OVV 8-K/A
Ovintiv Inc. (OVV)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| (Address of principal executive offices) | (Zip Code) | |||
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Explanatory Note
On February 3, 2026, Ovintiv Inc. (“Ovintiv”) filed with the U.S. Securities and Exchange Commission (“SEC”) a Current Report on Form 8-K (the “Original Form 8-K”) reporting, among other events, that Ovintiv and its wholly-owned subsidiary, Ovintiv Canada ULC (collectively, the “Company”), completed the acquisition of all of the common shares of NuVista Energy Ltd. (“NuVista”).
This Current Report on Form 8-K/A amends the Original Form 8-K to disclose the financial statements and other information set forth in Item 9.01(a) and Item 9.01(b) of Form 8-K. No other changes to the Original Form 8-K are being made hereby.
Subsequent to this Current Report on Form 8-K/A, Ovintiv will file a Current Report on Form 8-K disclosing pro forma financial information related to the divestiture of its Anadarko assets (the “Anadarko Divestiture”) and the acquisition of NuVista (the “NuVista Acquisition”). The unaudited pro forma condensed combined balance sheet as of December 31, 2025 contained therein, will give effect to the Anadarko Divestiture and the NuVista Acquisition as if such transactions had been completed on December 31, 2025. The unaudited pro forma condensed combined statement of earnings for the year ended December 31, 2025 contained therein, will give effect to the Anadarko Divestiture and the NuVista Acquisition as if such transactions had been completed on January 1, 2025.
| Item 9.01 | Financial Statements and Exhibits. |
(a) Financial statements of business to be acquired.
The audited consolidated financial statements of NuVista as of and for the year ended December 31, 2025, and the notes related thereto, are filed as Exhibit 99.1 hereto and incorporated by reference herein.
(b) Pro forma financial information.
The unaudited pro forma condensed combined financial information of the Company, which comprise the unaudited pro forma condensed combined balance sheet as of December 31, 2025, the related unaudited pro forma condensed combined statement of earnings for the year ended December 31, 2025, and the related notes to the pro forma condensed combined financial information, is filed as Exhibit 99.2 hereto and incorporated by reference herein.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: April 9, 2026 | OVINTIV INC. | |||||
| (Registrant) | ||||||
| /s/ Corey D. Code | ||||||
| Name: Corey D. Code | ||||||
| Title: Executive Vice-President & Chief Financial Officer | ||||||
Exhibit 23.1
Consent of Independent Auditors
The Board of Directors of Ovintiv Inc.
We consent to the use of our report dated March 4, 2026 on the consolidated financial statements of NuVista Energy Ltd. and its subsidiaries which comprise the consolidated statement of financial position as of December 31, 2025, and the related consolidated statements of net earnings and comprehensive income, changes in shareholders’ equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements (collectively the “consolidated financial statements”) which is included in the Current Report on Form 8-K/A of Ovintiv Inc. dated April 9, 2026.
We also consent to the incorporation by reference of such report in the Registration Statements (No. 333-231248, 333-140856, 333-124218, 333-85598, 333-266531, and 333-287195) on Form S-8, and (No. 333-293941 and 333-273488) on Form S-3 of Ovintiv Inc.
/s/ KPMG LLP
Chartered Professional Accountants
April 9, 2026
Calgary, Alberta
Exhibit 23.2
Consent of Independent Petroleum Engineers
We hereby consent to the reference of our firm and to the use of our report effective December 31, 2025 and dated February 11, 2026, evaluating NuVista Energy Ltd.’s crude oil, natural gas and natural gas liquids reserves incorporated by reference in the Registration Statements on Form S-3 (File Nos. 333-293941 and 333-273488) and Form S-8 (File Nos. 333-231248, 333-140856, 333-124218, 333-85598, 333-266531 and 333-287195) of Ovintiv Inc., which appears in this Current Report on Form 8-K/A of Ovintiv Inc.
| Yours truly, |
| GLJ LTD. |
| /s/ Kelly Zukowski |
| Kelly Zukowski, P.Eng. |
| Vice President |
| Calgary, Alberta |
| April 9, 2026 |
Exhibit 99.1
CONSOLIDATED FINANCIAL STATEMENTS
As at, and for the years then ended:
December 31, 2025 and 2024
KPMG LLP
KPMG Tower 2200, 240 Fourth Ave SW
Calgary AB T2P 4H4
Canada
Tel 403 691 8000
Fax 403 691 8008
INDEPENDENT AUDITORS’ REPORT
Board of Directors NuVista Energy Ltd.
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of NuVista Energy Ltd. and its subsidiaries (the Company), which comprise the consolidated statement of financial position as of December 31, 2025, and the related consolidated statements of net earnings and comprehensive income, changes in shareholders’ equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) Accounting Standards as issued by the International Accounting Standards Board (IASB).
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise significant doubt about the Company’s ability to continue as a going concern for one year after the date that the consolidated financial statements are authorized for issuance.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 2 |
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with GAAS, we:
| • | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| • | Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. |
| • | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed. |
| • | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements. |
| • | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise significant doubt about the Company’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ KPMG LLP
Chartered Professional Accountants
Calgary, Canada
March 4, 2026
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 3 |
NUVISTA ENERGY LTD.
Consolidated Statements of Financial Position
| ($Cdn thousands) | ||||||||||||
| As at December 31, |
Note | 2025 | 2024 | |||||||||
| ASSETS |
||||||||||||
| Current assets |
||||||||||||
| Accounts receivable and other |
$ | 144,144 | $ | 132,538 | ||||||||
| Prepaid expenses |
49,072 | 45,584 | ||||||||||
| Financial derivative assets |
21 | 123,594 | 65,537 | |||||||||
| Other receivables |
5 | 15,065 | — | |||||||||
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|
|
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| 331,875 | 243,659 | |||||||||||
| Financial derivative assets |
21 | 94,173 | 138,703 | |||||||||
| Other assets |
6 | 13,811 | 9,500 | |||||||||
| Exploration and evaluation assets |
7 | 35,935 | 29,790 | |||||||||
| Property, plant and equipment |
8 | 3,117,374 | 2,934,617 | |||||||||
| Right-of-use assets |
9 | 84,248 | 94,286 | |||||||||
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| Total assets |
$ | 3,677,416 | $ | 3,450,555 | ||||||||
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| LIABILITIES |
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| Current liabilities |
||||||||||||
| Accounts payable and accrued liabilities |
$ | 180,160 | $ | 206,862 | ||||||||
| Senior unsecured notes |
11 | 164,119 | — | |||||||||
| Current portion of other liabilities |
12,20 | 19,826 | 18,351 | |||||||||
| Current portion of lease liabilities |
13 | 8,335 | 7,441 | |||||||||
| Current portion of asset retirement obligations |
14 | 10,000 | 9,800 | |||||||||
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|
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|||||||||
| 382,440 | 242,454 | |||||||||||
| Long-term debt |
10 | 64,012 | 5,353 | |||||||||
| Senior unsecured notes |
11 | — | 163,258 | |||||||||
| Other liabilities |
12 | 15,346 | 16,801 | |||||||||
| Lease liabilities |
13 | 103,686 | 112,021 | |||||||||
| Asset retirement obligations |
14 | 116,735 | 112,614 | |||||||||
| Financial derivative liabilities |
21 | 19,640 | 136 | |||||||||
| Deferred tax liability |
15 | 479,878 | 443,938 | |||||||||
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| Total liabilities |
1,181,737 | 1,096,575 | ||||||||||
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| SHAREHOLDERS’ EQUITY |
||||||||||||
| Share capital |
16 | $ | 1,044,358 | $ | 1,091,990 | |||||||
| Contributed surplus |
41,759 | 47,342 | ||||||||||
| Retained earnings |
1,409,562 | 1,214,648 | ||||||||||
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| Total shareholders’ equity |
2,495,679 | 2,353,980 | ||||||||||
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| Total liabilities and shareholders’ equity |
$ | 3,677,416 | $ | 3,450,555 | ||||||||
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| Commitments |
23 | |||||||||||
| Subsequent event |
26 | |||||||||||
See accompanying notes to the consolidated financial statements.
Approved on behalf of the Board of Directors of NuVista Energy Ltd., as the amalgamated entity, Ovintiv Canada ULC:
| (signed) “Corey D. Code” | (signed) “Meghan N. Eilers” | |
| Director | Director |
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 4 |
NUVISTA ENERGY LTD.
Consolidated Statements of Net Earnings and Comprehensive Income
| ($Cdn thousands, except per share amounts) | ||||||||||||
| Year ended December 31, |
Note | 2025 | 2024 | |||||||||
| Revenues |
||||||||||||
| Petroleum and natural gas sales |
18 | $ | 1,260,673 | $ | 1,215,234 | |||||||
| Royalties |
(83,684 | ) | (130,810 | ) | ||||||||
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| Net revenue from petroleum and natural gas sales |
1,176,989 | 1,084,424 | ||||||||||
| Realized gain on financial derivatives |
109,509 | 26,202 | ||||||||||
| Unrealized gain (loss) on financial derivatives |
21 | (5,977 | ) | 150,077 | ||||||||
| Construction income |
5 | 59,137 | — | |||||||||
| Other income |
7,773 | 11,840 | ||||||||||
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| Total revenue, other income and gain (loss) on financial derivatives |
1,347,431 | 1,272,543 | ||||||||||
| Expenses |
||||||||||||
| Operating |
378,257 | 354,253 | ||||||||||
| Transportation |
153,674 | 145,292 | ||||||||||
| General and administrative |
25,492 | 25,405 | ||||||||||
| Share-based compensation |
20 | 21,227 | 14,121 | |||||||||
| Financing costs |
22 | 41,204 | 40,022 | |||||||||
| Transaction costs |
26 | 2,417 | — | |||||||||
| Construction costs |
5 | 59,137 | — | |||||||||
| Depletion, depreciation and amortization |
8,9 | 275,203 | 296,273 | |||||||||
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| 956,611 | 875,366 | |||||||||||
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| Earnings before taxes |
390,820 | 397,177 | ||||||||||
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| Current income tax expense |
15 | 59,246 | 4,699 | |||||||||
| Deferred income tax expense |
15 | 32,619 | 86,760 | |||||||||
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|||||||||
| Total income tax expense |
91,865 | 91,459 | ||||||||||
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| Net earnings and comprehensive income |
$ | 298,955 | $ | 305,718 | ||||||||
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| Net earnings per share |
17 | |||||||||||
| Basic |
$ | 1.51 | $ | 1.48 | ||||||||
| Diluted |
$ | 1.50 | $ | 1.46 | ||||||||
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See accompanying notes to the consolidated financial statements.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 5 |
NUVISTA ENERGY LTD.
Consolidated Statements of Changes in Shareholders’ Equity
| ($Cdn thousands) | ||||||||||||
| Year ended December 31, |
Note | 2025 | 2024 | |||||||||
| Share capital |
16,20 | |||||||||||
| Balance, January 1 |
$ | 1,091,990 | $ | 1,111,750 | ||||||||
| Issued for cash on exercise of stock options |
5,614 | 1,401 | ||||||||||
| Contributed surplus transferred on exercise of stock options |
2,755 | 1,655 | ||||||||||
| Conversion of restricted share awards |
2,275 | 2,898 | ||||||||||
| Conversion of performance share awards |
5,249 | 5,559 | ||||||||||
| Conversion of director share units |
1,219 | — | ||||||||||
| Repurchase of shares for cancellation |
(64,744 | ) | (31,273 | ) | ||||||||
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| Balance, end of year |
$ | 1,044,358 | $ | 1,091,990 | ||||||||
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| Contributed surplus |
||||||||||||
| Balance, January 1 |
$ | 47,342 | $ | 51,250 | ||||||||
| Share-based compensation |
18,658 | 11,770 | ||||||||||
| Transfer to share capital on exercise of stock options |
(2,755 | ) | (1,655 | ) | ||||||||
| Conversion of restricted share awards |
(2,275 | ) | (2,898 | ) | ||||||||
| Conversion of performance share awards |
(5,249 | ) | (5,559 | ) | ||||||||
| Share-based compensation - cash settled |
(10,640 | ) | (9,091 | ) | ||||||||
| Tax deduction on excess value of share awards |
(3,322 | ) | 3,525 | |||||||||
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| Balance, end of year |
$ | 41,759 | $ | 47,342 | ||||||||
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| Retained earnings |
||||||||||||
| Balance, January 1 |
$ | 1,214,648 | $ | 952,032 | ||||||||
| Repurchase of shares for cancellation |
(104,041 | ) | (43,102 | ) | ||||||||
| Net earnings |
298,955 | 305,718 | ||||||||||
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| Balance, end of year |
$ | 1,409,562 | $ | 1,214,648 | ||||||||
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| Total shareholders’ equity |
$ | 2,495,679 | $ | 2,353,980 | ||||||||
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See accompanying notes to the consolidated financial statements.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 6 |
NUVISTA ENERGY LTD.
Consolidated Statements of Cash Flows
| ($Cdn thousands) | ||||||||||||
| Year ended December 31, |
Note | 2025 | 2024 | |||||||||
| Cash provided by (used in) |
||||||||||||
| Operating activities |
||||||||||||
| Net earnings |
$ | 298,955 | $ | 305,718 | ||||||||
| Items not requiring cash from operations: |
||||||||||||
| Depletion, depreciation and amortization |
8,9 | 275,203 | 296,273 | |||||||||
| Share-based compensation |
20 | 15,805 | 9,842 | |||||||||
| Unrealized loss (gain) on financial derivatives |
21 | 5,977 | (150,077 | ) | ||||||||
| Deferred income tax expense |
15 | 32,619 | 86,760 | |||||||||
| Accretion |
14 | 4,833 | 3,680 | |||||||||
| Asset retirement expenditures |
14 | (9,925 | ) | (12,029 | ) | |||||||
| Change in non-cash working capital |
25 | (45,784 | ) | 60,086 | ||||||||
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| Cash provided by operating activities |
577,683 | 600,253 | ||||||||||
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| Financing activities |
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| Proceeds from the exercise of stock options |
16 | 5,614 | 1,401 | |||||||||
| Share-based compensation - settled with cash |
(10,640 | ) | (9,091 | ) | ||||||||
| Payment on lease liabilities |
13 | (7,441 | ) | (6,499 | ) | |||||||
| Repurchase of shares |
16 | (168,785 | ) | (74,375 | ) | |||||||
| Increase (decrease) of long-term debt |
58,659 | (11,543 | ) | |||||||||
| Other liabilities |
(1,467 | ) | (567 | ) | ||||||||
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| Cash used in financing activities |
(124,060 | ) | (100,674 | ) | ||||||||
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| Investing activities |
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| Property, plant and equipment expenditures |
8 | (434,505 | ) | (494,272 | ) | |||||||
| Exploration and evaluation expenditures |
7 | (7,296 | ) | (6,284 | ) | |||||||
| Other asset expenditures |
6 | (4,311 | ) | — | ||||||||
| Change in non-cash working capital |
25 | (7,511 | ) | 977 | ||||||||
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| Cash used in investing activities |
(453,623 | ) | (499,579 | ) | ||||||||
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| Change in cash and cash equivalents |
— | — | ||||||||||
| Cash and cash equivalents, beginning of year |
$ | — | $ | — | ||||||||
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| Cash and cash equivalents, end of year |
$ | — | $ | — | ||||||||
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| Current income tax expense paid in cash |
$ | 72,192 | $ | — | ||||||||
| Interest paid in cash |
$ | 21,188 | $ | 22,092 | ||||||||
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See accompanying notes to the consolidated financial statements.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 7 |
NUVISTA ENERGY LTD.
Notes to the Consolidated Financial Statements
As at, and for the year ended December 31, 2025, and 2024
| 1. | Corporate information |
NuVista Energy Ltd. and its subsidiary (together “NuVista” or the “Company”) is a Canadian publicly traded company incorporated in the province of Alberta. NuVista is a condensate and natural gas company actively engaged in the development, delineation, and production of condensate and natural gas reserves in the Western Canadian Sedimentary Basin. NuVista’s focus is on the scalable and repeatable condensate-rich Montney formation in the Alberta Deep Basin.
NuVista’s registered office and principal place of business is located at 2500, 525 – 8th Avenue S.W., Calgary, Alberta, Canada, T2P 1G1. NuVista’s common shares are traded on the Toronto Stock Exchange (“TSX”) under the symbol NVA.
On February 3, 2026 (the “Effective Date”), all of the issued and outstanding common shares of NuVista were acquired by Ovintiv Inc. (“Ovintiv”) through Ovintiv Canada ULC (“Ovintiv Canada”) (the “Transaction”). NuVista has been subsequently amalgamated into Ovintiv Canada. Refer to Note 26, “Subsequent event” for additional details.
| 2. | Basis of preparation |
Statement of compliance
These consolidated financial statements (the “financial statements”) have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”). A summary of NuVista’s material accounting policies under IFRS are presented in Note 3, “Material accounting policies”. These policies have been applied consistently for all periods presented in these financial statements.
These financial statements were approved and authorized for issuance by the Board of Directors of the amalgamated entity, Ovintiv Canada, on March 4, 2026.
Basis of measurement
These financial statements have been prepared on the historical cost basis, except for certain financial derivative instruments which are measured at fair value. The methods used to measure fair values are disclosed in Note 3, “Material accounting policies”.
Certain comparative figures in these financial statements have been reclassified to conform to the current period presentation. Specifically, on the balance sheet, the embedded derivative has been separated from other financial instrument contracts both of which are presented under financial derivative assets and liabilities headings. These reclassifications had no impact on the consolidated operating results or financial position for the year ended December 31, 2024.
