Energy Prospectus

On February 26 Ovintiv announced Q4 2024 results.

Fourth Quarter 2024

Generated fourth quarter cash from operating activities of $1.0 billion, Non-GAAP Cash Flow of $1.0 billion and Non-GAAP Free Cash Flow of $452 million after capital expenditures of $552 million < Operating Cash Flow beat my forecast of $889 million.

Delivered average quarterly production volumes of 580 MBOE/d, including 210 Mbbls/d of oil and condensate, 90 Mbbls/d of other NGLs and 1,680 MMcf/d of natural gas < Total Q4 production was below my forecast of 585,000 Boepd, but oil & condensate exceeded my forecast of 206.5 Mbpd.

2025 Outlook

Announced full year 2025 capital program of approximately $2.15 to $2.25 billion, which is expected to deliver total production volumes of 595 to 615 MBOE/d, including oil and condensate volumes of 202 to 208 Mbbls/d < 2025 Capex is lower than I expected and production volumes are lower than my 2025 forecast of 631,000 Boepd. The midpoint of their guidance is still a nice increase.

MY QUICK TAKE: My valuation of OVV will probably decline about $3 to $67 per share. OVV closed at $43 today.

I will update my forecast/valuation model for OVV on Friday.

I have updated my forecast/valuation model for OVV for Q4 actual results and their updated 2025 guidance. My current valuation stays at $70.00, but I have more confidence in the model now that Ovintiv has provided line-by-line guidance.

66% of Ovintiv's 2025 production is expected to be natural gas (51%) and NGLs (15%). ~27% of their natural gas is hedged with collars that have $3.00 floors and $4.47 ceilings, so this one is for those of you that believe gas prices are going higher.

TipRanks: "In the last 3 months, 13 ranked analysts set 12-month price targets for OVV. The average price target among the analysts is $58.08." < 6 of the 13 analysts have updated their price target since Ovintiv release Q4 actuals and 2025 guidance. The 6 new price targets range from $53 to $68 with an average of $57.80.

OVV was trading at $42.90 when this was posted.

My updated forecast model will be posted to the EPG website late this afternoon.