
2,179 |
|
Impairments |
|
|
1,675 |
|
|
|
920 |
|
Accretion of asset retirement obligation |
|
|
28 |
|
|
|
28 |
|
Interest |
|
|
388 |
|
|
|
376 |
|
Unrealized (gains) losses on risk management |
|
|
(135 |
) |
|
|
(6 |
) |
Foreign exchange (gain) loss, net |
|
|
20 |
|
|
|
31 |
|
(Gain) loss on divestitures, net |
|
|
337 |
|
|
|
- |
|
Other (gains) losses, net |
|
|
(72 |
) |
|
|
(46 |
) |
Income tax expense (recovery) |
|
|
(644 |
) |
|
|
(472 |
) |
Adjusted EBITDA |
|
$ |
4,675 |
|
|
$ |
4,252 |
|
Debt to Adjusted EBITDA (times) |
|
|
0.8 |
|
|
|
1.2 |
|