Functional and presentation currency
These financial statements are presented in Canadian (“Cdn”) dollars, which is NuVista’s functional currency. All tabular amounts are in thousands of Cdn dollars, unless otherwise stated.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 8 |
Use of management’s judgments and estimates
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies, if any, as at the date of the financial statements and the reported amounts of revenue and expenses during the period. Estimates are subject to measurement uncertainty and changes in such estimates in future years could require material change in the financial statements. These underlying assumptions are based on historical experience and other factors that management believes to be reasonable under the circumstances, and are subject to change as new events occur, as more industry experience is acquired, as additional information is obtained as NuVista’s operating environment changes.
Estimates and underlying assumptions are reviewed on an ongoing basis by management. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in the future periods affected. The key sources of estimation uncertainty and judgement in these financial statements are discussed below:
| i. | Determination of cash generating units |
NuVista’s assets are grouped into cash-generating units (“CGUs”) for the purpose of calculating depletion and assessing impairment. A CGU consists of assets that are grouped together based on the smallest group of assets whose cash flows that are largely independent of those from other assets or groups of assets. The determination of NuVista’s CGUs is subject to management judgment and interpretation, taking into account factors such as geographical proximity, shared infrastructure, commodity composition, similar market exposure, and the management of operations.
| ii. | Exploration and evaluation assets |
The application of NuVista’s accounting policy for exploration and evaluation (“E&E”) assets requires management to make certain judgments in determining whether it is likely that future economic benefits exist when activities have not generally reached a stage where technical feasibility and commercial viability can be reasonably determined.
| iii. | Reserve estimates |
Proved plus probable oil and natural gas reserves are used in the calculation of depletion and impairment, as well as to assess for indicators of impairment on each of the NuVista’s CGUs. Reserve estimates and their associated cash flows are based on several significant assumptions, which include forecasted oil and natural gas prices, operating costs, royalties, production volumes and future development costs, all of which are subject to many uncertainties and interpretations. NuVista expects that, over time, its reserve estimates will be revised upward or downward based on updated information, such as the results of future drilling, testing, production levels and changes in commodity prices.
Independent third-party reserve evaluators are engaged annually to estimate proved plus probable oil and natural gas reserves and the related cash flows from NuVista’s interest in oil and gas properties. This evaluation of proved plus probable oil and natural gas reserves is prepared in accordance with the reserves definitions as set up by the Canadian Securities Administrators in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation (“COGE”) Handbook.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 9 |
| iv. | Asset retirement obligations |
Asset retirement obligations are recognized for the future decommissioning and restoration of property, plant and equipment. These obligations are based on estimated costs, which consider the anticipated method and scope of restoration, as well as potential technological advances. Actual costs are uncertain, and estimates may vary due to changes in relevant laws and regulations, the emergence of new technology, operating experience, and market prices. The expected timing of future decommissioning and restoration may also change due to certain factors, including reserve life. The estimate for these obligations is also impacted by the risk-free rate and inflation rates used to calculate the present value of the asset retirement obligation.
| v. | Depreciation, depletion, amortization |
Property, plant and equipment is measured at cost less accumulated depreciation, depletion, amortization. Depletion of development and production assets is determined based on total proved plus probable reserves as well as future development costs as estimated by an independent qualified reserve evaluator.
| 3. | Material accounting policies |
Jointly controlled operations
A portion of exploration, development and production activities are conducted jointly with others and, accordingly, NuVista only reflects its proportionate interest of the assets, liabilities, revenues, expenses and cash flows. NuVista does not have any joint arrangements that are structured through a separate vehicle.
Revenue recognition
NuVista generates revenue primarily from the sale of natural gas, condensate, and natural gas liquids (“NGLs”) in accordance with the consideration specified in contracts with customers. Revenue is recognized when control of the product is transferred to the customer, which generally occurs when legal title passes at the agreed-upon delivery point, such as a pipeline or other designated transportation method. The amount of revenue recognized is based on the contractual consideration and may be subject to adjustments for product quality, location, delivery method, or other contract-specific factors.
NuVista assesses its transactions with third parties and partners to determine whether it is acting as the principal or an agent. NuVista is considered the principal when it has primary responsibility for the transaction, control of the product before transfer, and inventory risk. In such cases, revenue is recognized on a gross basis. If NuVista acts as an agent, revenue is recognized on a net basis, reflecting only the fee, if any, earned from the transaction. Due to various marketing arrangements, NuVista may transfer title of its commodity to a third-party marketing company, which then delivers the product to the end customer using its own reserved pipeline capacity. Revenue from such transactions is separately presented as transportation revenue.
The transaction price for variable-price contracts is typically based on a benchmark commodity index and may be adjusted for quality, location, delivery method, or other contractually agreed-upon factors. Revenue recognized may fluctuate due to changes in market conditions affecting pricing components. Tariffs, tolls, and fees charged to third parties for the use of pipelines and facilities owned by NuVista are evaluated to determine whether they originate from contracts with customers or from incidental or collaborative arrangements. When such fees arise from contracts with customers, revenue is recognized as the related services are provided. Additionally, royalty income is recognized as it accrues in accordance with the terms of the applicable overriding royalty agreement.
NuVista also produces power generation revenue which is recognized when control of the electricity is transferred to the customer, typically upon delivery to the grid or as specified in the contractual terms of the arrangement.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 10 |
Exploration and evaluation assets (“E&E”)
Exploration and evaluation expenditures are initially capitalized within “exploration and evaluation assets”. These expenditures may include the costs of acquiring licenses, technical services and studies, seismic acquisition, exploration drilling and testing costs, directly attributable general and administrative costs, and the cost of acquiring undeveloped land with no booked reserves. Costs incurred prior to having obtained the legal right to explore an area are charged to net earnings as exploration and evaluation expenditures in the period in which they are incurred.
E&E assets are not depreciated. These costs are accumulated and carried forward until technical feasibility and commercial viability of the area are determined or the assets are deemed impaired. Technical feasibility and commercial viability are met when NuVista has determined that an E&E asset will be developed, as evidenced by the classification of proved or probable reserves and the appropriate internal and external approvals.
E&E assets are assessed for impairment if:
| • | Sufficient data exists to determine technical feasibility and commercial viability, and |
| • | Facts and circumstances suggest that the carrying amount exceeds the recoverable amount. |
The recoverable amount of an asset is defined as the higher of fair value less costs to sell and value in use.
If proved and/or probable reserves have been discovered, E&E assets are first tested for impairment before being reclassified to property, plant, and equipment. The carrying value, after any impairment loss, of the relevant E&E assets and associated undeveloped land is then reclassified as development and production assets within property, plant, and equipment.
Any impairment loss on E&E assets, unsuccessful E&E costs, and the cost of undeveloped land that has expired are charged to net earnings as exploration and evaluation expenses.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 11 |
Development and production assets
Items of property, plant, and equipment, including oil and natural gas development and production assets as well as corporate assets, are measured at cost, net of accumulated depletion, depreciation, amortization, and impairment. Development and production assets are accumulated on an area-by-area basis, representing the cost of developing discovered commercial reserves and bringing them into production. This includes E&E expenditures transferred from E&E assets upon the discovery of commercial reserves.
Subsequent costs incurred after determining technical feasibility and commercial viability, as well as costs for replacing components of property, plant, and equipment, are recognized as oil and natural gas assets only if they enhance the future economic benefits of the specific asset. All other expenditures are expensed in net earnings as incurred. Capitalized oil and natural gas assets generally include costs related to developing proved and/or probable reserves and enhancing production from these reserves. When a component is replaced or sold, its carrying amount is derecognized. Routine servicing and maintenance costs are recognized in net earnings as incurred.
An impairment test is conducted at each reporting date if events or circumstances indicate that the carrying value of a development and production asset may exceed its recoverable amount. The carrying value is compared to the recoverable amount, which is defined as the higher of:
| • | Fair value less costs to sell – determined based on an arm’s-length transaction price between knowledgeable, willing parties. This may involve discounted future net cash flows from proved and probable reserves, using forecast prices, costs, and expansion prospects. |
| • | Value in use – estimated by calculating the present value of expected future net cash flows generated from the continued use of the asset. |
If indications of impairment exist, NuVista conducts an impairment test. Assets or areas are grouped into CGUs for this assessment. When the carrying amount of a CGU exceeds its recoverable amount, the CGU is considered impaired and is written down accordingly. The impairment charge is recorded within depletion, depreciation, amortization, and impairment expenses in net earnings.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 12 |
Depletion, depreciation and amortization (“DD&A”)
NuVista depletes the carrying value of its development and production assets using the unit-of-production method, based on the ratio of production during the period to the related proved plus probable reserves. This calculation considers estimated future development costs required to bring the reserves into production and the estimated salvage value of the assets at the end of their useful lives. Future development costs are forecasted based on the level of development required to produce the reserves. At least annually, an independent third-party reserve evaluator assesses the proved and probable reserves, which represent the estimated recoverable quantities of oil, natural gas, and natural gas liquids, based on geological, geophysical, and engineering data.
Other property, plant, and equipment are recorded at cost, net of accumulated depreciation, amortization, and any impairment. Depreciation is recognized on a straight-line basis over the estimated useful lives of each major component. Significant components of an asset with different useful lives are treated separately and depreciated accordingly.
Specific asset categories are depreciated over designated periods, as follows:
| • | Workover costs are depreciated over two years. |
| • | Plant turnarounds and overhauls are depreciated over five years. |
| • | Corporate assets are depreciated on a straight-line basis over their useful lives. |
| • | Right-of-use assets are depreciated on a straight-line basis over the economic life of the contract. |
Useful lives and residual values are reviewed annually, with any necessary changes applied prospectively.
Provisions
NuVista recognizes a provision when it has a present legal or constructive obligation resulting from a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. NuVista’s provisions primarily consist of asset retirement obligations related to abandonment, dismantling, decommissioning, and site disturbance remediation activities. A liability is recognized in the period when NuVista has a present legal or constructive obligation, and a reasonable estimate of the amount can be made. On a periodic basis, NuVista reviews these estimates, and any changes are applied prospectively.
An obligation is recognized for the estimated cost of abandonment and site restoration, determined by discounting the expected future cash flows required to settle the obligation using a risk-free rate. A corresponding amount is capitalized as asset retirement costs within property, plant, and equipment.
The asset retirement costs are then depleted over the useful life of the underlying assets, and the liabilities are accreted upwards to their estimated settlement value over time. The accretion expense is recognized in net earnings over the life of the asset. Changes in estimated future cash flows or discount rates are capitalized as part of the underlying assets. Actual costs incurred when settling the obligations are charged against the liability.
Leases
A contract is considered a lease, or contains a lease, if it grants the right to control the use of a specified asset for a defined period in exchange for consideration. Leases are recognized as a right-of-use asset and corresponding liability from the date the leased asset is available for use by NuVista. At the commencement of the lease term, a lease liability is recognized based on the present value of the lease payments that are not paid at that date, discounted at NuVista’s incremental borrowing rate when the rate implicit in the lease is not readily determinable. Each lease payment is allocated between the liability and lease interest expense. The lease interest expense is charged net earnings over the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. A corresponding right-of-use asset is recognized at the amount of the lease liability. The right-of-use asset is depreciated on a straight-line basis over the term of the lease.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 13 |
Lease payments for short-term leases, defined as those with terms of less than twelve months, or for leases involving low-value assets, are accounted for as expenses in net earnings and allocated on a straight-line basis over the lease term.
Financial instruments
The measurement categories for each class of NuVista’s financial assets and financial liabilities is as follows:
| Financial Instrument |
Measurement Category | |
| Accounts receivable and other | Amortized cost | |
| Prepaid expenses | Amortized cost | |
| Financial derivative assets and liabilities | Fair value through profit and loss | |
| Other receivable | Amortized cost | |
| Accounts payable and accrued liabilities | Amortized cost | |
| Lease liability | Amortized cost | |
| Other liabilities | Amortized cost | |
| Long-term debt | Amortized cost | |
| Senior unsecured notes | Amortized cost |
NuVista has entered into certain financial derivative contracts to manage its exposure to market risks arising from fluctuations in commodity prices. These instruments are not used for trading or speculative purposes. Although NuVista considers all commodity contracts to be economic hedges, it has not designated its financial derivative contracts as effective accounting hedges and has not applied hedge accounting. As a result, financial derivative contracts are classified as fair value through net earnings and are recorded on the consolidated statements of financial position at fair value. Transaction costs are recognized in net earnings when incurred. Subsequent to initial recognition, financial derivative contracts are measured at fair value, and changes therein are recognized in net earnings.
NuVista accounts for its forward physical delivery sales contracts, which were entered into and are held for the receipt or delivery of non-financial items, in accordance with its expected purchase, sale, or usage requirements as executory contracts. Consequently, these contracts are not considered financial derivative contracts and are not recorded at fair value on the statement of financial position. Realized gains or losses from natural gas and oil commodity physical delivery sales contracts are recognized in petroleum and natural gas revenue as the contracts are settled.
NuVista recognizes embedded derivatives when derivative features exist in a contract. Specifically, embedded derivatives are separated from the underlying host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, if a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and if the combined instrument is not measured at fair value through net earnings. Changes in the fair value of separable embedded derivatives are recognized immediately in net earnings.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 14 |
Income taxes
NuVista’s income tax expense is comprised of current and deferred tax recognized in respect of its earnings which are anticipated under the Income Tax Act (Canada). Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period.
Deferred income tax is recognized on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their corresponding tax values. Deferred income tax is measured using tax rates that are expected to apply when these temporary differences reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset them. Deferred income tax expense is recognized in the statement of earnings, except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
| 4. | Future accounting pronouncements |
In May 2024, the IASB issued amendments to IFRS 9 – Financial Instruments (“IFRS 9”) and IFRS 7 – Financial Instruments: Disclosures (“IFRS 7”). The amendments clarify the accounting for the settlement of financial liabilities through electronic payment systems and provide additional guidance on assessing the contractual cash flow characteristics of financial assets. The amendments are effective for annual reporting periods beginning on or after January 1, 2026, with early adoption permitted. NuVista is currently assessing the impact of these amendments; however, they are not expected to have a material effect on the Company’s financial statements.
The IASB also introduced IFRS 18 – Presentation and Disclosure in Financial Statements (“IFRS 18”), which is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted. IFRS 18 will replace IAS 1 and introduce new requirements for the presentation and disclosure of information in the financial statements. The standard requires entities to present income and expenses in defined categories (operating, investing, financing, and income taxes) in the statement of profit or loss, disclose specified subtotals, and provide enhanced disclosures regarding Management-Defined Performance Measures (“MPMs”). IFRS 18 also introduces additional guidance on the aggregation and disaggregation of information to improve transparency and comparability. NuVista is currently evaluating the impact of IFRS 18 on its financial statements, including presentation and disclosure changes.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 15 |
| 5. | Other receivables |
On July 14, 2025, NuVista entered into agreements with a third party relating to the construction of a compressor station and associated infrastructure in its Gold Creek area, as well as a gas handling agreement. Under the terms of the agreements, NuVista incurs construction costs on behalf of the third party and is reimbursed on specified funding dates. On the initial funding date, $46.1 million of previously incurred construction costs were reimbursed. Following the initial funding date, NuVista incurred an additional $59.1 million of construction costs. Of this amount, $15.1 million has been recorded in other receivables as at December 31, 2025 (December 31, 2024—nil), pending reimbursement on the next scheduled funding date of February 27, 2026.
Subsequent to the disposition date of July 14, 2025, NuVista is acting as the principal in connection with the remaining construction of the Gold Creek infrastructure. Accordingly, costs incurred and amounts reimbursed by the counterparty have been presented on a gross basis, resulting in the recognition of $59.1 million of construction revenue and a corresponding $59.1 million of construction expense for the year ended December 31, 2025.
The infrastructure is expected to be operational in the second quarter of 2026, at which time NuVista will recognize a right-of-use asset and corresponding lease liability with respect to committed processing capacity under the gas handling agreement.
| 6. | Other assets |
Other assets totaled $13.8 million at December 31, 2025 (December 31, 2024—$9.5 million), comprising $4.3 million of long-lead inventory and $9.5 million of long-term prepaid expenditures. Long-lead inventory, held for future drilling, completion, and facility projects, is recorded at cost and transferred to property, plant and equipment or expensed as used, and is reviewed for impairment if no longer required. Long-term prepaid expenditures represent future rights to third-party infrastructure and are expensed over the contract term once services begin.
| 7. | Exploration and evaluation assets |
| Note | 2025 | 2024 | ||||||||||
| Cost |
||||||||||||
| Balance, January 1 |
$ | 29,790 | $ | 27,754 | ||||||||
| Additions |
7,296 | 6,284 | ||||||||||
| Transfers to property, plant and equipment |
8 | (1,151 | ) | (4,248 | ) | |||||||
|
|
|
|
|
|||||||||
| Balance, end of year |
$ | 35,935 | $ | 29,790 | ||||||||
|
|
|
|
|
|||||||||
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 16 |
| 8. | Property, plant and equipment |
| Note | 2025 | 2024 | ||||||||||
| Cost |
||||||||||||
| Balance, January 1 |
$ | 4,979,931 | $ | 4,436,834 | ||||||||
| Additions |
434,505 | 494,272 | ||||||||||
| Capitalized share-based compensation |
20 | 2,853 | 1,928 | |||||||||
| Change in asset retirement obligations |
14 | 9,413 | 42,649 | |||||||||
| Transfers from exploration and evaluation assets |
7 | 1,151 | 4,248 | |||||||||
|
|
|
|
|
|||||||||
| Balance, end of year |
$ | 5,427,853 | $ | 4,979,931 | ||||||||
|
|
|
|
|
|||||||||
| 2025 | 2024 | |||||||
| Accumulated depletion, depreciation and amortization |
||||||||
| Balance, January 1 |
$ | 2,045,314 | $ | 1,759,080 | ||||
| Depletion, depreciation and amortization |
265,165 | 286,234 | ||||||
|
|
|
|
|
|||||
| Balance, end of year |
$ | 2,310,479 | $ | 2,045,314 | ||||
|
|
|
|
|
|||||
| 2025 | 2024 | |||||||
| Carrying value |
||||||||
| Balance, January 1 |
$ | 2,934,617 | $ | 2,677,754 | ||||
|
|
|
|
|
|||||
| Balance, end of year |
$ | 3,117,374 | $ | 2,934,617 | ||||
|
|
|
|
|
|||||
The calculation of depletion at December 31, 2025, includes estimated future development costs of $2.9 billion associated with NuVista’s proved and probable reserves (December 31, 2024 - $3.3 billion). Depletion expense related to NuVista’s development and production assets was $249.7 million for the year ended December 31, 2025 (December 31, 2024 - $271.1 million). Depreciation and amortization expense related to corporate assets, turnarounds and workovers was $15.4 million for the year ended December 31, 2025 (December 31, 2024 - $15.2 million).
