Ovintiv Inc. (OVV)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The MD&A is intended to provide a narrative description of the Company’s business from management’s perspective, which includes an overview of Ovintiv’s condensed consolidated results for the three and six months ended June 30, 2026, and period-over-period comparison. This MD&A should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and accompanying notes for the period ended June 30, 2026 (“Consolidated Financial Statements”), which are included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and accompanying notes and MD&A for the year ended December 31, 2025, which are included in Items 8 and 7, respectively, of the 2025 Annual Report on Form 10‑K.

Common industry terms and abbreviations are used throughout this MD&A and are defined in the Definitions, Conversions and Conventions sections of this Quarterly Report on Form 10-Q. This MD&A includes the following sections:

•
Executive Overview

•
Results of Operations

•
Liquidity and Capital Resources

•
Non-GAAP Measures

Executive Overview

Strategy

Ovintiv aims to be a leading North American energy producer and is focused on developing its high-quality multi-basin portfolio of oil and natural gas producing plays. Ovintiv is committed to delivering quality returns from its capital investment, generating significant cash flows and providing durable cash returns to its shareholders through the commodity price cycle. The Company aims to achieve its strategic priorities through execution excellence, disciplined capital allocation, and commercial acumen and risk management. In addition, the Company is dedicated to driving progress in the area of sustainability, aligning with its commitment to corporate responsibility.

In support of the Company’s commitment to enhancing shareholder value, Ovintiv utilizes its shareholder return framework to provide competitive returns to shareholders while strengthening its balance sheet.

Ovintiv continually monitors and evaluates changing market conditions to maximize cash flows, mitigate risks and renew its premium well inventory. The Company’s high-quality assets, located in the United States and Canada, form a multi-basin, multi-product portfolio which enables flexible and efficient investment of capital that supports the Company’s strategy.

Ovintiv seeks to deliver results in a socially and environmentally responsible manner. Best practices are deployed across its assets, allowing the Company to capitalize on operational efficiencies and decrease emissions intensity. The Company’s sustainability reporting, which outlines its key metrics, targets and relative progress achieved, can be found in the Company Outlook section of this MD&A and on the Company’s website.

Underpinning Ovintiv’s strategy are core values of one, agile, innovative and driven, which guide the organization to be collaborative, responsive, flexible and determined. The Company is committed to excellence with a passion to drive corporate financial performance and shareholder value.

For additional information on Ovintiv’s strategy, its reporting segments and the plays in which the Company operates, refer to Items 1 and 2 of the 2025 Annual Report on Form 10-K.

In evaluating its operations and assessing its leverage, Ovintiv reviews performance-based measures such as Non‑GAAP Cash Flow and debt-based metrics such as Debt to Adjusted Capitalization, Debt to EBITDA and Debt to Adjusted EBITDA, which are non-GAAP measures and do not have any standardized meaning under U.S. GAAP. These measures may not be similar to measures presented by other issuers and should not be viewed as a substitute for measures reported under U.S. GAAP. Additional information regarding these measures, including reconciliations to the closest GAAP measure, can be found in the Non-GAAP Measures section of this MD&A.

38

Highlights

During the first six months of 2026, the Company focused on executing its 2026 capital investment plan aimed at maximizing profitability through operational and capital efficiencies, and delivering cash from operating activities. In conjunction with closing the NuVista Acquisition, as discussed below, the Company was also focused on integrating the new assets into its existing operations.

Higher upstream product revenues in the first six months of 2026 compared to 2025, primarily resulted from higher average realized oil and plant condensate prices, excluding the impact of risk management activities, and higher plant condensate and natural gas production volumes, partially offset by lower oil production volumes. Average oil and plant condensate prices increased 26 percent and 29 percent, respectively, primarily due to higher benchmark prices. Plant condensate and natural gas production volumes increased primarily due to the NuVista Acquisition in the first quarter of 2026. Oil production volumes decreased primarily due to the sale of the Company’s Anadarko assets in the second quarter of 2026. Ovintiv continues to focus on optimizing realized prices from the diversification of the Company’s downstream markets.

