Ovintiv adds to Montney position with $890-million deal for Logan Energy
Ovintiv Inc. subsidiary Ovintiv Canada ULC has agreed to acquire Logan Energy Corp. in an all-cash transaction valued at about US$890 million ($1.26 billion, Can.), including assumed net debt, adding about 20,000 boe/d of production, 266,000 net acres (about 200,000 core acres, 80% undeveloped), and over 400 drilling locations in Alberta's oil-rich Montney fairway.
Ovintiv said the acquisition will add about 420 net 10,000-ft equivalent well locations, including about 220 premium-return locations and 200 additional upside locations in the Simonette and Pouce Coupe areas. The acquired assets, which lie in close proximity to Ovintiv's existing Montney operations, currently produce about 20,000 boe/d, including about 7,000 b/d of oil and condensate, 70 MMcfd of natural gas, and 1,000 b/d of other NGLs, the company said in a release Oct. 26.
The deal also includes two new oil batteries in Simonette—the first of which came online in this year’s third quarter and the second expected online by the end of first-quarter 2027—with combined capacity of 24,000 b/d, a 50% interest in a 90-MMcfd Simonette natural gas processing plant, and a 65% interest in a 57-MMcfd Pouce Coupe gas plant. Ovintiv said the infrastructure is expected to enhance margins and support future oil growth.
"The Logan assets have demonstrated leading oil productivity performance and will immediately compete for capital alongside the rest of our portfolio," said Brendan McCracken, president and chief executive officer (CEO) of Ovintiv.
The company estimates the acquisition will generate about $60 million/year in cost synergies, primarily through reduced capital, operating, and overhead costs. Ovintiv said the transaction is expected to be immediately accretive to key operational and financial metrics, including about 5% accretion to cash flow per share in 2027.
Ovintiv’s acquisition of Logan assets is expected to close in first-quarter 2027, subject to shareholder, court, and regulatory approvals, after which, the operator expects its core Montney position to increase to about 720,000 net acres. Also included in the transaction is about 60,000 net acres with exposure to the Duvernay shale.
Logan Oil spin-out
As part of the transaction, Logan will spin out Logan Oil Corp. to existing shareholders ahead of closing. The company will include the Sawn Lake steam-assisted gravity drainage (SAGD) project in Alberta’s Peace River region, to be acquired through a previously announced deal to acquire Andora Energy Corp. from CanAsia Energy Corp.; Clearwater assets in the Nipisi area to be acquired from Woodcote Energy Inc.; and certain undeveloped lands in northwest Alberta, including Charlie Lake lands. The assets will be excluded from the Ovintiv transaction and retained by Logan shareholders through the new company.
Logan Energy said Logan Oil aims to become a “leading greenfield SAGD developer” and will be led by Brendan Paton, as president, CEO, and a director. The management team of Logan Oil will be drawn from Logan's current team and will include Ashley Hohm, as chief financial officer; and Dylan Van Brunt, as chief operating officer; “along with the majority of the current Logan team,” the company said.