Ovintiv in advanced discussions to sell Eagle Ford asset in US

Oil producer Ovintiv is reportedly in advanced talks with Pontem Energy Capital, a privately owned energy investment firm, to divest its stake in Eagle Ford acreage in Texas for more than $800m.

A potential deal between the two parties could be announced as early as next, Reuters reported, citing sources familiar with the matter.

The Eagle Ford position was purchased by Ovintiv in 2014 from Freeport-McMoRan for about $3.1bn. This acreage included approximately 45,500 net acres in Karnes, Wilson and Atascosa counties of south Texas.

In February 2021, the company said that it is on a multi-year plan to reduce a $4.5bn debt by the end of 2022. The plan also includes generating around $1bn in proceeds by selling assets.

In its fourth quarter and full-year 2020 results announcement, the company said that it is planning to maintain crude and condensate production of approximately 200 barrels per day (Mbbls/d).

At that time, Ovintiv signed an agreement to sell its Duvernay assets for $263m. This also includes $12m of contingent payments.

Commenting on this deal, Ovintiv CEO Doug Suttles said: “Today’s announcement of the sale of our Duvernay asset combined with our strong fourth quarter and 2021 guide clearly demonstrate our commitment to debt reduction and puts us squarely on track to achieve our $4.5 billion dollar year-end 2022 goal.”

Ovintiv has a multi-basin portfolio with contiguous positions in the heart of the Permian and Anadarko basins, and the Montney basin in the US.