OVV - Quick Take - 1Q26: Strong Start; Montney Royalties & ROC Framework In Focus

Research evidence excerpt

OVV - Quick Take - 1Q26: Strong Start; Montney Royalties & ROC Framework In Focus

ed, the change in yield is modest.

2Q26 Outlook. 2Q26 total production guidance of 610–635 Mboe/d sits +2% above our

7 Page Document 612.3 Mboe/d model and is +0.4% above the Street at 620.3 Mboe/d at the midpoint. We

note the production guide reflects the impact of plant turnarounds and higher royalty rates in

the Montney. Oil/condensate guidance for 2Q is 200–205 Mbbls/d, which compared to our

Reasons for this report 207.8 kbbls/d estimate. Total capex guide for the quarter of $550–$600MM came in +8%

above our $533.5MM estimate and +3% above the Street's $560MM, driven by load-leveled

✓ First Look Post Earnings activity following the close of the Anadarko disposition.

Updates to FY26. OVV reaffirmed its FY26 total production guidance of 620–645 Mboe/d,

driven by total capex for the year guided at $2,250–$2,350MM. This implies a moderate step-

down in production to a 2H26 average of ~615 Mboe/d following the 1Q outperformance.

Moreover, 2H26 total capex is implied at ~$1.12Bn, representing roughly 49% of the full-

year program. All-in, our model for FY26 production of 626.8 Mboe/d and oil/condensate of

213.4 kbd remains within the reaffirmed guidance ranges of 620–645 Mboe/d and 205–212

Mbbls/d, respectively. Our FY26 capex estimate of $2.24Bn sits slightly below the bottom

end of the reaffirmed $2.25–$2.35Bn range. On the tax side, tax expense for FY26 was

revised higher to $165-200MM compared to the previous guide for FY26 given last quarter

at $90-110MM. Following the closing of the NuVista and Anadarko transactions, OVV has

completed its portfolio transformation, operating as a Permian-Montney leader with a strong

balance sheet and <0.8x leverage.