2q20 results conference call...2,000. 2018. 2019. 1h20. total company • 15% reduction in well...

23
1 2Q20 Results Conference Call

Upload: others

Post on 18-Jan-2021

1 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

1

2Q20 ResultsConference Call

Page 2: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

2

High confidence in ’20 & ’21 scenarios, cash cost savings on track

4Q20 avg oil and C5+ raised to 200 Mbbls/d (previously exit rate)

‘20 capex of $1.8B now at low-end of previous range

Tripled passive ownership in OVV since change in domicile

Excess cash flows goes to debt reduction over the next six quarters

Today’s Key Takeaways

Note: All references to capital investment and oil and condensate production scenarios do not represent formal guidance

Page 3: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

3

Previous CurrentOil & C5+(Mbbls/d)

200 exit

200 4Q20

Capex ($B) $1.8 - $1.9 $1.8

2Q Results Enhance “Next Six Quarters”High Operational Confidence:• Recent well cost achievements underwrite 2021 scenario

• 20% gain in capital efficiency vs 2019• ‘21 base decline improves 5% YoY to low 30%, adds material production / cash flow• Multi-basin portfolio offers flexibility, multiple “ways to win”

High Financial Confidence:• $300 MM cash cost savings expected in 2021

• Majority of 2020 cost savings & $100 MM legacy cost savings

Unhedged FY21 Price Sensitivities:• WTI $5 / bbl: $375 MM • NYMEX Gas $0.25 / MMBtu: $140 MM

‘21 FCFŦ PositivePost dividend at $35 / $2.75

~200 Mbbls/dAvg 2021 Oil & C5+

$1.4 – $1.6B2021 capex scenario; 20%

capital efficiency gain vs ‘19

2021 “Stay- Flat” Scenario

Note: Declaration and payment of future dividends subject to Board discretionŦ Non-GAAP measures defined in advisories. For additional information regarding non-GAAP measures see the Company’s website and disclosure in the appendix of this document

2020 Scenario

“Next Six Quarters”excess cash flows goes to debt reduction

Page 4: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

4

Priorities for “The Next Six Quarters”E F F E C T I V E L Y M A N A G I N G V O L A T I L I T Y

Maintaining Financial Strength/Reducing Debt Maintaining Scale

Protecting health & safety of our people

Leading cost structure and capital efficiency

Page 5: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

5

Strong 2Q20 Operating PerformanceB U I L D I N G C O N F I D E N C E I N T H E F U T U R E

Proven Capital Discipline

2Q20 Capex ($ MM)

Solid execution in unprecedented period of macro volatility• Proven world class operator rapidly reducing cost structure

Capital efficiencies evident: 2Q capex at low end of guidance / FY20 capex reduced• Massive organizational flexibility and optionality

12Q20 Capex Guidance

$250 (Low End)

$300 (High End)

$252 Actual

Dynamic Production Management

Mboepd Oil & C5+Equivalent MBOE/d

Oil & Condensate Mbbls/d

2Q20 Production

32 Shut-in

18 Shut-in

569

216

537Actual

198Actual

Page 6: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

6

2Q20 - Effectively Managing VolatilityD E M O N S T R A T E D F L E X I B I L I T Y

Cash FlowŦ

$304 MM$1.17 / share

Liquidity$3.0B1

Investment Grade

Note 1: Refer to Slide Notes Ŧ Non-GAAP measures defined in advisories. For additional information regarding non-GAAP measures see the Company’s website and disclosure in the appendix of this document

Total Costs Ŧ

$11.23 / BOE(8%) vs. 1Q20

>$200 MM SavingsAchieved ~50% of cash cost savings YTD

Operated Rigs1Q20

x232Q20

x07‘20

Delivered Free Cash Flow ŦChallenging Macro@ $28 WTI

Page 7: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

7

FY20 now on track for $1.8B capex • Low end of previous range of $1.8 - $1.9B

200 Mbbls/d oil and condensate now 4Q20 average• Previously 200 Mbbls/d oil and condensate was an exit rate• Demonstrates strong operations and asset performance• Strengthens confidence in ability to achieve 2021 scenario

140

160

180

200

220

1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21

Flexibility Continues in 2H202H20 Demonstrates Business Resiliency

4Q20

Workforce Balanced with Future Plans

Oil & C5+ Production (Mbbls/d)215

198 200Flat ‘21 oil and condensate

2H20 Game Plan Sets Up Optimal 2021 ScenarioConfidence in ‘20 & ‘21 scenarios bolstered by 2Q results

