Ovintiv sees red in Q2, continues debt reduction
US-based producer Ovintiv (formerly Canada’s Encana) reported a $205mn net loss in Q2 2021, a result which included a pre-tax loss on risk management activities of $799mn. In the same quarter last year, it reported a net loss of nearly $4.1bn, which included impairments of more than $3.2bn.
Net debt was reduced by $1.2bn, to $5.2bn, and the company accelerated its timeline to reach net debt of $4.5bn to year-end 2021. Ebitda increased to $290mn from a loss of $111mn a year ago.
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“Our track record of free cash flow generation continued in the second quarter with another $350mn of free cash, bringing us to a total of $890mn year-to-date,” outgoing CEO Doug Suttles said. “We also expect to reach our original $4.5bn net debt target before year-end – one year ahead of our original timeline.”
Cash from operating activities in Q2 was $750mn, up year-on-year from $117mn, while cash flow rose to $733mn from $304mn, leaving free cash flow of $350mn, up from just $52mn in Q2 2020.
Production averaged 554,600 barrels of oil equivalent /day in the quarter, up from 536,600 boe/d in Q2 2020, with natural gas output increasing to 1.61bn ft3/d from 1.55bn ft3/d and total liquids production averaging 286,700 b/d, up from 278,400 b/d.
Production from the liquids-rich Montney in Canada averaged 235,000 boe/d, 75% of which was natural gas. In the US, Permian output averaged 126,000 boe/d (82% liquids), production from the Anadarko basin averaged 133,000 boe/d (62% liquids) and the Bakken contributed 24,000 boe/d (79% liquids).
Alongside its quarterly results, Ovintiv also published its 2020 ESG metrics, highlighted by a 36% reduction in flaring and venting intensity, a 33% reduction in methane emissions intensity and a 14% reduction in greenhouse gas emissions intensity.
“Our latest ESG performance demonstrates our commitment to rapidly reducing our emissions in real time,” incoming CEO Brendan McCracken said.
McCracken is set to take over as CEO when Suttles retires on August 1.