Ovintiv Raises 2026 Output Guidance to 645 MBOE/d as $2.82 Billion Anadarko Sale Cuts Net Debt to $3 Billion

Ovintiv raised its full-year 2026 production guidance to 630 to 645 MBOE/d on July 23 after reporting second-quarter results that showed the $2.82 billion Anadarko Basin divestiture closing during the quarter. Net debt fell from $5.167 billion at year-end 2025 to $2.995 billion by June 30, a $2.172 billion reduction in one quarter. Capital spending guidance remains unchanged at $2.25 to $2.35 billion for the year. The company generated $682 million of non-GAAP free cash flow in Q2, with $429 million returned to shareholders.

Where the $2.82 Billion Went

The Anadarko Basin sale closed in Q2, generating $2.82 billion after closing adjustments and transaction costs, per Ovintiv's press release. Ovintiv's net debt fell by $2.172 billion during the quarter, from $5.167 billion at year-end 2025 to $2.995 billion at June 30. The Anadarko proceeds were the primary driver of that debt reduction. Separately, the company redeemed $700 million of senior notes at a 5.65% coupon originally due in 2028, eliminating $40 million in annual interest expense going forward.

Net debt measured as a multiple of adjusted EBITDA improved from 1.2x at year-end 2025 to 0.6x by June 30. Total liquidity reached $4.4 billion. Ovintiv returned $345 million to shareholders through share buybacks covering 6.1 million shares, and paid $84 million in dividends during Q2, a combined $429 million or 63% of free cash flow. For 2026 as a whole, the company targets returning more than 60% of non-GAAP free cash flow.

Permian and Montney Take Center Stage After the Anadarko Exit

Ovintiv's asset base now concentrates on two core plays after the Anadarko Basin exit: the Permian Basin in West Texas and the Montney Formation in northeastern British Columbia and Alberta. Permian production averaged 231 MBOE/d in Q2, with a 78% liquids weighting and 38 net wells brought online during the quarter. Full-year Permian capital is budgeted at $1.325 to $1.375 billion to run approximately 5 rigs and bring on 125 to 135 net wells.

Montney production averaged 374 MBOE/d in Q2, with 27% liquids and 40 wells turned in line during the period. Capital budgeted for the Montney in 2026 totals $875 to $925 million to support 130 to 140 net wells. For the second half of 2026, Ovintiv targets Montney oil and condensate production of 80 to 85 thousand barrels per day alongside 1.7 to 1.8 Bcf/d of natural gas. Q2 total company production was 615 MBOE/d before the guidance revision.

Q2 Results and CEO Commentary

CEO Brendan McCracken described Ovintiv as positioned with "deep inventory superior-return drilling" and a "fortified balance sheet" following the quarter's results. Q2 realized oil and condensate pricing averaged $91.22 per barrel, representing 98% of WTI, per the company's press release. Ovintiv reported net earnings of $456 million for Q2, or $1.62 per diluted share, though the figure includes a $337 million pretax loss on the Anadarko divestiture. Non-GAAP adjusted earnings were $491 million, excluding that write-down.

Year-to-date shareholder returns through June totaled $598 million, representing 45% of free cash flow. Operating cash flow for Q2 reached $1.6 billion. Ovintiv's two remaining core plays, Permian and Montney, now carry the full weight of the company's capital program and production growth targets through year-end.