2H20: Resumption of completions• Completions to resume in 3Q20• Frac holiday in 2Q20 to mark 3Q20 as production trough• Flexibility of completion schedule allows for dynamic operations• Exiting ‘20 with typical balance of drilled uncompleted wells (DUCs)

200

Align business with activity• Moderate growth vs. history

Confidence in 2021 scenario• Through cycle cost savings

Workforce efficiencies• Since 2013, 67% smaller with oil &

condensate production up >6x

25%2Q20 workforce

reduction increases expected margin and

cash flow

2021

~180

Page 8: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

8

>$200 MM of Cash Cost Savings in 20202020: >$200 MM of expected cash cost savings• Nearly half of estimated savings achieved YTD • Reduced operating and midstream costs• Lower G&A, interest and other costs• Midstream optimization• Cost reductions over and above shut-in related costs and

price-driven production tax reductions

2021: Legacy costs drop $100 MM+• Primarily unutilized midstream costs that expire in ’21

M U L T I - Y E A R R E S I L I E N C Y

$0

$100

$200

$300

2020 2021

Cash Cost Savings ($ MM)

Combination improves 2021 cash outlook by $300 MM

Durable Cash Cost SavingsLegacy Cost Savings

>$200

$300

Page 9: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

9

Core 3 Assets demonstrating capital efficiency gains• 2Q20 capital costs 15% lower vs 2019 (9% in 1Q20)• On track to realize 20% lower D&C in 2021 vs 2019

D R I V I N G C A P I T A L E F F I C I E N C Y

Track Record of Efficiency Improvements

Pacesetter

D&C ($ M) / 1,000 ft2

2Q20 D&C rates building on efficiencies established in 1Q20

1Q20 NEWPlay D&C DC&E1 D&C DC&E1

Permian $5.6 $6.2 $5.3 $5.8STACK $5.0 $5.4 $5.0 $5.4

Montney $3.5 $3.7 $3.4 $3.5

Go Forward Well Costs ($ MM)

$680$640

$500

$640

$540$490

$550 $520 $500

$530 $500

$450

Permian STACK MontneyFY19 1Q20 2Q20 Go Forward FY19 1Q20 2Q20 Go Forward FY19 1Q20 2Q20 Go Forward

Previously$560

Same as 1Q20

Previously $470

1 2 3

1Q Actual 2Q Actual Next Six QuartersCapital Efficiency 9% 15% 20%

Note 1, 2: Refer to Slide Notes

$300

Page 10: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

10

500

1,000

1,500

2,000

2,500

3,000

2018 2019 1H20

Permian STACK Montney

Anadarko• 14 STACK wells drilled and completed for under $5 MM2

• 2Q completions avg 20 hrs / day pump time (+5% vs 1Q20)

Capital Efficiency More Important Than EverPermian• Continued Simul-Frac improvements leading to increased

completion rates and $350k $400k savings per well

Montney• 4-well Pipestone pad achieved Ovintiv average completion rate

record of 3,450 ft / day

W O R L D C L A S S O P E R A T O R

Completions – Lateral Length (ft) / day

Drilling – Total Well (ft) / day1

1,000

1,500

2,000

2018 2019 1H20

Total Company• 15% reduction in well facility costs vs FY19 driven by optimized site

design and multi-basin knowledge transfer • Op. costs down 14% from 1Q20: $3.34 $2.86 / BOE (excl LTI)

Note 1, 2: Refer to Slide Notes

Page 11: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

11

OVV: Well Positioned vs Industry Narratives

“Stay-flat” capital efficiencies’21 scenario: 200 Mbbls/d oil & C5+ for $1.4 - $1.6B

Optionality through legacy gas production

Minimal Federal acreage exposure <1% exposure in Core 3 assets

Capital efficiency through innovationProven track record of safely reducing costs

