Ovintiv Splits US$460M Land-Buying Push Between Alberta and Texas, Adds 240 Well Locations

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Ovintiv is putting another US$460 million behind the two basins that increasingly define its North American business. The Denver-based producer has entered more than 60 transactions in 2026 to acquire roughly 41,000 net acres across the Permian Basin in Texas and the Montney formation in Alberta. The spending is almost perfectly divided between the two regions, with about US$230 million allocated to each. More important than the acreage alone, Ovintiv says the purchases will add 240 net drilling locations standardized to 10,000-foot laterals. The move comes after a period of much larger portfolio reshaping, particularly in Alberta, and suggests the company is now combining major acquisitions with a quieter strategy of accumulating smaller parcels around areas where it already knows how to drill, process and move hydrocarbons.

More Than 60 Deals Make Up the US$460 Million Push

Ovintiv’s latest expansion is not one large takeover. It is the product of more than 60 transactions entered into since the beginning of 2026, together covering approximately 41,000 net acres. The total purchase price is about US$460 million, or roughly US$11,000 per net acre after accounting for the limited existing production associated with the properties. That fragmented approach helps explain the company’s description of the strategy as a “ground game”: instead of waiting for another transformational acquisition, Ovintiv is assembling smaller pieces that can improve the shape and depth of its existing positions.

The purchases are expected to provide 240 net 10,000-foot-equivalent drilling locations. Ovintiv classifies 190 of those as base locations and another 50 as upside locations, an important distinction because a drilling location represents future inventory rather than an operating well. Some may be developed relatively soon, while others could remain in the company’s portfolio for years depending on commodity prices, well results, infrastructure and capital priorities. Ovintiv expects the remaining transactions associated with the program to close before the end of 2026, meaning some of the announced acreage is still subject to completion.

Texas Gets Half the Money and 120 New Locations

Approximately US$230 million of the total spending is going into the Midland Basin, where Ovintiv says it is acquiring about 21,000 net acres. Those properties are expected to contribute 120 total locations, consisting of 80 base locations and 40 upside opportunities. The Midland Basin lies entirely within Texas and forms the eastern portion of the larger Permian Basin. That matters because the Permian remains the most productive oil region in the United States, accounting for approximately 48% of U.S. crude production in 2025 and averaging about 6.6 million barrels a day that year.

Ovintiv is already operating there at substantial scale. Its Permian production averaged approximately 231,000 barrels of oil equivalent per day during the second quarter of 2026, with liquids representing 78% of the total. The company expects to spend roughly US$1.325 billion to US$1.375 billion in the play during 2026, running about five rigs and turning approximately 125 to 135 net wells in line. The newly acquired acreage therefore lands inside an active development machine rather than creating a new operating region. It gives Ovintiv additional places to deploy rigs and longer laterals as existing locations are consumed.

Alberta Matches Texas Dollar for Dollar

The other US$230 million is earmarked for approximately 20,000 net acres in the liquids-rich Alberta portion of the Montney. Ovintiv expects that acreage to provide another 120 drilling locations, divided between 110 base locations and 10 upside locations. Compared with the Midland package, a considerably larger share of the Montney locations falls into the company’s base category. The announcement does not provide individual seller names or a detailed drilling schedule, but it places the properties specifically in the Alberta oil window where Ovintiv has invested heavily during the past two years.

The Montney is already Ovintiv’s biggest producing asset by oil-equivalent volume. Second-quarter 2026 production there averaged approximately 374,000 barrels of oil equivalent per day, including a liquids mix of 27%. Ovintiv plans approximately US$875 million to US$925 million of Montney investment during 2026, with around six rigs and 130 to 140 net wells expected to be turned in line. The wider basin is also becoming increasingly important to Canada’s energy system. The Canada Energy Regulator has identified development in the Montney across northwestern Alberta and northeastern British Columbia as a major contributor to recent Canadian natural-gas production growth.

The Price per Well Location Helps Explain the Strategy

Acreage figures can make oil-and-gas transactions look abstract, so the more revealing number may be what Ovintiv says it is paying for inventory. After adjusting for the minimal production already coming from the acquired properties, the company values the purchases at approximately US$1.3 million to US$1.7 million per drilling location. That does not represent the cost of actually drilling and completing each future well. Rather, it is effectively the acquisition cost of securing the underlying development opportunity before future drilling capital is committed.

The distinction is particularly important as lateral lengths increase. Ovintiv reports its inventory using a standardized 10,000-foot-equivalent measurement, allowing locations of different physical lengths to be compared on a more consistent basis. Longer horizontal wells have become increasingly important in the Permian. U.S. Energy Information Administration data show wells shorter than 5,000 feet accounted for 43% of Permian horizontal completions in 2015 but only 4% by 2025, as operators increasingly moved toward longer laterals. For Ovintiv, adjoining acreage can consequently have value beyond its raw acreage count if it helps create longer, more efficient drilling configurations or improves development planning around an existing position.

