Ovintiv (OVV) 4 Aug 222022 Q2 Earnings call transcript

Company Profile

Participants

Brendan McCracken	Chief Executive Officer
Greg Givens	Executive Vice President, Chief Operating Officer
Corey Code	Executive Vice President, Chief Financial Officer
Jason Verhaest	Investor Relations
Arun Jayaram	JPMorgan
Neil Mehta	Goldman Sachs
Jeanine Wai	Barclays
Doug Leggate	Bank of America
Neal Dingmann	Truist
Greg Pardy	RBC Capital Markets
Gabe Daoud	Cowen
Menno Hulshof	TD Securities
Geoff Jay	Daniel Energy Partners

Call transcript

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Operator

Good day ladies and gentlemen and thank you for standing by. Welcome to Ovintiv's 2022 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. of you attending by may the representatives. members only a any For Ovintiv’s today, mode quote Instructions] the in media listen of [Operator statements made

who media you advise contact be those obtain to However, advised call, to to who directly consent. of on today's the quote members others their were individuals that speaking we conference wish Please this to I rebroadcast Jason would Please Mr. be not expressed the may conference Relations. without call from recorded the Verhaest or over like Investor go now Verhaest. of call to turn Ovintiv. consent ahead,

Jason Verhaest

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

take to I Please turn Brendan prepared available questions. to our limit remarks, McCracken. follow-up. one your and CEO, time to your will call question over be we'll the Following now one

Brendan McCracken

you Good us. Thank for joining morning!

across results second execution business and our Our returns. our strategy continues superior highlight that demonstrate to quarter generate the

we on the shareholders. focused are the in are to capital the and returns our business, We cash investing returning on are we both, our

is is strengths, reflect capital are of leading disciplined allocation. on focus minutes through innovation us million priced our spot having our of average to how is free This that today. results of on outside that our impact is access the quarterly be of gas LNG our our share has has Corey and technologies approach market cash dollars to highlight were to XX% added production our stream. than is going relative XX% XX:X higher up numbers, ratio, our more disciplined generating way, XXXX is performance. our Our to for innovation underlying our that line Greg maximize quality year, balance the billion our The and directly that a is ratio how seven delivered going our the our shareholders decade. and through With is margins. peers. in make the as BOE results, AECO is cash increase Canada us over $X for highest we $XXX high positioned return the performance our on flow our when returns. analysis In shareholders, free return performing $XXX reflect. prices we We've Montney our of assets, this the XX% this than our Greg the increased unique group of done million uses we’ll which innovation at in current and progress a on shareholder this tremendous returns few increased we of of doubling is guidance to Earlier higher By to our sure more deliver to effective due financial cash profile, and strong That announced to X. discipline capital cash our business drivers strong We with year. returns. July original places in if almost quarter translating flow this sheet of us third our ahead and full We flow flow has key several to relentless peers top set our Montney With quarter XX:X returns and to for to bottom a culture, us innovative showing combination on the of covering tier capital conservative efficiency, combination a to efficiency

Assuming double more next year. than current to amount this strip pricing, we expect

achieved excited end and achieved to to to condensate estimates cash cash addition of increasing share oil and per generation results. total free our profile, I'm flow consensus guidance, We the production flow our strong beat high operational cash return In of highlight and million. underlying $XXX

full CapEx Our remains year guidance unchanged.

creative our to industry put today. and maintain able versus solutions innovative value challenges our we're has long logistical creating over facing find through we’re the maximize chain Corey, thoughtful to to team and Our supply leading and to you. capital It the this that in hours is the peers innovation efficiency for shareholders.

Corey Code

than increase cost return and to no and benefited XX% most July part base the that's dramatically that increased directly flow quarter XX% more dividend. and improved top equates this yield the shareholders. XX%, nice deliver dramatically to back cash risk. when $XXX from free will annualized an with The debt, yield. is early the buybacks dividends lower from With doubt This we've the a cash cash third to alone. return almost we jump capital return return as cash over exciting to XX% though in of our to less through We substantial shareholders on This There's is announced removing structure less and impact million of financial billion capacity of we a to quarter in our a $X.X to basis XX% doubles or hedges. base would interest shareholders return each on

are as XXXX the hedging months XXXX today hedges flow realizing Speaking program. our into year. five we cash right-sized to are change a The about we hedges, roll-off of of head away from benefits meaningful next in set step program and generate refreshed less our than

