US-based oil and gas producer Ovintiv has agreed to acquire Canadian oil and natural gas producer Logan Energy Corp. in an all-cash transaction valuing the company at approximately $890Mn, including expected net debt at closing, the companies said October 26.
The acquisition is expected to add about 20,000 barrels of oil equivalent per day (boe/d) of production and 266,000 net acres in the Montney formation in western Canada.
The deal, valued at C$1.26Bn, includes approximately 7,000 bbl/d of oil and condensate, 70 mmcf/d of natural gas, and 1,000 bbl/d of natural gas liquids (NGLs). The acquired assets are located near Ovintiv’s existing Montney operations and include two oil batteries and additional natural gas processing capacity.
Ovintiv President and CEO Brendan McCracken said the acquisition would add high-margin oil and condensate production, expand the company’s drilling inventory, and generate operational synergies. The Logan assets have demonstrated strong oil productivity and will compete for capital alongside Ovintiv’s existing portfolio, he added.
The transaction is expected to generate annual cost synergies of about $60Mn, primarily through capital savings, lower production costs, and reduced overhead. Capital savings are estimated at more than $2Mn per well across the acquired assets.
The acquisition is expected to add approximately 420 net 10,000-foot-equivalent oil well locations, including 220 premium-return locations and about 200 additional upside locations in the Simonette and Pouce Coupe areas. It would increase Ovintiv’s core Montney acreage to approximately 720,000 net acres. The deal also includes about 60,000 net acres in the Duvernay shale.
Logan owns 100% of two oil batteries in Simonette with combined capacity of 24,000 bbl/d. The first began operating in the third quarter (Q3) of 2026, while the second is expected to start up by the end of Q1 2027. Logan also holds a 50% stake in a natural gas processing facility in Simonette with capacity of 90 mmcf/d and a 65% stake in a facility in Pouce Coupe with capacity of 57 mmcf/d.
Ovintiv expects the acquisition to be immediately accretive to key financial metrics, including non-GAAP cash flow per share by 5% and non-GAAP free cash flow per share by 3% in 2027.
The company plans to fund the transaction through cash on hand, borrowings under its credit facility, and its commercial paper program. Following the deal’s expected closing early in Q1 2027, Ovintiv expects net debt to remain below $4Bn.
Ovintiv said its shareholder-return targets remain unchanged. The company expects to return at least 60% of its 2026 non-GAAP free cash flow through share buybacks and regular dividends, with a target range of 50%-100% for subsequent years.
As part of the transaction, Logan shareholders will receive shares in Logan Oil Corp., a newly formed wholly owned subsidiary that will hold selected assets outside the Montney and Duvernay formations.
The transaction has been unanimously approved by the boards of directors of both companies and remains subject to Logan shareholder, court, and regulatory approvals, as well as other customary closing conditions.
