Ovintiv (NYSE: OVV) continues to demonstrate its commitment to capital efficiency and operational excellence in the Permian Basin, one of the most prolific oil-producing regions in North America. The company’s Q4 and full-year 2024 results showcase its ability to enhance well productivity, reduce costs, and generate sustainable free cash flow while maintaining a disciplined capital program.

With a 2025 capital allocation of $1.2-$1.3 billion focused on the Permian, Ovintiv is positioned for strong returns through efficiency improvements in drilling, completion, and production operations. Let’s take a closer look at how Ovintiv is leveraging its Permian assets to drive higher production at lower costs.

Operational Efficiencies in the Permian

1. Lower Drilling & Completion (D&C) Costs

$25 per foot cost reduction in 2025 compared to 2024, demonstrating continued efficiency gains.
Drilling and completion (D&C) costs range from $600-$650 per lateral foot, making Ovintiv one of the lowest-cost operators in the Permian Basin.
130-140 net wells planned for 2025, utilizing 4-5 drilling rigs and 1-2 completion crews.

2. Faster Drilling & Completion Speeds

Drilling speeds improved by 18% in 2024 vs. 2023, reducing well cycle times.
Completion speeds increased by 20% year-over-year, allowing for quicker well turnarounds.
The use of Trimulfrac technology (~75% adoption) is further enhancing well efficiency.

3. Capital Efficiency Maximization

85% of Ovintiv’s 2025 capital investment is directed toward high-return oil plays in the Permian and Montney.
The company is maintaining similar well counts year-over-year while spending less capital, a clear indicator of operational excellence.
Focus on long laterals (~11,500 feet average) to extract more hydrocarbons per well and maximize resource recovery.

Production Growth & Financial Performance

2025 production target: 202-208 Mbbls/d of oil and condensate from the Permian.
Cash flow growth: The Permian is a key driver of Ovintiv’s $2.1 billion free cash flow (FCF) projection for 2025.
Debt reduction focus: Ovintiv aims to bring net debt below $5 billion by the end of 2025 while maintaining capital discipline.

The Permian Advantage: High-Return Asset Base

The Permian Basin continues to be a high-margin play for Ovintiv, providing durable free cash flow and strong price realizations. The company’s focus on optimized well spacing, cube development, and infrastructure efficiencies ensures consistent production at lower costs.

Moreover, minimal flaring and emissions reduction initiatives further enhance the sustainability of its operations, aligning with long-term ESG commitments.

Conclusion

Ovintiv’s relentless focus on efficiency, capital discipline, and production optimization positions it as a top-tier operator in the Permian Basin. With industry-leading cost reductions, faster drilling times, and sustained production growth, the company is well-equipped to navigate market fluctuations and deliver long-term value to shareholders.

As the energy landscape evolves, Ovintiv’s strategic focus on capital-efficient growth ensures its Permian assets remain a cornerstone of its high-return portfolio. Expect to see continued improvements in productivity, cost efficiency, and free cash flow generation as the company executes its 2025 drilling and production plan.