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Ovintiv 8-K/A Report, Exhibit Filing (Feb 4, 2025)

Reports
Exhibits & Filings
Filing Date
Filed February 4, 2025
Period End
January 31, 2025
Security
OVV
In the record · 2020–202610-K710-Q218-K127

OVV filed 7 annual reports (10-K), 21 quarterly reports (10-Q) and 127 current reports (8-K) between 2020 and 2026.

  1. Material agreement8-K · Apr ’21Apr ’21
  2. Leadership change8-K · Sep ’22Sep ’22
  3. Leadership change8-K · Mar ’24Mar ’24
  4. Material agreement8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K/A filed February 4, 2025. Cited figures are marked; the original filing is the authoritative source.

Ovintiv Inc. filed this Form 8-K/A to amend its Original Form 8-K filed January 31, 2025, which reported that Ovintiv and its wholly-owned subsidiary Ovintiv Canada ULC completed the acquisition of approximately 109,000 net acres in the Montney formation from Paramount Resources Ltd. (the "Montney Acquisition").

This amendment provides the statements of revenue and expenses for the acquired properties (Karr, Wapiti and Zama) and the unaudited pro forma financial information required by Item 9.01. No other changes to the Original Form 8-K are made. According to the filing, the purchase agreement dated November 13, 2024 provided for undivided interests in Montney assets in northwest Alberta for approximately $2.307 billiona (C$3.325 billion), subject to closing adjustments.

The acquisition added approximately 900 net 10,000 foot well locations and the 109,000 net acres. The proceeds of approximately $2.0 billionb, before closing adjustments, from the sale of Ovintiv's Uinta oil and gas properties (closed January 22, 2025) were used to fund the acquisition, with the remainder financed using short-term borrowings. The preliminary total cost of the acquisition is $2,871 million, including $2,475 million of proved and unproved property and a $396 million operating lease asset, and the accounting is subject to revision at March 31, 2025.

The acquired properties' statements show petroleum and natural gas sales of C$1,445.8 millionc and revenue of C$1,228.4 million for 2023 (audited), compared with C$922.2 million of sales and C$774.6 million of revenue for the nine months ended September 30, 2024 (unaudited). Operating income for the nine months ended September 30, 2024 was C$457.2 million, versus C$820.0 million for 2023.

The pro forma nine-month 2024 combined statement shows total revenues of $7,067 milliond and net earnings of $1,198 million, compared with historical Ovintiv figures of $6,964 million and $1,185 million. The seller, Paramount, has agreed to sell the Karr, Wapiti and Zama assets, with closing expected in the first quarter of 2025.

02—Key points

Key Highlights

  1. Ovintiv completed the Montney Acquisition from Paramount Resources Ltd. on January 31, 2025, for approximately $2.307 billion (C$3.325 billion), subject to closing adjustments.
  2. The acquisition added approximately 109,000 net acres in the core of the Montney formation and approximately 900 net 10,000 foot well locations to Ovintiv's Montney inventory.
  3. Approximately $2.0 billion of proceeds from the sale of Uinta assets (closed January 22, 2025) funded most of the purchase price; the remainder was financed with short-term borrowings.
  4. Preliminary purchase cost allocation totals $2,871 million, including $2,475 million of proved and unproved properties and a $396 million operating lease asset; final allocation is expected at March 31, 2025.
  5. Acquired properties generated C$1,228.4 million of revenue in 2023 (audited) and C$774.6 million for the nine months ended September 30, 2024 (unaudited).
  6. Pro forma nine-month 2024 total revenues were $7,067 million and net earnings $1,198 million, compared with historical $6,964 million and $1,185 million.

03—Questions

Frequently Asked Questions

  1. What is the Montney Acquisition and what did Ovintiv acquire?

    Ovintiv and its wholly-owned subsidiary Ovintiv Canada ULC acquired undivided interests in oil and gas properties in the Montney formation in northwest Alberta from Paramount Resources Ltd., including approximately 109,000 net acres in the core of the Montney and approximately 900 net 10,000 foot well locations.

  2. How was the acquisition funded?

    The filing states that proceeds of approximately $2.0 billion, before closing adjustments, from the sale of Ovintiv's Uinta assets, which closed January 22, 2025, were used to fund the acquisition. The remaining consideration was financed using short-term borrowings.

  3. What do the filed financial statements of the acquired properties show?

    For the Karr, Wapiti and Zama properties, petroleum and natural gas sales were C$1,445.8 million in 2023 (audited) and C$922.2 million for the nine months ended September 30, 2024 (unaudited). Operating income was C$820.0 million for 2023 and C$457.2 million for the nine months ended September 30, 2024.

  4. How is the acquisition accounted for and what is the preliminary cost?

    The filing states the acquisition will be accounted for as an asset acquisition under U.S. GAAP because substantially all of the fair value is concentrated in a single asset group. The preliminary total cost is $2,871 million, consisting of $2,327 million of cash paid (including $20 million of transaction costs) and $544 million of liabilities assumed, subject to revision at March 31, 2025.

  5. Is the acquired business expected to change without the seller's sale process completing?

    The seller's statements note that in November 2024 Paramount entered into an agreement to sell the Karr, Wapiti and Zama assets, with closing expected in the first quarter of 2025, subject to regulatory approval and customary closing conditions.

04—Continue

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