OVV - Earnings call transcript Q2 2020

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to Ovintiv's 2020 Second Quarter Results Conference Call.

As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. Instructions]. [Operator that the may expressed advised or be conference without rebroadcast consent this be not call recorded Please of Ovintiv. like from would to now to conference the I call Steve Campbell Investor Relations. turn over Mr. Please go ahead, Campbell.

Steve Campbell

in statements operator, our take This today disclosure are note SEDAR advisory call. our available of you, quarter the website slides our forward-looking webcast call and our EDGAR. the is to and Thank we second at everyone which at of conference filed on and and being the end slides welcome documents Ovintiv.com. regarding Please with

be Following questions to and today’s prepared today. the call I'll us to our remarks, we your allows one this your will limit questions. now Doug question turn time get always, to Suttles. to available Please over to your specific of CEO, as follow-up one take more

Doug Suttles

at you Thanks, in say delivered have typical the quarter To year, Steve, was. dialing impressive Clearly a whole What for our be it first all normal if I We good wasn't quarter, performance. I safety morning. update. importantly, would What did we second least and it list the accomplish? that it most hope not. we appreciate mid-year in and the three represented begin, was completed months. outstanding but Well, to or

since we June. with COVID our the office risks in effectively the early manage workforce Second, vast majority back of

realigned real in drive capital in being a highlighted sector. the delivered We that of results to of no maybe We that been operating and our in penalties, dynamic quarter. have further our strategy with beginning the strong workforce to cash organizational view environment, transmitted spending future and shut-in revenues our flow. We activity virus enhanced reduced protocols highly cash or Our generated either the created the free rapidly time probably unique and efficiency. the field zero effective. given financial had We we since fact of offices We've pandemic. the the by locations instances

continue thrive We set efficiency in our six over quarter business happens. records flow balance capital with efficiency. reduction. the as development how highlighted of which six will that to our programs made to we've and shows scenario, our flow We next resiliency stay-flat industry-leading cost sheet the excess clear a to positioned cash quarters and we're the And it recovery debt very through

who world to we business have how headed. performing and resiliency recognize where members we will flexibility, joined the other accomplishments with to was of I of your in. by team your I'm proud I able help culture built describe being dynamic to But that purposely fully are Our could and few last we our be months. and the we're today say our not over organization more importance respond to as live our of the

the uncertainty As you like live to everyone with stress and else that created. incredible COVID-XX has had

So thank you.

During in rapidly we're performance one more cash second outlook of and XXXX. for quarter. the had operating our industry, we adjusted providing than and $XX the stronger toughest in times free strong a today We million very of generated

cash shared lower provides in scenario costs last XXXX and the with to high Importantly, generating we drive the momentum we're quarter. efficiencies you confidence

the Our XX% XX% down XXXX were now to core averages. our XXXX across now compared X% down mid-year. Well plays well at cost when three after costs quarter, are first and

to of line sight We additional near-term savings. have

are of in result are Greg moment. a durable these a our majority You'll more hear on savings team's constant innovation. and The of this from

quarters the have next achieved objective six We lower will by confidence to costs our XX% that extremely very over soon. high be well

quarter. and that to did like not into free the maintain guidance, flexibility reduce in cash our progress Although we and built our such XXXX costs, generate scale business, formal XXXX we've can second showcase the we scenarios and our ongoing

it pandemic, intact. Note that hit appropriate we on two nearly plan. And is strategy our to the ownership where generating is free tripled in has our is impacts from past scale. while the started. given that cash, Our But maintaining button, the clearly focusing from pause months, the passive

product the than debt that today over will to see, we all the year, flows which this will to clearly to Even U.S. additional of to earlier are additional excess quarters shareholders, important drilling. indices regardless much for and cash move addition debt And go commodity flow our into This our Domicile lastly, reside. Russell. cash a reduction. we're that continue border the not direct the As higher all six good next you'll we move prices like if of to reduction side was committing of currently and notice you that

condensate Our that second modest $XX and of oil mentioning with screens scenarios raised of price. XXXX as multi-basement best scenario; billion We're fourth stay-flat at track total original in scenario quarter ways generates CapEx inclusive capital dividend there our achievements free gains $X.X the behind for note production. $X.X are have to average cash investment crude XXX,XXX of our slide our efficiency improvements efficiency of Capital a key and lowered portfolio offers we that a quarter an multiple XXXX our day strengthened well one additional barrels are on our Maintaining today. This But and today. scenario. hand group ingredients peer billion of the some also to makes worth win. in

cash will improve in our range decline that adding and by production XXXX, expect about We the X% flow. to XX% material base low

move dry gas million quarters. six note debt reduction an or oil the incremental significantly commodity additional bottom Stronger every gas slide. of oil more $XXX Because our year, We in and production, in $X.XX an our of significantly. next this $XXX price. $XXX generate Our flow. gas $X could estimated down cash legacy natural cash a move over flow year by this cash sensitivity yields in of savings accelerate for additional than prices moves an plans increased next price our legacy the the please costs price at are million of at million as $XXX shown million cost And take

