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What changed in Ovintiv Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ovintiv Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+183 added−180 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-27)

Top changes in Ovintiv Inc.'s 2024 10-K

183 paragraphs added · 180 removed · 132 edited across 3 sections

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 50 Item 6. [Reserved] 52 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 81 Item 8. Financial Statements and Supplementary Data 83
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 50 Item 6. [Reserved] 52 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 78 Item 8. Financial Statements and Supplementary Data 80

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

121 edited+49 added−48 removed66 unchanged
Biggest changeOvintiv also incurs costs related to processing provided by third parties or through ownership interests in processing facilities. $ millions $/BOE 2023 2022 2023 2022 USA Operations $ 547 $ 626 $ 4.54 $ 5.80 Canadian Operations 1,056 1,002 $ 12.29 $ 12.80 Upstream Transportation and Processing 1,603 1,628 $ 7.76 $ 8.75 Market Optimization 163 158 Total $ 1,766 $ 1,786 2023 versus 2022 Transportation and processing expense decreased $20 million compared to 2022 primarily due to: • Lower variable contract rates in Permian ($139 million), a higher U.S./Canadian dollar exchange rate ($34 million) and the sale of the Bakken assets in the second quarter of 2023 ($24 million); partially offset by: • Higher volumes in Permian ($91 million), higher costs relating to the diversification of the Company’s downstream markets ($56 million) and higher third-party plant operating costs in Montney ($28 million).
Biggest changeOvintiv also incurs costs related to processing provided by third parties or through ownership interests in processing facilities. $ millions $/BOE 2024 2023 2024 2023 Upstream USA Operations $ 510 $ 547 $ 4.04 $ 4.54 Canadian Operations 1,043 1,056 $ 11.85 $ 12.29 Upstream Transportation and Processing 1,553 1,603 $ 7.25 $ 7.76 Other (1) 86 163 Total $ 1,639 $ 1,766 (1) Other includes pipeline transportation fees associated with previously divested assets in the USA Operations of approximately $50 million (2023 - $136 million) and other third-party transportation and processing fees in the Canadian Operations of approximately $36 million (2023 - $27 million). 2024 versus 2023 Transportation and processing expense decreased $127 million compared to 2023 primarily due to: • An expired pipeline transportation contract ($86 million), the impact of new downstream contracts in Uinta ($53 million), the sale of the Bakken assets in the second quarter of 2023 ($46 million), lower flow-through rates in Montney ($20 million), lower production volumes in Anadarko ($18 million), a higher U.S./Canadian dollar exchange rate ($17 million), the shut-in of production in Other Canadian Operations in 2024 due to low commodity prices ($11 million) and lower variable contract rates in Permian ($4 million); partially offset by: • Higher volumes in Permian, Uinta and Montney ($87 million), increased minimum volume commitments associated with certain gathering and processing assets in Montney ($20 million) and higher downstream transportation costs in Montney ($12 million). 62 Operating Operating expense includes costs paid by the Company, net of amounts capitalized, on oil and natural gas properties in which Ovintiv has a working interest.
Additional information on the Company’s Canadian Operations segment and the Bow office lease can be found in the Results of Operations section in this MD&A and the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Ovintiv is currently in compliance with all financial covenants under the Credit Facilities.
Additional information on the Company’s Canadian Operations segment and the Bow office lease can be found in the Results of Operations section in this MD&A and in the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Ovintiv is currently in compliance with all financial covenants under the Credit Facilities.
Natural gas prices for 2024 are expected to be impacted by the interplay between natural gas production and associated natural gas from oil production, changes in demand from the power generation sector, changes in export levels of U.S. liquefied natural gas, impacts from seasonal weather, as well as supply chain constraints or other disruptions resulting from geopolitical events.
Natural gas prices for 2025 are expected to be impacted by the interplay between natural gas production and associated natural gas from oil production, changes in demand from the power generation sector, changes in export levels of U.S. liquefied natural gas, impacts from seasonal weather, as well as supply chain constraints or other disruptions resulting from geopolitical events.
In addition, the Company has obligations to fund the disposal of long-lived assets upon their abandonment as well as its obligations to fund its defined benefit pension and other post-employment benefit plans as described in Notes 17 and 22, respectively, to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
In addition, the Company has obligations to fund the disposal of long-lived assets upon their abandonment as well as its obligations to fund its defined benefit pension and other post-employment benefit plans as described in Notes 17 and 23, respectively, to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.
Additional detail on changes in non-cash working capital can be found in Note 25 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Ovintiv expects it will continue to meet the payment terms of its suppliers.
Additional detail on changes in non-cash working capital can be found in Note 26 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Ovintiv expects it will continue to meet the payment terms of its suppliers.
Supply and the accumulation of global oil inventories are expected to be impacted by changes in OPEC+ production levels, consumer demand behavior and geopolitical volatility. Natural Gas Markets Natural gas prices are primarily impacted by structural changes in supply and demand as well as deviations from seasonally normal weather.
Supply and the accumulation of global oil inventories are expected to be impacted by changes in OPEC+ and non-OPEC+ production levels, consumer demand behavior and geopolitical volatility. Natural gas prices are primarily impacted by structural changes in supply and demand, deviations from seasonally normal weather, as well as volatility in regional markets.
This MD&A should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes for the year ended December 31, 2023 (“Consolidated Financial Statements”), which are included in Item 8 of this Annual Report on Form 10-K.
This MD&A should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes for the year ended December 31, 2024 (“Consolidated Financial Statements”), which are included in Item 8 of this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The MD&A is intended to provide a narrative description of the Company’s business from management’s perspective, which includes an overview of Ovintiv’s consolidated 2023 results and year-over-year comparisons between 2023 and 2022 results.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The MD&A is intended to provide a narrative description of the Company’s business from management’s perspective, which includes an overview of Ovintiv’s consolidated 2024 results and year-over-year comparisons between 2024 and 2023 results.
The fair value of estimated asset retirement obligations is recognized on the Consolidated Balance Sheet when incurred and a reasonable estimate of fair value can be made. The asset retirement cost, equal to the initially estimated fair value of the asset retirement obligation, is capitalized as part of the cost of the related long-lived asset.
The fair value of estimated asset retirement obligations is recognized in the Consolidated Balance Sheet when incurred and a reasonable estimate of fair value can be made. The asset retirement cost, equal to the initially estimated fair value of the asset retirement obligation, is capitalized as part of the cost of the related long-lived asset.
The Company continually monitors known and potential legal, environmental and other claims or contingencies based on available information. Future changes in facts and circumstances not currently foreseeable could result in the actual liabilities recorded exceeding the estimated amounts accrued. 78 Non-GAAP Measures Certain measures in this document do not have any standardized meaning as prescribed by U.S.
The Company monitors known and potential legal, environmental and other claims or contingencies based on available information. Future changes in facts and circumstances not currently foreseeable could result in the actual liabilities recorded exceeding the estimated amounts accrued. 75 Non-GAAP Measures Certain measures in this document do not have any standardized meaning as prescribed by U.S.
The Company has assessed its goodwill for impairment at December 31, 2023 and no impairment was recognized. The reporting units’ fair values were substantially in excess of the carrying values and as a result were not at risk of failing the impairment test as at December 31, 2023.
The Company has assessed its goodwill for impairment at December 31, 2024 and no impairment was recognized. The reporting units’ fair values were substantially in excess of the carrying values and as a result were not at risk of failing the impairment test as at December 31, 2024.
Discussion and analysis of 2021 results and year-over-year comparisons between 2022 and 2021 results that are not included in this Form 10-K, can be found in Item 7 of the 2022 Annual Report on Form 10-K.
Discussion and analysis of 2022 results and year-over-year comparisons between 2023 and 2022 results that are not included in this Form 10-K, can be found in Item 7 of the 2023 Annual Report on Form 10-K.
