Ovintiv faces first investor test after rebranding
Company to host tour of Slack operations as shares continue to head downward
The oil and gas producer formerly known as Encana Corp. has completed its corporate overhaul with a new domicile and a new name. It has yet another hurdle to cross.
Now based in Denver, Ovintiv Inc. was to update investors Wednesday on its progress for the shale oil assets in Oklahoma it amassed after the $5.5-billion acquisition of Newfield Exploration Co. in 2018.
The Stack and Scoop fields in the Anadarko Basin have faced investor scrutiny and operational challenges that sent a handful of small explorers into bankruptcy.
The company is also set to host a tour of its Stack operations Thursday.
“We think the focus will be on steps the company has taken to reduce well costs and improve returns to make the play more competitive with other resource plays in North America,” Jpmorgan Chase & Co. analyst Arun Jayaram said in a report.
“The company will likely face stiff headwinds ‘selling’ the play to the market given the sharp pullback in activity by industry.”
Jayaram has a neutral rating on Ovintiv.
Before its name change, the Canada-listed shares of Encana had been falling for a decade as it faced a rout in commodity prices and a pipeline bottleneck in Alberta. Its purchase of Newfield didn’t help as it reversed course on a strategy of slimming its oil and gas portfolio.
And as Ovintiv started trading with the new symbol OVV in the U.S. on Monday, the shares haven’t done much better — dropping nine per cent over two days.
The company still has a presence in the Bow building in downtown Calgary, and about 40 per cent of its workforce — approximately 1,100 people — remains in Canada.