DENVER, March 9, 2020 /CNW/ - Ovintiv Inc. (NYSE, TSX:
OVV) today provided additional information related to its strong
capital structure and liquidity. In addition, the Company has great
flexibility to quickly adapt operations to changing market
conditions.
"In addition to our liquidity, we have substantial operational
flexibility and a track record of driving cost reductions across
the business," said CEO Doug
Suttles. "We will be reducing our near-term capital spending
to ensure we maintain free cash neutrality in the current market
conditions. When combined with cost savings, we are confident that
we can do this while maintaining the scale of our business."
Balance Sheet & Liquidity:
- $4 billion credit facilities
recently renewed through July 2024.
No reserve-based, cash flow, EBITDA lending covenants or minimum
credit rating requirement. The facilities are based on book value
only (not market capitalization) with a maximum ratio of 60%
debt-to-adjusted capitalization (at year-end 2019, ratio was 28%).
The capitalization calculation adjustment includes a fixed
$7.7 billion add back to
capitalization. Full terms can be found as an exhibit to the
Company's Form 10-K.
- Current liquidity is approximately $3.5
billion, which represents the $4
billion credit facilities plus cash-on-hand, less the
current commercial paper balance.
- OVV is currently rated investment grade at BBB.
- Approximately 80% of total long-term debt is due in 2024 or
later with a weighted average bond maturity of approximately 10
years.
- The Company has significant flexibility to manage the late 2021
and 2022 maturities, including the use of the credit
facilities.
Hedging position protects cash flow:
- More than 70% of 2020 crude oil and condensate production and
2020 natural gas production is hedged at prices significantly above
the current market. The Company utilizes more than a dozen "A"
credit rated hedge counterparties. See hedge table in this
release.
Recent U.S. Shelf Registration Filing:
- A recent U.S. shelf registration filing was made Friday. This
shelf was part of a normal course renewal and the Company has no
current intentions of issuing any debt or equity under the
shelf.
The Company expects to finalize and communicate on its response
plan in the coming days.
Hedge Volumes as of December 31,
2019:
Natural Gas
Hedges
|
2020
|
|
Oil &
Condensate Hedges
|
2020
|
Total Benchmark
Hedges
|
1,188
MMcf/d
|
|
Total Benchmark
Hedges
|
165
Mbbls/d
|
Benchmark Hedges
($/Mcf)
|
|
Benchmark Hedges
($/bbl)
|
NYMEX
Swaps Swap Price
|
803 MMcf/d
$2.65
|
|
WTI
Swaps Swap Price
|
70
Mbbls/d $57.56
|
NYMEX 3-Way
Options
Short Call Long Put
Short Put
|
330
MMcf/d $2.72 $2.60 $2.25
|
|
WTI 3-Way
Options
Short Call Long Put
Short Put
|
80
Mbbls/d $61.68 $53.44 $43.44
|
NYMEX Costless
Collars Short Call Long
Put
|
55
MMcf/d $2.88 $2.50
|
|
WTI Costless
Collars Short Call Long
Put
|
15
Mbbls/d $68.71 $50.00
|
Basis Hedges
($/Mcf)
|
|
Basis Hedges
($/bbl)
|
AECO Basis
Swaps Swap
Price
|
349
MMcf/d ($0.88)
|
|
WTI / Midland
Swaps Swap Price
|
8
Mbbls/d ($1.20)
|
WAHA Basis
Swaps Swap Price
|
105
MMcf/d ($0.91)
|
|
|
|
ADVISORY REGARDING FORWARD-LOOKING STATEMENTS – This news
release contains certain forward-looking statements or information
(collectively, "FLS") within the meaning of applicable securities
legislation, including the United States Private Securities
Litigation Reform Act of 1995. FLS include: ability to reduce near
term investments; strength of balance sheet; value of hedge book
and quality of counterparties; efficiency of operations; reduction
in cash costs; ability to draw on credit facilities and other forms
of liquidity; and intentions regarding issuing debt or equity under
the shelf. These assumptions include: future commodity prices and
differentials; data contained in key modeling statistics;
enforceability of risk management program; and expectations and
projections made in light of the Company's historical experience.
Risks and uncertainties include: ability to generate sufficient
cash flow to meet obligations; commodity price volatility; ability
to secure adequate transportation and potential pipeline
curtailments; business interruption or unexpected technical
difficulties; counterparty and credit risk; impact of changes in
credit rating and access to liquidity; risks in marketing
operations; and other risks and uncertainties as described in the
Company's Annual Report on Form 10-K and as described from time to
time in its other periodic filings as filed on SEDAR and EDGAR.
Although the Company believes such FLS are reasonable, there can be
no assurance they will prove to be correct. The above assumptions,
risks and uncertainties are not exhaustive. FLS are made as of the
date hereof and, except as required by law, the Company undertakes
no obligation to update or revise any FLS.
Further information on Ovintiv Inc. is available on the
Company's website, www.ovintiv.com, or by contacting:
Investor
contact:
(888) 525-0304
|
Media
contact: (281) 210-5253
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/ovintiv-reiterates-strong-capital-structure-significant-liquidity-and-operational-flexibility-301020217.html
SOURCE Ovintiv Inc.