Ovintiv ends Oklahoma exploration
Houston’s Ovintiv Inc. is ending its oil and gas exploration in Oklahoma.
Additionally, this marks a significant exit from the Anadarko Basin region for a once highly active operator.
Therefore, Oklahoma Energy stakeholders will feel the immediate strategic shift as capital migrates north into Canada.
The company announced it reached an agreement to acquire Canadian-based NuVista Energy Ltd. in a $2.7 billion deal and plans to fund it through some of its divestiture of assets in Oklahoma’s Anadarko Basin.
Also, the structure signals aggressive capital redeployment away from legacy Oklahoma shale exposure.
Disposal pathway tied to aggressive timeline
The Houston company said it will launch a divestiture process for its Anadarko Basin asset, which it expects to complete by year-end 2026.
Additionally, the multi-year unwind highlights the scale and complexity of Oklahoma disposal.
“Divestiture proceeds are expected to be used for accelerated debt reduction,” stated the company in its announcement.
Meanwhile, accelerated debt reduction directly aligns with current investor preference for disciplined free cash flow prioritization.
Capital return strategy adjustments
Ovintiv also said it temporarily paused its share buyback program for two quarters.
Additionally, pausing capital return levers reinforces balance sheet preservation priorities during integration risk cycles.
The company’s bolt-on acquisitions activity was also paused until the share buyback program has resumed.
It said its base dividend is expected to remain unchanged.
Therefore, the dividend floor signals stability to the market despite the dramatic portfolio shift.
Ovintiv history in Oklahoma
Ovintiv had previously been an active player in Oklahoma’s Anadarko Basin, especially in the STACK and SCOOP plays.
Additionally, STACK and SCOOP represented the company’s core high-liquids growth lanes during peak shale acceleration cycles.
Its website promoted the Anadarko Basin.
“The Anadarko Basin is located in west-central Oklahoma and is one of the top liquids-rich resource plays in North America. Ovintiv’s acreage is held primarily in the black oil window of SCOOP and STACK. Multiple stacked geologic horizons make this play primed for long laterals and Ovintiv’s proven cube development application. The basin has significant existing infrastructure and is located in good proximity to attractive markets like Cushing, Oklahoma, and the Gulf Coast.”
Also, this positioning historically made Oklahoma Energy analysts track Ovintiv closely as a key execution benchmark.
The company did not reveal its total assets in the Anadarko Basin.
Board approvals and deal structure
Boards of director at the two companies approved the acquisition agreement.
Ovintiv will acquire NuVista Energy Ltd. and its outstanding shares in a cash and stock transaction that values NuVista Energy at approximately $2.7 billion or $3.8 billion in Canadian money.
Ovintiv will also assume $215 million in NuVista Energy net debt.
Additionally, that combined debt reduction pathway aims to extend multi-year balance sheet durability.
The acquisition is expected to add nearly 930 well locations and about 140,000 net acres, of which 70% is undeveloped in the oil-rich Alberta Montney.
Therefore, Alberta Montney becomes the dominant strategic frontier for Ovintiv moving forward.
Ovintiv described 620 of the well locations are considered “premium return well” locations.
Production profile and adjacency value
Full year 2026 production from the acquired assets is expected to average approximately 100 MBOE/d (approximately 25 thousand barrels per day (“Mbbls/d”) of oil and condensate).
Additionally, the assets are directly adjacent to Ovintiv‘s current operations and include access to processing and downstream infrastructure with significant available capacity.
Therefore, the adjacency integration reduces capital required per well and improves cycle timing inside the core Montney window.
Terms of consideration structure
Ovintiv currently owns approximately 9.6% of NuVista Energy‘s outstanding shares purchased previously in a private transaction for C$16.00 per share.
Under the terms of the agreement, Ovintiv will acquire all of the issued and outstanding common shares not otherwise owned by Ovintiv for C$18.00 per share.
Total consideration will be made up of 50% cash and 50% Ovintiv common stock.
Additionally, this bid ratio keeps post-close leverage aligned with debt reduction discipline and protects equity holders from dilution shock.
CEO commentary signals thesis consolidation
“This transaction boosts our free cash flow per share by acquiring top decile rate of return assets in the heart of the Montney oil window at an attractive price,” said Ovintiv President and CEO, Brendan McCracken.
“This acquisition, combined with the inventory additions from our bolt-on acquisitions work in the Permian is putting our investors into top tier resource at very attractive full cycle returns. It demonstrates the power of our durable returns strategy and further reinforces our increasingly distinctive and growing premium-return inventory life.”
Finally, Oklahoma Energy watchers will now shift attention to the ultimate sale valuation of the Anadarko Basin package as the final financial lever that completes debt reduction strategy and closes the chapter for Ovintiv’s Oklahoma footprint.