Ovintiv Inc. (OVV)

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

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

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

•
Executive Overview

•
Results of Operations

•
Liquidity and Capital Resources

•
Non-GAAP Measures

Executive Overview

Strategy

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

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

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

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

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

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

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

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Highlights

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

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

Significant Developments

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

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

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

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

Financial Results

Three months ended June 30, 2026

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

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

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

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

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

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

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Six months ended June 30, 2026

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

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

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

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

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

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

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

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

Capital Investment

During the six months ended June 30, 2026

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

Production

During the six months ended June 30, 2026

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

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

•
Produced average total volumes of 646.6 MBOE/d.

Operating Expenses

During the six months ended June 30, 2026

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

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

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

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

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2026 Outlook

Industry Outlook

Oil and Natural Gas Markets

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

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

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

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

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

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

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

•
Executive Overview

•
Results of Operations

•
Liquidity and Capital Resources

•
Accounting Policies and Estimates

•
Non-GAAP Measures

Executive Overview

Strategy

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

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

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

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

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

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

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

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

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

Highlights

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

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

Significant Developments and Subsequent Events

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

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

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

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

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

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

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

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

Financial Results

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

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

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

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

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

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

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

Capital Investment

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

Production

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

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

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

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Operating Expenses

•
Incurred upstream transportation and processing expenses of $1,685 million or $7.51 per BOE, an increase of $132 million compared to 2024, primarily due to increased production volumes related to the Montney Acquisition in the first quarter of 2025, partially offset by the sale of the Company’s Uinta assets in the first quarter of 2025. Upstream transportation and processing expenses of $7.51 per BOE was within the full year 2025 guidance range of $7.50 per BOE to $8.00 per BOE.

•
Incurred upstream operating expenses of $853 million or $3.80 per BOE, a decrease of $55 million compared to 2024, primarily due to the sale of the Company’s Uinta assets in the first quarter of 2025, partially offset by increased activity related to the Montney Acquisition in the first quarter of 2025. Upstream operating expenses of $3.80 per BOE was within the full year 2025 guidance range of $3.75 per BOE to $4.00 per BOE.

•
Incurred total production, mineral and other taxes of $286 million. This represents approximately four percent of upstream product revenues which was within the full year 2025 guidance range of 3.75 to 4.50 percent of upstream product revenues. Total production, mineral and other taxes decreased by $47 million compared to 2024, primarily due to the sale of the Company’s Uinta assets in the first quarter of 2025 and lower oil commodity prices.

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

2026 Outlook

Industry Outlook

Oil and Natural Gas Markets

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

Oil prices for 2026 are expected to be impacted by the interplay between the pace of global economic growth, global oil demand, OPEC+ and non-OPEC+ production, geopolitical events, and macroeconomic uncertainties.

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

Political developments, including trade disputes and policy changes, continue to elevate global uncertainty and financial market volatility. U.S. sanctions and tariffs on select products may disrupt global supply and demand, leading to commodity price volatility. These actions can provoke retaliatory measures from other countries, further increasing economic volatility and the risk of a global recession.

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Company Outlook

The Company will continue to exercise discretion and discipline, and intends to optimize capital allocation throughout 2026 as the commodity price environment evolves.

Markets for oil and natural gas are exposed to different price risks and are inherently volatile. The Company enters into derivative financial instruments to mitigate price volatility and provide more certainty around cash flows.

As at February 20, 2026, the Company has hedged approximately 52.4 Mbbls/d of expected oil and condensate production and 709 MMcf/d of expected natural gas production for the remainder of the year. In addition, Ovintiv proactively utilizes commodity derivatives and transportation contracts to diversify the Company’s sales markets, thereby reducing significant exposure to any given market and regional pricing. Additional information on Ovintiv’s hedging program can be found in Note 25 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Ovintiv’s 2026 guidance, including capital investment, production and operating expenses, reflects the strategic business combination with NuVista and assumes the Anadarko divestiture will close early in the second quarter. Further information can be found in the Significant Developments and Subsequent Events, and Liquidity and Capital Resources sections of this MD&A.

Capital Investment

The Company plans to spend approximately $2,250 million to $2,350 million on its full year 2026 capital investment program, focusing on maximizing returns from high-margin oil and condensate. In 2026, the Company expects to generate cash flows in excess of capital expenditures.