returns XX% we allocation to return in our the as outlined beyond Our capital the eliminate upside the deleveraging. as from potential and has framework. additional costs business continue profile level ability time Over the has further increase business

a growing it months offering through cash We intact by the see base base broader have return dividend. in the component competitive which have based our alone. industry currently is now dividend dividend we're dividend base market. noting, of growing X%, twice our our kept our very of a and and across shareholders. of Xx sustainable and our this XXX% for proposition underpinned about XXXX yield year last and sustainable We over including Finally as value all XX We or and is raised core

in in significant reduced lowering overall million the net structure. our progress make continue We by the debt $XXX billion. level debt $X.X during capital We to quarter to

half about totaled notes, In costs repurchasing absolute senior actively room to $XX approximately billion. and reduction, XXXX debt the a go base year. will pursuing notes, which expense in open approach of dividend with our it. first This million our over through We've for that million also our roughly additional In interest savings. we're redemption the redemption taking $XX interest interest annual debt create market the reducing purchases proactive net time. generate completed to addition Lower $X been of increases of June we costs the

higher will this interest lower We of continue these going notes. forward rates front on be as the price to opportunistic

end performance to business current generated the Xx debt our $X at end still trailing Even leverage cash to driving the the target strong Our we after XX a month year. before of expect has billion, XX%, net increasing returns ratio billion EBITDA, quarter. $X adjusted of of return north to the

to positions will the highlights. our operational volatility term. our also billion. the We market reduce the to now continue and us Greg see This opportunity bolsters net long over debt withstand business resiliency some of $X cover below of to

Greg Givens

a asset focus continues the for to key Capital be across our teams efficiency organization.

how volatile and differentiating seven matter culture cut in proven of strong innovation tier our our and among closest are efficiencies Our commodity track We truly leading industry of today's of to peers. competitors. environment. continues efficiencies program record it, No you compared our rank macroeconomic of capital top our XXXX out

of XX:X money. an were on and it efficiency, this an $XXX X:X oil This for or free returning that real value translates million or measure leadership capital average you BOEs on more to we deliver we less peer whether and our production more Now we're to delivering have production condensate to we XXXX barrels $XXX to using another way, program. for basis, cash our are flow generation incremental total If shareholders. either a we're driving capital. Put would year, basis to assume our another invest million

to pressures and with inflationary and the ahead. make volatility position to are responding on to stronger business us we our road industry, As our excel innovative challenge solutions continue

culture is culture not the competitive it something influences a pride technology It's operational is organization. Our the applying latest It and can you the it we something It results. as in, and manage our way objectives. that it’s of and complex we must innovation is Innovation operations. tangible simply something real approach great over within buy, challenges time delivering embedded cultivated than of be take our is advantage. more to we see

were We are environment, speed, supply drilling including most. categories, and inflationary an In key several Simul-Frac, the management. wet industry categories that matter today's chain sand, these logistics in leader

capital strong our here outstanding in efficiencies you performance the business see Our today. was driving

in XX sand we innovation wet house and storage feat an mile ability solution Permian is use a pumping sand efficiencies, day. to the work. continue sand on-site we the frontier confident our of of millions capital By first efficiencies. multiple a the completing storage innovation piloted as our and on-site quarter, made completions innovation been to sand stacked overcome and innovations, Simul-Frac, record sand level combining lateral over This logistics superior over local wet prime the of Our generating in was approach. in pounds bottlenecks efficiency. delays at single sand on-site we’ve leading able returns and achieve asset possible We're To and This completion our solution storage, trucking of is wet of generating in a reduces example by hauling system. industry of top-tier push

our completed efficiencies saw key day top managing a the environment. In in These to continued operational factor delivered feet XX% inflation a performance addition are step improvement completions strong our quarter Permian, second the per performance, the today's change average. versus in tier In efficiencies. XXXX well a in

day. per came in Anadarko with achieve to results X,XXX the feet play drilling per record feet of in than X,XXX we a day. pacesetter strong more the In nearly drilled at continue Our pacesetter

are over than XXXX drilling we're per turn every last On X% and reinforced day. These faster our I’ll achieving second back X,XXX We year. XXXX and XX% pacesetter results we in And now teams see drilling average. quarter program X% drilling longest continued laterals for average we striving Montney. speed call nearly the new new the the drilling average a in from was Corey. advancement up to our to faster the our efficiencies quarter, continue ever, pacesetter finally, the set efficiency than Our were feet day. achieving

