Ovintiv Inc. Delivers Robust 2025 Results, Announces Major Asset Moves and Sharply Increases Shareholder Returns Framework

Key Highlights from 2025 Financial and Operating Results

• Strategic Transformation Complete: Ovintiv has completed a comprehensive transformation, including portfolio optimization and balance sheet strengthening.
• Strong Cash Generation: The company reported cash from operating activities of \$3.7 billion and Non-GAAP Free Cash Flow of \$1.6 billion after capital investments of \$2.1 billion for the year.
• Robust Production: Average annual production reached 615 MBOE/d, including 209 Mbbls/d oil and condensate, 95 Mbbls/d NGLs, and 1,862 MMcf/d natural gas. Q4 production rose to 623 MBOE/d.
• Shareholder Returns: Returned over \$600 million to shareholders in 2025 via base dividends and share buybacks.
• Major M&A Activity: Acquired NuVista Energy Ltd., adding 100 MBOE/d production, 930 new well locations, and 140,000 net acres for \$2.7 billion (closed February 3, 2026). Also reached an agreement to sell Anadarko assets for \$3.0 billion cash (announced February 2026).
• 2026 Capital and Production Guidance: Capital program set at \$2.25–2.35 billion, targeting 620–645 MBOE/d production (205–212 Mbbls/d oil and condensate).
• Significant Increase in Shareholder Returns: New framework will return at least 75% of full-year 2026 Non-GAAP Free Cash Flow to shareholders via dividends and share buybacks. A new \$3.0 billion share buyback program is authorized and expected to start immediately.

Financial and Operational Details

• Net Earnings: \$1.2 billion for 2025 (\$4.78 per diluted share), including non-cash impairments of \$703 million after-tax (\$2.71 per share). Q4 net earnings were \$946 million (\$3.70 per share).
• Risk Management: Full-year net gains on risk management were \$172 million (pre-tax); Q4 net gains were \$75 million (pre-tax).
• Capital Investments: \$2.15 billion in 2025, in line with guidance. Q4 capital investment was \$465 million, also in line with guidance.
• Cost Structure:
  • Upstream operating expense: \$3.80/BOE (full year and Q4)
  • Transportation & processing: \$7.51/BOE (full year), \$7.47/BOE (Q4)
  • Production, mineral, and other taxes: \$1.27/BOE (full year), \$0.94/BOE (Q4)
  • Combined cost structure at low end of guidance
• Realized Pricing (including hedges):
  • Oil & condensate: \$64.48/bbl (full year), \$59.55/bbl (Q4)
  • Other NGLs: \$18.94/bbl (full year), \$17.44/bbl (Q4)
  • Natural gas: \$2.54/Mcf (full year), \$2.65/Mcf (Q4)
  • Total realized: \$32.59/BOE (full year), \$30.74/BOE (Q4)
• Balance Sheet:
  • Total liquidity at year-end: \$4.5 billion, including \$3.5 billion credit facilities, \$1.2 billion Term Credit, and \$35 million cash (net of \$351 million commercial paper).
  • Non-GAAP Debt to EBITDA: 1.6x; Debt to Adjusted EBITDA: 1.2x as of Dec 31, 2025. Post-Anadarko sale, Net Debt expected at ~\$3.6 billion.
  • Maintains investment grade ratings with four credit agencies.
• Dividend: Quarterly dividend of \$0.30/share declared, payable March 31, 2026.

Asset Highlights and 2026 Outlook

• Permian Basin:
  • Q4 production: 219 MBOE/d (79% liquids); 2025 average: 215 MBOE/d
  • 2026 plan: \$1.325–\$1.375 billion investment, ~5 rigs, 125–135 TILs (wells turned in line)
  • Expected 2026 oil and condensate output: 117–123 Mbbls/d; gas: 270–295 MMcf/d
• Montney:
  • Q4 production: 305 MBOE/d (25% liquids); 2025 average: 299 MBOE/d
  • 2026 plan: \$875–\$925 million investment, ~6 rigs, 130–140 TILs
  • Expected 2026 oil and condensate output: 80–84 Mbbls/d; gas: 1.7–1.8 Bcf/d
• Year-End Reserves: SEC proved reserves at 2.3 billion BOE (50% liquids, 74% proved developed). Proved reserves replacement (ex-acquisitions/divestitures): 150% of 2025 production. Reserve life index: >10 years.

2026 Guidance (Key Figures)

• Full Year 2026:
  • Total production: 620–645 MBOE/d
  • Oil & condensate: 205–212 Mbbls/d
  • NGLs: 80–85 Mbbls/d
  • Natural gas: 2,000–2,100 MMcf/d
  • Capital investment: \$2.25–\$2.35 billion
• Shareholder Returns: At least 75% of 2026 Non-GAAP Free Cash Flow to be returned to shareholders. Longer-term, 50–100% of annual Non-GAAP Free Cash Flow targeted for return to shareholders via dividends and buybacks.
• Share Buyback Program: New \$3.0 billion buyback program authorized, to commence immediately.

Shareholder-Relevant & Potentially Price-Sensitive Items

• Major Portfolio Actions:
  • Acquisition of NuVista Energy closed in February 2026, adding significant production, reserves, and inventory at a reported cost of \$2.7 billion.
  • Agreement to sell Anadarko assets for \$3.0 billion cash, expected to close in Q2 2026, further optimizing portfolio and strengthening the balance sheet.
• Substantially Increased Shareholder Return Framework:
  • Return of at least 75% of 2026 Non-GAAP Free Cash Flow via dividends and buybacks, compared to ~38% in 2025. Board authorization of \$3.0 billion buyback program.
• Solid Liquidity and Balance Sheet: Strong liquidity position and a plan to reduce net debt with asset sale proceeds, maintaining investment grade status.
• Operational and Cost Discipline: Capex and expenses remain tightly controlled, at or below guidance, despite a volatile commodity environment.
• Hedge Position: Active oil and gas hedging program in place to manage commodity price risks through 2027.

Conference Call and Additional Information

Ovintiv will host a conference call and webcast to discuss results at 8:00 a.m. MT (10:00 a.m. ET) on February 24, 2026. Investors can access the webcast, slides, and financial statements on www.ovintiv.com. The call will be archived for 90 days.

Conclusion

Ovintiv’s 2025 performance, strategic asset moves, and new shareholder return framework are highly significant and likely to impact the company’s valuation. The successful NuVista acquisition, Anadarko asset sale, robust free cash flow, and aggressive return of capital to shareholders all point to a value-focused strategy that should attract investor attention. The increased share buyback authorization and commitment to return 75%+ of free cash flow in 2026 are especially notable for those evaluating the company’s capital allocation and potential share price appreciation.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should refer to Ovintiv’s official filings and consult their financial advisors before making investment decisions. Forward-looking statements are subject to risks and uncertainties as outlined in the company’s filings.

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