Ovintiv to Acquire Logan Energy for $890 Million

Ovintiv Inc. (NYSE: OVV) has entered into a definitive agreement to acquire all outstanding shares of Logan Energy Corp. (TSXV: LGN) in an all-cash transaction valued at approximately $890 million (C$1.26 billion), including expected net debt at closing. The deal, announced on October 26, 2026, is designed to expand Ovintiv's position in the Montney oil window by adding approximately 266,000 net acres and 20,000 barrels of oil equivalent per day (MBOE/d) in current production.

The acquisition adds significant drilling inventory to Ovintiv's operations, including approximately 420 total net 10,000-foot equivalent oil well locations in the Simonette and Pouce Coupe areas. Of these, the company expects to add roughly 220 premium return locations, defined as those generating an internal rate of return greater than 35% at $55 per barrel WTI oil and $2.75 per MMBtu NYMEX natural gas prices. The remaining approximately 200 locations are categorized as upside opportunities. Ovintiv’s core Montney land position is expected to increase to approximately 720,000 net acres following the transaction.

Infrastructure assets are a central component of the deal, providing immediate operational leverage. Logan holds 100% ownership in two new oil batteries in Simonette with a combined capacity of 24 Mbbls/d. The first battery came online during the third quarter of 2026, while the second is scheduled to come online by the end of the first quarter of 2027. Additionally, Logan retains a 50% interest in a natural gas processing facility in Simonette with a total capacity of 90 MMcf/d and a 65% interest in a facility in Pouce Coupe with a total capacity of 57 MMcf/d. These assets are expected to enhance margins and support future growth optionality within the region.

Financially, the transaction is projected to be immediately and long-term accretive across key metrics. Ovintiv anticipates Non-GAAP Cash Flow per Share accretion of approximately 5% and Non-GAAP Free Cash Flow per Share accretion of 3% in 2027. The company expects to generate annual cost synergies of approximately $60 million, driven primarily by capital savings, production cost reductions, and overhead cuts. Capital cost savings are estimated at more than $2 million per well across the acquired assets, aligning with Ovintiv's current Montney well costs.

The deal will be funded through a combination of cash on hand, borrowings under the company's credit facility, and its commercial paper program. Following the closing, which is expected early in the first quarter of 2027 subject to shareholder, court, and regulatory approvals, Ovintiv projects its net debt will remain below $4 billion. The company's shareholder returns plan remains unchanged, targeting at least 60% of 2026 Non-GAAP Free Cash Flow to be returned via share buybacks and regular dividends. Beyond 2026, the target range for shareholder returns remains at 50% to 100%.

RBC Capital Markets is serving as the exclusive financial advisor to Ovintiv for this transaction. Legal advice is being provided by Blake, Cassels & Graydon LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP.