Ovintiv Inc. (DE)

Good day, ladies and gentlemen, and thank you for standing by. Welcome to OVINTIV's 2021 First Quarter Results Conference Call. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Members of the investment community will have the opportunity to ask questions and can join the queue at any time by pressing star 1. For members of the media attending in a listen-only mode today, you may quote statements made by any of the OVINTIV representatives. However, members of the media who wish to quote others who are speaking on this call today, we advise you to contact those individuals directly to obtain their consent. Please be advised that this conference call may not be recorded or rebroadcast without the express consent of OVINTIV. I will now turn the conference over to Steve Campbell from Investor Relations. Please go ahead, Mr. Campbell.

Thank you, Operator, and good morning, everyone. Welcome to our first quarter 2021 conference call. This call is being webcast, and the slides we will use today are available on our website at oventive.com. Please take note of the advisory regarding forward-looking statements at the end of our slides and in our disclosure documents filed on CDAR and EDGAR. Following our prepared remarks today, we will be available to take your specific questions. As always, limit your time to one question and one follow-up, as this allows us to get to more of your questions in a timely fashion. I'll now turn the call over to our CEO, Doug Suttles.

Thanks, Steve. Good morning, everyone, and thank you for joining us. We're eager to share our results today on another strong quarter. Following our prepared remarks, as Steve said, we'll be available to take your questions. As outlined in our pre-release a few weeks ago, and again in today's results, our business continues to perform exceptionally well. We are rapidly paying down debt. We finished the quarter with less debt generated significant free cash flow, and exceeded our divestiture target with the announced sale of our Eagleford and DuVernay assets. Our DuVernay asset closed yesterday, and our Eagleford sale is on track to close later this quarter. We weathered winter storm URI with minimal impacts in the quarter and no impact to our full-year forecast. We are highly confident in our ability to deliver the plan we've laid out for 2021. Our 2021 outlook remains consistent with our investment framework and reiterates our key priorities of debt reduction, maximizing efficiencies and maintaining the scale of our business. What a difference a year makes. This time last year, in the face of the pandemic-related destruction of global oil demand, we were making real-time decisions to reduce capital spending, shutting in production and quickly implementing new safety measures to protect the health of our people. Despite the uncertainty, we were very confident we could not only manage the challenge, but emerge stronger and more efficient, positioning the company to thrive as demand for our products returned. We were prepared for volatility, and our business had tremendous flexibility that aided our decision making. The proactive steps we took a year ago have positioned us very well today, and it is coming through in our results. In the first quarter, we delivered net earnings of $309 million, generated total cash flow of $890 million and free cash flow of $540 million. These numbers are inclusive of $156 million cash tax recovery that we received during the quarter. We expect 2021 to be our fourth consecutive year of free cash flow generation. Our capital investments came in lower than forecast at $350 million as our teams continue to do a great job of offsetting limited inflationary pressures with new efficiencies and innovation. Our culture of innovation makes a difference in every part of our business but is clearly evident in our operating performance. Our full-year capital program of $1.5 billion screens as one of the best capital efficiencies in the E&P sector today. We've made incredible progress on driving costs out of the business, and our culture of innovation is what drives and sustains this. Our multi-basin portfolio provided stability to our production profile in the quarter. Like others, we were forced to temporarily shut in volumes earlier this year in Texas and Oklahoma in response to winter storm Uri. But strong performance from the Montney and other base areas allowed us to maintain crude and condensate volumes of 198,000 barrels a day in line with our original full-year target of 200,000 barrels per day. In fact, on a full year basis, we expect to fully offset the effects of winter storm URI. Debt reduction remains our number one priority, and we've made tremendous progress towards our total debt target of $4.5 billion. During the quarter, we reduced our debt by $467 million and ended the quarter with liquidity of $3.8 billion. We've now dropped our debt by nearly $1 billion since mid-year 2020. the last three quarters. As I mentioned, we have exceeded our billion-dollar divestiture target. Yesterday, we closed the sale of our DuVernay asset, and we expect the Eagleford to close later this quarter. These proceeds will go directly to debt repayment. Based on a $50 WTI oil price and a $2.75 NYMEX gas price, which looks conservative compared to today's strip, We expect our total debt to be less than $5 billion by year end and expect to reach our $4.5 billion debt target in the first half of next year. We expect to generate free cash flow of about $1.5 billion in 2021 if we use pricing consistent with today's strip for the remainder of the year. Our longer-term framework remains intact with a leverage target of 1.5 times net debt to adjusted EBITDA or lower. and a reinvestment rate of less than 75%. Factoring in the impact of asset sales, we expect our full-year crude and condensate production to average approximately 190,000 barrels per day. We had no capital allocated to either the DuVernay or the Eagleford this year, so our planned capital investments for 2021 remain unchanged at approximately 1.5 billion. Strong environmental performance and continuous improvement was demonstrated again this quarter with our venting and flaring volumes coming in below 0.4% of gas sales. I'll now turn the call over to Corey.