Earnings call transcript Q2 2023

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Operator

Good morning, ladies and gentlemen and thank you for standing by. Welcome to Ovintiv's 2023 Second Quarter Results Conference Call.

As a reminder, today's call is being recorded. [Operator Instructions] Please be advised that this conference call may not be recorded or rebroadcast without the expressed consent of Ovintiv.

I would now like to turn the conference call over to Jason Verhaest from Investor Relations. Mr. ahead, go Please Verhaest.

Jason Verhaest

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

one to follow-up. take remarks, your available questions. one we question your limit prepared and Following to time will Please be

I the President turn will CEO, and our now to over call Brendan McCracken.

Brendan McCracken

joining Thank you morning. Good for us.

outstanding strong execution, with Our second for every we've quarter better targets making our the results lower on momentum on focus of We quarter. exceeded continue one our wells costs. created and guidance the

two extended transactions our go-forward compelling enhanced our simplified have our efficiency inventory closed and our portfolio, capital that We expanded margins. premium also

are second to Permian on I more our progress assets the a speak want moment, in acquired I'll with first, quarter but we the newly touch results. to making

production XQ the outperformance was previously our in during the our with our from new with included accelerated coming issued business. line is The and have legacy performed close the expectations assets right Our quarter. guidance, quarter in

is from production in a execution costs. moment, was a result beat on result this of efficiency more are our the detail capital well our cover the in capital outperformance across of innovations the and our exceeded productivity. to but per and Quarter oil unit our efficiencies to board completion We both reductions delivered targets Greg gains. design production will our

lowered our our full raised guide. production full capital year result, and guidance a we've As year

have deliver quarter especially intense Permian, we in results, continues operational another efficiencies. the execution on portfolio, placed the posted focus operational the where our record of teams Across to

new acreage. early on our the Our finished assets Permian operations. we’ve pleased were close and has activity the integrated existing new transaction to We into already the seamlessly team resetting

rest the the with rigs activity at run X crews currently expected our of We and the three rate for are in completion year Permian.

drilling proven have completion expect new first -- and We the assets, are expect later to fully we Ovintiv on online our and quarter. designs our fourth executing also our fully design wells in already we

end production, and oil, on on we NGLs asset below exceeded well were in On guidance for results by older the portfolio, end the decline of top performance management second were each of strong coming our base successful vintage quarter from gas capital. These wells. in our driven guidance our low

across continued gas rates the operational setting natural performance asset lower record savings from royalty the in base. from Tailwinds and Montney capital

approximately shareholders base and returned also $XXX our million We to through increased buybacks our share dividend. recently

I'll financial Corey results. call over to our cover the to now turn

Corey Code

Thanks, Brendan, and morning. good

$X.XX we to $X.XX, per the great of cash of delivered Brendan financial consensus beating with strong results and also addition operational share share quarter earnings the in In per flow estimates. results outlined,

We impact the costs with transaction-related remain Basin associated acquisition. Permian cash free flow the and of close incremental positive the early despite of the capital

midpoint We expense other cost of coming in expense, guidance production, per and also a performance the operating saw a mineral and with processing below transportation strong basis. taxes combined on unit and

and of million the of benefited with stable credit a finance are resulting very four Permian to all maintenance acquisition, year's rating costs. we debt from from investment pleased recovery the our structure $XX grade quarter issued outlook agencies. Operating capital expense also We a portion the and of and during prior our rating

$X acquired prices. EBITDA assuming billion debt, our from acquisition all XX the leverage total and ratio or end, assets. days of debt, committed of the this finance of quarter to our At Xx remain leverage mid-cycle We but X.Xx, mid-cycle only included target was of about

that recently our pay towards target. as debt optimize we The to down us issued schedule maturity will work profile our bonds of allow

us our in for While shareholder not of framework debt has return reduction is the changed. a near-term, focus area big

will continue of a determined XX% the balance shareholders remaining shareholder return to cash free each framework with We buybacks for sheet. discrete to quarter the is our post-dividend cash distribute available our least the that of to basis. going amount note flow in XX% I at to would like on