Scale provides stability thru-cycle

Multi-year track record of returning cash

Page 12: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

12

Defining the Successful E&P of the Future

Quality Multi-Basin Portfolio

Financial Strength and Risk Management

Industry Leading Efficiency Driven by Innovation

Size & Scale as One of The Largest Oil & Condensate Producers

Unique Combination of Capital Discipline & Flexibility

A Culture That Values Being One, Agile & Driven

Proven Team of Talented & Committed Professionals

Page 13: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

13

Future Oriented Information• anticipated operating and midstream costs, legacy costs, capital efficiencies, margins, G&A, cost

savings and sustainability thereof• financial flexibility and ability to maintain balance sheet strength• anticipated hedges, amount of hedge production, value of hedge book and hedging sensitivities based

on oil and gas prices• outcomes of risk management program, including exposure to commodity prices, market access,

market diversification strategy and physical sales locations• capital investment scenarios and associated production• credit ratings and impact to sources of liquidity and cost of financing thereof• expected future interest expense• focus of development and allocation of capital, level of capital productivity and expected return• anticipated production, cash flow, free cash flow, payout, net present value, rates of return, including

expected timeframes and potential upside• expected drilling and completions activity and the timing thereof

• number of rigs, drilling locations, well performance, spacing, wells per pad, rig release metrics, cycletimes, well costs, commodity composition and performance against type curves and versus peers

• potential index exposure and demand for shares• pacesetting metrics being indicative of future well performance and costs• estimated reserves and resources, including product types• commodity price outlook• anticipated success of and benefits from technology and innovation• expected transportation and processing capacity, commitments, curtailments and restrictions,

including flexibility of commercial arrangements• management of balance sheet, including target leverage, available free cash flow, dividends if any,

debt reduction and expected net debt• statements regarding the Company’s application of excess cash flows to reduce debt• statements regarding the benefits of the Company’s multi-basin portfolio• ESG approach, performance and results, and sustainability thereof

FLS involve assumptions, risks and uncertainties that may cause such statements not to occur or results to differ materially. These assumptions include: future commodity prices and differentials; assumptions asspecified herein; data contained in key modeling statistics; availability of attractive hedges and enforceability of risk management program; assumed tax, royalty and regulatory regimes; and expectations andprojections made in light of the Company’s historical experience. Risks and uncertainties include: suspension of or changes to guidance, and associated impact to production; ability to generate sufficient cash flow tomeet obligations; commodity price volatility and impact to the Company’s stock price and cash flows; ability to secure adequate transportation and potential curtailments of refinery operations, including resultingstorage constraints or widening price differentials; discretion to declare and pay dividends, if any; business interruption, property and casualty losses or unexpected technical difficulties; impact of COVID-19 to theCompany’s operations, including maintaining ordinary staffing levels, securing operational inputs, executing on portions of its business and cyber-security risks associated with remote work; counterparty and credit risk;impact of changes in credit rating and access to liquidity, including costs thereof; risks in marketing operations; risks associated with technology; risks associated with lawsuits and regulatory actions, including disputeswith partners; risks associated with decommissioning activities, including timing and costs thereof; ability to acquire or find additional reserves; imprecision of reserves estimates and estimates of recoverablequantities; and other risks and uncertainties, as described in the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and as described from time to time in its other periodic filings as filedon EDGAR and SEDAR. Although the Company believes such FLS are reasonable, there can be no assurance they will prove to be correct. The above assumptions, risks and uncertainties are not exhaustive. FLS are madeas of the date hereof and, except as required by law, the Company undertakes no obligation to update or revise any FLS.

Certain future oriented financial information or financial outlook information is included in this presentation to communicate current expectations as to Ovintiv’s performance. Readers are cautioned that it may not beappropriate for other purposes. Rates of return for a particular asset or well are on a before-tax basis and are based on specified commodity prices with local pricing offsets, capital costs associated with drilling,completing and equipping a well, field operating expenses and certain type curve assumptions. Pacesetter well costs for a particular asset are a composite of the best drilling performance and best completionsperformance wells in the current quarter in such asset and are presented for comparison purposes. Drilling and completions costs have been normalized as specified in this presentation based on certain laterallengths for a particular asset. For convenience, references in this presentation to “Ovintiv”, “OVV”, the “Company”, “we”, “us” and “our” may, where applicable, refer only to or include any relevant direct and indirectsubsidiary corporations and partnerships (“Subsidiaries”) of Ovintiv Inc., and the assets, activities and initiatives of such Subsidiaries.

