Highlights 

  • Ovintiv to acquire NuVista Energy in a CAD 3.8B deal, expanding Alberta Montney operations. 
  • Acquisition is expected to add 140,000 net acres and 100 MBOE/d in production. 
  • Anadarko asset divestiture planned to support debt reduction by 2026. 

Ovintiv Inc. (TSX:OVV) andNuVistaEnergy Ltd. (TSX:NVA) announceda definitive agreement under which Ovintiv will acquire all outstanding NuVista shares in a cash and stock transaction valued at approximately 2.7B (CAD 3.8B). The transaction value includes about 215M (CAD 300M) in NuVista net debt and 18.5M NuVista shares previously acquired by Ovintiv. 

Under the agreement, Ovintiv will purchase all remaining NuVista shares it does not already own for CAD 18.00 per share. The total consideration will consist of 50% cash and 50% Ovintiv common stock, resulting in a blended purchase price of roughly CAD 17.80 per share. Upon completion, NuVista shareholders will own approximately 10.6% of the combined company. 

The acquisition will add roughly 930 net well locations and 140,000 net acres in the Alberta Montney region, with approximately 70% of the acreage undeveloped. The assets are expected to deliver full-year 2026 production averaging about 100 MBOE/d, including 25 Mbbls/d of oil and condensate. 

Management Commentary 

“This transaction boosts our free cash flow per share by acquiring top decile rate of return assets in the heart of the Montney oil window at an attractive price,” said Brendan McCracken, President and CEO of Ovintiv. “The NuVista assets were identified as part of an in-depth technical and commercial analysis to identify the highest value undeveloped oil resource in North America. The position is 70% undeveloped and is an exceptional fit with our existing acreage and infrastructure. The team at NuVista has done a tremendous job building these assets which have demonstrated top-tier well performance. We are excited to apply our industry-leading expertise to the combined position.” 

McCracken also noted that NuVista’s existing processing and transportation infrastructure enhances flexibility for future development and provides natural gas market diversification. 

Transaction Implications and Strategic Outlook 

The acquisition is projected to be both immediate and long-term accretive across key financial metrics, including Non-GAAP Free Cash Flow and Return on Capital Employed. Annual synergies are estimated at around 100M, driven by capital, production cost, and overhead efficiencies. 

Ovintiv plans to finance the cash portion of the transaction using a combination of existing cash, credit facility borrowings, and/or proceeds from a term loan. To support funding, the company has suspended its share buyback program for two quarters but intends to maintain its base dividend. 

Additionally, Ovintiv announced plans to begin the divestiture of its Anadarko assets, with proceeds expected to accelerate debt reduction. The company aims to reach its Non-GAAP Net Debt target of 4B by the end of 2026. 

2026 Operational Outlook 

Following the transaction, Ovintiv plans to operate six rigs across its combined Montney acreage, five rigs in the Permian Basin, and one in the Anadarko region. Before any asset sales, 2026 oil and condensate output is expected to average approximately 230 Mbbls/d, with total production around 715 MBOE/d. Planned capital investment for the year is estimated at under 2.5B.