Shale producer Ovintiv sees modest Q3 gains
North American shale producer Ovintiv said November 8 it had a modest increase in adjusted net earnings in Q3 2022, to $605mn from $521mn.
But its after tax net earnings for the period were sharply higher, at $1.19bn against a $72mn loss in Q3 2021, largely reflecting a $710mn unrealised gain on risk management this year compared to an unrealised loss of $579mn a year ago.
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Cash flow increased to $948mn from $845mn, but free cash flow dipped to $437mn from $480mn.
Despite slightly lower free cash flow, Ovintiv was still able to return $387mn to shareholders in the third quarter, in the form of share buybacks and base dividends. It expects to return another $250mn to shareholders in the fourth quarter, which will bring returns to shareholders since the third quarter last year to about $1.14bn.
“Our strong results in the third quarter highlight our continued execution across the business and demonstrate that our strategy continues to generate superior returns and substantial free cash flow,” CEO Brendan McCracken said. “We have now bought back more than 5% of our shares outstanding and the combination of our strong portfolio, leading capital efficiency, and disciplined capital allocation is set to see us deliver durable cash returns that are higher than our E&P peers and the broader S&P 500.”
Total production dipped in Q3 2022 compared to the same period last year, to 516,300 barrels of oil equivalent (boe)/day from 534,700 boe/day. Natural gas production was also lower, at 1.5bn ft3/day compared to 1.6bn ft3/day.