Ovintiv Inc. (DE)

Good day, ladies and gentlemen, and thank you for standing by. Welcome to OVINTIV's 2021 Second 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 today's call, 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'd now like to turn the conference call over to Jason Verheest from Investor Relations. Please go ahead, Mr. Verheest.

Thank you, operator, and welcome, everyone, to our second quarter 21 conference call. This call is being webcast, and the slides 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 prepared remarks will be available to take your specific questions. Please limit your time to one question and one follow-up. This allows us to get to more of your questions today. I'll now turn the call over to our CEO, Doug Suttles.

Thanks, Jason, and thanks everyone for joining us today. As you can see from our second quarter results, our business is performing very well. Simply put, we are delivering on our promises. Our very strong performance is clearly seen in our substantial and recurring free cash flow generation. With almost $900 million of free cash flow through the first half of 2021, we have proven our business is capable of generating quality returns, significant cash flow, and free cash flow. This consistent strong performance allows us to directly increase cash returns to our shareholders while continuing to reduce our debt. We are on track to deliver our 4.5 billion net debt target before year end, a full year ahead of our original timeline. The achievement of this milestone will mark almost $3 billion of net debt reduction since the second quarter of 2020. In the same tone, we set a new debt target of $3 billion and increased shareholder returns by raising our dividend 50%. With that said, none of these tremendous financial achievements would be possible without the operational excellence delivered by our teams. A focus on operational efficiencies and industry-leading cost management is allowing us to more than offset economy-wide inflation pressure and continue to deliver industry-leading capital efficiencies. This is clearly demonstrated by our raising of full-year production guidance with no change to our capital budget. Ultimately, it is our culture of innovation that is providing a true competitive advantage and driving performance across the business. The team's ability to innovate in real time is unmatched. We have been through a lot over the past few years, and Inventive has persevered through it all. From a global pandemic to negative oil prices and a freak winter storm, our team has not only survived but thrived in the face of adversity. a true testament to the culture and the strength of what we have built. Extending on our proven track record, 2021 is expected to be our fourth consecutive year of free cash flow generation. We have generated almost $900 million of free cash flow year to date and expect to generate over $1.7 billion on a full year basis at current strip pricing. This substantial free cash flow is driven by our operational performance and our high-quality multi-basin portfolio. As Greg will highlight later, our team's culture of innovation is continuing to achieve leading-edge efficiencies, allowing us to reaffirm our $1.5 billion capital budget despite inflationary headlines across the economy, while also raising production guidance. With our reaffirmed capital budget and over 3.2 of estimated 2021 cash flow at strip prices, we are achieving a reinvestment ratio of less than 50%, substantially below our 75% investment framework. These outstanding results allow us to reinforce our commitment to shareholder returns as we return our efficiency gains to our investors. Yesterday, we announced a number of new actions that reflect the sustainability of our business model and the tremendous performance of our organization. First, we are increasing our base dividend by nearly 50%. This substantial increase reflects the confidence we have in the growing cash flow capacity of our business. As a reminder, not only did we leave our dividend untouched during the recent downturn, but this raise marks the second increase since 2019. We are delivering on our commitment to return cash to our shareholders, and we are we see a growing base dividend as an important part of the value proposition for our owners. Second, we have set a new debt target of $3 billion to be achieved by year end 2023. Over the last year, we've made tremendous progress deleveraging our balance sheet, and we are rapidly approaching our $4.5 billion target. which, as I noted earlier, we expect to achieve before year end, which is a full year ahead of our original plan. Third, we published our 2020 environmental performance and safety performance metrics on our website, marking our 17th consecutive year of sustainability reporting. We made significant improvements in our ability to measure and manage our ESG metrics, and our strong year-over-year performance demonstrates our focus on driving results across this evolving part of our business. We are relentlessly focused on delivering consistency, transparency, and continuous improvement in our environmental and safety performance and reporting. Finally, we increased full-year crude and condensate production guidance to 190 to 195,000 barrels per day. This increase is entirely driven by asset outperformance and comes with no additional capital spending. As I noted earlier, our capital budget remains unchanged at $1.5 billion. As I hand the reins over to Brendan McCracken, I cannot be more confident in Brendan, our executive team, the entire organization, and the future of our business. It has been an honor and an incredible privilege to lead this great team. With that, I'll now turn the call over to our Chief Financial Officer, Corey Cote.