- Price
- $69.33
- Fair value
- $80.00
- Discount
- 13.3%
- Uncertainty
- High
- LSEG rating
- 1.96
- Moat
- None
- Next earnings
- 2026-11-03
- Next earnings is estimate
- No
- Company name
- Ovintiv
- Sector
- Oil & gas exploration and production
- About
- Ovintiv produces oil, natural gas liquids (NGLs) and natural gas in two main areas: the Permian Basin in Texas and the Montney in Alberta and British Columbia, Canada. It is based in Denver and its shares trade in New York and Toronto. Production averaged 615 thousand barrels of oil equivalent per day in Q2 2026, with 206 thousand barrels per day of oil and condensate. In 2026, Ovintiv bought NuVista Energy, a Montney producer, for about $2.8 billion in cash and shares, and it sold its Anadarko assets in Oklahoma for $3.0 billion. It returns 50% to 100% of its annual free cash flow to shareholders through dividends and share buybacks.
- Thesis
- The market prices Ovintiv for the risk of lower oil prices and for weak Canadian natural gas prices. Its realized oil and condensate price before hedges was $97.50 per barrel in Q2 2026, which is high by historical standards, so investors expect free cash flow to fall when oil prices fall. Its realized natural gas price was only $1.71 per thousand cubic feet, 59% of the NYMEX price, because most of its gas comes from the Montney in Canada. The large changes to the portfolio in 2026, the NuVista purchase and the Anadarko sale, also make the results harder to compare. For the gap to close, three things must be true. Ovintiv must meet its 2026 guidance of 630 to 645 thousand barrels of oil equivalent per day for capital of $2.25 billion to $2.35 billion. It must return more than 60% of 2026 free cash flow to shareholders, as it expects, and keep net debt near 0.6 times adjusted EBITDA. Its new drilling locations in the Permian and the Montney must keep its well costs low and its inventory deep. The Q3 2026 report on November 3, 2026 gives the next test. The 2027 capital plan, expected with the Q4 2026 report in February 2027, shows the plan for next year. If these checks pass, the gap can close over the next three to five quarters. The main reason it may not close is a fall in oil prices, which Ovintiv cannot control.
- Risks
- Results depend on oil and natural gas prices, which Ovintiv cannot control. The realized oil price before hedges was $97.50 per barrel in Q2 2026. A large fall in oil prices reduces free cash flow, share buybacks and the value of its reserves.
Most of Ovintiv's natural gas comes from Canada, where prices are low. Its realized gas price was 59% of NYMEX in Q2 2026. Pipeline limits or more supply can keep Canadian gas prices low.
Ovintiv must replace the oil and gas it produces. It depends on new drilling locations, small land deals and low well costs. Weaker wells or higher costs reduce returns.
Ovintiv operates in the United States and Canada. Changes in tariffs, trade rules or environmental rules in either country can increase costs or limit sales.
- Balance sheet
- Cash: $700M
Debt: $3.7B
Net debt: $3.0B
Net debt / EBITDA: 0.6× (low)
Undrawn credit line: $3.5B
Debt due within 12 months: $0.0M
Ovintiv cut its debt in 2026 with the money from the Anadarko sale. Long-term debt was $3.70 billion at June 30, 2026, down from $5.20 billion at December 31, 2025, and no debt was due within one year. Cash was $700 million. Net debt was $2.995 billion, or about 0.6 times adjusted EBITDA, as the company states it. Total liquidity was about $4.4 billion, with $3.5 billion of available credit facilities, $159 million of uncommitted demand lines and the cash. Ovintiv redeemed $700 million of notes due 2028 on April 20, 2026. Its policy is to return 50% to 100% of annual free cash flow to shareholders. The figures leave out interest cover because the first half of 2026 included losses on the Anadarko sale.
As of 2026-06-30.
- Checkpoints
- Nov 3, 2026: Q3 2026 results: production and shareholder returns. Pending. Watch: Production within the Q3 guidance of 615 to 640 thousand barrels of oil equivalent per day and higher buybacks pass; lower production or lower shareholder returns fail.
Feb 2027 (estimate): Q4 2026 results: 2027 capital plan. Pending. Watch: A 2027 plan with flat or lower capital and steady oil production passes; higher capital for the same production fails.
- Recent events
- 2026-10-01: Ovintiv received approval from the Toronto Stock Exchange to renew its normal course issuer bid. It can buy back up to 26,973,037 shares from October 5, 2026 to October 4, 2027.
2026-08-26: Ovintiv said that it had made more than 60 small land deals in 2026 to add about 41,000 net acres in the Permian and the Montney for about $460 million. The deals add 240 net well locations, and with its own inventory work it added about 500 locations in 2026.
2026-07-23: Ovintiv reported Q2 2026 results. Net earnings were $456 million, or $1.62 per share, after a $337 million loss on the Anadarko sale. Cash from operations was $1.6 billion and free cash flow was $682 million. Production of 615 thousand barrels of oil equivalent per day beat the high end of guidance. Ovintiv bought back $345 million of shares and raised its 2026 production guidance with no change to capital.
2026-04-20: Ovintiv redeemed all $700 million of its 5.650% notes due 2028. It expects interest savings of about $40 million a year.
2026-04-09: Ovintiv closed the sale of its Anadarko assets in Oklahoma for $3.0 billion in cash. It used the money to reduce debt, and the CEO said that the sale reached the company's debt target.
2026-02-03: Ovintiv completed the purchase of NuVista Energy, a Montney producer, in a cash and stock deal worth about $2.8 billion. It issued about 30.1 million shares and paid about $1.2 billion in cash.