OVV - Earnings call transcript Q4 2024

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Operator

Welcome to Ovintiv's 2024 Fourth Quarter and Year-end 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 over to Jason Verhaest from Investor Relations. Please go ahead, Mr. Verhaest.

Jason Verhaest

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

will we available take be Following prepared remarks, your to questions.

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

Brendan McCracken

Jason. morning, everybody. Thank Thanks, for you Good joining us.

our We pleased results, very very are are excited XXXX with future. XXXX our and in we about

positions for and in us culture this to past several combine return that our our built the free year our to that begin industry. to team's come. executed sets on way with this capital durable inventory resource long return expertise efficiently. with exceptional one up Over most cash in we and We've very the we convert years, a We strategy, a of generate time have shareholder-friendly to premium valuable very position on

now Permian We X decline, Montney, focused a assets These remaining portfolio more by North free low are high largest generating in oil America. and undeveloped resources the the cash Basin. in Anadarko positions complemented have with anchor low in profitable our more the and cost, asset

the XX premium inventory in a the of years several Anadarko. in now past to inventory premium XX build close years close oil and over the to depth we work over in years of the to decade Our have Montney, inventory Permian, means

buying the costs. Uinta a delivering our a our foot a good the that completely gains from in efficiency Montney. barrel capital are the better XX,XXX each we oil at in efficiency type day up We barrels selling and gains show benefits how barrels on of guidance day seeing in up year-over-year of are or day, as a the X XX,XXX making basis Those the XXX,XXX XXXX and holding are per curves in are We're our barrels gap cash assets. also

generate generate cash We believe our to billion are our differentiating. ability will over of set be years demonstrated continue continue this this for and excellence confident $X come. execution to year, were to and to free With this inventory can flow superior we do we durably returns to

execution our without reset shareholders. enhanced course times strength translating value is demonstrate our show increased of of bolstered and excellence the results of investing more short, is X delivery XXXX capital. year, more our our strategy In Our strategy. our execution products profitability, against that another and into produce our our results These working efficiency, us excellence financial year we for We delivered our enabling portfolio. and our high-graded the capital to over beat tremendous targets

of total Our initial but day in X,XXX condensate XXXX and us per for XXX,XXX production. guide $X.X came additional for capital came XX,XXX day of delivering day oil We MBoe barrels and at guidance the had of an right oil a barrels billion. with it a

to billion. Our more which -- year-over-year free $XXX full was flow flow flow was year than cash full free million approximately XX% of billion, $X We cash returned cash up year shareholders. $X.X our of directly generated our

foot are capital. management return execution of per by assets, lateral our and We each decline base a performance, continue few the of invested contributing to efficiency in productivity industry design on to lead leading the gains our record-setting completion areas delivering exceptional innovations

closed Both returns of to have pay our to our Uinta deals Montney portfolio announcement efficiency shareholders. we of the addition since generation, and November, the in in acquisition increase an and high-graded Alberta with Montney free and cash the oil-rich significantly allowing core debt the assets. adding high-quality locations, In our enhance capital of drilling to us XXX faster transactions these down divestiture

on also we with $X.X the year, the a during billion year million. continued of more ending progress debt decrease reduction to $XXX of make than Importantly, net debt,

XXXX success in us in set execution strong for continued up XXXX. has Our

guidance Our quarter where XXX,XXX delivered from day, range NGLs averaged results The some performance of temporary oil end to fourth the Montney. decision in did reject impacts approximately commence well to gas operational to the Permian and the winter and of strong end volumes slightly continue volumes. base see the and We our during driven was and beating due on a in Anadarko our weather outperformance per the condensate value-based guidance. below low beat production the strong and natural high ethane the barrels Montney, by we our

approximately investment our the quarter was fourth capital midpoint million, $XXX with in guidance line range. Our of

We also track meet on per beat item, cost as our industry-leading to operator. unit guidance on an or continuing every record build

flow totaled momentum. more cash quarter our another about all, to significant in million. per share us consensus both with and XXXX cash free flow operationally fourth strong $XXX Our than financially, beat allowed estimates and X%, quarter, enter at which All $X.XX by

call Corey discuss in our the to plan now I'll over turn XXXX to more detail.

