Ovintiv Inc. OVV recently closed the previously announced Montney Asset acquisition for $2.3 billion from Paramount Resources Ltd. The assets acquired by Ovintiv are located near its current Montney operations with sufficient midstream infrastructure access, making them one of the most beneficial possessions for the company. This will position Ovintiv as a leading operator in the region.
The deal announced in November 2024 will add approximately 70,000 barrels of oil equivalent per day to the company’s production, 900 high-quality well locations and 109,000 net acres of strategically located land.
Ovintiv is looking forward to integrating the new assets into its portfolio post acquisition. It is one of the highest-quality undeveloped assets in North America, which will extend the company’s Montney oil and condensate inventory life to about 15 years and strengthen its competitive edge. This transaction, combined with the Uinta asset sale transaction, is accretive both immediately and for the long term across all key financial metrics.
In November 2024, the deal was valued at $2.377 billion, and Ovintiv entered into currency swaps to mitigate the risks associated with foreign exchange fluctuations. At the deal closing time, the transaction is valued at $2.307 billion, due to current foreign exchange rates, resulting in realized losses of approximately $97 million. Despite this, the acquisition is expected to deliver significant financial benefits, with a projected increase of $300 million in non-GAAP free cash flow for 2025 based on current commodity strip pricing.
Investors and stakeholders can expect further insights as Ovintiv plans to release its full-year and first-quarter 2025 guidance along with its fourth-quarter and full-year 2024 results on Feb. 26, 2025.
Ovintiv is an independent energy producer that explores and churns out oil and natural gas from diverse assets located in the United States and Canada. Currently, OVV has a Zacks Rank #2 (Buy).
Investors interested in the energy sector might look at other top-ranked stocks like SM Energy Company SM, Sunoco LP SUN and Gulfport Energy Corporation GPOR.While SM Energy and Sunoco currently sport a Zacks Rank #1 (Strong Buy) each, Gulfport Energy carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Denver, CO-based SM Energy Company is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. The Zacks Consensus Estimate for SM’s 2024 earnings indicates 15.11% year-over-year growth.
Dallas, TX-based Sunoco LP is a master limited partnership that deals with the distribution of motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors. The Zacks Consensus Estimate for SUN’s 2024 earnings indicates 184.11% year-over-year growth.
Gulfport Energy is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America. The Zacks Consensus Estimate for GPOR’s 2024 earnings indicates 108.53% year-over-year growth.
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