Ovintiv Acquires NuVista Energy and Plans Anadarko Asset Divestiture
Ovintiv Inc. announced its acquisition of NuVista Energy Ltd. in a significant transaction valued at approximately $2.7 billion (C$3.8 billion). This strategic move is expected to enhance Ovintiv’s already impressive portfolio in the Alberta Montney region.
Acquisition Details
The agreement stipulates an acquisition price of about C$17.80 per share. This includes NuVista’s existing net debt of approximately $215 million (C$300 million) and 18.5 million shares Ovintiv previously acquired at C$16.00 per share. Following the completion of the acquisition, NuVista shareholders will hold roughly 10.6% of the combined company.
Enhanced Resource Inventory
- Net Acres: The acquisition will add about 140,000 net acres to Ovintiv’s holdings.
- Oil Production: It is projected to yield approximately 100 thousand barrels of oil equivalent per day (MBOE/d).
- Drilling Locations: An estimated 930 new well locations will be introduced, with about 620 being classified as premium return locations.
This acquisition aims to improve operational efficiency. Annual synergies are anticipated to reach around $100 million. The deal is seen as immediately beneficial, increasing Ovintiv’s non-GAAP free cash flow by approximately 10%.
Future Divestitures and Financial Strategy
In conjunction with this acquisition, Ovintiv plans to initiate the divestiture of its Anadarko assets in the first quarter of 2026. Proceeds from this sale are intended for accelerated debt reduction. Ovintiv aims to lower its non-GAAP net debt to below $4 billion by the end of 2026.
Operational Outlook
Once the deal is finalized, Ovintiv expects to operate an average of six drilling rigs across its expanded Montney acreage. This position will further solidify the company’s operational base and maximize production growth.
Conclusion
Ovintiv’s acquisition of NuVista Energy marks a significant milestone in enhancing its resource base in the Montney region. Coupled with its strategic divestitures, it reflects a commitment to strengthening its financial position and maximizing shareholder value.
