Ovintiv Inc. (DE)

Good day, ladies and gentlemen, and thank you for standing by. Welcome to OVINTIV's 2022 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 would 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 22 conference call. This call is being webcast, and the slides are available on our website at eventive.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, we will be available to take your questions. Please limit your time to one question and one follow-up. I'll now turn the call over to our CEO, Brendan McCracken.

Good morning. Thank you for joining us. Our second quarter results highlight our execution across the business, demonstrate that our strategy continues to generate superior returns. We are focused on both the returns on the capital we are investing in our business and the cash we are returning to our shareholders. Our results reflect our unique combination of strengths, our innovative culture, our relentless focus on capital efficiency, our top-tier assets, and our disciplined capital allocation. That combination of innovation and discipline is showing up in our numbers as we make sure higher prices flow through to higher returns. In a few minutes, Greg is going to highlight how our innovation has us leading on several technologies that are the key drivers of returns today. The bottom line is that our capital efficiency has us generating $400 million more free cash flow this year than if we were performing at the average of our peers. By the way, that analysis uses a high-quality group of seven of our peers and is done on a 20 to 1 BOE ratio, which is conservative for us relative to the 12 to 1 ratio that current spot places reflect. With Greg covering the impact innovation is having on our results, Corey is going to share how our disciplined approach has us positioned to maximize our margins. We've added to our market access for our Montney production, and 80% to 85% of our Montney gas is priced outside of ACO through 2025, when LNG Canada is set to be on stream. We delivered our highest quarterly cash flow and free cash flow in more than a decade, This strong financial performance is translating directly to our shareholders with increased cash returns. Earlier this quarter, we announced the doubling of shareholder returns to 50% effective July 1. We delivered this increase ahead of our original guidance due to tremendous balance sheet progress and strong underlying business performance. With this increased return profile, we'll return almost $400 million to our shareholders in the third quarter and over $1 billion for the full year. Assuming current strip pricing, we expect this amount to more than double next year. In addition to our increase in cash return profile, I'm excited to highlight strong underlying operational results. We achieved the high end of our oil and condensate and total production guidance, beat consensus cash flow per share estimates, and achieved free cash flow generation of $713 million. Our full-year CapEx guidance remains unchanged. Our team has put in long hours to find creative and innovative solutions to the supply chain and logistical challenges facing industry today. It is through this thoughtful innovation that we're able to maintain our leading capital efficiency versus peers and maximize the value we're creating for our shareholders.