Ovintiv Inc. (OVV) Update - April 21

[dan_s]

This is why OVV is in much better shape than their share price would indicate. They have hedged more oil than what I'm assuming for Q2 in my forecast model. They've basically got 2020 operating cash flow locked in at $1.5 billion. Q4 production was 592,600 Boepd (46% natural gas, 29% crude oil and 25% NGLs).

Strong Hedging Position Protects Cash Flow:

Ovintiv is now substantially hedged on benchmark oil risk for the near term. For the second quarter of 2020, 206 Mbbls/d is hedged at an average price of $42.09 per barrel. Of these positions 191 Mbbls/d is in a fixed price swap at $41.47 per barrel and 15 Mbbls/d is covered by costless collars between $50.00 and $68.71 per barrel. The term "benchmark" above refers to NYMEX WTI and NYMEX Henry Hub.

With these updated positions, downside oil price risk is further reduced. A balance of year $20.00 NYMEX WTI price would generate oil hedge revenues of more than $1.1 billion. This amount excludes oil hedge settlements in the first quarter of 2020. Settlements for natural gas and various other oil differential and natural gas basis positions in 2020 are expected to further add to oil hedge revenues.