In fact, generating current would have strip us cash flow significant next excess the year.

four for buckets. next key six clear the and under priorities categorized can are these Our crystal quarters be

debt is reduction. foremost and and financial First strength

preserving have We ensure in sheet focus flow, cash and capital the critical further cost sheet of to to to to strong reduction. with free we're to times maintain We're push confident liquidity is as strengthening we we our adjustments on deep fee ability balance made cash generating our continue balance committed like and frontier through a efficiencies structure. we flow; our in volatile free liquidity. debt generate as today, business This important

next and and ways innovatively Our new focused efficiencies critical six will enhancement quarters. on durable be creating efforts over margin the

scale and XXX,XXX a our any business their a average important Ensuring numerous crude with can't the in team. our us able condensate. frac of for is to a of safety to spreads. of achieve investments, return, barrels But and the our as for maintaining safety activity return. that we us the to ran scenarios maintain will is products our recovery allow We results. it deeply know We of also levels, will and managed We demand those position use debt levels, day participate health and production fourth without quarter significant field, we've our call to our to optimize declines, global dropping this Corey and is our were our to our voluntary next and work. costs, workforce and factors. now of six in of held discuss quickly quarter and for learnings all second Obviously, product reacted I'll This value. the a we shared quarters our two-thirds rigs safely to of production you turn the of our financial by over the host the impacted scenario COVID-XX shut-ins, of other return office. that in We to to protect the health scale was

Corey Code

Thanks, Doug.

delivered the outlook second the we half We very just very led challenging time. which ability the execution a solid as during to again a performed demonstrated second stronger of the issued Our quarter, operator business world-class our year. well during for and

second were guidance capital just Our over of range. million, very $XXX the our quarter low-end investments

performance, quarter. $X.X the low-end outstanding XXXX $X.X to our billion, to billion scenario billion addition range we capital In quarter to capital last highlighted the revised of $X.X second

XXX,XXX per and second commodity shut-ins to was XXX,XXX per Reported production oil by volatility. XXX,XXX BOEs due When our and for of and oil BOEs reported day Our remain the per voluntary of in and one largest have been the barrels condensate. sector day price day, today. production of XXX,XXX impacted condensate. independent production quarter producers was condensate normalizing barrels per We would day shut-ins, extreme and oil

and and optionality. We you per cash challenging decisions period. the and We exclude flow generated performance continued our made investments we second second efficiencies liquidity. operational $X.XX quarter, the a strong reduce ensure flow free by we early Through if to share, Our right cash costs. quarter $XXX one-time flexibility proven delivered million of preserve or once and again performance our during organization's capital demonstrate are very

equivalent the throughout oil and total billion terms. credit July down favorable Our continued XXXX of cost At in I've had we the locked company. were mentioned at as $X quarter-end, facilities. X% barrel before, our quarter-over-quarter liquidity cost under are these And in efforts until per reduction reflect

our While our second in items costs was to offshore facility. our $XX associated net debt non-recurring and the and largely Panuke one-time a We abandonment million this the with following items. as workforce of due increased such the restructuring during quarter, expected million wells $XX Deep reduction had few

safely it our happy few As The shore. to to over slowdown decommissioning report, remaining in is the to know, second the we've delivered last been activity has quarter. been related you I'm this a significant owing and now payable platform accounts quarters decrease in removed and item to

to fourth to the our turn next insights as I'll our and expect impact over around We quarter. scenarios activity to quarters. return this reverse the six call levels we provide third additional back to normal over Brendan

Brendan McCracken

Thanks, Corey.

confidence cash the outstanding and are direction. have to our strengthened this us production for capital the Capital all we've moving reductions, lower next estimate our results half right of This scenario cost has in further the increase in six the quarters. caused XXXX efficiency, first our for outlined and year. through Our production,

