Ovintiv Inc. (NYSE: OVV) (TSX: OVV) has announced a definitive agreement to acquire all outstanding shares of NuVista Energy Ltd. (TSX: NVA) in a cash-and-stock transaction valued at approximately $2.7 billion (C$3.8 billion), including C$300 million in net debt and Ovintiv’s existing 9.6% ownership stake in NuVista. The deal, priced at an average of about C$17.80 per NuVista share, will add roughly 140,000 net acres—70% undeveloped—and 100 thousand barrels of oil equivalent per day (MBOE/d) in Alberta’s oil-rich Montney formation, significantly expanding Ovintiv’s core footprint in the region.
The acquisition is expected to contribute approximately 930 total net well locations, $100 million in annual synergies, and immediate Non-GAAP Free Cash Flow accretion of about 10%. President and CEO Brendan McCracken emphasized that the acquisition delivers “top decile rate of return assets in the heart of the Montney oil window at an attractive price,” citing NuVista’s strong well performance, strategic infrastructure, and gas diversification as key benefits. The transaction underscores Ovintiv’s commitment to high-quality, low-cost assets in the Montney, a premier North American resource play.
Ovintiv plans to fund the cash portion through existing liquidity and a term loan. The company will temporarily pause share buybacks for two quarters while maintaining its base dividend, signaling a focus on near-term debt reduction. Additionally, Ovintiv announced plans to divest its Anadarko Basin assets in 2026, using proceeds to accelerate debt reduction toward a Non-GAAP Net Debt target of $4 billion by year-end 2026. This strategic move aligns with Ovintiv’s long-term goal of strengthening its balance sheet and focusing on core assets.
The deal is subject to regulatory approvals and is expected to close in the first quarter of 2025. For more details, the full press release is available at https://ibn.fm/BdKGc.
