We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ovintiv (OVV) to Sell Eagle Ford Asset to Validus Energy for $880M
Read MoreHide Full Article
Ovintiv Inc. (OVV - Free Report) recently inked a deal with Validus Energy for the sale of its Eagle Ford acreage at a deal value of $880 million.
The company CEO Doug Suttles believes that this divestment continues its proven record of optimizing non-core asset value. He further added, "Proceeds will significantly accelerate the achievement of our debt reduction target and allow us to pay off near-term debt maturities with cash on hand. Our 2021 outlook is strong and we expect to generate significant free cash flow for the fourth consecutive year."
In the last reported quarter, the company set a target to trim its total debt to $4.5 billion by 2022 end, indicating a 35% reduction from the current levels. Also, the plan included generating $1 billion from asset divestments. However, with the recent divestiture of Eagle Ford asset, the company now expects year-end debt for 2021 to be less than $5 billion, assuming $50 per barrel of crude oil and $2.75 per MMBtu of natural gas for the rest of the year. It also aims to reach its debt decreasing goal of $4.5 billion by the first part of next year rather than the end of 2022 as was previously forecast.
Over the recent years, many U.S. shale producers including Ovintiv have been producing below-average returns. Also, the company’s acquisition of Newfield Exploration shook its shareholder confidence as the takeover induced a $7-billion debt and a high executive pay.
However, Ovintiv has managed to exceed its divestiture target with the sell of over $1.1 billion worth of assets so far this year, including the Eagle Ford and the previously declared Duvernay assets sale for roughly $263 million comprising approximately $12 million in contingency payments based on future commodity prices. The agreements are scheduled to close in the second quarter, subject to customary closing conditions, regulatory approvals, and other changes.
Meanwhile, following the winter storms in Texas and Oklahoma, Ovintiv's production was quickly restored to full rates while production in the remainder of the company's multi-basin portfolio remained unperturbed. Hence, only the first quarter of 2021 was affected by the storms for which the crude and condensate volumes are anticipated in the 196,000-200,000 barrels per day (bpd) range. For the ongoing month, more than 205,000 barrels per day of output is projected.
Depending on the expected divestiture closing dates in the second quarter, crude oil and condensate volumes are projected to average 190,000 barrels per day in 2021 including 10,000 bpd from the sold assets. In the meantime, Ovintiv reiterated its 2021 capital expenditure projection at $1.5 billion.
Company Profile
Ovintiv, formerly known as Encana, engages in exploration, development, production and marketing of natural gas, oil and natural gas liquids. The company holds principal assets in Anadarko Basin located in Western and Central Oklahoma, the Permian Basin located in Western Texas and South Eastern New Mexico, Midland Basin in Texas and the Montney Basin in western Canada.
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Ovintiv (OVV) to Sell Eagle Ford Asset to Validus Energy for $880M
Ovintiv Inc. (OVV - Free Report) recently inked a deal with Validus Energy for the sale of its Eagle Ford acreage at a deal value of $880 million.
The company CEO Doug Suttles believes that this divestment continues its proven record of optimizing non-core asset value. He further added, "Proceeds will significantly accelerate the achievement of our debt reduction target and allow us to pay off near-term debt maturities with cash on hand. Our 2021 outlook is strong and we expect to generate significant free cash flow for the fourth consecutive year."
In the last reported quarter, the company set a target to trim its total debt to $4.5 billion by 2022 end, indicating a 35% reduction from the current levels. Also, the plan included generating $1 billion from asset divestments. However, with the recent divestiture of Eagle Ford asset, the company now expects year-end debt for 2021 to be less than $5 billion, assuming $50 per barrel of crude oil and $2.75 per MMBtu of natural gas for the rest of the year. It also aims to reach its debt decreasing goal of $4.5 billion by the first part of next year rather than the end of 2022 as was previously forecast.
Over the recent years, many U.S. shale producers including Ovintiv have been producing below-average returns. Also, the company’s acquisition of Newfield Exploration shook its shareholder confidence as the takeover induced a $7-billion debt and a high executive pay.
However, Ovintiv has managed to exceed its divestiture target with the sell of over $1.1 billion worth of assets so far this year, including the Eagle Ford and the previously declared Duvernay assets sale for roughly $263 million comprising approximately $12 million in contingency payments based on future commodity prices. The agreements are scheduled to close in the second quarter, subject to customary closing conditions, regulatory approvals, and other changes.
Meanwhile, following the winter storms in Texas and Oklahoma, Ovintiv's production was quickly restored to full rates while production in the remainder of the company's multi-basin portfolio remained unperturbed. Hence, only the first quarter of 2021 was affected by the storms for which the crude and condensate volumes are anticipated in the 196,000-200,000 barrels per day (bpd) range. For the ongoing month, more than 205,000 barrels per day of output is projected.
Depending on the expected divestiture closing dates in the second quarter, crude oil and condensate volumes are projected to average 190,000 barrels per day in 2021 including 10,000 bpd from the sold assets. In the meantime, Ovintiv reiterated its 2021 capital expenditure projection at $1.5 billion.
Company Profile
Ovintiv, formerly known as Encana, engages in exploration, development, production and marketing of natural gas, oil and natural gas liquids. The company holds principal assets in Anadarko Basin located in Western and Central Oklahoma, the Permian Basin located in Western Texas and South Eastern New Mexico, Midland Basin in Texas and the Montney Basin in western Canada.
Zacks Rank & Key Picks
Ovintiv currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the energy space include Matador Resources Company (MTDR - Free Report) , Diamondback Energy, Inc. (FANG - Free Report) and Denbury Inc. , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>