```markdown [Selected Financial Information](index=1&type=section&id=Selected%20Financial%20Information) Presents consolidated financial statements, including earnings, balance sheet, and cash flow data for recent fiscal years [Condensed Consolidated Statement of Earnings](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Earnings) Ovintiv's 2023 revenues decreased to $10.88 billion, with net earnings falling to $2.09 billion from $3.64 billion in 2022 Consolidated Statement of Earnings (2021-2023) | For the years ended December 31 (US$ millions, except per share) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Total Revenues** | $10,883 | $12,464 | $8,658 | | **Operating Income** | $2,864 | $3,853 | $1,519 | | **Net Earnings (Loss)** | $2,085 | $3,637 | $1,416 | | **Diluted Net Earnings per Share** | $7.90 | $14.08 | $5.32 | [Condensed Consolidated Balance Sheet](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) Total assets grew to $19.99 billion in 2023, driven by increased property, plant, and equipment and long-term debt Consolidated Balance Sheet Highlights (as of Dec 31) | (US$ millions) | 2023 | 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $1,676 | $1,695 | | **Property, plant and equipment, net** | $14,640 | $9,468 | | **Total Assets** | $19,987 | $15,056 | | **Total Current Liabilities** | $2,812 | $2,780 | | **Long-Term Debt** | $5,453 | $3,177 | | **Total Liabilities** | $9,617 | $7,367 | | **Total Shareholders' Equity** | $10,370 | $7,689 | [Condensed Consolidated Statement of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Operating cash flow increased to $4.17 billion, while investing activities used $5.52 billion due to a corporate acquisition Consolidated Statement of Cash Flows (2021-2023) | For the years ended December 31 (US$ millions) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Cash From Operating Activities** | $4,167 | $3,866 | $3,129 | | **Cash From (Used in) Investing Activities** | $(5,519) | $(1,786) | $(525) | | *Corporate acquisition, net of cash acquired* | *$(3,225)* | *-* | *-* | | **Cash From (Used in) Financing Activities** | $1,359 | $(2,268) | $(2,419) | | **Increase (Decrease) in Cash** | $(2) | $(190) | $185 | [Supplemental Information](index=6&type=section&id=Supplemental%20Information) Provides additional financial and operational metrics, including non-GAAP results, production volumes, and segment-specific performance [Financial Results & Metrics](index=7&type=section&id=Financial%20Results%20%26%20Metrics) Non-GAAP Adjusted Earnings were $1.81 billion, while Non-GAAP Cash Flow decreased, and leverage metrics increased Annual Financial Performance (GAAP vs. Non-GAAP) | (US$ millions) | 2023 | 2022 | | :--- | :--- | :--- | | Net Earnings (Loss) | $2,085 | $3,637 | | Non-GAAP Adjusted Earnings | $1,810 | $1,769 | | Cash From Operating Activities | $4,167 | $3,866 | | Non-GAAP Cash Flow | $3,899 | $4,110 | Key Financial Metrics | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Debt to Capitalization | 36% | 32% | | Debt to Adjusted Capitalization | 24% | 19% | | Debt to EBITDA | 1.2x | 0.7x | | Debt to Adjusted EBITDA | 1.3x | 0.8x | [Operating Performance](index=8&type=section&id=Operating%20Performance) Total production rose to 565.6 MBOE/d in 2023, but netback decreased to $24.22/BOE due to lower commodity prices [Results by Play](index=14&type=section&id=Results%20by%20Play) Permian basin production increased to 167.3 MBOE/d with $1.44 billion in capex, while the Bakken asset was divested [Non-GAAP Definitions and Reconciliations](index=19&type=section&id=Non-GAAP%20Definitions%20and%20Reconciliations) Details the reconciliation of GAAP to non-GAAP financial measures, including adjusted earnings, cash flow, and leverage ratios [Non-GAAP Reconciliations](index=20&type=section&id=Non-GAAP%20Reconciliations) Reconciles GAAP to non-GAAP measures, showing $3.90 billion Non-GAAP Cash Flow and $1.81 billion Adjusted Earnings Reconciliation to Non-GAAP Free Cash Flow (YTD 2023) | (US$ millions) | Amount | | :--- | :--- | | Cash from Operating Activities | $4,167 | | *Adjustments for working capital, etc.* | $(268) | | **Non-GAAP Cash Flow** | **$3,899** | | Deduct: Capital expenditures | $(2,744) | | **Non-GAAP Free Cash Flow** | **$1,155** | Reconciliation to Non-GAAP Adjusted Earnings (YTD 2023) | (US$ millions) | Amount | | :--- | :--- | | Net Earnings Before Income Tax | $2,510 | | *Adjustments for unrealized gains, etc.* | $(192) | | **Adjusted Earnings Before Income Tax** | **$2,318** | | Income tax expense | $(508) | | **Non-GAAP Adjusted Earnings** | **$1,810** | Reconciliation to Adjusted EBITDA (YTD 2023) | (US$ millions) | Amount | | :--- | :--- | | Net Earnings (Loss) | $2,085 | | Add back: DD&A | $1,825 | | Add back: Interest | $355 | | Add back: Income tax expense | $425 | | **EBITDA** | **$4,690** | | *Other adjustments* | $(176) | | **Adjusted EBITDA** | **$4,514** | ```

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-39191 Ovintiv Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Suit ...

