Ovintiv expands its Montney shale business with NuVista $2.7 billion deal

Ovintiv announced on Tuesday that it will buy the remainder of NuVista in a cash and stock deal valued at $2.7 Billion, including debt. This move will strengthen the presence of the Canadian shale producers in the Montney basin.

The North American firm acquired oil assets in the Montney Shale from Canadian company Paramount Resources for $2.38 Billion in cash last year.

Brendan McCracken, CEO of the company said: "This acquisition combined with our inventory additions in the Permian from our bolt-on work is giving our investors top-tier resources at attractive full-cycle return."

The company said that it also planned to start a divestiture for its Anadarko assets, which they expect to finish by the end 2026. The proceeds will be used to reduce debt.

Ovintiv already owns 9.6% NuVista and said that it would pay C$18.00 for each share. The total consideration will consist of 50% cash and half Ovintiv common stocks. The offer represents a premium of 5.6% over NuVista’s Tuesday closing price.

The deal will add approximately 140,000 acres net and 100,000 barrels oil equivalent per day to Ovintiv’s existing operations, which are located in the heart of Canada’s most important shale-play.

The company has suspended its share-buyback program for the next two quarters in order to fund a part of the transaction, which is expected to be completed by the end 2026.

Ovintiv shares rose by 1.2% after the bell to $37.75. Reporting by Vallari Shrivastava from Bengaluru, Editing by Tasim Zaid

(source: Reuters)