S&P Global Ratings revised Ovintiv Inc.’s outlook to positive from stable while affirming its BBB- issuer credit rating, citing the Denver-based oil and gas producer’s progress in debt reduction.
The company reduced net debt by nearly $2.2 billion in the first half of 2026, bringing total net debt to just under $3 billion as of June 30. Ovintiv achieved its $4 billion net debt target in the second quarter, aided by the $3 billion sale of its Anadarko assets in April. The proceeds were used to fully redeem $700 million of 5.65% senior notes due 2028.
Ovintiv’s free operating cash flow is projected to reach about $3.6 billion in 2026, up from $1.6 billion in 2025, driven by elevated oil prices amid the ongoing conflict in Iran. S&P expects funds from operations to average roughly 150% of debt from 2026 to 2028, with debt to EBITDA forecasted to remain below 1x. The ratings agency also anticipates the company will allocate about 75% of its free cash flow to shareholder returns.
S&P’s marginal price assumptions include WTI oil at $50 per barrel and Henry Hub natural gas at $2.75 per million Btu. The company’s production split stands at approximately 62% from the Montney basin and 38% from the Permian basin, following the $2.7 billion acquisition of NuVista Energy Ltd. in February.
S&P noted it would likely raise Ovintiv’s rating within the next 24 months if the company sustains net debt below $4 billion and generates positive discretionary cash flow.