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.47 and cash flow per share of $4.02, meeting consensus estimates [42] - Free cash flow generated in the quarter was $278 million, with approximately $127 million returned to shareholders through share buybacks and dividends [42] - Total debt at quarter end was just over $6.1 billion, with a leverage ratio of 1.5 times, and the company remains committed to a mid-cycle leverage target of 1 times or about $4 billion [18] Business Line Data and Key Metrics Changes - The company brought on 116 net wells, exceeding plans by 16, with 15 of those in the Permian [7] - The average oil IP30 for wells on recently acquired acreage exceeded the 2022 and 2023 Midland basin average, with approximately 20 wells showing IP30 oil rates of more than 1,100 barrels per day [11] - The Uinta basin's recent nine-well Tomlin pad achieved an IP30 rate of 1,490 barrels of oil per day per well, outperforming the Delaware basin by almost 10% [48] Market Data and Key Metrics Changes - Year-to-date, the company realized 97% of WTI prices for its products, making the Montney competitive with top oil basins in North America [23] - The Uinta basin margin is now consistent with the Permian basin margin, enhancing margin stability [80] Company Strategy and Development Direction - The company focuses on deepening premium inventory and generating durable returns through innovation and operational efficiency [15][28] - The strategy includes a commitment to distribute at least 50% of post-dividend free cash flow to shareholders, with the remaining 50% allocated to debt reduction [9] - The company is actively testing high-potential locations identified during the acquisition and expects to see improved well performance and capital efficiency [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational execution and the ability to stabilize production at 200,000 barrels per day in the second quarter of 2024 [20] - The company has raised its full-year 2023 production guidance and narrowed the range for capital spending, indicating improved capital efficiency [50] - Management emphasized the importance of consistent execution and innovation in driving operational and financial success [16][28] Other Important Information - The company has integrated the Permian acquisition ahead of schedule and accelerated the timeline for wells in progress [44] - The Trimulfrac technology is expected to reduce cycle time and save costs, with significant savings observed in recent completions [22][95] Q&A Session Summary Question: Future potential project size changes in the Permian - Management indicated that consistent lateral lengths and well spacing will be maintained, with strong well performance expected without upspacing [31][32] Question: Thoughts on accelerating shareholder payout - Management plans to maintain a 50-50 approach to shareholder returns and debt reduction, focusing on generating more free cash flow [34] Question: Productivity and efficiency gains for 2024 - Management confirmed that projections for 2024 remain stable at 200,000 barrels per day, with no changes to the basis for this projection [37][62] Question: Evolution of Simulfrac to Trimulfrac - Management explained that Trimulfrac builds on previous innovations, enhancing capital efficiency and returns [69][75] Question: Update on Montney assets and capital allocation - Management stated that 20% of capital will be deployed in the Montney, focusing on the oil window, with plans for future gas market access [77] Question: Clarification on base decline rates and D&C costs - Management highlighted efforts to reduce base decline rates and indicated that costs are similar to pre-pandemic levels, except for tubulars [82][85]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-39191 Ovintiv Inc. (Exact name of registrant as specified in its charter) Delaware 84-4427672 (State or other jurisdiction of incorporation or organization) ( ...

2Q23 Results Conference Call Certain measures in this presentation do not have any standardized meaning as prescribed by U.S. GAAP and, therefore, are considered non-GAAP measures. These measures may not be comparable to similar measures presented by other companies and should not be viewed as a substitute for measures reported under U.S. GAAP. These measures are commonly used in the oil and gas industry and/or by Ovintiv to provide shareholders and potential investors with additional information regarding ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-39191 Ovintiv Inc. (Exact name of registrant as specified in its charter) Delaware 84-4427672 (State or other jurisdiction of incorporation or organization) (I.R.S ...

Financial Data and Key Metrics Changes - The company reported net earnings of $487 million, cash from operating activities of $1.1 billion, and free cash flow of $241 million, exceeding consensus estimates [3] - Cash flow per share was $3.44, and approximately $300 million was returned to shareholders through share buybacks and dividends, representing a cash return yield of nearly 15% [3] Business Line Data and Key Metrics Changes - Production during the quarter was 511,000 BOEs per day, exceeding guidance on oil, gas, and NGL [19] - The company achieved an impressive IP30 rate of 1,165 barrels of oil per day in the Permian, indicating strong well performance [10] - In the Montney, a recent well posted a 30-day IP rate of over 5,300 BOE per day, showcasing robust productivity [26] Market Data and Key Metrics Changes - The company realized 111% of NYMEX after hedges across its portfolio, with Canadian gas prices exceeding 140% of NYMEX on a pre-hedge basis [8][27] - The economics in the Montney remain strong, with expected returns of over 100% across the 2023 program [27] Company Strategy and Development Direction - The company announced two transactions aimed at enhancing capital efficiency and extending inventory depth, including acquiring Midland acreage and selling