Ovintiv, Inc. (NYSE:OVV) Q1 2023 Earnings Conference Call May 10, 2023 11:00 AM ET

Company Participants

Jason Verhaest - IR

Brendan McCracken - President, CEO & Director

Gregory Givens - EVP & COO

Corey Code - EVP & CFO

Conference Call Participants

Doug Leggate - Bank of America Merrill Lynch

Joshua Silverstein - UBS

Neal Dingmann - Truist Securities

Nicholas Pope - Seaport Research Partners

Arun Jayaram - JPMorgan Chase & Co.

Noel Parks - Tuohy Brothers Investment Research

Gabriel Daoud - TD Cowen

Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Ovintiv's 2023 First Quarter Results Conference Call. As a reminder, today's call is being recorded. [Operator Instructions].

I would now like to turn the conference call over to Jason Verhaest from Investor Relations. Please go ahead, Mr. Verhaest.

Jason Verhaest

Thank you, operator, and welcome, everyone, to our first quarter '23 conference call. This call is being webcast and the slides are available on our website at ovintiv.com. Please take note of the advisory regarding forward-looking statements at the beginning of our slides and in our disclosure documents filed on SEDAR and EDGAR. [Operator Instructions]. Following prepared remarks, we'll be available to take your questions. Please limit your time to 1 question and 1 follow-up.

I will now turn the call over to our President and CEO, Brendan McCracken.

Brendan McCracken

Good morning. Thank you for joining us. We've kicked the year off with great momentum. We delivered net earnings of $487 million; cash from operating activities of $1.1 billion; free cash flow of $241 million; and cash flow per share of $3.44, beating consensus estimates. We also returned approximately $300 million to our shareholders through share buybacks and base dividends. This represents a cash return yield of nearly 15%, which is very competitive in today's market across both industry peers and the broader economy.

Production during the quarter came in at 511,000 BOEs per day. We exceeded guidance on oil, gas and NGL while coming in at the low end of guidance for capital. This result was driven by strong well performance across our portfolio and combined with some impressive capital savings from our innovation and efficiency focus that saw us once again push the leading edge for industry on drilling and completion speed.

We also announced 2 compelling transactions that enhance our capital efficiency, grow our margins, simplify our portfolio and extend our premium inventory depth. First, we entered into an agreement to acquire core Midland acreage and added over 1,000 locations to our inventory. And second, we entered into a separate agreement to sell all our assets in the Bakken for $825 million. The combined transactions are immediately and sustainably accretive on all key metrics including cash flow per share, free cash flow per share, shareholder returns, NAV and inventory life.