Impairment assessment
As at December 31, 2025 and December 31, 2024, there were no indicators of impairment identified within property, plant & equipment, and an impairment test was not performed.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 17 |
| 9. | Right-of-use assets |
| Lease | Total | |||||||||||||||||||
| Office | Gas Gathering |
Gas Processing |
2025 | 2024 | ||||||||||||||||
| Cost |
||||||||||||||||||||
| Balance, January 1 |
$ | 9,697 | $ | 36,921 | $ | 97,239 | $ | 143,857 | $ | 143,857 | ||||||||||
| Additions |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance, end of year |
$ | 9,697 | $ | 36,921 | $ | 97,239 | $ | 143,857 | $ | 143,857 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Accumulated depreciation |
||||||||||||||||||||
| Balance, January 1 |
$ | 4,942 | $ | 12,843 | $ | 31,786 | $ | 49,571 | $ | 39,532 | ||||||||||
| Depreciation |
917 | 2,408 | 6,713 | 10,038 | 10,039 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance, end of year |
$ | 5,859 | $ | 15,251 | $ | 38,499 | $ | 59,609 | $ | 49,571 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Carrying amount |
||||||||||||||||||||
| Balance, January 1 |
$ | 4,755 | $ | 24,078 | $ | 65,453 | $ | 94,286 | $ | 104,325 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance, end of year |
$ | 3,838 | $ | 21,670 | $ | 58,740 | $ | 84,248 | $ | 94,286 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 10. | Long-term debt |
Covenant-based credit facility
On May 8, 2025, NuVista amended and renewed its existing covenant-based credit facility (the “Credit Facility”) with a syndicate of Canadian financial institutions. The amendments included an increase in the Credit Facility from $450 million to $550 million and an extension of the maturity date by one year to May 7, 2028. The amendments also included updates to the applicable benchmark rates for borrowing and certain administrative changes. NuVista’s financial covenants remain unchanged.
The Credit Facility continues to have a three-year tenor and may be extended annually at NuVista’s request, subject to lender consent. It is secured by a demand debenture and includes an expansion feature (the “accordion”), which allows the Company, subject to lender approval, to either increase the facility amount or add a term loan by up to $300 million at any time during the term, either by increasing the commitments of existing lenders or by adding new lenders.
Borrowings under the Credit Facility may be made through prime loans and CORRA loans or SOFR loans and U.S. base rate loans (for U.S. borrowings). These advances bear interest at the bank’s prime rate and/or at money market rates plus applicable margins. For the year ended December 31, 2025, borrowing costs averaged 5.2% (December 31, 2024 - 7.1%).
Under the terms of the Credit Facility, NuVista is subject to the following financial covenants (collectively, the “financial covenants”), which must be met at the end of each reporting period:
| • | the Senior Debt to EBITDA(1) ratio will not exceed 3.0:1; |
| • | the Total Debt to EBITDA ratio will not exceed 3.5:1; and |
| • | the EBITDA to Interest Coverage Ratio will not be less than 3.5:1. |
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 18 |
At December 31, 2025, NuVista was in compliance with its financial covenants, the details of which are as follows:
| Financial Covenant |
Reported | Threshold | Compliance | |||||||||
| Senior debt to EBITDA ratio |
0.09:1 | Not exceed 3.0:1 | Met | |||||||||
| Total debt to EBITDA ratio |
0.33:1 | Not exceed 3.5:1 | Met | |||||||||
| EBITDA to interest expense ratio |
19.15:1 | Not be less than 3.5:1 | Met | |||||||||
| (1) | EBITDA is defined as net earnings before unrealized gains and losses on financial derivatives, plus interest, taxes and depreciation, depletion and amortization, and where EBITDA and interest expense are calculated on a rolling 12-month basis. Total Debt is inclusive of outstanding financial letters of credit whereas Senior Debt excludes the amount of the demand letter of credit facility. Interest Coverage Ratio is defined as EBITDA to Interest expense for the 12-months ending at the end of each reporting period. |
As at December 31, 2025, NuVista had $64.0 million drawn on its credit facility (December 31, 2024 – $5.4 million) and no outstanding letters of credit (December 31, 2024 – nil). Outstanding letters of credit reduce the available borrowing capacity under the Credit Facility.
On June 30, 2025, NuVista, with the consent of its syndicate, increased its unsecured letter of credit facility under Export Development Canada’s (“EDC”) Account Performance Security Guarantee (“APSG”) program from Cdn$30 million to US$50 million. As at December 31, 2025, NuVista had outstanding letters of credit associated with the APSG of Cdn$16.4 million (December 31, 2024—Cdn$15.6 million), leaving approximately US$38.1 million of credit available on this letter of credit facility.
Upon the closing of the Transaction on February 3, 2026, all amounts outstanding under the Credit Facility were repaid in full, all related obligations were discharged, and the Credit Facility was terminated. The EDC APSG program was concurrently terminated at closing. See Note 26, “Subsequent event,” for additional details.
| 11. | Senior unsecured notes |
| 2025 | 2024 | |||||||
| Principal amount of senior unsecured notes |
$ | 165,393 | $ | 165,393 | ||||
| Debt issue cost |
(1,274 | ) | (2,135 | ) | ||||
|
|
|
|
|
|||||
| Senior unsecured notes (1) |
$ | 164,119 | $ | 163,258 | ||||
|
|
|
|
|
|||||
| (1) | Represents the carrying value of senior unsecured notes. |
On July 23, 2021, NuVista issued $230.0 million of senior unsecured notes maturing on July 23, 2026 (the “2026 Notes”) and bearing interest at a fixed rate of 7.875%, payable semi-annually in arrears. The 2026 Notes were issued at $989.89 per $1,000 principal amount and are fully and unconditionally guaranteed on a senior unsecured basis with respect to the payment of principal and interest. The terms of the 2026 Notes do not include any financial covenants.
Since issuance, NuVista has redeemed an aggregate principal amount of $64.6 million of the 2026 Notes. As the remaining $164.1 million aggregate principal matures within 12 months of the reporting date, such amount has been reclassified from non-current to current liabilities.
In conjunction with the closing of the Transaction on February 3, 2026, the remaining 2026 Notes were redeemed. Refer to Note 26, “Subsequent event,” for additional details.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 19 |
| 12. | Other liabilities |
During the year ended December 31, 2023, NuVista, together with its joint venture partners, completed the construction of a cogeneration unit at the Wembley Gas Plant, which it operates. As part of its majority working interest, NuVista partnered with five Indigenous Nations, who collectively invested $20 million in support of this emissions reduction project. In return, the Indigenous Nations are entitled to defined contractual cash flows, which represent a financial obligation for NuVista. Consequently, NuVista recognized an initial liability of $20 million within Other Liabilities.
As at December 31, 2025, the carrying value of the liability was $17.3 million (December 31, 2024 - $18.6 million), with $2.7 million classified as a current liability and $14.6 million as a long-term liability. Changes in carrying value reflect accretion of interest and cash settlements made during the period.
| 13. | Lease liabilities |
NuVista has the following future commitments associated with its lease obligations relating to office, gas gathering, and gas processing leases:
| 2025 | 2024 | |||||||
| Balance, January 1 |
$ | 119,462 | $ | 125,961 | ||||
| Lease interest expense |
13,363 | 14,145 | ||||||
| Payment of leases |
(20,804 | ) | (20,644 | ) | ||||
|
|
|
|
|
|||||
| Balance, end of year |
$ | 112,021 | $ | 119,462 | ||||
|
|
|
|
|
|||||
| Consisting of: |
||||||||
| Current portion of lease liabilities |
$ | 8,335 | $ | 7,441 | ||||
| Non-current portion of lease liabilities |
$ | 103,686 | $ | 112,021 | ||||
The following table details the undiscounted cash outflows and contractual maturities relating to NuVista’s lease liabilities:
| 2025 | 2024 | |||||||
| Less than 1 year |
$ | 20,817 | $ | 20,805 | ||||
| 1-3 years |
62,597 | 62,684 | ||||||
| 4-5 years |
39,495 | 40,479 | ||||||
| After 5 years |
54,909 | 74,655 | ||||||
|
|
|
|
|
|||||
| Total undiscounted future lease payments |
$ | 177,818 | $ | 198,623 | ||||
| Amounts representing lease interest expense over the term of the leases |
(65,797 | ) | (79,161 | ) | ||||
|
|
|
|
|
|||||
| Present value of net lease payments |
$ | 112,021 | $ | 119,462 | ||||
|
|
|
|
|
|||||
| 14. | Asset retirement obligations |
NuVista’s asset retirement obligations are based on estimated costs for reclaiming and abandoning its ownership interests in oil and natural gas assets, including well sites, gathering systems, and processing facilities. As of December 31, 2025, NuVista estimated the total undiscounted, uninflated cash flows required to settle these obligations to be $172.0 million (December 31, 2024 – $155.9 million), with approximately 47% expected to be settled within the next 10 years. During the year ended December 31, 2025, NuVista incurred a change in estimate of $12.0 million which largely related to revised liability cost estimates for well abandonments in certain non-core areas.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 20 |
The following table reconciles NuVista’s provision for asset retirement obligations:
| 2025 | 2024 | |||||||
| Balance, January 1 |
$ | 122,414 | $ | 88,114 | ||||
| Accretion expense |
4,833 | 3,680 | ||||||
| Liabilities incurred |
5,171 | 4,780 | ||||||
| Change in estimates |
11,990 | 39,781 | ||||||
| Change in discount rate (1) |
(7,748 | ) | (1,912 | ) | ||||
| Liabilities settled |
(9,925 | ) | (12,029 | ) | ||||
|
|
|
|
|
|||||
| Balance, end of year |
$ | 126,735 | $ | 122,414 | ||||
|
|
|
|
|
|||||
| Consisting of: |
||||||||
| Current portion of asset retirement obligations |
$ | 10,000 | $ | 9,800 | ||||
| Non-current portion of asset retirement obligations |
$ | 116,735 | $ | 112,614 | ||||
| (1) | A long-term risk-free bond rate of 3.9% (December 31, 2024 – 3.3%) and an inflation rate of 2.0% (December 31, 2024 – 1.8%) were used to calculate the net present value of the asset retirement obligations. The inflation rate was determined as the difference between the long-term risk-free rate bond rate of 3.9% (December 31, 2024 - 3.3%) and the real rate of interest of 1.9% (December 31, 2024 - 1.5%). |
| 15. | Income taxes |
The table below reconciles NuVista’s income tax expense, as calculated using the combined Canadian federal and provincial corporate tax rate of 23.0% (December 31, 2024 – 23.0%), which includes both current and deferred tax impacts.
| 2025 | 2024 | |||||||
| Income before tax |
$ | 390,820 | $ | 397,177 | ||||
| Expected tax rate (1) |
23.00 | % | 23.00 | % | ||||
|
|
|
|
|
|||||
| Expected income tax expense |
89,889 | 91,351 | ||||||
| Non-deductible expenses |
170 | 155 | ||||||
| Non-deductible share-based expense |
696 | 558 | ||||||
| Other |
1,110 | (605 | ) | |||||
|
|
|
|
|
|||||
| Total income tax expense |
$ | 91,865 | $ | 91,459 | ||||
|
|
|
|
|
|||||
| Consisting of: |
||||||||
| Current income tax expense (2) |
$ | 59,246 | $ | 4,699 | ||||
| Deferred income tax expense |
$ | 32,619 | $ | 86,760 | ||||
| (1) | The statutory rate consists of the combined statutory rates for NuVista. |
| (2) | Current taxes payable are included in accounts payable and accrued liabilities. |
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 21 |
The following table presents the significant components of NuVista’s deferred income tax liability:
| 2025 | 2024 | |||||||
| Deferred tax liability |
||||||||
| Oil and natural gas properties |
$ | 500,103 | $ | 465,467 | ||||
| Financial derivative contracts |
45,569 | 46,944 | ||||||
| Senior unsecured notes |
— | 106 | ||||||
|
|
|
|
|
|||||
| 545,672 | 512,517 | |||||||
| Deferred tax assets |
||||||||
| Asset retirement obligations |
(54,914 | ) | (55,632 | ) | ||||
| Share issue costs |
(128 | ) | (358 | ) | ||||
| Other |
(10,752 | ) | (12,589 | ) | ||||
|
|
|
|
|
|||||
| (65,794 | ) | (68,579 | ) | |||||
|
|
|
|
|
|||||
| Net deferred tax liability |
$ | 479,878 | $ | 443,938 | ||||
|
|
|
|
|
|||||
A continuity of NuVista’s deferred tax liability is detailed in the following tables:
| Assets (liability) |
Balance January 1, 2025 |
Recognized in profit or loss |
Recognized in equity | Balance December 31, 2025 |
||||||||||||
| Oil and natural gas properties |
$ | (465,467 | ) | $ | (34,636 | ) | $ | — | $ | (500,103 | ) | |||||
| Asset retirement obligations |
55,631 | (717 | ) | — | 54,914 | |||||||||||
| Share issue costs |
358 | (230 | ) | — | 128 | |||||||||||
| Senior unsecured notes |
(106 | ) | 106 | — | — | |||||||||||
| Financial derivative contracts |
(46,944 | ) | 1,375 | — | (45,569 | ) | ||||||||||
| Other |
12,590 | 1,484 | (3,322 | ) | 10,752 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
$ | (443,938 | ) | $ | (32,618 | ) | $ | (3,322 | ) | $ | (479,878 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Assets (liability) |
Balance | Recognized in profit or loss |
Recognized in equity | Balance December 31, 2024 |
||||||||||||
| Oil and natural gas properties |
$ | (429,859 | ) | $ | (35,608 | ) | $ | — | $ | (465,467 | ) | |||||
| Asset retirement obligations |
49,237 | 6,394 | — | 55,631 | ||||||||||||
| Share issue costs |
593 | (235 | ) | — | 358 | |||||||||||
| Senior unsecured notes |
(351 | ) | 245 | — | (106 | ) | ||||||||||
| Financial derivative contracts |
(12,426 | ) | (34,518 | ) | — | (46,944 | ) | |||||||||
| Non-capital losses |
14,153 | (14,153 | ) | — | — | |||||||||||
| Other |
17,950 | (8,885 | ) | 3,525 | 12,590 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
$ | (360,703 | ) | $ | (86,760 | ) | $ | 3,525 | $ | (443,938 | ) | |||||
|
|
|
|
|
|
|
|
|
|||||||||
A summary of the NuVista’s estimated tax pools is as follows:
| 2025 | 2024 | |||||||
| Canadian development expense |
639,000 | 598,000 | ||||||
| Canadian oil and natural gas property expense |
165,000 | 176,000 | ||||||
| Undepreciated capital cost |
230,000 | 230,000 | ||||||
| Other |
1,000 | 2,000 | ||||||
|
|
|
|
|
|||||
| Total federal tax pools (1) |
$ | 1,035,000 | $ | 1,006,000 | ||||
|
|
|
|
|
|||||
| (1) | Additionally, NuVista has Alberta tax pools totalling $15 million (December 31, 2024 – $14 million). |
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 22 |
| 16. | Share capital |
| 2025 | 2024 | |||||||||||||||
| Number | Amount | Number | Amount | |||||||||||||
| Balance, January 1 |
203,701,229 | $ | 1,091,990 | 207,584,197 | $ | 1,111,750 | ||||||||||
| Issued for cash on exercise of stock options |
— | 5,614 | — | 1,401 | ||||||||||||
| Contributed surplus transferred on exercise of stock options |
1,095,741 | 2,755 | 953,112 | 1,655 | ||||||||||||
| Conversion of restricted share awards |
192,591 | 2,275 | 175,031 | 2,898 | ||||||||||||
| Conversion of performance share awards |
422,647 | 5,249 | 931,389 | 5,559 | ||||||||||||
| Conversion of director share units |
93,152 | 1,219 | — | — | ||||||||||||
| Repurchase of shares for cancellation |
(12,198,400 | ) | (64,744 | ) | (5,942,500 | ) | (31,273 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Balance, end of year |
193,306,960 | $ | 1,044,358 | 203,701,229 | $ | 1,091,990 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Normal course issuer bid
In the second quarter of 2025, NuVista received TSX approval to continue its NCIB, authorizing the purchase of up to 16,398,617 outstanding common shares. The program commenced on June 23, 2025, and will expire on the earlier of June 22, 2026, or upon completion of the authorized repurchases. NuVista’s prior NCIB, which authorized the purchase of 14,234,451 common shares, expired on June 19, 2024, with 11,234,200 shares repurchased and cancelled.