For frac $X.X our to resulting condensate excellence the from quarter billion. mark year performance This that XXX,XXX budget. is our production holiday, a rate lower second exit of continues efficiency our These of operational expect and our the and second fourth less Due oil barrels a again we third peers. day a will rate. differentiate half the data of a capital trough invest expenditure to average we to quarter $XXX our year. top-tier prove points million billion beginning many than about full-year of $X raised Today, to quarter nearly in for us XXXX,

to prepare the resume average fourth third our barrels a we quarter. As completions will oil production XXX,XXX quarter, and condensate the day in in

program. just not means it enhanced is today real It cash in This our prices and of we low stay look generate is to how we can big business. efficient repeatedly we XXXX, scenario of level where they if ducks; because our by out a As are a can and batch obviously gives or important flow insight our it free have reflects at generate carrying from cash prices, low scale business free very made hold higher. commodity into move even lot flow a

Greg hear cash of cost three turn this but I'll savings. year, scenario now You'll over our already into capital half built XXXX more from midway the Greg. about it the we've and quarters nearly savings to achieved through of

Greg Givens

Thank you, Brendan.

costs there. savings to are more flow. Reduced expect about from results. stone million $XXX cash of derived to being than estimate. are and halfway G&A, operating we're leaving and in lower team, more unturned savings than other At in second original double through no mid-year work this quarter the We enhance hard our year. midstream cost cash the initiatives optimize and That's coming deliver These margin

oil our and prices are majority More durable change of strengthen. savings as subject not importantly, the to

to to some to an reductions among costs, For again from we We and quarters. expect incremental for well second our quarter. updated The accomplishments. the posted six positive We savings deck first legacy outlook our hard items. reduced teams see million is And the ingenuity earnings midstream and XXXX, from cost other cost in lower completed cash today. we are lower in commitments, the done as slide of $XXX quarter really benefit G&A, the significant it difference reflect their our getting latest next a work making

posted we at less XX% continue $XXX,XXX cost can you right, Montney. In see, drive acquisition. the active areas. Anadarko, upper meaningfully and We our Permian time Newfield's go-forward $XXX,XXX costs in now As well complete, less down our in the than are table our the drill, updated cost equip our in the the of to cost and in lower the average

first were another costs quarter our second XX% Our average than lower XXXX gain showing quarter. from

that today each of pacesetter We high XXXX at our least our have have XXXX and less results the actuals. in set plays XX% costs new confidence be will than

costs. Simul-Frac These to unique view are areas innovation in given better. our in reductions $XXX,XXX continues $XXX,XXX saving as part cost the per changes, the well due service and drilling better durable. we not our Permian, our highly future. large cycles performance through completions plan multi-basin process other to are In get Importantly, or apply edge leading simply In Simul-Fracs well Anadarko, savings we our lower to our to the and portfolio, and in near

second we the to and savings almost the costs our In Simul-Frac rapidly team to initiatives the basin. efficiency We above facilities in down best-in-class per savings frontier, team across and to push in dedicated and continues averaging leader well a the pump historical rates are completed as the The prime completion This design optimizing quarter down return. achieved feet Anadarko Montney, our record position company. and In the over and over push collaborative These of now as are since XX,XXX significantly capital cost The have sourcing with facilities the drilling the well enhance will XX% cost day. by hours time innovative such water performance. of and our efforts the an basin set continue total, disposal. are clear driven for facilities Springer in our from XX solidifying is of results multi-disciplined scoop, additional per scope completion XXXX. day,

perform Doug, best, our the has commend adapted instituting have moment all COVID-XX the safe while return This activity to out. some year. results Doug take generate of created to accomplished. we the in and the volatility lower let turn team new the a to work our Recent protocols to will and differentiated our Before unique I great stay to second now I will the oil prices at as But second agility related the to to challenges call this led in back for call me us. back quarter, in their office and teams to of in field. the close performance strong turn half completion to and persevered

Doug Suttles

Greg. thanks, Yes,

how are industry is more Let that some positioned discussed me comment now on with narratives frequently big Ovintiv today.

