Blakes advising Ovintiv; BD&P representing NuVista Energy
Ovintiv Inc. has reached a definitive agreement to acquire NuVista Energy Ltd., a Calgary-based oil and natural gas producer, in a cash and stock deal valued at approximately $3.8 billion. The transaction includes about $300 million in NuVista’s net debt and 18.5 million shares of NuVista common stock that Ovintiv previously purchased.
Ovintiv, a U.S. petroleum company formed in 2020 after restructuring its Canadian predecessor Encana, is set to expand its footprint in Alberta’s Montney region. The acquisition will add roughly 930 net well locations – each equivalent to 10,000 feet – and about 140,000 net acres, with around 70 percent of that land still undeveloped. Ovintiv projects that the new assets will deliver an average production of 100,000 barrels of oil equivalent per day in 2026, including 25,000 barrels per day of oil and condensate. The newly acquired acreage sits adjacent to Ovintiv’s existing operations and provides access to processing and downstream infrastructure with significant available capacity.
The boards of directors for both companies have unanimously approved the agreement.
Ovintiv already owns about 9.6 percent of NuVista’s outstanding shares, acquired earlier in a private transaction at $16.00 per share. Under the new agreement, Ovintiv will buy the remaining shares it does not already own for $18.00 per share, with payment split evenly between cash and Ovintiv stock. The blended acquisition price comes to about $17.80 per share. Once the deal closes, NuVista shareholders will hold roughly 10.6 percent of the combined company.
"The NuVista assets were identified as part of an in-depth technical and commercial analysis to identify the highest value undeveloped oil resource in North America,” Ovintiv president and CEO Brendan McCracken said in a statement. “The position is 70 percent undeveloped and is an exceptional fit with our existing acreage and infrastructure. In addition to the high-quality resource and fit with our legacy assets, NuVista has secured significant processing capacity, further unlocking optionality for future oil and condensate growth, paired with a downstream market access portfolio that provides valuable natural gas price diversification outside of the AECO market. This acquisition, combined with the inventory additions from our bolt-on acquisition work in the Permian is putting our investors into top tier resource at very attractive full cycle returns.”
NuVista president and CEO Mike Lawford said, “We are very excited about this strategic transaction with Ovintiv and its unique opportunity for synergy realization that will maximize the value of NuVista’s top-tier Montney acreage. This transaction will provide exposure to a complementary portfolio of assets in Ovintiv that share the same quality and longevity to ours.”
Legal counsel for Ovintiv includes Blake, Cassels & Graydon LLP, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Gibson, Dunn & Crutcher LLP. Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are advising Ovintiv on the transaction, with Veriten serving as independent strategic advisor.
NuVista is represented by Burnet, Duckworth & Palmer LLP and Vinson & Elkins L.L.P., with Peters & Co. Limited and RBC Capital Markets acting as financial advisors.
The deal is expected to be completed by the first quarter of 2026, subject to customary closing conditions.
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