[Selected Financial Information](index=1&type=section&id=Selected%20Financial%20Information) Ovintiv's Q2 2025 revenues slightly rose to $2,318 million, but net earnings declined to $307 million, with a six-month drop to $148 million due to a $730 million impairment [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Ovintiv's Q2 2025 revenues slightly rose to $2,318 million, but net earnings declined to $307 million, with a six-month drop to $148 million due to a $730 million impairment [Condensed Consolidated Statement of Earnings](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Earnings) Q2 2025 revenues increased to $2,318 million, but net earnings decreased to $307 million, with a six-month net earnings drop to $148 million due to a $730 million impairment Statement of Earnings Summary (US$ millions, except per share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $2,318 | $2,288 | $4,695 | $4,640 | | **Operating Income (Loss)** | $511 | $556 | $422 | $1,050 | | **Net Earnings (Loss)** | $307 | $340 | $148 | $678 | | **Diluted EPS** | $1.18 | $1.27 | $0.57 | $2.51 | - A **$730 million impairment charge** was recorded in the first six months of 2025, significantly impacting net earnings for the period, with no such charge in 2024[2](index=2&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Q2 2025 comprehensive income rose to $500 million due to currency adjustments, while the six-month total decreased to $348 million Comprehensive Income Summary (US$ millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Earnings (Loss)** | $307 | $340 | $148 | $678 | | **Other Comprehensive Income (Loss)** | $193 | $(33) | $200 | $(110) | | **Comprehensive Income (Loss)** | $500 | $307 | $348 | $568 | [Condensed Consolidated Balance Sheet](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) Total assets increased to $19,734 million, and liabilities to $9,357 million, with stable shareholders' equity at $10,377 million as of June 30, 2025 Balance Sheet Summary (US$ millions) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $1,244 | $1,369 | | **Property, plant and equipment, net** | $14,383 | $14,364 | | **Total Assets** | $19,734 | $19,254 | | **Total Current Liabilities** | $2,874 | $2,681 | | **Long-Term Debt** | $4,393 | $4,853 | | **Total Liabilities** | $9,357 | $8,923 | | **Total Shareholders' Equity** | $10,377 | $10,331 | [Condensed Consolidated Statement of Cash Flows](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Operating cash flow increased to $1,886 million, while investing activities used $1,453 million due to acquisitions and divestitures, ending with $20 million cash Cash Flow Summary (US$ millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Cash From Operating Activities** | $1,886 | $1,679 | | **Cash From (Used in) Investing Activities** | $(1,453) | $(1,402) | | **Cash From (Used in) Financing Activities** | $(442) | $(274) | | **Increase (Decrease) in Cash** | $(22) | $5 | | **Cash, End of Period** | $20 | $8 | - Key investing activities for the first six months of 2025 included **$2,313 million for acquisitions** and **$1,896 million in proceeds from divestitures**[5](index=5&type=chunk) - Key financing activities for the first six months of 2025 included **$147 million for share repurchases** and **$155 million for dividend payments**[5](index=5&type=chunk) [Interim Supplemental Information](index=5&type=section&id=Interim%20Supplemental%20Information) This section provides detailed quarterly financial and operating data, including non-GAAP measures, production volumes, and per-unit netback analysis [Supplemental Financial Information](index=6&type=section&id=Supplemental%20Financial%20Information) Q2 2025 Non-GAAP Adjusted Earnings decreased to $265 million, and Non-GAAP Cash Flow to $913 million, with stable debt ratios Quarterly Financial Results (US$ millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net Earnings (Loss)** | $307 | $340 | | **Non-GAAP Adjusted Earnings** | $265 | $331 | | **Non-GAAP Cash Flow** | $913 | $1,025 | Financial Metrics | Metric | YTD 2025 | Year 2024 | | :--- | :--- | :--- | | **Debt