2020 Outlook highlights:
- 2020 is expected to be third consecutive year of significant
non-GAAP free cash flow.
- Plan expected to yield 4% year-over-year proforma growth in
crude oil and condensate(1) production.
- Planned 2020 capital investments total $2.7 billion, down 6%, or $175 million less than 2019 proforma capital
investment when including 2019 utilized third party capital of
$75 million in the Montney.
- Strong hedge position: over 70% of 2020 crude oil and
condensate and natural gas production hedged.
Full-year and fourth quarter 2019 highlights:
- Fourth quarter and full-year financial and operating results
exceed guidance and consensus expectations.
- Full-year cash from operating activities was $2.9 billion, also equal to non-GAAP cash flow;
2019 non-GAAP free cash flow was $305
million, or $476 million
excluding $171 million of acquisition
and restructuring costs.
- 2019 net earnings were $234
million and non-GAAP operating earnings were $860 million.
- Proforma 2019 crude oil and condensate production grew 9% over
2018 (excluding the impact of divestitures). With volumes of 228
Mbbls/d, this ranks Ovintiv as one of the largest independent
producers of crude oil and condensate. Total proforma production
was 589 MBOE/d. See the "Capital Investment and Production" table
below.
- 2019 capital investment hit the mid-point of original guidance
of $2.6 billion reportable and
$2.8 billion proforma.
- Company repurchased approximately 13% of shares outstanding
through its stock buyback program and, including dividends,
returned more than $1.35 billion to
stockholders in 2019 and approximately $1.7
billion over the last two years.
- Ovintiv recorded a fourth quarter net loss of $6 million, which was impacted by unrealized risk
management losses. Non-GAAP Operating earnings were $210 million, cash from operating activities was
$730 million and non-GAAP cash flow
was $815 million, and fourth quarter
non-GAAP free cash flow was $241
million.
- Fourth quarter crude oil and condensate production was 226
Mbbls/d. See the "Capital Investment and Production" table
below.
DENVER, CO, Feb. 19, 2020 /PRNewswire/ - Ovintiv Inc.
(NYSE, TSX: OVV) today announced its fourth quarter and full-year
2019 financial and operating results, which exceeded consensus
estimates. The Company also announced its 2020 Outlook with capital
investments expected to decrease about $175
million from the prior year on a proforma basis. The outlook
is expected to generate the Company's third consecutive year of
significant non-GAAP free cash flow and grow crude oil and
condensate production by 4%. The 2020 investment program is aligned
with Ovintiv's strategy to grow long-term stockholder value through
disciplined capital investments, a return of cash to stockholders
and profitable liquids growth.
"We finished 2019 very strong, marking the second consecutive
year of generating free cash flow while growing our crude and
condensate production," said CEO Doug
Suttles. "Our disciplined capital investments, combined
with a relentless focus on efficiency and innovation, has
transformed Ovintiv into one of the largest independent producers
of crude oil and condensate and amongst the top independents in
EBITDA generation."
1.
|
Throughout this
document, crude and condensate refers to tight oil including medium
and light crude oil volumes and plant condensate.
|
A conference call and webcast to discuss the 2019 fourth quarter
and full-year results and the 2020 outlook will be held at
7 a.m. MT (9
a.m. ET) on February 20, 2020.
To participate, please dial 888-231-8191 (toll-free in North America) or 647-427-7450 (international)
approximately 10 minutes prior to the conference call. The live
audio webcast of the conference call, including slides and
financial statements, will be available on Ovintiv's website,
www.ovintiv.com under Investors/Presentations and Events. The
webcast will be archived for approximately 90 days.
2020 Outlook
Ovintiv's 2020 planned capital
investments are $2.7 billion.
Approximately 80% of the investments are allocated to development
programs in the U.S. and more than 75% are earmarked for its three
core assets—Permian, Anadarko and Montney.
Crude oil and condensate volumes are expected to grow 4%
proforma year-over-year to 229 – 239 Mbbls/d. Full-year NGL (C2 –
C4) production is expected to be 89 – 93 Mbbls/d, up 2% proforma
from the prior year. Liquids (total crude oil and NGLs) are
expected to comprise 56% of total production, up 2% over 2019
proforma volumes.