Corey Code

to of in and of our X condensate rich reduce areas. most portfolio we XXXX, we on leveraging these continue the XX%. level debt. of to XX% program will Each approximately XXX% on focus our expected maximizing is invested cash This our our areas investment after-tax capital means to returns multi-basin and increase oil returns generate focusing shareholder In Brendan. our our flow, our free are further and to returns Thanks,

Although for the each all are different, value compete within capital asset drivers for portfolio. they our

doubling and XXXX. WTI cash $X an increase $XX This gas. million represents flow billion of near NYMEX $X.X and from $XXX of to more than year-over-year of and assuming a expect We about in XXXX free cash flow generate prices commodity free of

approximately and of Our peers XX% the in XXXX and across free market return cash both today's yield flow very broader yield of a are XX% competitive cash industry economy.

quarter free quarter flow. cash first to we reminder, with buyback expect in share a program As restart our the

progress pace, and debt reducing optimize debt Our our structure a making will interest enhanced capital us faster year-end, $X By our debt billion to towards expense. total below $X allow expect -- our target. debt total significant to efficiency at we decreasing well billion our be capital

Even to profile diversified have oil-rich our to is production though gas And AECO U.S. pricing the most result, and price we weaker higher and [ Canada. torque moving markets ]. exposure significant investing in gas prices. about XX% parts intentional of we're a been in our away acreage, the from like downstream hubs as in our Waha We've very

acquiring the basin done of We physically both hedges. have transportation that firm by basis financially with out and

prices, benefit we expect gas year, and AECO even $XXX of Henry X/X from about $X.XX natural price and stand cash outside gas prices, we AECO significantly prices higher remain every more for our million to will generate weak. Hub In flow. XXXX, Waha if of in to free This Waha. means move gas This

Matterhorn a with As on cubic quarter the our reminder, the the price fourth of our exposure even in Permian better commencement day. million for service gets XX the pipeline in per feet

an acquisitions. Access generating extend organic to early of premium this inventory a essential is recognized efforts returns. through appraisal and and runway and to last to lot our done component We to assessment identify work have durable few the opportunities resource years over

across our highlighted built earlier, inventory portfolio. premium we've Brendan enviable As position an

shareholders superior time a returns our As a our long for and can result, plan come. generate we for to execute business

roughly product, very Permian our from a same our strong market. building we million At been high-quality portfolio disciplined of and remain acquisition expect of North deep broader our with many very we intentional and in a that we've deals the we've Montney stewards in in each XXXX, demonstrated capital. with American recent each compares the we per deal We've returns our seen will shareholders' We inventory pleased from acquisition. well the have in recent in and the deliver with are and Montney accretion asset $X realized value location, favorably

now and will to turn the I'll guidance XXXX our Greg, operational to over highlights. call speak who

Gregory Givens

free and teams Corey. for Thanks, primary XXXX. remains a focus in Maximizing our cash flow efficiency capital

As Permian Corey prices. upside our the we Montney, assets, to free flow focused gas free investment focusing of by the our have Anadarko. be from condensate, will of significant anchor our cash also X are the stronger XX% oil About mentioned, and flow on cash but on we and capital supported XXX%

XXX,XXX XXX,XXX of production investment. day deliver total billion will capital barrels oil of and condensate of $X.X day program XXX,XXX about for per per XXXX BOE volumes to Our and

Our full both lower be if X. January the on total closed had slightly than production year transactions Montney will and Uinta

reject elected higher to reject gas the of Anadarko ethane are we've in royalties. Canadian our also higher to royalties due supports and for modestly Additionally, higher realizations expect will ethane the majority volumes. now decision to prices. the and The items we affect our the These year

So free flow the cash result net accretive. is

Montney during day condensate. and about quarter of roughly condensate average first flat We the XXX,XXX The Oil X,XXX the the end approximately impact to transaction from and production per stabilize the quarter the barrels day expect timing remain BOE XXX,XXX close our quarter. and through and in barrels of oil per is per year. day, Uinta including production will second production

will spend the be from in to the inherited impacts, drilling Montney quarter, largely first temporary close activity completions we highest Permian in the in higher transaction capital due timing the activity Our and that seller.