to Capitalization** | 34% | 35% | | **Debt to Adjusted Capitalization** | 23% | 23% | | **Debt to EBITDA** | 1.6x | 1.3x | | **Debt to Adjusted EBITDA** | 1.2x | 1.2x | [Supplemental Operating Information](index=7&type=section&id=Supplemental%20Operating%20Information) Total production increased to 615.3 MBOE/d in Q2 2025, driven by natural gas and NGLs, with USA Operations as the largest contributor Production Volumes by Product (Average) | Product | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Oil (Mbbls/d)** | 142.0 | 167.3 | | **NGLs (Mbbls/d)** | 164.7 | 136.6 | | **Natural Gas (MMcf/d)** | 1,851 | 1,740 | | **Total (MBOE/d)** | 615.3 | 593.8 | Production Volumes by Segment (Average, MBOE/d) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **USA Operations** | 314.7 | 341.9 | | **Canadian Operations** | 300.6 | 251.9 | | **Total** | 615.3 | 593.8 | [Supplemental Financial & Operating Information (Results of Operations)](index=8&type=section&id=Supplemental%20Financial%20%26%20Operating%20Information%20(Results%20of%20Operations)) Total operations netback, excluding hedging, decreased to $18.55/BOE in Q2 2025, primarily due to lower realized prices in USA Operations Per-Unit Netback (US$/BOE, excluding hedging) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **USA Operations Netback** | $26.41 | $32.24 | | **Canadian Operations Netback** | $10.30 | $5.68 | | **Total Operations Netback** | $18.55 | $20.99 | - The decrease in total netback was primarily due to a lower average realized price, which fell to **$31.32/BOE in Q2 2025** from $34.08/BOE in Q2 2024[16](index=16&type=chunk) [Supplemental Oil and Gas Operating Statistics](index=10&type=section&id=Supplemental%20Oil%20and%20Gas%20Operating%20Statistics) Q2 2025 realized oil prices before hedging were $64.50/bbl, with Permian and Montney as core plays, and 73 net wells brought on production [Per-Unit Prices and Risk Management Impact](index=10&type=section&id=Per-Unit%20Prices%20and%20Risk%20Management%20Impact) Q2 2025 average realized price per BOE before hedging was $31.32, with hedging adding $0.59/BOE for a total of $31.91/BOE Per-Unit Prices by Product (Q2 2025 vs Q2 2024, excluding hedging) | Product | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Oil Price ($/bbl)** | $64.50 | $78.19 | | **NGLs - Total Price ($/bbl)** | $36.14 | $35.74 | | **Natural Gas Price ($/Mcf)** | $2.24 | $1.30 | | **Total Price ($/BOE)** | $31.32 | $34.08 | - Realized gains on risk management contributed an additional **$0.59/BOE** to the total price in Q2 2025, lifting the realized price to **$31.91/BOE**[19](index=19&type=chunk)[20](index=20&type=chunk) [Results by Play (Production & Capital)](index=13&type=section&id=Results%20by%20Play%20(Production%20%26%20Capital)) Permian (214.5 MBOE/d, $265 million capex) and Montney (300.3 MBOE/d, $171 million capex) are key production and capital drivers Production by Key Play (Q2 2025 Average, MBOE/d) | Play | Production (MBOE/d) | | :--- | :--- | | **Permian (USA)** | 214.5 | | **Anadarko (USA)** | 99.9 | | **Montney (Canada)** | 300.3 | Capital Expenditures by Key Play (Q2 2025, US$ millions) | Play | Capital Expenditures | | :--- | :--- | | **Permian (USA)** | $265 | | **Anadarko (USA)** | $83 | | **Montney (Canada)** | $171 | [Drilling and Completions Activity](index=17&type=section&id=Drilling%20and%20Completions%20Activity) In Q2 2025, 55 net wells were drilled and 73 net wells brought on production, with Permian and Montney being the most active Drilling & Completions Activity (Net Wells) | Activity | Q2 2025 | YTD 2025 | | :--- | :--- | :--- | | **Wells Drilled** | 55 | 120 | | **Wells on Production** | 73 | 154 | [Non-GAAP Definitions and Reconciliations](index=18&type=section&id=Non-GAAP%20Definitions%20and%20Reconciliations) This section defines and reconciles key non-GAAP financial measures, including cash flow, adjusted earnings, and debt-related metrics [Key Non-GAAP Measure Definitions and Reconciliations](index=19&type=section&id=Key%20Non-GAAP%20Measure%20Definitions%20and%20Reconciliations) Q2 2025 Non-GAAP Cash Flow was $913 