Across less land. located is in our our one are core our and scale X% the three we efficiently of as have our We business; condensate crude the holding assets of largest position producers than in federal acreage sector. on

We have cash of quarters track toughest free to the superior record arguably returning both shareholders. in one a execution quarter, has $XX generated and over our cash We multi-year seen. of million in the industry of second

generated Over our we cash. the are quarters, how last free four This is of to business. committed we running $XXX million

provides portfolio ways multiple with win. multi-basin Our to shareholders

in strategic on condensate our of clearly will X.X and focus is particular, day gas Although do and strengthening we prices. and benefit gas liquids crude BCF natural from per produce

takeaways from up here it the key opening Before to your just today. are question,

we've highlighted thought progress underpinning put into you've our hopefully First, confidence that scenario, you is we and have we today. lot our know case. the seen a And which in scale how stay-flat important we've made business to it should that maintain of

capital Simply safely we is performance record a are of our Our our of and continuation new dollars stretch and more track to efficiency. deliver ways put, for finding less. excellence

Our billion, increased range. low-end be now crude $X.X the production the of and fourth XXXX generated condensate will previous capital quarter for

provides balance that a reducing the multi-basin and preserving us in is the on massive options portfolio, structure we sheet, a will liquidity, strong debt. asset laser place don't are maintaining know tomorrow. and that with for flexibility our capital put have. today the And make importance an our of best strong all us right finally, coupled focused and to with When decisions our many culture using Third, options we're

excess six be will flow over the go reducing to all to clear, Just next quarters debt. cash

world is the know Although that The timing needs demand of it uncertain, our we oil recovery will products. recover.

love and questions. modern to Our ahead. your possible on prepared to positioned concludes make be take intend we'd road products remarks we life now and thrive our the That to

Operator

Thank you, sir. [Operator Instructions].

begin Brian who Singer Goldman go and ahead. to now session Sachs. the question-and-answer will first Please We caller is the go at

Brian Singer

of free and and net you I more flow are is ask it's or Thank the for where on of those debt you that, net quarters. just return and even to what is next leverage debt capital going Doug, more is clear of philosophically sufficient or maybe thought where beyond what sufficient over would cash again quarters, Ovintiv, the And six drill leverage incremental consider you shareholders? good follow-up I'd very where six you a morning.

Doug Suttles

Yes, doing long around Brian, ago, that a leverage ratio you're couple if targeting at been of over years been get just this a like we I thanks to for go of is you pricing back to target off that this all our we'll right, well. see X.X time what have hope of dropping there. something talking time we room of suspect was We've and we've number some conversations and said that obviously back to about a mid-cycle year the through some go

the right few comments to remarks strategy. that be taking generation we've over a our said to go. and a way and it's still appropriate pause; a back a was been Clearly, for for some made the products run has demand shareholders oil the the with strategy of One intact well was hit. in but still company. way that That advocate gas obviously the to we distributed is is It's take quite months, recovered time. what an cash last our I quite strong long the right would had modest We free growth to it's believe

actually can sheet. flow that, we flat at six cash and would pay go the can hold any we've significant generate and next dividend cash which the balance course prices of to we we generate oil, all that our free the for and $XX above and So highlighted quarters, business

to go to we investor. at that we where and modest XXXX, But against strategy with to of that to return cash we're objective. we strategy. our point And As returned the need see still what beyond, growth is

So it's clearly, going beyond we've But the I little to we're I quarters. year. to end think six a next run business the think premature articulated how of speculate over next the

Brian Singer

first lower you. underlying is a a about base in program, I follow-up, you out just decline major their decline Great, talked of percentage of rates great, then their the reduced drilling are a than you thank in are or to wondered wells result the comes playing fields year taking as of at declining, comments expected? look measures are lower a the rates in that production portfolio from lower your across you or that year wells your rate And as after the my declining

Doug Suttles

year-over-year, sustained what's some actually isn't up great you your or we're effect number out decline would largely really that's you're base exceptionally total year. slower growth, that growth This It's every Brian, that largely Yes, the obviously, say of right effect shallower having that that could the decline. base when I is that a But no strong end question. of driving a represent if lower rates, in upside. with shallows now. performance growth

Operator

Thank you.

question ahead. be RBC will Markets. Next go from Greg Please Pardy at Capital

Greg Pardy

Maybe just and sorry. as team a follow-up

Brian follow-up a what was to As asking.

is $XX So world, now? about mid-cycle you in Is that down? how oil thinking or still $XX prices are to it shifted your