Bakken assets for $825 million [4][14] - The acquisition is expected to enhance capital efficiency and lower cash costs per BOE, while maintaining a strong investment-grade rated balance sheet [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and execution, highlighting strong operational performance and innovation culture [7][21] - The company anticipates production growth in Q2 2023 to approximately 515,000 to 535,000 BOEs per day, with capital spending of $590 million to $630 million [41] Other Important Information - A 20% increase in the base dividend per share was announced alongside the transactions [20] - The company expects to run a low-level development program in 2024, producing over 200,000 barrels of oil and condensate per day with a capital range of $2.1 billion to $2.5 billion [56] Q&A Session Summary Question: Clarification on cash outflow and acquisition price adjustments - Management estimated the closing adjustment on the Permian acquisition to be under $100 million, noting that the asset is running free cash flow negative during the interim period [39] Question: Thoughts on shareholder return program - Management confirmed the shareholder return framework remains unchanged, emphasizing buybacks as the best value for returning cash to shareholders [53][81] Question: Integration plans for newly acquired assets - Management stated that integration processes are in motion, covering drilling, completion plans, and midstream marketing [97][99]

Part I [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Ovintiv's unaudited condensed consolidated financial statements for Q1 2023 are presented, covering earnings, balance sheet, cash flows, and detailed notes [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Ovintiv reported Q1 2023 net earnings of **$487 million**, a turnaround from a **$241 million** net loss in Q1 2022, with operating cash flow increasing to **$1.068 billion** Condensed Consolidated Statement of Earnings (Q1 2023 vs Q1 2022) | (US$ millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Total Revenues | 2,551 | 1,967 | | Total Operating Expenses | 1,873 | 2,167 | | Operating Income (Loss) | 678 | (200) | | Net Earnings (Loss) | 487 | (241) | | Diluted Net Earnings (Loss) per Share | $1.97 | $(0.94) | Condensed Consolidated Balance Sheet (As at March 31, 2023) | (US$ millions) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | 1,395 | 1,695 | | Property, plant and equipment, net | 9,911 | 9,468 | | Total Assets | 15,123 | 15,056 | | Total Current Liabilities | 2,632 | 2,780 | | Long-Term Debt | 3,176 | 3,177 | | Total Liabilities | 7,229 | 7,367 | | Total Shareholders' Equity | 7,894 | 7,689 | Condensed Consolidated Statement of Cash Flows (Q1 2023 vs Q1 2022) | (US$ millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Cash From Operating Activities | 1,068 | 685 | | Cash Used in Investing Activities | (863) | (417) | | Cash Used in Financing Activities | (184) | (193) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover segmented performance, **$199 million** in Q1 acquisitions, **$300 million** in shareholder returns, and subsequent **$4.275 billion** Permian acquisition and **$825 million** Bakken divestiture Segment Operating Income (Loss) (Q1 2023 vs Q1 2022) | (US$ millions) | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | USA Operations | 497 | 761 | | Canadian Operations | 247 | 220 | | Market Optimization | (33) | (33) | | Corporate & Other | (33) | (1,148) | - In Q1 2023, the company completed acquisitions totaling **$199 million**, primarily for property purchases in the Permian and Uinta basins (**$193 million** in USA Operations). Divestitures amounted to **$12 million**[58](index=58&type=chunk)[59](index=59&type=chunk) - During Q1 2023, Ovintiv purchased approximately **5.2 million shares** for **$239 million** under its Normal Course Issuer Bid (NCIB) and paid dividends of **$0.25 per share**, totaling **$61 million**[73](index=73&type=chunk)[77](index=77&type=chunk) - Subsequent to quarter end, on April 3, 2023, Ovintiv announced a definitive agreement to acquire core Midland Basin assets for approximately **$4.275 billion** (**$3.125 billion** cash and ~**32.6 million shares**)[134](index=134&type=chunk) - Concurrently with the Permian acquisition announcement, Ovintiv agreed to sell its Bakken assets for approximately **$825 million**. Both transactions are expected to close in Q2 2023[135](index=135&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 performance, strategic portfolio changes including a **$4.275 billion** Permian acquisition, and updated 2023 outlook with increased capital guidance [Executive Overview](index=31&type=section&id=Executive%20Overview) Ovintiv generated **$487 million** net earnings and **$1.068 billion** cash from operations in Q1 2023, announcing a major Permian acquisition, Bakken divestiture, and a **20%** dividend increase - Announced a definitive agreement to acquire core Midland Basin assets for ~**$4.275 billion** and to sell its Bakken assets for ~**$825 million**, both expected to close in Q2 2023[144](index=144&type=chunk) - Announced a **20%** increase to its quarterly dividend, representing an annualized dividend of **$1.20 per share**[144](index=144&type=chunk) Q1 2023 Financial Highlights | Metric | Value (US$ millions) | | :--- | :--- | | Net Earnings | 487 | | Cash from Operating Activities | 1,068 | | Non-GAAP Cash Flow | 851 | | Share Repurchases | 239 | | Dividends Paid | 61 | [2023 Outlook](index=33&type=section&id=2023%20Outlook) The 2023 outlook anticipates oil and gas price volatility, with updated capital investment guidance of **$2.6 billion-$2.9 billion** and production guidance of **520.0-545.0 MBOE/d** post-Permian acquisition, alongside ESG commitments - Oil prices in 2023 will be influenced by recessionary concerns, OPEC+ production cuts, and geopolitical supply uncertainties[148](index=148&type=chunk) - Full year 2023 capital investment guidance was