Ovintiv has closed transactions involving the Midland Basin and Bakken oil and gas assets, the Denver-based company said in a news release.

The combined transactions are “expected to enhance capital efficiency by 15 [percent] and durably increase cash returns per share by more than 25 [percent]”, Ovintiv said.

Ovintiv has closed its acquisition of core Midland Basin assets involving all leasehold interests and related assets of Black Swan Oil & Gas, PetroLegacy Energy, and Piedra Resources (NMB sellers), which are portfolio companies of funds managed by EnCap Investments L.P. The cash and stock transaction was valued at $4.275 billion, according to the news release.

The deal adds approximately 1,050 net 10,000-foot well locations to Ovintiv’s Permian inventory and approximately 65,000 net acres in the core of the Midland Basin, strategically located in proximity to Ovintiv’s current Permian operations, the company said.

“Located in some of the best rock in the Permian, these assets have demonstrated leading well performance and are a natural fit with our existing Martin County acreage. The acquisition checks all the boxes on our disciplined durable returns strategy – it will be immediately and long-term accretive across all key financial metrics, the acreage is in an area where we have a competitive operating advantage, and it significantly increases our premium Permian well inventory,” Ovintiv President and CEO Brendan McCracken said in an earlier company statement.

Ovintiv also closed the sale of the entirety of its Bakken assets, located in the Williston Basin of North Dakota, to Grayson Mill Bakken LLC in an all-cash transaction of $825 million. Grayson Mill Bakken is a portfolio company of funds managed by EnCap.

Ovintiv’s landholdings in the play totaled 46,000 net acres as of December 31, 2022, and estimated first-quarter Bakken production is expected to average approximately 37,000 barrels of oil equivalent per day (boepd), the company said.

“The sale of our Bakken asset is aligned with our track record of unlocking significant value from non-core assets while high grading our portfolio and extending inventory runway in our core areas,” McCracken said.

Ovintiv’s portfolio will now be focused on four premier North American basins, each with more than 125,000 net acres of land, according to an earlier news release.

With the close of the transactions, Ovintiv updated its second-quarter guidance of total production to a range of 520,000 to 540,000 boepd from 515,000 to 535,000 boepd. It also updated its full-year 2023 guidance to 521,000 to 546,000 boepd from 520,000 to 545,000 boepd.

In 2024, Ovintiv forecasts delivering total company oil and condensate production of greater than 200,000 barrels per day (bpd) with a total capital investment of $2.1 billion to $2.5 billion. The company's production profile is expected to normalize by mid-year 2024 with second-half 2024 oil with condensate production stabilizing at 200,000 bpd, according to the news release.

According to its earnings report, Ovintiv said it generated first-quarter 2023 net earnings of $487 million, or $1.97 per diluted share of common stock, and cash from operating activities of $1.068 billion. The company announced a 20 percent increase in quarterly dividend payments to 30 cents per share, effective for the June 2023 record date.

Ovintiv said its first-quarter average total production volumes were above company guidance on all products at approximately 511,000 bpd, including 166,000 bpd of oil and condensate, 86,000 bpd of other natural gas liquids, and 1.555 billion cubic feet per day of natural gas.

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