XXXX of oil capital of beyond, sustain development per $X.X allowing of is XXX,XXX investment the about day repeatable to with in us and billion. production efficiency approximately program and our Importantly, XXXX barrels capital condensate

we Permian, being Merit We capital the cash level for highest basin JPMorgan top consistently In free in by Let's the program Midland the cost of operators as productivity, efficiency basin. operations. to of priorities for awarded remain of third-party aspect Basin recently is Ovintiv every work to in the drive one of XXXX performance. the Order shift leadership asset our lowest now our development programs. from recognition the efficiency generation and our received

XX% completed Our XX% more XXXX day was On year about than was per average. completions, in costs. than result X,XXX XXXX and cycle program X,XXX. time XXXX feet roughly feet These our per lower This average. full speed average program than the improvements faster well drilling day averaged was faster our

D&C our at industry per cost at pace in among $XXX than the the foot. Our is less best

brought to unchanged X condensate first the XXXX type at unchanged end XXX roughly This the barrels wells day quarter for oil on and year, and we in at to production started type hold curve. X paint on year. remains the wells This of bring XXXX. drop net will to across and per XXXX, with average rigs was XXX,XXX continue in XXX to online we it the and gross XXX The curve

average Our and than to D&C cost is last $XXX per foot $XX to is lower foot per $XXX year. expected about

from team in deliver to performance well similar Permian consistent turn of expects less capital. number Our for year-over-year a lines

Moving north to Montney. the

new are excited are and working in assets to have portfolio, efficiently as We them business the into integrate our Paramount safely to our and possible. very we as

year. expected, very the Ovintiv the first are as wells performing forward end-to-end looking and well later are design So wells our delivering we to far, in

deliver than to industry-leading plan average we approach well cost reminder, to to assets applying more by a per acquired well we our steady savings XXXX million operations. positive across This in and approach completion drilling, As completion the yield results as daily of in $X.X our and speed. continued production drilling saw improvements data-driven

in the and our cost foot. than our XXXX about average The well portfolio, cost well foot is per XXXX, the lowest we This Montney less expect per has in $XXX D&C $XX to cost.

trade market, production. foreseeable structural it realization was the our XX Canadian there with lines, areas. X-rig In of newly in is Cutbank the price the to of XX Our Montney of And Pipestone ridge roughly acreage, the remaining WTI we'll acquired XX% tightly long-term The since is for to and the XXXX, X/X future. Western legacy see value of average split for XXXX activity activity program WTI. to between our a our driver turn-in condensate X- in Montney deficit in net primary should continue to condensate the

capital. XXXX, to total addition the XX,XXX XX% assets, In or the producer with only the we This the in condensate us per new play. largest barrels for day condensate second more XX% makes expect about more of about produce in

gas than continue XXX% gas As AECO improve year Corey fundamentals should the online. was Montney of underlying NYMEX comes mentioned, and for the In Montney price are LNG The of XXXX, to benchmark prices average Western Canada higher XX% benchmark. or we in AECO imply. supply much our receiving as demand realization our gas Canada would this

to Moving Anadarko. the

per wells minimal from This in per significant about continue a of $XXX is benefit per the and maximizing deliver progress average We stable, foot generation on costs to production in of requirement. nearly out focusing to the cash rate team year. the well-priced of an D&C $XXX year-over-year. lateral lowering continued make operating providing casing base about stay-flat maximizing reduction part decline costs drilling asset, XXXX, exceptionally set pad. due a average to at from well length, per with taken by a its of strong in unique asset In foot speed, $XXX low cost, XX% number capital flow They've strings in per stream low XXXX, foot and the minimizing are to and our of free

our on X.X Our This year, efforts an Order the year. average this XX to from XXXX around rigs gone in barrels unnoticed in condensate plan Anadarko oil and received to the play asset JPMorgan. XX the also at as average hold of for have not delivering We run wells. of XX,XXX recently per day play the will volumes our essentially Merit

I'll now turn back to the Brendan. call

Brendan McCracken

sheet. maximizing We're free Thanks, Greg. generating cash outstanding deliver In the maintaining generating strong of and balance closing, significant focused and results. -- on profitability business, we our continue to our

driving execution to positioned premium focus inventory road profitability and on Our building thrive have ahead. the allocation excellence, disciplined business capital our on depth,

now This remarks. the line questions. concludes prepared to our Operator, for ready open we're