During the year ended December 31, 2025, NuVista repurchased and cancelled 12,198,400 common shares under its NCIB programs, at an average price of $13.84 per common share, for a total repurchase cost of $168.8 million, including $2.8 million of share buyback tax. The total cost of $168.8 million exceeded the average carrying value of the shares repurchased of $64.7 million, with the difference of $104.0 million recorded to retained earnings.
| 17. | Earnings per share |
The following table summarizes the weighted average common shares used in calculating net earnings per share:
| (thousands of shares) |
2025 | 2024 | ||||||
| Weighted average common shares outstanding |
||||||||
| Basic |
197,968 | 206,020 | ||||||
| Diluted (1) |
199,553 | 208,902 | ||||||
| (1) | For the year ended December 31, 2025, 954,559 options and nil share awards (December 31, 2024 - 1,456,841 options and 440,483 share awards) were excluded from the diluted weighted average common share calculation as they were anti-dilutive. |
| 18. | Petroleum and natural gas revenues |
NuVista produces natural gas, condensate, and NGLs from its assets in the Montney area of Alberta. The company sells its production through fixed-price or variable-price physical delivery contracts. For variable-price contracts, the transaction price is based on a benchmark commodity price, adjusted for quality, location, or other factors. Each component of the pricing formula may be fixed or variable, depending on the contract terms.
Under its contracts with customers, NuVista is obligated to deliver volumes of natural gas, condensate and NGLs to specified locations, where control over the delivered volumes is transferred to the customer. In cases where a third-party marketer takes title of NuVista’s product but uses NuVista’s pipeline contract for delivery to the end customer, a portion of the natural gas revenue is recognized as natural gas transportation revenue.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 23 |
The following table summarizes petroleum and natural gas revenue by product:
| 2025 | 2024 | |||||||
| Natural gas revenue (1) |
$ | 394,367 | $ | 279,478 | ||||
| Condensate revenue |
746,623 | 857,625 | ||||||
| NGL revenue (2) |
119,683 | 78,131 | ||||||
|
|
|
|
|
|||||
| Total petroleum and natural gas revenue |
$ | 1,260,673 | $ | 1,215,234 | ||||
|
|
|
|
|
|||||
| (1) | Natural gas revenue includes transportation revenue of $38.2 million and $36.5 million, for the years ended December 31, 2025 and 2024, respectively. |
| (2) | Includes butane, propane, ethane and sulphur revenue. Sulphur revenue totaled $51.1 million for the year ended December 31, 2025 compared to a loss of $66,000 for the year ended December 31, 2024. |
Included in accounts receivable at December 31, 2025 was $116.5 million (December 31, 2024 - $97.1 million) of accrued petroleum and natural gas revenue related to deliveries for periods prior to the reporting date. There were no significant adjustments for prior period accrued petroleum and natural gas revenue reflected in the current period.
| 19. | Capital management |
NuVista manages its capital structure with the goal of maintaining flexibility to respond to changing economic conditions, commodity prices, and the risk profiles of its assets. NuVista has the ability to adjust its capital structure through various means, including issuing new shares and debt, repurchasing shares or debt, or changing capital expenditures relative to adjusted funds flow.
NuVista has established a long-term net debt target of less than 1.0 times adjusted funds flow, annualized for the current quarter, in a stress test price environment of US$45.00/Bbl WTI and US$2.00/MMBtu NYMEX. While the actual ratio may fluctuate on a quarterly basis due to factors such as facility outages, commodity price changes, capital expenditures, and the timing of acquisitions and dispositions, NuVista actively monitors these variables to manage its capital structure effectively. As of December 31, 2025, NuVista’s net debt was 0.4 times its annualized fourth quarter adjusted funds flow (December 31, 2024 - 0.4 times). This ratio represents the number of years it would take to pay off net debt if no additional capital expenditures were made and adjusted funds flow remained consistent.
| 20. | Share-based compensation |
Stock options
NuVista has established a Stock Option plan under which officers and employees are eligible to receive options to purchase common shares. The options granted under this plan vest at a rate of one-third per year and expire 2.5 years after the vesting date. The maximum number of common shares reserved for issuance under the Stock Option plan is 12,945,000 of which 4,358,815 remain to be issued at December 31, 2025.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 24 |
The following continuity table summarizes the stock option activity:
| 2025 | 2024 | |||||||||||||||
| Number of options |
Weighted average exercise price |
Number of options |
Weighted average exercise price |
|||||||||||||
| Balance, January 1 |
2,811,741 | $ | 8.15 | 3,415,160 | $ | 5.27 | ||||||||||
| Granted |
332,520 | 13.88 | 662,831 | 12.74 | ||||||||||||
| Exercised - issuance of shares from treasury |
(1,095,741 | ) | 5.69 | (953,112 | ) | 2.60 | ||||||||||
| Exercised - cash (1) |
(628,556 | ) | — | (285,829 | ) | 2.60 | ||||||||||
| Forfeited |
(10,778 | ) | 12.48 | (26,639 | ) | 10.71 | ||||||||||
| Expired |
(11,204 | ) | 13.12 | (670 | ) | 13.77 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Balance, end of year |
1,397,982 | $ | 12.47 | 2,811,741 | $ | 8.15 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | In 2025, represents stock options that were cash-settled due to restrictions under Lock-up Agreements entered into in connection with the Arrangement Agreement, refer to Note 26, “Subsequent event”. In 2024, pertains to the cash settlement of applicable withholding taxes. |
The following table summarizes stock options outstanding and exercisable at December 31, 2025:
| Options outstanding | Options exercisable | |||||||||||||||||||
| Range of exercise price |
Number of options outstanding |
Weighted average remaining contractual life |
Weighted average exercise price |
Number of options exercisable |
Weighted average exercise price |
|||||||||||||||
| $0.84 to $1.99 |
16,910 | 0.4 | $ | 0.84 | 16,910 | $ | 0.84 | |||||||||||||
| $2.00 to $3.99 |
19,622 | 0.9 | 2.62 | 19,622 | 2.62 | |||||||||||||||
| $6.00 to $7.99 |
34,527 | 0.9 | 7.28 | 34,527 | 7.28 | |||||||||||||||
| $10.00 to $11.99 |
195,306 | 1.9 | 11.31 | 115,305 | 11.41 | |||||||||||||||
| $12.00 to $13.92 |
1,131,617 | 3.1 | 13.17 | 279,357 | 13.06 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| $0.84 to $13.92 |
1,397,982 | 2.9 | $ | 12.47 | 465,721 | $ | 11.34 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
NuVista uses the fair value-based method to determine share-based compensation costs. The fair value of each option granted during the year was estimated on the date of grant using the Black-Scholes option pricing model.
The weighted average fair value and weighted average assumptions used to fair value the options granted in in the year are as follows:
| 2025 | 2024 | |||||||
| Risk-free interest rate (%) |
2.90 | 3.40 | ||||||
| Expected volatility (%) |
47 | 51 | ||||||
| Expected life (years) |
4.5 | 4.4 | ||||||
| Forfeiture rate (%) (1) |
— | 9.03 | ||||||
| Fair value at grant date ($ per option) |
5.81 | 5.72 | ||||||
| (1) | As at December 31, 2025, management revised its estimate of the number of outstanding share options expected to vest, resulting in a nil forfeiture rate, related to the Transaction described in Note 26, “Subsequent event”. |
Share award incentive plan
NuVista has a Share Award Incentive plan for certain directors, officers, employees and consultants consisting of Restricted Share Awards (“RSA”) and Performance Share Awards (“PSA”). The maximum number of common shares reserved for issuance under the Share Award Incentive Plan is 14,350,000 of which 3,917,584 remain to be issued at December 31, 2025.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 25 |
Restricted share awards
NuVista has a RSA plan for its officers and employees, entitling the holder to receive one common share for each RSA granted upon vesting. RSA grants may vest within three years from the date of grant. To date, all RSA grants have had a two-year vesting period.
The fair value of RSAs is determined based on the weighted average trading price of the five days preceding the grant date. This fair value is recognized as share-based compensation expense over the vesting period, with a corresponding increase to contributed surplus. The compensation expense is adjusted by an estimated forfeiture rate, which is determined at the grant date and updated periodically. Upon vesting of the RSAs and settlement in common shares, the previously recognized value in contributed surplus is transferred to share capital.
The following table summarizes the change in the number of RSAs:
| 2025 | 2024 | |||||||
| Balance, January 1 |
538,268 | 488,392 | ||||||
| Settled - issuance of shares from treasury |
(192,591 | ) | (175,031 | ) | ||||
| Settled - cash (1) |
(56,200 | ) | (52,446 | ) | ||||
| Granted |
134,622 | 297,044 | ||||||
| Forfeited |
(6,507 | ) | (19,691 | ) | ||||
|
|
|
|
|
|||||
| Balance, end of year |
417,592 | 538,268 | ||||||
|
|
|
|
|
|||||
| (1) | In 2025, represents RSAs that were cash-settled due to restrictions under Lock-up Agreements entered into in connection with the Arrangement Agreement, refer to Note 26, “Subsequent event”. In 2024, pertains to the cash settlement of applicable withholding taxes. |
Performance share awards
NuVista has a PSA plan for its officers and employees. Each PSA entitles the holder to receive the number of common shares specified in the performance award, multiplied by a payout multiplier ranging from 0 to 2.0x. The payout multiplier for performance-based awards is determined by NuVista’s Board of Directors, based on an assessment of the Company’s achievement of predefined corporate performance measures for the applicable period. PSA grants vest three years from the date of grant.
The fair value of PSAs is determined based on the weighted average trading price of the five days preceding the grant date. This fair value is recognized as share-based compensation expense over the vesting period, with a corresponding increase to contributed surplus. The amount of the compensation expense is adjusted for an estimated forfeiture rate, determined at the date of the grant and updated periodically. Upon vesting of the PSAs and settlement in common shares, the previously recognized value in contributed surplus is transferred to share capital.
The following table summarizes the change in the number of PSAs:
| 2025 | 2024 | |||||||
| Balance, January 1 |
1,314,076 | 1,755,372 | ||||||
| Settled - issuance of shares from treasury |
(422,647 | ) | (931,389 | ) | ||||
| Settled - cash (1) |
(130,527 | ) | (494,509 | ) | ||||
| Granted |
216,817 | 527,828 | ||||||
| Forfeited |
(19,435 | ) | (84,994 | ) | ||||
| Performance adjustment (2) |
154,632 | 541,768 | ||||||
|
|
|
|
|
|||||
| Balance, end of year |
1,112,916 | 1,314,076 | ||||||
|
|
|
|
|
|||||
| (1) | In 2025, represents PSAs that were cash-settled due to restrictions under Lock-up Agreements entered into in connection with the Arrangement Agreement, refer to Note 26, “Subsequent event”. In 2024, pertains to the cash settlement of applicable withholding taxes. |
| (2) | Awards granted on the vest date due to a performance factor of 1.46x for the year ended December 31, 2025 (December 31, 2024 - 1.56x). |
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 26 |
Cash award incentive plan
NuVista has a Cash Award Incentive Plan that includes Director Deferred Share Units (“DSU”) for non-management directors and Restricted Stock Units (“RSU”) for non-management directors, officers, and employees.
Director deferred share units
NuVista’s DSU plan provides compensation to non-management directors. Each DSU entitles the holder to receive cash equal to the trading price of the equivalent number of common shares of the NuVista. All DSUs granted vest and become payable upon the director’s retirement. The compensation expense is calculated using the fair value method, based on the trading price of the NuVista’s common shares at the end of each reporting period.
The following table summarizes the change in the number of DSUs:
| 2025 | 2024 | |||||||
| Balance, January 1 |
1,129,643 | 1,034,614 | ||||||
| Settled - issuance of shares from treasury (1) |
(93,152 | ) | — | |||||
| Settled - cash |
(140,380 | ) | — | |||||
| Granted |
43,654 | 95,029 | ||||||
|
|
|
|
|
|||||
| Balance, end of year |
939,765 | 1,129,643 | ||||||
|
|
|
|
|
|||||
| (1) | During the year ended December 31, 2025, NuVista elected to settle vested DSUs totaling 93,152 through the issuance of common shares. |
The following table summarizes the change in compensation liability relating to DSUs:
| 2025 | 2024 | |||||||
| Balance, January 1 |
$ | 15,612 | $ | 11,422 | ||||
| Change in accrued compensation liabilities |
5,214 | 4,190 | ||||||
| Settled - issuance of shares from treasury |
$ | (1,219 | ) | $ | — | |||
| Settled - cash |
$ | (2,579 | ) | $ | — | |||
|
|
|
|
|
|||||
| Balance, end of year |
$ | 17,028 | $ | 15,612 | ||||
|
|
|
|
|
|||||
The compensation liability was calculated using NuVista’s closing share price at December 31, 2025 and December 31, 2024, of $18.12 and $13.82, respectively, and is recorded within the current portion of other liabilities on the Statement of Financial Position.
Restricted share units
NuVista’s RSU plan provides compensation to non-management directors, officers and employees. Each RSU entitles the holder to receive cash equal to the trading price of the equivalent number of common shares of NuVista. The vesting arrangement of RSU’s is at the discretion of NuVista Board of Directors, although each RSU will typically vest and become payable within two years from the date of grant.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 27 |
The following table summarizes the change in the number of RSUs:
| 2025 | 2024 | |||||||
| Balance, January 1 |
19,416 | 8,236 | ||||||
| Settled - cash |
(8,236 | ) | — | |||||
| Granted |
7,023 | 11,180 | ||||||
|
|
|
|
|
|||||
| Balance, end of year |
18,203 | 19,416 | ||||||
|
|
|
|
|
|||||
The following table summarizes the change in compensation liability relating to RSUs:
| 2025 | 2024 | |||||||
| Balance, January 1 |
$ | 107 | $ | 18 | ||||
| Change in accrued compensation liabilities |
208 | 89 | ||||||
| Settled - cash |
(138 | ) | — | |||||
|
|
|
|
|
|||||
| Balance, end of year |
$ | 177 | $ | 107 | ||||
|
|
|
|
|
|||||
| Current portion of compensation liabilities |
$ | 138 | $ | 79 | ||||
| Non-current portion of compensation liabilities |
$ | 39 | $ | 28 | ||||
Share-based compensation expense
The following table summarizes the total share-based compensation expense relating to stock options, RSAs, PSAs, DSUs and RSUs:
| 2025 | 2024 | |||||||
| Stock options |
$ | 3,025 | $ | 2,425 | ||||
| Restricted share awards |
2,837 | 2,634 | ||||||
| Performance share awards |
9,943 | 4,783 | ||||||
|
|
|
|
|
|||||
| Non-cash share-based compensation expense |
15,805 | 9,842 | ||||||
|
|
|
|
|
|||||
| Director deferred share units |
5,214 | 4,190 | ||||||
| Restricted share units |
208 | 89 | ||||||
|
|
|
|
|
|||||
| Cash share-based compensation expense |
5,422 | 4,279 | ||||||
|
|
|
|
|
|||||
| Total share-based compensation expense |
$ | 21,227 | $ | 14,121 | ||||
|
|
|
|
|
|||||
The following table summarizes the capitalized share-based compensation relating to stock options, RSAs and PSAs:
| 2025 | 2024 | |||||||
| Capitalized stock options |
$ | 536 | $ | 489 | ||||
| Capitalized restricted share awards |
499 | 486 | ||||||
| Capitalized performance share awards |
1,818 | 953 | ||||||
|
|
|
|
|
|||||
| Capitalized share-based compensation |
$ | 2,853 | $ | 1,928 | ||||
|
|
|
|
|
|||||
Capitalized share-based compensation is attributable to personnel involved with the exploration and development of the NuVista’s capital projects.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 28 |
In connection with the closing of the Transaction on February 3, 2026, and upon the Arrangement becoming effective, all outstanding NuVista incentive awards, including PSAs, RSAs, RSUs, DSUs and Options (collectively, the “NuVista Incentives”), were accelerated and vested.
RSAs and PSAs held by employees and directors vested on the Effective Date and were settled in cash based on the applicable payout multiplier and the Settlement Price, less applicable taxes, and were terminated in accordance with the NuVista Share Award Plan. RSUs and DSUs were similarly vested and settled in cash based on the Settlement Price, less applicable taxes, and were terminated in accordance with the NuVista Cash Award Plan.
All outstanding Options held by current and certain former employees and directors vested on the Effective Date. NuVista obtained surrender agreements from holders pursuant to which the Options were cancelled in exchange for a cash payment equal to the excess, if any, of the Settlement Price over the applicable exercise price, less applicable taxes.
Refer to Note 26, “Subsequent event” for additional details.
| 21. | Risk management |
In the normal course of business, NuVista is exposed to various financial risks arising from its exploration, development, production, and financing activities, including:
| • | credit risk; |
| • | liquidity risk; and |
| • | market risk. |
NuVista’s Board of Directors oversees the establishment and execution of the Company’s risk management framework, while management is responsible for implementing and ensuring compliance with risk management policies. These policies are designed to identify and assess key risks, establish appropriate risk limits and controls, and monitor risk exposure in alignment with market conditions and the Company’s operations.
Credit risk
Credit risk is the risk of financial loss to NuVista if a customer or counterparty to a financial instrument fails to meet its contractual obligations. This risk primarily arises from joint operations partners, oil and natural gas marketers, and financial intermediaries. Most of NuVista’s accounts receivable are with oil and natural gas marketers and joint operations partners and subject to standard industry credit risks. NuVista mitigates its credit risk by contracting with financially stable counterparties that have strong credit ratings and by regularly monitoring its exposure to individual counterparties.