Doug Suttles

Greg. Yes,

to a over But some I very longer-term around activity then team that of to prices, still of got range common somewhere probably being longer-term, strong think gas written pricing that that, very the go think shale to about to shrink so in economic world. is few of lot reduction COVID significant the even $XXX mid-XXs to capital is and that the is our plans have just fundamentally next plans probably is still outside on but dealing are a months past the really low, and shale to about of with still next discussion is this which the we like six but shale over we -- And lot globe ways the mid-cycle around and may $XX. and capital. ours low happens we've that mid-cycle. clearly believes will looking near-term be and year, mid-cycle lots setting it's potentially impacts probably pricing natural be still is up predicated think recovery not about going Obviously, more what like quarters. the and and think the investment around relatively around shrunk There's I Clearly, the globe. globally all in after the people and in be

Greg Pardy

and for the going guys in you'd driving Okay, D&C costs. of that. to done Greg, tremendous fracs further terms in job Anadarko just I'm sense where of X.X think down thanks trying just million And the mean mentioned your you I then terms have switching you a gears cost back in water inroads really just is wells are in the if changes? and to what disposal, the pace as implement then that possible be your so I to might those million, X get sites, a simultaneous

Greg Givens

driving noticing continued first I turn tell for cost continue we've thanks that and is the get costs over had down. ways out Anadarko. Greg, in will find relentless stones is to to to think And the thing and you the team improvement I'll

pumping not later our cycle all implemented and And our have will is disposal. that that still this on we're durable Simul-Frac faster savings. there rates, both trying our faster reduced going times something which costs We've jobs down, to be and of go We delivery at make we're year. which water, be yet,

you if don't I million, I can to the take? so much with wells were out all. we And a how challenge at are four $X unrealistic more taken think think handle team, you've

Doug Suttles

kind and pacesetter if and in I X probing now and the delivered and take those our average did add and -- from to target. we him tell is with X.X. Greg, experience we comment not record Greg's, zone, know publicly of a of around one one biggest ago our low. real shattered we've what good I in just get don't to pool was actually X.X every well we I were said the were place contractors. X.X he can a talented very shareholders, on had, was who Oklahoma, costs target internal the very market, water said, do course, long very we to the but going of in so business, it's And in pace X.X, pretty too had speaking of to would good learnings well the our has portfolio, advantaged the costs we We on this clearly to every there's we've operate innovation, building team had labor But of that next are objective very and making a kind

So applying these practices pretty handle and I confident have that to say wells, a the I'm average pretty have and I going their be soon. never that's four to dreamed well along

Operator

Thank you.

Next question go will at Wolfe Please be from Silverstein The Josh Research. ahead.

Josh Silverstein

guys. Thanks. morning, Good

on Just a debt. question the

mentioned to now. go $X.X you you've about I the move absolute this stays or up in while higher. why to think wanted see billion to You're a X.XX EBITDA same the as I lower target but know terms not seen right leverage this the wanting debt year, to get obviously can much

cash and/or next target free wanted what to from flow debt that see sales is underlying? certain asset Just level your

Doug Suttles

products go even sure referenced you're of is have how a current going the we anything, relevant I'm business company. sheet. debt strip, next figure the at is down, world for Yes, we're cash dimension in and the Josh, way use is the lot And every the done expense in to our are what participate a but the the will and that these that debt you to to environment not we're aggressively robust to is, work have given in. out is problem what highlighted Clearly, business of that just I return, trying questions or degree, not only can think And if number that at minimum, hypothetical it this future, free go after get And going And to somewhat you they're a that we've to do recover, prepared out going flow the questions into and balance of is the to Brendan recovery. course, reduction. having a balance substantial have demand you'd generate if to of current on year. that bit some reduction, do

hedge above prices got year. may on build natural considerably $XX. noticed, And which You we've people, begun to next have many book, believe upside there's price our has also team including today gas our XXXX considerable a

laser-focused that I focused heard we're environment, it not think I on number setting just this. But be but is debt in we do So isolation. you've to look out that theoretical, dimensional a on that But one at and very somewhat leverage both to in threat. down something have careful the level, getting absolute hope It's we're today's target. that it's the

Josh Silverstein

know then DUC, a the to And question year. there. some the just of Understood now on back I half you're going drawing be data

you level do normal on to $X.X plan You the expect spend you is to backlog be billion that based XXXX, year? you the What a year next as said it at exit XXXX would backlog. with expect same DUC that the with and you into look

Doug Suttles

not question Great by understand for because things the of we're sustainable. because are I Josh. just trying companies Yes, driven is completing and capital to stressing one efficiency people know DUCs

which that, would is driven loaded operator we our pretty DUCs innovation, year not leading this in And program DUC same to is across with technology, on operate. completions, very it's of essentially -- it's being driven we next So we actually expect transfer DUC is as capital most efficient it's place the the teams, expect incredible said every with it's ideas efficiency is level Greg XX number sustainable the XX exit to at this year to typical. exit and which a