Operator

question First Instructions] TD from at Cowen. comes Daoud [Operator Gabe

Gabriel Daoud

was in you to bias you maybe Midland. standpoint, highlighted attractive inventory? Brendan, more I Permian, there add first would say from -- Montney returns and some rising add more a given here Would an start pretty acreage versus Permian where Montney the from was where in the hoping your to be portfolio. if could to are But A&D versus the need maybe with location values entire you if across

Brendan McCracken

What being thanks on far. at assets have beat I'd I'd really a and has guess like a market pointed level inventory in and the at acquisitions. a what is generate for come. the of representing before we for long I of say confidence today to Yes, portfolio say relative feels I cash that a to investors. multiyear so Gabe, high questions. X the making hard what for been XXXX a depth we're to for a and And it our level quality ton maybe to comment done we've the is really time flow high for feel able effort to level portfolio portfolio the what assemble we a free new that and This

I feels to high it so beat really a that you'd it guess, bar And difficult, today. call

be years. our general, last we've in would view from so what position we're And about we of a anything done is would and several do strength, excited coming the over

the for massive X. you've million do the of there's terms to just we prints the around for hit same seen were in north relative mean, as time, of that. -- In our transaction able it, between in we've I right the a arbitrage well And at Permian $X undeveloped location,

So we that's to to them. be we're our positioned create to access and for think able value that uniquely shareholders

Gabriel Daoud

as really Brendan. the then powerhouse. follow-up, slide, the Permian helpful. you on a I Thanks, guess Montney just That's And oil and mentioned

there? the off would then does So that updated I Any back question of term. how guess, good thoughts fit just Anadarko into the be longer portfolio

Brendan McCracken

the in the a Montney, to big the part prosecuting of Permian then ourselves going a Yes. And how you inventory in running got our absolutely, XX over place XX% the of where business put that if and so premium strategy to we're inventory the We've and Permian, is and of decade oil at the the close in we Anadarko. in capital of years look into XX% XX%, oil and Montney closer a here. is

of supercharges it's us. for valuable and It's of And it, nature And couple free cash is the is even it low does generating. is And really highlighted what role perhaps asset. that play. unique about what's times the a the that Anadarko so the that filling but it underappreciated like really a that we really decline we've

are the we're great really type capital our down year. boost a very out build the which XX,XXX And that spend well spot cost will QX a is that XX% the excited base of lower that's don't team year-over-year. has in a asset also where little about job a in would role returns. a we the But this highlight curves type So around curves means mark but up, XX%. then much that decline, getting barrel level day done I there to that to have at to and Anadarko start playing. up and It

Permian in financial for we're rig they're allocation perspective. the rig so same in running the And is Montney, from which the outcome the whether capital a or a or delivering a the very Anadarko business, important

Operator

next The Doug question comes at Research. from Wolfe Leggate

Unknown Analyst

[indiscernible] for of target Doug in have Leggate be first particular question debt target, a net billion. $X you regarding this morning, this he your is time. long-term unavailable My would

by your the target for by reduced million I do being end you project guys past guess debt of You of kind quarter. net $X.XX XXXX. what

how any give color number? and get you can you me that that on If to

Brendan McCracken

absolutely. Yes,

I So of mark by underneath year. end going we're we've the to got $X the material is get well think it in what the billion this

$X.X which us If -- of you $X.X $X screen XXXX about prices by end look million that distance we're billion get the into spitting puts getting the because range excited that target within in that or on today, be to at year, now to XXXX. that million, in the really

about So the were on really excited there. trajectory they

in about the pointed Montney in acquisition resuming kind to into quickly. well, buying very that really on second and here quarter the materials back excited this pause market get reduce shares at buybacks we've we'll incremental took be and with the able in that back of because And acquisition the following debt we've we off buyback level. the the the of the that we're been excited as

Operator

from JPMorgan. Jayaram Arun at The question comes next

Arun Jayaram

opportunities what which a across you from inventory you and terms do this strategic you look inventory the position X future into that on and forward, oil in the durable billion points Brendan, little of continue to does highlighted maybe double Brendan, basins, as other the time. maybe updated depth inventory at $X of potential beyond we strip think side for free obviously, of over analysis just gas core your a digits and over provided for well A&D as we that an cash flow, you standpoint, just bit that side. on about having think that to the