updated to **$2,600 million - $2,900 million**, reflecting the Permian Acquisition[157](index=157&type=chunk) Updated Full Year 2023 Production Guidance | Product | Guidance Range | | :--- | :--- | | Total Production | 520.0 - 545.0 MBOE/d | | Oil & Plant Condensate | 185.0 - 195.0 Mbbls/d | | Natural Gas | 1,525 - 1,575 MMcf/d | - The company has achieved a >**30%** reduction in Scope 1&2 GHG emissions intensity and is on track to meet its **50%** reduction target by 2030. The GHG target is tied to 2023 employee compensation[165](index=165&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Q1 2023 total revenues increased to **$2.55 billion** due to reduced risk management losses, despite a **21%** decline in average realized prices and a **2%** increase in total production to **511.4 MBOE/d** Production Volumes and Realized Prices (Q1 2023 vs Q1 2022) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total Production (MBOE/d) | 511.4 | 499.9 | | Total Oil & NGLs (Mbbls/d) | 252.2 | 252.1 | | Natural Gas (MMcf/d) | 1,555 | 1,487 | | Avg. Realized Price ($/BOE) | $40.72 | $51.62 | - Upstream product revenues decreased by **$447 million** YoY, driven by a **$436 million** negative impact from lower sales prices, particularly for oil and NGLs[181](index=181&type=chunk) - Transportation and processing expenses increased by **$49 million** YoY to **$455 million**, primarily due to rate escalations and higher costs for downstream market diversification[196](index=196&type=chunk) - Administrative expense decreased by **$86 million** YoY to **$58 million**, mainly due to a **$98 million** reduction in long-term incentive costs reflecting a decrease in the company's share price[210](index=210&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, Ovintiv maintained **$3.2 billion** in total liquidity and a **19%** Debt to Adjusted Capitalization ratio, with Q1 operating cash flow of **$1.068 billion** funding capital expenditures, acquisitions, and shareholder returns Liquidity Position (As at March 31, 2023) | (US$ millions) | Amount | | :--- | :--- | | Cash and Cash Equivalents | 26 | | Available Credit Facilities | 3,200 | | Available Uncommitted Demand Lines | 280 | | Issuance of U.S. Commercial Paper | (280) | | **Total Liquidity** | **3,226** | - The company is in compliance with all financial covenants, with a Debt to Adjusted Capitalization ratio of **19%** as of March 31, 2023, well below the **60%** covenant limit[234](index=234&type=chunk) - In Q1 2023, the company returned **$300 million** to shareholders through **$239 million** in share repurchases and **$61 million** in dividends[236](index=236&type=chunk)[242](index=242&type=chunk) - The cash portion of the Permian Acquisition will be funded through cash on hand, proceeds from the Bakken divestiture, and new debt financing and/or credit facility borrowings[232](index=232&type=chunk) [Non-GAAP Measures](index=49&type=section&id=Non-GAAP%20Measures) Reconciliations for non-GAAP measures show Q1 2023 Non-GAAP Cash Flow at **$851 million**, with Debt to Adjusted Capitalization at **19%** and Debt to Adjusted EBITDA at **0.9 times** Reconciliation of Non-GAAP Cash Flow | (US$ millions) | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Cash From Operating Activities | 1,068 | 685 | | Excl: Net change in other assets/liabilities | (5) | (12) | | Excl: Net change in non-cash working capital | 222 | (346) | | **Non-GAAP Cash Flow** | **851** | **1,043** | Debt to Adjusted EBITDA Ratio | (US$ millions, except ratio) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Debt | 3,756 | 3,570 | | Adjusted EBITDA (LTM) | 4,191 | 4,243 | | **Debt to Adjusted EBITDA (times)** | **0.9** | **0.8** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Ovintiv faces market risks from commodity prices, foreign exchange, and interest rates, with a **10%** commodity price change impacting fair value by **$16-30 million** and a **10%** CAD/USD rate change impacting pre-tax earnings by **$129-157 million** Commodity Price Sensitivity Analysis (Impact on Fair Value of Hedges) | (US$ millions) | 10% Price Increase | 10% Price Decrease | | :--- | :--- | :--- | | Crude oil price | (24) | 30 | | Natural gas price | (17) | 16 | - A **10%** increase or decrease in the Canadian to U.S. foreign currency exchange rate could result in unrealized gains/losses impacting pre-tax net earnings by **$129 million** or **$(157) million**, respectively[276](index=276&type=chunk) - As of March 31, 2023, the company had **$580 million** in floating-rate debt. A **1%** change in interest rates would impact pre-tax earnings by approximately **$6 million**[278](index=278&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting in Q1 2023 - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of March 31, 2023[280](index=280&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2023 that materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting[281](index=281&type=chunk) Part II [Item 1A. Risk Factors](index=54&type=page&id=Item%201A.%20Risk%20Factors) New material risk factors related to the pending Permian Basin acquisition include transaction completion risks, integration challenges, increased indebtedness, and potential earnings per share dilution - Completion of the Permian Acquisition is subject to conditions that may not be satisfied, and failure to complete it could have adverse effects on the company, including unrecovered transaction costs and negative market reactions[285](index=285&type=chunk)[286](index=286&type=chunk) - The company may be unable to successfully integrate the acquired assets, and the assessment of recoverable reserves and operating costs is inherently uncertain, which could prevent the realization of anticipated benefits[287](index=287&type=chunk)[288](index=288&type=chunk) - The company will have substantial indebtedness after the acquisition, which could limit financial flexibility, increase vulnerability to adverse economic conditions, and