Yesterday, day, and we quarter portfolio. across quarter, provided year of full we've and third to the to average total reflect BOE updated our we our XXX,XXX XXX,XXX the day. XXXX production productivity XXX,XXX and condensate see barrels seen efficiencies, improved production third to with year-to-date guide cost oil savings XXX,XXX expect guidance per the to well per In

averaged This grow reflects the and of We XXX,XXX expect momentum through the barrels to new will normalize oil acquired continue the by production condensate half WIPs bring in to production fourth day Permian at second the from production per condensate per quarter profile half the year. and XXX,XXX assets XXXX production with XXXX the oil day. barrels online. The stabilizing midyear and as second we

performance well We portfolio. full raised natural also guide across due gas our to the strong year

the the the spending at to X with progress as of $XXX by level for a million. quarter shift wells reflects in program time And work acquisition year acquired to Permian will peak activity the million current program. higher our we capital at online rig Third rig This closed be bring in from the $XXX XX to the the associated year-end. the the capital

of wells roughly these half expect bring Permian the in about third to assets. the acquired XXX quarter, We with from online

The guidance well success had we've in the year full our efficiencies guide capital with and operational base higher the updated productivity offsetting production achieved our and production and we lower We've new incorporates performance strong declines. capital investment.

lower savings. We anticipate approximately X% the increased in and In in We of year. capital asset added increased a of Bakken combined the and Permian. T&P for a the addition divested cost second the company level relatively basis to a expect see asset relatively efficiency, savings cost also in on half OpEx we to cost higher cash

NYMEX also gas across durable focus efficiently XX% efficiency returns XX approach. our with a of exposure materials cash organization the the of our our next of is positions our flow Capital with is about for as crucial a update an to and converting exposure the our hedged resource into provided key We XX% aspect yesterday WTI hedging months. about

top billion ranks day capital per Ovintiv's at for environment. about produce condensate is year-over-year to condensate our guide. That's day increase commodity expect peers of and the in XXXX of per value creating of exceptional more we barrels original midpoint. of today's with volatile $X.X XXX,XXX than In associated CapEx improvement oil tier versus our an a in XXXX, macroeconomic efficiency efficiency oil barrels and XX% XX,XXX among capital

capital and to us efficiency million generates require in our same at to production Ovintiv's higher capital capital allows cash invested and deliver capital program deliver and will peers, the $XXX increase capital to This production to XXXX our XXXX returns returns condensate higher less guides. about When compared of oil our on the midpoint shareholders.

turn I call to now will Greg over to the our cover highlights. operational

Gregory Givens

Thanks, Corey.

been integration Brendan priority done year. With and acres the last and running X.X As the Permian has activity spreads at job. across the of months the our play, team rate seamless existing the efficient the currently over rigs impressive we frac in has XXX,XXX X assets for the rest new very X into our of a already top our noted, are operations. And run

Basin performing year-to-date excited XXXX capital increase we development our these Permian acreage. on we as and have productivity line to results wells Midland to the rates, acquired to proven see on in acreage in apply model the unleash been with efficiency our approach the The opportunities and are performance well average Our and are we stellar, very new drilling and completion assets.

closed. cycle and our the We completion accelerated techniques acquisition lift design, already on that were when artificial deploying have optimization times in already proven the wells begun on progress

streamlining of versus across were their We are individual work footprints. that the separate planning our combined also each position, previously improving Permian operating and logistics on executing and three companies planning efficiency

reduced hits the as program our offset already have frac We optimized we've position. combined across

see noted, Brendan end-to-end first in we online the quarter. As wells expect to Ovintiv designed our fourth

continue completion and first well on average design deliver XXXX leading stage acreage. The right XXXX on the particularly Basin curve efforts to we and of our half Midland shows type architecture, wells our brought year. compared industry online the Permian in the across chart the performance the on Our to

Our we've enhance of the the and chemistry performance in we've important ever that to to Permian. stage loading. note highest completion oil advances fluid design, including year-to-date result proppant delivered the It's is outperformance architecture, is the made among the well

approach stayed across out consistent spread development and acreage an and were increase our cost. well results These cube year-over-year. our enhanced Our has unchanged completions program well to our spacing executed footprint without is completed being are

able our better As efficiencies to wells. we are into leading making deploy

from production a is we handle completions the can bring repeatable see we did will than go-forward performance half Once XX% uplift well Permian. of our assumptions. longer thoughtful in In outstanding, we the remain more into results recent we the the will previous quarter third we in as with first wells much the as more the alone, than well term forecast. the type these entire our on from incorporate the While have wells, better on we year the curve

like a quick our I'd Permian the performance outstanding in quarter. recognize to moment this team take from the to

completions architecture cylinders, our are continued optimization deliver stage These newly through improved records in integrating all hit results stronger acquired to Our and performance seamlessly on operations performance cost-effective new setting manner. well a assets. allowing while to us

than and more frame average per X quarter is the speed For feet XX% and average we comparison, now Using than well speed our same XX% example, per time first second completion at years more X,XXX quarter XX% about day our over fluid. faster over day last proppant the average. faster our pump XX%

at is performance lower cost, efficiency. better capital our wells enhanced Our delivering improving