In addition, differences between the future commodity prices when acquiring assets and the historical 12-month average trailing price to calculate ceiling test impairments of upstream assets may impact net earnings. 75 Description Judgments and Uncertainties Goodwill Impairments Goodwill is assessed for impairment at least annually in December, at the reporting unit level which are Ovintiv’s country cost centers.
In addition, differences between the future commodity prices when acquiring assets and the historical 12-month average trailing price to calculate ceiling test impairments of upstream assets may impact net earnings. Goodwill Impairments Goodwill is assessed for impairment at least annually in December, at the reporting unit level which are Ovintiv’s country cost centers.
The Company has full access to two committed revolving U.S. dollar denominated credit facilities totaling $3.5 billion, which include a $2.2 billion revolving credit facility for Ovintiv Inc. and a $1.3 billion revolving credit facility for a Canadian subsidiary (collectively, the “Credit Facilities”).
The Company continues to have full access to two committed revolving U.S. dollar denominated credit facilities totaling $3.5 billion, which include a $2.2 billion revolving credit facility for Ovintiv Inc. and a $1.3 billion revolving credit facility for a Canadian subsidiary (collectively, the “Credit Facilities”).
Reserves are calculated using an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements.
Reserves are calculated using an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements (“SEC Average Trailing Prices”).
There is no assurance the underlying assumptions or estimates associated with the valuation will occur as initially expected. Fair value estimates are determined based on information that existed at the time of the acquisition, utilizing expectations and assumptions that would be available to and made by a market participant.
There is no assurance the underlying assumptions or estimates associated with the valuation will occur as initially expected. 72 Description Judgments and Uncertainties Fair value estimates are determined based on information that existed at the time of the acquisition, utilizing expectations and assumptions that would be available to and made by a market participant.
Changes in these estimates impact net earnings through accretion of the asset retirement obligation in addition to depletion of the asset retirement cost included in property, plant and equipment. Derivative Financial Instruments Ovintiv uses derivative financial instruments to manage its exposure to market risks relating to commodity prices, foreign currency exchange rates and interest rates.
Changes in these estimates impact net earnings through accretion of the asset retirement obligation in addition to depletion of the asset retirement cost included in property, plant and equipment. 73 Description Judgments and Uncertainties Derivative Financial Instruments Ovintiv uses derivative financial instruments to manage its exposure to market risks relating to commodity prices, foreign currency exchange rates and interest rates.
Management monitors Debt to Adjusted Capitalization, which is a non-GAAP measure defined in the Non-GAAP Measures section of this MD&A, as a proxy for Ovintiv’s financial covenant under the Credit Facilities, which requires Debt to Adjusted Capitalization to be less than 60 percent. As at December 31, 2023, the Company’s Debt to Adjusted Capitalization was 24 percent.
Management monitors Debt to Adjusted Capitalization, which is a non-GAAP measure defined in the Non-GAAP Measures section of this MD&A, as a proxy for Ovintiv’s financial covenant under the Credit Facilities, which requires Debt to Adjusted Capitalization to be less than 60 percent. As at December 31, 2024, the Company’s Debt to Adjusted Capitalization was 23 percent.
Changes in these estimates and assumptions can impact net earnings, revenues and expenses. 76 Description Judgments and Uncertainties As Ovintiv has chosen not to elect hedge accounting treatment for the Company’s derivative financial instruments, changes in the fair values of derivative financial instruments can have a significant impact on Ovintiv’s results of operations.
Changes in these estimates and assumptions can impact net earnings, revenues and expenses. As Ovintiv has chosen not to elect hedge accounting treatment for the Company’s derivative financial instruments, changes in the fair values of derivative financial instruments can have a significant impact on Ovintiv’s results of operations.
Realized gains or losses on risk management activities related to commodity price mitigation are included in the USA Operations, Canadian Operations and Market Optimization revenues as the contracts are cash settled. Unrealized gains or losses on fair value changes of unsettled contracts are included in the Corporate and Other segment.
Realized gains or losses on risk management activities related to commodity price mitigation are included in the USA and Canadian Operations’ revenues as the contracts are cash settled. Unrealized gains or losses on fair value changes of unsettled contracts are included in the Corporate and Other segment.
The deferred tax liability considers U.S. federal, state and foreign withholding tax implications. 77 Description Judgments and Uncertainties Contingent Liabilities Ovintiv is subject to various legal proceedings, environmental remediation, commercial and regulatory claims and liabilities that arise in the ordinary course of business.
The deferred tax liability considers U.S. federal, state and foreign withholding tax implications. Contingent Liabilities Ovintiv is subject to various legal proceedings, environmental remediation, commercial and regulatory claims and liabilities that arise in the ordinary course of business.
Additional information can be found in Note 24 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Additional information on fair value changes can be found in Note 24 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Contingencies For information on contingencies, refer to Note 26 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. 74 Accounting Policies and Estimates Critical Accounting Estimates The preparation of financial statements in conformity with U.S.
Contingencies For information on contingencies, refer to Note 27 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. 71 Accounting Policies and Estimates Critical Accounting Estimates The preparation of financial statements in conformity with U.S.
Additional information on the Company’s commodity price positions as at December 31, 2023 can be found in Note 24 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Additional information on the Company’s commodity price positions as at December 31, 2024 can be found in Note 25 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Production • Produced average liquids volumes of 292.0 Mbbls/d, which accounted for 52 percent of total production volumes.
Production • Produced average liquids volumes of 302.0 Mbbls/d, which accounted for 52 percent of total production volumes.
As at December 31, 2023, the Company has a taxable temporary difference of approximately $705 million in respect of unremitted earnings that continue to be permanently reinvested for which a deferred income tax liability of $35 million has not been recognized and becomes subject to taxation upon the remittance of dividends.
As at December 31, 2024, the Company has a taxable temporary difference of approximately $137 million in respect of unremitted earnings that continue to be permanently reinvested for which a deferred income tax liability of $7 million has not been recognized and becomes subject to taxation upon the remittance of dividends.
In 2024, the Company expects to incur full year upstream transportation and processing costs of approximately $7.50 per BOE to $8.00 per BOE, upstream operating expenses of approximately $4.25 per BOE to $4.75 per BOE, and total production, mineral and other taxes of approximately four to five percent of upstream revenues.
In 2025, the Company expects to incur full year upstream transportation and processing costs of approximately $7.50 per BOE to $8.00 per BOE, upstream operating expenses of approximately $3.75 per BOE to $4.25 per BOE, and total production, mineral and other taxes of approximately 3.75 to 4.50 percent of upstream revenues.
Contractual commitments relating to transportation and processing commitments, and drilling and field services can be found in Notes 14 and 26 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Contractual commitments relating to transportation and processing commitments, and drilling and field services can be found in Note 27 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.
($ millions, except as indicated) 2023 2022 Cash From (Used in) Operating Activities $ 4,167 $ 3,866 (Add back) deduct: Net change in other assets and liabilities (62 ) (57 ) Net change in non-cash working capital 330 (187 ) Non-GAAP Cash Flow $ 3,899 $ 4,110 Debt to Capitalization and Debt to Adjusted Capitalization Debt to Adjusted Capitalization is a non-GAAP measure which adjusts capitalization for historical ceiling test impairments that were recorded as at December 31, 2011.
($ millions, except as indicated) 2024 2023 Cash From (Used in) Operating Activities $ 3,721 $ 4,167 (Add back) deduct: Net change in other assets and liabilities (74 ) (62 ) Net change in non-cash working capital (247 ) 330 Non-GAAP Cash Flow $ 4,042 $ 3,899 Debt to Capitalization and Debt to Adjusted Capitalization Debt to Adjusted Capitalization is a non-GAAP measure which adjusts capitalization for historical ceiling test impairments that were recorded as at December 31, 2011.
These strategies include incorporating new and proven technologies, optimizing processes in its operations and working closely with third-party providers to develop best practices. The Company continues to look for innovative techniques and efficiencies in support of its commitment to emission reductions.
