Denver-based Ovintiv Inc. surpassed its fourth quarter guidance for oil and condensate production and is almost halfway toward a goal to reduce total debt at the end of 2021 by at least $1 billion, the North American exploration giant said Monday.

ovintiv

Fourth quarter liquids production jumped above 210,000 b/d, ahead of initial guidance of 200,000 b/d, management said in a preview of 4Q2020 and full-year 2021 results. Total output in the final quarter was more than 550,000 boe/d, with full-year 2020 production estimated at 540,000-plus boe/d.

“We finished 2020 with one of our best quarters, achieving outstanding financial and operating results that will likely be well ahead of consensus,” CEO Doug Suttles said.

The multi-basin producer’s assets stretch from the Montney Shale in Canada to the Anadarko and Permian basins. Today, it is primarily focused on crude and condensate, but it also had around 1.5 Bcf/d of natural gas output in 3Q2020.

“2020 was an incredibly challenging year but showed our strengths through a high-quality portfolio, industry-leading efficiencies and world class risk management,” Suttles said. “For the third consecutive year, we delivered meaningful free cash flow. We enter 2021 with high confidence in our ability to deliver on our $1 billion-plus debt reduction target while efficiently maintaining our scale.”

The independent reduced total long-term debt by $257 million in the final three months of the year. 

Meanwhile, capital spending last year came in at around $1.75 billion, under guidance of $1.8 billion. The savings came from capital efficiencies, as average completed well costs in 4Q2020 were around 25% lower than full-year 2019 averages, management said. Ovintiv also set new pacesetter well costs in each of the three core plays.

The initial budget for 2021 is set at $1.5 billion, with the funding designed to deliver average annual oil and condensate production of 200,000 b/d. 

Ovintiv used average natural gas prices of $3.00/Mcf and a West Texas Intermediate oil price average of $45/bbl for the budget.

Full-year results and 2021 guidance are set to be delivered Feb. 17, one day ahead of the conference call to discuss results.