Total Costs in 2020 are expected to drop again year-over-year to
$12.20 – $12.50 per barrel of oil equivalent (BOE).
The 2020 Outlook is supported by Ovintiv's derivatives'
positions with over 70% of 2020 crude oil, condensate and natural
gas production hedged. The 2020 program is expected to be free cash
flow positive at prices lower than the current strip prices of
approximately $52/bbl WTI oil and
approximately $2.15/MMBtu NYMEX
natural gas. As of December 31, 2019,
Ovintiv had 2020 benchmark hedges of approximately 165 Mbbls/d of
crude oil and condensate and 1,188 MMcf/d of natural gas. An
updated hedge table can be found below.
"Our 2020 Outlook balances industry competitive crude oil and
condensate growth, disciplined capital allocation and highly
efficient execution to generate free cash flow for the third
consecutive year", said Suttles. "In 2020, our business is well
positioned for the current market volatility. Our risk management
programs combined with almost complete capital flexibility give us
confidence that we can generate free cash flow across a wide range
of commodity outcomes and continue to return cash to our
stockholders."
Full-year and fourth quarter 2019 summary
For 2019,
net earnings were $234 million, or
$0.90 per share. Non-GAAP operating
earnings were $860 million, or
$3.29 per share. Cash from operating
activities for the full year was $2.9
billion, equivalent to non-GAAP cash flow.
For the fourth quarter, Ovintiv reported a net loss of
$6 million, or $(0.02) per share, driven primarily by a
$264 million (after-tax) non-cash
unrealized risk management loss on hedge positions recognized in
the quarter. Non-GAAP operating earnings for the quarter were
$210 million, or $0.81 per share. Cash from operating activities
for the fourth quarter was $730
million and non-GAAP cash flow was $815 million.
At year-end, Ovintiv had $3.5
billion of liquidity. The Company's credit facilities have
no reserve-based covenants. In early 2020, the facilities were
replaced and extended to July 2024.
Ovintiv has an investment grade credit rating and maintains
significant financial flexibility. The Company has no debt
maturities until late 2021 and approximately 80% of long-term debt
does not come due until 2024 or later.
Refer to Note 1 Non-GAAP measures and the tables in this
release for reconciliation to comparable GAAP financial measures.
Note that Per Share amounts in this document reflect the share
consolidation.
Production summary and asset highlights
Ovintiv's
higher than expected production was driven by strong and consistent
well results across the portfolio. Through its proven cube
development practices, the Company continues to deliver leading
performance across all assets to generate quality returns and
maximize acreage value.
For the full year, on a proforma basis and excluding production
from assets divested during 2019, Ovintiv's total production
averaged 578,600 BOE/d, 9% higher than the prior year. Full year
proforma crude oil and condensate production, excluding the impact
of divestitures, also grew 9% over 2018. See the "Capital
Investment and Production" table below.
Total Company production in the fourth quarter of 2019 was
592,600 BOE/d. Fourth quarter liquids production averaged 322,000
bbls/d. See the "Capital Investment and Production" table
below.
Permian
Production in the Permian increased 14%
over 2018 and averaged 104,800 BOE/d. Fourth quarter production
averaged 112,200 BOE/d (81% liquids) with 18 net wells
turned-in-line (TILs) during the quarter.
For 2020, well costs are forecast to be 8% lower than the prior
year as a result of play-leading drilling and completion
performance and supply chain management. Improved spud-to-rig
release times led to five recent pacesetter wells which averaged
under 11 days from spud to rig release.
Anadarko
Proforma production from the
Anadarko increased 17% year-over-year to 158,300 BOE/d, of which
62% was liquids. For the fourth quarter, production averaged
163,500 BOE/d (62% liquids) and 25 net TILs.
During the year, Ovintiv doubled its initial target for well
cost reductions in the play, lowering completed well costs by
nearly $2 million per well. Recently,
Ovintiv turned to sales four pacesetter wells at a drilling and
completions cost of less than $5.2
million per well.
Montney
Liquids production grew 25%
year-over-year to 52,100 bbls/d. Fourth quarter production averaged
209,100 BOE/d (25% liquids) with eight net TILs during the quarter.
Ovintiv had industry leading cycle times (78 days with an average
of seven wells per pad) in the Montney in 2019.