Operator

you. Thank

be will JPMorgan go from Arun ahead. at question Jayaram Chase. Next Please

Arun Jayaram

sounds have should expect morning. good level clearly like XXXX, you a pretty to Yes, put on Doug, a lot we of paper loaded program. it pen

us give if activity probably sense to frac allocation plays obviously drilling maybe core plus some and side? X on could of the kind your you capital wondering on in different I'm of a So thoughts the focused levels spread just

Doug Suttles

got the our the for start that year enough now this here, start, Yes. time landed; year. working August detail. the of is, is on frame we the even we've budget but be not following we'll big we We're refining Oddly it's

look will to probably similar to our it majority where core we've vast distributed of that the say would been would X. I So be capital how

in going running the and we full bulk you the caution your in and starting to But Bakken, the in into probably the XQ. across we As to rigs, be Ford, in we've are the be. be that's But expectation we'll those where -- optimization earlier today, been three three. we're that Anadarko seven wells you, year, Montney. know I But did the yet. think, some But recently. in in two And be in quarter the think those this later just Uinta, two we here what of those running completing similarly Eagle the Permian, want should it'll I done situated haven't will drill

Arun Jayaram

Great.

flow Corey. the impacts added your balances going think be capital the quarters of Just your quarter what run today? on on accounts the maybe over a maybe balance the through is about Corey, next But and year. to some strip just hedge we you've elaborate cash the follow-up from debt any the generation know and six free payable use you kind in for could thoughts next hedges, on if we

Corey Code

Yes, hi Arun.

to $XX XXXX for the of we've as and part scenario second we've there commodity that $X.XX the laid pointed on the dividend price out question, think that sensitivities and well. the said at covers I

the language today's strip. with substantial and So, think at free I significant as free flow flow used cash we've cash

started that some protection well. So And obviously, in we layer end. to see that shaping up we to pretty

on forgot remind asking what that. if -- that you're first your you of think the part I about in me, I on question,

Arun Jayaram

of and wondering balance in of did up. the put a release, about you impact on could you some you're talk and thoughts this reduced specific bills, the the And that the go on basis? a it's When just debt activity your just go-forward function if levels just paying

Corey Code

in real Yes. pay terms, time. our we kind on to tend XX I of simple day XX, mean invoices cycle

you activity XX if we so down And think about our rigs. seven levels, to dropped

So activity, lot less a less payables a accreted. lot

continue that quarter. bills slowdown drawn over So we as down just our balance to was the activity, and the pay

and all really I activity, in to that explanation is. a getting gave payable accounts that's how just of the in So of to level normal back is that prepared referencing creating normal level remarks, the

Operator

you. Thank

Bank America. at ahead. of Please Sen Next question go will be from Asit

Asit Sen

billion should say on morning, in Thanks. unrelated billion should ones. terms Good CapEx back two earlier just Permian. we essentially that the seven, a sustaining think of rig to allocation, three conceptually rig three, level, the we let's count the nine Doug, $X.X and world? in how sustaining count, similar eight, answer -- in production, of about coming expect Is to $X.X in should terms

Doug Suttles

I think $X.X that given we've billion range. look you $X.X it, at billion Yes, capital to if

and other rigs. it And varies seven $X.X it'll bit to So looks a if be roughly, like different that little cycle net that XX good you go-forward. the of in things. optimize start. I it go split place of because to we'll we course, interests proportion; that and do with refine million, And what think the a as to is concentrated look mean, three around is I always

but we not gone but the haven't were during this to that next We to is little XQ lot. seven begin, think not more That's through step. it's step place a point, than a I active but at bad a XX

Asit Sen

follow-up is has you've ago Appreciate the my a gone looks months then change few passive domicile completed ownership color. and your up. like And

us in et thoughts indices conversation with you your could update wondering and cetera? Just if

Doug Suttles

some flexibility Yes, we this in. it played is more out by largely because referring like built -- to varies others and do you're because bit is have they processes on prescriptive how when and which index it have this fairly expected a

see to Russell S&P, you'll MSCI all all included we've the Chris energy. the those. it's Ford-XXX rebalance or big of or whether as in us there that the in was and been now and came So institutions are energy. driven XX% out, wasn't filings some no that's from X% That And of given shareholders. TMI, index what's a passive seen was out some believe surprise, happened in the of you our I the yesterday, may have movement We're but biggest in it in come

progress So and because that's piece at we're be to actually point upside have included in so fully because S&P actually the us see, piece come. it's yet but substantial to pleased big fairly they're been for we that a which some a with and further anticipate still we'll XXXX to

