Ovintiv(US:OVV)2024-11-07 22:03Selected Financial Information (unaudited) This section provides key unaudited financial data, including consolidated statements of earnings, comprehensive income, balance sheet, and cash flows Condensed Consolidated Financial Statements This section presents Ovintiv's unaudited consolidated financial statements, highlighting Q3 2024 net earnings growth and strong cash flow Condensed Consolidated Statement of Earnings Ovintiv reported Q3 2024 net earnings of $507 million, or $1.92 per diluted share, up from $406 million in Q3 2023 Q3 & Nine Months 2024 Statement of Earnings Highlights (US$ millions, except per share) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $2,324 | $2,649 | $6,964 | $7,717 | | Operating Income | $527 | $467 | $1,577 | $1,676 | | Net Earnings | $507 | $406 | $1,185 | $1,229 | | Diluted EPS | $1.92 | $1.47 | $4.41 | $4.73 | Condensed Consolidated Statement of Comprehensive Income Comprehensive income for Q3 2024 significantly improved to $550 million, driven by positive foreign currency translation adjustments Q3 2024 Comprehensive Income (US$ millions) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net Earnings | $507 | $406 | | Other Comprehensive Income (Loss) | $43 | $(61) | | Comprehensive Income | $550 | $345 | Condensed Consolidated Balance Sheet As of September 30, 2024, Ovintiv's total assets were $19.86 billion, with total debt decreasing and shareholders' equity increasing Balance Sheet Summary (US$ millions) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $1,507 | $1,676 | | Property, plant and equipment, net | $14,817 | $14,640 | | Total Assets | $19,859 | $19,987 | | Total Current Liabilities | $2,892 | $2,812 | | Long-Term Debt | $4,853 | $5,453 | | Total Liabilities | $9,204 | $9,617 | | Total Shareholders' Equity | $10,655 | $10,370 | Condensed Consolidated Statement of Cash Flows Q3 2024 cash from operating activities increased to $1.02 billion, with significant cash used in investing and financing activities Q3 & Nine Months 2024 Cash Flow Summary (US$ millions) | Activity | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Cash From Operating Activities | $1,022 | $906 | $2,701 | $2,805 | | Cash Used in Investing Activities | $(516) | $(854) | $(1,918) | $(4,725) | | Cash Used in Financing Activities | $(453) | $(101) | $(727) | $1,921 | | Increase (Decrease) in Cash | $51 | $(49) | $56 | $(2) | Interim Supplemental Information (unaudited) This section provides detailed interim financial and operating data, including key metrics, production volumes, and capital expenditures by segment and play Financial Summary & Metrics This section summarizes key financial results and strength indicators, including Q3 2024 adjusted earnings of $489 million and stable debt metrics Q3 & YTD 2024 Financial Summary (US$ millions) | Metric | Q3 2024 | YTD 2024 | | :--- | :--- | :--- | | Net Earnings (Loss) | $507 | $1,185 | | Adjusted Earnings | $489 | $1,209 | | Cash Flow | $978 | $3,038 | Financial Metrics | Metric | YTD 2024 | Year 2023 | | :--- | :--- | :--- | | Debt to Capitalization | 36% | 36% | | Debt to Adjusted Capitalization | 24% | 24% | | Debt to EBITDA | 1.1x | 1.2x | Operating Summary This section details Q3 2024 production volumes, which increased to 592.6 MBOE/d, and drilling activities focused on the Permian basin Production Volumes Total Q3 2024 production reached 592.6 MBOE/d, with USA Operations contributing 348.0 MBOE/d and Canadian Operations 244.6 MBOE/d Q3 2024 Average Production Volumes | Product | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Oil (Mbbls/d) | 168.4 | 170.9 | | Oil & NGLs (Mbbls/d) | 305.0 | 300.9 | | Natural Gas (MMcf/d) | 1,725 | 1,625 | | Total (MBOE/d) | 592.6 | 571.8 | Q3 2024 Average Production by Segment (MBOE/d) | Segment | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | USA Operations | 348.0 | 338.5 | | Canadian Operations | 244.6 | 233.3 | | Total | 592.6 | 571.8 | Drilling and Completion Activity In Q3 2024, the company drilled 69 net wells and completed 63 net wells, primarily in the Permian basin Q3 2024 Drilling & Completions (Net Wells) | Activity | Permian | Anadarko | Uinta | Montney | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Wells Drilled | 50 | 7 | 0 | 12 | 69 | | Wells on Production | 32 | 9 | 11 | 11 | 63 | Financial & Operating Details This section details segment-level financial performance, including revenues, realized prices, netbacks, and capital expenditures, with a focus on USA Operations Revenues and Realized