Brendan McCracken

I love Yes, Arun, question. the

us inventory the new built I the category which it business the and generation behalf we're confidence that shareholders, and a that's the into the is free that think really of that lower in confidence which with on quality, gives inventory in impress it, it to us that puts here, costs, we've cash and our We're think point and which important coming addition of to and lower what free durability in also position. enviable. is profitability higher you're that. capital seeing means depth is the flagging cash and really higher cash we trying that's

flow cash So to to to time. by to side a returns generate say, just confidence to the buybacks drive our a the and free equity reducing able and boost cost and over inventory value shareholders cash durably of providing per holder flow effect then the shifting great it's we're continuing And on I use just cash combined gains, the then capital be efficiency really our that in debt. these the we're share like the getting with both

So kind it's attack. of all-of-the-above an really

to And you in makes portfolio. would And asked A&D hinted I or at I we've the of an bar been frames high question up that how do terms what say given in you this already that higher, just able with it of even think also -- your thoughts.

Arun Jayaram

question just I is impact. follow-up, and the Canada if you the incoming my question was us potential pretty just it's analysis done given Maybe just Trump don't hear. here, just can maybe wondering on provide one picture of I general was wondering, gotten a Brendan ton you've a and some impact tariffs where frame regulatory have to if on macro -- there's we've potential I details that if Great of Corey, help the know some thoughts maybe we some but because complicated just on

Brendan McCracken

extreme And Is What at dig as you me uncertainty and a be our modest moderate the Yes, in that anticipate And of to modest to of more. we fair how going still sort kind you a in even timing. type might give are to are they a so magnitude impacts impact it more of scenario let more be it 'XX. what a describe there absolutely. Look, market? is and bit a from expect, sort pictures in you tariff going flagged, very about we our expressed a done, And the scenario little we've the steering we impact this the business. flow ranging exceptions? the of cash contained in to extreme scenario. there's a any point, bit to as pretty tariff of more

just places supply to different in might for helpful our folks tariffs this in business. tariffs to impacting we I'll Maybe and be aluminum understand We place. that expect something already the it we'd because would flag see see the potentially have steel chain.

could So an in here, that bleed through OCTG remember source largely international imports. U.S., because impact. as tariffs OCTG of some prices on all And the shows our domestically be there the we domestic up of but to

we proactive supply effect. in part a already. we've severe chain to anticipate don't that and So of But a been purchasing be pricing significant that XXXX

On export the gas of course, side, into West the and we Coast. U.S. Chicago into gas

for is finally, into this so a then, to on of there dollar import, tariffs I'd could And there. we And Canadian Canadian dollar. business, view for of point is for that lower be Canada. the into the see imports AECO the down sort exchange. dollar And the are within that the free some our say counterbalance there all U.S. strengthen domestically favorable cash through U.S. And is the consensus on relative foreign then the Canada Canadian would generation. which And of is of around reciprocal condensate tariffs conditional gas all the Again, sell our course, markets. bleed that range. impacts the a and also could

suggest their pretty we that to of our picture paint cash even different flows, and all those you neutral of that net-net kind So an today. terms in can scenario extreme put XXXX together more impact categories tariff scenarios

being lot a anticipate flows. impact 'XX it So significant cash of watching Clearly, closely. a to dynamics, but don't there's it

Operator

at comes from Truist Securities. Dingmann next The Neal question

Neal Dingmann

efficiencies of your I'm question maybe for you are expectations ops again, you or are sort notable. the Greg, for just Greg cost what and wondering, of when I'm for that you of wondering, at or are both. my And thinking have just wondering efficiencies. looks yourself might least operational guide at just year. continued It I'm look just sort remainder this service all viewing Brendan, the versus you a like this year, benefit how of

Brendan McCracken

Yes. Neal, absolutely.

