Ovintiv Inc. (OVV) Q1 Results - April 29

Post Reply
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Ovintiv Inc. (OVV) Q1 Results - April 29

Post by dan_s »

Highlights:

Ovintiv Inc--Ovintiv Reports First Quarter 2021 Financial and Op

First quarter 2021 net earnings of $309 million ($1.16 per share diluted), cash from operating activities of $827 million and non-GAAP cash flow of $890 million < Compares to my forecast of $184 million net income.

Generated $540 million of non-GAAP free cash flow in the quarter and reduced total debt by $467 million to $6.4 billion

Exceeded divestiture target with more than $1.1 billion in announced asset sales; well ahead of year-end 2022 target; previously announced Duvernay asset sale closed today

Leveraged dynamic operational execution, multi-basin optionality and strong realized prices for products across the portfolio to offset the production and cash flow impacts of winter storm Uri

Continued to deliver leading well cost efficiencies through the application of innovation and technology

Accelerated expected achievement of $4.5 billion total debt target to the first half of 2022 and updated year-end 2021 total debt target to be less than $5 billion at $50 WTI oil and $2.75 NYMEX natural gas prices

Reiterated $1.5 billion full-year 2021 capital guidance and updated full-year crude and condensate(1) guidance to 190 Mbbls/d to reflect asset sales

DENVER, April 28, 2021 /CNW/ - Ovintiv Inc. (NYSE: OVV) (TSX: OVV) today announced its first quarter 2021 financial and operating results. In addition, the Company accelerated its $4.5 billion total debt target timeline to the first half of 2022 and forecasts its year-end 2021 total debt to be less than $5 billion, assuming $50 WTI oil and $2.75 NYMEX natural gas prices.

The Company plans to hold a conference call and webcast at 9 a.m. MT (11 a.m. ET) on April 29, 2021. Please see dial-in details within this release, as well as additional details on the Company's website at www.ovintiv.com.

"This quarter we continued our track record of delivery," said Ovintiv CEO, Doug Suttles. "Our strong start to 2021 demonstrates our industry-leading operational capability, our focus on maximizing free cash generation, and our ability to manage risk. During winter storm Uri, our operating team kept production online longer and brought it back sooner than many of our peers. In addition, our multi-basin portfolio minimized impacts. Our marketing team also delivered another quarter of strong realized prices. Our continued application of innovation and technology to maximize efficiency led to another quarter of industry leading well cost performance. We delivered significant free cash flow, which along with the proceeds from recent divestitures has allowed us to materially accelerate our debt reduction target."
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Ovintiv Inc. (OVV) Q1 Results - April 29

Post by dan_s »

Neal Dingmann at Truist Financial 4-28-2021

Ovintiv Inc. (OVV)
1Q21 Beat w/2021 Guidance Reiterated, Strong FCF and Divestitures Take Bites Out of Debt

Ovintiv reported higher than Truist Securities/Street 1Q21 earnings/FCF driven by oil
production and oil/nat gas prices among other things. Though 2021 guidance remained
unchanged, the company appears to be running ahead of schedule assuming volumes/
pricing continue as seen YTD. OVV appeared to have minimal net overall storm impacts
with production, prices, costs mostly remaining better than expected during the quarter. We
continue to believe the company could run several months ahead of schedule in its debt
reduction goal.

Neal rates OVV a BUY with a price target of $43.00. My valuation will be slightly higher, but I need to adjust my forecast/valuation model after I have a chance to see their 10Q.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Ovintiv Inc. (OVV) Q1 Results - April 29

Post by dan_s »

I listened to the replay of the OVV Q1 conference call. It definitely helped me "tweak" my forecast/valuation model.

OVV reported OUTSTANDING Q1 results and I am raising my valuation by $10 to $45 per share. Actually, that is a "conservative" valuation based on just 4X 2021 operating cash flow per share. Neal Dingmann at Truist Financial rates it a BUY with a $43 price target.

They are paying off a lot of debt this year and proceeds from assets sales that close in Q2 will get them to their year-end debt reduction target by June 30th.

OVV is going to generate over $1.5 Billion of free cash flow from operations this year.

OVV closed at $24.95 and IMO it is a "Screaming Buy" up to $30.

My updated forecast valuation model will be posted to the EPG website this evening.
Dan Steffens
Energy Prospectus Group
Post Reply