This presentation contains forward-looking statements or information (collectively, “FLS”) within the meaning of applicable securities legislation, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. FLS include:

Page 14: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

14

Advisory Regarding Oil & Gas InformationAll reserves estimates in this presentation are effective as of December 31, 2019, prepared by qualified reserves evaluators in accordance with procedures and standards contained in the Canadian Oil and GasEvaluation ("COGE") Handbook, National Instrument 51-101 (NI 51-101) and SEC regulations, as applicable. Detailed Canadian and U.S. protocol disclosure will be contained in the Form 51-101F1 and Annual Report on Form 10-K, respectively. Information on the forecast prices and costs used in preparing the Canadian protocol estimates are contained in the Form 51-101F1. For additional information relating to risks associated with theestimates of reserves, see "Item 1A. Risk Factors" of the Annual Report on Form 10-K.

Reserves are the estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, from a given date forward, based on: analysis of drilling,geological, geophysical and engineering data, the use of established technology, and specified economic conditions, which are generally accepted as being reasonable. Proved reserves are those reserves which canbe estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

Ovintiv uses the terms play and resource play. Play encompasses resource plays, geological formations and conventional plays. Resource play describes an accumulation of hydrocarbons known to exist over a largeareal expanse and/or thick vertical section, which when compared to a conventional play, typically has a lower geological and/or commercial development risk and lower average decline rate. Ovintiv has providedinformation with respect to its assets which are “analogous information” as defined in NI 51-101, including production type curves. This analogous information is presented on a basin, sub-basin or area basis utilizing dataderived from Ovintiv's internal sources, as well as from a variety of publicly available information sources which are predominantly independent in nature. Production type curves are based on a methodology ofanalog, empirical and theoretical assessments and workflow with consideration of the specific asset, and as depicted in this presentation, is representative of Ovintiv’s current program, including relative to currentperformance, but are not necessarily indicative of ultimate recovery. Some of this data may not have been prepared by qualified reserves evaluators, may have been prepared based on internal estimates, and thepreparation of any estimates may not be in strict accordance with COGEH. Estimates by engineering and geo-technical practitioners may vary and the differences may be significant. Ovintiv believes that the provisionof this analogous information is relevant to Ovintiv's oil and gas activities, given its acreage position and operations (either ongoing or planned) in the areas in question, and such information has been updated as ofthe date hereof unless otherwise specified. Estimates of Ovintiv potential gross inventory locations, including premium return well inventory, include proved undeveloped reserves, probable undeveloped reserves, un-risked 2C contingent resources and unbooked inventory locations. As of December 31, 2019, on a proforma basis, 2,184 proved undeveloped locations, 2,671 probable undeveloped locations and 4,292 un-risked 2Ccontingent resource locations (in the development pending, development on-hold or development unclarified project maturity sub-classes) have been categorized as either reserves or contingent resources.Unbooked locations have not been classified as either reserves or resources and are internal estimates that have been identified by management as an estimation of Ovintiv's multi-year potential drilling activitiesbased on evaluation of applicable geologic, seismic, engineering, production, resource and acreage information. There is no certainty that Ovintiv will drill all unbooked locations and if drilled there is no certainty thatsuch locations will result in additional oil and gas reserves, resources or production. The locations on which Ovintiv will actually drill wells, including the number and timing thereof is ultimately dependent upon theavailability of capital, regulatory and partner approvals, seasonal restrictions, equipment and personnel, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained,production rate recovery, transportation constraints and other factors. While certain of the unbooked locations may have been de-risked by drilling existing wells in relative close proximity to such locations, many ofother unbooked locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled insuch locations and if drilled there is more uncertainty that such wells will result in additional proved or probable reserves, resources or production.

30-day IP and other short-term rates are not necessarily indicative of long-term performance or of ultimate recovery. The conversion of natural gas volumes to barrels of oil equivalent (“BOE”) is on the basis of sixthousand cubic feet to one barrel. BOE is based on a generic energy equivalency conversion method primarily applicable at the burner tip and does not represent economic value equivalency at the wellhead. Readersare cautioned that BOE may be misleading, particularly if used in isolation.

