Ovintiv Expands in Montney with $2.38 Billion Acquisition of Paramount Resources Assets
(Reuters) — Shale producer Ovintiv said on Thursday it was acquiring oil assets from Paramount Resources for $2.38 billion in cash, expanding its presence in Canada's Montney shale play.
Shares of Ovintiv rose nearly 3% while Paramount's shares rose 14% in early morning trading.
Ovintiv acquired oil-focused assets in the Permian Basin for $4.3 billion last year.
Since the Permian transaction, the cost of acquiring core Midland Basin and Delaware Basin assets has gone up significantly, a senior company executive said in a call with analysts.
In contrast, in Montney, Ovintiv was able to acquire undeveloped locations at under a million dollars, he added.
Montney, a 50,000-square-mile area spanning northern Alberta and British Columbia, is considered one of Canada's most attractive oil and gas-producing regions because of its strong economics.
The assets, located near Ovintiv's current operations, will add 70,000 barrels of oil equivalent per day (boepd) of production at the Montney formation in Alberta and nearly double Ovintiv's existing production in the shale.
The company also expects to save costs greater than $1.5 million per well across the acquired assets.
Ovintiv said it will also sell its Uinta Basin assets in Utah to FourPoint Resources for $2 billion.
"While a greater position in the Montney could potentially weigh on the valuation, the assets come at a low entry cost, have the potential to grow oil production," Siebert Williams Shank analysts said in a note, adding that they expected markets to react well to both transactions.
Both transactions, likely to close by the first quarter of 2025, are expected to increase the company's adjusted free cash flow by about $300 million in 2025.
Ovintiv will finance the Montney acquisition through cash proceeds received from the Uinta Basin exit, cash on hand and borrowings under its credit facility or temporary financing.
It said it had paused its share buyback program until the cash borrowed under the temporary financing was recovered.
The company expects to resume the buybacks in the second quarter of 2025.
Related News
Related News

- Kinder Morgan Proposes 290-Mile Gas Pipeline Expansion Spanning Three States
- Enbridge Plans 86-Mile Pipeline Expansion, Bringing 850 Workers to Northern B.C.
- Intensity, Rainbow Energy to Build 344-Mile Gas Pipeline Across North Dakota
- Tallgrass to Build New Permian-to-Rockies Pipeline, Targets 2028 Startup with 2.4 Bcf Capacity
- U.S. Moves to Block Enterprise Products’ Exports to China Over Security Risk
- U.S. Pipeline Expansion to Add 99 Bcf/d, Mostly for LNG Export, Report Finds
- A Systematic Approach To Ensuring Pipeline Integrity
- 275-Mile Texas-to-Oklahoma Gas Pipeline Enters Open Season
- TC Energy’s North Baja Pipeline Expansion Brings Mexico Closer to LNG Exports
- Consumers Energy Begins 135-Mile Michigan Gas Pipeline Upgrade, Taps 600 Workers
Comments