Ovintiv has signed deals with undisclosed firms to divest portions of its oil and gas assets, located in the Uinta and Bakken basins in the US, for approximately $250m.
The firm’s Uinta basin assets considered for sale include approximately 3,000 gross vertical wells. These are said to be mature waterflood assets, with operating expenses of nearly $35.00 per barrel of oil equivalent.
Following the transaction, Ovintiv will hold nearly 130,000 largely contiguous net acres in the horizontal shale portion of the play.
In the Bakken, the firm will offload an estimated 88 wells, located mainly in Richland County, Montana, approximately 30 miles from Ovintiv’s primary Bakken position.
According to Ovintiv, the assets being divested have a total combined volume of approximately 5,000 barrels of oil equivalent per day, including 4,900 barrels per day of oil and condensate, as of April 2022.
In a press statement, the firm said: “Total proceeds received are subject to customary closing adjustments. Ovintiv plans to update its 2022 production and Total Cost guidance to reflect the impact of the asset sales with its second quarter results. 2022 capital guidance will remain unchanged.”
Planned to be closed in Q3 2022, the agreements are subject to regulatory approvals, closing conditions, and other adjustments.
Ovintiv CEO Brendan McCracken said: “These transactions continue our track record of portfolio optimisation, and this means we will double our cash returns to shareholders starting now.
“This enables our shareholders to directly benefit from these non-core asset sales and our continuing strong performance.”