Ovintiv Inc. (DE)

Welcome to OVINTIV's 2023 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 expressed consent of OVINTIV. I would now like to turn the conference call over to Jason Verhest from Investor Relations. Please go ahead, Mr. Verhest.

Thank you, Operator, and welcome everyone to our first quarter 23 conference call. This call is being webcast and slides are available on our website at ovento.com. Please take note of the advisory regarding forward-looking statements at the beginning 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 will now turn the call over to our President and CEO, Brendan McCracken.

Good morning. Thank you for joining us. We've kicked the year off with great momentum. We delivered net earnings of $487 million, cash from operating activities of $1.1 billion, free cash flow of $241 million, and cash flow per share of $3.44, beating consensus estimates. We also returned approximately $300 million to our shareholders through share buybacks and base dividends. This represents a cash return yield of nearly 15%, which is very competitive in today's market across both industry peers and the broader economy. Production during the quarter came in at 511,000 BOEs per day. We exceeded guidance on oil, gas, and NGL while coming in at the low end of guidance for capital. This result was driven by strong well performance across our portfolio and combined with some impressive capital savings from our innovation and efficiency focus that saw us once again push the leading edge for industry on drilling and completion speeds. We also announced two compelling transactions that enhance our capital efficiency, grow our margins, simplify our portfolio, and extend our premium inventory depth. First, we entered into an agreement to acquire core Midland acreage and added over 1,000 locations to our inventory. And second, we entered into a separate agreement to sell all our assets in the Bakken for $825 million. The combined transactions are immediately and sustainably accretive on all key metrics including cash flow per share, free cash flow per share, shareholder returns, NAV, and inventory life. In conjunction with the transactions, we also announced a 20% per share increase to our base dividend. I'll speak more to the transactions later in the call, but we are reiterating the projections we made at the announcement and remain on track to close both deals before the end of June. I want to thank our team for delivering an impressive quarter in all aspects across every asset. These results demonstrate that our strategy is working and our execution is translating into value for our shareholders. Our team is focused on execution and delivery. Our 2023 program is designed to maximize free cash flow while load leveling our activity through the year. The beat in our first quarter production volumes reflect the intense focus of our teams on executing that plan and delivering strong well performance. We saw great results across the portfolio with especially strong productivity in the Permian. Greg will speak to this more in a minute, but the work our teams are doing to enhance completion design is clearly showing up in our well results. Our culture of innovation amplifies these operational successes as learnings are quickly transferred across the portfolio. In addition to strong volumes, we also saw significant margin enhancement from our market access strategy. We continue to successfully manage our gas flow assurance and price risk across the portfolio. With over 90% of our Montney gas priced outside the basin and 65% of our production physically accessing downstream markets, We were once again positioned to benefit from premium pricing at Malin, Sumas, Don, and Chicago. This diversification allowed us to capture some of the high West Coast gas prices we saw in the quarter, resulted in a pre-hedged natural gas price realizations of more than 140% of NYMEX for our Canadian gas. Across the whole portfolio, we realized 111% of NYMEX after hedges. I'll now turn the call over to Greg to discuss the operational highlights from the quarter.