Ovintiv reported stronger-than-expected Permian Basin performance during its second-quarter 2026 earnings call, prompting the company to raise its expected oil and condensate production rate without increasing drilling activity or capital spending.
The company’s 2026 well permits support that outlook. Ovintiv has secured 78 Texas permits in the Midland Basin, with activity concentrated in Martin, Upton, Andrews, Midland and Howard counties. More than half of these locations had not yet recorded an Activity Date, providing Ovintiv with a sizeable inventory of approved wells for future drilling.
Permian production exceeds expectations
Ovintiv’s Permian oil and condensate production averaged approximately 127,000 barrels per day during Q2 2026, extending the outperformance recorded during the first quarter.
Management increased the asset’s expected production rate from 120,000 to 125,000 barrels per day. Importantly, the higher target does not require additional capital, rigs or drilling activity. Ovintiv expects to maintain a level-loaded Permian development program while benefiting from stronger new wells and improved production from existing wells.
The Permian performance helped Ovintiv increase its company-wide 2026 oil and condensate guidance to 210,000–212,000 barrels per day.
Ovintiv 2026 permits concentrated in the Midland Basin
Ovintiv’s 2026 U.S. permit data contains 86 well permits, including 78 in Texas and eight in Oklahoma. The Texas program is entirely concentrated in the Midland Basin portion of the Permian.
Permit count by state
| State | Permit count | Share |
|---|---|---|
| Texas | 78 | 90.7% |
| Oklahoma | 8 | 9.3% |
| Total | 86 | 100.0% |
Permit count by play and basin
| Play/Basin | Counties | Permit count |
|---|---|---|
| Midland Basin – Permian | Martin, Upton, Andrews, Midland and Howard | 78 |
| STACK – Anadarko Basin | Blaine, Kingfisher and Dewey | 6 |
| SCOOP – Anadarko Basin | Garvin | 2 |
| Total | 86 |
The data reinforces the importance of the Permian to Ovintiv’s U.S. development strategy. More than 90% of its 2026 U.S. permits are located in the Midland Basin.
Martin and Upton counties lead the program
Martin County is Ovintiv’s most active permitting area, accounting for 31 permits. Upton County follows with 18 permits. Together, the two counties represent 49 permits, or approximately 63% of Ovintiv’s Permian total.
Permian permit count by county
| County | Permits | With Activity Date | No Activity Date |
|---|---|---|---|
| Martin | 31 | 15 | 16 |
| Upton | 18 | 8 | 10 |
| Andrews | 11 | 7 | 4 |
| Midland | 11 | 0 | 11 |
| Howard | 7 | 4 | 3 |
| Permian total | 78 | 34 | 44 |
Of Ovintiv’s 78 Permian permits, 34 have an Activity Date, indicating reported drilling or spud activity. The remaining 44 permits have no Activity Date and appear to represent approved locations that had not yet been reported as drilled.
Midland County stands out because none of its 11 permits had an Activity Date. Martin and Upton counties contain another 26 approved locations without reported activity. These permits give Ovintiv flexibility to maintain its development program without requiring an immediate increase in permitting.
A missing Activity Date does not necessarily mean a well has been deferred or cancelled. Some permits were approved recently, including 19 of the 46 company-wide unspud permits issued during June. There can also be a delay between field activity and the date it appears in the dataset.
Technology supports higher well productivity
Ovintiv attributed its Permian production growth to improved new-well performance and stronger base production. Management said results are exceeding the company’s type curve across the portfolio—not only from its high-performing Dean wells in the northern Midland Basin.
Several operating improvements are contributing:
- Ovintiv has deployed customized surfactant treatments on approximately 400 Permian wells since 2019.
- The treatments have delivered an estimated 9% improvement in oil productivity.
- Treatment costs have been reduced from approximately $500,000 to $100,000 per well.
- Almost every Permian well completed during 2026 is expected to receive a surfactant treatment.
- AI, automation and remote monitoring are helping optimize artificial lift, reduce equipment failures and return offline wells to production faster.
- Base production is now expected to perform approximately 3% above the original 2026 plan.
Ovintiv described these technologies as part of its “stacked innovation” strategy, which combines completion design, cube development, reoccupation timing, surfactants, automation and production optimization.
Barnett Shale adds another Permian opportunity
One Martin County permit in the dataset is identified as an Emma–Barnett Shale well. This aligns with management’s disclosure that Ovintiv has identified approximately 100,000 acres of Barnett potential within its existing Permian position.
Ovintiv is drilling its first Barnett evaluation well in Martin County, with production expected to begin late in 2026. The company may drill another one or two evaluation wells during 2027 while using its results and industry data to assess productivity and development costs.
Because the acreage is already held, Ovintiv can evaluate the Barnett without facing immediate lease-expiration pressure.
Industry outlook
Ovintiv’s higher Permian production target is being driven by productivity and operating efficiency rather than an increase in rigs or capital spending. Its 44 approved Permian permits without Activity Dates provide the inventory required to sustain a level-loaded development program, while Martin and Upton counties should remain the company’s primary areas of activity.
For drilling contractors, completion companies and suppliers, the permit data points to continued work in the Midland Basin—but not necessarily a major near-term increase in Ovintiv’s rig count. The most immediate opportunities are likely tied to maintaining the existing development pace, supporting larger multiwell programs and supplying technologies that improve completion speed, well productivity and base-production performance.
Author: phinds