Corey Code

benefits prices can past In We've the in prices keep higher not to we're commodity about supply chain an commodity the over managed with higher lost be of happen. costs; letting that constraints, increase inflationary environment year. XX% the easily of to

XX the represents our margin year This before months in cash XX%, our from up second about went less ago. up expansion margin $XX a commodity margin last cost. realized realized of realizable over of our by with prices average BOE. Our continued Simply quarter put, price the the XX% hedges,

Our we points cost increased of products. price by has When our job have a only for done less our not diverse we sales a look than at access, BOE. also great securing but market in marketing of ensuring our $X team portfolio realizations, strong

day realized quarter access active about priced production way gas and in This the to unhedged This BTU the WTI markets Chicago XXX It XX% approximately a XX% XX% out to firm or of we is access natural Our market. affirmed of California, and pipelines for In our work outside NYMEX. oil on adds market was of price recently we taking of gas basin to transportation at additional AECO an expand to enhancing realized Montney we've price of increases exposure supplements ways: across price acquired the already markets of to out margin we is Montney transport per the Montney natural Canada, portfolio, Pacific contracts our have XX%. current been delivered Midwest. for decade. second and the over outside and One portfolio for First, billion was derived role transport diversification our unhedged the in XX% and shipped condensate gas of Eastern by AECO. is Northwest two the

fourth is that hedges those the production now to cost. Chicago back slightly quarter, at The transfer to XX% the will our We about beginning executed offset turn basis more expect additional than but AECO egress premium $X.XX to behind our realize NYMEX. XX% the gas increase price T&P $X we to call exposure NYMEX. of and through I'll protected to hedges in between Montney Second, Brendan. to expense

Brendan McCracken

value provide positioned three into of uniquely clear our as producer analysts, investors with We're premium in to basin significant meetings insight the more with Thanks there's American Corey. a scale North Through plays. that investors opportunity multi our Montney. it's fixed an and become

fully Our this the mind, free in With Montney this billion asset. think us to deliver value asset is on critical more year. than flow for track this we it's operating in $X to cash of upstream communicate

highest We cubic day. Our over per wells production returns delivering more the the prolific among than with oil in wells from industry. per the play gas in feet are drill XX natural day, rates everything million X,XXX barrels to

We play decades over inventory of have of with significant scale over in oil inventory. and two well decade a the premium gas premium

September. include interactive early date the of a play the the session. we've best in will you plan leadership by the the Stay to us Montney Q&A year. on XX formal followed Montney which in our We call, the capital efficiency we’ll have have Montney production join webcast team some XX. for to We top of release and XX We for on in news by drilled our tuned in save the wells which last September an be invite details,

Before takeaways like I’d to sum key call. from the to moved the today's up Q&A, we

flow ratio strong and team total cash free the end of and production capital of production end. pay-out delivered flow top Our guidance. to returns shareholders to a our to July. We're bottom condensate quarter. pleased cash above and in increasing share guidance, dividend expectations, free doubling the post by our the accelerate Crude below top of flow cash XX% per the Cash at end of with at our

yield the double been result increasing of year cash head to and market. our offerings return XX% is of has to we're this As compared peers to the cash At than return we shift, continue poised poised and a and to highest yield one delivering more to increase that in broader as XXXX.

allocating our us close peers. the We our to We're are and free to gap and valuation strengths that cash determination shares. between generation back free resolute in that maximize cash flow our to doing using today our by buying

an and operational premium culture our we discipline leader years categories. industry XX years unique multiple over than Finally, more of of as driving across inventory oil excellence, execution premium key is inventory technology XX innovation With of positioning us and and This gas the our we for continue returns remarks. to shareholders returns our expect we’ll years to and take now capital prepared the on portfolio, cash questions. business come. deliver Operator, across invest both to our concludes superior in many to

Operator

Instructions]. [Operator

Jayaram Arun JPMorgan. Please question first Your with go from comes ahead.

Arun Jayaram

know target get thinking I And of perhaps you you're kind thoughts Brendan, about balancing. move strip assuming know your and capital you you team! XXXX, the and towards and you Brendan morning fourth good how Yeah, next do you think for year allocation Corey, just as wanted the quarter your to you around about so, by how enter deleveraging holds. a thought,

debt level balance balance return building you have more cash You free beyond minimal to know doing versus that the How cash incremental you XX% do the XX% flow. the on reduction return cash or sheet?