million, leading to $392 million in Free Cash Flow, with Adjusted Earnings at $265 million - Non-GAAP Cash Flow is defined as cash from operating activities excluding net change in other assets and liabilities, and net change in non-cash working capital[34](index=34&type=chunk) - Non-GAAP Adjusted Earnings excludes items like unrealized hedging gains/losses, impairments, and non-operating foreign exchange impacts to improve comparability between periods[35](index=35&type=chunk) Reconciliation to Non-GAAP Free Cash Flow (Q2 2025, US$ millions) | Metric | Amount | | :--- | :--- | | Cash From Operating Activities | $1,013 | | Adjustments | $(100) | | **Non-GAAP Cash Flow** | **$913** | | Less: Capital expenditures | $(521) | | **Non-GAAP Free Cash Flow** | **$392** | [Debt-Related Non-GAAP Measures](index=20&type=section&id=Debt-Related%20Non-GAAP%20Measures) As of Q2 2025, Debt to Adjusted Capitalization was 23%, well below the 60% covenant limit, with Net Debt at $5,313 million - The company's credit facilities require **Debt to Adjusted Capitalization to be less than 60%**, with the YTD 2025 ratio at **23%**[38](index=38&type=chunk)[39](index=39&type=chunk) Key Debt Metrics (YTD 2025) | Metric | Value | | :--- | :--- | | **Net Debt** | $5,313 million | | **Debt to Capitalization** | 34% | | **Debt to Adjusted EBITDA (TTM)** | 1.2x | [Netback Calculation](index=22&type=section&id=Netback%20Calculation) Q2 2025 total operations netback was $18.59/BOE, calculated from a $31.34/BOE price less production-related costs - Netback is a non-GAAP measure calculated on a BOE basis using upstream product revenues (excluding hedging), less costs for production taxes, transportation, processing, and operations[46](index=46&type=chunk) Total Operations Netback Calculation (Q2 2025, US$/BOE) | Item | Amount | | :--- | :--- | | Price | $31.34 | | Production, mineral and other taxes | $(1.30) | | Transportation and processing | $(7.61) | | Operating | $(3.84) | | **Netback** | **$18.59** |

Core Insights - Ovintiv Inc. has lowered its full year capital investment guidance while increasing its production guidance for 2025, reflecting strong operational performance and capital efficiency [3][5][9] Financial Performance - For Q2 2025, Ovintiv reported net earnings of $307 million, or $1.18 per diluted share, with cash from operating activities amounting to $1,013 million and Non-GAAP Free Cash Flow of $392 million after capital expenditures of $521 million [9][22] - The company generated Non-GAAP Cash Flow of $913 million, down from $1,025 million in Q2 2024, while capital expenditures decreased from $622 million in Q2 2024 to $521 million in Q2 2025 [21][22] Production and Capital Guidance - Full year production volumes are now expected to average between 600 to 620 MBOE/d, with capital investment guidance lowered to $2.125 billion to $2.175 billion, a reduction of $50 million at the midpoint [5][9] - Q2 2025 production averaged 615 MBOE/d, exceeding guidance, with specific contributions of 211 Mbbls/d of oil and condensate, 96 Mbbls/d of other NGLs, and 1,851 MMcf/d of natural gas [8][9] Shareholder Returns - The company remains committed to returning at least 50% of post-base dividend Non-GAAP Free Cash Flow to shareholders through buybacks and variable dividends, having returned $223 million in Q2 2025 [7][9] - In Q2 2025, Ovintiv repurchased approximately 4.1 million shares for about $146 million and declared a quarterly dividend of $0.30 per share [7][13] Debt and Liquidity - As of June 30, 2025, Ovintiv had approximately $3.2 billion in total liquidity, with a Debt to EBITDA ratio of 1.6 times and Non-GAAP Debt to Adjusted EBITDA of 1.2 times [11][12] - The company reduced its net debt by $217 million during the quarter, bringing it to approximately $5.31 billion [9][11] Asset Highlights - In the Permian region, production averaged 215 MBOE/d, with a full year capital investment expected to be around $1.20 billion to $1.25 billion [14] - Montney production averaged 300 MBOE/d, with anticipated capital investment of approximately $575 million to $625 million [15] - Anadarko production averaged 100 MBOE/d, with expected capital investment of about $290 million to $310 million [16]