Year-end 2019 reserves
Under Canadian reserves
protocol, proved and probable reserves were 5.1 billion BOE before
royalties and 4.2 billion BOE after royalties. SEC proved reserves
at year-end 2019 were 2.2 billion BOE, of which 60% were liquids
and 48% were proved developed and, excluding the impact of
acquisitions and dispositions, reserve replacement was more than
two times 2019 production.
For additional information, please refer to the 2020 Outlook
and 2019 Results Presentation at
https://www.ovintiv.com/investors/
Dividend declared
On February
19, 2020, Ovintiv's Board declared a dividend of
$0.09375 per share of common stock
payable on March 31, 2020 to common
stockholders of record as of March 13,
2020.
Capital Investment and Production
|
|
|
|
Reportable
(1)
|
Proforma
(2)
|
(for the period ended
December 31)
|
2019
|
2018
|
Q4
2019
|
Q4
2018
|
2019
|
2018
|
Q4
2019
|
Q4
2018
|
Upstream Capital
Expenditures
($
millions)
|
2,614
|
1,964
|
568
|
346
|
2,793
|
3,367
|
568
|
654
|
Oil (Mbbls/d)
(3)
|
164.4
|
89.9
|
172.9
|
96.5
|
174.0
|
167.8
|
172.9
|
174.0
|
NGLs – Plant
Condensate (Mbbls/d)
|
52.9
|
39.0
|
52.9
|
50.9
|
53.7
|
45.0
|
52.9
|
57.5
|
NGLs – Other
(Mbbls/d)
|
84.6
|
39.2
|
96.2
|
45.3
|
89.4
|
76.8
|
96.2
|
86.9
|
Total NGLs
(Mbbls/d)
|
137.5
|
78.2
|
149.1
|
96.2
|
143.1
|
121.8
|
149.1
|
144.4
|
Total Liquids
(Mbbls/d)
|
301.9
|
168.1
|
322.0
|
192.7
|
317.1
|
289.6
|
322.0
|
318.4
|
Natural gas
(MMcf/d) (4)
|
1,577
|
1,158
|
1,624
|
1,265
|
1,632
|
1,598
|
1,624
|
1,735
|
Total production
(MBOE/d)
|
564.9
|
361.2
|
592.6
|
403.4
|
589.2
|
555.8
|
592.6
|
607.5
|
(1)
|
Reportable includes
Upstream capital and production volumes from Newfield, commencing
February 14, 2019. 2018 includes Ovintiv's capital and production
as previously reported.
|
(2)
|
Proforma includes
Ovintiv and Newfield Upstream capital and combined production
volumes for all periods shown.
|
(3)
|
Primarily tight oil,
including minimal medium and light crude oil volumes.
|
(4)
|
Primarily shale gas,
including minimal conventional natural gas.
|
|
2020
Outlook
|
|
FY2020
|
Pro Forma
2019(1)
|
Midpoint YoY
Growth (2020 vs.
PF 2019)
|
Capital Investment
($ Billion)
|
$2.7
|
$2.8
|
(4%)
|
Oil &
Condensate (Mbbls/d) (2)
|
229 -
239
|
225
|
4%
|
Other NGLs
(Mbbls/d)
|
89 –
93
|
89
|
2%
|
Natural Gas
(MMcf/d) (3)
|
1,520 -
1,580
|
1,583
|
(2%)
|
Total Costs per
BOE
(Upstream
Transportation and Processing, Operating, Production, Mineral and
Other Taxes, plus Corp G&A) (4)
|
$12.20 -
$12.50
|
$12.59(5)
|
(2%)
|
(1)
|
Capital investment
and production volumes have been adjusted for the Newfield
acquisition, and Arkoma and China sales during 2019.
|
(2)
|
Primarily tight oil,
including minimal medium and light crude oil volumes, and plant
condensate.
|
(3)
|
Primarily shale gas,
including minimal conventional natural gas.
|
(4)
|
Operating and G&A
costs exclude long-term incentive costs.
|
(5)
|
Total Costs shown as
reportable.