These strategies include incorporating new and proven technologies, optimizing processes in its operations and working closely with third-party providers to develop best practices. The Company continues to look for innovative techniques and efficiencies in support of its commitment to emission reductions. In May 2024, Ovintiv published its 2023 Sustainability Report.
Normal Course Issuer Bid and Other Share Buybacks On September 26, 2023, the Company announced it had received regulatory approval for the renewal of its NCIB program, which enables the Company to purchase, for cancellation or return to treasury, up to approximately 26.7 million shares of common stock over a 12-month period from October 3, 2023 to October 2, 2024.
Normal Course Issuer Bid On September 26, 2024, the Company announced it had received regulatory approval for the renewal of its NCIB program, which enables the Company to purchase, for cancellation or return to treasury, up to approximately 25.9 million shares of common stock over a 12-month period from October 3, 2024 to October 2, 2025.
Ovintiv continually monitors and evaluates changing market conditions to maximize cash flows, mitigate risks and renew its premium well inventory. The Company’s assets, located in some of the best plays in North America, form a multi-basin, multi-product portfolio which enables flexible and efficient investment of capital that supports the Company’s strategy.
Ovintiv continually monitors and evaluates changing market conditions to maximize cash flows, mitigate risks and renew its premium well inventory. The Company’s high-quality assets, located in the United States and Canada, form a multi-basin, multi-product portfolio which enables flexible and efficient investment of capital that supports the Company’s strategy.
($ millions, except as indicated) 2023 2022 Cash and Cash Equivalents $ 3 $ 5 Available Credit Facilities 3,486 3,500 Available Uncommitted Demand Lines (1) 234 195 Issuance of U.S.
($ millions, except as indicated) 2024 2023 Cash and Cash Equivalents $ 42 $ 3 Available Credit Facilities 3,500 3,486 Available Uncommitted Demand Lines (1) 91 234 Issuance of U.S.
Ovintiv’s disciplined capital program and continuous innovation create flexibility to allocate capital in changing commodity markets to maximize cash flows while preserving the long-term value of the Company’s multi-basin portfolio. 56 Production In 2024, the Company expects full year average total production volumes of approximately 545 MBOE/d to 575 MBOE/d, including oil and plant condensate production volumes of approximately 202 Mbbls/d to 208 Mbbls/d, other NGLs production volumes of approximately 85 Mbbls/d to 90 Mbbls/d and natural gas production volumes of approximately 1,550 MMcf/d to 1,650 MMcf/d.
Ovintiv’s disciplined capital program and continuous innovation create flexibility to allocate capital in changing commodity markets to maximize cash flows while preserving the long-term value of the Company’s multi-basin portfolio. 56 Production In 2025, the Company expects full year average total production volumes of approximately 595 MBOE/d to 615 MBOE/d, including oil and plant condensate production volumes of approximately 202.0 Mbbls/d to 208.0 Mbbls/d, other NGLs production volumes of approximately 87.0 Mbbls/d to 92.0 Mbbls/d and natural gas production volumes of approximately 1,825 MMcf/d to 1,875 MMcf/d.
Ovintiv expects to continue to deliver additional shareholder returns through share buybacks. 72 For additional information on long-term debt, refer to Note 15 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Dividends The Company pays quarterly dividends to common shareholders at the discretion of the Board of Directors.
For additional information on long-term debt, refer to Note 15 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Dividends The Company pays quarterly dividends to common shareholders at the discretion of the Board of Directors.
Additional information regarding the Permian Acquisition can be found in Note 9 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Divestitures in 2023 were $772 million, which primarily included the sale of the Bakken assets in North Dakota and certain properties that did not complement Ovintiv’s existing portfolio of assets.
Additional information regarding the Permian Acquisition can be found in Note 9 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Proceeds from divestitures in 2024 were $7 million, which included certain properties that did not complement Ovintiv’s existing portfolio of assets.
Further to the commitments discussed above, Ovintiv also has various obligations that become payable if certain future events occur relating to take or pay arrangements and guarantees on transportation commitments resulting from completed property divestitures as described in Notes 20, 24 and 26, respectively, to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Further to the commitments discussed above, Ovintiv also has various obligations that become payable if certain future events occur relating to take or pay arrangements and payout of minimum costs as described in Notes 20 and 27 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
The Company subleased approximately 50 percent of The Bow office space under the lease agreement. Additional information on leases can be found in Note 14 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Risk management liabilities represent Ovintiv’s net liability positions with counterparties.
Additional information on leases can be found in Note 14 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Risk management liabilities represent Ovintiv’s net liability positions with counterparties. Additional information can be found in Note 25 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.
Ovintiv remains committed to protecting the health and safety of its workforce. Safety is a foundational value at Ovintiv and plays a critical role in the Company’s belief that a safe workplace is a strong indicator of a well-managed business. This safety-oriented mindset enables the Company to quickly respond to emergencies and minimize any impacts to employees and business continuity.
Safety is a foundational value at Ovintiv and plays a critical role in the Company’s belief that a safe workplace is a strong indicator of a well-managed business. This safety-oriented mindset enables the Company to quickly respond to emergencies and minimize any impacts to employees and business continuity. Safety performance goals are incorporated into the Company’s annual compensation program.
Additional information on foreign exchange rates and the effects of foreign exchange rate changes can be found in Item 7A of this Annual Report on Form 10-K. 2023 versus 2022 Net foreign exchange losses increased $4 million compared to 2022 primarily due to: • Losses on other monetary revaluations compared to gains in 2022 ($23 million), unrealized foreign exchange losses on the translation of intercompany notes ($14 million) and foreign exchange losses on the settlement of intercompany notes compared to 2022 ($8 million); partially offset by: • Unrealized foreign exchange gains on the translation of U.S. dollar risk management contracts and foreign exchange gains on the settlement of U.S. dollar financing debt issued from Canada compared to losses in 2022 ($34 million and $10 million, respectively).
Additional information on foreign exchange rates and the effects of foreign exchange rate changes can be found in Item 7A of this Annual Report on Form 10-K. 2024 versus 2023 Net foreign exchange gain of $19 million compared to a loss of $19 million in 2023 primarily due to: • Unrealized foreign exchange gains on the translation of intercompany notes compared to losses in 2023 ($71 million), realized foreign exchange gains on the settlement of intercompany notes compared to losses in 2023 ($49 million) and gains on other monetary revaluations compared to losses in 2023 ($26 million); partially offset by: • Unrealized foreign exchange losses on the translation of U.S. dollar risk management contracts issued from Canada compared to gains in 2023 ($112 million).
Commercial Paper (270 ) (393 ) Total Liquidity $ 3,453 $ 3,307 Long-Term Debt, including current portion (2) $ 5,737 $ 3,570 Total Shareholders’ Equity (2) $ 10,370 $ 7,689 Debt to Capitalization (%) (3) 36 32 Debt to Adjusted Capitalization (%) (3) 24 19 (1) Includes three uncommitted demand lines totaling $289 million, net of $55 million in related undrawn letters of credit (2022 - $321 million and $126 million, respectively).
Commercial Paper - (270 ) Total Liquidity $ 3,633 $ 3,453 Long-Term Debt, including current portion $ 5,453 $ 5,737 Total Shareholders’ Equity $ 10,331 $ 10,370 Debt to Capitalization (%) (2) 35 36 Debt to Adjusted Capitalization (%) (2) 23 24 (1) Includes three uncommitted demand lines totaling $295 million, net of $204 million in related undrawn letters of credit (2023 - $289 million and $55 million, respectively).
Additional information on the Company’s long-term incentive costs can be found in Note 21 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Additional information on the net settlement proceeds can be found in Note 8 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Operating Expenses Production, Mineral and Other Taxes Production, mineral and other taxes include production and property taxes. Production taxes are generally assessed as a percentage of oil, NGLs and natural gas production revenues.
Production taxes are generally assessed as a percentage of oil, NGLs and natural gas production revenues.