Brendan McCracken

Maybe Yeah, just part great morning question. a for Thanks take first. first good Arun. the

process, another the the at how within, about be the it, returns, be several of allocation it's but We're say signals You today. want flow flow cash in what amongst scale. of in both going in early capital look to today, XXXX know our clearly unchanged we're scenarios a towards week But sitting the share. seeing you to going allocation, XXXX, you from year Clearly give first maximizing here products. level biased know but maintaining focused to I’d sense to cash for on August, high capital thinking plays allocation of probably just and also on free and at we’re we per strategy of

we share free and and outcomes, on convinced cash just we’re clearly One risked of a really evaluating kind of the look of to need that cash that be growth things three per be to fundamentals. sort course at any modest flow there’s know better flow You that would is Arun. market

wanted of at. demand out first that's real a of the August, but and to the a don't in and it’s continue have repurchases, the be that On buybacks in get zero. and versus we'll investment come go today year inflationary second to But consider of as there any more to there to must part on the capital something environment of well. is with debt more doing three Clearly see capital reduction. we've information remember we And week course through XX% know level maintain look net how At we efficiency the down, our needs drill your is then those as in items share we're this You going debt got us, rest conviction compete you investment call, know the so balance are we time. wells returns so generally think to to debt then we we’ll we around, allocation, for both. an do to course ability calculus

our saw double the shareholder And year. The cadence returns cash guided. been us of so really earlier you than through have returns clear

Just the million as now $XXX million a second reminder, to first quarter, we close $XXX the quarter. million and quarter this in $XXX in returned

pretty a we're pattern clear there's what there. of So doing

commitment And ability it's we've proceed. at so got to and optionality least as this that's and we but at makes that it sense quarter, if is where do the more our XX% than

Arun Jayaram

give on an I Thanks impact we’ve the lot us, of of on advantage, getting the Great! you wondered companies answer. byside U.S. AMT as that that positioned. such have if questions tax Corey, a for could Ovintiv

know threshold So to your of subject I get thoughts. three income if billion average $X it's a or was year maybe so. I wondering you do book could

the and potential this or us could you Canadian impact what's on flow give earnings. could on maybe impact thoughts some So to how treatment cash

Corey Code

if language average whole the to $X three so key for – way to kind above identifying it’s thanks right, right. and be that's a a historical the billion, But drafted. it's you're you feature Yes, year of

‘XX remember would think would $X about as we have impairments. ‘XX significant ceiling that don’t test you XXXX, and want that be billion the us had pretty for know XXXX, So was as much when you to and XXXX, average we if

So over year you $X know net loss is that billion. in

So we'll to be over going hard get even though to that billion. it's this for strong to be where us earnings a position $X year,

even AMT an written have impact So for has on that the XXXX if it's passed, us. shouldn't

going know might would calculation period our could that a a in kind it from be bring as forward, of from it and would about XXXX, can forward know XX XX year, forward you probably that a subject tax you horizon and think U.S., and that of that we be obviously prepayment the bring to You XXXX the that one perspective.

Operator

Your with next Neil question ahead. Please Goldman comes Sachs. Mehta go from

Neil Mehta

I appreciate Yeah, you the taking questions.

The basis. We noticed Montney. the in solution first around takeaway is just added regional you gas some

Now, of is AECO outside of to the XX% out gas of Waha. XX% priced XX% and

way about talked how out risk you're that and the see you playing from managing basis here? Just and thinking it about

Brendan McCracken

assets, thanks get that the particularly the the Montney. the both at basin across strategy get we‘ve where and Yeah, can Permian gas, question. pricing things we and purely exposed and Waha Neil, I price AECO actions that don't outside of diversification if our on Permian the acted look the to we you in to Really basin so gas proactively do and is play our make move one a in of the you like out in appreciate the see the in to outside our sure pricing, we of get outside Montney

numbers what right. places, are of So those highlighted you got in the positioned we've which both we now, here well is so quite

deal of we’ve XX% you of Permian on that the XXXX be secured a XXXX priced pressure to Montney of that’s priced gas when XX% AECO outside outside priced transport outside for and there critical XXXX could so. of – sorry, – of Permian, lack the gas our period, takeaway, fully basis And great to because then its our know of from AECO. got So gas

Neil Mehta

and It the update. And spend to efficiency. No, able year you then that's Brendan this talk quarter, helpful. capital huge maintain was obviously for could in a focus about the the were capital first in you

as some about organization an What and you are Just mitigating are moving of you thinking into the of move are how components the around as how it? that you pieces XXXX? inflation