Significant Developments

•
On April 9, 2026, the Company closed the previously announced divestiture of its Anadarko assets, comprising approximately 360,000 net acres in the Anadarko Basin of Oklahoma, for proceeds of approximately $2.8 billion, after preliminary closing adjustments and transaction costs. The transaction had an effective date of January 1, 2026. Following the closing of the divestiture, Ovintiv repaid the balance under its Term Credit Agreement and the facility was terminated. The Term Credit Agreement is defined in the Liquidity and Capital Resources section of this MD&A.

•
On April 9, 2026, Ovintiv issued a notice to the trustee to redeem the Company’s $700 million, 5.65 percent senior notes due May 15, 2028. The senior notes were redeemed on April 20, 2026, using proceeds from the divestiture of the Company’s Anadarko assets, and is expected to result in annualized interest savings of approximately $40 million.

•
On February 23, 2026, Ovintiv announced an update to its shareholder return framework in support of the Company’s commitment to enhancing shareholder value. The new framework commits to returning between 50 percent and 100 percent of annual Non-GAAP Cash Flow in excess of capital expenditures through base dividends and share buybacks.

•
On February 3, 2026, the Company closed its previously announced acquisition of all the issued and outstanding common shares of NuVista Energy Ltd. (“NuVista”) in a cash and stock transaction valued at approximately $2.8 billion (C$3.8 billion) (“NuVista Acquisition”), including Ovintiv’s previous purchase of 18.5 million common shares of NuVista. The Company issued approximately 30.1 million shares of Ovintiv common stock and paid cash consideration of approximately $1.2 billion (C$1.6 billion). Additionally, Ovintiv assumed and subsequently repaid NuVista’s debt, totaling approximately $282 million (C$385 million). The assets acquired are strategically located adjacent to Ovintiv’s current operations in the oil-rich Alberta Montney and add approximately 930 net well locations to Ovintiv’s existing Montney inventory and approximately 140,000 net acres.

Financial Results

Three months ended June 30, 2026

•
Reported net earnings of $456 million, or $1.62 per share diluted.

•
Recognized a loss on the divestiture of the Company’s Anadarko assets of $337 million, before tax, and allocated goodwill of $502 million to the transaction.

•
Recognized a net gain on risk management in revenues of $122 million, before tax.

•
Generated cash from operating activities of $1,632 million and Non-GAAP Cash Flow of $1,256 million.

•
Purchased for cancellation, approximately 6.1 million shares of common stock for total consideration of approximately $345 million.

•
Paid dividends of $0.30 per share of common stock totaling $84 million.

39

Six months ended June 30, 2026

•
Reported a net loss of $174 million, or $0.63 per share diluted, including non-cash ceiling test impairments of $1,154 million, after tax, or $4.21 per share diluted.

•
Recognized a loss on the divestiture of the Company’s Anadarko assets of $337 million, before tax, and allocated goodwill of $502 million to the transaction.

•
Recognized a net gain on risk management in revenues of $59 million, before tax.

•
Generated cash from operating activities of $2,688 million and Non-GAAP Cash Flow of $2,495 million.

•
Purchased for cancellation, approximately 7.6 million shares of common stock for total consideration of approximately $429 million.

•
Paid dividends of $0.60 per share of common stock totaling $169 million.

•
Had approximately $4.4 billion in total liquidity as at June 30, 2026, which included available credit facilities of $3.5 billion, available uncommitted demand lines of $159 million, and cash and cash equivalents of $700 million.

•
Reported Debt to EBITDA of 1.3 times and Non-GAAP Debt to Adjusted EBITDA of 0.8 times.

Capital Investment

During the six months ended June 30, 2026

•
Executed the Company’s 2026 capital plan with expenditures totaling $1,179 million.

Production

During the six months ended June 30, 2026

•
Produced average liquids volumes of 306.4 Mbbls/d, which accounted for 47 percent of total production volumes. Average oil and plant condensate volumes of 215.5 Mbbls/d, represented 70 percent of total liquids production volumes.