make it harder to service debt obligations[292](index=292&type=chunk) - The issuance of approximately **32.6 million** new shares for the acquisition may be dilutive to earnings per share and could depress the stock price, especially if sellers dispose of their shares after the **90-day** lock-up period[296](index=296&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Ovintiv repurchased approximately **5.2 million shares** for **$238 million** in Q1 2023 under its NCIB program, with **16.2 million** shares remaining for repurchase until October 2, 2023 Share Repurchases in Q1 2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2023 | 1,312,436 | $49.43 | | February 2023 | 1,551,789 | $45.80 | | March 2023 | 2,339,252 | $43.63 | | **Total** | **5,203,477** | **$45.74** | - The company has an exemption from Canadian securities regulators allowing it to make larger repurchases on U.S. Markets under its NCIB, effectively permitting purchases up to **10%** of its public float[307](index=307&type=chunk) [Other Part II Items](index=54&type=section&id=Other%20Part%20II%20Items) This section covers other required disclosures, including references for legal proceedings, and confirms no defaults on senior securities or mine safety disclosures - Item 1. Legal Proceedings: Refers to Item 3 of the 2022 Annual Report on Form 10‑K and Note 20 of this report[283](index=283&type=chunk) - Item 3. Defaults Upon Senior Securities: None[308](index=308&type=chunk) - Item 4. Mine Safety Disclosures: Not applicable[309](index=309&type=chunk)

Financial Data and Key Metrics Changes - The company achieved net earnings of $1.3 billion and adjusted EBITDA of $918 million for Q4 2022, with free cash flow of $537 million and cash flow per share of $3.55, slightly above consensus estimates [103][104] - Total annual production reached 510,000 BOEs per day, with Q4 production at 524,000 BOEs per day, despite extreme winter weather [102][103] - The company returned approximately $250 million to shareholders through share buybacks and dividends, increasing to $300 million in Q1 2023 [104][106] - Long-term debt was reduced by $1.2 billion, resulting in a leverage ratio of 0.8x at year-end [107] Business Line Data and Key Metrics Changes - The Uinta Basin matched the Permian for the highest operating margin in the portfolio in 2022, with plans to share rigs between Uinta and Bakken to bring on 40 to 50 net wells [13][21] - The Anadarko asset, primarily natural gas and associated NGLs, provides stable production with strong price realizations, although activity has been reduced due to weaker gas and NGL price outlook [22][42] Market Data and Key Metrics Changes - The company has 25% of its 2023 oil and gas volumes covered by WTI and NYMEX benchmark contracts, allowing participation in price upside [8] - The Uinta Basin oil receives an average price of about 85% of WTI, generating impressive margins [21] Company Strategy and Development Direction - The company focuses on capital efficiency and maximizing shareholder returns while maintaining flat production volumes year-over-year [7][15] - A multi-basin multiproduct portfolio allows for operational and commodity diversification, providing a competitive advantage [6] - The 2023 capital plan is designed to generate significant free cash flow and maintain balance sheet strength [7][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate volatility and emphasized the importance of a disciplined development program [44][45] - The company anticipates a low point in production for Q1 2023, driven by known weather events and a methodical approach to bringing wells online [16][10] - The outlook for natural gas and NGL prices is weak, prompting a shift in capital allocation towards oil and condensate-rich areas [16][22] Other Important Information - The company reduced emissions intensity by more than 30% and is on track to meet a 50% reduction target [5] - The company added approximately 450 new premium return locations, primarily in the Permian, through organic appraisal and transactions [112][114] Q&A Session Summary Question: Stability of Shareholder Return Plan - Management confirmed the consistency of the capital allocation plan since Q3 2021, with a focus on increasing the base dividend over time [46] Question: Inflation Impact Across Different Plays - Inflation was observed throughout 2022, but the rate of change has subsided, with less inflation seen in Canada compared to the U.S. [28] Question: Oil Reserves Revisions - U.S. oil reserves were flat year-over-year after accounting for the sale of high-cost mature waterflood, with a net increase of 30 million barrels in approved reserves [30] Question: Hedging Effectiveness - The new hedging approach aims to provide downside protection, ensuring free cash flow positivity even at low commodity prices [31] Question: Capital Efficiency Factors - Capital efficiencies improved due to faster drilling and completion times, with a focus on maintaining these efficiencies moving forward [83][84]

Part I [Business and Properties](index=7&type=section&id=Items%201%20and%202.