Brendan McCracken

where we've there's focus the add the and of here. Neil, I which to Yeah of the on of pieces two highlight of investor efficiency. sequential course I that are lots changes. think it. on really other you trajectory But on appreciate in kind I tried to mean, materials piece is capital that the important today highlight One capital trajectory, is

know and Well, feature at. change its to didn't – the as course starting trajectory absolutely are So a so thing of you we’re important so on amongst place where capital is capital our we But best unchanged. well. great very place this the efficiency, is other we one quarter, the is

there. deal We through here that are confidence of year, in of this good we've a the program and priced capital the have rest got shape great the in guidance out

had we into look what goods next today to a be of think A higher asking. so is pricing of that off, are think those market as place I and we of you services. the number agreements would year, were in I subject price out kind for some we which rolling

investors guided capital. we’ve about think level is what So maintenance to

recognizing For to today looking early, to higher current look sitting XX% it's out here XX% like capital but us than is its you XXXX. when it

Operator

Jeanine ahead. Your Wai from next question with Barclays. Please comes go

Jeanine Wai

comments revisiting maybe side. taking cash, follow do about on Hi! debt capital again like just everyone. on for all the the allocation prior Thanks particular just with up on We’d what your questions. mechanics Good in going to to and morning, our this you're

open you repurchases. out about the did of you million and XXXX So market notes took $XX as planned then

is do really what you down Are you looking market? get type to make know willing on after appetite XXXX really just to trying things opportunistically premiums? plus whole to the in You more your the paying maturities? Are

Brendan McCracken

there to absolute to about over I Corey on reductions. going we're thanks question. just debt turn those think I’ll appreciate Yeah, how Jeanine, it the

Corey Code

take-outs make much below and been the six that’s once nine ago, rates months Jeanine, Corey its here. more they trading these hey Obviously would again. than attractive par debt even Yeah, to higher we've have interest got no

across we higher discount out prices. that either benefits take free if got stack, in a flow means we've debt got short out high notes of and So a like cash It excess manage at you can to of us, debt really of to the look at for down. look we’ve payout, one or of the a you we’d coupon because some our you start know number

and XX’s So trying and the interest balance which but out the that optionality at the into bite trading low are notes. XXX need you out we cost do to know of opportunistic buy May parts a a don't go will with we'll like lot interest relatively the can reduce different even call on expense, range, rate probably for those us to kind taking higher of in of curve, the help the

Brendan McCracken

Yeah, them and zone, there. did took for maturity I the wait when out, interest got right XX’s, six we about the acted. took so months you with we we We Jeanine, them of balanced the if once remaining early, those and think we to out and sort the premium is into we that watch the early out what didn't take

going probably pattern it that's think I forward. for So good think a we'll how about

Jeanine Wai

optionality with to increased quarter-over-quarter the to be of gas oil, Lots the NGOs the guide operations guidance, that but an looks moving for on calls great! cash. is it in XQ going Okay, and there flat. and like Maybe just

Thank there the on what's could any the color for year? and maybe what driving on exit this you. any So rate commentary be

Brendan McCracken

well when the just Yes, stream. asset and the coming on they it’s are across really mix

a margin. decent by So third the biggest quarter of year our is turn-in lines our quarter

a as really a the coming shape, in we’ll in of so consistent you we of oiler third through March turn and production line. that way stream on our see quarter wells know you profile that's in number here, driving plays So Montney fairly the what's got then the and

and drives really most. probably shape the NGL that's what gas So the

cadence just a really it's on and stream. coming of that wells timing So of reflection

Operator

Your America. next ahead. of with Leggate Bank Doug comes question from Please go

Doug Leggate

I thanks! on I about your Brendan, comments up debt. Oh pick inventory could wonder if

know maybe really but guess on of than could if you My more one love a seen gas, wonder two thoughts I of and got would perspective on I relative that’s your as opposed forward debt is know more here. you just think the reset with sustaining – questions that than you years question XX about the capital the U.S. your you we've have, as always resetting gas about towards LN in I've gas. first you of inventory see the the And market. decade. XX the gas referred move talked to You you volatility, growing towards the the years be, allocations frame related and Canadian Clearly to I’d LNG oil market then the of how capital kind oil do middle

Brendan McCracken

I thanks Doug, appreciate questions, Yeah for that. the

You macro views. know gas, really on quick

You know views our we’d characterize think increasingly way would be the I constructive here.