•
Produced average natural gas volumes of 2,041 MMcf/d, which accounted for 53 percent of total production volumes.

•
Produced average total volumes of 646.6 MBOE/d.

Operating Expenses

During the six months ended June 30, 2026

•
Incurred upstream transportation and processing expenses of $989 million or $8.45 per BOE, an increase of $172 million compared to 2025, primarily due to increased production volumes related to the NuVista Acquisition in the first quarter of 2026.

•
Incurred upstream operating expenses of $408 million or $3.49 per BOE, a decrease of $12 million compared to 2025, primarily due to the sale of the Company’s Anadarko assets in the second quarter of 2026, partially offset by increased activity related to the NuVista Acquisition in the first quarter of 2026.

•
Incurred total production, mineral and other taxes of $160 million, which represents approximately 3.55 percent of upstream product revenues. Total production, mineral and other taxes were in line with 2025.

Additional information on the items above and other expenses can be found in the Results of Operations section of this MD&A.

40

2026 Outlook

Industry Outlook

Oil and Natural Gas Markets

The oil and gas industry is cyclical and commodity prices are inherently volatile. Oil prices reflect global supply and demand dynamics as well as the geopolitical and macroeconomic environment. Natural gas prices are primarily impacted by structural changes in supply and demand, deviations from seasonally normal weather, as well as volatility in regional markets.

Oil prices for the remainder of 2026 are expected to be impacted by the conflict in the Middle East, the interplay among the pace of global economic growth, global oil demand, OPEC+ and non-OPEC+ production, other geopolitical events, and macroeconomic uncertainties.

Natural gas prices for the remainder of 2026 are expected to be impacted by the interplay among natural gas production and associated natural gas from oil production, changes in demand from the power generation sector, changes in export levels of U.S. and Canadian liquefied natural gas, impacts from seasonal weather, as well as supply chain constraints or other disruptions resulting from geopolitical events.

Political developments, including trade disputes and policy changes, continue to elevate global uncertainty and financial ma

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The MD&A is intended to provide a narrative description of the Company’s business from management’s perspective, which includes an overview of Ovintiv’s consolidated 2025 results and year-over-year comparisons between 2025 and 2024 results. This MD&A should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes for the year ended December 31, 2025 (“Consolidated Financial Statements”), which are included in Item 8 of this Annual Report on Form 10-K. Discussion and analysis of 2023 results and year-over-year comparisons between 2024 and 2023 results that are not included in this Form 10-K, can be found in Item 7 of the 2024 Annual Report on Form 10-K.

Common industry terms and abbreviations are used throughout this MD&A and are defined in the Definitions, Conversions and Conventions sections of this Annual Report on Form 10-K. This MD&A includes the following sections:

•
Executive Overview

•
Results of Operations

•
Liquidity and Capital Resources

•
Accounting Policies and Estimates

•
Non-GAAP Measures

Executive Overview

Strategy

Ovintiv aims to be a leading North American energy producer and is focused on developing its high-quality multi-basin portfolio of oil and natural gas producing plays as part of its strategy outlined in Items 1 and 2 of this Annual Report on Form 10-K.

Ovintiv is committed to delivering quality returns from its capital investment, generating significant cash flows and providing durable cash returns to its shareholders through the commodity price cycle. The Company aims to achieve its strategic priorities through execution excellence, disciplined capital allocation, and commercial acumen and risk management. In addition, the Company is dedicated to driving progress in the area of sustainability, aligning with its commitment to corporate responsibility.

In support of the Company’s commitment to enhancing shareholder value, Ovintiv utilizes its shareholder return framework to provide competitive returns to shareholders while strengthening its balance sheet.

Ovintiv continually monitors and evaluates changing market conditions to maximize cash flows, mitigate risks and renew its premium well inventory. The Company’s high-quality assets, located in the United States and Canada, form a multi-basin, multi-product portfolio which enables flexible and efficient investment of capital that supports the Company’s strategy.

