In the Permian Basin, where M&A valuations have surged and top-tier drilling inventory commands a premium, most operators insist that “everything is picked over.” But Ovintiv is proving otherwise. While mega-deals dominate headlines, Ovintiv is quietly executing one of the most effective—and overlooked—strategies in the Midland Basin: the ground game.
This strategy is not about billion-dollar acquisitions. It’s about disciplined, block-by-block expansion: small bolt-ons, lease trades, mineral deals, and micro-acquisitions that stitch together premium drilling locations at a fraction of current market pricing.
And it’s working.
What Is the Ground Game?
In the Permian, “ground game” refers to an operator’s continuous, boots-on-the-ground process of acquiring acreage through dozens (sometimes hundreds) of small, targeted transactions. These can include:
- 1–2 location bolt-ons
- Mineral owner deals
- Lease swaps with adjacent operators
- Non-operated WI purchases
- Fill-ins that allow for longer laterals
- Micro-parcels that unlock entire development blocks
It’s the opposite of splashy corporate M&A.
It’s slow, steady, surgical—and incredibly value accretive.
Ovintiv’s results prove it.
170 Premium Locations Added in 2025—At Just $1.5M Per Well
While Permian inventory valuations have soared (recent deals imply $6–7M per drilling location), Ovintiv continues to buy premium Midland acreage at a quarter of that price.
From the earnings call:
“Year-to-date, we’ve added 170 drilling locations, 90% of which are premium, for an average cost of $1.5 million per well.”
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These are pure inventory acquisitions—no producing wells included.
Every location competes immediately for capital.
This is extraordinarily rare in a basin where Tier-1 rock trades like gold.
Why Can Ovintiv Buy So Cheaply? A Unique Competitive Advantage
Brendan McCracken explained why Ovintiv consistently wins these small deals:
“If you’re a large mineral rights holder in the Permian, the operator of choice is Ovintiv… We deliver the best royalty outcomes because of our cube development and re-occupation strategy.”
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Translation:
Mineral owners prefer Ovintiv because:
- Their cube development maximizes well recovery
- Their spacing approach protects royalty value
- Their development efficiency keeps downtime low
- They re-develop acreage in predictable, disciplined cycles
This reputation attracts sellers—and at prices far below the market norm.
Extending the Midland Basin Runway to Nearly 15 Years
Ovintiv has now increased its Permian inventory by acquisition of more than 1,000 drilling locations since 2023, at an average of $2M per location—again, well below current valuation levels.
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This pushes Permian runway toward 15 years of high-quality oil inventory, all competitive for capital even in a moderate oil-price environment.
Why the Ground Game Matters More Now Than Ever
The Permian is maturing.
Consolidation is accelerating.
Tier-1 drilling locations are scarce—and expensive.
Most operators are now in “inventory preservation mode,” facing:
- Longer laterals
- Higher acquisition costs
- Tighter spacing economics
- Plateauing legacy zones
The operators who can manufacture inventory through strategic bolt-ons—rather than buying it at premium multiples—will define the next decade of Permian performance.
Ovintiv is positioning itself as one of those operators.
Growth Optionality Without Infrastructure Constraints
Ovintiv also noted that the Permian asset has ample processing capacity to support future growth if the macro improves:
“The Permian also gives us a lot of confidence in growth… there is ample processing capacity available should we choose to exercise that.”
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This means the ground game does more than extend the runway—it enhances optionality.
If oil prices strengthen, Ovintiv can accelerate Midland development without major midstream spend.
The Bottom Line
While competitors focus on billion-dollar acquisitions, Ovintiv is quietly adding some of the highest-return, lowest-cost drilling inventory in the entire Midland Basin—one deal at a time.
Their ground game strategy is delivering:
- Ultra-low cost premium inventory
- 15 years of Permian runway
- Better royalty relationships
- Highly competitive capital efficiency
- Built-in optionality for future oil growth
In a basin where Tier-1 rock is scarce, Ovintiv is proving that disciplined, data-driven ground game execution may be the most valuable strategy left.