%20Business%20and%20Properties) Ovintiv is a North American oil and natural gas exploration and production company with a multi-basin portfolio in the U.S. and Canada, focused on disciplined capital allocation and free cash flow generation [Strategy and Approach](index=7&type=section&id=Strategy%20and%20Approach) Ovintiv's strategy focuses on delivering quality returns, generating free cash flow, and providing significant cash returns to shareholders through disciplined capital allocation and operational excellence - The company aims to **maximize shareholder returns** through a transparent capital allocation framework that includes base dividends, share buybacks, and/or variable dividends[41](index=41&type=chunk) - Ovintiv's **strategic pillars** include: Execution Excellence, Disciplined Capital Allocation, Commercial Acumen & Risk Management, Driving ESG Progress, Top Tier Multi-Basin Assets, Financial Strength, and People & Values[42](index=42&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - A key focus is on debt reduction, with over **$3.3 billion** in total long-term debt reduced since the end of 2020[47](index=47&type=chunk) [Reporting Segments](index=9&type=section&id=Reporting%20Segments) Ovintiv's operations are organized into three reportable segments: USA Operations, Canadian Operations, and Market Optimization, each focusing on distinct geographic and functional areas - USA Operations include key plays such as **Permian** (Texas), **Anadarko** (Oklahoma), **Bakken** (North Dakota), and **Uinta** (Utah)[49](index=49&type=chunk) - Canadian Operations are focused on plays including **Montney** (British Columbia/Alberta), **Horn River** (British Columbia), and **Wheatland** (Alberta)[49](index=49&type=chunk) - The **Market Optimization segment** handles the sale of proprietary production and uses third-party purchases and sales to manage transportation commitments and diversify customer base[49](index=49&type=chunk) [USA Operations](index=11&type=section&id=USA%20Operations) In 2022, USA Operations invested approximately **$1.49 billion**, drilled **153 net wells**, and produced **131.5 thousand barrels per day of oil**, accounting for **66% of upstream revenues** USA Operations 2022 Overview | Metric | Value | | :--- | :--- | | Capital Investment | $1,493 million | | Net Wells Drilled | 153 wells | | Average Oil Production | 131.5 thousand barrels/day | | Average NGL Production | 82.1 thousand barrels/day | | Average Natural Gas Production | 492 million cubic feet/day | | Net Acreage | 822,000 acres | USA Operations Production by Play (2022 Average Daily) | Play | Oil (thousand barrels/day) | NGLs (thousand barrels/day) | Natural Gas (million cubic feet/day) | | :--- | :--- | :--- | :--- | | Permian | 62.7 | 29.4 | 149 | | Anadarko | 35.5 | 43.2 | 286 | | Bakken | 15.3 | 8.2 | 36 | | Uinta | 17.9 | 1.1 | 16 | [Canadian Operations](index=13&type=section&id=Canadian%20Operations) In 2022, Canadian Operations invested **$334 million**, drilled **55 net wells**, and produced **47.5 thousand barrels per day of oil and NGLs**, primarily in the Montney play Canadian Operations 2022 Overview | Metric | Value | | :--- | :--- | | Capital Investment | $334 million | | Net Wells Drilled | 55 wells | | Average Oil & NGL Production | 47.5 thousand barrels/day | | Average Natural Gas Production | 1,002 million cubic feet/day | | Net Acreage | 1.2 million acres | Canadian Operations Production by Play (2022 Average Daily) | Play | Oil & NGLs (thousand barrels/day) | Natural Gas (million cubic feet/day) | | :--- | :--- | :--- | | Montney | 47.5 | 970 | | Other (Horn River, etc.) | - | 32 | [Proved Reserves and Other Oil and Natural Gas Information](index=15&type=section&id=Proved%20Reserves%20and%20Other%20Oil%20and%20Natural%20Gas%20Information) As of December 31, 2022, Ovintiv's total proved reserves were **2,273.6 million barrels of oil equivalent**, with **43%** classified as proved undeveloped reserves Total Proved Reserves by Product (as of Dec 31, 2022) | Product | Developed | Undeveloped | Total | | :--- | :--- | :--- | :--- | | Oil (million barrels) | 257.3 | 278.0 | 535.3 | | NGLs (million barrels) | 359.5 | 247.4 | 606.9 | | Natural Gas (billion cubic feet) | 4,031 | 2,757 | 6,789 | | **Total (million barrels of oil equivalent)** | **1,288.7** | **984.9** | **2,273.6** | Changes in Proved Reserves (2022, MMBOE) | Category | Amount (million barrels of oil equivalent) | | :--- | :--- | | Beginning of year | 2,258.2 | | Revisions and improved recovery | (189.2) | | Extensions and discoveries | 370.6 | | Purchases | 45.9 | | Sales | (25.7) | | Production | (186.2) | | **End of year** | **2,273.6** | - Proved undeveloped reserves (PUDs) decreased from **932.5 million barrels of oil equivalent** at the start of 2022 to **984.9 million barrels of oil equivalent** at year-end. The company converted **161.3 million barrels of oil equivalent** of PUDs to proved developed status during the year, spending approximately **$1,195 million** on this development[106](index=106&type=chunk)[109](index=109&type=chunk) [Marketing, Competition, and Human Capital](index=22&type=section&id=Marketing%2C%20Competition%2C%20and%20Human%20Capital) Ovintiv manages market risk through derivatives, faces intense industry competition, and as of December 31, 2022, employed **1,744 people**, with Vitol Inc. accounting for over **10% of consolidated revenues** - The company has significant long-term transportation and processing financial commitments totaling **$5.156 billion**[137](index=137&type=chunk) - For the year ended December 31, 2022, **Vitol Inc.** was a major customer, accounting for **over 10%** of consolidated revenues[140](index=140&type=chunk) - As of December 31, 2022, the company employed **1,744 people** (997 in the U.S. and 747 in Canada) with an average tenure of **over nine years** and a voluntary turnover rate of approximately **six percent**[144](index=144&type=chunk)[148](index=148&type=chunk) [Regulatory Matters](index=25&type=section&id=Regulatory%20Matters) Ovintiv's operations are subject to extensive federal, state, provincial, and local regulations in the U.S. and Canada, covering exploration, production, and environmental protection - The company faces **regulatory risks** related to oil and gas leasing and permitting on **U.S. federal lands**, with potential for increased royalty rates and stricter land-use planning[158](index=158&type=chunk)[159](index=159&type=chunk) - In **British Columbia**, a court ruling and subsequent agreements with First Nations (Blueberry River First Nation) will transform land and resource management, potentially impacting development activities in the **Montney play**, though the company does not anticipate a material impact on its plans[169](index=169&type=chunk) - The company is subject to **increasing regulation