Ovintiv to productive dominate performance on the results We in BOE continue our impressive year-to-date and play deliver to is a of continue exception. portfolio, the wells basis. our Montney wells the in list no total across most

Montney Over and brought wells months, the the top XX have the on of XX in we last XX top XX. the

come market almost XX% further price well, of to outside want higher to XX of quarter. of average The flow during are the assurance pricing these by our manage in pre-hedge NYMEX on production million impressive and the a returns received all wells Montney of our Montney the condensate not and lowest highlighted our great The do With in the be play was our $X.X price we basis, which WTI diversification wells we making we rates gas cost chart strategy, use a XX% realized the AECO, with cost enhanced that generate portfolio. per clear tag. I in risk.

results County to brought of of deliver continue rates oil well. of with Well some Jorgensen recently America. oil Pad Uinta, in In strong on per our well the North X we X,XXX strongest day barrels in the IPXX per We Duchesne

a with Our It which large approximately translates runway. undeveloped, is X,XXX benches of about XX% inventory of acres net into feet contiguous multiple as XXX,XXX land significant collective base pay.

our to first for supports As Due in rail of half plans rail the option Coast, in our of to and Permian we future noted, our for year, of highest capacity there. margin the Gulf the we previously the display development XX% to we oily the XX% secured additional the This volumes currently recently play. about nature the portfolio. operating the tied highly Uinta scalable

current That in our said, reduced year. we’ve Basin XXXX the portfolio. our cash back remains half NGL free the our Anadarko generating to in the and the gas a be the asset premier top Given Anadarko and expected flow activity in option of markets, in is multiproduct

asset a per XXXX continues team note, versus drilling quarter XX% the a work half feet this realizing year's the declines wrapped hard, cutting average. in The also They in in our our activity since base on up XXXX. increase day to high

call to now turn will the I Brendan. back

Brendan McCracken

takeaways like Q&A, key to Thanks, team to today's Greg. for year-to-date. sum call. from outstanding up I'd results we And I'd the the before our like to commend move

on Our portfolio. our across excellence up execution has shown focus

assets, been have The development We successfully asset our progress. applying opportunities to already Permian the has for team strong, our gains and model integrated going the and forward. new see we wells performance in is further

We guidance XXXX capital are lowering increasing and year full production spending.

industry, one We dollars. for to is to and operators most efficient fewer of program XXXX deliver the advantaged its peers our capital more barrels in compared the ability in are our

to debt We to returning while shareholders. are reduction our committed significant cash

be unchanged approach shareholder will determined the to quarter. amount and available framework the same shareholders Our remains reliable by every returns

E&P companies invested on the long-term, capital that we superior the return come can cash to value shareholders. believe in return durably both that of will space generate from and creation Over

sure capital well-positioned returns cash bottom efficiency are leading deliver line allocation to that inventory, make this convert value and through free to on proposition to disciplined the inventory our to capital shareholders. a to We with and to the flow, those flow deep premium

the open This are concludes we line remarks. to prepared our questions. ready Michelle, now for

Operator

Your Jayaram comes Instructions] JPMorgan. first at [Operator ahead. Please go question from Arun

Arun Jayaram

fluid the Yes. and particularly Good completion stage in on was if productivity morning. if Permian. more potential shed could seeing, you're wondering the on I you preliminary I Brendan, wondering you gains some was the And that share. could you mentioned insights you've perhaps results design, give us Greg architecture, outside wondering well just was core, areas this more the to I in have maybe and -- tested of if if also repeatability. any insights that but

Brendan McCracken

morning. the Yes. Arun, from wells I factors history Obviously, shale. here about. the we piece really we're the to whole is reported are multiyear not Really, the online on program drive that by XX our enthused with This can curve, XXXX type are Permian, portfolio. the across as and question there. we've true of effort seeing it's on our design performance. is in the are performance has And team production we that appreciate today, you well seeing above been this excited performance and the just well good got completion and obviously driver And the about pickup we we well the now the what recovery zero-in causal deploying mentioned. which here increased a

And more for of point to as and it like which network cluster we to drive probably service really, efficiencies three cluster detail factors design, the that of won't and feeding the architecture, are conductive drill entire course, Arun, multiple that the through buckets, stage phrase water buckets the spacing a that has more are and the kind are along we of And that engineering those I course, that fracture way. and in what our combination team important on, and driving then, in here, consistently the is do the sand And longer loading of the driving laterals the I down been terms is becomes get into architecture placed more clusters. whole lateral. to of of in these plays stage we really see three break

first So that's the bucket.

