Ovintiv has entered into a definitive agreement to acquire NuVista Energy in a cash and stock transaction valuing NuVista at approximately $2.7 billion (C$3.8 billion), including debt.
The acquisition will expand Ovintiv’s Montney position with the addition of approximately 140,000 net acres, of which about 70 percent is undeveloped, and production of around 100,000 barrels of oil equivalent per day in 2026. The assets are located adjacent to Ovintiv’s existing operations in the Alberta Montney and include access to strategic processing and downstream infrastructure.
The transaction is structured at a blended price of approximately C$17.80 per NuVista share. Ovintiv, which already owns roughly 9.6 percent of NuVista through a prior private share purchase, will acquire the remaining shares for C$18.00 per share, with 50% of the consideration paid in cash and 50% in Ovintiv common stock. Following the closing, NuVista shareholders, excluding Ovintiv, are expected to own approximately 10.6 percent of the combined company. The Boards of Directors of both companies unanimously approved the agreement, which is expected to close by the end of the first quarter of 2026, pending shareholder, court, and customary regulatory approvals.
Ovintiv expects the deal to add approximately 930 net 10,000-foot equivalent well locations, including about 620 premium-return locations and roughly 310 upside locations. The company projects the acquisition to be immediately and long-term accretive across multiple financial and operational measures. Annual synergies are anticipated to reach approximately $100 million through capital efficiencies, reduced operating expenses, and overhead cost savings.
The company plans to fund the cash portion of the transaction through its balance sheet and credit facilities. Ovintiv has temporarily paused share repurchases for two quarters to support the transaction and does not anticipate any changes to its base dividend.
Concurrently, Ovintiv announced plans to initiate a sale process for its Anadarko asset beginning in the first quarter of 2026. Proceeds from the divestiture are expected to accelerate debt reduction. Ovintiv targets reducing its Non-GAAP Net Debt to $4 billion by year-end 2026, after which the company expects to allocate a greater share of post-dividend free cash flow to shareholder returns.
The acquisition significantly increases Ovintiv’s scale in the Montney, expanding its core position to approximately 510,000 net acres and strengthening its oil and condensate growth potential through secured processing and firm transport capacity. Ovintiv plans to operate an average of six rigs across the combined Montney acreage following closing, while maintaining activity in the Permian and Anadarko prior to divestiture.
KEY QUOTE:
“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. The NuVista assets were identified as part of an in-depth technical and commercial analysis to identify the highest value undeveloped oil resource in North America.”
“The position is 70% undeveloped and is an exceptional fit with our existing acreage and infrastructure. The team at NuVista has done a tremendous job building these assets which have demonstrated top-tier well performance. We are excited to apply our industry-leading expertise to the combined position. In addition to the high-quality resource and fit with our legacy assets, NuVista has secured significant processing capacity, further unlocking optionality for future oil and condensate growth, paired with a downstream market access portfolio that provides valuable natural gas price diversification outside of the AECO market.”
“This acquisition, combined with the inventory additions from our bolt-on acquisition 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.”
Brendan McCracken, President and CEO, Ovintiv
