Ovintiv To Buy Leasehold Interest, Related Assets From NMB Sellers For $4.275 Bln In Cash, Stock

Ovintiv Inc. (OVV), a hydrocarbon exploration and production firm, said on Monday that it has inked a deal to acquire substantially all leasehold interest and related assets of the portfolio companies of funds managed by EnCap Investments L.P., in a cash and share transaction, for around $4.275 billion.

The list of portfolio companies includes Black Swan Oil & Gas, PetroLegacy Energy, and Piedra Resources or NMB sellers. The NMB sellers will receive approximately 32.6 million shares of Ovintiv common stock and $3.125 billion of cash.

The transactions, scheduled to be completed by the end of the second quarter, are expected to be immediately accretive across key per share operational and financial metrics of the acquirer.

Upon closing, the acquisition will add around 1,050 net 10,000 foot well locations to Ovintiv’s Permian inventory and approximately 65,000 net acres in the core of the Midland Basin, located close proximity to Ovintiv’s current Permian operations.

The cash portion of the transaction is expected to be funded through a combination of cash on hand, cash proceeds received from the Ovintiv’s pending sale of its Bakken assets

In addition, Ovintiv announced a deal to sell the entire Bakken assets located in the Williston Basin of North Dakota to Grayson Mill Bakken, LLC, a portfolio company of funds managed by EnCap, for around $825 million in cash.

Looking ahead, for 2023, Ovintiv has raised its output guidance. The company now expects total production of 520 MBOE/d to 545 MBOE/d against its previous outlook of 500 MBOE/d to 525 MBOE/d.

Ovintiv expects to deliver 2024 total average oil and condensate production volumes of over 200 Mbbls/d with total capital investment of $2.1 billion to $2.5 billion.

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