fluid is the chemistry in of enhance the The kind the we try chemistry, call second bucket oil permeability of network. what fracture frac of using that's and and that

the monitoring. place. it, a is And bucket it's of And poor from system this And as then, got so consequence, things few real-time really a recovery here the is in the in traditionally final but frac idea more get then really, our the industry in approach approach then back out in road, then on field optimization office sometime would was to be and write a send pump it would the would subsequent the field up and and And the engineers there the frac look occur potentially the program wells. it. a down in

with but trying And crack with getting long from and the then more go trying frac And design, back tune are be pumping we time. we network learning the subsurface to what we frac -- signals that as is are we our are to and as telemetry consequence, to a and real well the technology we more able efficient design that along are be that also to just recovery get lateral. do

speak I'd Arun. three are the those buckets really, to, So

Arun Jayaram

how of sounds Tier is of And tested of Miller. have map Jeff outside you completion My smart where the any be the Brendan, of of, X technology, there this call follow-up, Tier fleet core. locations mimic could It the like endorsement kind could perhaps a overall economics? you boost to type X productivity a design on implications it, nice

Brendan McCracken

here, of spread base. that that shows see -- but XX also the those the we of don't Yes. base. what type math off shows curve Permian performance And land wells the And our can number is across head the slide are top have land there's where my the you from across I slide the

these is Permian for working is completion this what that So the us designs are -- us. across telling

we the we story really, as Tier of the in better. what sort much across our the far Tier are implications, making is basin And X news seeing Tier board. X, of is it's X so core pretty acreage for stuff the as And good are the the position

really we've which X all So got, we've the acres on using really been are that Tier in it just bucket.

I the premium all well. from that into premium valid, is look win, which but point as we bucket do time is and your -- moving is So locations near to think a that

One And on things out, count of development we've Greg bench across and XXX in about the wells of we've is bench that the pointed will we in even quite got cubes progress new acres stream instances. talked underwrites acreage. those be number X some either a premium on X that or cubes the are higher or all bringing X

them designs to those year. completion excited see start So get we this when how to up later show

Arun Jayaram

Thanks. Great. [Indiscernible].

Brendan McCracken

Thanks, Arun.

Operator

ahead. question next come Securities. Your go will Dingmann Truist Neal from at Please

Neal Dingmann

Brendan, first seems Good my which morning. quite time. your Thanks plan, question good. forward is on for the

talked believe. level And just this? you all kind about if I a kind the production, I'm to to -- maintenance out would of needed Specifically, the maybe of around stable sustain you so, CapEx you could of wondering, consider speak your this And plan?

Brendan McCracken

about Yes, reiterated and new feel here much obviously cost guide know we that actually to still going we and as sitting the is now about today here the total are guide. be what have really activity that deflation how further us. The year today get Neal, sitting structure to shows levels assets, I sense up. that and control appreciate here we makes into actually that further We feel it. about Yes, with and where to movers good XXXX view big good continuing think of

XXX,XXX sense. and in the capital day midpoint So the total in half, a at then implied second that of settling for barrels make 'XX

either growth, talked maintenance gates we allocation to business. making thing we've that's to decision to I'd to is per this shares our capital consider continue think outcome in would that only it And than X have around for really, about us to terms for would gates of order to better way cash just add in buying be prosecute of the And really The back. modest growth. about right share first, the a X flow modest or maintenance be, think even

so test need does the And be then the execution more adding world that's test. And be barrels would that risk on then the the And first more what's third test BTUs. the second activity. and would

when run is it model and better BTUs certainly, then judgment And here, risk execution company. year-over-year a running isn't the our screen gate and last then did was And world that year buyback through barrels rigs adding if that just there, program. spreads to pretty feels asking than I hard. than for today quickly from the today from our And the favorably a more perspective still third lot the more inflation

but would gates other -- mode. So maintenance still, X those that us have in staying

Neal Dingmann

Agree. Permian. Yes. the question That's sense. makes for certainly All that well. second me maybe to And as on Greg, my

Specifically, of maybe plan that deal, or have It now you shut-ins a you kind about of future you number frac talked the of me can post more your that unlike well hits various this. have to even level all shut-ins. address potential needed seems guys are experiencing minimum much peers

Gregory Givens

bring are is to because already coordinated off full benefit as we And that And the to they but by thanks seen a of were mentioned exactly I we with and just the having out brought. shortly already now get we feel of my acquisition we operating coordinate Yes, pumping go-forward, the able a That is that optimize the newer Neil, closed remarks knocking that And had doing what big we've not which approach for question. but fracs allows right. of were the was of today, wells footprint we'll XXX,XXX-acre in be good all as this value to seen, entire one not we've independently. we these the that like companies hits, job, this in knocking problem. were reduction after us a there to three saw off. they that, across a why propositions wells to you're continue using you able by going be have, we a was acreage to part value the do schedules frac And weren't prepared that they were

these of helping well. completion on to designs as be some And seem also front new that

Neal Dingmann

Brendan. to hear. Greg. Thanks, Thanks, Great No.