So I'm XXXX we've to are built single-digit it High about program, into to a the to really going Greg gains, it kick level, just Greg. -- few got but deflation kick and the true I'll gains low of to efficiency bulk highlight maybe but key of a the ones. the

Gregory Givens

in both XXXX. wells drilled couple Yes. of what drilling completion, drilled stats. in had in be a were the and Permian and able just in in the XX our Permian the of continue XXXX accomplish. fastest was the for we've and I we've impressed Maybe with Neal. ever mean, I'm Canada. the XX fastest just to teams Thanks year to they're question, ever

significantly to continue continues just that's what rig to count. better. team And the So to get drop us allowed

we of is activity. to amount that to my in here constantly frac the up at just frac as calendar. end X ended dropping number trying to in X rigs trying really X take up as the right And then And all prepared off of and efficient with of rigs had Permian, dropping the be the the Last of we'll mentioned running white to year. the the late first remarks, I possible We're right the crews rigs space sync match as quarter. be to in up year,

impressive. Something that was really

for that X do to wells you the were to with could of set we're XXX that majority on this crew. that If pair trimul-frac We and rigs take X with the up. XXX running year planning

almost what X see we with norm the for full if to continue today with wouldn't crew be we with think efficiencies I surprised rigs program the So that becomes trimul-frac going be and forward. our accomplished us could X

strongly continue course, in going. to believe schedule. be balanced But of teams just and we they're how the of really programs fast in level-loaded then So a proud

some we year, loaded just as efficiencies bring to more level think we towards that the So of will we're activity But that these to program. year of more great then savings performance, the going into get end reallocated be see even those here and see the to continue continue 'XX. in well

Neal Dingmann

the the one now And wondering, Permian you footprint. just for been fair obviously, your you space still last Montney guys white that when there the just on you amount I'm thing, Is fill foot see hit Brendan, in with of M&A, in. have Great. busy Montney. a can

on smaller Just wondering deals.

Brendan McCracken

Neal, a just question to going try some of Yes, little we on -- Montney think fill on and just but are there, space map. was I to Permian and your you're the the muscle in I yes. continue white in sort And

Good. right. heard that I Okay. Yes.

terms of capital given high I it raising even described in the last similar created. allocating that we've is inventory there think bar answer towards acquisitions, we've quality several years depth over of and kind to we're taking a higher and had the the what the I before. success It's and given --

do I a at up long expect teams bolt-ons laterals pace. can are continue going coring we've and the swaps that I on but -- we're think pretty that drill footprint disciplined and already would to got. of to So a continuing acquisitions. go-forward to about work so around we be on And that thinking how lot

Operator

question The Bank Kalei from . of comes Akamine America. of next

Kaleinoheaokealaula Akamine

Corey. for is question this Maybe

the appreciate a sensitivity delta flow at versus free there we cash kind is yield of So the Street. XX%,

to insufficient? guys analysis you you were do together, be where numbers find Street putting As that

Brendan McCracken

Kalei. that Yes. Thanks. Corey, to I'll over flip

Corey Code

portfolio. the to a our about we or to even natural bit little oil mean the time back did go lot year X, And last more gas. we've I leverage Yes. I talked take highlight you over think a if

gas at our of just results, not what and various you've all had reminding just the cost, heard I So if elements people we look efficiency, that capital the of outperformed. but of some But the think, you natural good exposure have. of through significant call, have actual we've

factors So short guess it's it's probably realized But on which contributing the to free price look a bit of multiple cost flow. analyst on at, outperformance a cash combination answer the side. or I on that you depending whether is

Brendan McCracken

Kalei, And did I disclosure is out, would this would the some add, I overnight think just have good just we there. would put with -- Again, a we're that team those had -- Brendan. did models add them, with analysts there projections the few some I I sorry, we've put conversations get to up bus of the that in cash and cleaned able and just that some match out the were free add, where

Kaleinoheaokealaula Akamine

than why Sounds Montney GP&T over consider remind kind if shifting of higher your you ownership fixed so, that bringing the And to at would it's good. assets? us looking to in-house. it's different? peers related Kind ever Is it of expense, in cost GT here, Can you of basin.