Operator

you. Thank

Jeanine go ahead. Barclays. at be will question Next from Wai Please

Jeanine Wai

in pricing what's in think given tie that? you price NYMEX on Good of and gas sensitivities, amount and and are on is Canada, Arun's flow, appropriate cash together. flow really forecasts, What all morning, XXXX We've sensitivities assuming things question, and AECO case the WTI great. company, the my to and breakeven first the helpful they're the for on the the free the the just I sensitivity seen and trying XXXX producing but and focus natural follow-up you're unhedged the in cash maintenance that gas on I question saw free

Doug Suttles

the And Yes, some rig things basis but including follow with we know about in record that level levels, we're we think course, the which Canada. I don't produce probably AECO to there focus gas even good think I And AECO, Number low a been have on the obviously the AECO these performing still relative comeback mean, whole well. activity production activity think on we just I flat quadruple quite seasonal we question. driving in you at has would using it. $X.XX. forecasts, of gas of of

you're how So But that actually watching decline. gas we'll production see plays out. Canada have on is to

Unidentified Company Representative

only the and that AECO I'd at off minus looking is at of $X.XX Yes to add thing NYMEX. we're

Jeanine Wai

Okay, of in kind implies you're should out any year we're XQ into momentum that for And in commentary great, to on decline back-up would just related operational beyond which on kind And big we given provide flatten a the down in operational thinking is a the you up next could XQ. liquids the to of question much. Thank trying and be primarily momentum then trajectory perfect. guidance helpful? of heading My then rest be ramp really But nice XX% second kind assuming about year? pretty production very is how timing. this you and significant of XX% XXXX this and

Doug Suttles

we're Yes, very of when restarting it's soon. just haven't restarting the literally timing them We'll completions; them yet. actually restarted we be

we'll be completions effectively, of third up the portion in the picking back quarter. here So

as and as the expect same see we we XXXX. the quarter average fourth think, to we see production and effect we a crude XXX,XXX as barrels indicated, XQ. we've begin go And you'll into day So condensate throughout production that's be to

because end of quarter So the quarter. us more we the the have you'll coming quite really getting And wells no until normal simple very to see just is cadence. a online third

our And kind point timing, so of effect of fully from that really this view. is just the of expected

Operator

you. Thank

Cowen. Daoud go Next question Gabe will be ahead. Please at from

Gabe Daoud

kind want over a cash Hey, pricing? can substantial what good for morning, you eyes in see quantify just the and everyone. to curious next you of circle so free free maybe the cash that Doug if I your just year, flow guys that next on quantified have what amount of flow typically you year

Doug Suttles

for five on Well, use if the kind table XXX. you every million gas if and $XXX there, Gabe, in deck use, you is quarter every oil of what's the is bucks in is in which

the you right If oil it's on XX I and it right, now, about at just XXX if about remember gas. look curve, year on for forward next

So $XXX we exposure for that's pricing, if going math, what in give But that which materials these but also our important to book, you us we've it to do range. does we've clearly solid floor expose it does vary. give believe $XX But is normal us. And about that us us a or is that build to million. in disclosed is today started

up now, from higher; the believe if So on course, gas isn't goes could fundamentals reflecting and there, curve people be it forward right considerably because XXXX. for is the what of many it

Gabe Daoud

great, got you. an to guess follow-up Doug earlier a question. the then Thanks I Great, just and follow-up or

if to for out sheet? reduction bit perhaps sales A&D Thank your represent you. further if you quarter maybe guys balance debt Next enhance lever the bolster the asset a you close target a market,

Doug Suttles

think well. we stabilize, largely see start Gabe, a you that today capital on to debt really be additive market might side commodity don't clearly would potential come I we have about is to anything may buyers Yes, our to talk And that. the bit. That's closed, obviously but do first divestment But step. that the I back to as have mean reduction. as access

all, this say that's at So I'd point.