of GHG emissions** in both the U.S. and Canada, including proposed EPA standards for methane and Canada's goal to reduce oil and gas methane emissions by **75% by 2030**[172](index=172&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including market volatility, operational uncertainties, increasing environmental regulations, financial indebtedness, and regulatory compliance challenges - Market Risk: A **substantial or extended decline in oil, NGLs, or natural gas prices** could materially and adversely affect business, financial condition, and results of operations[187](index=187&type=chunk)[189](index=189&type=chunk) - Operational Risk: Oil and natural gas reserve estimates are **inherently uncertain**, and inaccuracies could cause the quantity and value of reserves to be **materially misstated**[187](index=187&type=chunk)[208](index=208&type=chunk) - Environmental Risk: The company is subject to **increasing environmental regulations** and government actions related to **climate change**, which could reduce demand for its products, increase operating costs, and limit development areas[187](index=187&type=chunk)[231](index=231&type=chunk)[240](index=240&type=chunk) - Financial Risk: The company's **level of indebtedness** may limit its financial flexibility, and **downgrades in credit ratings** could increase the cost of capital and limit access to it[187](index=187&type=chunk)[248](index=248&type=chunk)[250](index=250&type=chunk) [Legal Proceedings](index=47&type=section&id=Item%203.%20Legal%20Proceedings) Ovintiv is involved in various legal claims arising in the normal course of business, which are not currently expected to have a material adverse effect on its financial position - The company is involved in **various legal claims and actions** arising in the normal course of operations[274](index=274&type=chunk) - Management does **not expect these matters to have a material adverse effect**, but an unfavorable outcome is possible and could materially impact net earnings in the period it becomes estimable[274](index=274&type=chunk) Part II [Market for Common Equity, Shareholder Matters, and Issuer Purchases](index=48&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Ovintiv's common stock trades on the NYSE and TSX, with the company paying **$0.95 per share in dividends** and repurchasing **3.5 million shares** in Q4 2022, aiming to return **50% of free cash flow** to shareholders - In 2022, the company paid a total annual dividend of **$0.95 per share** of common stock[281](index=281&type=chunk) - The company increased its cash return target to **50% of Non-GAAP Cash Flow** in excess of capital expenditures and base dividends, delivered through share buybacks and/or variable dividends[282](index=282&type=chunk) Share Repurchases (Q4 2022) | Period | Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | Oct 2022 | 957,525 | $52.22 | | Nov 2022 | 1,803,312 | $54.93 | | Dec 2022 | 724,362 | $53.77 | | **Total** | **3,485,199** | **$53.94** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=51&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, Ovintiv reported **$3.64 billion in net earnings** and **$3.87 billion in cash from operations**, while reducing debt by **$1.22 billion** and repurchasing **$719 million** in shares, with a 2023 capital outlook of **$2.15-$2.35 billion** 2022 Financial & Operational Highlights | Metric | 2022 Value | | :--- | :--- | | Net Earnings | $3,637 million | | Cash from Operating Activities | $3,866 million | | Capital Expenditures | $1,831 million | | Total Long-Term Debt Reduction | $1,216 million | | Shares Repurchased | 14.7 million shares for $719 million | | Dividends Paid | $0.95 per share ($239 million total) | | Average Total Production | 510.0 thousand barrels of oil equivalent/day | - The company's 2023 capital investment plan is approximately **$2,150 million to $2,350 million**, with expected average total production of **500.0 to 525.0 thousand barrels of oil equivalent/day**[317](index=317&type=chunk)[321](index=321&type=chunk) [Results of Operations](index=57&type=section&id=Results%20of%20Operations) In 2022, total revenues increased to **$12.46 billion**, resulting in **$3.64 billion in net earnings**, despite a **$1.87 billion net loss on risk management** and higher operating expenses Selected Financial Information (in millions) | Metric | 2022 ($ millions) | 2021 ($ millions) | | :--- | :--- | :--- | | Total Revenues | $12,464 | $8,658 | | Total Operating Expenses | $8,611 | $7,139 | | Operating Income | $3,853 | $1,519 | | Net Earnings | $3,637 | $1,416 | - Upstream product revenues increased by **$2.7 billion** YoY, driven by a **$3.16 billion** increase from higher sales prices, partially offset by a **$437 million** decrease from lower production volumes[346](index=346&type=chunk) - The company recorded a realized loss of **$2.61 billion** on risk management activities in 2022, a significant increase from the **$1.40 billion** realized loss in 2021, primarily due to higher commodity prices exceeding hedged levels[351](index=351&type=chunk) [Liquidity and Capital Resources](index=67&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2022, Ovintiv maintained **$3.3 billion in liquidity**, reduced long-term debt to **$3.57 billion**, and generated **$3.87 billion in cash from operations** to fund investments and shareholder returns Capital Structure (as of Dec 31, in millions) | Metric | 2022 ($ millions) | 2021 ($ millions) | | :--- | :--- | :--- | | Total Liquidity | $3,307 | $4,495 | | Long-Term Debt | $3,570 | $4,786 | | Total Shareholders' Equity | $7,689 | $5,074 | | Debt to Capitalization | 32% | 49% | - In 2022, the company redeemed its **$1.0 billion**, 5.625% senior notes due 2024 and repurchased an additional **$565 million** of other senior notes in the open market[422](index=422&type=chunk)[423](index=423&type=chunk) - The company increased its cash return to shareholders to **50% of Non-GAAP Cash