The shares were canceled during the third and fourth quarters of 2023. • On September 26, 2023, the Company announced it had received regulatory approval for the renewal of its NCIB program, which enables the Company to purchase, for cancellation or return to treasury, up to approximately 26.7 million shares of common stock over a 12-month period from October 3, 2023 to October 2, 2024.
The transaction had an effective date of October 1, 2024. • On September 26, 2024, the Company announced it had received regulatory approval for the renewal of its NCIB program, which enables the Company to purchase, for cancellation or return to treasury, up to approximately 25.9 million shares of common stock over a 12-month period from October 3, 2024 to October 2, 2025.
Benchmark Prices (average for the period) 2023 2022 Oil & NGLs WTI ($/bbl) $ 77.62 $ 94.23 Houston ($/bbl) 78.95 95.89 Edmonton Condensate (C$/bbl) 103.76 122.02 Natural Gas NYMEX ($/MMBtu) $ 2.74 $ 6.64 AECO (C$/Mcf) 2.93 5.56 Dawn (C$/MMBtu) 3.15 7.89 59 Production Volumes and Realized Prices Production Volumes (1) Realized Prices (2) 2023 2022 2023 2022 Oil (Mbbls/d, $/bbl) USA Operations 158.8 131.5 $ 76.46 $ 94.25 Canadian Operations 0.1 0.1 81.59 87.28 Total 158.9 131.6 76.46 94.25 NGLs – Plant Condensate (Mbbls/d, $/bbl) USA Operations 10.9 10.4 58.53 73.22 Canadian Operations 32.0 33.6 74.52 93.22 Total 42.9 44.0 70.46 88.52 NGLs – Other (Mbbls/d, $/bbl) USA Operations 74.6 71.7 16.27 29.35 Canadian Operations 15.6 13.8 26.78 42.39 Total 90.2 85.5 18.09 31.45 Total Oil & NGLs (Mbbls/d, $/bbl) USA Operations 244.3 213.6 57.29 71.44 Canadian Operations 47.7 47.5 58.93 78.46 Total 292.0 261.1 57.55 72.72 Natural Gas (MMcf/d, $/Mcf) USA Operations 517 492 2.43 6.18 Canadian Operations 1,125 1,002 2.89 5.75 Total 1,642 1,494 2.74 5.89 Total Production (MBOE/d, $/BOE) USA Operations 330.4 295.5 46.15 61.91 Canadian Operations 235.2 214.5 25.76 44.26 Total 565.6 510.0 37.67 54.49 Production Mix (%) Oil & Plant Condensate 36 34 NGLs – Other 16 17 Total Oil & NGLs 52 51 Natural Gas 48 49 Production Change – Year Over Year (%) (3) Total Oil & NGLs 12 (5 ) Natural Gas 10 (4 ) Total Production 11 (4 ) (1) Average daily.
Benchmark Prices (average for the period) 2024 2023 Oil & NGLs WTI ($/bbl) $ 75.72 $ 77.62 Houston ($/bbl) 77.24 78.95 Edmonton Condensate (C$/bbl) 100.34 103.76 Natural Gas NYMEX ($/MMBtu) $ 2.27 $ 2.74 AECO (C$/Mcf) 1.44 2.93 Dawn (C$/MMBtu) 2.79 3.15 58 Production Volumes and Realized Prices Production Volumes (1) Realized Prices (2) 2024 2023 2024 2023 Oil (Mbbls/d, $/bbl) USA Operations 167.9 158.8 $ 73.90 $ 76.46 Canadian Operations 0.4 0.1 70.38 81.59 Total 168.3 158.9 73.90 76.46 NGLs – Plant Condensate (Mbbls/d, $/bbl) USA Operations 11.2 10.9 57.83 58.53 Canadian Operations 31.7 32.0 71.97 74.52 Total 42.9 42.9 68.28 70.46 NGLs – Other (Mbbls/d, $/bbl) USA Operations 75.8 74.6 18.02 16.27 Canadian Operations 15.0 15.6 27.45 26.78 Total 90.8 90.2 19.57 18.09 Total Oil & NGLs (Mbbls/d, $/bbl) USA Operations 254.9 244.3 56.57 57.29 Canadian Operations 47.1 47.7 57.80 58.93 Total 302.0 292.0 56.76 57.55 Natural Gas (MMcf/d, $/Mcf) USA Operations 537 517 1.62 2.43 Canadian Operations 1,161 1,125 1.73 2.89 Total 1,698 1,642 1.70 2.74 Total Production (MBOE/d, $/BOE) USA Operations 344.4 330.4 44.39 46.15 Canadian Operations 240.6 235.2 19.67 25.76 Total 585.0 565.6 34.22 37.67 Production Mix (%) Oil & Plant Condensate 36 36 NGLs – Other 16 16 Total Oil & NGLs 52 52 Natural Gas 48 48 Production Change – Year Over Year (%) (3) Total Oil & NGLs 3 12 Natural Gas 3 10 Total Production 3 11 (1) Average daily.
The decrease reflected lower other NGL benchmark prices and lower regional pricing; • A decrease of $18.06 per bbl, or 20 percent, in the average realized plant condensate prices which decreased revenues by $278 million.
The increase reflected higher other NGL benchmark prices and higher regional pricing; and • A decrease of $2.18 per bbl, or three percent, in the average realized plant condensate prices which decreased revenues by $31 million. The decrease reflected the lower Edmonton Condensate benchmark price which was down three percent.
The U.S. shelf registration statement was renewed in March 2023 and expires in March 2026. The obligations under the Company’s existing debt securities are fully and unconditionally guaranteed on a senior unsecured basis by Ovintiv Canada ULC, an indirect wholly-owned subsidiary of the Company.
The obligations under the Company’s existing debt securities are fully and unconditionally guaranteed on a senior unsecured basis by Ovintiv Canada ULC, an indirect wholly-owned subsidiary of the Company.
Additional information on changes in foreign exchange gains or losses can be found in Note 5 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Additional information on income taxes can be found in Note 6 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
(2) Other primarily includes realized gains or losses from other derivative contracts with no associated production volumes. Ovintiv recognizes fair value changes from its risk management activities each reporting period. The changes in fair value result from new positions and settlements that occur during each period, as well as the relationship between contract prices and the associated forward curves.
Ovintiv recognizes fair value changes from its risk management activities each reporting period. The changes in fair value result from new positions and settlements that occur during each period, as well as the relationship between contract prices and the associated forward curves.
The Company’s capital structure consists of total shareholders’ equity plus long-term debt, including any current portion. The Company’s objectives when managing its capital structure are to maintain financial flexibility to preserve Ovintiv’s access to capital markets and its ability to meet financial obligations and finance internally generated growth, as well as potential acquisitions.
The Company’s objectives when managing its capital structure are to maintain financial flexibility to preserve Ovintiv’s access to capital markets and its ability to meet financial obligations and finance internally generated growth, as well as potential acquisitions.
Acquisitions in 2023, other than the Permian Acquisition, were $277 million, which primarily included property purchases with oil and liquids-rich potential in the USA Operations (2022 - $286 million). Corporate acquisition in 2023 was $3,225 million, which relates to the Permian Acquisition in the second quarter of 2023.
Acquisitions in 2024 were $205 million, which primarily included property purchases with oil and liquids-rich potential in the USA Operations (2023 - $277 million). Corporate acquisitions in 2024 included the final cash settlements of $12 million related to the Permian Acquisition in the second quarter of 2023. Corporate acquisitions in 2023 were $3,225 million, which related to the Permian Acquisition.
Safety performance goals are incorporated into the Company’s annual compensation program. Additional information on DEI and employee safety can be found in the Human Capital section of Items 1 and 2 of this Annual Report on Form 10-K.
Additional information on talent management and employee safety can be found in the Human Capital section of Items 1 and 2 of this Annual Report on Form 10-K.
