Ovintiv has agreed to purchase Logan Energy in an all-cash deal valued at approximately $890 million (equivalent to $1.26 billion CAD). This amount includes Logan's anticipated net debt at the time of closing. Logan shareholders will receive $1.40 CAD per share.
Land and Production Details
This deal adds approximately 266,000 acres of land in the Montney oil region to Ovintiv, which includes about 200,000 acres of core land, 80 percent of which remains undeveloped. Additionally, this agreement provides Ovintiv with production of 20,000 barrels of oil equivalent per day (boed), which includes approximately 7,000 barrels per day of oil and condensate, 70 million cubic feet per day of natural gas, and 1,000 barrels per day of other gas liquids.
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New Drilling Locations and Infrastructure
Ovintiv expects to acquire approximately 420 oil well locations equivalent to 10,000 feet in the Simonette and Pouce Coupe areas. Of these, about 220 locations are recognized as top-tier locations with over 35 percent returns at $55 per barrel of oil and $2.75 per million BTU of gas, averaging about $1.5 million each. The remainder includes potential locations. This deal increases Ovintiv's core position in Montney to approximately 720,000 acres, including about 60,000 acres located in Duvernay.
This agreement also comes with infrastructure. Logan has two new oil battery facilities in Simonette with a combined capacity of 24,000 barrels per day. The first battery is expected to be operational in the third quarter of this year, and the second will come online by the end of the first quarter of 2027. Logan also holds 50 percent of a gas processing facility with a capacity of 90 million cubic feet per day in Simonette and 65 percent of a 57 million cubic feet facility in Pouce Coupe.
Ovintiv expects to achieve approximately $60 million in annual cost savings, which includes capital savings of over $2 million per well. The company plans to finance this deal using existing liquidity, credit facilities, and commercial paper. The transaction is expected to close in early the first quarter of 2027, pending approval from Logan shareholders, courts, and regulatory authorities. As part of this deal, Logan will transfer its assets outside the Montney and Duvernay areas to its shareholders as a new company, Logan Oil Corp.
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