Ovintiv to Acquire NuVista for $2.7B

Ovintiv Inc signed a definitive agreement to buy NuVista Energy Ltd in a cash-and-stock transaction valuing the Canadian company at around $2.7 billion (CAD 3.8 billion), the parties said Tuesday.

Ovintiv already owns 9.6 percent of NuVista’s outstanding shares, obtained in a private transaction at CAD 16 per share, the Denver, Colorado-based oil and gas explorer and producer said in an online statement. Under the merger deal, the holders of the remaining NuVista shares may elect to receive for each NuVista share CAD 18 in cash, 0.344 Ovintiv shares or a combination of cash and Ovintiv shares, subject to proration, NuVista said separately.

“Total consideration will be made up of 50 percent cash and 50 percent Ovintiv common stock”, Ovintiv said. “This results in a blended total acquisition price for NuVista of approximately CAD 17.8 per share.

“Following the transaction, NuVista shareholders other than Ovintiv will own approximately 10.6 percent of the pro forma company”.

The total consideration includes around $215 million of NuVista net debt, Ovintiv said.

The transaction will give Ovintiv about 930 net 10,000-foot equivalent well locations and approximately 140,000 net acres, of which about 70 percent are undeveloped, in the core of the Alberta Montney, Ovintiv said. Ovintiv expects the assets to produce an average 100,000 barrels of oil equivalent a day, including about 25,000 barrels per day of oil and condensate, next year.

“The assets are directly adjacent to Ovintiv’s current operations and include access to processing and downstream infrastructure with significant available capacity”, Ovintiv said.

“NuVista has secured approximately 600 MMcfd of long-term raw inlet processing capacity, which is expected to allow optimized oil and condensate development of the pro forma asset base”, Ovintiv said. “This would allow optionality for Ovintiv’s Montney oil and condensate volumes to grow more than five percent per year for the next three to five years.

“NuVista also has access to approximately 250 MMcfd of long-term firm transport to natural gas markets outside of the local AECO market”.

Ovintiv president and chief executive Brendan McCracken said, “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”.

NuVista president and chief executive Mike Lawford said the combination offers a “unique opportunity for synergy realization that will maximize the value of NuVista’s top-tier Montney acreage”.

NuVista said the agreement is the result of a confidential process it had initiated August 2025 to examine strategic alternatives for the company.

“The purchase price of CAD 18 per NuVista Share implies a 21 percent premium to NuVista’s unaffected 20-day volume-weighted NuVista share price as of September 19, 2025… The purchase price is higher than any closing price achieved on NuVista shares in the last 15 years”, NuVista said.

Ovintiv said, “The transaction is expected to generate cost synergies of approximately $100 million annually, comprised primarily of capital savings, production cost savings and overhead cost reductions. Per-well cost savings are estimated at approximately $1 million across the acquired assets, consistent with Ovintiv’s current Montney well costs, resulting from streamlined facility design and faster cycle times”.

Ovintiv said it will fund the acquisition with cash on hand, borrowings from its existing credit facility and a term loan.

Ovintiv said it has also paused its share buyback program for two quarters. “Ovintiv’s bolt-on acquisition activity has effectively been paused until the share buyback program has resumed”, Ovintiv said. “The company’s base dividend is expected to remain unchanged”.

To accelerate debt reduction Ovintiv said it will sell its Anadarko position by yearend 2026.

“Once the company has reduced non-GAAP net debt to or below its long-term target of $4 billion, Ovintiv plans to update its capital allocation framework to direct a greater portion of its post-dividend non-GAAP free cash flow to shareholder returns”, Ovintiv said.

The parties expect to complete the transaction by the end of the first quarter of 2026, subject to NuVista shareholder, court and other customary approvals, Ovintiv said.

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