Ovintiv to acquire NuVista Energy in $2.7bn deal

Core Viewpoint - Ovintiv has agreed to acquire NuVista Energy in a cash and stock transaction valued at approximately $2.7 billion (C$3.8 billion), enhancing its asset portfolio in the Montney oil region [1][2] Group 1: Transaction Details - The acquisition involves purchasing all outstanding common shares of NuVista not already owned by Ovintiv at C$18.00 per share, with an effective blended price of roughly C$17.80 per share [1][2] - The payment structure will be 50% in cash and 50% in Ovintiv common stock, and NuVista shareholders will own about 10.6% of the combined company post-transaction [2] - The deal has received unanimous approval from both companies' boards and is expected to close by the end of Q1 2026, pending necessary approvals [2] Group 2: Strategic Rationale - The acquisition is expected to boost Ovintiv's free cash flow per share by acquiring high-return assets in the Montney oil window at an attractive price [3] - Approximately 70% of the acquired assets are undeveloped, which aligns well with Ovintiv's existing acreage and infrastructure [4] - The acquisition adds around 930 net 10,000ft equivalent well locations and 140,000 net acres in Alberta Montney, enhancing the company's operational footprint [5] Group 3: Financing and Future Plans - To finance the acquisition, Ovintiv has paused its share buyback program for two quarters, while maintaining its base dividend [5] - The company plans to divest its Anadarko asset by the end of 2026, with proceeds aimed at debt reduction [5] - Ovintiv's management emphasizes that this acquisition, along with ongoing inventory additions, positions investors in top-tier resources with attractive full-cycle returns [7]