Ovintiv Inc. OVV is expanding its drilling inventory through an active 2026 acquisition program. The company has entered into more than 60 transactions so far this year, adding approximately 41,000 net acres across its Permian and Montney assets.
The total acquisition cost is about $460 million. Along with the acreage, the deals are expected to add 240 net 10,000-foot equivalent well locations, including 190 base locations and 50 upside locations. Ovintiv is paying about $11,000 per net acre, while the cost per well location ranges from roughly $1.3 million to $1.7 million after adjusting for minimal production from the acquired assets.
Permian Adds More Midland Basin Potential
The Permian is a major part of the expansion. Ovintiv is acquiring approximately 21,000 net acres in the Midland Basin for around $230 million. The transaction adds 120 total well locations, comprising 80 base locations and 40 upside locations.
The acquisition gives Ovintiv additional drilling opportunities in a key U.S. oil-producing region. More importantly, the acreage adds depth to the company's inventory, potentially supporting development activity over the longer term.
Montney Deal Broadens OVV’s Liquids-Rich Inventory
Ovintiv is committing another $230 million to its Montney operations, acquiring approximately 20,000 net acres in the liquids-rich Alberta oil window. The deal brings 120 additional well locations, including 110 base locations and 10 upside locations.
The balanced split between the Permian and Montney highlights Ovintiv's approach of building inventory across both of its key operating areas. The Montney addition also increases exposure to a liquids-rich portion of the play, giving the company more development opportunities within its existing asset base.
Inventory Growth Strengthens the Long-Term Outlook
The latest transactions take Ovintiv's year-to-date additions to approximately 500 net 10,000-foot equivalent well locations. This includes 260 locations generated through organic inventory enhancement, showing that the company's inventory growth is coming from both acquisitions and internal efforts.
For investors, the scale of the inventory buildout is the key takeaway. Ovintiv is spending capital today to secure a larger pool of future drilling opportunities while maintaining its presence in the Permian and Montney. The company expects the remaining transactions to close before the end of 2026.
Overall, the acquisition spree gives Ovintiv a significantly larger development runway. Whether these assets ultimately translate into stronger production and returns will depend on future drilling economics, but the additions provide the company with substantial new inventory to work with.
OVV’s Zacks Rank & Key Picks
Ovintiv is an independent energy producer that explores and churns out oil and natural gas from diverse assets located in the United States and Canada. Currently, OVV carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may consider some top-ranked stocks like Delek Logistics Partners, LP DKL, Drilling Tools International Corporation DTI and PBF Energy Inc. PBF, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brentwood, TN-based Delek Logistics Partners owns, operates, acquires and constructs crude oil and refined products logistics and marketing assets. The Zacks Consensus Estimate for DKL’s 2026 earnings indicates 19.4% year-over-year growth.
Drilling Tools International is a global oilfield services provider focused on supplying downhole tools used in horizontal and directional drilling. The Zacks Consensus Estimate for DTI’s current quarter earnings indicates 200% year-over-year growth.
PBF Energy is a leading independent refiner of crude oil based in Parsippany, NJ. The Zacks Consensus Estimate for PBF’s 2026 earnings indicates 481.1% year-over-year growth.
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This article originally published on Zacks Investment Research (zacks.com).