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Ovintiv (OVV) Beats on Earnings in Q2, Increases Dividend
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Ovintiv Inc. (OVV - Free Report) recently reported second-quarter 2021 adjusted earnings per share of $1.11, beating the Zacks Consensus Estimate of $1.06. However, the year-ago bottom line was a loss of 43 cents. This upside in results can be attributed to higher commodity price realization and successful cost-control initiatives.
Even though total revenues of $1.69 billion missed the Zacks Consensus Estimate of $1.81 billion, the same improved 1.33% from the year-ago sales of $726 million.
Ovintiv’s board of directors declared a quarterly dividend of 14 cents per share for its common shareholders of record as of Sep 15, 2021, which will be paid out on Sep 30. This signifies a 50% hike in its quarterly dividend payout from its previous levels of 9.375 cents.
Production and Prices
Total second-quarter production came in at 554,600 barrels of oil equivalent per day (BOE/d) compared with 536,600 BOE/d in the prior-year period. The rise in volumes was in response to a balanced commodity mix. Natural gas production rose 3.7% year over year to 1,607 million cubic feet per day while liquids production was up 3% to 286,700 BOE/d.
Ovintiv's realized natural gas price was $2.74 per thousand cubic feet compared with the year-ago level of $2.09. Realized oil price increased to $51.27 per barrel from $39.7 in the second quarter of 2020.
Total expenses decreased to $1.8 billion from the year-ago figure of $4.8 billion. This decline is primarily attributed to lower depreciation, depletion and amortization charges.
Ovintiv’s cash from operating activities in the quarter under review summed $750 million, up from the year-ago figure of $117 million. The company's capital investments were $383 million compared with $252 million in the year-ago period.
As of June 30, Ovintiv had cash and cash equivalents worth $122 million, and a long-term debt of $4.8 billion. Its debt-to-capitalization ratio was 54.9.
The company generated non-GAAP free cash flow of $350 million.
In the second quarter, Ovintiv advanced its $4.5-billion net debt objective to 2021 end from its initial target date of 2022 end. Since the second quarter of 2020, this objective has reduced net debt by roughly $3 billion.
The company set a new net debt target of $3 billion, which it intends to meet by the end of 2023, assuming oil prices to be trending at $50 per barrel and natural gas prices at $2.75 per Mcf on the NYMEX. Ovintiv aims to accomplish this goal without funds from asset sales.
Guidance
Ovintiv reaffirms its 2021 capital expenditure at $1.5 billion. Following its assets' significant output outperformance, the company now projects crude oil and condensate volumes to average between 190,000 barrels per day (bpd) and 195,000 bpd in 2021 compared with its prior guidance of 190,000 bpd.
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Ovintiv (OVV) Beats on Earnings in Q2, Increases Dividend
Ovintiv Inc. (OVV - Free Report) recently reported second-quarter 2021 adjusted earnings per share of $1.11, beating the Zacks Consensus Estimate of $1.06. However, the year-ago bottom line was a loss of 43 cents. This upside in results can be attributed to higher commodity price realization and successful cost-control initiatives.
Even though total revenues of $1.69 billion missed the Zacks Consensus Estimate of $1.81 billion, the same improved 1.33% from the year-ago sales of $726 million.
Ovintiv’s board of directors declared a quarterly dividend of 14 cents per share for its common shareholders of record as of Sep 15, 2021, which will be paid out on Sep 30. This signifies a 50% hike in its quarterly dividend payout from its previous levels of 9.375 cents.
Production and Prices
Total second-quarter production came in at 554,600 barrels of oil equivalent per day (BOE/d) compared with 536,600 BOE/d in the prior-year period. The rise in volumes was in response to a balanced commodity mix. Natural gas production rose 3.7% year over year to 1,607 million cubic feet per day while liquids production was up 3% to 286,700 BOE/d.
Ovintiv's realized natural gas price was $2.74 per thousand cubic feet compared with the year-ago level of $2.09. Realized oil price increased to $51.27 per barrel from $39.7 in the second quarter of 2020.
Ovintiv Inc. Price, Consensus and EPS Surprise
Ovintiv Inc. price-consensus-eps-surprise-chart | Ovintiv Inc. Quote
Costs, Capex and Balance Sheet
Total expenses decreased to $1.8 billion from the year-ago figure of $4.8 billion. This decline is primarily attributed to lower depreciation, depletion and amortization charges.
Ovintiv’s cash from operating activities in the quarter under review summed $750 million, up from the year-ago figure of $117 million. The company's capital investments were $383 million compared with $252 million in the year-ago period.
As of June 30, Ovintiv had cash and cash equivalents worth $122 million, and a long-term debt of $4.8 billion. Its debt-to-capitalization ratio was 54.9.
The company generated non-GAAP free cash flow of $350 million.
In the second quarter, Ovintiv advanced its $4.5-billion net debt objective to 2021 end from its initial target date of 2022 end. Since the second quarter of 2020, this objective has reduced net debt by roughly $3 billion.
The company set a new net debt target of $3 billion, which it intends to meet by the end of 2023, assuming oil prices to be trending at $50 per barrel and natural gas prices at $2.75 per Mcf on the NYMEX. Ovintiv aims to accomplish this goal without funds from asset sales.
Guidance
Ovintiv reaffirms its 2021 capital expenditure at $1.5 billion. Following its assets' significant output outperformance, the company now projects crude oil and condensate volumes to average between 190,000 barrels per day (bpd) and 195,000 bpd in 2021 compared with its prior guidance of 190,000 bpd.
Zacks Rank & Other Key Picks
Ovintiv currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the energy space include Matador Resources Company (MTDR - Free Report) , Devon Energy Corporation (DVN - Free Report) and Continental Resources, Inc. , each presently flaunting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.