Ovintiv Inc. has entered into a definitive agreement to acquire all outstanding shares of NuVista Energy Ltd. in a cash-and-stock transaction valued at approximately C$3.8 billion, including C$300 million in net debt and Ovintiv's existing 9.6% NuVista ownership. The acquisition represents a strategic consolidation in the North American energy sector, positioning Ovintiv as a more substantial player in Alberta's resource-rich Montney formation.
The transaction, priced at an average of about C$17.80 per NuVista share, will add roughly 140,000 net acres to Ovintiv's portfolio, with 70% of these acres remaining undeveloped. This substantial land acquisition includes approximately 100 thousand barrels of oil equivalent per day in production capacity from the Montney formation, one of North America's most productive energy regions. The deal is expected to contribute approximately 930 total net well locations to Ovintiv's development inventory.
President and CEO Brendan McCracken described the acquisition as delivering "top decile rate of return assets in the heart of the Montney oil window at an attractive price." He highlighted NuVista's strong well performance, strategic infrastructure, and gas diversification as key benefits that will enhance Ovintiv's operational capabilities. The company anticipates achieving approximately $100 million in annual synergies through the combination of operations.
Financially, the acquisition is projected to provide immediate Non-GAAP Free Cash Flow accretion of about 10%, strengthening Ovintiv's financial position. The company plans to fund the cash portion of the transaction through existing liquidity and a term loan, while temporarily pausing share buybacks for two quarters. Ovintiv will maintain its base dividend throughout this period, providing stability for shareholders.
As part of its broader strategic realignment, Ovintiv announced plans to divest its Anadarko Basin assets in 2026. The proceeds from this divestiture will be used to accelerate debt reduction toward a Non-GAAP Net Debt target of $4 billion by year-end 2026. This financial discipline demonstrates the company's commitment to maintaining a strong balance sheet while pursuing growth opportunities.
The acquisition's importance extends beyond the immediate financial metrics, representing a significant consolidation in the North American energy landscape. By combining operations, the companies can achieve greater operational efficiency and scale in the competitive Montney formation. More information about the transaction is available in the full press release at https://ibn.fm/BdKGc, while additional details about Ovintiv's operations can be found on the company website at https://www.ovintiv.com/.
This transaction occurs during a period of ongoing consolidation in the energy sector, where companies are seeking to optimize their asset portfolios and achieve greater operational scale. The combination of Ovintiv and NuVista creates a stronger competitor in the North American energy market, with enhanced capabilities to develop the Montney formation's substantial resources efficiently and responsibly.