|
Hedge Volumes as of December 31,
2019:
|
|
|
|
|
Natural Gas
Hedges
|
2020
|
|
Oil &
Condensate Hedges
|
2020
|
Total Benchmark
Hedges
|
1,188
MMcf/d
|
|
Total Benchmark
Hedges
|
165
Mbbls/d
|
Benchmark Hedges
($/Mcf)
|
|
Benchmark Hedges
($/bbl)
|
NYMEX
Swaps
|
803
MMcf/d
|
|
WTI
Swaps
|
70
Mbbls/d
|
Swap Price
|
$2.65
|
|
Swap Price
|
$57.56
|
NYMEX 3-Way
Options
|
330
MMcf/d
|
|
WTI 3-Way
Options
|
80
Mbbls/d
|
Short Call
|
$2.72
|
|
Short Call
|
$61.68
|
Long Put
|
$2.60
|
|
Long Put
|
$53.44
|
Short Put
|
$2.25
|
|
Short Put
|
$43.44
|
NYMEX Costless
Collars
|
55
MMcf/d
|
|
WTI Costless
Collars
|
15
Mbbls/d
|
Short Call
|
$2.88
|
|
Short Call
|
$68.71
|
Long Put
|
$2.50
|
|
Long Put
|
$50.00
|
Basis Hedges
($/Mcf)
|
|
Basis Hedges
($/bbl)
|
AECO Basis
Swaps
|
349
MMcf/d
|
|
WTI / Midland
Swaps
|
8
Mbbls/d
|
Swap Price
|
($0.88)
|
|
Swap Price
|
($1.20)
|
WAHA Basis
Swaps
|
105
MMcf/d
|
|
|
|
Swap Price
|
($0.91)
|
|
|
|
Fourth Quarter and Year-End Highlights
|
Non-GAAP Cash Flow
Reconciliation
|
(for the period ended
December 31) ($ millions,
except as indicated)
|
Q4
2019
|
Q4
2018
|
2019
|
2018
|
Cash from (used
in) operating activities
|
730
|
559
|
2,921
|
2,300
|
Deduct (add
back):
|
|
|
|
|
Net change in other
assets and liabilities
|
(42)
|
(27)
|
(97)
|
(60)
|
Net change in non-cash
working capital
|
(43)
|
46
|
87
|
245
|
Non-GAAP cash
flow(1)
|
815
|
540
|
2,931
|
2,115
|
Non-GAAP cash flow
margin(1) ($/BOE)
|
14.95
|
14.56
|
14.21
|
16.05
|
|
|
|
|
|
Non-GAAP Free Cash
Flow Reconciliation
|
Non-GAAP cash
flow(1)
|
815
|
540
|
2,931
|
2,115
|
Less: capital
expenditures
|
574
|
349
|
2,626
|
1,975
|
Non-GAAP free cash
flow(1)
|
241
|
191
|
305
|
140
|
|
|
|
|
|
Non-GAAP Operating
Earnings Reconciliation
|
Net earnings
(loss)
|
(6)
|
1,030
|
234
|
1,069
|
Before-tax (addition)
deduction:
|
|
|
|
|
Unrealized gain (loss)
on risk management
|
(345)
|
941
|
(730)
|
519
|
Restructuring
charges
|
(4)
|
-
|
(138)
|
-
|
Non-operating foreign
exchange gain (loss)
|
52
|
(76)
|
94
|
(184)
|
Gain (loss) on
divestitures
|
(1)
|
1
|
3
|
5
|
Income tax
|
(298)
82
|
866
(141)
|
(771)
145
|
340
(93)
|
After-tax (addition)
deduction
|
(216)
|
725
|
(626)
|
247
|
Non-GAAP operating
earnings (loss)(1)
|
210
|
305
|
860
|
822
|
(1)
|
Non-GAAP cash flow,
non-GAAP cash flow margin, non-GAAP free cash flow, and non-GAAP
operating earnings are non-GAAP measures as defined in Note
1.
