Ovintiv Inc. (OVV) Q2 Results - July 29

[dan_s]

Ovintiv's Financial Results were below my forecast, primarily due to much lower realized NGL prices. Production volumes exceeded my expectations.
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Second Quarter 2023 Highlights:

Generated net earnings of $336 million, cash from operating activities of $831 million, Non-GAAP Cash Flow of $699 million and Non-GAAP Free Cash Flow of $59 million after capital expenditures of $640 million < Compared to my forecast of $410 million net income and $822 million of Adjusted Operating Cash flow.

Exceeded second quarter production guidance on every product with average total production volumes of 573 thousand barrels of oil equivalent per day ("MBOE/d"), including 186 thousand barrels per day ("Mbbls/d") of oil and condensate, 97 Mbbls/d of other NGLs (C2 to C4) and 1,743 million cubic feet per day ("MMcf/d") of natural gas < Much higher than my production forecast of 530,000 Boepd for Q2.

Increased full year 2023 production guidance and lowered both full year 2023 capital and per unit cost guidance

Closed the previously announced acquisition of Midland Basin assets, which added approximately 65,000 net acres and approximately 1,050 net well locations to Ovintiv's Permian inventory < This significant increase in "running room" is why I remain very bullish on OVV.

Closed the previously announced sale of Ovintiv's Bakken assets, representing the Company's exit from the play

Announced inclusion on the S&P 400 index effective June 20, 2023

Returned $172 million to shareholders through the combination of base dividend payments and share buybacks

Announced a 20% increase to quarterly per share dividend payment representing an annualized dividend of $1.20 per share of common stock
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I will have my valuation model updated this afternoon.