Financing Activities Net cash from and/or used in financing activities has been impacted by the Company’s bond offering in the second quarter of 2023 to finance a portion of the Permian Acquisition and Ovintiv’s strategic objective to return value to shareholders by repaying or repurchasing existing debt, purchasing shares of common stock and paying dividends. 2023 versus 2022 Net cash from financing activities in 2023 was $1,359 million compared to net cash used in financing activities of $2,268 million in 2022.
Financing Activities Net cash from and/or used in financing activities has been impacted by Ovintiv’s strategic objective to return value to shareholders by repaying existing debt, purchasing shares of common stock and paying dividends. 2024 versus 2023 Net cash used in financing activities in 2024 was $1,231 million compared to net cash from financing activities of $1,359 million in 2023.
Average oil and plant condensate volumes of 201.8 Mbbls/d, or 69 percent of total liquids production volumes, exceeded full year 2023 guidance of 196.0 Mbbls/d to 198.0 Mbbls/d. • Produced average natural gas volumes of 1,642 MMcf/d, which accounted for 48 percent of total production volumes.
Average oil and plant condensate volumes of 211.2 Mbbls/d, or 70 percent of total liquids production volumes, exceeded full year 2024 guidance range of 209.0 Mbbls/d to 211.0 Mbbls/d. • Produced average natural gas volumes of 1,698 MMcf/d, which accounted for 48 percent of total production volumes.
The decrease reflected lower Dawn, NYMEX and AECO benchmark prices which were down 60 percent, 59 percent and 47 percent, respectively; and • Higher average natural gas production volumes of 148 MMcf/d increased revenues by $315 million.
The decrease reflected lower AECO, NYMEX and Dawn benchmark prices which were down 51 percent, 17 percent and 11 percent, respectively, and lower regional pricing relative to benchmark prices in the USA Operations; and • Higher average natural gas production volumes of 56 MMcf/d increased revenues by $60 million.
Higher volumes were primarily due to lower effective royalty rates resulting from lower commodity prices in Montney (106 MMcf/d) and successful drilling in Montney and Permian (60 MMcf/d).
Higher volumes were primarily due to successful drilling in Permian and Montney (73 MMcf/d), lower effective royalty rates resulting from lower commodity prices in Montney (46 MMcf/d), and the Permian assets acquired in the second quarter of 2023 (12 MMcf/d).
Sublease Revenues Sublease revenues primarily include amounts related to the sublease of office space in The Bow office building recorded in the Corporate and Other segment. Additional information on office sublease income can be found in Note 14 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Additional information on office sublease income can be found in Note 14 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. 61 Operating Expenses Production, Mineral and Other Taxes Production, mineral and other taxes include production and property taxes.
The net proceeds of the offering, totaling $2,278 million, were used to fund a portion of the Company’s Permian Acquisition. In support of the Company’s commitment to enhancing shareholder value, Ovintiv utilizes its capital allocation framework to provide competitive returns to shareholders while strengthening its balance sheet.
In support of the Company’s commitment to enhancing shareholder value, Ovintiv utilizes its capital allocation framework to provide competitive returns to shareholders while strengthening its balance sheet.
($ millions, except as indicated) December 31, 2023 December 31, 2022 Debt (Long-Term Debt, including Current Portion) $ 5,737 $ 3,570 Net Earnings (Loss) 2,085 3,637 Add back (deduct): Depreciation, depletion and amortization 1,825 1,113 Interest 355 311 Income tax expense (recovery) 425 (77 ) EBITDA $ 4,690 $ 4,984 Debt to EBITDA (times) 1.2 0.7 Debt (Long-Term Debt, including current portion) $ 5,737 $ 3,570 Net Earnings (Loss) 2,085 3,637 Add back (deduct): Depreciation, depletion and amortization 1,825 1,113 Accretion of asset retirement obligation 19 18 Interest 355 311 Unrealized (gains) losses on risk management (194 ) (741 ) Foreign exchange (gain) loss, net 19 15 Other (gains) losses, net (20 ) (33 ) Income tax expense (recovery) 425 (77 ) Adjusted EBITDA $ 4,514 $ 4,243 Debt to Adjusted EBITDA (times) 1.3 0.8 The increases in Debt to EBITDA and Debt to Adjusted EBITDA are primarily due to the increase in long-term debt resulting from the Permian Acquisition.
($ millions, except as indicated) December 31, 2024 December 31, 2023 Debt (Long-Term Debt, including Current Portion) $ 5,453 $ 5,737 Net Earnings (Loss) 1,125 2,085 Add back (deduct): Depreciation, depletion and amortization 2,290 1,825 Interest 412 355 Income tax expense (recovery) 226 425 EBITDA $ 4,053 $ 4,690 Debt to EBITDA (times) 1.3 1.2 Debt (Long-Term Debt, including Current Portion) $ 5,453 $ 5,737 Net Earnings (Loss) 1,125 2,085 Add back (deduct): Depreciation, depletion and amortization 2,290 1,825 Impairments 450 - Accretion of asset retirement obligation 19 19 Interest 412 355 Unrealized (gains) losses on risk management 136 (194 ) Foreign exchange (gain) loss, net (19 ) 19 Other (gains) losses, net (165 ) (20 ) Income tax expense (recovery) 226 425 Adjusted EBITDA $ 4,474 $ 4,514 Debt to Adjusted EBITDA (times) 1.2 1.3 77
These expenses primarily include salaries and benefits, operating leases, office, information technology, transaction and long-term incentive costs. $ millions $/BOE 2023 2022 2023 2022 Administrative, excluding Long-Term Incentive Costs, Transaction and Legal Costs, and Current Expected Credit Losses (1) $ 278 $ 258 $ 1.35 $ 1.39 Long-term incentive costs 22 164 0.11 0.88 Transaction and legal costs 93 1 0.45 - Current expected credit losses - (1 ) - - Total Administrative $ 393 $ 422 $ 1.91 $ 2.27 (1) Includes costs related to The Bow office lease of $114 million (2022 - $116 million), half of which is recovered from sublease revenues. 2023 versus 2022 Administrative expense decreased $29 million compared to 2022 primarily due to: • Lower long-term incentive costs resulting from a decrease in the Company’s share price in 2023 compared to an increase in 2022 ($142 million); partially offset by: • Transaction costs mainly related to the Permian Acquisition in the second quarter of 2023 ($83 million) and increases in legal, information technology and community investment costs ($16 million).
These expenses primarily include salaries and benefits, operating leases, office, information technology, transaction, restructuring and long-term incentive costs. $ millions $/BOE 2024 2023 2024 2023 Administrative, excluding Long-Term Incentive Costs, Restructuring Costs, Transaction and Legal Costs (1) $ 283 $ 278 $ 1.32 $ 1.35 Long-term incentive costs 40 22 0.19 0.11 Restructuring costs 27 - 0.13 - Transaction and legal costs 15 93 0.07 0.45 Total Administrative $ 365 $ 393 $ 1.71 $ 1.91 (1) Includes costs related to The Bow office lease of $116 million (2023 - $114 million), half of which is recovered from sublease revenues. 2024 versus 2023 Administrative expense decreased $28 million compared to 2023 primarily due to: • Transaction costs incurred mainly related to the Permian assets acquired in the second quarter of 2023 ($83 million); partially offset by: • Restructuring costs incurred in 2024 ($27 million), higher long-term incentive costs resulting from changes in the Company’s share price in 2023 ($18 million), and increases in travel and legal costs ($9 million).
Additional information can be found under Upstream Assets and Reserve Estimates in the Critical Accounting Estimates section of this MD&A. $ millions $/BOE 2023 2022 2023 2022 USA Operations $ 1,519 $ 861 $ 12.60 $ 7.98 Canadian Operations 286 235 $ 3.33 $ 3.01 Upstream DD&A 1,805 1,096 $ 8.74 $ 5.89 Corporate & Other 20 17 Total $ 1,825 $ 1,113 2023 versus 2022 DD&A increased $712 million compared to 2022 primarily due to: • Higher depletion rates in the USA and Canadian Operations ($556 million and $37 million, respectively) and higher production volumes in the USA and Canadian Operations ($102 million and $22 million, respectively); partially offset by: • Higher U.S./Canadian dollar exchange rate ($8 million).
