(WO) – Ovintiv has agreed to acquire Logan Energy in an all-cash deal valued at about $890 million (C$1.26 billion), including Logan’s expected net debt at closing. Logan shareholders will receive C$1.40 per share. The deal adds about 266,000 net acres in the Montney oil window, including about 200,000 core acres, 80% of them undeveloped. It also adds about 20,000 boed of production: roughly 7,000 bpd of oil and condensate, 70 MMcfd of natural gas and 1,000 bpd of other NGLs.
Ovintiv expects to gain about 420 net 10,000-ft-equivalent oil well locations in the Simonette and Pouce Coupe areas. About 220 are what Ovintiv calls premium locations, which it defines as earning more than a 35% return at $55/bbl WTI and $2.75/MMBtu gas, and they average about $1.5 million each. The rest are upside locations. The deal raises Ovintiv’s core Montney position to about 720,000 net acres and includes about 60,000 net acres with Duvernay exposure.
The deal also brings infrastructure. Logan owns two new oil batteries in Simonette with a combined capacity of 24,000 bpd. The first came online in the third quarter, and the second is expected online by the end of the first quarter of 2027. Logan also holds 50% of a 90-MMcfd gas processing facility in Simonette and 65% of a 57-MMcfd facility in Pouce Coupe.
“This bolt-on transaction delivers value for our shareholders by adding high margin oil and condensate production and infrastructure, utilizing our operational advantage to drive significant synergies, and adding to our already deep drilling inventory and future growth optionality,” said Ovintiv President and CEO Brendan McCracken. “The Logan assets have demonstrated leading oil productivity performance and will immediately compete for capital alongside the rest of our portfolio.”
Ovintiv expects about $60 million in annual cost synergies, including capital savings of more than $2 million per well. It plans to fund the deal with cash on hand, its credit facility and commercial paper. The transaction is expected to close early in the first quarter of 2027, subject to Logan shareholder, court and regulatory approvals. As part of the deal, Logan will spin out its assets outside the Montney and Duvernay to its shareholders as a new company, Logan Oil Corp.
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