Ovintiv(US:OVV)2025-07-24 21:02Selected Financial Information 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 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 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 20242 Condensed Consolidated Statement of Comprehensive Income 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 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 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 divestitures5 - Key financing activities for the first six months of 2025 included $147 million for share repurchases and $155 million for dividend payments5 Interim Supplemental Information This section provides detailed quarterly financial and operating data, including non-GAAP measures, production volumes, and per-unit netback analysis Supplemental Financial Information 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 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) 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 202416 Supplemental Oil and Gas Operating Statistics 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 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/BOE1920 Results by Play (Production & Capital) 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 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 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 Q2 2025 Non-GAAP Cash Flow was $913 million, leading to $392 million in Free Cash Flow, with Adjusted Earnings at $265 million - Non-GAAP Cash Flow is defined as cash from operating activities excluding net change in other assets and liabilities, and net change in non-cash working capital34 - Non-GAAP Adjusted Earnings excludes items like unrealized hedging gains/losses, impairments, and non-operating foreign exchange impacts to improve comparability between periods35 Reconciliation to Non-GAAP Free Cash Flow (Q2 2025, US$ 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 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%3839 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 Q2 2025 total operations netback was $18.59/BOE, calculated from a $31.34/BOE price less production-related costs - Netback is a non-GAAP measure calculated on a BOE basis using upstream product revenues (excluding hedging), less costs for production taxes, transportation, processing, and operations46 Total Operations Netback Calculation (Q2 2025, US$/BOE) | Item | Amount | | :--- | :--- | | Price | $31.34 | | Production, mineral and other taxes | $(1.30) | | Transportation and processing | $(7.61) | | Operating | $(3.84) | | Netback | $18.59 |