Core Viewpoint - Analysts project Ovintiv (OVV) will report quarterly earnings of $1.03 per share, a decline of 16.9% year over year, with revenues expected to reach $1.95 billion, down 14.7% from the same quarter last year [1] Earnings Projections - Revisions to earnings projections are crucial for predicting investor behavior, with empirical studies showing a strong link between earnings estimate trends and short-term stock performance [2] Analyst Forecasts - Analysts' average forecasts for Ovintiv's key metrics provide valuable insights into the company's performance [3] Revenue Estimates - Estimated revenues from Canadian operations are projected at $611.52 million, reflecting a year-over-year increase of 32.9% [4] - Revenues from USA operations are expected to be $1.19 billion, indicating a decline of 17.9% from the previous year [4] - Revenues from corporate and other sources are estimated at $18.19 million, down 30.1% year over year [4] Production Volumes - Total production volumes are projected to reach 599.60 thousand barrels of oil equivalent per day, up from 593.80 thousand barrels per day a year ago [5] - Oil and plant condensate production volumes are expected to be 207.78 thousand barrels per day, down from 211.90 thousand barrels per day [5] - NGLs (Natural Gas Liquids) production volumes are estimated at 89.81 thousand barrels per day, down from 92.00 thousand barrels per day [6] - Total oil production volumes are projected at 147.84 thousand barrels per day, down from 167.30 thousand barrels per day [7] - NGLs total production is expected to be 149.02 thousand barrels per day, up from 136.60 thousand barrels per day in the same quarter last year [7] - Total production volumes for Canadian operations are forecasted at 286.62 thousand barrels of oil equivalent per day, up from 251.90 thousand barrels per day a year ago [9] - Total production volumes for USA operations are expected to reach 313.29 thousand barrels of oil equivalent per day, down from 341.90 thousand barrels per day [9] Stock Performance - Over the past month, Ovintiv shares have remained unchanged, while the Zacks S&P 500 composite has increased by 5.9% [10] - Based on its Zacks Rank 3 (Hold), Ovintiv is expected to perform in line with the overall market in the upcoming period [10]

Core Viewpoint - Ovintiv Inc. is expected to report second-quarter earnings on July 24, with estimates of $1.04 per share and revenues of $1.9 billion [1][7]. Group 1: Previous Quarter Performance - In the last reported quarter, Ovintiv exceeded earnings expectations with adjusted earnings per share of $1.42, surpassing the Zacks Consensus Estimate of $1.20 [2]. - Total revenues for the last quarter were $2.4 billion, beating the Zacks Consensus Estimate by 3.3%, driven by improved natural gas pricing and higher product and service sales [2]. - Ovintiv has consistently beaten earnings estimates in the past four quarters, achieving an average surprise of 27.8% [2]. Group 2: Estimate Revisions and Projections - The Zacks Consensus Estimate for second-quarter 2025 earnings has increased by 2% in the past week, although it indicates a 16.1% year-over-year decline [3]. - Revenue estimates for the second quarter suggest a decline of approximately 14.7% compared to the previous year [3]. - Ovintiv's natural gas volumes are projected to rise by 4.5% year-over-year to 1818 million cubic feet per day (MMcf/d) in Q2 [4][7]. Group 3: Operational Insights - The company anticipates higher natural gas volumes due to full gas systems in Western Canada, preparing for LNG Canada coming online [4]. - Revenues from Canadian operations are expected to reach $481.7 million, reflecting a 4.7% increase from the prior year [4]. - However, operating expenses are projected to increase significantly to $2.3 billion from $1.7 billion in the previous year [5][7]. Group 4: Earnings Prediction - The model predicts an earnings beat for Ovintiv, supported by a positive Earnings ESP of +7.28% and a Zacks Rank of 3 [6][8].