Prices Q3 2024 revenues before hedging were $1.38 billion for USA Operations and $391 million for Canadian Operations, with a total realized price of $32.41/BOE Q3 2024 Revenues (US$ millions) | Segment | Revenues (excl. hedging) | Realized Hedging Gains | | :--- | :--- | :--- | | USA Operations | $1,376 | $44 | | Canadian Operations | $391 | $53 | Q3 2024 Realized Prices ($/BOE) | Metric | USA Operations | Canadian Operations | Total Operations | | :--- | :--- | :--- | :--- | | Price (excl. hedging) | $42.97 | $17.39 | $32.41 | | Price (incl. hedging) | $44.32 | $19.71 | $34.17 | Per-Unit Results (Netbacks) Total operations netback before hedging was $19.37/BOE in Q3 2024, with USA Operations achieving a higher netback of $30.38/BOE Q3 2024 Netback (US$/BOE, excl. hedging) | Segment | Price | Costs* | Netback | | :--- | :--- | :--- | :--- | | USA Operations | $42.97 | $12.59 | $30.38 | | Canadian Operations | $17.39 | $13.70 | $3.69 | | Total Operations | $32.41 | $13.04 | $19.37 | - *Costs include production/mineral taxes, transportation/processing, and operating expenses13 Capital Expenditures Total Q3 2024 capital expenditures were $538 million, primarily allocated to USA Operations, with $374 million directed to the Permian basin Q3 2024 Capital Expenditures (US$ millions) | Area | Capital Expenditure | | :--- | :--- | | USA - Permian | $374 | | USA - Anadarko | $54 | | USA - Uinta | $26 | | Total USA Operations | $457 | | Total Canadian Operations | $80 | | Total Capital Expenditures | $538 | Results by Play This section details Q3 2024 production and capital expenditure by key operational play, highlighting Permian and Montney contributions Q3 2024 Production by Key Play (MBOE/d) | Play | Oil & NGLs (Mbbls/d) | Natural Gas (MMcf/d) | Total (MBOE/d) | | :--- | :--- | :--- | :--- | | Permian | 166.6 | 243 | 207.3 | | Anadarko | 59.1 | 264 | 103.1 | | Uinta | 31.4 | 33 | 36.8 | | Montney | 47.5 | 1,182 | 244.5 | Non-GAAP Definitions and Reconciliations (unaudited) This section provides definitions and reconciliations for key non-GAAP financial measures, including cash flow, adjusted earnings, and debt metrics Key Non-GAAP Measures This section defines and reconciles key non-GAAP metrics, including Q3 2024 Non-GAAP Cash Flow of $978 million and Adjusted Earnings of $489 million - Non-GAAP Cash Flow is defined as cash from operating activities excluding net change in other assets and liabilities, and net change in non-cash working capital. Management believes it is a useful measure of operating and financial performance24 Q3 2024 Non-GAAP Cash Flow Reconciliation (US$ millions) | Metric | Amount | | :--- | :--- | | Cash from Operating Activities (GAAP) | $1,022 | | Less: Net change in other assets/liabilities | $19 | | Less: Net change in non-cash working capital | $25 | | Non-GAAP Cash Flow | $978 | | Less: Capital expenditures | $538 | | Non-GAAP Free Cash Flow | $440 | Q3 2024 Non-GAAP Adjusted Earnings Reconciliation (US$ millions) | Metric | Amount | | :--- | :--- | | Net Earnings Before Income Tax (GAAP) | $558 | | Unrealized gain on risk management | $(31) | | Non-operating foreign exchange loss | $16 | | Adjusted Earnings Before Income Tax | $543 | | Income tax expense (recovery) | $54 | | Non-GAAP Adjusted Earnings | $489 | Debt Metrics and Reconciliations This section explains and calculates non-GAAP debt metrics, showing a Q3 2024 Debt to Capitalization ratio of 36% and Debt to Adjusted EBITDA of 1.2x - Debt to Adjusted Capitalization is a covenant metric under the company's credit facilities, which requires the ratio to be less than 60%28 Trailing 12-Month Debt to Adjusted EBITDA (Leverage Ratio) | Metric | Amount (US$ millions) | | :--- | :--- | | Long-Term Debt, Including Current Portion | $5,877 | | Adjusted EBITDA (Trailing 12-Months) | $4,820 | | Debt to Adjusted EBITDA (times) | 1.2x | Netback Calculation This section provides a detailed reconciliation of the Netback metric, showing a Q3 2024 total operations netback of $19.31 per BOE - Netback is a common oil and gas metric used to measure operating performance on a per-unit basis. It is calculated using upstream product revenues less costs associated with delivering the product to market (production taxes, transportation, and operating expenses)34 Q3 2024 Total Operations Netback Calculation (US$/BOE) | Metric | Amount | | :--- | :--- | | Price | $32.40 | | Less: Production, mineral and other taxes | $1.58 | | Less: Transportation and processing | $7.32 | | Less: Operating | $4.20 | | Netback | $19.31 |