Ovintiv to buy Logan Energy in $1.26B Montney deal

Ovintiv Inc. has agreed to buy Montney oil producer Logan Energy Corp. for $1.40 per share in cash, a deal that values Logan at about US$890 million, or C$1.26 billion, including net debt, the companies announced Monday.

The all-cash transaction adds about 266,000 net acres in the oil window of the Montney formation, about 200,000 of them core acres that are 80 per cent undeveloped, and current production of about 20,000 barrels of oil equivalent a day, Ovintiv said in a news release. That includes roughly 7,000 barrels a day of oil and condensate and 70 million cubic feet a day of natural gas.

The assets are in the Simonette and Pouce Coupe areas of northwestern Alberta, close to Ovintiv’s existing Montney operations. Ovintiv said the deal brings about 420 net drilling locations, including about 220 it classes as premium return, meaning they would earn an internal rate of return above 35 per cent at US$55 a barrel WTI and US$2.75 per million British thermal units of natural gas.

“This bolt-on transaction delivers value for our shareholders by adding high margin oil and condensate production and infrastructure,” Ovintiv president and CEO Brendan McCracken said.

Logan owns two new oil batteries at Simonette with combined capacity of 24,000 barrels a day. The first came online in the third quarter of 2026 and the second is expected by the end of the first quarter of 2027. It also holds a 50 per cent stake in a Simonette gas plant and a 65 per cent stake in a Pouce Coupe gas plant. About 60,000 net acres with Duvernay shale exposure are part of the purchase.

Ovintiv expects annual cost savings of about US$60 million and said the deal should add about five per cent to cash flow per share in 2027. It plans to pay with cash on hand, its credit facility and commercial paper, and expects net debt below US$4 billion after closing. Its target of returning at least 60 per cent of free cash flow to shareholders in 2026 is unchanged.

A new company, Logan Oil Corp., will be spun out to Logan shareholders with select assets outside the Montney and Duvernay. Both boards approved the deal, which is expected to close early in the first quarter of 2027, pending Logan shareholder, court and regulatory approvals.

For Alberta, the purchase continues a run of consolidation in the oilpatch. Ovintiv expanded in the same formation in 2024 with its $3.3-billion purchase of assets from Paramount, and the new deal would lift its core Montney land to about 720,000 net acres. The company has not said what the deal means for Logan’s employees or offices.

Oil prices have been elevated this month, with Brent at a six-month high, though Alberta producers still face a wide Western Canada Select discount, which widened to US$27 a barrel last week. Ovintiv’s release is at investor.ovintiv.com.

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