Page 15: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

15

Non-GAAP MeasuresCertain measures in this presentation do not have any standardized meaning as prescribed by U.S. GAAP and, therefore, are considered non-GAAP measures. These measures may not be comparable to similar

measures presented by other companies. These measures have been provided for meaningful comparisons between current results and other periods and should not be viewed as a substitute for measures reported

under U.S. GAAP. For additional information regarding non-GAAP measures, including reconciliations, see the Company’s website and Ovintiv’s most recent Annual Report as filed on SEDAR and EDGAR. This presentation

contains references to non-GAAP measures as follows:

• Non-GAAP Cash Flow and Non-GAAP Free Cash Flow – Non-GAAP Cash Flow (or Cash Flow) is definedas cash from (used in) operating activities excluding net change in other assets and liabilities, netchange in non-cash working capital and current tax on sale of assets. Non-GAAP Free Cash Flow (orFree Cash Flow) is Non-GAAP Cash Flow in excess of capital expenditures, excluding net acquisitions anddivestitures. Management believes these measures are useful to the company and its investors as ameasure of operating and financial performance across periods and against other companies in theindustry, and are an indication of the company’s ability to generate cash to finance capital programs,to service debt and to meet other financial obligations. These measures may be used, along with othermeasures, in the calculation of certain performance targets for the company’s management andemployees.

• Total Costs is a non-GAAP measure which includes the summation of production, mineral and othertaxes, upstream transportation and processing expense, upstream operating expense andadministrative expense, excluding the impact of long-term incentive costs, restructuring costs andcurrent expected credit losses. It is calculated as total operating expenses excluding non-upstreamoperating costs and non-cash items which include operating expenses from the Market Optimizationand Corporate and Other segments, depreciation, depletion and amortization, impairments, accretionof asset retirement obligation, long-term incentive costs, restructuring costs and current expectedcredit losses. When presented on a per BOE basis, Total Costs is divided by production volumes.Management believes this measure is useful to the Company and its investors as a measure ofoperational efficiency across periods.

Page 16: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

16

Page 17: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

Appendix

Page 18: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

18

OVV’s Culture Drives our SuccessO V I N T I V E D G E

A Company defined by its

Culture

• Sense of team; we all win when the organization wins; OVV first• Transparency and information sharing across the organization• One performance “scorecard” for entire Company aligns compensation• Support for healthy debate and a trust in team

We are “ONE”

• Innovative - biased to action toward improvements• Purpose-built flexibility provides optionality

We are “AGILE”

• Relentless focus on operational excellence and efficiencies• Disciplined approach to allocating capital and effectively managing risks• Results-focused with accountability for our actions

We are “DRIVEN”

Page 19: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

19

Strong Hedge Position• 2020 cash flowŦ protected through strong hedges1

• Substantially hedged on near-term benchmark oil price risk

• Mitigated 72% of WTI Roll exposure for balance of year, combination of physical sales and hedges at plus ~$0.26/bbl

Select balance of 2020 Basis hedges: • 3.5 Mbbls/d WTI / Midland swaps ($1.20)

• 238 MMcf/d AECO swaps ($0.88)

• 105 MMcf/d WAHA swaps ($0.91)

Hedge SummaryOil and Condensate1 3Q20 4Q20 2021

WTI Swaps Volume Mbbls/dPrice $/bbl

160$44.60

89$52.95

7$43.02

WTI Costless Collars

Volume Mbbls/dCall Strike $/bblPut Strike $/bbl

15$68.71$50.00

15$68.71$50.00

15$45.84$35.00

WTI 3-Way Options

Volume Mbbls/dCall Strike $/bblPut Strike $/bblPut (Sold) Strike $/bbl

76$61.46$53.36$43.36

15$50.00$35.23$24.64

Natural Gas1,2 3Q20 4Q20 2021NYMEX Swaps

Volume MMcf/dPrice $/mcf

970$2.51

793$2.65

165$2.51

NYMEX Costless Collars

Volume MMcf/dCall Strike $/mcfPut Strike $/mcf

55$2.88$2.50

55$2.88$2.50

NYMEX 3-Way Options

Volume MMcf/dCall Strike $/mcfPut Strike $/mcfPut (Sold) Strike $/mcf

330$2.72$2.60$2.25

330$2.72$2.60$2.25

170$3.22$2.75$2.50

Quarterly Hedge Positions

Note 1, 2: Refer to Slide Notes Ŧ Non-GAAP measures defined in advisories. For additional information regarding non-GAAP measures see the Company’s website and disclosure in the appendix of this document

Page 20: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

20

Pricing and Hedge Sensitivity Update

Extreme 2Q price volatility protected by hedges• Realized price per BOE (including hedge): $21.21/BOE

