Ovintiv

Last updated

Ovintiv Inc.
Company type Public company
ISIN US69047Q1022
Industry Petroleum
Predecessors Encana
FoundedJanuary 24, 2020 (2020-01-24)
Headquarters
Denver, Colorado
Key people
Peter Dea, Board Chair;
Brendan McCracken, President & CEO;
Corey Code, EVP & CFO
Products Petroleum
Natural gas
Natural gas liquids
Production output
533.9 thousand barrels of oil equivalent (3,266,000 GJ) per day (2021)
RevenueIncrease2.svg US$8.658 billion (2021)
3,853,000,000 United States dollar (2022)  OOjs UI icon edit-ltr-progressive.svg
Increase2.svg US$1.416 million (2021)
Total assets Decrease2.svg US$14.055 billion (2021)
Total equity Increase2.svg US$5.074 billion (2021)
Number of employees
1,744 (December 2022)
Website www.ovintiv.com
Footnotes /references
[1] [2]

Ovintiv Inc. is an American independent petroleum company. The company was formed in 2020 through a restructuring of its Canadian predecessor, Encana. Ovintiv is incorporated in Delaware and headquartered in Denver, Colorado.

Contents

History

On January 24, 2020, after receiving shareholder approval, the company completed the transfer of its corporate domicile from Canada to the United States, [3] [4] Ovintiv Canada ULC retains an office in Calgary. [5]

In June 2020, the company announced layoffs of 25% of its workforce. [6] [7] [8]

Hydrocarbon production

In 2021, the company's average production was 533.9 thousand barrels of oil equivalent (3,266,000 GJ) per day, of which 26% was petroleum, 25% was natural gas liquids, and 49% was natural gas. Of 2021 production, 56% was in the United States and 44% was in Canada. [2]

List of notable sales, mergers and acquisitions

In October 2004, EnCana sold its UK unit, including a 43% stake in the Buzzard field (discovered in 2001 by a PanCanadian-led group), to Nexen for $2.1bn US. [9]

In January 2007, the company sold its assets in Chad to China National Petroleum Corporation for $202.5 million. [10] [11]

In May 2007, the company sold its assets in the delta of the Mackenzie River. [12]

In 2009, EnCana's oil business was spun-off as Cenovus Energy. [13]

In November 2011, a potential buyer backed out of a $45 million deal to buy the company's gas field in Pavillion, Wyoming. [14]

In December 2011, the company sold the majority of its natural gas producing assets in the Barnett Shale. [15]

In February 2012, Mitsubishi paid approximately C$2.9 billion for a 40% interest in the Cutbank Ridge Partnership with Encana, which involves 409,000 net acres of Montney Formation natural gas lands in northeast British Columbia. [16] [17] The company also sold its midstream assets in the Cutbank Ridge to Veresen for C$920 million. [18]

In June 2014, the company sold its Bighorn assets in Alberta to Jupiter Resources for US$1.8 billion. [19]

In November 2014, the company acquired Athlon Energy for $7.1 billion. [20]

In May 2014, Jonah Energy LLC acquired the company's Jonah Field operations in Sublette County, Wyoming. [21]

In June 2014, the company acquired assets in the Eagle Ford Group from Freeport-McMoRan for $3.1 billion. [22]

In August 2015, the company sold its assets in the Haynesville Shale for $850 million to affiliates of GSO Capital Partners and GeoSouthern Energy. [23]

In December 2015, the company significantly cut its dividend and capital expenditures budget after a fall in energy prices. [24]

In July 2016, the company sold its assets in the Denver Basin for $900 million. [25] [26]

In June 2017, the company sold its assets in the Piceance Basin for $735 million. [27] [28]

In May 2018, the company permanently ceased production at Deep Panuke. The Deep Panuke project produced and processed natural gas 250 kilometers offshore southeast of Halifax, Nova Scotia. [29] The platform was sent for recycling in 2020. [30]

In December 2018, the company sold its assets in the San Juan Basin for $480 million. [31] [32]

