Ovintiv extends Montney footprint by $2.38 billion

Ovintiv, a Canadian shale producer, announced on Thursday that it would acquire oil assets from Paramount Resources in exchange for cash of approximately $2.38 billion. This will strengthen its position in Canada’s highly productive Montney shale.

About half of Canada's natural gas is produced in the shale formation that spans northern Alberta, British Columbia and British Columbia.

The assets are near Ovintiv’s current operations. They would add 70,000 barrels per day of oil equivalent production to the Montney Formation in Alberta.

Ovintiv said that it will also sell its Uinta Basin asset, located in Utah to FourPoint Resources, for $2 billion.

Both transactions should be completed by the first quarter 2025.

Ovintiv stated that it will finance the Montney purchase using a combination cash proceeds from the sale its Uinta assets and cash on hand, as well as borrowings under the credit facility or temporary funding.

The company has said that it has suspended its share-buyback program until all the money borrowed through the temporary financing can be recovered.

Ovintiv anticipates that the buybacks will resume in the second quarter 2025. Reporting by Vallari Shrivastava, Bengaluru. Editing by Pooja Deai.

(source: Reuters)