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Ovintiv's Q3 Earnings Beat Estimates, Revenues Down 12% Y/Y
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Ovintiv Inc. (OVV - Free Report) reported third-quarter 2024 adjusted earnings per share of $1.85, which beat the Zacks Consensus Estimate of $1.09. The beat can be attributed to better-than-expected total production, which exceeded the consensus mark by 3% and a 17.4% year-over-year reduction in expenses. Additionally, the bottom line increased from the year-ago level of $1.74.
The Denver, CO-based oil and gas exploration and production company’s total revenues of $2.3 billion decreased 12.3% from the year-ago quarter’s figure and missed the Zacks Consensus Estimate by 3.4%. This was due to a year-over-year decline in revenues from products and services.
On Nov. 7, OVV’s board of directors declared a quarterly dividend of 30 cents per share for its common shareholders of record as of Dec. 13, 2024. The dividends will be paid out on Dec. 31.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the reported quarter, the company repurchased approximately 3.7 million shares of common stock for a total of around $162 million and paid dividends of 30 cents per share, amounting to $78 million. OVV reduced total debt by $210 million, bringing this to $5.88 billion and reported a non-GAAP debt to adjusted EBITDA ratio of 1.2 times during the same time.
OVV’s Production & Prices
Total third-quarter production was 592,600 barrels of oil equivalent per day (BOE/d) compared with 571,800 BOE/d in the prior-year period. The figure beat our prediction of 577,800 BOE/d.
Natural gas production increased 1,725 million cubic feet per day (MMcf/d) in the third quarter of 2024, compared with 1,625 MMcf/d in the prior-year quarter. The figure beat our estimate of 1,683.6 MMcf/d.
Total liquids production increased to 305 thousand barrels per day (Mbbls/d) in the third quarter of 2024, up from 300.9 Mbbls/d in the third quarter of 2023. The figure beat our prediction of 297.2 Mbbls/d.
Ovintiv's realized natural gas price was $1.88 per thousand cubic feet compared with the year-ago level of $2.51 and missed our estimate of $2.51.
Realized oil price decreased to $73.23 per barrel from $79.52 in the third quarter of 2024. The figure also missed our projection of $80.32.
OVV’s Costs, Capex & Balance Sheet
Total expenses in the reported quarter decreased to $1.8 billion from the year-ago quarter’s figure of $2.18 billion, due to lower costs associated with transportation and processing, production, mineral and other taxes, operating, purchased products and administration.
Ovintiv’s cash from operating activities in the quarter under review was $1.02 billion, which increased from the year-ago figure of $906 million.
OVV's capital investments were $538 million compared with $834 million in the year-ago period. The company generated a non-GAAP free cash flow of $978 million in the reported quarter.
As of Sept. 30, the company had cash and cash equivalents worth $9 billion and long-term debt of $4.9 billion. Its debt-to-capitalization ratio was 31.3%.
OVV’s Asset Performance and Outlook
Permian Basin: Third-quarter production averaged 205 thousand barrels of oil equivalent per day (MBOE/d), with a strong liquids component of 88%. The company brought 32 net wells online in this period. Ovintiv expects to allocate capital expenditures of $1.35 billion to $1.45 billion for the Permian in 2024, targeting the addition of 120 to 130 net wells.
Montney: Production totaled 245 MBOE/d in the third quarter, with a liquids weighting of 19%. The company added 11 net wells in the quarter under review. To support growth, Ovintiv plans to invest between $425 million and $475 million in the Montney in 2024, with an expected addition of 60 to 70 net wells.
Uinta Basin: Third-quarter production averaged 37 MBOE/d, demonstrating a strong liquids-rich profile of 85%. Seven net wells were brought online. The company anticipates investing $300-$350 million in the Uinta Basin in 2024, targeting the addition of 25 to 30 net wells.
Anadarko Basin: Production averaged 103 MBOE/d in the third quarter, with a liquids component of 57%. Nine new wells were brought online in this period. Additionally, Ovintiv expects to invest $100-$125 million in the Anadarko Basin in 2024, targeting the addition of seven to 10 net wells.
OVV’s management expects total production volumes to average between 575,000 barrels per day (bpd) and 595,000 bpd in the fourth quarter and between 583,000 bpd and 587,000 bpd for the full year.
The company anticipates crude oil and condensate volumes to average between 203,000 bpd and 207,000 bpd in the fourth quarter and between 209,000 bpd and 211,000 bpd in 2024.
In the fourth quarter, natural gas production is estimated to be in the range of 1,700-1,750 MMcf/d and between 1,700 MMcf/d and 1,715 MMcf/d for the year.
