Ovintiv increases production guidance on Permian asset integration pace
Ovintiv Inc., Denver, has increased its full year 2023 production guidance on strong well productivity and faster-than-expected integration of Permian assets acquired in a multi-billion dollar deal earlier this year.
Full-year production volumes are expected to average 550,000-560,000 boe/d, with full year capital investment of $2.745-2.785 billion. Full-year capital efficiency is expected to improve by about 6% compared with guidance issued following completion of the Permian asset acquisition in June, the company said in a release Nov. 7.
Earlier this year, Ovintiv agreed to acquire substantially all the leasehold interest and related assets of Black Swan Oil & Gas, PetroLegacy Energy, and Piedra Resources (OGJ Online, June 15, 2023).
The operator expects all acquired Permian wells in progress to be on production by year end. Total company oil and condensate production is expected to average 220,000-227,000 b/d in this year’s fourth quarter.
In 2024, Ovintiv expects to deliver total company average oil and condensate production volumes of about 200,000 b/d with total capital investment of $2.1-2.5 billion. The production profile is expected to stabilize at about 200,000 b/d by second-quarter 2024, one quarter sooner than originally planned, the company said.
Third-quarter 2023
Third quarter production was at or above the high end of guidance on every product with average total production volumes of 572,000 boe/d, including 214,000 b/d of oil and condensate, 87,000 b/d of other NGLs (C2 to C4), and 1,625 MMcfd of natural gas.
Permian production in this year’s third quarter averaged 194,000 boe/d (83% liquids). Ovintiv had 83 net wells turned-in-line (TIL). Ovintiv plans to invest about $1.43-1.47 billion in the play in 2023 to bring on 170-180 net wells.
Montney production averaged 229,000 boe/d (21% liquids) in the quarter. The company had 22 net wells TIL. Ovintiv plans to invest $540-580 million in the play in 2023 to bring on 75-80 net wells.
Uinta production averaged 24,000 boe/d (84% liquids) in the quarter. Ten net wells were TIL. Total investment of $415-435 million is expected this year to bring on 21-26 net wells. Capital investment in 2023 includes drilling and completion expenditures on wells that will not TIL until 2024.
Anadarko production averaged 119,000 boe/d (60% liquids) in the quarter. The company had one net well TIL. Ovintiv plans to invest about $190-210 million in the play in 2023 to bring on 26 net wells.
For this year’s third quarter, the company generated net earnings of $406 million and cash from operating activities of $906 million.
Third-quarter capital investment of $834 million was lower than the third quarter guidance range of $840-890 million resulting from capital efficiencies.
