Ovintiv Inc.

Ovintiv's Big Move: What the NuVista Energy Acquisition Means for Investors

Ovintiv Inc. is making a significant move that could reshape its future and impact your investment. Let's dive into the details.

1. The Deal: Ovintiv Acquires NuVista Energy

Ovintiv Inc. is acquiring NuVista Energy Ltd., a Canadian oil and natural gas producer. NuVista's shareholders have approved the transaction, and an Alberta court granted final approval on January 23, 2026. This confirms the acquisition, initially announced on November 4, 2025, is on track to close.

Ovintiv values the deal at approximately C$2.6 billion (US$1.9 billion), which includes NuVista's net debt. Ovintiv will pay for NuVista shares with a mix of cash and stock: specifically, C$3.00 in cash and 0.3528 of an Ovintiv common share for each NuVista share. Based on Ovintiv's share price at the initial announcement, this equates to approximately C$11.25 per NuVista share.

2. Why This Deal? Ovintiv's Strategic Play

Ovintiv is making a strategic move to significantly expand its presence in Canada's Montney play. NuVista brings high-quality, liquids-rich assets in this region, known for low-cost development and long-life production potential.

This acquisition is expected to:

• Boost Production: Add approximately 80,000 barrels of oil equivalent per day (boe/d) to Ovintiv's production, with a significant portion consisting of higher-value liquids.
• Increase Reserves: Grow Ovintiv's proven and probable reserves, extending its resource base.
• Drive Efficiencies: Create substantial operational efficiencies by integrating NuVista's assets into Ovintiv's existing Canadian operations. This integration is expected to generate an estimated US$100 million in annual cost savings and capital efficiencies within the first year.
• Enhance Financials: Ovintiv expects the deal to immediately increase its cash flow per share and free cash flow per share, strengthening its financial position and its ability to generate shareholder returns.

3. What It Means for Ovintiv (and You)

This acquisition transforms Ovintiv into a larger, more dominant player in the Montney, a key North American energy basin.

• For Ovintiv's Financials: While the deal should boost cash flow, it involves issuing new Ovintiv shares, which will dilute existing shareholders' ownership. Including NuVista's debt will initially increase Ovintiv's overall debt levels, though the company aims to reduce this debt quickly using increased cash flow. Ovintiv expects to maintain its current dividend and share buyback program, but investors should monitor updated capital allocation plans after closing.
• For Employees: Ovintiv will integrate NuVista's employees into its operations. While this creates new opportunities, it also means potential changes and some redundancies as Ovintiv combines operations.
• Market Reaction: The market's initial reaction to the deal has been mixed, reflecting both its strategic benefits and financial considerations (dilution, debt). Expect continued stock price volatility as the market fully processes the implications and as Ovintiv provides updated guidance.

4. What's Next? The Road Ahead

With shareholder and court approvals secured, the acquisition is expected to close in early 2026, pending customary closing conditions, including regulatory approvals.

Once the deal closes, Ovintiv will immediately focus on:

• Seamless Integration: Efficiently combining NuVista's assets and operations to achieve projected efficiencies and cost savings.
• Updated Guidance: Ovintiv will likely provide updated financial and operational guidance, including revised production targets, capital expenditure plans, and free cash flow projections for the combined entity.

5. Investor Takeaways

This is a significant strategic move for Ovintiv, aiming to strengthen its position in a high-value basin and boost its long-term free cash flow generation.

• Growth vs. Dilution: While the deal promises growth and efficiencies, consider the immediate share dilution and increased debt.
• Integration is Key: The acquisition's success hinges on Ovintiv's ability to effectively integrate NuVista's assets and achieve the projected efficiencies.
• Monitor Financials: Closely watch Ovintiv's updated financial guidance after closing, especially its free cash flow generation, debt reduction plans, and capital allocation strategy (dividends, buybacks).
• Commodity Prices: As always, Ovintiv's performance remains sensitive to fluctuations in oil and natural gas prices.

This acquisition marks a pivotal moment for Ovintiv. Investors should stay informed and consider how these changes align with their investment goals.