In the fourth quarter, Ovintiv expects to receive around $150 million in cash from the settlement of a legacy asset sale, with the entire amount allocated to debt repayment. Additionally, share buybacks in the quarter are anticipated to be approximately $181 million.
Important Energy Earnings So Far
Right in the middle of earnings season, there have been a few key energy releases so far. Let us glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced an adjusted net income of 45 cents per share, which missed the Zacks Consensus Estimate of 55 cents. This was primarily due to poor equipment and services execution and lower activity in the reported quarter. Additionally, the bottom line declined from the year-ago quarter’s reported figure of 86 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, LBRT’s board of directors announced a dividend of 8 cents per common share payable on Dec. 20, to its stockholders of record as of Dec. 6. This dividend represents a 14% increase from the prior regular quarterly dividend of 7 cents per share. In the quarter, Liberty returned $51 million to its shareholders through a combination of share repurchases and cash dividends.
Energy infrastructure provider, Kinder Morgan, Inc. (KMI - Free Report) reported third-quarter adjusted earnings per share of 25 cents, which missed the Zacks Consensus Estimate of 27 cents. The bottom line was flat year over year. The weakness in quarterly results was caused by lower contributions from the Products Pipelines and CO2 business segments.
KMI also announced a quarterly cash dividend of 28.75 cents per share for the third quarter of 2024 (annualized dividend of $1.15), implying a 2% increase from the third-quarter 2023 level. The dividend is payable on Nov. 15, 2024, to its shareholders of record as of Oct. 31.
Schlumberger Limited (SLB - Free Report) , a Houston, TX-based oil and gas equipment and services provider announced third-quarter earnings of 89 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 88 cents. The bottom line also increased from the year-ago quarter’s 78 cents. The strong quarterly earnings were primarily driven by broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions and contributions from long-cycle deepwater and gas projects played significant roles.
SLB reported a free cash flow of $1.81 billion in the third quarter. As of Sept. 30, the company had approximately $4.46 billion in cash and short-term investments. At the end of the quarter, it registered a long-term debt of $11.86 billion.
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Ovintiv's Q3 Earnings Beat Estimates, Revenues Down 12% Y/Y
Ovintiv Inc. (OVV - Free Report) reported third-quarter 2024 adjusted earnings per share of $1.85, which beat the Zacks Consensus Estimate of $1.09. The beat can be attributed to better-than-expected total production, which exceeded the consensus mark by 3% and a 17.4% year-over-year reduction in expenses. Additionally, the bottom line increased from the year-ago level of $1.74.
The Denver, CO-based oil and gas exploration and production company’s total revenues of $2.3 billion decreased 12.3% from the year-ago quarter’s figure and missed the Zacks Consensus Estimate by 3.4%. This was due to a year-over-year decline in revenues from products and services.
Ovintiv Inc. Price, Consensus and EPS Surprise
Ovintiv Inc. price-consensus-eps-surprise-chart | Ovintiv Inc. Quote
On Nov. 7, OVV’s board of directors declared a quarterly dividend of 30 cents per share for its common shareholders of record as of Dec. 13, 2024. The dividends will be paid out on Dec. 31.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the reported quarter, the company repurchased approximately 3.7 million shares of common stock for a total of around $162 million and paid dividends of 30 cents per share, amounting to $78 million. OVV reduced total debt by $210 million, bringing this to $5.88 billion and reported a non-GAAP debt to adjusted EBITDA ratio of 1.2 times during the same time.
OVV’s Production & Prices
Total third-quarter production was 592,600 barrels of oil equivalent per day (BOE/d) compared with 571,800 BOE/d in the prior-year period. The figure beat our prediction of 577,800 BOE/d.
Natural gas production increased 1,725 million cubic feet per day (MMcf/d) in the third quarter of 2024, compared with 1,625 MMcf/d in the prior-year quarter. The figure beat our estimate of 1,683.6 MMcf/d.
Total liquids production increased to 305 thousand barrels per day (Mbbls/d) in the third quarter of 2024, up from 300.9 Mbbls/d in the third quarter of 2023. The figure beat our prediction of 297.2 Mbbls/d.
Ovintiv's realized natural gas price was $1.88 per thousand cubic feet compared with the year-ago level of $2.51 and missed our estimate of $2.51.
Realized oil price decreased to $73.23 per barrel from $79.52 in the third quarter of 2024. The figure also missed our projection of $80.32.
OVV’s Costs, Capex & Balance Sheet
Total expenses in the reported quarter decreased to $1.8 billion from the year-ago quarter’s figure of $2.18 billion, due to lower costs associated with transportation and processing, production, mineral and other taxes, operating, purchased products and administration.
