Ovintiv Divests Duvernay Shale Assets
TSX-listed Ovintiv Inc., through its wholly-owned subsidiary, has initiated the sale of its Duvernay Shale acreage in Alberta for a consideration of C$263 million, including certain contingent payments. The names of the buyers have not been disclosed.
Under the terms of the deal, Ovintiv will receive a cash payment of C$251 million, plus an additional C$12 million contingent on future commodity prices.
The divested assets include approximately 245,000 net acres located in west-central Alberta, and includes ninety-three gas wells and six oil wells. During 2019, the work program on the acreage included filling of existing processing capacity, reducing drilling days, and increasing lateral lengths drilled to maximize capital efficiency. Production from the acreage averaged approximately 10,000 barrels of oil equivalent per day (boe/d) during Q4-2020, of which 43% was oil.
“Today’s announcement of the sale of our Duvernay asset combined with our strong fourth quarter and 2021 guide clearly demonstrate our commitment to debt reduction and puts us squarely on track to achieve our $4.5 billion dollar year-end 2022 goal,” stated Doug Suttles, CEO of Ovintiv.
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals, and is expected to be completed in Q2-2021.