Ovintiv Inc. is buying Montney property in Alberta from Paramount Assets Ltd. in an all-cash transaction valued at roughly $2.377 billion (CAD 3.325 billion).
Upon closing, the acquisition will add roughly 70,000 barrels of oil equal per day (boepd) of manufacturing, consisting of roughly 25,000 barrels per day (bpd), Ovintiv stated in a information launch.
The acquisition additionally provides 900 web 10,000-foot equal effectively places and roughly 109,000 web acres, of which roughly 80 % are undeveloped, within the core of the oil-rich Alberta Montney.
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Ovintiv stated that the property are strategically positioned close to its present operations and have entry to midstream infrastructure with obtainable capability. The Montney transaction will broaden the corporate’s premium oil and condensate stock within the play to roughly 15 years with the addition of roughly 600 premium return places and roughly 300 upside places, it remarked.
Additional, Ovintiv additionally entered right into a definitive settlement to promote considerably all of its Uinta Basin property positioned in Utah, to FourPoint Assets, LLC, for complete money proceeds of roughly $2.0 billion.
The divestiture consists of roughly 126 thousand web acres of largely undeveloped land. Ovintiv’s third-quarter Uinta oil and condensate manufacturing was roughly 29,000 bpd.
The efficient date of the acquisition of the Montney property and the Uinta disposition is October 1, 2024. The transactions, that are anticipated to shut by the top of the primary quarter of 2025, are topic to the satisfaction of customary closing situations and shutting changes.
“We’re buying prime decile charge of return property within the coronary heart of the Montney oil window,” Ovintiv President and CEO, Brendan McCracken stated. “This acquisition is the focused results of our in-depth technical and industrial evaluation of the basin to determine the very best worth undeveloped oil useful resource. The acquired property have demonstrated main effectively efficiency and are a pure match with our working benefit and our current acreage. The property include ample midstream capability, unlocking optionality for mid-single-digit development in our Montney oil and condensate volumes. The Montney is the second largest undeveloped oil useful resource in North America, and with this acquisition, we’ve got solidified our place because the premier operator within the play”.
McCracken added, “The sale of our Uinta place is aligned with our monitor file of unlocking important worth from our property whereas focusing our portfolio and lengthening stock runway in our core areas. We’re grateful for the arduous work and dedication of our Uinta crew”.
Ovintiv plans to fund the Montney acquisition by means of a mixture of money proceeds acquired from the pending sale of the Uinta property, money readily available, in addition to borrowings below the corporate’s credit score facility and/or momentary financing.
Following the closing of the transactions, Ovintiv stated it plans to run a mean of three rigs throughout its mixed Montney acreage, 5 rigs on its Permian acreage and one to 2 rigs on its Anadarko acreage. Roughly 85 to 90 % of 2025 complete capital is anticipated to be allotted to the Permian and the Montney.
Ovintiv stated it expects to ship 2025 complete common oil and condensate manufacturing volumes of roughly 205,000 bpd and complete volumes of roughly 620,000 boepd, with capital funding of roughly $2.2 billion, or about $100 million lower than it beforehand anticipated.
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