Ovintiv’s cash from operating activities in the quarter under review was $1.02 billion, which increased from the year-ago figure of $906 million.
OVV's capital investments were $538 million compared with $834 million in the year-ago period. The company generated a non-GAAP free cash flow of $978 million in the reported quarter.
As of Sept. 30, the company had cash and cash equivalents worth $9 billion and long-term debt of $4.9 billion. Its debt-to-capitalization ratio was 31.3%.
OVV’s Asset Performance and Outlook
Permian Basin: Third-quarter production averaged 205 thousand barrels of oil equivalent per day (MBOE/d), with a strong liquids component of 88%. The company brought 32 net wells online in this period. Ovintiv expects to allocate capital expenditures of $1.35 billion to $1.45 billion for the Permian in 2024, targeting the addition of 120 to 130 net wells.
Montney: Production totaled 245 MBOE/d in the third quarter, with a liquids weighting of 19%. The company added 11 net wells in the quarter under review. To support growth, Ovintiv plans to invest between $425 million and $475 million in the Montney in 2024, with an expected addition of 60 to 70 net wells.
Uinta Basin: Third-quarter production averaged 37 MBOE/d, demonstrating a strong liquids-rich profile of 85%. Seven net wells were brought online. The company anticipates investing $300-$350 million in the Uinta Basin in 2024, targeting the addition of 25 to 30 net wells.
Anadarko Basin: Production averaged 103 MBOE/d in the third quarter, with a liquids component of 57%. Nine new wells were brought online in this period. Additionally, Ovintiv expects to invest $100-$125 million in the Anadarko Basin in 2024, targeting the addition of seven to 10 net wells.
OVV’s Q4 and 2024 Guidance
This Zacks Rank #3 (Hold) company expects capital expenditure in the range of $525-$575 million for fourth-quarter 2024 and between $2.28 billion and $2.33 billion for the full year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
OVV’s management expects total production volumes to average between 575,000 barrels per day (bpd) and 595,000 bpd in the fourth quarter and between 583,000 bpd and 587,000 bpd for the full year.
The company anticipates crude oil and condensate volumes to average between 203,000 bpd and 207,000 bpd in the fourth quarter and between 209,000 bpd and 211,000 bpd in 2024.
In the fourth quarter, natural gas production is estimated to be in the range of 1,700-1,750 MMcf/d and between 1,700 MMcf/d and 1,715 MMcf/d for the year.
In the fourth quarter, Ovintiv expects to receive around $150 million in cash from the settlement of a legacy asset sale, with the entire amount allocated to debt repayment. Additionally, share buybacks in the quarter are anticipated to be approximately $181 million.
Important Energy Earnings So Far
Right in the middle of earnings season, there have been a few key energy releases so far. Let us glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced an adjusted net income of 45 cents per share, which missed the Zacks Consensus Estimate of 55 cents. This was primarily due to poor equipment and services execution and lower activity in the reported quarter. Additionally, the bottom line declined from the year-ago quarter’s reported figure of 86 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, LBRT’s board of directors announced a dividend of 8 cents per common share payable on Dec. 20, to its stockholders of record as of Dec. 6. This dividend represents a 14% increase from the prior regular quarterly dividend of 7 cents per share. In the quarter, Liberty returned $51 million to its shareholders through a combination of share repurchases and cash dividends.
Energy infrastructure provider, Kinder Morgan, Inc. (KMI - Free Report) reported third-quarter adjusted earnings per share of 25 cents, which missed the Zacks Consensus Estimate of 27 cents. The bottom line was flat year over year. The weakness in quarterly results was caused by lower contributions from the Products Pipelines and CO2 business segments.
KMI also announced a quarterly cash dividend of 28.75 cents per share for the third quarter of 2024 (annualized dividend of $1.15), implying a 2% increase from the third-quarter 2023 level. The dividend is payable on Nov. 15, 2024, to its shareholders of record as of Oct. 31.
Schlumberger Limited (SLB - Free Report) , a Houston, TX-based oil and gas equipment and services provider announced third-quarter earnings of 89 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 88 cents. The bottom line also increased from the year-ago quarter’s 78 cents. The strong quarterly earnings were primarily driven by broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions and contributions from long-cycle deepwater and gas projects played significant roles.
SLB reported a free cash flow of $1.81 billion in the third quarter. As of Sept. 30, the company had approximately $4.46 billion in cash and short-term investments. At the end of the quarter, it registered a long-term debt of $11.86 billion.