Brendan McCracken

Neal. Thanks,

Operator

ahead. question come Gabe next will Please at from TD Daoud go Your Cowen.

Gabriel Daoud

and performance where cubes Good Permian need would comment XXX,XXX outperformance. to the also new to on like what a factoring production much what your do thanks. how & the of Permian And curious think as pointed it Maybe then in you data day to on everyone. acreage. Greg, you Hey, hear back today? just guess look is the barrels oil your need just -- on to depend at thoughts deal, or you you to maybe our time morning, exactly these forma go-forward could of of you on in or see conde some start could guidance. collect here time pro the new on combined. But I on that. to just I comment

or where more less at that's if curious just you're today. So

Gregory Givens

Yes.

forecasting So today. as mentioned, the as activity lot far a as on going of the in play goes, I

year. the a and We wells those half in are on to up. the the what in half pleased going very But with of be we bringing first saw to are lot we more hold continue back wells

We how the are of a to in mind wells, half online are up the going keeping over holds the that to bringing in we wells want productivity third number see in wells bringing from completion, them their online. involved influencing quarter in that wells those not inception end be tail of are going the to we -- while were the we to are

a those do. into So operations. quickly completion We're see do our incorporating there. our there's want techniques uncertainty little we to of how We wells all believe

wells then quarter, a the wells we duration, how So data long you're of this not new a approach this. sense uplift, fourth to later up. lot and be should whole and we trying existing going long number to we into holds portfolio, to it's this just but is how uplift and how see, the is that have we well of only year, third much the go the how in, need as are this about production impacting through better our coming we legacy not the see By of thoughtful

continue to we see our consistently, to into forward we start as So baking that. will that And then seeing we forecast. more that are looking

Brendan McCracken

forma too. Gabe, a question pro on think you I Yes, the had there,

So to yes, bring in about picked we as Permian up XX on Greg to wells quarter. got XX earlier, the

given So But moment. the day it's you're a barrel over little a here. that dynamic at just any fairly are we right, XXX,XXX number, day running a

Gabriel Daoud

Got it. it. Got

side, to helpful. Cool. continue for little highlighted could for talk that a Okay. Or Thanks, And driving what's we That's to is that then see deflation about some efficiencies range But a and some hold, follow-up guess, that number $X.X efficiencies you in trend you savings out guys. cost more you the guys. curious, number. could that of embedded cost guess, billion. it, towards $X.X 'XX. I $X.X expectations Just there Is billion quick bit if $X.X just a of the continuing? $X.X around on curious what billion billion? need there maybe billion, Thanks, I bit have little

Brendan McCracken

I Gabe, it. Yes, appreciate

bit, again, the -- prices think what sitting little environment like steering counts has here range the And been there the stronger feels the lower summer today. we've is is have service we deflation bigger telling and keep cost that have that the are just see I just We've the months. a gas market push us we a will And that about of and we obviously, maybe to the probably midpoint up And And gas both with will seen see here the we then ticked that service through the what on further where driving peaks. oil it in XX% off driver will as could know. the point -- oil bit right rig by side come of the if to range. from trend. range see, and continues, we has

the been 'XX clear will as about but what to tune industry. We've translates happens are see of rest and by through activities So the we we guide will what activity, industry get of to we we our that closer adding not rest see across it.

