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Ovintiv Inc. (OVV)
NYSE - NYSE Delayed Price. Currency in USD
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There's been a lot of discussion here about 2022 hedging program. I've thrown out some rough numbers but thought it would be useful for us all to have a clearer picture. I've distilled it down to what matters and have added another layer of precision to my last post.
First, in total 80 Mmbbls/d have been hedged for 2022 compared to 130 Mmbbls/d for 2021. This is made up of 75 Mmbbls/d for 3 way collars down from 80Mmbbls/d for 2021. Swaps have gone down from 30 Mmbbls/d to 5 Mmbbls/d and the 15 Mmbbls/d of costless collars have been reduced to 0. Most importantly, the floor has been raised more than $15.
This makes up 42% of anticipated production for 2022 and leaves 58% in the open market. Last year 68% of production was hedged.
What does this mean? OVV hedges break even at around $65. Anything below that and hedges start to pay.
Here's why this is important. Every $5 higher of realized price of Oil, we now add $95 Million to the bottom line for the unhedged portion of production. And they have committed to distributing 50% of profit to shareholders until they hit $3B in debt, after which we will receive 75% of quarterly profits!
Even if Oil goes averages $65 this year, we will all be very well rewarded. I believe we will approach $100 and average in the low $80's.
Ok so.. what can we indicate for today’s sell off? Did they hedge more for 2022 during the last quarter? Cant understand today’s move when the entire sector is positive right now.
4 Q hedges are terrible probably under $50. At $80 oil they lose 350 million for 4Q.
For all of 2022 they lose 300 million at $80 oil and 600 million for $90 oil .
More shocking are 2022 nat gas hedges. At $4.50 gas they lose 850 million, at $5 gas they lose 1.1 B, at $5.50 gas they lose $1.3 B.
They seemed to have positioned themselves for solid and protected free cash flow this year but they also seem to have cut off any chance of a big windfall like may accrue to other energy companies.
Maybe I have this wrong.
Oil soaring to 7 year highs. OVV sinking? Hedges @ $50. Oil surely doesn't help. The hedges Are in place through 3rd quarter 2022. Not sure what percentage of oil is heged. Hopefully they're hedging at these 7 year high prices. Unlikely?
If you set your stop loss orders too tight they will cascade this thing every time. This is a relatively thinly traded stock and that is probably an easy thing to do. It moves with oil price and how the option bets were placed. The upward trend will resume Monday unless of course Russia invades the Ukraine before Friday at market close. If they do oil will pop 10$/bbl and these %&&^%'s will be caught with their pants down: " Wouldn't It Be Loverly"
i wish i remember my buddy here that predicted also oil go up so much he charter a private jet to Bali. talking the days OVV about $3
Patiently waiting for a good spot to enter before earnings.
Definitely some manipulation going on with this stock right now. Trading way below its peers when compared with current price of oil. Spread between CNQ and OVV averages $4 and is currently $10. This price action is reminding me of a year ago when shorts were keeping it low. I will be doing some research on short interest this weekend.
I just reviewed hedging for 2022 and it looks encouraging. Swaps almost disappear going from 30Mbbls's to 5 for 2022. 3 way collars reduce from 85 Mbbls/d to 75 but the floor increases $15. I believe that leaves us at around 60% hedged.
This should increase what has already been incredible cash flow from 2021.
Hold on longs! OVV deserves to be trading much higher. Cannot ignore cash flow forever
...Gee, I guess someone finally discovered OVV was trading at a P/E of 4...now if they can just keep their mitts off the hedging lever...
Now trading at a PE ratio of....4!!! I have never seen anything like this before:(you would think there would be massive inside buying as well, but apparently management prefers to use our shareholder equity instead for buybacks. Well, when they get bought out for peanuts, the least the acquiring firm can do is sack them all)
Ovintiv Inc. (NYSE:OVV) – Equities research analysts at Seaport Res Ptn boosted their Q4 2021 earnings estimates for shares of Ovintiv in a research report issued on Wednesday, January 5th. Seaport Res Ptn analyst N. Pope now anticipates that the company will post earnings of $2.13 per share for the quarter, up from their previous forecast of $2.12. Seaport Res Ptn currently has a “Buy” rating on the stock. Seaport Res Ptn also issued estimates for Ovintiv’s Q1 2022 earnings at $2.45 EPS, Q4 2022 earnings at $2.43 EPS and FY2022 earnings at $9.80 EPS.
Can anyone here give me a little nudge in to why oil is nearly 90$ but oil stocks are not making any gains?
Holy $hiET, i’m buying some Whiskey tonight.
This is about $8.20 before that reversed of 1 - 5 split. Hope OVV will get to 68 before end of May 2022.
OVV is due for a huge jump. I'm a long time investor and have made a retirement from trading this stock. It often goes ignored while its peers climb (as we see happening now). But the value is simply to hard to ignore and it will make huge gains and catch up. OVV is one of the most efficient and disciplined operators will one of the lowest well costs in the industry. Hedges have been painful, but this is still a cash generating machine! I'm looking for $46-47 before selling and waiting for a brief reset to $40 before buying in again. I played the last drop with 4000 shares. Sold at $38.50 and bought in at $31 and change.
Big crash on very HIGH volume as oils soars???? I'm afraid something is going on that is causing selling based on inside info.
Question on hedging. How do you have a lost if oil/gas goes higher? I can see where you lost the opportunity to make more. Is that the loss they mean?
Sure looks like some kind of collusion going on. It seems pretty strange that every bank, institution and investment firm decided to dump oil stocks today in chorus. When i checked the oil stocks I follow pre-market all were up except OVV. I thought that was strange but considering the run up of $2.60 last Friday I thought it was just profit taking. Now I am suspicious. With oil up over a dollar today this all seems contrived. If one institution has this much power in the market it should be split up.
Weird enough. It bounced higher than everyone else yesterday, is crashing today. They will have massive hedging losses quarter after quarter, but also massive free cash flows even at their reduced net price.
Look at the 1-year chart, which is a thing of beauty btw, and you’ll see that selling the breakout has universally been the wrong move. You usually get another ~20% after the breakout. Buy and hold.
Like what I am seeing....heading back to the $50 range. Considering where oil prices are headed, we should see some good gains in the near term and with next quarterly reports coming...I hope to see some better price appreciation.
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