The following table presents NuVista’s disaggregated accounts receivable balance:
| 2025 | 2024 | |||||||
| Production revenues |
$ | 116,547 | $ | 97,139 | ||||
| Joint interest and other |
26,417 | 20,746 | ||||||
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| Accounts receivable |
$ | 142,964 | $ | 117,885 | ||||
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| NuVista Energy Ltd. | 2025 Annual Financial Statements | 29 |
The majority of NuVista credit exposure on accounts receivable at December 31, 2025 pertains to accrued sales revenue for December 2025 production volumes. Receivables from oil and natural gas marketers are normally collected on the 25th of the month following production. Receivables with joint operations partners are typically collected within one to three months of the joint operations invoice being issued to the partner. As at December 31, 2025, NuVista’s receivables consisted of $116.5 million from oil and natural gas marketers of which all has been subsequently collected and $26.4 million from joint operations partners and other receivables of which $9.3 million has been subsequently collected. NuVista does have any past due accounts receivable that it has determined to be uncollectible.
Liquidity risk
Liquidity risk is the risk that NuVista may be unable to meet its financial obligations as they become due. NuVista actively manages its liquidity through continuously monitoring cash flows from operating, financings, and investing activities, as well as reviewing and adjusting its capital expenditures program as necessary.
To ensure sufficient liquidity under both normal and adverse conditions, NuVista maintains a revolving credit facility with adequate capacity, manages the maturity profiles of financial assets and liabilities, and aligns its payment cycles with revenue collection where possible. Additionally, NuVista oversees its commodity price risk management program to help mitigate cash flow volatility. These measures enable NuVista to meet both short-term and long-term financial obligations while maintaining financial flexibility.
The timing of cash flows relating to financial liabilities as at December 31, 2025 is as follows:
| Total | 1 year | 2 to 3 years |
4 to 5 years |
Beyond 5 years |
||||||||||||||||
| Accounts payable and accrued liabilities |
$ | 180,160 | $ | 180,160 | $ | — | $ | — | $ | — | ||||||||||
| Senior unsecured notes (1) |
164,119 | 164,119 | — | — | — | |||||||||||||||
| Long-term debt (2) |
64,012 | 64,012 | — | — | — | |||||||||||||||
| Lease liabilities |
112,021 | 8,335 | 31,620 | 25,409 | 46,657 | |||||||||||||||
| Other liabilities |
35,172 | 19,826 | 5,559 | 5,520 | 4,267 | |||||||||||||||
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| Total financial liabilities |
$ | 555,484 | $ | 436,452 | $ | 37,179 | $ | 30,929 | $ | 50,924 | ||||||||||
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| (1) | In conjunction with closing of the Transaction on February 3, 2026, the remaining 2026 Notes were redeemed. Refer to Note 26, “Subsequent event,” for additional details. |
| (2) | NuVista’s Credit Facility is a revolving facility with a three-year term and a current maturity date of May 7, 2028. Upon the closing of the Transaction on February 3, 2026, all amounts outstanding under the Credit Facility were repaid in full, all related obligations were discharged, and the Credit Facility was terminated. Refer to Note 26, “Subsequent event,” for additional details. |
Market risk refers to the potential fluctuation in the fair value or future cash flows of a financial instrument due to changes in commodity price risk, currency risk, and interest rate risk. NuVista is involved in oil and natural gas exploration, development and production activities in Canada, resulting in significant exposure to commodity price risk. To mitigate this, NuVista has implemented a disciplined commodity price risk management program as part of its overall financial management strategy. Although, NuVista considers these transactions to be economic hedges, it does not designate them as hedges for accounting purposes.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 30 |
i. Commodity price risk
Commodity price risk refers to the potential fluctuation in the fair value of future cash flows due to changes in commodity prices. Significant shifts in commodity prices can materially affect NuVista’s financial performance, operating results, and financial position. These price changes are influenced not only by the domestic supply and demand of crude oil and natural gas in Canada and the United States, but also by global events that affect worldwide supply and demand levels. NuVista is exposed to commodity price risk as prices for its natural gas, natural gas liquids, and condensate fluctuate due to various local and global factors, including supply and demand, inventory levels, weather patterns, pipeline transportation constraints, political stability, and economic factors.
To manage this risk, NuVista employs a disciplined commodity price risk management program as part of its overall financial risk management strategy. This program aims to reduce volatility in financial results and stabilize adjusted funds flow against unpredictable commodity prices. NuVista manages commodity price risk through the use of various financial derivative and physical delivery sales contracts. Financial derivative contracts are considered financial instruments, while physical delivery sales contracts are excluded from the definition of financial instruments, as they consist of executory contracts. NuVista uses these instruments to manage petroleum and natural gas commodity price risk. The Board of Directors has authorized the use of fixed price, put option, and costless collar contracts (“Fixed Price Contracts”) and approved the terms of the commodity price risk management program as follows:
| (% of net forecast after royalty production) |
First 18 month forward period |
Following 18 month forward period |
Following 24 month forward period |
|||||||||
| Natural Gas Fixed Price Contracts |
up to 70 | % | up to 60 | % | up to 50 | % | ||||||
| Crude Oil Fixed Price Contracts |
up to 70 | % | up to 60 | % | up to 30 | % | ||||||
The Board of Directors has set limits for entering into natural gas basis differential contracts, which are the lesser of 70% of forecast natural gas production, net of royalties, or the volumes required to bring the combined natural gas basis differential contracts and natural gas fixed price contracts to 100% of forecast natural gas production, net of royalties. These contracts are limited to a term of no more than 7 years from the date any such swap is entered into.
Financial derivative contracts
At December 31, 2025, NuVista had the following financial derivative contracts in place to manage commodity price risk:
| WTI fixed price swap | WTI 3 way collar | WTI collar | ||||||||||||||||||||||||||||||||||
| Term (1) | Bbls/d | Cdn$/Bbl | Bbls/d | Cdn$/Bbl | Cdn$/Bbl | Cdn$/Bbl | Cdn$/Bbl | Cdn$/Bbl | Cdn$/Bbl | |||||||||||||||||||||||||||
| 2026 |
4,000 | 87.41 | 1,000 | 77.00 | 88.00 | 94.75 | 1,000 | 80.00 | 96.30 | |||||||||||||||||||||||||||
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| (1) | Table presented as weighted average volumes and prices. |
| AECO-NYMEX basis swap | ||||||||
|
Term (1) |
MMBtu/d | US$/MMBtu | ||||||
| 2026 |
187,500 | (0.92 | ) | |||||
| 2027 |
140,000 | (0.91 | ) | |||||
| 2028 |
120,000 | (1.04 | ) | |||||
| 2029 |
47,500 | (1.11 | ) | |||||
| 2030 |
70,000 | (1.08 | ) | |||||
| 2031 |
25,000 | (1.23 | ) | |||||
| (1) | Table presented as weighted average volumes and prices. |
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 31 |
| NYMEX fixed price swap | NYMEX collars | |||||||||||||||||||
| Term (1) |
Mmbtu/d | US$/Mmbtu | Mmbtu/d | US$/Mmbtu | US$/Mmbtu | |||||||||||||||
| 2026 |
20,000 | 4.07 | 95,000 | 3.75 | 5.27 | |||||||||||||||
| 2027 |
— | — | 15,000 | 3.50 | 4.72 | |||||||||||||||
| (1) | Table presented as weighted average volumes and prices. |
| AECO fixed price swap | AECO collars | |||||||||||||||||||
| Term (1) |
GJ/d | Cdn$/GJ | GJ/d | Cdn$/GJ | Cdn$/GJ | |||||||||||||||
| 2026 |
27,260 | 2.90 | 5,863 | 2.40 | 3.05 | |||||||||||||||
| 2027 |
11,726 | 2.60 | 8,384 | 2.50 | 3.35 | |||||||||||||||
| (1) | Table presented as weighted average volumes and prices. |
The following table summarizes the impact of commodity price fluctuations on net earnings, resulting from changes in the fair value of financial derivative contracts in place at December 31, 2025. Due to the non-linear relationship between assumption changes and fair value fluctuations, changes in fair value typically cannot be extrapolated.
| CDN $ |
2025 | 2024 | ||||||
| Increase in $ WTI – oil $10/Bbl |
$ | (25,519 | ) | $ | (11,085 | ) | ||
| Decrease in $ WTI – oil $10/Bbl |
$ | 25,135 | $ | 11,138 | ||||
| Increase in $ AECO – gas $0.50/GJ |
$ | (18,020 | ) | $ | (81,544 | ) | ||
| Decrease in $ AECO – gas $0.50/GJ |
$ | 17,125 | $ | 80,615 | ||||
Embedded derivative
NuVista has a long-term natural gas supply agreement to deliver 21,000 MMBtu/d of LNG for a term of up to thirteen years, commencing January 1, 2027. Under the agreement, natural gas will be delivered at the NOVA Inventory Transfer Point (“NIT”), with pricing based on the Japan Korea Marker (“JKM”) index, net of transportation and liquefaction costs. The agreement contains an embedded derivative, for which the NuVista recognizes unrealized gains or losses based on changes in forward JKM and AECO 7A monthly index price forecasts. Realized gains or losses will be recognized upon commencement of physical deliveries, expected in January 2027.
As at December 31, 2025, NuVista recorded an embedded derivative liability of $19.6 million (December 31, 2024 - $0.1 million liability) related to the JKM natural gas supply agreement and an associated unrealized loss of $19.5 million (December 31, 2024 - $0.1 million unrealized loss). The embedded derivative is measured at fair value using a Level 2 valuation methodology, estimated through an internally developed model that incorporates observable market inputs and assumptions that can be reasonably substantiated by available market information, including forecasted JKM prices.
ii. Currency risk
Currency risk refers to the potential fluctuation in the fair value of a financial instrument due to changes in foreign exchange rates. NuVista’s financial instruments are indirectly exposed to currency risk, as the prices of petroleum and natural gas in Canada are influenced by changes in the exchange rate between the Canadian dollar and the US dollar. Additionally, NuVista has US dollar-denominated receivables and payables, with future cash payments directly impacted by the exchange rate in effect at the time of payment.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 32 |
| iii. | Interest rate risk |
Interest rate risk refers to the potential fluctuation in the fair value or future cash flows of a financial instrument due to changes in market interest rates. NuVista is exposed to interest rate fluctuations on its Credit Facility, which carries a floating interest rate. To manage this risk, NuVista maintains a mix of fixed and variable interest rates on its debt, including its 2026 Notes and Credit Facility. NuVista had no interest rate swap or financial contracts in place as at or during the year ended December 31, 2025.
At December 31, 2025, NuVista had $64.0 million drawn on its bank credit facility (December 31, 2024 - $5.4 million).
Fair value of financial instruments
NuVista’s financial instruments recognized on the statement of financial position consist of accounts receivable, financial derivative contracts, accounts payable and accrued liabilities, compensation liability, lease liabilities, and long-term debt. The carrying value of the long-term debt approximates its fair value as it bears interest at market rates. Except for financial derivative contracts and compensation liability, which are recorded at fair value, the carrying values of other financial instruments reflect their current fair value, given their short-term maturities. The estimated fair values of recognized financial instruments have been determined based on quoted market prices when available, or through third-party models and valuation methodologies utilizing observable market data.
NuVista classifies fair value measurements according to the following hierarchy based on the amount of observable inputs used to value the instrument.
| • | Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions occur in sufficient frequency and volume to provide pricing information on an ongoing basis. |
| • | Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable as of the reporting date. Level 2 valuations are based on inputs, including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the marketplace. |
| • | Level 3 – Valuations in this level are those with inputs for the asset or liability that are not based on observable market data. |
NuVista’s financial commodity derivative contracts and embedded derivative contracts are classified as Level 2 fair value measurements. The Company does not have any recurring fair value measurements classified as Level 3. Fair values are determined using third-party valuation models and methodologies, as well as internally developed models that incorporate observable market data and inputs that can be corroborated by market information. The determination of the significance of individual inputs to the fair value measurement requires judgment and may affect the classification within the fair value hierarchy.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 33 |
Risk management contracts
The following provides a summary of the unrealized gains and losses on financial instruments for the years ended December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Unrealized gain on financial instruments - commodity contacts |
$ | 13,527 | $ | 150,212 | ||||
| Unrealized loss on financial instruments - embedded derivative |
(19,504 | ) | (135 | ) | ||||
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| Total unrealized gain (loss) on financial instruments |
$ | (5,977 | ) | $ | 150,077 | |||
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The following is a summary of the fair value of financial instruments as at December 31, 2025 and 2024:
| Financial derivative contracts |
Natural gas embedded derivative |
2025 Total |
2024 Total |
|||||||||||||
| Current asset |
$ | 123,594 | $ | — | $ | 123,594 | $ | 65,538 | ||||||||
| Long term asset (liability) |
94,173 | (19,640 | ) | 74,533 | 138,566 | |||||||||||
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| Total fair value of financial instruments |
$ | 217,767 | $ | (19,640 | ) | $ | 198,127 | $ | 204,104 | |||||||
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| 22. | Financing costs |
| Note | 2025 | 2024 | ||||||||||
| Interest on long-term debt |
$ | 9,007 | $ | 7,914 | ||||||||
| Interest on senior unsecured notes |
14,000 | 14,283 | ||||||||||
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| Interest expense |
23,007 | 22,197 | ||||||||||
| Lease interest expense |
13,364 | 14,145 | ||||||||||
| Accretion expense |
14 | 4,833 | 3,680 | |||||||||
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| Total financing costs |
$ | 41,204 | $ | 40,022 | ||||||||
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| 23. | Commitments |
The following is a summary of the NuVista’s commitments as at December 31, 2025:
| Total | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | ||||||||||||||||||||||
| Transportation (1) |
$ | 1,086,222 | $ | 161,275 | $ | 164,841 | $ | 141,625 | $ | 127,623 | $ | 102,363 | $ | 388,495 | ||||||||||||||
| Processing (1) (2) |
1,975,647 | 168,763 | 179,091 | 180,371 | 177,956 | 182,859 | 1,086,607 | |||||||||||||||||||||
| Drilling (3) |
6,117 | 3,831 | 2,286 | — | — | — | — | |||||||||||||||||||||
| Other (4) |
1,517 | 117 | 117 | 117 | 117 | 117 | 932 | |||||||||||||||||||||
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| Total commitments (5) |
$ | 3,069,503 | $ | 333,986 | $ | 346,335 | $ | 322,113 | $ | 305,696 | $ | 285,339 | $ | 1,476,034 | ||||||||||||||
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| (1) | Certain of the transportation and processing commitments are secured by outstanding letters of credit totaling $15.8 million at December 31, 2025 (December 31, 2024 - $14.8 million). |
| (2) | Includes processing and disposal commitments to guarantee firm capacity or priority service in various facilities. |
| (3) | Includes minimum standby rate commitments on two designated drilling rigs. |
| (4) | Includes certain community and scholarship investments committed for a period of 15 years. |
| (5) | Excludes commitments recognized within lease liabilities. |
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 34 |
| 24. | Key management compensation |
Key management personnel includes the Board of Directors and executive officers of NuVista. The compensation recognized in general and administrative expenses for key management personnel during the year consisted of the following:
| 2025 | 2024 | |||||||
| Salaries, wages and short-term benefits |
$ | 5,205 | $ | 6,323 | ||||
| Termination and post-employment benefits |
377 | — | ||||||
| Share-based payments (1) |
8,730 | 8,147 | ||||||
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| Total |
$ | 14,312 | $ | 14,470 | ||||
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| (1) | Represents the amortization of share-based compensation expense as recorded in the financial statements. |
| 25. | Supplemental information |
Supplemental cash flow information
The following table provides a detailed breakdown of certain non-cash items included in cash flows from operating and investing activities:
| 2025 | 2024 | |||||||
| Cash provided by (used for): |
||||||||
| Accounts receivable and other |
$ | (11,606 | ) | $ | 6,913 | |||
| Prepaid expenses |
(3,488 | ) | (343 | ) | ||||
| Other receivables |
(15,065 | ) | — | |||||
| Accounts payable and accrued liabilities |
(23,136 | ) | 54,493 | |||||
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| $ | (53,295 | ) | $ | 61,063 | ||||
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| Related to: |
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| Operating activities |
$ | (45,784 | ) | $ | 60,086 | |||
| Investing activities |
(7,511 | ) | 977 | |||||
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| $ | (53,295 | ) | $ | 61,063 | ||||
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Supplemental disclosures
NuVista’s statement of earnings is prepared primarily by nature of expense, except for employee compensation, which is included in both operating and general and administrative expenses.
The following table details the amount of total employee compensation included in the operating expenses, general and administrative expenses and share-based compensation in the statement of earnings:
| 2025 | 2024 | |||||||
| Operating |
$ | 2,650 | $ | 2,825 | ||||
| General and administrative |
22,219 | 22,211 | ||||||
| Share-based compensation |
21,227 | 14,121 | ||||||
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| Total employee compensation costs |
$ | 46,096 | $ | 39,157 | ||||
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| NuVista Energy Ltd. | 2025 Annual Financial Statements | 35 |
| 26. | Subsequent event |
On February 3, 2026, Ovintiv (TSX: OVV; NYSE: OVV), through Ovintiv Canada, completed the acquisition of all of the issued and outstanding common shares of NuVista not already owned by Ovintiv or its affiliates pursuant to a definitive arrangement agreement dated November 4, 2025 (the “Arrangement Agreement”). The acquisition was completed by way of a plan of arrangement under the Business Corporations Act (Alberta) in a cash and share transaction valued at approximately $3.8 billion (the “Transaction”).