In February 2019, the company acquired Newfield Exploration. [33] [34]

Major land assets

The company has a land position in Canada of 1.3 million net acres, of which about 773,000 net acres are undeveloped. [2] Its assets in Canada are in the Montney Formation, where it has a partnership with Mitsubishi to develop Cutbank Ridge, Wheatland County, Alberta, and the Horn River Formation. [2]

In February 2022, Ovintiv absorbed former subsidiary EWL Management Limited [35] making it the owner of five decommissioned mines in Ontario: Coldstream Copper Mine, Gordon Lake Mine, Greyhawk Mine (uranium), Dyno Mine (uranium), and Madawaska Mine (uranium) which is being rehabilitated to meet current compliant standards. [36] [37]

In the United States, the company holds approximately 929,000 net acres of land, of which 152,000 net acres are undeveloped. It operates in the Permian Basin, Anadarko Basin, Uinta Basin, and the Bakken formation. [2]

Lawsuits

Alleged collusion and bid rigging with Chesapeake Energy

From 2008 through 2010, the company accumulated 250,000 net acres in the Collingwood-Utica Shale gas play in the Middle Ordovician Collingwood formation of the Michigan Basin at an average cost of $150/acre. [38] In May 2012, the company paid about $185 an acre for oil and gas rights on 2,156 acres (873 hectares) at an auction by the Michigan Department of Natural Resources, which was "88 percent less than the average paid two years ago in the area". [39]

In July 2012, Reuters reported about e-mails between the company and Chesapeake Energy, the second-largest natural gas producer in the U.S., to divide up Michigan counties state land leases to suppress land prices in an October 2010 auction. [40] In 2013, a private landowner filed suit against the company and Chesapeake for bid rigging. [41] Justice Department and Michigan authorities were investigating whether state or federal laws were violated; the Internal Revenue Service and U.S. Securities and Exchange Commission also investigated.

While the case was dropped by the DOJ, Michigan's Attorney General followed up on the accusations, and Encana ended up with a fine of $5 million, and Chesapeake paid $25 million into a victim-compensation fund. [42]

Failed lawsuit by adjacent property owners to prevent drilling

In 2013, two property owners adjacent to a drilling unit filed suit against the Michigan Department of Environmental Quality (DEQ) and Encana for potential harm due to proximity. In October 2013, the judge of the Circuit Court of Ingham County issued an injunction against Encana starting to drill until an administrative hearing before DEQ's supervisor of wells had been completed, re part 12 of DEQ's rules for oil and gas operations. [43] In May 2014, the supervisor of wells found with Encana, that the petitioners did "not have standing", because they did not own land within the drilling unit and dismissed the case. [44]

Alleged excessive water use for hydraulic fracturing

In November 2013, Ecojustice, the Sierra Club and the Wilderness Committee filed a lawsuit against Encana Corporation and the British Columbia's Oil and Gas Commission for excessive water use from lakes and rivers for its hydraulic fracturing for shale gas, "granted by repeated short-term water permits, a violation of the provincial water act". [45]

Criticism

Wyoming water pollution

In spring 2008, residents from Pavillion, Wyoming, approached the United States Environmental Protection Agency (EPA) about changes in water quality from their domestic wells. Encana was the primary natural gas producer in the area. In 2009, the EPA announced that it had found hydrocarbon contaminants in residents' drinking water wells. [46]

Pipeline explosions

In Pouce Coupe British Columbia five explosions targeted Encana pipelines between October 2008 and January 2009; media reports indicate the pipeline may have been bombed by a disgruntled community member fearing the sour gas (containing hydrogen sulfide, which can be fatal if too much of it is inhaled) poses a danger to the community. [47] Encana was fined CAD $250,000 under Canada's Environmental Emergency Act. [48]

Encana's hydraulic fracturing operations in the United States are portrayed in the 2010 documentary, Gasland , which alleges that hydraulic fracturing causes pollution of ground and surface water, air, and soil. [49]