|
|
Production
Summary
|
(for the period ended
December 31) (average)
|
Q4 2019
|
Q4 2018
|
% ∆
|
2019
|
2018
|
% ∆
|
Oil
(Mbbls/d)(1)
|
172.9
|
96.5
|
79
|
164.4
|
89.9
|
83
|
NGLs – Plant
Condensate (Mbbls/d)
|
52.9
|
50.9
|
4
|
52.9
|
39.0
|
36
|
NGLs – Other
(Mbbls/d)
|
96.2
|
45.3
|
112
|
84.6
|
39.2
|
116
|
Total NGLs
(Mbbls/d)
|
149.1
|
96.2
|
55
|
137.5
|
78.2
|
76
|
Total Oil and NGLs
(Mbbls/d)
|
322.0
|
192.7
|
67
|
301.9
|
168.1
|
80
|
Natural gas
(MMcf/d) (2)
|
1,624
|
1,265
|
28
|
1,577
|
1,158
|
36
|
Total production
(MBOE/d)
|
592.6
|
403.4
|
47
|
564.9
|
361.2
|
56
|
(1)
|
Primarily tight oil,
including minimal medium and light crude oil volumes.
|
(2)
|
Primarily shale gas,
including minimal conventional natural gas.
|
Realized Pricing Summary
|
|
|
|
|
|
Q4
2019
|
Q4 2018
|
2019
|
2018
|
Liquids($/bbl)
|
|
|
|
|
WTI
|
56.96
|
58.81
|
57.03
|
64.77
|
Realized liquids
prices (1)
|
|
|
|
|
Oil
|
56.17
|
56.54
|
57.40
|
56.84
|
NGLs – Plant
Condensate
|
52.03
|
41.98
|
51.95
|
49.56
|
NGLs –
Other
|
12.90
|
24.63
|
14.04
|
24.93
|
Total
NGLs
|
26.80
|
33.80
|
28.63
|
37.21
|
|
|
|
|
|
Natural
gas
|
|
|
|
|
NYMEX
($/MMBtu)
|
2.50
|
3.64
|
2.63
|
3.09
|
Realized natural
gas price (1) ($/Mcf)
|
2.25
|
2.64
|
2.28
|
2.76
|
(1)
|
Prices include the
impact of realized gain (loss) on risk management.
|
Year-End 2019 Reserves Estimates
|
2019 Reserves
Estimates – Canadian Protocols (Net, After
Royalties)(1)
|
Using forecast prices
and costs; simplified table (MMBOE)
|
1P Proved
|
2P Proved + Probable
|
Canadian
Operations
|
728.1
|
1,434.7
|
USA
Operations
|
1,571.7
|
2,754.8
|
Total as of
December 31, 2019
|
2,299.8
|
4,189.5
|
|
2019 Proved
Reserves Estimates – Canadian Protocols (Net, After
Royalties) (1)
|
Using forecast prices
and costs; simplified table
|
Oil (MMbbls)(3)
|
NGLs (MMbbls)
|
Natural
Gas (Bcf)(4)
|
Total (MMBOE)
|
December 31,
2018
|
352.9
|
279.8
|
3,578
|
1,228.9
|
Revisions and
economic factors
|
104.8
|
93.8
|
812
|
334.0
|
Extensions, improved
recovery and discoveries
|
48.7
|
35.2
|
301
|
134.1
|
Acquisitions
|
296.5
|
238.7
|
2,041
|
875.3
|
Dispositions
|
(5.2)
|
(0.6)
|
(364)
|
(66.3)
|
Production
|
(60.0)
|
(50.2)
|
(576)
|
(206.2)
|
December 31,
2019
|
737.6
|
596.7
|
5,793
|
2,299.8
|
|
2019 Proved Plus
Probable Reserves Estimates – Canadian Protocols (Net, After
Royalties) (1)
|
Using forecast prices
and costs; simplified table
|
Oil (MMbbls)(3)
|
NGLs (MMbbls)
|
Natural
Gas (Bcf)(4)
|
Total (MMBOE)
|
December 31,
2018
|
986.8
|
699.3
|
8,623
|
3,123.4
|
Revisions and
improved recovery
|
(131.3)
|
(31.3)
|
(618)
|
(265.7)
|
Extensions and
discoveries
|
221.5
|
117.7
|
1,139
|
529.0
|
Purchase of reserves
in place
|
386.7
|
312.5
|
2,634
|
1,138.2
|
Sale of reserves in
place
|
(34.5)
|
(18.8)
|
(456)
|
(129.3)
|
Production
|
(60.0)
|
(50.2)
|
(576)
|
(206.2)
|
December 31,
2019
|
1,369.1
|
1,029.3
|
10,746
|
4,189.5
|
|
2019 Proved
Reserves Estimates – U.S. Protocols (Net, After
Royalties)(1)
|
Using constant prices
and costs; simplified table
|
Oil (MMbbls)(3)
|
NGLs (MMbbls)
|
Natural
Gas (Bcf)(4)
|
Total (MMBOE)
|
December 31,
2018
|
351.8
|
280.8
|
3,499
|
1,215.7
|
Revisions and
improved recovery (2)
|
(55.6)
|
(17.1)
|
(515)
|
(158.7)
|
Extensions and
discoveries
|
230.6
|
158.4
|
1,298
|
605.3
|
Purchase of reserves
in place
|
262.0
|
217.2
|
1,904
|
796.6
|
Sale of reserves in
place
|
(5.1)
|
(0.5)
|
(351)
|
(64.1)
|
Production
|
(60.0)
|
(50.2)
|
(576)
|
(206.2)
|
December 31,
2019
|
723.7
|
588.5
|
5,259
|
2,188.8
|
(1)
|
Numbers may not add
due to rounding.