Additional information can be found under Upstream Assets and Reserve Estimates in the Critical Accounting Estimates section of this MD&A. $ millions $/BOE 2024 2023 2024 2023 Upstream USA Operations $ 1,971 $ 1,519 $ 15.64 $ 12.60 Canadian Operations 297 286 $ 3.37 $ 3.33 Upstream DD&A 2,268 1,805 $ 10.60 $ 8.74 Corporate & Other 22 20 Total $ 2,290 $ 1,825 2024 versus 2023 DD&A increased $465 million compared to 2023 primarily due to: • Higher depletion rates and production volumes in the USA Operations ($384 million and $68 million, respectively).
The number of shares authorized for purchase represents 10 percent of Ovintiv’s public float as at September 21, 2023. The Company expects to continue to execute the renewed NCIB program in conjunction with its capital allocation framework. During 2023, the Company purchased for cancellation, approximately 10 million shares of common stock for total consideration of approximately $426 million.
The number of shares authorized for purchase represents 10 percent of Ovintiv’s public float as at September 20, 2024. The Company expects to execute the renewed NCIB program in conjunction with its capital allocation framework in the second quarter of 2025.
As at the end of 2023, the Company has achieved a greater than 40 percent reduction in the Scope 1&2 GHG emissions intensity and is on track to meet its emissions intensity reduction target of 50 percent by 2030. The GHG emissions reduction target is tied to the annual compensation program for all employees.
As at the end of 2024, the Company had achieved a greater than 45 percent reduction in the Scope 1&2 GHG emissions intensity from 2019 levels and is on track to meet its emissions intensity reduction target of 50 percent by 2030 measured against the 2019 baseline.
CP programs, which include a $1.5 billion program for Ovintiv Inc. and a $1.0 billion program for a Canadian subsidiary. As at December 31, 2023, the Company had $270 million of commercial paper outstanding under its U.S.
Depending on the Company’s credit rating and market demand, the Company may issue from its two U.S. commercial paper (“CP”) programs, which include a $1.5 billion program for Ovintiv Inc. and a $1.0 billion program for a Canadian subsidiary. As at December 31, 2024, the Company had no balance outstanding under its U.S. CP program.
Oil Revenues 2023 versus 2022 Oil revenues were lower by $92 million compared to 2022 primarily due to: • A decrease of $17.79 per bbl, or 19 percent, in the average realized oil prices which decreased revenues by $1,031 million.
Natural Gas Revenues 2024 versus 2023 Natural gas revenues were lower by $590 million compared to 2023 primarily due to: • A decrease of $1.04 per Mcf, or 38 percent, in the average realized natural gas prices which decreased revenues by $650 million.
The Company routinely assesses potential uncertain tax positions and, if required, establishes accruals for such amounts. The accruals are adjusted based on changes in facts and circumstances. Material changes to Ovintiv’s income tax accruals may occur in the future based on the progress of ongoing audits, changes in legislation or resolution of pending matters.
The Company routinely assesses potential uncertain tax positions and, if required, establishes accruals for such amounts. The accruals are adjusted based on changes in facts and circumstances.
Higher volumes were primarily due to successful drilling in Permian and Montney (5.1 Mbbls/d), the Permian Acquisition in the second quarter of 2023 (2.7 Mbbls/d), and lower effective royalty rates resulting from lower commodity prices in Montney (1.5 Mbbls/d), partially offset by the sale of the Bakken assets in the second quarter of 2023 (3.4 Mbbls/d) and natural declines in Anadarko (1.4 Mbbls/d). 61 Natural Gas Revenues 2023 versus 2022 Natural gas revenues were lower by $1,569 million compared to 2022 primarily due to: • A decrease of $3.15 per Mcf, or 53 percent, in the average realized natural gas prices which decreased revenues by $1,884 million.
Higher volumes were primarily due to the Permian assets acquired in the second quarter of 2023 (21.1 Mbbls/d) and successful drilling in Uinta (7.5 Mbbls/d), partially offset by the sale of the Bakken assets in the second quarter of 2023 (9.3 Mbbls/d) and natural declines in Anadarko (8.7 Mbbls/d); and • A decrease of $2.56 per bbl, or three percent, in the average realized oil prices which decreased revenues by $167 million.
(2) Total Operating Expenses include non-cash items such as DD&A, accretion of asset retirement obligations and long-term incentive costs. Revenues Ovintiv’s revenues are substantially derived from sales of oil, NGLs and natural gas production. Increases or decreases in Ovintiv’s revenue, profitability and future production are highly dependent on the commodity prices the Company receives.
(2) Service revenues comprise third-party gathering and processing fees. (3) Total Operating Expenses include non-cash items such as DD&A, impairments, accretion of asset retirement obligations and long-term incentive costs. Revenues Ovintiv’s revenues are substantially derived from sales of oil, NGLs and natural gas production.
($ millions, except as indicated) December 31, 2023 December 31, 2022 Debt (Long-Term Debt, including Current Portion) $ 5,737 $ 3,570 Total Shareholders’ Equity 10,370 7,689 Capitalization $ 16,107 $ 11,259 Debt to Capitalization 36% 32% Debt (Long-Term Debt, including Current Portion) $ 5,737 $ 3,570 Total Shareholders’ Equity 10,370 7,689 Equity Adjustment for Impairments at December 31, 2011 7,746 7,746 Adjusted Capitalization $ 23,853 $ 19,005 Debt to Adjusted Capitalization 24% 19% The increases in Debt to Capitalization and Debt to Adjusted Capitalization are primarily due to the increase in long-term debt resulting from the Permian Acquisition in the second quarter of 2023. 79 Debt to EBITDA and Debt to Adjusted EBITDA Debt to EBITDA and Debt to Adjusted EBITDA are non-GAAP measures.
($ millions, except as indicated) December 31, 2024 December 31, 2023 Debt (Long-Term Debt, including Current Portion) $ 5,453 $ 5,737 Total Shareholders’ Equity 10,331 10,370 Capitalization $ 15,784 $ 16,107 Debt to Capitalization 35% 36% Debt (Long-Term Debt, including Current Portion) $ 5,453 $ 5,737 Total Shareholders’ Equity 10,331 10,370 Equity Adjustment for Impairments at December 31, 2011 7,746 7,746 Adjusted Capitalization $ 23,530 $ 23,853 Debt to Adjusted Capitalization 23% 24% 76 Debt to EBITDA and Debt to Adjusted EBITDA Debt to EBITDA and Debt to Adjusted EBITDA are non-GAAP measures.
Additional information on income taxes can be found in Note 6 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. 68 Liquidity and Capital Resources Sources of Liquidity The Company has the flexibility to access cash equivalents and a range of funding alternatives at competitive rates through committed revolving credit facilities as well as debt and equity capital markets.
Liquidity and Capital Resources Sources of Liquidity The Company has the flexibility to access cash equivalents and a range of funding alternatives at competitive rates through committed revolving credit facilities as well as debt and equity capital markets.
The definitions used in the covenant under the Credit Facilities adjust capitalization for cumulative historical ceiling test impairments recorded in conjunction with the Company’s January 1, 2012 adoption of U.S. GAAP. Additional information on financial covenants can be found in Note 15 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
The definitions used in the covenant under the Credit Facilities adjust capitalization for cumulative historical ceiling test impairments recorded in conjunction with the Company’s January 1, 2012 adoption of U.S. GAAP.