Deep Panuke project

Issues were raised for the Deep Panuke project offshore of Nova Scotia, when it was proposed in 2006 as a smaller version with increased ocean discharges and when Encana asked for a "streamlined regulatory process" without public hearings. [50]

In British Columbia, between 2007 and 2019, Ovintiv was charged for breaching provincial legislation 19 times, more than any other company, as well as being fined the highest amount. [48]

Leadership

Chairman of the BoardPresident

Clayton H. Woitas, January 24, 2020 – June 30, 2020
Peter A. Dea, June 30, 2020 –

Michael G. McAllister, January 24, 2020 – June 30, 2020
Brendan M. McCracken, December 1, 2020 –

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References

  1. ↑ "Our History". Ovintiv.
  2. 1 2 3 4 5 "Ovintiv Inc. 2021 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  3. ↑ "Encana completes reorganization and establishes corporate domicile in the U.S." (Press release). PR Newswire. January 24, 2020.
  4. ↑ Morgan, Geoffrey (November 1, 2018). "Doug Suttles transforms 'headquarter-less' Encana with $7.7-billion deal to buy Newfield". Financial Post .
  5. ↑ "Regulatory Action – Ovintiv Canada ULC". Canadian Nuclear Safety Commission . May 19, 2022. Retrieved June 23, 2022.
  6. ↑ Seskus, Tony (June 17, 2020). "Oil and gas company Ovintiv, formerly Encana, laying off workers across North America". CBC News .
  7. ↑ Nair, Shanti S.; Khan, Shariq (June 18, 2020). "Ovintiv lays off 25% of workforce after oil demand slumps". Reuters .
  8. ↑ Orland, Kevin (June 17, 2020). "Ovintiv cutting jobs in Calgary, Denver and Texas as drilling slows". Calgary Herald. Bloomberg News.
  9. ↑ "Nexen buys EnCana unit". The Globe and Mail . October 29, 2004.
  10. ↑ "CNPC buys EnCana's Chad operations for $202.5 mln". Reuters . January 21, 2007.
  11. ↑ "CNPC International to buy EnCana's Chad holdings". Oil & Gas Journal . January 15, 2007.
  12. ↑ EBNER, DAVID (May 9, 2007). "MGM Energy buys into several EnCana assets". The Globe and Mail .
  13. ↑ Haggett, Scott (November 30, 2009). "EnCana wraps up spinoff of its oil business". Reuters .
  14. ↑ Lustgarten, Abrahm (November 29, 2011). "Company Backs out of $45 Million Deal to Buy Troubled Wyoming Gas Field". ProPublica .
  15. ↑ Joyce, Matt (December 22, 2011). "Encana closes sale on most Barnett assets". American City Business Journals .
  16. ↑ "Encana Completes Cutbank Ridge Deal with Mitsubishi". LNG World News. February 27, 2012.
  17. ↑ DE LA MERCED, MICHAEL J. (February 17, 2012). "Mitsubishi Buys 40% Stake in Encana Shale Gas Assets" . The New York Times .
  18. ↑ "Encana closes C$920 million sale of Cutbank Ridge midstream assets" (Press release). Business Wire. February 9, 2012.
  19. ↑ "Encana Reaches Agreement to Sell Bighorn Assets to Jupiter Resources for Approximately US$1.8 Billion" (Press release). GlobeNewswire. June 27, 2014.
  20. ↑ "Encana completes acquisition of Athlon Energy". Oil & Gas Journal . November 13, 2014.
  21. ↑ "Jonah Energy Completes Acquisition of the Jonah Field Operations in Wyoming from Encana" (Press release). Business Wire. May 12, 2014.
  22. ↑ "Encana Completes $3.1 Billion Eagle Ford Acquisition" (Press release). GlobeNewswire. June 20, 2014.
  23. ↑ Graeber, Daniel J. (August 25, 2015). "Encana Corp. leaves Louisiana shale". United Press International .
  24. ↑ Pinto, Anet Josline (December 14, 2015). "Canada's Encana slashes dividend, cuts capex". Reuters .