The Transaction was approved on January 23, 2026 by over 99% of the votes cast at a special meeting of NuVista shareholders, with approximately 64% of outstanding shares represented at the meeting. Pursuant to the Arrangement Agreement, NuVista shareholders were entitled to elect to receive: (i) $18.00 in cash per NuVista share; (ii) 0.344 of an Ovintiv common stock per NuVista share; or (iii) a combination thereof, subject to proration and a maximum aggregate cash consideration of approximately $1.57 billion and a maximum aggregate share consideration of approximately 30.1 million Ovintiv common stock. Shareholders who did not make a valid election were deemed to have elected to receive 50% cash consideration and 50% share consideration.
Debt Settlement
Pursuant to the Arrangement Agreement and the applicable indenture, the remaining outstanding principal amount of NuVista’s 2026 Notes was redeemed in connection with the closing of the Transaction.
In addition, upon closing, all amounts outstanding under NuVista’s credit facility were repaid in full, all related obligations were discharged, and the credit facility was terminated. The EDC APSG program was likewise terminated at closing.
Transaction Costs
In connection with the Transaction, NuVista incurred transaction costs of $2.4 million as at December 31, 2025, primarily related to legal and advisory fees. Upon closing, total transaction costs attributable to third-party professional services amounted to $32.8 million. These amounts exclude costs related to employee severance and compensation arrangements.
Following completion of the Transaction, the NuVista Shares were delisted from the TSX, and on February 19, 2026, NuVista was amalgamated with Ovintiv Canada.
| NuVista Energy Ltd. | 2025 Annual Financial Statements | 36 |
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION OF OVINTIV INC.
On February 3, 2026, Ovintiv Inc. (“Ovintiv”) completed a business combination with NuVista Energy Ltd. (“NuVista”), a corporation organized under the laws of the Province of Alberta, Canada, pursuant to an Arrangement Agreement (the “Arrangement Agreement”), dated November 4, 2025, whereby Ovintiv acquired all of the outstanding common shares of NuVista in a cash and share transaction valued at approximately $2.8 billion (C$3.8 billion) (the “NuVista Acquisition”). The acquisition added approximately 930 net drilling 10,000-foot equivalent well locations and approximately 140,000 net acres in the core of the condensate-rich Montney play which is located near Grande Prairie in Alberta, and in close proximity to Ovintiv’s current Montney operations. The NuVista Acquisition was effected pursuant to, among other provisions, Section 193 of the Business Corporations Act (Alberta) and the Arrangement Agreement.
Ovintiv and NuVista prepare their respective financial statements in accordance with U.S. GAAP and International Financial Reporting Standards (“IFRS”) Accounting Standards as issued by the International Accounting Standards Board, respectively. In accordance with Financial Accounting Standards Board’s (“FASB”), ASC 805: Business Combinations, the NuVista Acquisition will be accounted for using the acquisition method of accounting with Ovintiv identified as the acquirer. Under the acquisition method of accounting, Ovintiv will record all assets acquired and liabilities assumed at their respective acquisition date fair values at the effective time of the acquisition.
The acquisition method of accounting is dependent upon certain valuations and other studies that are underway but have yet to progress to a stage where there is sufficient information for a definitive measure. The sources and amounts of transaction expenses may also differ from that assumed in the following pro forma adjustments. Accordingly, the pro forma adjustments are preliminary, have been made solely for the purpose of providing pro forma condensed combined financial information, and are subject to revision based on a final determination of fair values as of the date of acquisition. Differences between these preliminary estimates and the final acquisition accounting may have a material impact on the accompanying pro forma condensed combined financial information and the combined company’s future results of operations and financial position.
The unaudited pro forma condensed combined financial information is derived from the historical consolidated financial statements of Ovintiv and NuVista, adjusted to reflect the combination of Ovintiv and NuVista. Certain of NuVista’s historical amounts have been reclassified to conform to Ovintiv’s financial statement presentation. NuVista’s historical amounts have been derived from their audited consolidated financial statements. The unaudited pro forma condensed combined balance sheet as of December 31, 2025, gives effect to the NuVista Acquisition as if the acquisition had been completed on December 31, 2025. The unaudited pro forma condensed combined statement of earnings for the year ended December 31, 2025, gives effect to the NuVista Acquisition as if the acquisition had been completed on January 1, 2025.
The unaudited pro forma condensed combined financial information reflects the following pro forma adjustments, based on available information and certain assumptions that Ovintiv believes are reasonable:
| • | the issuance of approximately 30.1 million shares of Ovintiv common stock and approximately $1.2 billion in cash; |
| • | the effects of debt financing including Ovintiv’s Two-Year Term Credit Agreement (“Term Loan”) that was entered into in connection with the acquisition and from Ovintiv’s short-term borrowings to fund the cash consideration of the NuVista Acquisition; |
| • | the acquisition of NuVista’s assets consisting primarily of oil and gas properties and assumption of liabilities; |
| • | the harmonization of NuVista’s accounting policies to Ovintiv’s accounting policies and GAAP differences; and |
| • | the recognition of transaction-related costs and estimated tax impacts of the pro forma adjustments. |
The unaudited pro forma condensed combined financial information has been prepared in accordance with Regulation S-X Article 11 promulgated by the SEC using the assumptions set forth in the notes herein (“Article 11”). Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed combined financial information. In Ovintiv’s opinion, all adjustments that are necessary to present fairly the pro forma information have been made. The unaudited pro forma condensed combined financial information should be read in conjunction with the audited consolidated financial statements and accompanying notes contained in Ovintiv’s Annual Report and on Form 10-K for the year ended December 31, 2025, and NuVista’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2025, which are included in this Form 8-K.
The unaudited pro forma condensed combined financial information is provided for illustrative purposes only and is not intended to represent what Ovintiv’s financial position or results of operations would have been had the NuVista Acquisition actually been consummated on the assumed dates, nor is it indicative of Ovintiv’s future financial position or results of operations. The unaudited pro forma condensed combined financial information does not reflect future events that may occur after the acquisition, including, but not limited to, the anticipated realization of ongoing savings from potential operating efficiencies, cost savings or economies of scale that the combined company may achieve with respect to the combined operations. As a result, future results may vary significantly from the pro forma results reflected herein.
| Unaudited Pro Forma Condensed Combined Balance Sheet As of December 31, 2025 |
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| Historical | Pro Forma Adjustments | |||||||||||||||||||||||
| ($ millions) |
Ovintiv | NuVista Adjusted (Note 2) |
Acquisition Adjustments (Note 3) |
Transaction Adjustments (Note 3) |
Pro Forma Combined |
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| Assets |
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| Current Assets |
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| Cash and cash equivalents |
35 | 1 | — | — | 36 | |||||||||||||||||||
| Accounts receivable and accrued revenues |
1,128 | 152 | (7 | ) | b.iv) | — | 1,273 | |||||||||||||||||
| Investment in marketable securities |
245 | — | — | (245 | ) | a), b.i) | — | |||||||||||||||||
| Risk management |
86 | 90 | — | — | 176 | |||||||||||||||||||
| Income tax receivable |
29 | — | — | — | 29 | |||||||||||||||||||
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|
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| 1,523 | 243 | (7 | ) | (245 | ) | 1,514 | ||||||||||||||||||
| Property, Plant and Equipment, at cost: |
||||||||||||||||||||||||
| Oil and natural gas properties, based on full cost accounting |
||||||||||||||||||||||||
| Proved properties |
70,133 | 2,277 | (70 | ) | b.i) | 270 | a), b.i) | 72,610 | ||||||||||||||||
| Unproved properties |
434 | 26 | 575 | b.ii) | — | 1,035 | ||||||||||||||||||
| Other |
864 | — | 19 | b.iii) | — | 883 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
| Property, plant and equipment |
71,431 | 2,303 | 524 | 270 | 74,528 | |||||||||||||||||||
| Less: Accumulated depreciation, depletion and amortization |
(57,187 | ) | — | — | — | (57,187 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
| Property, plant and equipment, net |
14,244 | 2,303 | 524 | 270 | 17,341 | |||||||||||||||||||
| Other Assets |
1,299 | 119 | (7 | ) | b.iv) | — | 1,411 | |||||||||||||||||
| Risk Management |
4 | 69 | — | — | 73 | |||||||||||||||||||
| Deferred Income Taxes |
744 | — | — | — | 744 | |||||||||||||||||||
| Goodwill |
2,576 | — | 312 | b.v) | — | 2,888 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| 20,390 | 2,734 | 822 | 25 | 23,971 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Liabilities and Shareholders’ Equity |
||||||||||||||||||||||||
| Current Liabilities |
||||||||||||||||||||||||
| Accounts payable and accrued liabilities |
1,861 | 153 | — | 26 | d) | 2,040 | ||||||||||||||||||
| Current portion of operating lease liabilities |
117 | 6 | — | — | 123 | |||||||||||||||||||
| Incomes taxes payable |
5 | — | — | — | 5 | |||||||||||||||||||
| Risk management |
2 | — | — | — | 2 | |||||||||||||||||||
| Current portion of long-term debt |
810 | 120 | 1 | b.vi) | 53 | c) | 984 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| 2,795 | 279 | 1 | 79 | 3,154 | ||||||||||||||||||||
| Long-Term Debt |
4,392 | 47 | — | 1,151 | c) | 5,590 | ||||||||||||||||||
| Operating Lease Liabilities |
1,105 | 106 | — | — | 1,211 | |||||||||||||||||||
| Other Liabilities and Provisions |
100 | 11 | — | — | 111 | |||||||||||||||||||
| Risk Management |
13 | 14 | — | — | 27 | |||||||||||||||||||
| Asset Retirement Obligation |
388 | 85 | (41 | ) | b.vii) | — | 432 | |||||||||||||||||
| Deferred Income Taxes |
402 | 350 | 223 | b.viii) | — | 975 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| 9,195 | 892 | 183 | 1,230 | 11,500 | ||||||||||||||||||||
| Shareholders’ Equity |
||||||||||||||||||||||||
| Share capital |
3 | 762 | (762 | ) | — | e) | 3 | |||||||||||||||||
| Paid in surplus |
7,779 | 31 | (31 | ) | 1,277 | e) | 9,056 | |||||||||||||||||
| Retained earnings (Accumulated deficit) |
2,440 | 1,049 | (1,049 | ) | (1 | ) | a), d) | 2,439 | ||||||||||||||||
| Accumulated other comprehensive income |
973 | — | — | — | 973 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Shareholders’ Equity |
11,195 | 1,842 | (1,842 | ) | 1,276 | 12,471 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| 20,390 | 2,734 | (1,659 | ) | 2,506 | 23,971 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Unaudited Pro Forma Condensed Combined Statement of Earnings For the Year Ended December 31, 2025 |
||||||||||||||||||||||||||
| Historical | Pro Forma Adjustments | |||||||||||||||||||||||||
| ($ millions, except per share amounts) |
Ovintiv | NuVista Adjusted (Note 2) |
Pro Forma Adjustments (Note 4) |
Transaction Adjustments (Note 4) |
Pro Forma Combined |
|||||||||||||||||||||
| Revenues |
||||||||||||||||||||||||||
| Product and service revenues |
7,176 | 842 | — | — | 8,018 | |||||||||||||||||||||
| Sales of purchased product |
1,487 | — | — | — | 1,487 | |||||||||||||||||||||
| Gains (losses) on risk management, net |
172 | 74 | — | — | 246 | |||||||||||||||||||||
| Sublease revenues |
73 | — | — | — | 73 | |||||||||||||||||||||
| Construction income |
— | 42 | — | — | 42 | |||||||||||||||||||||
| Other income |
— | 6 | — | — | 6 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Revenues |
8,908 | 964 | — | — | 9,872 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating Expenses |
||||||||||||||||||||||||||
| Production, mineral and other taxes |
286 | 9 | — | — | 295 | |||||||||||||||||||||
| Transportation and processing |
1,724 | 110 | — | — | 1,834 | |||||||||||||||||||||
| Operating |
862 | 279 | — | — | 1,141 | |||||||||||||||||||||
| Purchased product |
1,447 | — | — | — | 1,447 | |||||||||||||||||||||
| Depreciation, depletion and amortization |
2,179 | 190 | 141 | a | ) | — | 2,510 | |||||||||||||||||||
| Impairments |
920 | — | — | — | 920 | |||||||||||||||||||||
| Accretion of asset retirement obligation |
28 | 3 | — | — | 31 | |||||||||||||||||||||
| Construction costs |
— | 42 | — | — | 42 | |||||||||||||||||||||
| Administrative |
331 | 35 | — | 26 | c) | 392 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Operating Expenses |
7,777 | 668 | 141 | 26 | 8,612 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating Income |
1,131 | 296 | (141 | ) | (26 | ) | 1,260 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Other (Income) Expenses |
||||||||||||||||||||||||||
| Interest |
376 | 16 | 56 | b | ) | — | 448 | |||||||||||||||||||
| Foreign exchange (gain) loss, net |
31 | — | — | — | 31 | |||||||||||||||||||||
| Other (gains) losses, net |
(46 | ) | — | — | — | (46 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Other (Income) Expenses |
361 | 16 | 56 | — | 433 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net Earnings Before Income Tax |
770 | 280 | (197 | ) | (26 | ) | 827 | |||||||||||||||||||
| Income tax expense (recovery) |
(472 | ) | 66 | (47 | ) | d | ) | (6 | ) | d) | (459 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net Earnings |
1,242 | 214 | (150 | ) | (20 | ) | 1,286 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net Earnings Per Share of Common Stock |
||||||||||||||||||||||||||
| Basic |
4.83 | 4.48 | ||||||||||||||||||||||||
| Diluted |
4.78 | 4.44 | ||||||||||||||||||||||||
| Weighted Average Per Share of Common Stock Outstanding (millions) |
||||||||||||||||||||||||||
| Basic |
257.2 | 30.1 | e | ) | 287.3 | |||||||||||||||||||||
| Diluted |
259.7 | 30.1 | e | ) | 289.8 | |||||||||||||||||||||
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Note 1 — Basis of Presentation
The unaudited pro forma condensed combined financial information has been derived from the historical consolidated financial statements of Ovintiv and the historical financial statements of NuVista in accordance with Article 11 of the Securities and Exchange Commission’s (“SEC”) Regulation S-X.
On February 3, 2026, Ovintiv completed the business combination with NuVista, a corporation organized under the laws of the Province of Alberta, Canada, pursuant to the Arrangement Agreement. The NuVista Acquisition will be accounted for using the acquisition method of accounting using the accounting guidance in FASB ASC 805, Business Combinations, with Ovintiv treated as the accounting acquirer. The acquisition method of accounting is dependent upon certain valuations and other studies that have yet to progress to a stage where there is sufficient information for a definitive measure. Accordingly, the pro forma adjustments are preliminary, have been made solely for the purpose of providing pro forma financial information and are subject to revision based on a final determination of fair value as of the date of the acquisition. Differences between preliminary estimates and the final allocation of the consideration to be paid may have a material impact on the accompanying unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined balance sheet as of December 31, 2025, gives effect to the NuVista Acquisition and the related financing transactions as if they had occurred on December 31, 2025. The unaudited pro forma condensed combined statement of earnings for the year ended December 31, 2025, gives effect to the NuVista Acquisition and the related financing transactions as if they had occurred on January 1, 2025.
The unaudited pro forma condensed combined financial information reflects pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions that Ovintiv believes are reasonable. However, actual results may differ from those reflected in these statements. In Ovintiv’s opinion, all adjustments that are necessary to present fairly the pro forma information have been made. The following unaudited pro forma condensed combined information does not purport to represent what the financial position or results of operations would have been if the NuVista Acquisition and the related financing transactions had actually occurred on the dates indicated above, nor are they indicative of Ovintiv’s future financial position or results of operations. No adjustments have been made to the pro forma financial information to reflect costs savings or synergies that may be obtained as a result of the NuVista Acquisition described herein.
Note 2 — NuVista’s Historical Financial Statements
NuVista’s historical balances were derived from NuVista’s historical consolidated financial statements as described above and are presented in accordance with IFRS and are denominated in Canadian dollars (CAD). The historical balances have been adjusted to reflect certain reclassifications within NuVista’s consolidated statement of net earnings and consolidated balance sheet categories to conform to Ovintiv’s presentation in its consolidated statement of earnings and consolidated balance sheet. Additionally, these historical consolidated financial statements were adjusted from Canadian dollars to U.S. dollars and from IFRS to U.S. GAAP where applicable. Refer to Note 2b) for additional consideration of the IFRS to U.S. GAAP adjustments.