See Notes 8 and 9 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. 60 Upstream Product Revenues ($ millions) Oil NGLs - Plant Condensate NGLs - Other Natural Gas Total 2022 Upstream Product Revenues (1) $ 4,526 $ 1,422 $ 981 $ 3,213 $ 10,142 Increase (decrease) due to: Sales prices (1,031 ) (278 ) (445 ) (1,884 ) (3,638 ) Production volumes 939 (40 ) 59 315 1,273 2023 Upstream Product Revenues (1) $ 4,434 $ 1,104 $ 595 $ 1,644 $ 7,777 (1) Revenues for 2023 exclude certain other revenue and royalty adjustments with no associated production volumes of $1 million (2022 - $9 million).
See Notes 8 and 9 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. 59 Upstream Product Revenues, Excluding Realized Gains (Losses) on Risk Management ($ millions) Oil NGLs - Plant Condensate NGLs - Other Natural Gas Total 2023 Upstream Product Revenues (1) (2) $ 4,447 $ 1,110 $ 598 $ 1,649 $ 7,804 Increase (decrease) due to: Sales prices (167 ) (31 ) 51 (650 ) (797 ) Production volumes 279 1 3 60 343 2024 Upstream Product Revenues $ 4,559 $ 1,080 $ 652 $ 1,059 $ 7,350 (1) Revenues for 2023 exclude certain other revenue and royalty adjustments with no associated production volumes of $1 million.
The Company proactively mitigates price risk and optimizes margins by entering into firm transportation contracts to diversify market access to different sales points. Realized prices, excluding the impact of risk management activities, may differ from the benchmarks for many reasons, including quality, location, or production being sold at different market hubs.
Realized prices, excluding the impact of risk management activities, may differ from the benchmarks for many reasons, including quality, location, or production being sold at different market hubs. Benchmark prices relevant to the Company are shown in the table below.
Oil prices for 2024 are expected to be impacted by the interplay between the pace of global economic growth and demand for oil, continued OPEC+ production restraint and continued supply uncertainties resulting from geopolitical events. Recessionary concerns continue to have an impact on global demand as central banks evaluate and recalibrate their strategies in response to the prevailing economic environment.
Oil prices reflect global supply and demand dynamics as well as the geopolitical and macroeconomic environment. Oil prices for 2025 are expected to be impacted by the interplay between the pace of global economic growth and demand for oil, OPEC+ and non-OPEC+ production levels and continued supply uncertainties resulting from geopolitical events.
The following table provides the effects of the Company’s risk management activities on revenues. $ millions Per-Unit 2023 2022 2023 2022 Realized Gains (Losses) on Risk Management Commodity Price (1) Oil ($/bbl) $ (24 ) $ (594 ) $ (0.40 ) $ (12.37 ) NGLs - Plant Condensate ($/bbl) 1 (125 ) $ 0.05 $ (7.78 ) NGLs - Other ($/bbl) - - $ - $ - Natural Gas ($/Mcf) (21 ) (1,895 ) $ (0.03 ) $ (3.47 ) Other (2) 1 6 $ - $ - Total ($/BOE) (43 ) (2,608 ) $ (0.21 ) $ (14.04 ) Unrealized Gains (Losses) on Risk Management 194 741 Total Gains (Losses) on Risk Management, Net $ 151 $ (1,867 ) (1) Primarily includes realized gains and losses related to the USA and Canadian Operations.
The following table provides the effects of the Company’s risk management activities on revenues. $ millions Per-Unit 2024 2023 2024 2023 Realized Gains (Losses) on Risk Management Commodity Price Oil ($/bbl) $ (34 ) $ (24 ) $ (0.55 ) $ (0.40 ) NGLs - Plant Condensate ($/bbl) (1 ) 1 $ (0.04 ) $ 0.05 NGLs - Other ($/bbl) 4 - $ 0.13 $ - Natural Gas ($/Mcf) 298 (21 ) $ 0.47 $ (0.03 ) Other (1) 4 1 $ - $ - Total ($/BOE) 271 (43 ) $ 1.25 $ (0.21 ) Unrealized Gains (Losses) on Risk Management (136 ) 194 Total Gains (Losses) on Risk Management, Net $ 135 $ 151 (1) Other primarily includes realized gains or losses from other derivative contracts with no associated production volumes.
($ millions, except as indicated) 2023 2022 Dividend Payments $ 307 $ 239 Dividend Payments ($/share) $ 1.15 $ 0.95 On February 27, 2024, the Board of Directors declared a dividend of $0.30 per share of common stock payable on March 28, 2024 to common shareholders of record as of March 15, 2024.
($ millions, except as indicated) 2024 2023 Dividend Payments $ 316 $ 307 Dividend Payments ($/share) $ 1.20 $ 1.15 On February 26, 2025, the Board of Directors declared a dividend of $0.30 per share of common stock payable on March 31, 2025 to common shareholders of record as of March 14, 2025. 70 Dividends increased $9 million compared to 2023 as a result of Ovintiv increasing its annualized dividend to $1.20 per share of common stock in the second quarter of 2023.
For additional information on the NCIB, refer to Note 18 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Material Cash Requirements Ovintiv’s material cash requirements include various contractual obligations arising from long-term debt, operating leases, risk management liabilities and asset retirement obligations which are recognized on the Company’s Consolidated Balance Sheet.
Material Cash Requirements Ovintiv’s material cash requirements include various contractual obligations arising from long-term debt, operating leases, risk management liabilities and asset retirement obligations which are recognized in the Company’s Consolidated Balance Sheet. The Company expects to fund long-term material cash requirements primarily with cash from operating activities.
In May 2023, Ovintiv published its sustainability report, which highlights the Company’s progress in emissions intensity reductions including an emissions reduction roadmap aimed to meet the Company’s Scope 1&2 GHG emissions target by 2030.
The report highlights the Company’s 2023 environmental, social and governance results, and its progress in emissions intensity reductions with the goal to meet its Scope 1&2 GHG emissions target by 2030.
Property taxes are generally assessed based on the value of the underlying assets. $ millions $/BOE 2023 2022 2023 2022 USA Operations $ 327 $ 401 $ 2.71 $ 3.72 Canadian Operations 15 14 $ 0.18 $ 0.18 Total $ 342 $ 415 $ 1.66 $ 2.23 2023 versus 2022 Production, mineral and other taxes decreased $73 million compared to 2022 primarily due to: • Lower production tax in USA Operations due to lower commodity prices ($93 million) and the sale of the Bakken assets in the second quarter of 2023 ($31 million); partially offset by: • Higher volumes in Permian primarily due to the Permian Acquisition in the second quarter of 2023 ($48 million). 63 Transportation and Processing Transportation and processing expense includes transportation costs incurred to move product from production points to sales points including gathering, compression, pipeline tariffs, trucking and storage costs.
Property taxes are generally assessed based on the value of the underlying assets. $ millions $/BOE 2024 2023 2024 2023 USA Operations $ 319 $ 327 $ 2.53 $ 2.71 Canadian Operations 14 15 $ 0.16 $ 0.18 Total $ 333 $ 342 $ 1.56 $ 1.66 2024 versus 2023 Production, mineral and other taxes decreased $9 million compared to 2023 primarily due to: • The sale of the Bakken assets in the second quarter of 2023 ($26 million), lower production volumes in Anadarko ($18 million), lower production tax rates ($9 million) and lower natural gas commodity prices ($6 million); partially offset by: • Higher volumes in Permian and Uinta ($42 million) and higher property taxes in Permian primarily due to the assets acquired in the second quarter of 2023 ($11 million).
NGL Revenues 2023 versus 2022 NGL revenues were lower by $704 million compared to 2022 primarily due to: • A decrease of $13.36 per bbl, or 42 percent, in the average realized other NGL prices which decreased revenues by $445 million.
NGL Revenues 2024 versus 2023 NGL revenues were higher by $24 million compared to 2023 primarily due to: • An increase of $1.48 per bbl, or eight percent, in the average realized other NGL prices which increased revenues by $51 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs at December 31, 2023, Ovintiv has entered into $400 million notional U.S. dollar denominated currency swaps at an average exchange rate of C$1.3592 to US$1, which mature monthly throughout 2024. As at December 31, 2023, Ovintiv did not have any U.S. dollar denominated financing debt issued from Canada that was subject to foreign exchange exposure.