Core Viewpoint - Ovintiv (OVV) is anticipated to report a year-over-year decline in earnings due to lower revenues, with the consensus outlook indicating a potential impact on its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on July 24, with a consensus EPS estimate of $1.04, reflecting a year-over-year decrease of 16.1%. Revenues are projected to be $1.95 billion, down 14.7% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised 0.76% higher in the last 30 days, indicating a collective reassessment by analysts [4]. The Most Accurate Estimate for Ovintiv is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +7.28%, suggesting a bullish outlook on the company's earnings prospects [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3. Stocks with this combination have historically produced a positive surprise nearly 70% of the time [10][12]. Historical Performance - Ovintiv has a history of beating consensus EPS estimates, having done so in the last four quarters. In the most recent quarter, it exceeded expectations by delivering earnings of $1.42 per share against an expected $1.20, resulting in a surprise of +18.33% [13][14]. Conclusion - Ovintiv is positioned as a compelling earnings-beat candidate, but investors should consider other factors that may influence stock performance beyond earnings results [15][17].

Core Insights - Ovintiv Inc. is a prominent player in the oil and gas exploration and production sector, with significant operations in North America, particularly in the Permian Basin, Anadarko Basin, and Montney Formation [1][7] - Since rebranding from Encana Corporation in 2020, the company has focused on strategic growth, operational optimization, and financial discipline, enhancing its market position [2] - Ovintiv's shares have increased by 29.2% over the past three months, outperforming the Zacks United States Exploration and Production sub-industry growth of 19.1%, indicating strong investor confidence [3][8] Company Performance - The company possesses a high-quality asset portfolio with a deep inventory in key basins, ensuring sustainable production and competitive returns [7] - The recent $2.3 billion acquisition in Montney is expected to boost condensate production significantly, enhancing cash flow and diversifying the long-term drilling inventory [8][11] - Ovintiv has achieved cost efficiencies, with Permian drilling costs below $600 per foot and Montney well cost savings targeting $1.5 million, which supports profitability even in lower-price environments [9][10] Shareholder Returns - The company follows a 50/50 capital return strategy, allocating half of post-dividend free cash flow to buybacks and the other half to debt reduction, having repurchased $2 billion in shares since 2021 [10] - A stable quarterly dividend of 30 cents per share complements total shareholder returns, reflecting a commitment to returning value to investors [10] Strategic Positioning - Ovintiv's business model is designed to be resilient to macro volatility, ensuring profitability at mid-cycle prices and maintaining a free cash flow of $1 billion at $50 WTI [10] - The Montney acquisition is progressing ahead of schedule, with cost synergies and operational improvements already being realized [11] Challenges - The company remains exposed to commodity price volatility, with revenues tied to oil and gas prices, which are cyclical in nature [12] - Approximately 40% of Canadian gas volumes are exposed to weak AECO pricing, which could impact cash flow despite diversification efforts [13] - Ovintiv's conservative growth approach prioritizes free cash flow over production growth, which may limit upside potential in stronger market conditions [13][14]

Group 1 - Ovintiv Inc. plans to hold its second quarter 2025 results conference call on July 25, 2025, at 8:00 a.m. MT [1] - The financial and operating results will be released after market close on July 24, 2025 [1] - Supplemental slides and financial statements will be available on the company's website [1] Group 2 - Participants can join the conference call by registering online or dialing in directly [2] - The toll-free number for North America is 888-510-2154, and the international number is 437-900-0527 [2] - The live audio webcast of the event will be available on Ovintiv's website and archived for approximately 90 days [3]