Brendan McCracken

-- in of The been ownership decades, and ownership the exactly. of a of midstream Kalei. it third-party hit owned. bag Yes, -- non built just is it has Montney, the There's midstream largely speaking, midstream a our way the mixed on you've and out generally over

So our acquisition. we'd looking every as cost cost, but we side things profitability, looking of realizations weigh the have opportunity far of at we're to always think And to course, enhance reflect as that. on can that the bringing at I in-house, that against

Operator

at comes question next [indiscernible] Goldman from Sachs. The

Unknown Analyst

Are with here? the characterize book? you reduce to about in is production from either gas Thinking volatility, unhedged your proportion further sufficient management you hedge would or covered seeking of through your exposure, a risk portfolio oil current

Brendan McCracken

much the management Absolutely, further. retain signaled sort And pretty to that's $X that can along, we've that it, way hedge been be to prices, XX using we've on been NYMEX. commodity TI it, hedge have what while while about withstand the this and think to floor. risk X we've ways to down, that -- call book debt call put is can that strategy you're want following all we it so really we been been of on XX% continues And place the book running we've case, how that period, even months able as the a shrink long we delevering. that creating need $XX get about the And is of and in a we to as be large low a

we thereafter, strategy. leverage target following be hedge look that can get out do we XXXX, then range. we into I So to as think to the as back continue drag down continue look the we'll into that to But

Unknown Analyst

about my then you compelling XX have trimul-frac. Permian much estimate of optimal been XXXX XXXX. in you consider XX% that operations would in closer upside And second see trimul-frac to Great. question, XXXX the results or or operations? of the Do for from for July proportion also outlook XX% to utilizing very

Brendan McCracken

it I And so see have the know, team. don't other with up inch any the been you'd I Yes, sort we'll of far Greg, time. record continue think track for comments there? if to That's

Gregory Givens

Yes.

up. keeping just thing come over think will our wells doing from trimul-frac only The the all are location to with us ground. continue limitations I physical of that time, on physical

or have same We wells you pad thing that or X wells frac X where we'll a that that all prevents But X you have physical up. other at some on road from the a in continue don't you separated time. situations to of have are by those inch some

what's think, That's there. trimul-frac. we're complete the feet with results We from more per be very anybody continue getting we industry to than allowing [indiscernible] in us out the day to happy

that. work And continue so we'll to on

Operator

Partners. MacCurdy Energy from comes next question Kevin Pickering at The

Unknown Analyst

to the company that price assets a shift sensitivities of companies. to My are operational agree prices about there flow going little on But or activity? X and to we among I X, you would the sensitivity on gassier questions focus on on sensitivities. one gas the ask higher would the cash Slide gas. to Is bit that details oilier free capital you have the a increase I overall appreciate wanted

Brendan McCracken

Kevin, but question. oil a an with you you of a you with drill you we've oil folks, tried X whole gas -- of really meaningful. one. it. great you a it's And flag When get well, bunch interesting bunch a it. well, when get you get I well, drill gas when for a whole Yes, It's to drill gas think actually And

from it so capital actually value an is asymmetrical perspective. And choice a allocation

like, like the So what being we really prices are in given and fundamentals where maintenance is today we mode.

cash for cash of is allocation to we're right shares buying get business. a share investing by excess the we buybacks that's could And free to outcome continue those growth from back gathering the that growth. to flow in not and flow the We better than per believe because

off. of sort that's first so And

depending and we obviously, we're the gas to "Oh, you opposed between to then allocate no, we decision the And as But breaking there our upside. upside wells prices, with associated So look can point the and today's a fundamentals. saying, really directly dry capital oil, an favor allocating comes and gas gas." associated then the be on continue to getting to oil the drilling at allocation going when oil to it to like as with gas along

Unknown Analyst

follow-up, And AECO diversifying of I really appreciate have on a that done But that market how you've as locally? more any comes your response. good for a hopefully, do online you view exposure. demand develops, job

Brendan McCracken

Yes.

which I X already operators day benefit think off a line transient But be And pretty a coming some to see and of our AECO is which there, little offtake going from of for view our there, the the this the up first which from companies been some summer been to opposed participant relatively there's this exciting. we're that is additional over probably Bcf reset pricing. as is Coast. of color has time West of loads, some it's the structural been on to consistent the has a some quarter going view

AECO so to been from gas away our that the And of has to basin. continue strategy continue. think diversify will kind I And

hundred a of AECO exposure acquisition. day with Montney couple a inherited We the additional million of

interested a that's also be counterparties exciting. options into showing we've at Chicago more So markets gas, the optionality in West chip that's where exploring there's up really LNG been Coast a of data likely between already lot lot conversations gas that to of something this of but the getting there, which is some exploring demand see in with serving you'll we're away for center -- us

in of counterparty the in some to a status And our and those we which subsurface both it's confidence, investment-grade of think a a because provider differentiated of basin, petchem we're financially of Western gas our lot or choice gas and resource for give deep a Canada be of in because can center place projects, data whether in the resource.

