Ovintiv Reports $1.5bn Loss in Q3, Cites Impairment
Denver-based Ovintiv (formerly Canada’s Encana) reported October 28 a Q3 2020 net loss of $1.52bn against year-ago earnings of $149mn. It attributed most of the loss – a feature common to almost all producers this year – to a non-cash ceiling test impairment on the value of its reserves.
Excluding the $1.34bn impairment, a $243mn risk management loss and other items, the company reported an operating loss of $8mn against operating earnings of $195mn in Q3 2019.
Cash from operating activities in Q3 fell year-on-year to $493 from $756mn, Ovintiv said, and it continues to focus on debt retirement.
“Our business is performing exceptionally well and we are exiting 2020 with lower costs, greater efficiencies and a laser-focus on debt reduction,” CEO Doug Suttles said. “Despite the global headwinds, during the quarter we delivered $47mn of free cash flow and reduced our net debt by $217mn.”
Natural gas production averaged 1.44bn ft3/d in the quarter, down from 1.65bn ft3/d a year ago, while liquids production fell to 269,900 b/d from 329,200 b/d. Total production was 510,200 barrels of oil equivalent (boe)/d, down from 605,100 boe/d in Q3 2019.