Ovintiv agreed Monday to buy Canadian oil producer Logan Energy for C$1.40 a share in cash, in a transaction valued at about US$890 million, or C$1.26 billion, including expected net debt at closing.
The definitive agreement announced by the companies would expand Ovintiv’s position in the oil-rich Montney formation, adding production, drilling locations and processing infrastructure near its existing operations.
The acquisition is expected to close early in the first quarter of 2027. It still requires Logan shareholder, court and regulatory approvals and other customary closing conditions.
More acreage and production in the Montney
The assets currently produce about 20,000 barrels of oil equivalent a day. That includes roughly 7,000 barrels a day of oil and condensate, 70 million cubic feet a day of natural gas and 1,000 barrels a day of other natural gas liquids.
Ovintiv said the purchase would add about 266,000 net acres and approximately 420 net drilling locations measured on a 10,000-foot-equivalent basis. It would increase the company’s core Montney land position to about 720,000 net acres.
The package includes ownership of two oil batteries and interests in two natural gas processing facilities. One oil battery began operating during the third quarter; the second is expected to come online by the end of the first quarter of 2027.
Cash funding and projected savings
Ovintiv plans to fund the purchase using cash on hand, its credit facility and its commercial paper program.
The company projects about US$60 million in annual cost savings, mainly from lower capital spending, production expenses and overhead. Those are management estimates, not savings already achieved.
Chief Executive Brendan McCracken said the acquired oil and condensate production and infrastructure would compete for capital alongside Ovintiv’s existing portfolio.
Ovintiv said its shareholder-return plan is unchanged. It continues to target returning at least 60% of 2026 non-GAAP free cash flow through share buybacks and regular dividends.
JBizNews Desk | Denver
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