  25. ↑ SVALDI, ALDO (July 29, 2016). "Encana Corp. completes sale of Denver-Julesburg Basin assets". The Denver Post .
  26. ↑ McKinnon, Judy (October 8, 2015). "Encana to Sell Colorado Oil and Gas Assets for $900 Million" . The Wall Street Journal .
  27. ↑ "Encana announces agreement to sell its Piceance natural gas assets" (Press release). Globe Newswire. June 9, 2017.
  28. ↑ "BRIEF-Encana to sell its Piceance natural gas assets for $735 mln". Reuters . June 9, 2017.
  29. ↑ "Encana Corporation – Abandonment of Deep Panuke Offshore Gas Development". National Energy Board.
  30. ↑ "Canada: Deep Panuke Offshore Platform Removed from Field". Offshore Engineer. August 7, 2020.
  31. ↑ "DJR Energy Closes Acquisition of Encana's San Juan Basin Assets" (Press release). Business Wire. December 27, 2018.
  32. ↑ KOHLER, JUDITH (December 28, 2018). "Denver-based DJR Energy closes $480M purchase of assets in San Juan Basin". The Denver Post .
  33. ↑ "Encana completes acquisition of Newfield Exploration to create North America's premier resource company" (Press release). Globe Newswire. February 13, 2019.
  34. ↑ Pulsinelli, Olivia (February 14, 2019). "Encana closes multibillion-dollar acquisition of Woodlands co". American City Business Journals .
  35. ↑ Canadian Nuclear Safety Commission, Order Under Section 25 or Paragraph 37(2)(f) of the Nuclear Safety Control Act, 6 May 2022. (archive)
  36. ↑ "Independent Environmental Monitoring Program: Dyno, Bicroft, and Madawaska Mines". Canadian Nuclear Safety Commission . September 21, 2020.
  37. ↑ "EWL Legacy Mine Properties Perpetual Management Strategy" (PDF). May 1, 2014.
  38. ↑ Petzet, Alan (May 7, 2010). "Explorations: Michigan Collingwood-Utica gas play emerging". Oil & Gas Journal .
  39. ↑ Carroll, Joe (June 27, 2012). "Encana Expands in Michigan Shale Chesapeake Is Abandoning". Financial Post . Bloomberg News.
  40. ↑ Grow, Brian; Schneyer, Joshua; Roberts, Janet (June 25, 2012). "Special Report: Chesapeake and rival plotted to suppress land prices". Reuters .
  41. ↑ Grow, Brian; Schneyer, Joshua (February 25, 2013). "Chesapeake, Encana sued in civil antitrust action". Reuters .
  42. ↑ "Minimizing Antitrust Risks in Joint Ventures, Joint Bidding, and AMIs: A Review of Recent Enforcement Activities". Oil and Gas, Natural Resources, and Energy Journal. 2 (5): 536. January 2017.
  43. ↑ Smith, Lee (February 8, 2014). "Michigan's fracking: Actors and issues". Midland Daily News .
  44. ↑ "Supervisor of Wells Orders". Department of Environmental Quality. Michigan.
  45. ↑ Moore, Dene (November 13, 2013). "Fracking Lawsuit Targets EnCana, B.C. Oil And Gas Commission". HuffPost . The Canadian Press.
  46. ↑ "Pavillion, Wyoming Groundwater Investigation: January 2010 Sampling Results and Site Update" (PDF). United States Environmental Protection Agency. August 2010.
  47. ↑ "Latest EnCana pipeline explosion was deliberate: RCMP". CBC News . July 2, 2009.
  48. 1 2 Narwhal, The. "Meet the frackers: B.C.'s top 10 fracking companies, their subsidies, profits and taxes, revealed". The Narwhal. Retrieved October 9, 2021.
  49. ↑ Mosier, Jeff (February 3, 2017). "Wise County couple that sued Plano gas company may lose their $2.9M judgment". The Dallas Morning News .
  50. ↑ "EnCana unveils smaller Deep Panuke project". CBC News. August 29, 2006.
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