|
(2)
|
Changes in reserve
estimates resulting from application of improved recovery
techniques are included in revisions of previous
estimates.
|
(3)
|
Primarily tight oil,
including minimal medium and light crude oil volumes.
|
(4)
|
Primarily shale gas,
including minimal conventional natural gas.
|
Differences between estimates under Canadian and U.S. protocols
primarily represent the use of forecast prices in the estimation of
reserves under Canadian standards, while U.S. standards require the
use of 12-month average historical prices which are held constant.
For information on reserves reporting, see Note 2.
Important information
Ovintiv reports in U.S. dollars
unless otherwise noted. Production, sales and reserves estimates
are reported on an after-royalties basis, unless otherwise noted.
The term liquids is used to represent oil and NGLs. The term
liquids-rich is used to represent natural gas streams with
associated liquids volumes. Unless otherwise specified or the
context otherwise requires, references to Ovintiv or to the Company
includes reference to subsidiaries of and partnership interests
held by Ovintiv Inc and its subsidiaries.
NOTE 1: Non-GAAP measures
Certain measures in this news release 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 companies 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/or by
Ovintiv to provide stockholders and potential investors with
additional information regarding the Company's liquidity and its
ability to generate funds to finance its operations. For additional
information regarding non-GAAP measures, see the Company's website.
This news release contains references to non-GAAP measures as
follows:
- 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, net change in non-cash working
capital and current tax on sale of assets. Non-GAAP Cash Flow
Margin is a non-GAAP measure defined as Non-GAAP Cash Flow per
BOE of production. Non-GAAP Free Cash Flow is a non-GAAP
measure defined as Non-GAAP Cash Flow in excess of capital
investment, excluding net acquisitions and divestitures.
- Non-GAAP Operating Earnings (Loss) is a non-GAAP
measure defined as net earnings (loss) excluding non-recurring or
non-cash items that management believes reduces the comparability
of the company's financial performance between periods. These items
may include, but are not limited to, unrealized gains/losses on
risk management, impairments, restructuring charges, non-operating
foreign exchange gains/losses, gains/losses on divestitures and
gains on debt retirement. Income taxes may include valuation
allowances and the provision related to the pre-tax items listed,
as well as income taxes related to divestitures and U.S. tax
reform, and adjustments to normalize the effect of income taxes
calculated using the estimated annual effective income tax
rate.
- Total Costs per BOE is defined as the summation of
production, mineral and other taxes, upstream transportation and
processing expense, upstream operating expense and administrative
expense, excluding the impact of long-term incentive and
restructuring costs, per BOE of production. Management believes
this measure is useful to the company and its investors as a
measure of operational efficiency across periods.
NOTE 2: Information on reserves reporting – Detailed
Canadian protocol disclosure will be contained in the Company's
Form 51-101F1 for the year ended December
31, 2019 ("Form 51-101F1") and detailed U.S. protocol
disclosure will be contained in the Company's Annual Report on Form
10-K for the year ended December 31,
2019 ("Annual Report on Form 10-K"), each of which the
Company anticipates filing with applicable securities regulatory
authorities on or about February 21,
2020. A description of the primary differences between the
disclosure requirements under Canadian standards and under U.S.
standards will be set forth under the heading "Note Regarding
Additional Reserves Information" in the Form 51-101F1.
