Ovintiv agrees to buy Montney oil producer Logan Energy for about $890 million

Ovintiv agreed to acquire Logan Energy, an oil producer in Canada's Montney play, in an all-cash deal valued at approximately $890 million, or C$1.26 billion, including expected net debt at closing, according to a release filed with an 8-K on Monday.

Logan shareholders will receive C$1.40 per share in cash. Ovintiv plans to fund the purchase with cash on hand, borrowings under its credit facility and its commercial paper program.

The deal adds roughly 266,000 net acres in the oil window of the Montney and about 20,000 barrels of oil equivalent per day of current production, including about 7,000 barrels a day of oil and condensate, the company said.

Drilling inventory and synergies

Ovintiv expects to gain about 420 net 10,000-foot-equivalent oil well locations, including about 220 it classifies as premium return locations and about 200 upside locations. It also picks up full ownership of two new oil batteries with combined capacity of 24,000 barrels a day, plus stakes in two natural gas processing plants.

The company expects annual cost synergies of about $60 million, mostly from capital, production and overhead savings. It said the deal should lift non-GAAP cash flow per share by about 5% and non-GAAP free cash flow per share by about 3% in 2027.

"This bolt-on transaction delivers value for our shareholders by adding high margin oil and condensate production and infrastructure," President and CEO Brendan McCracken said in the release.

Shareholder returns unchanged

Ovintiv said its plan to return at least 60% of 2026 non-GAAP free cash flow to shareholders through buybacks and dividends is unchanged, and its target range beyond 2026 remains 50% to 100%.

The company expects the deal to close early in the first quarter of 2027 and its net debt to be below $4 billion afterward.

By the numbers

• About $890 million: deal value including net debt
• C$1.40: cash per Logan share
• About 266,000: net acres added
• About 20,000 BOE/d: current production acquired
• About $60 million: expected annual cost synergies

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