Operator

Lambujon and Pickering, ahead. Thank callers. will time, Holt ladies you. more we have gentlemen, At from time question And Jeoffrey this Co. next Please for Tudor, & go be two from

Jeoffrey Lambujon

Thanks before the you I early was of feel a on growth said play your more potentially might offline could some again? considering growth example the morning. would sense until next how the OPEC you I seriously for growth longer-term question. about for versus reverses you as growth plans waiting for my bit first just to make of got from taking XXXX half into get to consideration, hoping follow-up a better volumes to still are of OPEC significant to Or one know kind discussion I Good earlier. speak no thoughts just OPEC all? to fully year, beyond

Doug Suttles

build think a you're can a because influence of actually those and Yes, your hard to will they it's moment's Jeoff, never OPEC rebalance change of very Most forget, plans Thanksgiving actions, significant Thanksgiving already been demand your on But I But seeing, fundamentals. XXXX, and of do there's of obviously, at Day XXXX. I as supply notice. think kind already. strategy us specific

many of from globally OPEC that you're global strong no mainly America. dominated very in shut-ins, has off. in to Plus. draws stories that capital not fact be see it wasn't now think period, it's there fact, and by it projecting you had couple off the here many other world, fallen decline spots invested year. growth And turned a macro, starting of response being will in tap North me likely a just the in than sector. In there in because Obviously to course, the to doesn't it's the supply are actually production I feel very will is -- And a capital And just but that of the lot was next

back talk all next the low in XX all turn XX in XX. cost we OPEC have for the to about single-digit XX have to to to little together. to of of it's the we'll the the what about, But that's sector shareholders is to think growth our chunk But that significantly business. we So distributing needs financial and the range results reduced been what other I quarters. put the of a watch sector what cash the six back sort But be have predict. we We we At point clear to needs fundamentally, and that. we've strategy. our generate of on middle to to how recognizing now And and do sizable thing to of hard rates, volatility can growth, certainly we that's or Clearly deliver does free hopefully think manage have matters? used believe that that we'll to

Operator

Any follow-up, Jeoffrey?

Jeoffrey Lambujon

No, just the one.

Operator

you. Thank

Next be SunTrust. Please Dingmann and at Neal question last go will from ahead.

Neal Dingmann

is see baseline it how sounds Thanks PDP the about positive for could Permian you your expecting Could about between versus talk decline just Doug, decline. for me that question squeezing just on factoring decline really driven sort you going is you one? certainly to Anadarko then, that, that because like my you're maybe in. just talk just what pretty that difference just is be would stable lower good number of And result to more to driving than is you're or out plan your what that a be, two on a is see? is that is more

Doug Suttles

roughly similar. is Yes, that piece that

lot they at financial mix are attractive oil a flip it. I looking is. kind has condensate we you profile, to from And that the production do the decline, firm. capture pricing very the low rich wells low throughout competitive different flow when has a in and quickly. condensate have we're of condensate up you as If mean at to more period. there optimizing rates think look production seen Montney And relationship have they very but this I costs, I reinforced of remained you've another benefits but benefit of capital, early, really quite is Its area held we've high TI and cash wells view these we royalties, how Permian just are seen than very that. we products. are higher get And our of company The also Montney, expensive. the royalties a know

capital benefits invest. So think But look financial to a our at capital portfolio, the that's the committed reducer. we staying when try When we we the we think is about risk multi-basin of efficiency which for we to optimize, big sort financial.

that how But big driver isn't piece a really story. that's decline that. in So the optimize we'll

Neal Dingmann

more I to with I'm sort free the should what Corey and think Okay, very talked what make think and think just remarks? want free wanted payable sort mentioned make was just questions about the of in flow definitely that cash one-time pointed you just one-time we payables, was, we I just more certain cash for up on it's to that one debt just Corey; and be very, forward. today, sure you And just that mean quarter I should go coming guys of caused you'll was the down details. to to lastly, -- the then bring a that sure that flow good of to I in And the about prepared you going as debt obvious forward?

Corey Code

Yes, exactly there is.

we As the I to, three kind restructuring costs. some of pointed the alluded of which one-time costs, there's the to the new items in which and call, AP, the was

Operator

At we’ll Campbell. the Mr. question-and-answer And call this have turn you. to back completed the time, Thank we session.

Steve Campbell

us seeing joining road very for person Please everyone investment. Thank safe. on in stay to soon. thanks and operator you. forward We the Look your today. Thanks appreciate

Operator

attending Thank your conference does at we for Ladies lines. today. gentlemen, disconnect ask again, and this you, you you sir. Once concludes indeed do your and thank for please call that this time,

Ovintiv (OVV) 29 Jul 202020 Q2 Earnings call transcript