Further review may identify additional reclassifications or adjustments that could have a material impact on the unaudited pro forma financial information of the combined company. The reclassifications and adjustments identified and presented in the unaudited pro forma financial information are based on discussions with NuVista’s management, due diligence and information presented in NuVista’s historical consolidated financial statements. Ovintiv is not aware of any additional reclassifications or adjustments that would have a material impact on the unaudited pro forma financial information that are not reflected in the pro forma condensed combined financial information.
| NuVista Condensed Balance Sheet December 31, 2025 |
||||||||||||||||||||||||||
| ($ thousands) |
NuVista Historical (CAD) (Audited) |
Reclassification Adjustments (Note 2a) (CAD) (Unaudited) |
IFRS to U.S. GAAP Adjustments (Note 2b) (CAD) (Unaudited) |
Currency Translation Adjustments (Note 2c) (Unaudited) |
NuVista Adjusted (USD) (Unaudited) |
|||||||||||||||||||||
| Assets |
||||||||||||||||||||||||||
| Current assets |
||||||||||||||||||||||||||
| Cash and cash equivalents |
— | 708 | i | ) | — | (191 | ) | 517 | ||||||||||||||||||
| Accounts receivables and other |
144,144 | 64,137 | ii | ) | — | (56,319 | ) | 151,962 | ||||||||||||||||||
| Prepaid expenses |
49,072 | (49,072 | ) | ii | ) | — | — | — | ||||||||||||||||||
| Financial derivative assets |
123,594 | — | — | (33,420 | ) | 90,174 | ||||||||||||||||||||
| Other receivables |
15,065 | (15,065 | ) | ii | ) | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 331,875 | 708 | — | (89,930 | ) | 242,653 | |||||||||||||||||||||
| Financial derivative assets |
94,173 | — | — | (25,464 | ) | 68,709 | ||||||||||||||||||||
| Other assets |
13,811 | (4,311 | ) | iii | ) | 153,085 | ii) | (43,963 | ) | 118,622 | ||||||||||||||||
| Exploration and evaluation assets |
35,935 | (35,935 | ) | iv | ) | — | i) | — | — | |||||||||||||||||
| Property, plant and equipment |
3,117,374 | (3,117,374 | ) | v | ) | — | i) | — | — | |||||||||||||||||
| Proved properties |
— | 3,121,685 | v | ), iii) | — | i) | (844,104 | ) | 2,277,581 | |||||||||||||||||
| Unproved properties |
— | 35,935 | iv | ) | — | i) | (9,717 | ) | 26,218 | |||||||||||||||||
| Right-of-use assets |
84,248 | — | (84,248 | ) | ii) | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total assets |
3,677,416 | 708 | 68,837 | (1,013,178 | ) | 2,733,783 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Liabilities |
||||||||||||||||||||||||||
| Current liabilities |
||||||||||||||||||||||||||
| Accounts payable and accrued liabilities |
180,160 | 29,826 | vi | ) | — | (56,780 | ) | 153,206 | ||||||||||||||||||
| Senior unsecured notes |
164,119 | — | — | (44,378 | ) | 119,741 | ||||||||||||||||||||
| Current portion of other liabilities |
19,826 | (19,826 | ) | vi | ) | — | — | — | ||||||||||||||||||
| Current portion of lease liabilities |
8,335 | — | — | (2,254 | ) | 6,081 | ||||||||||||||||||||
| Current portion of asset retirement obligation |
10,000 | (10,000 | ) | vi | ) | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 382,440 | — | — | (103,412 | ) | 279,028 | |||||||||||||||||||||
| Long-term debt |
64,012 | 708 | i | ) | — | (17,500 | ) | 47,220 | ||||||||||||||||||
| Other liabilities |
15,346 | — | — | (4,150 | ) | 11,196 | ||||||||||||||||||||
| Lease liabilities |
103,686 | — | 41,064 | ii) | (39,140 | ) | 105,610 | |||||||||||||||||||
| Asset retirement obligation |
116,735 | — | — | iii) | (31,565 | ) | 85,170 | |||||||||||||||||||
| Financial derivative liabilities |
19,640 | — | — | (5,311 | ) | 14,329 | ||||||||||||||||||||
| Deferred tax liability |
479,878 | — | — | (129,759 | ) | 350,119 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total liabilities |
1,181,737 | 708 | 41,064 | (330,837 | ) | 892,672 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Shareholders’ equity |
||||||||||||||||||||||||||
| Share capital |
1,044,358 | — | — | (282,394 | ) | 761,964 | ||||||||||||||||||||
| Contributed surplus |
41,759 | (41,759 | ) | vii | ) | — | — | — | ||||||||||||||||||
| Paid in surplus |
— | 41,759 | vii | ) | — | (11,292 | ) | 30,467 | ||||||||||||||||||
| Retained earnings |
1,409,562 | — | 27,773 | ii) | (388,655 | ) | 1,048,680 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total shareholders’ equity |
2,495,679 | — | 27,773 | (682,341 | ) | 1,841,111 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total liabilities and shareholders’ equity |
3,677,416 | 708 | 68,837 | (1,013,178 | ) | 2,733,783 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| NuVista Condensed Statement of Earnings December 31, 2025 |
||||||||||||||||||||||||||
| ($ thousands) |
NuVista Historical (CAD) (Audited) |
Reclassification Adjustments (Note 2a) (CAD) (Unaudited) |
IFRS to U.S. GAAP Adjustments (Note 2b) (CAD) (Unaudited) |
Currency Translation Adjustments (Note 2c) (Unaudited) |
NuVista Adjusted (USD) (Unaudited) |
|||||||||||||||||||||
| Revenues |
||||||||||||||||||||||||||
| Petroleum and natural gas sales |
1,260,673 | (83,684 | ) | i | ) | — | (334,618 | ) | 842,371 | |||||||||||||||||
| Royalties |
(83,684 | ) | 83,684 | i | ) | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net revenue from petroleum and natural gas sales |
1,176,989 | — | — | (334,618 | ) | 842,371 | ||||||||||||||||||||
| Gains (losses) on risk management, net |
— | 103,532 | ii | ), iii) | — | (29,434 | ) | 74,098 | ||||||||||||||||||
| Realized gain on financial derivatives |
109,509 | (109,509 | ) | ii | ) | — | — | — | ||||||||||||||||||
| Unrealized gain (loss) on financial derivatives |
(5,977 | ) | 5,977 | iii | ) | — | — | — | ||||||||||||||||||
| Construction income |
59,137 | — | — | (16,813 | ) | 42,324 | ||||||||||||||||||||
| Other income |
7,773 | — | — | (2,210 | ) | 5,563 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total revenue, other income and gain (loss) on financial derivatives |
1,347,431 | — | — | (383,075 | ) | 964,356 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Expenses |
||||||||||||||||||||||||||
| Production, mineral and other taxes |
— | 12,138 | iv | ) | — | (3,451 | ) | 8,687 | ||||||||||||||||||
| Operating |
378,257 | (12,138 | ) | iv | ) | 23,402 | ii) | (110,741 | ) | 278,780 | ||||||||||||||||
| Transportation |
153,674 | — | — | (43,690 | ) | 109,984 | ||||||||||||||||||||
| General and administrative |
25,492 | 23,644 | v | ) | — | (13,969 | ) | 35,167 | ||||||||||||||||||
| Share-based compensation |
21,227 | (21,227 | ) | v | ) | — | — | — | ||||||||||||||||||
| Financing costs |
41,204 | (41,204 | ) | vi | ) | — | — | — | ||||||||||||||||||
| Transaction costs |
2,417 | (2,417 | ) | v | ) | — | — | — | ||||||||||||||||||
| Construction costs |
59,137 | — | — | (16,813 | ) | 42,324 | ||||||||||||||||||||
| Depreciation, depletion and amortization |
275,203 | — | (10,038 | ) | ii) | (75,386 | ) | 189,779 | ||||||||||||||||||
| Accretion of asset retirement obligation |
— | 4,833 | vi | ) | — | (1,374 | ) | 3,459 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 956,611 | (36,371 | ) | 13,364 | (265,424 | ) | 668,180 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Other (income) expenses |
||||||||||||||||||||||||||
| Interest |
— | 36,371 | vi | ) | (13,364 | ) | ii) | (6,541 | ) | 16,466 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net earnings before income tax |
390,820 | — | — | (111,110 | ) | 279,710 | ||||||||||||||||||||
| Income tax expense (recovery) |
— | 91,865 | vii | ) | — | (26,117 | ) | 65,748 | ||||||||||||||||||
| Current income tax expense |
59,246 | (59,246 | ) | vii | ) | — | — | — | ||||||||||||||||||
| Deferred income tax expense |
32,619 | (32,619 | ) | vii | ) | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net earnings |
298,955 | — | — | (84,993 | ) | 213,962 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Note 2.a) Reclassification Adjustments
The historical balances have been adjusted to reflect certain reclassifications within NuVista’s consolidated statement of net earnings and consolidated balance sheet categories to conform to Ovintiv’s presentation in its consolidated balance sheet and consolidated statement of earnings.
Balance Sheet Reclassifications:
Reflects reclassification of NuVista’s balance sheet amounts presented to conform to Ovintiv’s presentation:
i) Cash from Long-term debt;
ii) Prepaid expenses and Other current assets to Accounts receivable and accrued revenues;
iii) Inventory from Other assets to Proved properties;
iv) Exploration and Evaluation Assets to Unproved properties;
v) Property, Plant and Equipment to Proved properties;
vi) Current portion of other liabilities and Current portion of asset retirement obligation to Accounts payable and accrued liabilities; and
vii) Contributed surplus to Paid in surplus.
Statement of Net Earnings Reclassifications:
Reflects reclassification of NuVista’s earnings amounts presented to conform to Ovintiv’s presentation:
i) Royalties to Petroleum and natural gas sales;
ii) Realized gain on financial derivatives to Gains (losses) on risk management, net;
iii) Unrealized gain (loss) on financial derivatives to Gains (losses) on risk management, net;
iv) Production, mineral and other taxes from Operating;
v) Share-based compensation and Transaction costs to General and administrative;
vi) Financing costs to Interest and Accretion of asset retirement obligation; and
vii) Current income tax expense and Deferred income tax expense to Income tax expense (recovery).
Note 2. b) IFRS to U.S. GAAP Adjustments
i) Oil and gas properties
The unaudited pro forma condensed combined financial information includes adjustments to conform NuVista’s accounting policies to Ovintiv’s accounting policies, including adjusting NuVista’s oil and gas properties to the full cost method. NuVista follows IFRS which is similar to the U.S. GAAP successful efforts method of accounting for oil and gas properties. Ovintiv follows the full cost method of accounting for oil and gas properties under U.S. GAAP. Certain costs such as unsuccessful exploration drilling costs are expensed under IFRS that are capitalized under the full cost method. NuVista did not have any costs related to exploration and evaluation expense reflected in the statement of net earnings for the year ended December 31, 2025.
Other differences between Ovintiv’s full cost method of accounting and NuVista’s accounting for oil and gas properties under IFRS are as follows:
| • | Under the full cost method of accounting, capitalized costs are amortized on a units-of-production basis at a country level cost center, which includes estimated future development costs, over total proved reserves. Ovintiv’s oil and natural gas reserves are determined in accordance with U.S. GAAP using a simple average of beginning-of-month commodity prices over the past 12 months (“SEC trailing prices”). Additionally, such reserves are limited to only total proved reserves, with further limitations to the quantities associated with proved undeveloped (“PUD”) reserves to a five-year development horizon. Under IFRS, capitalized costs are amortized on a units-of-production basis over forecast case reserves which may include total proved as well as probable reserves. The forecast case reserves estimates utilized under IFRS are based on several significant assumptions, which includes forecasted oil and natural gas prices, operating costs, royalties, production volumes and future development costs. In addition, oil and natural gas reserves determined in accordance with IFRS do not limit PUDs to a five-year development horizon, and allow for the inclusion of probable reserves. NuVista’s depletion would have been higher under the U.S. GAAP full cost method of accounting because of differences in how oil and natural gas reserve quantities are determined between the two accounting frameworks. |
| • | Under the full cost method of accounting, the carrying amount of Ovintiv’s oil and natural gas properties within each country cost center is subject to a ceiling test, which is recognized in net earnings when the carrying amount of the country cost center exceeds the country cost center ceiling. The cost center ceiling is the sum of the estimated after-tax future net cash flows from proved reserves, using the 12-month average trailing prices and unescalated future development and production costs, discounted at 10 percent. The 12-month average trailing price is calculated as the average of the price on the first day of each month within the trailing 12-month period. Any excess of the carrying amount over the calculated ceiling amount is recognized as an impairment in net earnings. Under IFRS, when an impairment indicator is determined to exist, an impairment test is performed to determine if the cash generating unit carrying amount is greater than its fair value less costs of disposal and its value in use. An impairment expense previously recorded is reversible in subsequent periods under certain conditions. NuVista’s carrying amount of oil and gas properties would have been lower under the U.S. GAAP full cost method of accounting because of differences in the commodity prices utilized in calculating impairment tests as determined between the two accounting frameworks. |
| • | Under the full cost method of accounting, proceeds from the divestiture of properties are normally deducted from the full cost pool without recognition of a gain or loss unless the deduction significantly alters the relationship between capitalized costs and proved reserves in the cost center, in which case a gain or loss is recognized in earnings. Under IFRS, gains or losses are recognized on divestitures of properties. NuVista’s carrying amount of oil and gas properties would have been lower under the U.S. GAAP full cost method of accounting because of how proceeds on divestitures are recognized between the two accounting frameworks. |
While the accounting policy differences related to depletion and impairments are significant, Ovintiv does not possess the information to recompute the cumulative impact of these differences since the inception and throughout the life of NuVista. Accordingly, the unaudited pro forma condensed combined balance sheet does not reflect any adjustment for such differences.
However, on closing of the NuVista Acquisition, the oil and natural gas properties of NuVista were recorded by Ovintiv at their respective fair values. Accordingly, the historical cost basis of the oil and natural gas properties of NuVista has been eliminated and replaced with the estimated fair value of the properties as indicated in the preliminary purchase accounting reflected in Note 3.
In the unaudited pro forma condensed combined statement of earnings, depletion expense and impairments were estimated using the full cost method of oil and natural gas accounting based on the estimated fair value of the oil and gas properties for the year ended December 31, 2025. Refer to Note 4 for additional information.
ii) Leases
Under IFRS, all leases are recorded on the balance sheet as a lease liability with a corresponding right-of-use asset. Each lease payment is allocated between the lease liability and lease interest expense and the right of use asset is depreciated on a straight-line basis over the lease term. Under U.S. GAAP, while all leases are recorded on the balance sheet, the lease is classified as either a finance lease or an operating lease. Unlike IFRS, operating lease expenses are recognized in net earnings on a straight-line basis over the lease term under U.S. GAAP.
As a result, to harmonize NuVista’s IFRS accounting policies to Ovintiv’s accounting policies under U.S. GAAP, the building office leases, vehicles, gathering and processing leases have been classified as operating leases in NuVista’s adjusted balance sheet and the associated impacts of interest and depreciation expense have been eliminated and replaced with straight-line lease payment amounts in operating expense in net earnings. The difference in the amounts between the IFRS and U.S. GAAP expenses recognized was not material.
On closing of the NuVista Acquisition, the leases were classified as operating leases and measured at the present value of future minimum lease payments. Accordingly, the historical lease right of use assets and lease liabilities of NuVista have been eliminated and replaced with amounts measured at the present value of future minimum lease payments over the lease term, as indicated in the preliminary purchase accounting reflected in Note 3.
iii) Asset Retirement Obligations
Under U.S. GAAP, the initial recognition of the asset retirement obligation is measured at its fair value, utilizing expected future cash flows required to satisfy the obligation and discounted at a credit-adjusted risk-free interest rate. Subsequent revisions to either the timing or amount of the original estimate of undiscounted cash flows are treated as separate layers of the obligation. Under IFRS, asset retirement obligations are generally measured as the best estimate of the expenditure to settle the obligation and discounted at a pretax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Subsequent revisions for changes in the estimate of expected undiscounted cash flows or discount rate are remeasured for the entire obligation by using an updated discount rate that reflects current market conditions as of the balance sheet date.
Ovintiv does not possess the information to recompute the cumulative impact of these differences since the inception of NuVista, and such differences would be further impacted by the timing of additions and divestitures throughout the life of NuVista.
However, the differences between the two accounting frameworks with respect to asset retirement obligations are not material to the unaudited pro forma condensed combined financial information as the differences between discount rates used would not materially impact either recorded balance sheet accounts or periodic accretion expense. This is in part due to the long lives associated with the assets and the minor differences between historical rates. Accordingly, the unaudited pro forma condensed combined balance sheet does not reflect any adjustment for such differences.
On closing of the NuVista Acquisition, asset retirement obligation was recorded at estimated fair value. Accordingly, the asset retirement obligation of NuVista has been eliminated and replaced with the estimated fair value as indicated in the preliminary purchase accounting reflected in Note 3.
iv) Other Adjustments
No other significant differences between IFRS, as applied by NuVista, and U.S. GAAP, as applied by Ovintiv, were identified based on the information available from discussions with NuVista’s management and review of publicly available information. Further review may identify additional adjustments that could have a material impact on the unaudited pro forma condensed combined financial information.
Note 2.c) Currency Translation Adjustments
Currency translation adjustments to convert NuVista’s balance sheet and statement of earnings were calculated according to the following table:
| Foreign Currency Translation Rates: |
USD/CAD | |||
| Balance Sheet as at December 31, 2025 (ending period exchange rate) |
0.7296 | |||
| Statement of Earnings for the year ended December 31, 2025 (average period exchange rate) |
0.7157 | |||
Note 3. Unaudited Pro Forma Condensed Combined Balance Sheet
The NuVista Acquisition will be accounted for using the acquisition method of accounting for business combinations. The allocation of the preliminary estimated purchase price is based upon Ovintiv’s estimates of, and assumptions related to, the fair value of assets to be acquired and liabilities to be assumed, using currently available information. Because the unaudited pro forma combined financial information has been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on financial position and results of operations may differ significantly from the pro forma amounts.
The preliminary purchase price allocation is subject to change as a result of several factors, including but not limited to, changes between the estimated and final fair value of NuVista’s assets acquired and liabilities assumed, and the tax basis NuVista’s assets and liabilities as of the effective time of the closing date of the NuVista Acquisition.