Montney. ton also America the address big the and markets. understand gas do clear need of world’s gas well. then You gas piece we connectivity about Clearly for market to for we’re for gas. resource we've think both of us make to incredible connect a gas while. to it critical something of option building North things actions, globally know both with layer difficult, just you you high we is for think portfolio, be challenge medium know the But, in need you the on you get so to global infrastructure can clearly access one that’s quality natural a the a for got great energy is at constructive NYMEX huge know in Montney going that’s of is and demand global there's gas-to-market it and the demand And pathway so is sort that see North and we’ve for likely a that’s that’s that high challenge to sure great the of got in ensure increasing and the at market Montney of more of this least we the markets for market But us, making But and can moved very piece that in webcast. today our resource between that our really why you resource shifted it also our see we near we here we’ve that the connecting to course benchmark and is in sector to prices, we’ve Canada our and a strong and that the U.S. on news the price that term, more for for price, does that also great to kind an because to portfolio we and and policy attractive America as so see and talk can diversification known get in have chunk

I there, we’ve to great to it cash for be optionality is share think looking capital and lever with so start cash per free maximize and a your allocation, returns, XXXX the got the to about on and capital that on. we’ll that can and question program, design how pull as we is flow to respect flow You know we way think

You million there's historical choose year in $XXX know we I if at to allocation, midpoint capital room in of Montney the we've a more Montney look done guidance clearly you to. there our is so think recent This about us bit little the if over XXX, years. do for

Doug Leggate

that within assume numbers it, go place, remains is clear be swing to to X.X the Montney to that towards inflationary to it above on X.X, that perhaps? before more in considering is just Brendan, right Sorry fair but that it think the could effects,

Brendan McCracken

have X.X and and is a have massively gas to mix the it be right in approach swing would fairly X.X product today, – deal so be flat BOE’s you really It’s know we’d us to know great balanced conviction around. That's Doug, to keeping the something you of really a on oil.

– So just the was level would if across board. know our choice, starting be maintaining I starting think would it our point a be and point maintenance you

Doug Leggate

Okay, thanks guys.

Brendan McCracken

Yeah.

Operator

Neal next Please go Truist. comes Your from ahead. question with Dingmann

Neal Dingmann

just based on questions on question. of something Brendan, just around Doug’s Good my strategy, kind morning!

share You mentioned something on growth. per

grow the question So shareholder share, or you plan is, do my best when you view that growth have unique laid business you you'll either guess how returns per I the out. way to know this production obviously consider

Brendan McCracken

effect. instantaneous of that's Neal, is those are not to to think risk a it and over – is Yeah. is looking Well, really other I your course I looking We're basis you how time, on think think a them laying deliver. at alongside we deliver two know because looking about an we effect, just question this sustained each

right how XXXX just really and choices. So two comparing thinking those about we as across allocation are competing that's into head you know the we capital and

clearly our So makes pretty buyback attractive. sits the you know valuation where today

Neal Dingmann

about then second Greg. agree. this in a know you just we a seven. the a slide have information Brendan just question, place getting past, talk guys folks done have put inflation like now is you prepared lot ‘XX talked you beyond your know don't doing. you of would Yeah, of for you things And and at – you in that. what the – have and different thinking about might, if Simul-Frac I'm lot how that. Others I I sort are about are around are you and likely shown this I job similar on of the out wondering what hands on Greg, to to good

you do have contracting know more of thinking there if you know the pipe, needed past. go of have inflation of rigs, is in know in lock been to are has you that to than you now more kind You again might there do you up,

Greg Givens

know know you recognizing what a program I did Neal, you might here really capital have missed signal its but today, Yeah, August. sitting it knowing think we I before, maintenance

reflects probably You agreements that rolling know just to market. XX% the put we’ve number have up the and guide number that that pricing of range XXXX that in the today, we on, to XX% from re-price our and having place over really it's

a into ensuring some in secured and still we've that rigs priced be. that some services, are But we We extent where don't do us spreads we already a through know see heading portion discovery to we're that year, long to in, the steal, will got So of I XXXX. this place then very get On particularly mean locking only in locking really question around you months is on your we in done. price items, ever lead next early that market stages of of engaged a program. that few and and on know work kind the what got at

the is volatile because do that whole flexibility lock know commodity live program, You valuable, in industry. to going never we're in we because a

Neal Dingmann

Well, thank you.

Greg Givens

Yeah, thank you.

