Ovintiv Inc. recently closed its previously announced Eagle Ford asset sale, officially marking the company’s exit from the South Texas shale play.
The roughly $880 million in proceeds, combined with those recently received from the Duvernay asset sale, will be applied toward its goal to cut debt by around 35% to $4.5 billion. The company also announced on May 19 it had issued notice to fully redeem outstanding 2021 and 2022, which represents approximately $1.1 billion of debt retirement for Ovintiv.
“Today’s Eagle Ford asset sale continues our track record of delivery and allows us to meaningfully accelerate debt reduction,” Ovintiv CEO Doug Suttles said in a statement in a May 19 company release.
In addition to “strong free cash flow generation,” Suttles now expects Ovintiv to reach the $4.5 billion debt reduction goal by year-end instead of the previously targeted first half of 2022, he said.
“Our priorities today are clear—reduce debt, maintain scale, drive efficiencies, and return cash to shareholders,” Suttles added.
The buyer of the Ovintiv Eagle Ford assets, Validus Energy, is a privately owned E&P company led by Felix Energy founder Skye Callantine, who previously built and sold roughly $7 billion of assets over an 8-year period under the Felix Energy platform.
Validus Energy is financially backed by equity commitments from Pontem Energy Capital, other institutions, and private investors, according to its website.
BMO Capital Markets and Citigroup Global Markets Inc. was Ovintiv’s financial advisers for the Eagle Ford transaction and Davis Graham & Stubbs LLP provided legal counsel.
Pin Oak Energy closed a transaction with a Shell affiliate to acquire roughly 43,000 acres prospective for Utica Shale development in northwestern Pennsylvania.
North Dakota oil production jumped to more than 1 million bbl/d in July for the first time in two months but remained below its peak output in the state's Bakken shale field.
The miners are increasingly sending these rigs out to oil fields because it’s one of the cheapest ways to obtain the energy they need.