Operator

from The next World Dennis Markets. CIBC Fong comes question at

Dennis Fong

of first along the to carry thought last the of with is Maybe there. kind one train

You describe ensure -- for few the contract longer duration a in that LNG know kind term that to characteristics for wanted guess, what if was selling longer I us can you'd to, a or situation? whatnot I of to looking that a the an there's whether attractive debt. to option types or I want you've contract be as type but mentioned been of of Can remind you of historically, lock opportunities in these or some necessarily pricing, don't you

Brendan McCracken

the markets to made start you thing in diversification the the like having to interested so not is of with to with think diversified already. I Dennis, putting X of Yes, And downstream speak. all that see first we're basket, here. We that we've portfolio a idea in getting can today. eggs

I think our that pet you expect a local mix should of going vision I is opportunities. portfolio have centers to and said, of is portfolio what for from whether so like us forward, demand, a And and a data incremental it's, LNG chem mix or

up only really think that into fixed not realizations, processing uncertain risk. is long-term point for but so not about things portfolio really focus upside an like we us those to that's signing for our been transportation deals one a the how But what for provides helps a see manage is us And I and And we'll come wind it together. the of kind contract up that's market. of

that commercial And long-term sure ways service a make wind up so to we of to risk that's is find long been the that diversification manage time. periods underwater and agreement for not focus of with team is our

Dennis Fong

I I to cost shift color. side. appreciate bit that more a little gears Great. into wanted the

that's forth, with so material the leader guys efficiencies lot and a maybe completion use [ rate obviously, obviously your tubulars something with been tariffs group to the remind supply of you around to obviously, are completions so management. of trying you I Can optimizing so a trade efficiency, go drill as You've risk chain that have also of and kind ] you is forth? risk management how of around trimul-frac. on around managing wanted and made forth? drilling, operations, of progress well obviously, to into maybe I how pipe, supply and manage us know chain

Brendan McCracken

over tariff been a in we've upsets be is And supply I the player you, looks lot geopolitical quite that we've Yes. to supply would tell that piece pretty the sophisticated while. off of years a for been be encounter chain. prepared It Dennis. Great work that last paying uncertainties. as risk a question, for now of these to in the chain And couple doing we

this on have too, before so year. want to And comments, some we've of we're mentioned sort covered fairly on might for well OCTG and Greg

sole day if a make supplier into sure add see are And and any don't Greg, a or we impact. the or you chain that tariff to we've that up for pieces other see our reviewed feel and dynamic parts pipe whether every fittings to free. disruption points, and anything we supply the it's where But thoroughly type wind chips also utilize pinch for a sales of big or want

Gregory Givens

the supply. was we last for job to make had chains several of That question. a Thanks Yes. over supply the team security really our deep good the initial sure done years has concern. our And of into digging

guarantee not get our to only recently, all traced that supply more supply, being and avoid at the of are to chains all also where what of not we sure guarantee price potential providers the right secondary to only but we way initial back applies and we've products to but our making So then it manufactured the need, can tariffs. get of security

working other year, items as we've but locked in most then so and pricing supply. locked fair our to at so And we're smaller access got through sure A we've we're those we've tubulars all secured of the domestically, well. that are of this year. in need those of to lot predominantly going prices the for done

overall as cost. as minor capital be or mentioned So other volatility through question, should they relatively Brendan in previous our any the tariffs to flow

Operator

completed At call Mr. Verhaest. this have to we turn the back session. over the And question-and-answer time, I will

Jason Verhaest

joining Thanks, for and this us thank you, Joanna, morning. everyone,

Our is now complete. call

Operator

today. We Ladies and that for conference lines. thank you gentlemen, your call you and concludes disconnect please this we ask your for participating,

Ovintiv (OVV) 27 Feb 252024 Q4 Earnings call transcript