Operator

Please with question Capital ahead. from Pardy RBC comes next go Greg Your Markets.

Greg Pardy

what a in kind of is call. you of mention the Is improvement rundown. off could balance you're just – pivot earlier Yes, rolling thanks remind market strategy for sheet maybe both? hedges us is function the you the of the call just the is change, Brendan, the or hedging or and

Brendan McCracken

question that's appreciate really because we for Greg, actually, the Yeah us. an important piece

you late and year last know So pretty substantially. we our did change policy hedging

hedge making and the progress reflects of to really as that sheet. balance approach So we we're risk moved the kind a on I referred to what management pure

production materially. and years, quite you last three our need down the several if at history so been hedged, go we we improving, saw balance saw heavily like of quarters to hedged as sheet And really look over the the hedge we've

risk – to are is low free And what or to dividend, we're hedge want those what way is of against better be seeing quarter out neutral We're we us quarters of is, time, a production. commodity and is to a of cash very today so at you four it hedging of about a the do the we business XX% protect so prices out. hedging low what be drops and that and base period able we're still doing flow after to manage prices, doing the know you’re the XX%

our you look are if the part can the book quarter ‘XX quarter and see done, way and third So second the you books first quarter today at we’re ‘XX building ‘XX disclosure today. through

the a with is manages with three we’re other to the comfortable using vehicles upside, can but floor risk to pleased also that attention to do that. gives how call quite and we're exposure make aspect to we prices, and in sure I’ll low we're we've able And put that been so that of way

gives today, that book the think still our in I downside at look that providing it drop. you protection exposure price us a approach reflects If while commodity that upside and event unforeseen of

Greg Pardy

Thanks before no spending Has years. talked for Corey Okay, that high overall cash prices? get cash five and that you about I taxes kind taxes, before, but for and given of we've know you just your know material we've maybe mentioned I talked it. picture changed with

Corey Code

and prices I than that little today last Greg! been Yeah, around hey cash tax year. the obviously at give teaser that are In a in mean February dramatically with it would've have a we exited bit. of earlier, obviously higher about that officially We about were they so bit XXXX, Montney rise of billion Oh XXX there. with that prices in time think could kind which and talked into I We so about strong know But impact. and and out the in think us free you of point highlighted we $X.X move you there Canada, a little year think exited we if about by I our in bigger in billion AMT of did even last that in U.S., color prices our business flow $X gas the asset. NOL’s cash time. last today's at year with puts domestically NOLs

about you as that's the if high. we to the minimal really prices next probably stay forward come Canadian So tax think in million if that business, in have business could cash $XXX year

in Canadian $X more of next whole about point off there, small magnitude to taxable for really some cash order So of year, if to cash you the cut you might it's have a trigger in but your the think opposed as like of millions the business as think hundreds about tax kind enterprise. of where

Operator

Daoud Your Gabe go Please ahead. next with question comes Cowen. from

Gabe Daoud

curious thoughts believe bolt-on bucks continuing it? some and you sticking Thanks. how to I do M&A maybe if couple that cash Good Brendan, about we of everybody! cited morning the flow, could million think free was is a give us out you around figure just of an for previous on should update still $XXX bolt-on’s.

Brendan McCracken

locations our Yeah, our million. inventory for working inorganically hey added bolt-on is really $XX we've for The Gabe! launched strategy well no us. here. premium September, to we last that net Yeah, to change approach around Since over XXX

math accretive see good organic the over really to the and portfolio be locations that that also period, that. is added fantastically on to that like undertaking to we we we're renewal that that a continue XXX So complement about so

regards see options, other that and our large own just with of compete the don’t to with in capital we think especially allocation equity. our see M&A, value I sort we to continue

on no the change M&A strategy So to front. our

Gabe Daoud

update Thanks the Super guys. us Brandon. give around you Montney. a an Great! could Is highlight in follow-up, Maybe there. permits Thanks clear. anything there just to

Brendan McCracken

thanks Gabe. Yeah,

province Montney deal there. see the River So on in the have high encouraging treaty Blueberry work to province at starting the issued, framework First the level we First Nation place side, The and permitting an got in through remain on Nations encouraged permits we backlog.

third we got the permits Dave, So, our a program and permitted XXXX. XXXX for as over all on you here sit we’re

want either So capital as other to portfolio the got clearly we’re great and the to Alberta side the part multi-basin on be generate place of is and strategy, of going rotate the we're through going is that capital the into allocation of to corporate ability in we've the that get year, return. definitive This Montney into there. to same land parts the watching closely, this of something or the it’s see we it a rest we before

to see for is some outcome, here, regardless So encouraging are in but it the shape progress good we there.