Biggest changeAs at December 31, 2024, Ovintiv has entered into $100 million notional U.S. dollar denominated currency swaps at an average exchange rate of C$1.3875 to US$1, which mature monthly throughout the first half of 2025.
Realized pricing is primarily driven by the prevailing worldwide price for crude oil and spot market prices applicable to the Company’s natural gas production. Pricing for oil, NGLs and natural gas production is volatile and unpredictable as discussed in Item 1A. “Risk Factors” of this Annual Report on Form 10-K.
Realized pricing is primarily driven by the prevailing worldwide price for oil and spot market prices applicable to the Company’s natural gas production. Pricing for oil, NGLs and natural gas production is volatile and unpredictable as discussed in Item 1A. “Risk Factors” of this Annual Report on Form 10-K.
For additional information relating to the Company’s derivative and financial instruments, see Note 24 under Item 8 of this Annual Report on Form 10-K. The table below summarizes the sensitivity of the fair value of the Company’s risk management positions to fluctuations in commodity prices, with all other variables held constant.
For additional information relating to the Company’s derivative and financial instruments, see Note 25 under Item 8 of this Annual Report on Form 10-K. The table below summarizes the sensitivity of the fair value of the Company’s risk management positions to fluctuations in commodity prices, with all other variables held constant.
The table below summarizes selected foreign exchange impacts on Ovintiv’s financial results when compared to the same periods in the prior years. 2023 2022 $ millions $/BOE $ millions $/BOE Increase (Decrease) in: Capital Investment $ (13 ) $ (14 ) Transportation and Processing Expense (1) (34 ) $ (0.17 ) (34 ) $ (0.18 ) Operating Expense (1) (5 ) (0.02 ) (4 ) (0.02 ) Administrative Expense (9 ) (0.04 ) (4 ) (0.02 ) Depreciation, Depletion and Amortization (1) (8 ) (0.04 ) (11 ) (0.06 ) (1) Reflects upstream operations. 81 Foreign exchange gains and losses also arise when monetary assets and monetary liabilities denominated in foreign currencies are translated and settled, and primarily include: • U.S. dollar denominated financing debt issued from Canada • U.S. dollar denominated risk management assets and liabilities held in Canada • U.S. dollar denominated cash and short-term investments held in Canada • Foreign denominated intercompany loans To partially mitigate the effect of foreign exchange fluctuations on future commodity revenues and expenses, the Company may enter into foreign currency derivative contracts.
The table below summarizes selected foreign exchange impacts on Ovintiv’s financial results when compared to the same periods in the prior years. 2024 2023 $ millions $/BOE $ millions $/BOE Increase (Decrease) in: Capital Investment $ (8 ) $ (13 ) Transportation and Processing Expense (1) (16 ) $ (0.07 ) (34 ) $ (0.17 ) Operating Expense (1) (1 ) (0.01 ) (5 ) (0.02 ) Administrative Expense (1 ) (0.01 ) (9 ) (0.04 ) Depreciation, Depletion and Amortization (1) (4 ) (0.02 ) (8 ) (0.04 ) (1) Reflects upstream operations. 78 Foreign exchange gains and losses also arise when monetary assets and monetary liabilities denominated in foreign currencies are translated and settled, and primarily include: • U.S. dollar denominated financing debt issued from Canada • U.S. dollar denominated risk management assets and liabilities held in Canada • U.S. dollar denominated cash and short-term investments held in Canada • Foreign denominated intercompany loans To partially mitigate the effect of foreign exchange fluctuations on future commodity revenues and expenses, the Company may enter into foreign currency derivative contracts.
The following table presents the foreign exchange rates for the respective years ended December 31. 2023 2022 Foreign Exchange Rates (C$ per US$1) Average 1.350 1.301 Period End 1.323 1.354 As Ovintiv operates primarily in the United States and Canada, fluctuations in the exchange rate between the U.S. and Canadian dollars can have a significant effect on the Company’s reported results.
The following table presents the foreign exchange rates for the respective years ended December 31. 2024 2023 Foreign Exchange Rates (C$ per US$1) Average 1.370 1.350 Period End 1.439 1.323 As Ovintiv operates primarily in the United States and Canada, fluctuations in the exchange rate between the U.S. and Canadian dollars can have a significant effect on the Company’s reported results.
Fluctuations in foreign currency exchange rates could have resulted in unrealized gains (losses) impacting pre-tax net earnings as follows: December 31, 2023 (US$ millions) 10% Rate Increase 10% Rate Decrease Foreign currency exchange $ 130 $ (159 ) INTEREST RATE RISK Interest rate risk arises from changes in market interest rates that may affect the fair value or future cash flows from the Company’s financial assets or liabilities.
Fluctuations in foreign currency exchange rates could have resulted in unrealized gains (losses) impacting pre-tax net earnings as follows: December 31, 2024 (US$ millions) 10% Rate Increase 10% Rate Decrease Foreign currency exchange $ 131 $ (160 ) INTEREST RATE RISK Interest rate risk arises from changes in market interest rates that may affect the fair value or future cash flows from the Company’s financial assets or liabilities.
Accordingly, on a before-tax basis, the sensitivity for each one percent change in interest rates on floating rate revolving credit and term loan borrowings was $3 million (2022 - $4 million). 82
Accordingly, on a before-tax basis, the sensitivity for each one percent change in interest rates on floating rate revolving credit and term loan borrowings was nil (2023 - $3 million). 79
The Company may partially mitigate its exposure to interest rate changes by holding a mix of both fixed and floating rate debt and may also enter into interest rate derivatives to partially mitigate effects of fluctuations in market interest rates. As at December 31, 2023, Ovintiv had floating rate revolving credit and term loan borrowings of $284 million.
The Company may partially mitigate its exposure to interest rate changes by holding a mix of both fixed and floating rate debt and may also enter into interest rate derivatives to partially mitigate effects of fluctuations in market interest rates. As at December 31, 2024, Ovintiv did not have any floating rate revolving credit and term loan borrowings outstanding.
Fluctuations in commodity prices could have resulted in unrealized gains (losses) impacting pre-tax net earnings as follows: December 31, 2023 10% Price 10% Price (US$ millions) Increase Decrease Crude oil price $ (97 ) $ 95 NGL price (2 ) 2 Natural gas price (44 ) 45 FOREIGN EXCHANGE RISK Foreign exchange risk arises from changes in foreign exchange rates that may affect the fair value or future cash flows of the Company’s financial assets or liabilities.
Fluctuations in commodity prices could have resulted in unrealized gains (losses) impacting pre-tax net earnings as follows: December 31, 2024 10% Price 10% Price (US$ millions) Increase Decrease Oil price $ (161 ) $ 164 Natural gas price (18 ) 16 FOREIGN EXCHANGE RISK Foreign exchange risk arises from changes in foreign exchange rates that may affect the fair value or future cash flows of the Company’s financial assets or liabilities.
The table below summarizes the sensitivity to foreign exchange rate fluctuations, with all other variables held constant. The Company has used a 10 percent variability to assess the potential impact from Canadian to U.S. foreign currency exchange rate changes.
The Company has used a 10 percent variability to assess the potential impact from Canadian to U.S. foreign currency exchange rate changes.
Added
To manage the foreign exchange risk associated with purchasing an asset denominated in Canadian dollars, the Company entered into $2.4 billion notional U.S. dollar denominated currency swaps at an average exchange rate of C$1.3825 to US$1. These swaps were settled ahead of the transaction close on January 31, 2025.
Added
As at December 31, 2024, Ovintiv did not have any U.S. dollar denominated financing debt issued from Canada that was subject to foreign exchange exposure. The table below summarizes the sensitivity to foreign exchange rate fluctuations, with all other variables held constant.

Other OVV 10-K year-over-year comparisons