Gabriel Daoud

guys. Thanks,

Brendan McCracken

you. thank Yes,

Operator

will Josh Silverstein come UBS. at ahead. from Your Please go next question

Joshua Silverstein

Yes. Thanks. guys. morning, Good

cash balance for up it. profile of opportunistic as 'XX just little reduction hand to basically want thinking the else? the to about be bolt-ons for more cash do the kind Just you other they the come bit anything have to shareholder XX% you actually of versus sheet to maturities enough mentioned down pay portion Or and up? return on build [Indiscernible] that a 'XX debt than or

Brendan McCracken

Yes.

return think, Josh, X. is for we then the shareholder to trying over and for And be to debt follow the calls down the take will we I available there what base at program do the will rest dividend. the to which reduction, we is above least incremental that will are here, which debt

And very opportunistic we think about to that to And go so capital will think along. I that we we thoughtful cost. the as be extra do structure were enable without

of so we've got maturities in that. you couple some to And like able do be well-timed said, the to next years

Joshua Silverstein

on the infrastructure guys then it good mean I a [technical curious guys basin And really rail is it. just it increased Thanks. Got I you well performance that Is supporting Or for growth capital you have you there. pretty do [technical a was allocation? this had an have potential difficulty] now, mentioned. seems you guys, like difficulty]?

Brendan McCracken

the it. hard Uinta. last spacing about demonstrate appreciate worked in X and we've unlock well to Gulf cube access what what performance remember, Yes, I No, are Yes. we And the then is are Coast. at seeing that years, market development do to we excited the

And progress made those fronts. so great on both we

half with some total production And we the railing in now year. the are X into through ramp the to of running XX% going back big a volumes. to rigs our We are see to XX% Uinta of the the there, Gulf,

and is infrastructure scalable. low that rail So cost

on that year we XXXX, be so Uinta depending how and set have us higher afford volumes to into capital production will able through of this And to in 'XX. the part back

Joshua Silverstein

Thanks. it. Got

Brendan McCracken

Thanks, Josh. Yes, great.

Operator

Doug from will go Please Leggate question ahead. next America. come Bank Your at of

Unidentified Analyst

[indiscernible] Good morning. is for Doug on John This Leggate.

questions are Anadarko really the Basin. Our on

of bring First what basin? to you with activity, have to see the activity prices of all, in back terms that would of reduction there to

Brendan McCracken

good Yes, John. Hey, morning.

means that the that Anadarko, the XX%. The done in the to And cash and been wells using a base first year here it's our the really flow On design an And ton the brought assets shallowing resulted same the highest to on in set the in focus had the team stream of just have optimizations completion we've I incredible be substantial in our generator other that has portfolio. the mentioned that's free strong a of the value been us performers. creates has of team earlier, innovation decline really our for as job here. on the in Anadarko. recent Permian, half same

into of -- second half and time underlying are out encouraged we really we for of the being. the capital NGL year there And gas rotate but why by So with really the fundamentals the the is saw performance. to we coming asset chose that

so with start back later we into that rigs up 'XX the Anadarko could once signal 'XX, the there. NGL that the stronger the fundamental back incremental gas pull some capital Coast, And brings of be off in LNG the brings into and particularly Gulf see the

price in And bit So I one as we'll initiatives and just not a other D&C toggle structure it. on hard watch the for there's way Anadarko think going specific sure team well. a costs the been I'm depend to cost working reduce as times it's increased well. has cycle always little the on or really because to

a on those and a little of more things, the it's the balance supply side. and gas combination So I for a things see bit NGL side to big we think want but healthy demand of the

Unidentified Analyst

follow-up as just quick very That's helpful. a Anadarko. on the And

wanted potentially seeing. declines in you actually terms years and long How in How do of long do many improvements you that can the how productivity that you do hold think you for you're given if Just can holding? of to? that you inventory, the think flat actually underlying

Brendan McCracken

Yes.

as to So that got flat asset a to inventory a really, deep, is the drilling see piece should And inventory in Anadarko, there well. we hold do play there we high-quality that over the allocate decade the that. of capital fantastic we've choose to

Unidentified Analyst

All you very right. Thank much.

Brendan McCracken

Thanks, John.

Operator

next will from Sachs. Your Choudhary go at question ahead. Goldman come Umang Please

Umang Choudhary

terms in Permian I the in to the especially half seen how year. activity color and of the the and I trying the performance questions. recently My Permian. will in there's next back which I'm production the appreciate understand remind of of implication that the in assets assets. less year, acquired the strong shape on And in us Montney. the your the in guidance in to Can on you the pare legacy up performance XQ the you've your this performance, Permian improved cadence all clarity

Brendan McCracken

going cadence here appreciate the I in lot Permian the a Yes, the Yes, half on back year. wise, of in it.

we between little bit XX in a but So less well. there are as and rate than the going to the see quarter. fourth TILs quarter, that just XX third and up in

total that the of company that the averaged through see on XXX,XXX So barrels that day the back half the hold conde cadence, back through and at flat that's barrels then which to the is half at setup the crude level, a back level of to year, in and of and a and going a expect out back us we'd then some XXX,XXX half. spill early by 'XX will of into day midyear year