Core Insights - Ovintiv Inc. is a prominent oil and gas exploration company with significant operations in the U.S. and Canada, focusing on natural gas, crude oil, and natural gas liquids [1][2] - The company has a strong financial outlook, driven by strategic growth plans and operational improvements since its rebranding from Encana Corporation in 2020 [2] Operational Efficiency - Ovintiv reported a non-GAAP free cash flow of $387 million in Q1 2025, with a commitment to return at least 50% of post-dividend free cash flow to shareholders through buybacks [3][10] - The company has returned over $3 billion to shareholders since 2021, demonstrating financial resilience despite commodity price volatility [3] - Ovintiv's breakeven oil price is below $40 per barrel, allowing it to remain profitable during downturns, with expectations to generate $1 billion in free cash flow at $50 per barrel [4][5] Asset Performance - Key assets in the Permian, Montney, and Anadarko regions yield returns exceeding 35% at current price points, contributing to mid-to-high teen corporate returns [5] - The $2.3 billion acquisition of Montney has already led to cost savings and improved free cash flow, with the potential for $1.5 million in savings per well [6] Financial Health - Ovintiv has reduced its debt by $350 million since November 2024, maintaining a leverage ratio of 1.2x and holding $3.5 billion in liquidity [7] - The company has an investment-grade credit rating, recently upgraded to "Positive" by Fitch, enhancing its financial flexibility [7] Operational Excellence - The company has achieved capital efficiency with drilling and completion costs in the Permian below $600 per foot, and improved drilling cycle times in Montney by 10 days post-acquisition [8] Challenges - Ovintiv's stock performance has lagged behind industry peers, with a 1.6% decline compared to a 6.4% increase in the Zacks United States Exploration and Production subindustry [11] - The company remains vulnerable to commodity price volatility, with potential capital cuts if WTI prices fall below $50 for an extended period [14] - Execution risks exist in the integration of Montney assets, with potential delays in realizing expected savings [15] - Declining production in the Permian region is anticipated, with volumes expected to drop from 131,000 bbl/d in Q1 to 120,000 bbl/d for the remainder of 2025 [16]

Core Viewpoint - Ovintiv's shares have increased by approximately 10.3% since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this positive trend leading up to the next earnings release [1]. Group 1: Earnings Performance - The most recent earnings report is essential for understanding the key catalysts affecting Ovintiv's stock performance [1]. Group 2: Estimates and Scores - Fresh estimates for Ovintiv have remained flat over the past month, indicating stability in expectations [2]. - Ovintiv has a Growth Score of B and a Momentum Score of C, while achieving an A grade on the value side, placing it in the top 20% for this investment strategy. The overall aggregate VGM Score is A, which is significant for investors not focused on a single strategy [3]. Group 3: Outlook - Ovintiv holds a Zacks Rank of 3 (Hold), suggesting an expectation of an in-line return from the stock in the upcoming months [4].

Group 1 - Ovintiv (OVV) is projected to generate over $1.6 billion in free cash flow in 2025 at current strip prices [1] - The anticipated free cash flow will enable Ovintiv to reduce its net debt to $5 billion by the end of the forecast period [1] - The analysis is provided by Aaron Chow, a top-rated analyst with over 15 years of experience, focusing on value opportunities and distressed plays in the energy sector [1]