The preliminary consideration transferred, fair value of assets acquired and liabilities assumed were calculated as follows:
| ($ millions) | ||||
| Consideration |
||||
| Fair value of Ovintiv shares of common stock issued (1) |
1,277 | |||
| Consideration paid in cash (2) |
1,204 | |||
|
|
|
|||
| Total Consideration |
2,481 | |||
| Fair value of 18.5 million NuVista common shares held by Ovintiv (3) |
270 | |||
|
|
|
|||
| Total Consideration and Fair Value of NuVista Shares held by Ovintiv |
2,751 | |||
| Fair Value of Liabilities Assumed |
||||
| Accounts payable and accrued liabilities |
146 | |||
| Debt |
168 | |||
| Lease liabilities |
112 | |||
| Asset retirement obligation |
51 | |||
| Other non-current liabilities |
11 | |||
| Deferred income tax |
573 | |||
| Fair Value of Assets Acquired |
||||
| Cash and cash equivalents |
1 | |||
| Accounts receivable and accrued revenues |
145 | |||
| Derivative assets, net |
145 | |||
| Proved properties |
2,477 | |||
| Unproved properties |
601 | |||
| Other property, plant and equipment |
19 | |||
| Right-of-use lease assets |
112 | |||
| Goodwill |
312 | |||
|
|
|
|||
| Net Assets Acquired and Liabilities Assumed |
2,751 | |||
|
|
|
|||
|
(1) Based on approximately 30.1 million Ovintiv shares of common stock at $42.47 per share (C$58.08 per share using the closing price on February 2, 2026, on the TSX). (2) Includes cash consideration which was paid to shareholders of NuVista common shares as well as to NuVista employees in respect of liability awards held. (3) On October 1, 2025, Ovintiv purchased 18.5 million NuVista common shares for $212 million (C$296 million). On February 2, 2026, the NuVista shares were remeasured at fair value using Ovintiv shares of common stock at $42.47 per share (C$58.08 per share using the closing price on February 2, 2026, on the TSX). | ||
On closing of the NuVista Acquisition, NuVista shareholders received C$18.00 per NuVista common share, which was paid as 50 percent in cash and 50 percent in Ovintiv common stock. Based on the closing price of Ovintiv’s shares of common stock of $42.47 per share (C$58.08 per share on February 2, 2026, on the TSX), the transaction has a value of approximately $2.8 billion (C$3.8 billion), including the fair value of 18.5 million of NuVista’s common shares that were purchased on October 1, 2025, and held by Ovintiv.
Goodwill recognized is primarily attributable to the excess of the consideration transferred over the acquisition-date identifiable assets acquired net of liabilities assumed, measured in accordance with U.S. GAAP. NuVista’s tax basis in the assets and liabilities will carry over to Ovintiv.
The following adjustments have been made to the accompanying unaudited pro forma condensed combined balance sheet as of December 31, 2025:
| (a) | Reflects the remeasurement of the 18.5 million NuVista common shares that were purchased on October 1, 2025, and held by Ovintiv. The fair value of the shares held of $270 million was reclassified to proved properties in conjunction with the purchase price adjustments as described in note b.i) below. |
| (b) | The estimated fair value of the assets acquired and liabilities assumed resulted in the following preliminary purchase price allocation adjustments: |
| i) | $70 million decrease in NuVista’s net book basis of oil and gas proved properties, which excludes the $270 million remeasurement of the 18.5 million of NuVista common shares described in note a) above. The total adjustment results in a net increase of $200 million to proved properties to reflect fair value; |
| ii) | $575 million increase in NuVista’s net book basis of oil and gas unproved properties to reflect fair value; |
| iii) | $19 million increase in Other in Property, plant and equipment related to a cogeneration electricity generation facility; |
| iv) | $14 million decrease in Accounts receivable and accrued revenues and Other Assets from the fair valuation adjustment of contract rights; |
| v) | $312 million increase in Goodwill associated with the difference between the fair value of the assets acquired and liabilities assumed and NuVista’s tax basis in the assets and liabilities that will carry over to Ovintiv; |
| vi) | $1 million increase in Current portion of long-term debt related to the elimination of NuVista’s debt issuance costs; |
| vii) | $41 million decrease in Asset retirement obligation to reflect fair value; and |
| viii) | $223 million increase in net Deferred tax liability associated with the preliminary purchase price allocation. |
| (c) | Reflects debt financing of $1.2 billion to finance the cash consideration of the NuVista Acquisition under the Term Loan and from other short-term borrowings. |
| (d) | Reflects the impact of severance costs and transaction costs of $26 million incurred by Ovintiv in connection with the acquisition. The severance costs are a result of dual triggers in the event of a change in control event and termination and are therefore not part of the business combination. The transaction costs include estimated financial advisor, legal and accounting fees that are not capitalizable as part of the transaction. These costs are not reflected in the historical December 31, 2025, balance sheet of Ovintiv but are reflected in the unaudited pro forma condensed combined balance sheet as an increase to liabilities and a reduction of equity as they will be expensed by Ovintiv as incurred. |
| (e) | Reflects the increase in Ovintiv’s common stock, resulting from the issuance of Ovintiv shares of common stock to NuVista shareholders to effect the transaction as follows (in millions, except per share amounts): |
| Ovintiv shares of common stock issued |
30.1 | |||
| Closing price per share of Ovintiv common stock on February 2, 2026 (C$58.08 per share from the TSX) |
$ | 42.47 | ||
|
|
|
|||
| Fair value of Ovintiv shares of common stock issued |
$ | 1,277 |
Note 4. Adjustments to the Unaudited Pro Forma Condensed Combined Statement of Earnings
The following adjustments have been made to the accompanying unaudited pro forma condensed combined statement of earnings for the year ended December 31, 2025:
| (a) | Reflects the harmonization of accounting policies, whereby depreciation, depletion and amortization expense is calculated using Ovintiv’s depletion rate calculated under the full cost method of accounting for oil and gas properties based on the preliminary purchase price allocation. |
| (b) | Reflects interest expense calculated using the average interest rate of 4.66 percent from Ovintiv’s Term Loan and 4.37 percent interest rate from Ovintiv’s short-term borrowings to fund the cash portion of the NuVista Acquisition. Interest expense associated with the Term Loan was calculated utilizing historical average Canadian over-night repo rate average interest rates during 2025. Interest expense associated with the short-term borrowings was calculated utilizing historical weighted average interest rates that were available under Ovintiv’s Commercial Paper program during 2025. |
| (c) | Reflects the impact of severance costs related to NuVista’s employees as well as transaction costs of $26 million incurred by Ovintiv in connection with the NuVista Acquisition. The severance costs are a result of dual triggers in the event of a change in control event and termination and are therefore not part of the business combination. The transaction costs include estimated financial advisor, legal and accounting fees that are not capitalizable as part of the transaction. These costs are reflected in the unaudited pro forma condensed combined earnings for the year ended December 31, 2025. Actual costs paid by Ovintiv will be recognized as incurred in net earnings as a post-business combination expense. |
| (d) | Reflects the approximate income tax effects of the pro forma adjustments presented. The tax rate applied to the pro forma adjustments was the statutory federal and apportioned statutory provincial tax rate, net of the federal benefit of provincial taxes, applied to pre-tax net earnings. |
| (e) | Reflects Ovintiv’s shares of common stock issued to NuVista shareholders. |
SUPPLEMENTAL PRO FORMA OIL, NATURAL GAS LIQUIDS AND NATURAL GAS RESERVES INFORMATION AS OF DECEMBER 31, 2025
The following tables present the estimated pro forma combined net proved developed and undeveloped, oil, natural gas liquids and natural gas reserves as of December 31, 2024, along with a summary of changes in quantities of net remaining proved reserves during the year ended December 31, 2025. The pro forma reserve information set forth below gives effect to the NuVista Acquisition as if the transaction had occurred on January 1, 2025.
The following estimates of the net proved oil and natural gas reserves of Ovintiv’s oil and gas properties as of December 31, 2025, are based on evaluations prepared by Ovintiv’s internal qualified reserves evaluators. In 2025, Netherland, Sewell & Associates, Inc. audited 26 percent of Ovintiv’s estimated U.S. proved reserve volumes and McDaniel & Associates Consultants Ltd. audited 47 percent of Ovintiv’s estimated Canadian proved reserve volumes. The estimates of the net proved oil and natural gas reserves of the NuVista properties are as of December 31, 2025, and were prepared by GLJ Ltd. All reserves information presented herein was prepared in accordance with applicable SEC regulations.
There are numerous uncertainties inherent in estimating quantities and values of proved reserves and in projecting future rates of production and the amount and timing of development expenditures, including many factors beyond the property owner’s control. The following reserve data represents estimates only and should not be construed as being precise. The assumptions used in preparing these estimates may not be realized, causing the quantities of oil and gas that are ultimately recovered, the timing of the recovery of oil and gas reserves, the production and operating costs incurred and the amount and timing of future development expenditures to vary from the estimates presented herein. Actual production, revenues and expenditures with respect to reserves will vary from estimates and the variances may be material.
These estimates were calculated using the 12-month average of the first day of the month reference prices as adjusted for location and quality differentials. Any significant price changes will have a material effect on the quantity and present value of the reserves. These estimates depend on a number of variable factors and assumptions, including historical production from the area compared with production from other comparable producing areas, the assumed effects of regulations by governmental agencies, assumptions concerning future oil and gas prices, and assumptions concerning future operating costs, transportation costs, severance and excise taxes, development costs and workover and remedial costs.
The following estimated pro forma combined net proved developed and undeveloped oil, natural gas liquids and natural gas reserves is not necessarily indicative of the results that might have occurred had the acquisition been completed on January 1, 2025, and is not intended to be a projection of future results. As a result, future results may vary significantly from the pro forma results reflected herein.
| Oil (MMbbls) (1) | ||||||||||||||||||||
| Historical Ovintiv U.S. |
Historical Ovintiv Canada |
NuVista Acquisition |
Pro Forma Canada |
Pro Forma Total |
||||||||||||||||
| Balance—December 31, 2024 |
579.8 | 0.2 | — | 0.2 | 580.0 | |||||||||||||||
| Revisions and improved recovery |
(29.9 | ) | 0.1 | — | 0.1 | (29.8 | ) | |||||||||||||
| Extensions and discoveries |
19.6 | — | — | — | 19.6 | |||||||||||||||
| Purchases of reserves in place |
33.3 | — | — | — | 33.3 | |||||||||||||||
| Sale of reserves in place |
(108.2 | ) | — | — | — | (108.2 | ) | |||||||||||||
| Production |
(52.0 | ) | (0.2 | ) | — | (0.2 | ) | (52.2 | ) | |||||||||||
| Balance—December 31, 2025 |
442.5 | 0.2 | — | 0.2 | 442.7 | |||||||||||||||
| Proved developed reserves as of |
||||||||||||||||||||
| December 31, 2024 |
273.7 | 0.2 | — | 0.2 | 273.9 | |||||||||||||||
| December 31, 2025 |
240.6 | 0.2 | — | 0.2 | 240.8 | |||||||||||||||
| Proved undeveloped reserves as of |
||||||||||||||||||||
| December 31, 2024 |
306.0 | — | — | — | 306.0 | |||||||||||||||
| December 31, 2025 |
201.9 | — | — | — | 201.9 | |||||||||||||||
| Natural Gas Liquids (MMbbls) (1) | ||||||||||||||||||||
| Historical Ovintiv U.S. |
Historical Ovintiv Canada |
NuVista Acquisition |
Pro Forma Canada |
Pro Forma Total |
||||||||||||||||
| Balance—December 31, 2024 |
534.5 | 99.7 | 130.9 | 230.6 | 765.1 | |||||||||||||||
| Revisions and improved recovery |
10.1 | 10.8 | 6.3 | 17.1 | 27.2 | |||||||||||||||
| Extensions and discoveries |
13.6 | 6.1 | 3.0 | 9.1 | 22.7 | |||||||||||||||
| Purchases of reserves in place |
24.3 | 101.5 | — | 101.5 | 125.8 | |||||||||||||||
| Sale of reserves in place |
(14.9 | ) | — | — | — | (14.9 | ) | |||||||||||||
| Production |
(31.9 | ) | (27.1 | ) | (10.4 | ) | (37.5 | ) | (69.4 | ) | ||||||||||
| Balance—December 31, 2025 |
535.8 | 191.1 | 129.8 | 320.9 | 856.7 | |||||||||||||||
| Proved developed reserves as of |
||||||||||||||||||||
| December 31, 2024 |
336.2 | 59.9 | 57.9 | 117.8 | 454.0 | |||||||||||||||
| December 31, 2025 |
364.9 | 105.6 | 64.3 | 169.9 | 534.8 | |||||||||||||||
| Proved undeveloped reserves as of |
||||||||||||||||||||
| December 31, 2024 |
198.4 | 39.8 | 73.0 | 112.8 | 311.2 | |||||||||||||||
| December 31, 2025 |
170.9 | 85.5 | 65.5 | 151.0 | 321.9 | |||||||||||||||
| Natural Gas (Bcf) (1) | ||||||||||||||||||||
| Historical Ovintiv U.S. |
Historical Ovintiv Canada |
NuVista Acquisition |
Pro Forma Canada |
Pro Forma Total |
||||||||||||||||
| Balance—December 31, 2024 |
3,052 | 2,005 | 1,578 | 3,583 | 6,635 | |||||||||||||||
| Revisions and improved recovery |
190 | 1,053 | 37 | 1,090 | 1,280 | |||||||||||||||
| Extensions and discoveries |
69 | 529 | 30 | 559 | 628 | |||||||||||||||
| Purchases of reserves in place |
119 | 797 | — | 797 | 916 | |||||||||||||||
| Sale of reserves in place |
(201 | ) | — | — | — | (201 | ) | |||||||||||||
| Production |
(188 | ) | (492 | ) | (102 | ) | (594 | ) | (782 | ) | ||||||||||
| Balance—December 31, 2025 |
3,041 | 3,892 | 1,543 | 5,435 | 8,476 | |||||||||||||||
| Proved developed reserves as of |
||||||||||||||||||||
| December 31, 2024 |
1,953 | 1,269 | 699 | 1,968 | 3,921 | |||||||||||||||
| December 31, 2025 |
2,123 | 2,572 | 771 | 3,343 | 5,466 | |||||||||||||||
| Proved undeveloped reserves as of |
||||||||||||||||||||
| December 31, 2024 |
1,099 | 736 | 879 | 1,615 | 2,714 | |||||||||||||||
| December 31, 2025 |
919 | 1,319 | 772 | 2,091 | 3,010 | |||||||||||||||
| (1) | Numbers may not add due to rounding. |
The pro forma standardized measure of discounted future net cash flows relating to proved oil, natural gas liquids and natural gas reserves as of December 31, 2025, is as follows:
| ($ millions) | Historical Ovintiv U.S. |
Historical Ovintiv Canada |
NuVista Acquisition |
Pro Forma Canada |
Pro Forma Total |
|||||||||||||||
| Future cash inflows |
41,435 | 15,123 | 8,415 | 23,538 | 64,973 | |||||||||||||||
| Less future: |
||||||||||||||||||||
| Production costs |
12,732 | 7,505 | 4,309 | 11,814 | 24,546 | |||||||||||||||
| Development costs |
6,895 | 3,004 | 1,200 | 4,204 | 11,099 | |||||||||||||||
| Income taxes |
3,042 | 155 | 507 | 662 | 3,704 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Future net cash flows |
||||||||||||||||||||
| Less 10% annual discount for estimated timing of cash flows |
8,871 | 1,440 | 1,036 | 2,476 | 11,347 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Discounted future net cash flows |
9,895 | 3,019 | 1,363 | 4,382 | 14,277 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
The changes in the pro forma standardized measure of discounted future net cash flows relating to proved oil, natural gas liquids and natural gas reserves for the year ended December 31, 2025, are as follows:
| ($ millions) |
Historical Ovintiv U.S. |
Historical Ovintiv Canada |
NuVista Acquisition |
Pro Forma Canada |
Pro Forma Total |
|||||||||||||||
| Balance, beginning of year—January 1, 2025 |
12,860 | 812 | 1,243 | 2,055 | 14,915 | |||||||||||||||
| Changes resulting from: |
||||||||||||||||||||
| Sales of oil and gas produced during the year |
(3,163 | ) | (1,197 | ) | (411 | ) | (1,608 | ) | (4,771 | ) | ||||||||||
| Discoveries and extensions, net of related costs |
338 | 365 | 48 | 413 | 751 | |||||||||||||||
| Purchases of proved reserves in place |
587 | 907 | — | 907 | 1,494 | |||||||||||||||
| Sales and transfers of proved reserves in place |
(1,551 | ) | — | — | — | (1,551 | ) | |||||||||||||
| Net change in prices and production costs |
(3,678 | ) | 1,112 | 14 | 1,126 | (2,552 | ) | |||||||||||||
| Revisions to quantity estimates |
90 | 721 | 230 | 951 | 1,041 | |||||||||||||||
| Accretion of discount |
1,451 | 89 | 151 | 240 | 1,691 | |||||||||||||||
| Development costs incurred during the year |
1,555 | 615 | 306 | 921 | 2,476 | |||||||||||||||
| Changes in estimated future development costs |
1,053 | (361 | ) | (107 | ) | (468 | ) | 585 | ||||||||||||
| Other |
(1 | ) | — | 3 | 3 | 2 | ||||||||||||||
| Net change in income taxes |
354 | (44 | ) | (114 | ) | (158 | ) | 196 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance, end of year—December 31, 2025 |
9,895 | 3,019 | 1,363 | 4,382 | 14,277 | |||||||||||||||