01—Abstract
Summary
Summary of the 10-Q filed July 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Ovintiv Inc. reported net earnings of $340 milliona for the three months ended June 30, 2024, compared with $336 million in the same period of 2023, and net earnings of $678 million for the six months ended June 30, 2024, compared with $823 million a year earlier.
Diluted earnings per share were $1.27b for the quarter and $2.51 for the six months. Product and service revenues were $2.19 billion for the quarter and $4.58 billion for the six months, while cash from operating activities was $1,020 million for the quarter and $1,679 million for the six months. Non-GAAP Cash Flow was $1,025 million for the quarter and $2,060 million for the six months.
Production averaged 593.8 MBOE/d in the second quarter, above the company's guidance range of 560.0 to 575.0 MBOE/d, and 583.8 MBOE/d for the six months, which the filing attributes in part to the Permian assets acquired in the second quarter of 2023. Realized natural gas prices fell 43 percent for the six months, while realized oil prices rose. The company repurchased approximately 9.0 million shares for about $434 millionc in the six months and paid $0.60 per share in dividends totaling $160 million.
On July 30, 2024, the Board declared a dividend of $0.30d per share payable September 27, 2024. Long-term debt, including the current portion, was $6,087 million at June 30, 2024, up from $5,737 million at December 31, 2023, and the current portion rose to $1,234 million.
Total liquidity was approximately $3.1 billion, and the company reported Debt to EBITDA of 1.2 times. The company also updated its full-year 2024 production guidance to 570.0 to 580.0 MBOE/d and narrowed its full-year capital investment guidance to $2,250 million to $2,350 million.
02—Key points
Key Highlights
- Net earnings of $340 million in Q2 2024 versus $336 million in Q2 2023; six-month net earnings of $678 million versus $823 million.
- Total revenues of $2,288 million for Q2 2024 versus $2,517 million in Q2 2023, including $77 million of net gains on risk management.
- Cash from operating activities of $1,020 million in Q2 2024 and $1,679 million for the six months; Non-GAAP Cash Flow of $2,060 million for the six months.
- Q2 2024 production of 593.8 MBOE/d exceeded the guidance range of 560.0 to 575.0 MBOE/d; full-year 2024 production guidance was updated to 570.0 to 580.0 MBOE/d.
- Repurchased approximately 9.0 million shares for $434 million and paid $160 million in dividends during the first six months of 2024.
- Long-term debt rose to $6,087 million at June 30, 2024 from $5,737 million at year-end 2023; Debt to EBITDA was 1.2 times and total liquidity was approximately $3.1 billion.
- A dispute over previously divested legacy assets was resolved in Q2 2024, with net proceeds of approximately $150 million expected later in the year as a contingent gain.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 30, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $2.29B$2.52B | −9.1% |
| Operating Expenses | $1.73B$1.99B | −12.8% |
| Operating Income | $556.00M$531.00M | +4.7% |
| Interest Expense | $105.00M$80.00M | +31.3% |
| Net Income | $340.00M$336.00M | +1.2% |
| EPS (Basic) | $1.28$1.35 | −5.2% |
| EPS (Diluted) | $1.27$1.34 | −5.2% |
| Shares Outstanding (Basic) | 266.20M249.40M | +6.7% |
| Shares Outstanding (Diluted) | 268.10M250.80M | +6.9% |
05—Questions
Frequently Asked Questions
How did Ovintiv's earnings change in the second quarter of 2024?
Net earnings were $340 million for the three months ended June 30, 2024, compared with $336 million in the same period of 2023. Diluted earnings per share were $1.27 versus $1.34. Operating income rose to $556 million from $531 million, while income tax expense increased to $126 million from $101 million.
What drove the change in natural gas revenues?
For the six months ended June 30, 2024, the average realized natural gas price fell $1.33 per Mcf, or 43 percent, which decreased revenues by $411 million. This was partly offset by higher natural gas production volumes that added $30 million. The filing attributes the price decline to lower AECO, NYMEX and Dawn benchmark prices.
What is Ovintiv's capital investment plan for 2024?
In July 2024 the company narrowed its full-year 2024 capital investment guidance to $2,250 million to $2,350 million. Capital expenditures were $1,213 million in the first six months of 2024, and the company invested $622 million in the second quarter, in line with its guidance range of $610 million to $650 million.
How much debt does Ovintiv have and how is its liquidity?
Long-term debt, including the current portion, totaled $6,087 million at June 30, 2024, and the current portion was $1,234 million. Total liquidity was approximately $3.1 billion, including $3,250 million of available credit facilities. Debt to EBITDA was 1.2 times, and the company stated it was in compliance with its financial covenants.
What shareholder returns did Ovintiv provide in 2024?
During the first six months of 2024, Ovintiv purchased approximately 9.0 million shares for total consideration of about $434 million and paid dividends of $0.60 per share totaling $160 million. The Board declared a $0.30 per share dividend on July 30, 2024, payable September 27, 2024.
06—Continue