Ovintiv Inc. (OVV) Q3 Results - Oct 29
Posted: Thu Oct 29, 2020 10:48 am
OVV produces a lot of natural gas and NGLs, which will give them a big revenue boost heading into 2021.
Results strengthen outlook for 2021 Scenario
Consistent framework provided for future capital allocation and debt reduction
Highlights:
Posted $47 million of non-GAAP free cash flow and reduced net debt by $217 million during the third quarter, reaffirmed pledge that all excess cash flows will go toward debt reduction
Reported third quarter cash from operating activities of $493 million and non-GAAP cash flow of $398 million < Compares to my forecast of $405 million operating cash flow.
Exceeded guidance with third quarter crude and condensate production of 186 thousand barrels per day (Mbbls/d).
Fourth quarter and full-year 2021 crude and condensate average production forecast of 200 Mbbls/d reaffirmed
Achieved 20% capital efficiency gains ahead of schedule; Company achieved record low well costs in each active drilling area which provides high confidence in 2021 scenario
Reaffirmed 2020-21 scenarios and provided additional clarity around its framework for future capital allocation and debt reduction
The 2021 scenario capital investment midpoint of $1.5 billion represents less than 70% cash flow reinvestment at at $45 WTI and $3 NYMEX natural gas
The Company recorded a net loss in the third quarter of $1.5 billion, or ($5.85) per share of common stock. Results were impacted by the following items:
> A non-cash ceiling test impairment of $1,336 million, before-tax, primarily related to the decline in 12-month average trailing commodity prices which reduced SEC proved reserves.
>A non-cash unrealized loss on risk management of $243 million, before-tax, related to the mark-to-market value of derivative positions.
Excluding these and other items, the Company reported a non-GAAP operating loss of $8 million. < Compares to my forecast of a net loss of $56 million for Q3.
Results strengthen outlook for 2021 Scenario
Consistent framework provided for future capital allocation and debt reduction
Highlights:
Posted $47 million of non-GAAP free cash flow and reduced net debt by $217 million during the third quarter, reaffirmed pledge that all excess cash flows will go toward debt reduction
Reported third quarter cash from operating activities of $493 million and non-GAAP cash flow of $398 million < Compares to my forecast of $405 million operating cash flow.
Exceeded guidance with third quarter crude and condensate production of 186 thousand barrels per day (Mbbls/d).
Fourth quarter and full-year 2021 crude and condensate average production forecast of 200 Mbbls/d reaffirmed
Achieved 20% capital efficiency gains ahead of schedule; Company achieved record low well costs in each active drilling area which provides high confidence in 2021 scenario
Reaffirmed 2020-21 scenarios and provided additional clarity around its framework for future capital allocation and debt reduction
The 2021 scenario capital investment midpoint of $1.5 billion represents less than 70% cash flow reinvestment at at $45 WTI and $3 NYMEX natural gas
The Company recorded a net loss in the third quarter of $1.5 billion, or ($5.85) per share of common stock. Results were impacted by the following items:
> A non-cash ceiling test impairment of $1,336 million, before-tax, primarily related to the decline in 12-month average trailing commodity prices which reduced SEC proved reserves.
>A non-cash unrealized loss on risk management of $243 million, before-tax, related to the mark-to-market value of derivative positions.
Excluding these and other items, the Company reported a non-GAAP operating loss of $8 million. < Compares to my forecast of a net loss of $56 million for Q3.