• Realized price only down 15% from 1Q levels versus benchmark WTI down 40%, NYMEX natural gas down 12%

Strong 1H20 Protection from volatility• 1H20 oil and condensate realized hedges $387 MM, hedged

at average WTI price of $47.88/bbl• 1H20 Natural Gas realized hedges of $112 MM with hedged at

average NYMEX price $2.40/MMBtu

Hedge Sensitivities – Gain / (Loss) ($ MM)1

WTI Price $/bbl 3Q20 4Q20 Bal 20$10 $565 $477 $1,042

$20 $404 $381 $785

$30 $243 $285 $528

$40 $82 $190 $272

$50 ($79) $48 ($31)

NYMEX Natural Gas $/MMBtu 3Q20 4Q20 Bal 20

$1.00 $155 $141 $296

$1.25 $131 $121 $252

$1.50 $108 $102 $210

$1.75 $84 $82 $166

$2.00 $60 $63 $123

$2.25 $37 $43 $80

Note 1, Refer to Slide Notes

Page 21: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

21

Industry Leading ESG Performance

#1 0.44

0.340.30 0.30 0.28

0.21

2014 2015 2016 2017 2018 2019

<$6.0

2016 2018

Third Party ESG Assessment

6th Consecutive Safest Year Ever Proven Safety Results

vs. 23 AXPC peers in the U.S.

Environmental Performance

AScore

#1Out of 14

Methane Intensity 2018 Water Use

% of Total WaterTons CH4 / MBOETotal Recordable Injury Frequency (TRIF): Number of Recordable Injuries x 200,000 divided by exposure hours

~45%

Fresh Alternative

TRIF

0.43

0.221

#2Out of 14

35Score

#2Out of 14

3Score

Note 1, 2 Refer to Slide Notes

Page 22: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

22

Proactive ESG ApproachTask Force on Climate-Related Financial Disclosures• Climate-related risks have the potential to impact our business • Governance framework allows us to effectively manage these risks• Applicable concerns are integrated into planning and risk management• Established history of measuring, managing and reporting ESG

performance

Sustainability Reporting and Programs• An annual Sustainability Report is published on the OVV website

Focus on Climate Change and Air Quality• OVV has proactive programs in place for effective Emissions Management

• Electrifying production equipment and facilities• Top Tier LDAR program utilizing Optical Gas Imaging for >10-years

Founding member of The Environmental Partnership• Committed to reducing VOC emissions through sustainable practices

ESG Impact Matrix

EnvironmentalClimate Change

Water

SafetyProcess Safety

GovernanceStakeholder activism

SocialCommunity concerns

Page 23: 2Q20 Results Conference Call...2,000. 2018. 2019. 1H20. Total Company • 15% reduction in well facility costs vs FY19 driven by optimized site design and multi-basin knowledge transfer

23

NotesSlide 61) Total liquidity includes $183 MM of available capacity on uncommitted demand lines

Slide 91) DC&E includes: drill, complete, facilities and on lease tie in costs. STACK and Permian well lengths normalized to 10,000 ft. Montney normalized to 7,500 ft. Montney costs displayed in USD. 0.72 FX rate 2) Montney D&C / 1,000 ft cost performance reflects only Pipestone turned-in-lines for 2Q20 . All other time frames reflect 50% Pipestone and 50% Dawson well split

Slide 101) Total well (ft) / day is calculated by: Total well measured depth / spud to rig release in days (Spud to rig release time excludes surface casing rig drill time for Permian and STACK)2) Well lengths normalized to 10,000 ft

Slide 191) Hedges as of July 27, 2020 For more information on Ovintiv’s Financial Instruments and Risk Management please refer to Note 22 of the interim financial statements. 2021 Oil positions exclude WTI swaptions of 10 Mbbls/d @$58.00 2) Excludes 230 BBtu/day of NYMEX call options sold

Slide 201) Based on July 27, 2020 positions. Sensitivities do not include gains or losses related to differential hedges. Additional Ethane, Butane and Propane hedges not included in sensitivities

Slide 211) Proforma 2019 including Newfield and Ovintiv results2) Historical data represents standalone OVV unless otherwise noted. ISS Score is calculated by averaging each company’s individual ISS Quality Scores for environment, social and governance. Third Party ESG Assessment peer group consists of APA, CLR, COG, CXO, DVN, EOG, MRO, MUR, NBL, PXD, QEP, WPX, XEC