ADVISORY REGARDING OIL AND GAS INFORMATION - All
estimates in this news release are effective as of December 31, 2019, prepared by qualified reserves
evaluators in accordance with procedures and standards contained in
the Canadian Oil and Gas Evaluation ("COGE") Handbook, National
Instrument 51-101 ("NI 51-101") and SEC regulations, as applicable.
On February 6, 2020, Ovintiv was
granted an exemption by the Canadian Securities Administrators from
the requirements under NI 51-101 that each qualified reserves
evaluator or qualified reserves auditor appointed under section 3.2
of NI 51-101 and who execute the report under Item 2 of Section 2
of NI 51-101 be independent of the Company. Detailed Canadian and
U.S. protocol disclosure will be contained in the Form 51-101F1 and
Annual Report on Form 10-K, respectively. Additional detail
regarding economic contingent resources will be available in the
Supplemental Disclosure Document filed concurrently with the Form
51-101F1. Information on the forecast prices and costs used in
preparing the Canadian protocol estimates will be contained in the
Form 51-101F1. For additional information relating to risks
associated with the estimates of reserves and resources, see "Item
1A. Risk Factors" of the Annual Report on Form 10-K.
Reserves are the estimated remaining quantities of oil and
natural gas and related substances anticipated to be recoverable
from known accumulations, from a given date forward, based on
analysis of drilling, geological, geophysical and engineering data,
the use of established technology, and specified economic
conditions, which are generally accepted as being reasonable.
Proved reserves are those reserves which can be estimated with a
high degree of certainty to be recoverable. It is likely that the
actual remaining quantities recovered will exceed the estimated
proved reserves. Probable reserves are those additional reserves
that are less certain to be recovered than proved reserves. It is
equally likely that the actual remaining quantities recovered will
be greater or less than the sum of the estimated proved plus
probable reserves. The conversion of natural gas volumes to barrels
of oil equivalent (BOE) is on the basis of six thousand cubic feet
to one barrel. BOE is based on a generic energy equivalency
conversion method primarily applicable at the burner tip and does
not represent economic value equivalency at the wellhead. Readers
are cautioned that BOE may be misleading, particularly if used in
isolation.
ADVISORY REGARDING FORWARD-LOOKING STATEMENTS – This news
release contains certain forward-looking statements or information
(collectively, "FLS") within the meaning of applicable securities
legislation, including the United States Private Securities
Litigation Reform Act of 1995. FLS include: 2020 guidance,
including capital, production and total costs; expectation of free
cash flow generation; debt and leverage levels; return of cash to
stockholders; anticipated hedging; and operating performance
relative to peers. FLS involve assumptions, risks and uncertainties
that may cause such statements not to occur or results to differ
materially. These assumptions include: future commodity prices and
differentials; assumptions in corporate guidance; data contained in
key modeling statistics; availability of attractive hedges and
enforceability of risk management program; and expectations and
projections made in light of the Company's historical experience.
Risks and uncertainties include: ability to generate sufficient
cash flow to meet obligations; commodity price volatility; ability
to secure adequate transportation and potential pipeline
curtailments; discretion to declare and pay dividends, if any;
business interruption, property and casualty losses or unexpected
technical difficulties; counterparty and credit risk; impact of
changes in credit rating and access to liquidity; risks in
marketing operations; risks associated with lawsuits and regulatory
actions, including disputes with partners; ability to acquire or
find additional reserves; imprecision of reserves estimates and
estimates of recoverable quantities; and other risks and
uncertainties as described in the Company's Annual Report on Form
10-K and as described from time to time in its other periodic
filings as filed on SEDAR and EDGAR. Although the Company believes
such FLS are reasonable, there can be no assurance they will prove
to be correct. The above assumptions, risks and uncertainties are
not exhaustive. FLS are made as of the date hereof and, except as
required by law, the Company undertakes no obligation to update or
revise any FLS.
Further information on Ovintiv Inc. is available on the
Company's website, www.ovintiv.com, or by contacting:
Investor
contact:
|
Media
contact:
|
(281)
210-5110
|
(281)
210-5253
|
(403)
645-3550
|
|
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