Eagle Ford sale lessens debt burden of Ovintiv

North American exploration and production company Ovintiv (formerly Canada's Encana) said March 24 its debt burden will ease due to the sale of its assets in the Eagle Ford shale.

The $880mn sale to Validus Energy, coupled with an earlier $263mn sale of its Duvernay acreage in Canada, helped the company exceed its target of divesting some $1.1bn from its portfolio.

“Proceeds will significantly accelerate the achievement of our debt reduction target and allow us to pay off near-term debt maturities with cash on hand,” CEO Doug Suttles said. “Our 2021 outlook is strong and we expect to generate significant free cash flow for the fourth consecutive year”

Validus, a Denver based upstream company looking to build its footprint in the Eagle Ford shale, had no comment on the sale.

For the year, Ovintiv said it still expects to spend about $1.5bn and stay focused on its remaining acreage in Eagle Ford.

Eagle Ford is the fifth-largest source of natural gas among the major US shale basins and the second-largest oil producer. The US Energy Information Administration expects Eagle Ford gas production to decline by about 1% and oil production to fall 1.4% from March levels next month.