CA - Ovintiv: Projecting 2024 FCF At Around $1.8 Billion To $1.9 Billion

2024-03-22 17:11:25 ET

Summary

• Ovintiv exceeded 2H 2023 production expectations by around 85%.
• It appears to be relatively conservative with its 2024 guidance, calling for a 10% decline in oil and condensate production from 2H 2023 levels.
• I think there is a good chance Ovintiv will end up around the high-end of its production guidance.
• However, due to weaker natural gas prices, I have trimmed its estimated value to $50 to $51 per share.

Ovintiv Inc. ( OVV ) finished 2023 strongly with 2H 2023 production around 8% above expectations. It appears to have provided relatively conservative guidance for 2024, with average oil and condensate production expected to decline 10% from 2H 2023 levels at the midpoint of its guidance. This is still 2% to 3% higher than its previous outlook for 2024 oil and condensate production, but it doesn't appear that Ovintiv is factoring in a large carryover into 2024 from its 2H 2023 production momentum....

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