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2020 Outlook and 2019 Results – Ovintiv Inc.

Ovintiv Inc. · Feb 19, 2020 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 1
    2020 Outlook & 2019 Results Conference Call February 20, 2020 1
  2. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 2
    OUR CULTURE DRIVES OUR PERFORMANCE Business is Robust Through the Cycle Strong liquidity Financial Investment grade credit rating Sustainable dividend Strength 1.5x leverage target at mid-cycle prices Disciplined Capital Plan…
  3. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 3
    4Q19 & FY19 Results
  4. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 4
    2019 Highlights Strong 2019 performance Second consecutive year of free cash flow generation and 9% YOY proforma growth in crude and condensate 1 2018-19 cumulative free cash flow of 616 MM 2, Exceeded consensus expectations on…
  5. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 5
    2019 Results Net Earnings (6) MM 4Q19 Free Cash Flow Cash Flow (0.02) / share* 241 MM 815 MM Operating Earnings 3.14 / share* 210 MM 0.81 / share* Net Earnings Free Cash Flow 1, Cash Flow 234 MM 475 MM 2,931 MM 0.90 /…
  6. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 6
    STRONG EXECUTION TRACK RECORD CONTINUES FY19: A Beat Across the Board FY19 Guidance Original Current Results FY19 Upstream Operating Free Cash Flow 2, Midpoint Low High FY19 Pro Forma: Base Assets Anadarko Total Liquids 3 310 312…
  7. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 7
    Disciplined Financial Management BBB Positive 10 Yrs 3.5B Investment Grade Credit Rating FCF Average Bond Maturity (Weighted Average) Liquidity (Facility + Cash & Cash Equivalents less Commercial Paper) 4B fully committed,…
  8. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 8
    2020 Outlook
  9. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 9
    2020 Outlook Highlights Delivering Results Margin Enhancement FCF +4% 56% (2%) 3rd Consecutive Year Crude oil & Liquids Mix Total Cost Reduction Positive below todays strip prices condensate growth vs FY19 liquids mix of 54% 3 vs…
  10. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 10
    2020 Outlook: FCF for Third Consecutive Year 2020 Outlook Expect 3rd consecutive year of significant FCF & growth Midpoint FY2020 Growth 2020 Capex down 6% YOY; crude oil and condensate up 4% FY19 1 Low High FY20 vs FY19 175 MM…
  11. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 11
    OVV has Scale & Financial Strength Proven free cash flow generation S&P 400 & 500 E&P Companies Free cash flow earmarked for balance sheet Liquids Scale Financial Scale XOM XOM CVX CVX Outperformed NFX acquisition synergies OXY COP…
  12. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 12
    Asset Highlights
  13. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 13
    CORE 3 Permian Permian Liquids Production 209 MM FY19 upstream operating FCF before hedge (Mbbls/d) 87 78 22% of total Company FY19 upstream operating FCF 67 61 55 2019 crude and C5+ volumes +10% YoY to 67 Mbbls/d 43 Strong…
  14. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 14
    CORE 3 Anadarko Anadarko Liquids Production (Mbbls/d, Proforma) 263 MM FY19 upstream operating FCF before hedge 120 12.0 11 10 99 28% of total Company FY19 upstream operating FCF 100 10.0 82 80 8.0 65 Significant 2019 volume…
  15. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 15
    CORE 3 Montney 60 Montney Liquids Production 52 16 (Mbbls/d) 14 199 MM FY19 upstream operating FCF before hedge 50 42 12 21% of total Company FY19 upstream operating FCF 40 37 10 8 29 30 7 8 Rapid liquids growth driven by…
  16. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 16
    EAGLE FORD, BAKKEN, UINTA & DUVERNAY Base Assets Base Assets Liquids Production (Mbbls/d Proforma) 283 MM FY19 upstream operating FCF before hedge 80 76 29% of total FY19 upstream operating FCF 68 65 2019 margin before hedge of…
  17. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 17
    Business is Robust Through the Cycle Strong liquidity Financial Investment grade credit rating Strength 1.5x leverage target at mid-cycle prices Lower Prices Sustain business scale Sustain Business Prioritize free cash flow…
  18. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 18
    20
  19. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 19
    Appendix
  20. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 20
    2020 Outlook Detail Production Contribution (Liquids) Base Total (rounded to nearest 5%) Anadarko Permian Montney Core 3 Assets Company Base Assets Anadarko Crude & Condensate 35% 60% 20% 35% 65% 40% NGLs (C2 C4) 30% 20% 5% 15% 10%…
  21. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 21
    Liquids-Focused, Multi-Basin Proved Reserves Reserves additions replaced FY19 production by 2x YE19 Proved Reserves by Asset Core 3 make up 85% of YE19 proved reserves Proved developed reserves 50% of total proved 10-year total proved…
  22. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 22
    2020 Pricing and Hedge Summary Strong hedge positions protect cash flow 1, Key Oil Hedges 2020 Key Gas Hedges 2020 70% crude & condensate production hedged WTI Hedges (Mbbls/d) 165 Henry Hub Hedges (MMcf/d) 1,188 70% natural gas…
  23. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 23
    Strategic Marketing Efforts Protect Cash Flow Canada Permian 1 Bcf/d of protected price realizations Substantial oil & gas price realization protections Basis hedges protect against market volatility Oil & gas basis hedges Firm…
  24. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 24
    Additional Financial & Operational Detail Total Costs ( / BOE) 2020 Other Corporate Items 14 Quarterly Market Optimization 35 - 40 MM Cash Flow Impact 12 Corporate G&A 75 - 80 MM Excluding LTI 10 Sublease recoveries (15) (20)…
  25. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 25
    Industry Leading ESG Performance 6th Consecutive Safest Year Ever Proven Safety Results Environmental Performance TRIF Methane Intensity 2018 Water Use 1 0.44 0.43 45% 0.34 0.30 0.30 0.28 0.22 0.21 1 Fresh Alternative 2014…
  26. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 26
    Proactive ESG Approach Task Force on Climate-Related Financial Disclosures ESG Impact Matrix Climate-related risks have the potential to impact our business Governance framework allows us to effectively manage these risks Applicable…
  27. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 27
    ESG Performance Metrics Category Metric Measurement 2018 2017 2016 metric tons CO2e/gross annual GHG Intensity 17.33 25.05 27.12 Emissions production metric tons CH4/gross annual Methane Intensity 0.22 0.38 0.43 production…
  28. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 28
    Non-GAAP Reconciliations Non-GAAP Cash Flow Reconciliation (for the period ended December 31) ( millions, except per BOE amounts) Q4 2019 2019 Cash from (used in) operating activities 730 2,921 Deduct (add back): Net change in other…
  29. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 29
    2019 Proforma Production Reconciliation Reportable 1 Proforma 2 (for the period ended December 31) 2019 2018 Q4 2019 Q4 2018 2019 2018 Q4 2019 Q4 2018 Upstream Capital Expenditures 2,614 1,964 568 346 2,793 3,367 568 654 (…
  30. 2020 Outlook and 2019 Results – Ovintiv Inc. – slide 30
    2019 Upstream Operating Free Cash Flow Summary Upstream Operating Free Cash Flow, Excluding Hedge ( millions) Upstream Upstream Upstream Operating Cash Reportable, FY 2019 Capital Operating Free % of Total Flow Excluding…

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