Flow** (in excess of capex and base dividends) during the third quarter of 2022, delivering the returns via its NCIB program[425](index=425&type=chunk) [Critical Accounting Estimates](index=72&type=section&id=Critical%20Accounting%20Estimates) Management's critical accounting estimates involve significant judgment, particularly in estimating proved oil and gas reserves, assessing goodwill impairment, valuing asset retirement obligations, and determining deferred income taxes - Upstream Assets and Reserve Estimates: The **estimation of proved reserves is a subjective process** based on geological and engineering data and is a **key input for depletion and ceiling test impairment calculations**. Revisions can be necessary due to changes in development plans, reservoir performance, and economic conditions[443](index=443&type=chunk)[444](index=444&type=chunk)[449](index=449&type=chunk) - Goodwill Impairments: **Goodwill is assessed annually** by comparing the carrying amount of each reporting unit (country cost center) to its **fair value**. Fair value is estimated using income and market approaches, relying on significant assumptions about reserves, commodity prices, and costs[446](index=446&type=chunk)[447](index=447&type=chunk)[452](index=452&type=chunk) - Income Taxes: The company **assesses the realizability of deferred tax assets**, and if it's more likely than not they won't be realized, a **valuation allowance** is recorded. This assessment involves judgments about future taxable income, which is dependent on factors like future commodity prices[460](index=460&type=chunk)[465](index=465&type=chunk)[470](index=470&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=77&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Ovintiv manages market risks from commodity prices, foreign currency, and interest rates using derivative financial instruments, with a **10% commodity price change having a relatively small impact** on derivative fair value - The company uses **derivative financial instruments**, including options and swaps, to manage exposure to fluctuations in oil, NGL, and natural gas prices[489](index=489&type=chunk) Commodity Price Sensitivity on Risk Management Positions (Dec 31, 2022) | Price Change | Impact on Pre-Tax Net Earnings (US$ millions) | | :--- | :--- | | 10% Crude Oil Price Increase | $(28) | | 10% Crude Oil Price Decrease | $27 | | 10% Natural Gas Price Increase | $6 | | 10% Natural Gas Price Decrease | $(6) | - As of December 31, 2022, the company had **$393 million** in floating-rate debt, exposing it to interest rate risk. A one percent change in interest rates would result in a **$4 million** change in before-tax earnings[499](index=499&type=chunk) [Financial Statements and Supplementary Data](index=79&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Ovintiv's audited consolidated financial statements for 2022, including the auditor's report and detailed notes on accounting policies, segment information, debt, and reserves - The auditor's report from PricewaterhouseCoopers LLP provides an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting[509](index=509&type=chunk) - A **critical audit matter** identified by the auditor was the impact of **estimates of proved oil, NGL, and natural gas reserves** on the net value of oil and natural gas properties, due to the significant judgment involved in these estimates[517](index=517&type=chunk)[518](index=518&type=chunk) Key Consolidated Balance Sheet Items (in millions) | Account | Dec 31, 2022 ($ millions) | Dec 31, 2021 ($ millions) | | :--- | :--- | :--- | | Total Assets | $15,056 | $14,055 | | Total Liabilities | $7,367 | $8,981 | | Total Shareholders' Equity | $7,689 | $5,074 | | Long-Term Debt (incl. current) | $3,570 | $4,786 | Key Consolidated Statement of Cash Flows Items (in millions) | Account | 2022 ($ millions) | 2021 ($ millions) | | :--- | :--- | :--- | | Cash From Operating Activities | $3,866 | $3,129 | | Cash Used in Investing Activities | $(1,786) | $(525) | | Cash Used in Financing Activities | $(2,268) | $(2,419) | [Controls and Procedures](index=137&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2022, management concluded that the company's disclosure controls and internal control over financial reporting were effective, with no material changes in Q4 2022 - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were **effective** as of December 31, 2022[803](index=803&type=chunk) - Management concluded that the Company's internal control over financial reporting was **effective** as of December 31, 2022, based on the COSO framework[804](index=804&type=chunk)[505](index=505&type=chunk) Part III [Directors, Executive Compensation, Security Ownership, and Principal Accountant Fees](index=138&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information on directors, executive compensation, security ownership, and principal accountant fees is incorporated by reference from the company's 2023 definitive proxy statement - Information regarding Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, Certain Relationships and Related Transactions, and Principal Accounting Fees and Services is **incorporated by reference** from the registrant's definitive proxy statement for the 2023 Annual Meeting of Shareholders[811](index=811&type=chunk)[813](index=813&type=chunk)[814](index=814&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=139&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed as exhibits to the Form 10-K, including governance documents, debt agreements, compensation plans, and required certifications - This section provides a **comprehensive list of all exhibits** filed with the Form 10-K, including key agreements, indentures, and certifications[819](index=819&type=chunk)[820](index=820&type=chunk) - Key exhibits filed include reports from **independent reserves auditors** McDaniel & Associates Consultants Ltd. and Netherland, Sewell & Associates, Inc[826](index=826&type=chunk)