So cadence there. set that's up the

Umang Choudhary

Got really then That's you. management. was risk on helpful. And question next my

Any of transaction. the hedges leverage year? added hedging you some with -- price next protect from you you As commodity do here around level to earlier, the updated yourself to risk want thoughts mentioned

Brendan McCracken

there. question the appreciate I Yes.

is really here So to done what on use we've XX-month continue our approach. hedging, next

also to course, one exposure, the participate And months. over market. XX comfortable out of with, floor price building the next a So us but would which, a structurally a some continued we to higher structures give time to way enable in stronger upside soft that to also provide book use we've are three quarter at

on 'XX gas hedges did quarter here, the So quarter in side. second we some second the add

next taking. that has of XX three but XX-month XX% approach that, hedged the I'm those it, details about wave got Slide but period, been saw about structures. gas, half are And on oil the that's primarily in generally sure we've you over so again, on hedged And we and

I think XX% third and we'll we that as down, of quarter more hedging continue XX% level to back debt down drive that to towards sort of production from that level. a down drive

Umang Choudhary

Thank it. much. Got you so

Brendan McCracken

Thank you.

Operator

question Phillips go ahead. will from Your next One. come Please at Johnston Capital

Phillips Johnston

Thanks.

also seeing you're Midland year's mentioned are outperforming wells forecast. in In in of properties. In to older that you wells addition vintage in uplift deck, this the [ph] legacy the slide the productivity

Just which seeing you be magnitude biggest trim wondering the what to? about upside? would kind there, areas that And you what of might you're talking

Brendan McCracken

optimizing the by And of that. pick up. Appreciate that's base. add the one Obviously, Yes, Phil production catch ways on is efficient to most awesome

we've And been so it's and on have what doing workover been kind about. some artificial wells of factors then treatments lift. boosts fill-ins, the inexpensive really creating but have here, vintage excited some contributing been Greg that also And might some older our in we that are

you know, there? anything to add don't I So if want Greg,

Gregory Givens

the frequency. the impact work is just that But lot to of are beat all Yes. a on the wells. side. parent little But looking really, some something to designs And new with do things really just nice that tackling, we focused less reducing see seem frac we of the this there the great the little are of the we in failure by It's not pumping blocking have a a on are teams, adding a are teams on up lot improvement and just base of areas, Permian. at

Phillips Johnston

into year guessing second I'm 'XX factored also guidance, correct? guidance that's And or your production Okay. the not half the of

Brendan McCracken

we've what the now seen Well, we've PDP. in uptick on think I here existing the factored is performance

where the just impacts forward can we is so included guide. the realizing decline in what further we but today the that PDP And still abatement we have upside are do,

Phillips Johnston

Okay.

then you but participant, And LNG an help That Okay. sense. direct [technical realize just maybe Canada X. aren't Phase going update difficulty]. obviously guys on the it's in makes to I pricing a

over complete in September, of first the 'XX. project quarter I the in was think XX% think as I timing Day with Montney

been has wondering Just progress the since then? how

Brendan McCracken

generally I'd what or we the LNG remember terms But because the in to Coast actually are chime might several Yes. and progress been the now. there here some updates the like and LNG all others. say side, like continue liquefaction in get I West he pretty complete X pre-FID and construction pipe operators the side both percent there, Phase are about will evaluate have of engaged Corey high from under percentages. of LNG on is They're projects either in to that recent

of have the exposure to in complementary rules, sense kind strategy it you some to will. our LNG for Montney. think makes do to existing We Couple portfolio if that's price time. ground diversification our think We

interested we in I stake. equity think, one, are not an

can that rest I egress out developing board. of success into great the take the the think shown here. we off to of And of extension But of demonstrate that piece think by also the a is have North So we've Montney America. we logical can I and exposure global

to And any of work if is But projects of so I hard you've top at commercial there. update head of across don't numbers those of solution got project Corey, team each for us. right your find the know, our those

Corey Code

Yes, sure, Brendan.

they're XX% talked little Shell sounds think pipeline. the So yesterday, the than even the on bit about more and this it complete but certainly they're a on more XX% I in midstream past, than talking about reference optimistic point, complete had

coming updates that's from So obviously, soon good standpoint. that and

Phillips Johnston

good. Okay. That Thanks. sounds

Brendan McCracken

Phillips. Thanks,

Operator

comes Your next Lambujon Please TPH Jeoffrey Co. go ahead. question from at &

Jeoffrey Lambujon

generate about today. talking actually overall to potentially more range you've How everyone thanks for Permian what's XXXX first for is looking get the production morning, with able taking conservative particular next we the forecast and my outlook we at been about forecasting a current think Good the the CapEx My one same you're than If modeled prove for for one on situation another how should year. questions. to where changing. maybe

the range should QX here closer on to for with might see capital, more I on about the bit for less sense or just longer? think greater get might like want a XXX sold than again, still So spending it a to to CapEx, maybe to for spoken [indiscernible] achieve be reductions what volumes a in we if needed range, if to that steady but potential you've we with level

