Ovintiv to sell Eagle Ford assets for $880 million

Ovintiv Inc., Denver, agreed to sell its Eagle Ford assets to Validus Energy for $880 million, exceeding its target of $1 billion by 2022 with over $1.1 billion in asset sales year-to-date. The deal follows one signed in February in which the company agreed to sell Duvernay assets for $263 million.

According to its 2020 annual report, as of Dec. 31, 2020, the company held 44,000 acres (gross) and 531 (gross) producing wells (437 oil, 94 natural gas) in the Eagle Ford with an average 95% working interest. Full year 2021 volumes from the Eagle Ford assets were expected to average 21,000 boe/d, including 14,000 b/d of crude and condensate.

In 2014, Ovintiv—then Encana Corp.—agreed to acquire 45,500 net acres in Karnes, Wilson, and Atascosa counties, part of the Eagle Ford shale in South Texas, from Freeport-McMoRan Oil & Gas LLC for $3.1 billion (OGJ Online, May 7, 2014; June 20, 2014).

Total company crude and condensate volumes in this year’s first quarter are expected to average 196,000–200,000 b/d following restored production after winter storms in Texas and Oklahoma.

Based on expected second-quarter closures for both the Eagle Ford and Duvernay deals, full-year 2021 crude and condensate production is expected to average 190,000 b/d, inclusive of about 10,000 b/d from divested assets.

Planned capital investments for 2021 remain unchanged at $1.5 billion, and the company expects to reach its target debt of $4.5 billion by mid-2022. This year, Ovintiv plans to run 3 rigs and 1-2 completion crews in the Permian basin with total capex of $600-650 million. In the Anadarko basin, 2 rigs are planned with 1-2 completion crews and total capex of $300-325 million. In the Montney, 3-4 rigs with 1-2 completion crews are planned with total capex of $375-425 million.