Operator

ahead. Your go next question Securities. Hulshof comes from with TD Please Menno

Menno Hulshof

everyone. Good morning,

earlier drilling roughly pacesetter completions; feet think for per those or data day about day references feet for talked obviously take that you pacesetter I'll give number. X,XXX and big are start the with I that per pacesetter X,XXX

where a innovation gains comment that and on you estimate on of we whether seeing XX% is talked and you related what in improvement starting captured about? you or the the cycle stand to those note, efficiency can your out XX% to curves is So maybe that net in already you're think flatten inflation

Brendan McCracken

to is bet now I think unwrap questions. bet smart market a the we've right, one There's Yeah down. innovation piece the game always us. for believe about on bet and Menno, of here has costs of deeply and drive to shown gains a cultural years in number it's further the and innovation, always efficiency innings great for and was the and Greg layer with, what’s we always The been up as on that really another kind said, talked

more to represent able big we you so play this are just we've from then and about changes pacesetters, been it But are on do again is about once time step we all the so is those And where because just a know tells it we've talked to we’ve repeatability. the and seen question excited for about pacesetter, and what averages of before. us they there's

turn into averages kind pacesetters our work approach to over quarterly that's through and this we So of take the time. way

second year your part it that but the of to gain the going range can is market on more of continue why baked to efficiency XX repeatable – we we also pricing. where the convert back today, we're So averages, really the half on sits the question around learn going know those the XX how are to sitting here into that's through learn into pacesetters is much to because about is large you is, and so

of but So of calculation trying that on right account, lots take that both sides uncertainty into to now.

Menno Hulshof

I'll and that's Yeah, helpful. it There thanks Maybe of operations repot. in on reference sustainability Brendan, your your fleets. up with follow a is to a electrification question

of nuanced operational much like how benefits you just can seeing that? So of a stuff priority What the maybe decarbonization? you of remind electric are obvious is the more outside in of process that and us going

Brendan McCracken

– Yeah, know electrification reduction plan. of the you piece is our a emissions

We have XX%. intensity GHG to a reduce by target

released that sustainability sitting target last our through here about quarter report. we on our in actuals halfway are We that

the that, So and operations on And that in where ongoing then were production in emissions completions is progress to our great we electrification out of it's drilling other take place in and our forth. compression places some is able of that and like business. so

the really for to piece emissions cost DNC overall a direct in are particularly pie lines. returns gas environment either of by the power diesel, higher and electricity natural us and we're emissions the or Now, displace so from ability driven smaller with the the today's

driving then secondary So that, the that there. a to that's complement us on for look we and but are really the emissions the returns primary it's reduction course of driver, gain

Operator

Daniel Jay Energy with Your next ahead. comes from Please go Partners. Geoff question

Geoff Jay

the in you year? just increases being of this Hey somewhere divested old know curious, the question the XX% earlier, Neal’s XX%, assets is in sort you of the the kind guess or locked guys! kind verified of in terms there room. of associated And in capital I on not Thanks. any was secondarily, the there to think you quarter. in do Kind having any are Congratulations of CapEx I'm not? in then how for follow-up with or for figure of

Brendan McCracken

minimus and Geoff. the Uinta no, zero Yeah, were No, one we attracting have assets so as essentially associated high inventory assets had capital. is them. with almost mature de cost sold flow They that didn't were associated take them first, really structure. the that Yeah, that capital appreciate in Bakken cash they second there that because By with the high way, cost divestiture assets the not I I'll well, those questions. of

we proceeds divest locked that earlier you the services, how percentage in pretty opportunity was a DNC on us. it’s locked steel. it did We on that this fairly the we saw market in in are, high for fairly the know the already And for where time year to So add then locked in. to so we We them an prices were in like things did. for excellent the do locked question

Geoff Jay

lot. Excellent! a No, helpful. that’s Thanks

Brendan McCracken

Yeah, you you. Thank bet.

Operator

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

Jason Verhaest

operator, call Thank and you Ovintiv. the thank you, your for today continued us everyone in joining and interest for on

now Our is complete. call

Operator

for thank We Have Ladies today. a and your your call and ask you concludes please lines. you this participating day! that for gentlemen, great disconnect conference

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