Ovintiv seeks to deliver results in a socially and environmentally responsible manner. Best practices are deployed across its assets, allowing the Company to capitalize on operational efficiencies and decrease emissions intensity. The Company’s sustainability reporting, which outlines its key metrics, targets and relative progress achieved, can be found in the Company Outlook section of this MD&A and on the Company’s sustainability website.

Underpinning Ovintiv’s strategy are core values of one, agile, innovative and driven, which guide the organization to be collaborative, responsive, flexible and determined. The Company is committed to excellence with a passion to drive corporate financial performance and shareholder value.

For additional information on Ovintiv’s strategy, its reporting segments and the plays in which the Company operates, refer to Items 1 and 2 of this Annual Report on Form 10-K. For additional information on the segmented results, refer to Note 2 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.

In evaluating its operations and assessing its leverage, Ovintiv reviews performance-based measures such as Non‑GAAP Cash Flow and debt-based metrics such as Debt to Adjusted Capitalization, Debt to EBITDA and Debt

51

to Adjusted EBITDA, which are non-GAAP measures and do not have any standardized meaning under U.S. GAAP. These measures may not be similar to measures presented by other issuers and should not be viewed as a substitute for measures reported under U.S. GAAP. Additional information regarding these measures, including reconciliations to the closest GAAP measure, can be found in the Non-GAAP Measures section of this MD&A.

Highlights

During 2025, the Company focused on executing its capital investment plan aimed at maximizing profitability through operational and capital efficiencies, and delivering cash from operating activities. In conjunction with the Montney Acquisition, as discussed below, the Company has fully integrated the new assets into its existing operations.

The Company had lower upstream product revenues in 2025 compared to 2024, which primarily resulted from lower oil production volumes and lower average realized liquids prices, excluding the impact of risk management activities, partially offset by higher plant condensate production volumes and higher average realized natural gas prices, excluding the impact of risk management activities. Oil production volumes decreased primarily as a result of the sale of the Company’s Uinta assets in the first quarter of 2025. Average realized oil and plant condensate prices decreased 11 percent and 12 percent, respectively, primarily due to lower benchmark prices. Plant condensate production volumes increased due to the Montney Acquisition in the first quarter of 2025. Higher average realized natural gas prices of 39 percent were primarily due to higher benchmark prices and exposure to other downstream benchmark prices. Ovintiv continues to focus on optimizing realized prices from the diversification of the Company’s downstream markets.

Significant Developments and Subsequent Events

•
On February 23, 2026, Ovintiv announced an update to its shareholder return framework in support of the Company’s commitment to enhancing shareholder value. The new framework commits to returning between 50 percent and 100 percent of annual Non‑GAAP Cash Flow in excess of capital expenditures through base dividends and share buybacks. The Company expects to implement the updated framework immediately.

•
On February 17, 2026, the Company announced it had entered into a definitive agreement to sell its Anadarko assets, comprising approximately 360,000 net acres in the Anadarko Basin of Oklahoma, for cash proceeds of $3.0 billion before closing adjustments. The transaction is expected to close early in the second quarter of 2026 and is subject to customary closing conditions, regulatory approvals and closing adjustments. The transaction has an effective date of January 1, 2026. Ovintiv intends to use the proceeds from the Anadarko divestiture to reduce debt.

•
On February 3, 2026, the Company closed its previously announced acquisition of all the issued and outstanding common shares of NuVista Energy Ltd. (“NuVista”) in a cash and stock transaction valued at approximately $2.8 billion (C$3.8 billion) (“NuVista Acquisition”), including Ovintiv’s previous purchase of 18.5 million common shares of NuVista. The Company issued approximately 30.1 million shares of Ovintiv common stock and paid cash consideration of approximately $1.2 billion (C$1.6 billion). Additionally, Ovintiv assumed and subsequently repaid NuVista’s debt, totaling approximately $282 million (C$385 million). The acquisition is strategically located adjacent to Ovintiv’s current operations in the oil-rich Alberta Montney and adds approximately 930 net well locations to Ovintiv’s existing Montney inventory and approximately 140,000 net acres.