Ovintiv Says 2026 Inventory Additions Have Now Reached About 500 Locations

The 240 locations from acquisitions tell only part of Ovintiv’s 2026 inventory story. The company says it has also generated approximately 260 locations through what it calls organic inventory enhancement, bringing expected year-to-date additions to roughly 500 net 10,000-foot-equivalent locations after the transactions are included. Organic additions can come from technical work, drilling results, revised spacing or identifying new targets within acreage a producer already controls, meaning additional inventory does not always require buying more land.

That number stands out against Ovintiv’s current drilling pace. The company expects to turn approximately 125 to 135 Permian wells and 130 to 140 Montney wells in line during 2026. At its second-quarter update, management said organic work had already replaced the full-year drilling program in both basins. The new acquisitions therefore add another layer of potential locations on top of that internal replacement work. Ovintiv has previously described its premium inventory runway as approximately 12 to 15 years in the Permian and 15 to 20 years in the Montney. The latest purchases have not been assigned a specific number of additional years, but they reinforce the company’s focus on continually replenishing the locations being consumed by current development.

The Purchases Arrive With a Much Stronger Balance Sheet

Spending US$460 million on undeveloped inventory can look aggressive until it is placed beside Ovintiv’s recent cash generation and debt reduction. The company generated approximately US$1.6 billion of cash from operating activities in the second quarter and reported US$682 million of non-GAAP free cash flow after US$574 million of capital expenditures. By June 30, Ovintiv’s net debt stood at approximately US$2.995 billion, while long-term debt was US$3.695 billion and cash and cash equivalents totaled US$700 million.

That balance sheet looks materially different from a year earlier. Ovintiv completed the sale of its Anadarko assets during the second quarter for approximately US$2.82 billion after preliminary closing adjustments and transaction costs. It also redeemed US$700 million of 5.65% senior notes in April, a step expected to save roughly US$40 million annually in interest expense. At June 30, the company reported approximately US$4.4 billion of total liquidity and no fixed-rate long-term debt maturing before 2030. Those figures help explain how Ovintiv can pursue acreage while continuing other capital-allocation priorities instead of relying on another major increase in leverage.

Buying Land Has Not Replaced Buybacks and Dividends

The acreage push is occurring alongside a significant shareholder-return program. Ovintiv returned approximately US$429 million to shareholders during the second quarter of 2026, including roughly US$345 million through the repurchase of 6.1 million shares and US$84 million through dividends. For the first six months, total shareholder returns were approximately US$598 million. Management has said it expects full-year returns to exceed 60% of non-GAAP free cash flow, while the broader framework commits between 50% and 100% of annual free cash flow to dividends and share repurchases.

At the same time, the company left its 2026 capital-investment guidance unchanged at US$2.25 billion to US$2.35 billion when it reported second-quarter results, even while increasing its expected production range. Full-year output is now forecast at 630,000 to 645,000 barrels of oil equivalent per day. The US$460 million ground-game program therefore adds another demand on capital, but it is being pursued during a period in which Ovintiv is simultaneously drilling its core assets, buying back stock, paying dividends and operating with lower leverage. Investors will ultimately judge the purchases by whether those new locations can generate returns competitive with the company’s other uses of cash.

The Smaller Deals Fit a Much Bigger Montney-Permian Transformation

The latest transactions look modest beside the acquisitions Ovintiv has completed recently, particularly in Alberta. In January 2025, it closed the purchase of Montney assets from Paramount Resources that added approximately 109,000 net acres and 900 net 10,000-foot-equivalent well locations. Then, in February 2026, Ovintiv completed its acquisition of NuVista Energy in a transaction valued at roughly US$2.7 billion. That deal was expected to add another 140,000 net acres and approximately 930 locations in the core Alberta Montney. Together, those moves demonstrate how heavily the company has concentrated its future around the Montney and Permian.

The new US$460 million program appears to represent the bolt-on stage of that strategy: improve acreage positions around existing operations, deepen inventory and give engineers more development choices without another multibillion-dollar transaction. Still, none of the 240 locations represents guaranteed future production. Ovintiv explicitly lists commodity prices, transaction closings, drilling productivity, costs, infrastructure and other operating assumptions among the factors that could affect its plans. The remaining acquisitions also have not all closed. For now, the clearest conclusion is narrower: Ovintiv is willing to spend substantial money today to preserve more drilling options for tomorrow, and it is dividing that bet almost evenly between Texas and Alberta.

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