It didn’t take long for the Logan Energy rumours to be proven true, with Ovintiv (OVV) stepping in to the tune of $1.3B - expanding its presence in the Montney…

… by 200K core acres (80% undeveloped) and adding 220 premium return wells (35% IRR at $55 WTI) to its drilling inventory. While the immediate production lift is incremental…

… management expects run-rate synergies of ~$60M, which would improve OVV’s EBITDA netback by 4% (all else equal).

The company expects to keep the balance sheet in good shape, with a sub-$4B net debt target post-close…

… which gives them the financial capacity to continue pursuing growth while digesting this one and last year’s $4B NuVista deal.

In addition to cash, LGN shareholders will receive 0.0817 shares and 0.05 purchase warrants ($1 strike) in a spinoff owning assets from the Andora and Woodcote acquisitions as well as certain undeveloped lands.

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