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Ovintiv Inc. OVV recently reported first-quarter 2021 adjusted earnings per share of $1.10, meeting the Zacks Consensus Estimate. The bottom-line result can be attributed to higher gas price realization and successful cost-control initiatives, partially offset by lower production and oil price realizations.
Meanwhile, the reported figure was higher than the year-ago bottom line of 10 cents per share.
Total revenues of $1.84 billion beat the Zacks Consensus Estimate of $1.65 billion but dropped 30.4% from the year-ago sales of $2.64 billion.
Production and Prices
Total first-quarter production came in at 538,300 barrels of oil equivalent per day (BOE/d) compared with 571,300 BOE/d in the prior-year period. The decline in volumes was in response to the winter storms in Texas and Oklahoma. Natural gas production marginally rose year over year to 1,576 million cubic feet per day while liquids production was down 11.03% to 275,600 BOE/d.
Ovintiv's realized natural gas price was $3.10 per thousand cubic feet compared with the year-ago level of $1.97. Realized oil price decreased to $47.44 per barrel from $48.99 in the first quarter of 2020.
Costs, Capex and Balance Sheet
Total expenses decreased to $1.64 billion from the year-ago figure of $1.88 billion. This decline is primarily attributed to lower depreciation and amortization charges.
Ovintiv’s cash from operating activities in the quarter under review summed $827 million, up from the year-ago figure of $566 million. The company's capital investments were $350 million compared with $790 million in the year-ago period.
As of Mar 31, Ovintiv had cash and cash equivalents worth $9 million, and a long-term debt of $6.4 billion. Its debt-to-capitalization ratio was 60.8.
The company generated non-GAAP free cash flow of $540 million.
Ovintiv’s board of directors declared a quarterly dividend of 9.375 cents per share to its common shareholders of record on Jun 15, 2021, which will be paid out on Jun 30.
Ovintiv Inc. Price, Consensus and EPS Surprise
Ovintiv Inc. price-consensus-eps-surprise-chart | Ovintiv Inc. Quote
Update on Duvernay Asset Sales
Ovintiv, formerly known as Encana Corp., recently concluded the divestment of its Duvernay assets for nearly $263 million comprising approximately $12 million worth contingency payments based on future commodity prices. Proceeds from the sale will be used for debt repayment.
Ovintiv reaffirms its 2021 capital expenditure to be $1.5 billion. Following the asset sales, the company now projects crude oil and condensate volumes to average 190,000 barrels per day (bpd) in 2021 compared with its prior guidance of 200,000 bpd.
Zacks Rank & Key Picks
Ovintiv currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Whiting Petroleum Corporation WLL, Diamondback Energy, Inc. FANG and Continental Resources, Inc. CLR, each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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