Deal Marks Continued Focus on Permian and Preparation for Acquisition of Montney Assets.
Originally inked in late 2024, Ovintiv Inc. has completed its sale of Uinta assets in Utah to partners Four Point Resources LLC and Quantum Capital Group for $2 billion, noting that the funds will help to offset the cash purchase of approximately $2.377 billion of Paramount Resource Ltd.’s Montney assets in Canada. The Montney deal is expected to close in Q1 2025. This compliments their previous sale of $825 million worth of assets in the Williston Basin of North Dakota in 2023, which also added 65,000 net acres of undeveloped land in Ovintiv’s existing Permian area.
These transactions will allow for allocation of 85-90% of their 2025 capital resources to Permian and Montney assets and increase their free cash flow by almost $300 million. Ovintiv has also paused their stock buybacks until the remaining difference between their sale of Uinta assets and purchase of Montney assets is balanced.
Figure 1. Ovintiv’s current assets in Uintah, announced as substantially all being sold to Four Point Resources.
Figure 2. Map showing Paramount Resources and Ovintiv current wells across Canada.
We recently noted increased activity and future unconventional potential in the Uinta Basin in several TGS Weekly Spotlight analyses (1 2 3 4). While other players have moved into the region, with some proclaiming that production yields can compete with the Permian, Ovintiv has chosen to tighten their purview to core areas with existing assets they have deemed to be more in line with their long-term goals.
Using TGS Well Data Analytics, we can see Ovintiv’s assets within the Uinta Basin (Figure 1) and recent overall production and forecast (Figure 3), showing that Ovintiv’s largest producing formation, Uteland Butte, has a total cumulative volume of 30.4 mmbbl.
Figure 3. Overall daily production for Ovintiv’s Uinta wells has been on a steady increase since 2020.
Figure 4. Daily unconventional oil production by formation for Ovintiv.
Looking at type curves for oil and water production (Figures 5 and 6), we can see that Ovintiv wells perform favorably compared to peers in the basin, with their oil EUR 19.2% higher and water production only 1.3% higher than other top operators. These assets will serve to bolster a foothold for Four Point Resources and Quantum Energy Partners in the up-and-coming region.
Figure 5. Oil Type Curve for the first 200 months showing Ovintiv as the highest oil producer.
Figure 6. Water Type Curve for the first 200 months showing lower water output for Ovintiv compared to peers.
For more information on TGS Well Data Analytics or to schedule a demo, contact us at WDPSales@tgs.com.