US Ovintiv to Acquire Canadian Montney Oil and Gas Assets for $890 Million

en.Wedoany.com Reported - On October 26, US oil and gas producer Ovintiv announced that it has signed a definitive acquisition agreement with Canada's Logan Energy to acquire all of the latter's shares for a transaction consideration of approximately $890 million (approximately C$1.26 billion), including net debt expected to be assumed at closing. The transaction involves approximately 266,000 net acres of land in the Canadian Montney oil and gas play, production of approximately 20,000 barrels of oil equivalent per day, and 420 potential drilling locations, with closing expected in early the first quarter of 2027.

Under the agreement, Ovintiv will acquire Logan Energy shares through a Canadian subsidiary at C$1.40 in cash per share. The transaction also provides for the spin-off of Logan Oil, a newly formed entity under Logan, to existing shareholders, who will also receive corresponding warrants. Including the initial valuation of the spun-off company, the total consideration to shareholders is approximately C$1.48 per share. The acquisition is expected to be funded through a combination of the company's existing cash, credit facilities, and commercial paper borrowings.

The assets to be acquired are primarily located in the Simonette and Pouce Coupe areas of the Canadian Montney oil and gas play. Current production is approximately 20,000 barrels of oil equivalent per day, comprising approximately 7,000 barrels of oil and condensate, 70 million cubic feet of natural gas, and 1,000 barrels of other natural gas liquids. The 420 potential drilling locations are calculated on a 10,000-foot horizontal well equivalent length basis, of which approximately 220 are identified by the company as high-return locations and the remaining approximately 200 are future development locations. Upon completion of the acquisition, Ovintiv's core land position in the Montney region is expected to expand to approximately 720,000 acres.

Supporting facilities include two newly built crude oil gathering and processing facilities in the Simonette area with a combined processing capacity of 24,000 barrels per day. One of these was placed into service in the third quarter of 2026, and the other is scheduled to be placed into service by the end of the first quarter of 2027. The transaction also includes interests in two natural gas processing facilities: a 50% interest in a facility in the Simonette area with a processing capacity of 90 million cubic feet per day, and a 65% interest in a facility in the Pouce Coupe area with a processing capacity of 57 million cubic feet per day.

Ovintiv expects to achieve approximately $60 million in annual cost synergies through the integration of oil and gas production, drilling and development, field operations, and management. Among these, per-well capital cost savings on the assets to be acquired are expected to exceed $2 million. The transaction has been unanimously approved by the boards of directors of both companies, and closing remains subject to approval by Logan Energy shareholders, court, and regulatory authorities.