•
On December 15, 2025, the Company announced it had entered an agreement with a subsidiary of Pembina Pipeline Corporation for approximately 67 MMcf/d of natural gas liquefaction capacity at the Cedar LNG facility (“Cedar LNG”) in northwest British Columbia. Under the terms of the agreement, Pembina will provide transportation and liquefaction to Ovintiv over a 12-year term, commencing with commercial operations at Cedar LNG, anticipated in late 2028.

•
During October 2025, Ovintiv closed acreage acquisitions in Permian for total consideration of approximately $250 million. The Company acquired over 8,000 net acres and added approximately 120 net well locations.

52

•
On September 29, 2025, the Company announced it had received regulatory approval for the renewal of its NCIB program, which enables the Company to purchase, for cancellation or return to treasury, up to approximately 22.3 million shares of common stock over a 12-month period from October 3, 2025, to October 2, 2026. The number of shares authorized for purchase represents 10 percent of Ovintiv’s public float as at September 26, 2025.

•
On January 31, 2025, the Company closed its previously announced acquisition of certain Montney assets from Paramount Resources Ltd. (“Paramount”), in an all-cash transaction of approximately $2.274 billion (C$3.280 billion), after closing adjustments (“Montney Acquisition”). The acquisition added approximately 109,000 net acres in the core of the liquids-rich Alberta Montney. The transaction had an effective date of October 1, 2024.

•
On January 22, 2025, the Company closed its previously announced divestiture of substantially all of its Uinta assets, comprising approximately 126,000 net acres in the Uinta Basin of Utah, to FourPoint Resources, LLC, for approximately $1.9 billion, after closing and other adjustments. The transaction had an effective date of October 1, 2024.

Financial Results

•
Reported net earnings of $1,242 million, or $4.78 per share diluted, including non-cash ceiling test impairments of $703 million, after tax, or $2.71 per share diluted.

•
Recognized net gains on risk management in revenues of $172 million, before tax.

•
Generated cash from operating activities of $3,652 million and Non-GAAP Cash Flow of $3,785 million. Cash from operating activities exceeded capital expenditures by $1,505 million.

•
Purchased for cancellation, approximately 7.8 million shares of common stock for total consideration of approximately $307 million.

•
Paid dividends of $1.20 per share of common stock totaling $308 million.

•
Had approximately $4.5 billion in total liquidity as at December 31, 2025, which included available credit facilities of $3.5 billion, an available Term Credit Agreement of $1.2 billion, available uncommitted demand lines of $125 million, and cash and cash equivalents of $35 million, net of outstanding commercial paper of $351 million. The Term Credit Agreement is defined in the Liquidity and Capital Resources section of this MD&A.

•
Reported Debt to EBITDA of 1.6 times and Non-GAAP Debt to Adjusted EBITDA of 1.2 times.

Capital Investment

•
Reported total capital spending of $2,147 million, which was within the full year 2025 investment guidance range of approximately $2,125 million to $2,175 million.

Production

•
Produced average liquids volumes of 304.2 Mbbls/d, which accounted for 50 percent of total production volumes. Average oil and plant condensate volumes of 209.4 Mbbls/d, or 69 percent of total liquids production volumes, were within the full year 2025 guidance range of 208.0 Mbbls/d to 210.0 Mbbls/d.

•
Produced average natural gas volumes of 1,862 MMcf/d, which accounted for 50 percent of total production volumes. Average natural gas volumes were within the full year 2025 guidance range of 1,850 MMcf/d to 1,870 MMcf/d.

•
Produced average total volumes of 614.5 MBOE/d, which was within the full year 2025 guidance range of 610.0 MBOE/d to 620.0 MBOE/d.

53

Operating Expenses

•
Incurred upstream transportation and processing expenses of $1,685 million or $7.51 per BOE, an increase of $132 million compared to 2024, primarily due to increased production volumes related to the Montney Acquisition in the first quarter of 2025, partially offset by the sale of the Company’s Uinta assets in the first quarter of 2025. Upstream transportation and processing expenses of $7.51 per BOE was within the full year 2025 guidance range of $7.50 per BOE t

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]