Brendan McCracken

and take on question, Yes, Jeoff, love appreciate your the it. I

like risk? look cash do, the that barrels of And answer make will flow on here a set feel it we in impact, per our sense to But today, through share the those. the as and BTUs. point be what's decision. terms think three do then is to we'll 'XX as sitting world And what execution half where to that chance continues the get starting maintenance for that I level on think But we'll obviously, right year. the that at back we'll does asking we of those what I run gates from see a

we'll really hard And factor then piece is think to teams the benefiting that our just program the create loaded it We year. greatly. other loading. this We've into level that's worked a level

and across be into And kind setting we for so to XXXX assets full 'XX. that loaded of preserving a year up the go-forward program level we as want consistent

our we cash both the returns, on shareholders. as optimize this, of the be through to So looking return the and then work and we'll those will way things we that weigh capital invested to be return

Jeoffrey Lambujon

see just capital just And been asset contribution you see additional alluded then I you a is follow-up simply one you've here about from the as given allocate Uinta, the productivity Okay, to the just wanted great. second what second need some more that in there. on my we're comparisons. to. about ask half, talking to to to I know

some kind of to of next year spoken that's about go. for where depth but asset there the you to going room balance thinking wanted into making ultimately refresh versus competitiveness portfolio? spoke in on the equation you're infrastructure just if you've I side get that, a how decide the that past, the the to just You think earlier, And of on to the cost of

Brendan McCracken

bet. you Yes,

It now, in the the other is return with right here are got rest the of the so on same through right And returns 'XX rest program competitive on seeing of there the level we of sits portfolio. assets. that we've absolutely the our

first of is in see from ramp that's big a there. really wouldn't then going So there. to put otherwise, all, as rigs capital think we important, trajectory volumes as I here, because And far X

kind and the head about XXXX, will as performance through to the that of year. like and we see we right So go as feels we just watch the into thinking level be

Jeoffrey Lambujon

Perfect. That’s all.

Brendan McCracken

Yes. Thank you, Jeoff.

Operator

We've back Gruber. left apologize. will Please at the call this the to question Gruber time, question-and-answer Mr. ahead, Mr. go and At turn have the I Actually, Citigroup. one Scott session, do we Verhaest. from I in completed queue

Scott Gruber

Yes. Thanks for in. me squeezing

inflation Just level a with of What of ballpark. kind 'XX midpoint just cost couple would questions. the of follow-up align of guide overall the

Brendan McCracken

of we be any there, guidance the that Scott. for would Yes, I seeing confusion. Hey, Yes, that sort of deflation midpoint got range trajectory currently. that are Yes. glad so we you really, apologize

reductions on other and we've some green and like categories as we've like on of seen kind categories of So bit pricing. of the the spreads. Most cost diesel We've little rigs seen service a shoots of reductions steel. reviewed recently,

And see watch have we'll if materializes to so as I and it's half back deflation we things basically we go the unfold see And more the how including year. said, like what of today. through

Scott Gruber

mid way quantify double-digit Is Any type trending Okay. to it single-digit a [indiscernible]? it kind of Is that? number? towards

Brendan McCracken

be we are are for I so the say comment -- about single it course, what fairly in that, we numbers think, what I'd you're starting And other just of it had seeing to arrangements from. rooted I've your always and low 'XX is on in point yes, in depends different numbers the 'XX in seen here here. -- has of service only And number digit. starting E&P on favorable a thing pricing

So relative single digits to what we are is seeing of kind low that.

Scott Gruber

Okay. I Thanks. the appreciate color.

Brendan McCracken

Yes. Thanks, Scott.

Operator

turn Mr. the time, this concluded back question-and-answer the to we’ve At will apologies My and Verhaest. again. session, I call

Jason Verhaest

thank Michelle, you, today. Thanks, for everyone, and joining us

Our call is now complete.

Operator

you and please everyone conclude like thank Ladies participating this conference your and this lines. We your to call disconnect for would morning. ask to for does gentlemen,

Ovintiv (OVV) 28 Jul 232023 Q2 Earnings call transcript