Ovintiv continually strives to improve well performance and lower costs through innovative techniques. Ovintiv’s large-scale cube development model utilizes multi-well pads and advanced completion designs to maximize returns and resource recovery from its reservoirs. Ovintiv’s disciplined capital program and continuous innovation create flexibility to allocate capital in changing commodity markets to maximize cash flows while preserving the long-term value of the Company’s multi-basin portfolio.

Production

In 2026, the Company expects full year average total production volumes of approximately 620.0 MBOE/d to 645.0 MBOE/d, including oil and plant condensate production volumes of approximately 205.0 Mbbls/d to 212.0 Mbbls/d, other NGLs production volumes of approximately 80.0 Mbbls/d to 85.0 Mbbls/d and natural gas production volumes of approximately 2,000 MMcf/d to 2,100 MMcf/d.

Operating Expenses

Ovintiv promotes a collaborative culture that values knowledge exchange, open communication, continuous improvement and learning. This culture stimulates innovation and fosters the creation of best practices resulting in efficiency improvements and enhanced operational performance for the Company.

In 2026, following the close of the Anadarko divestiture, the Company expects to incur upstream transportation and processing costs of approximately $8.75 per BOE to $9.25 per BOE, upstream operating expenses of approximately $3.00 per BOE to $3.50 per BOE, and total production, mineral and other taxes of approximately 3.25 to 3.75 percent of upstream product revenues.

Additional information on Ovintiv’s 2026 Corporate Guidance can be accessed on the Company’s website at www.ovintiv.com.

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Sustainability

Ovintiv recognizes the importance of implementing and maintaining sustainable practices to manage its environmental footprint. The Company participates in emission reduction programs and has adopted a range of strategies to help reduce emissions from its operations. These strategies include incorporating new and proven technologies, optimizing processes in its operations and working closely with third-party providers to develop best practices. The Company continues to look for innovative techniques and efficiencies in support of its commitment to emission reductions.

In May 2025, Ovintiv published its 2024 Sustainability Report. The report highlights the Company’s 2024 environmental, social and governance results, and its progress in emissions intensity reductions with the goal to meet its Scope 1&2 GHG emissions target by 2030. As at the end of 2025, the Company had achieved a greater than 43 percent reduction in the Scope 1&2 GHG emissions intensity from 2019 levels and expects to meet its emissions intensity reduction target of 50 percent by 2030 measured against the 2019 baseline. Ovintiv remains committed to its GHG emissions reduction target and has tied the target to the Company’s annual compensation program for all employees. In addition, Ovintiv continues to work towards eliminating routine flaring in its operations.

In conjunction with the Company’s strategy, Ovintiv may acquire assets to strengthen its portfolio. Acquisitions are assessed and evaluated for environmental impacts and alignment with the Company’s GHG emissions target. Ovintiv continues to work to integrate sustainable practices within acquired operations to support company-wide sustainability objectives, while maintaining its 2030 GHG emissions target.

The Company’s social commitment framework, which is rooted in the Company’s foundational values of integrity, safety, sustainability, trust and respect, reflects Ovintiv’s positive contributions to the communities where it operates and highlights the Company’s approach to enabling an inclusive culture.

Ovintiv remains committed to protecting the health and safety of its workforce. Safety is a foundational value at Ovintiv and plays a critical role in the Company’s belief that a safe workplace is a strong indicator of a well-managed business. This safety-oriented mindset enables the Company to quickly respond to emergencies and minimize impacts to employees and business continuity. Safety performance goals are incorporated into the Company’s annual compensation program. Additional information on talent management and employee safety can be found in the Human Capital section of Items 1 and 2 of this Annual Report on Form 10-K.

Further information on Ovintiv’s sustainable business practices are outlined in Items 1 and 2 of this Annual Report on Form 10-K, and on the Company’s sustainability website at sustainability.ovintiv.com.

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Results of Operations

Selected Financial Information

(1)
Service revenues comprises third-party gathering and processing fees and other revenues.

(2)
Total Operating Expenses include non-cash items such as DD&A, impairments, accretion of asset retirement obligations and long-term incentive costs. The year ended December 31, 2025, includes non-cash ceiling test impairments of $920 million (2024 - $450 million).

Revenues

Ovintiv’s revenues are substantially derived from sales of oil, NGLs and natural gas production. Increases or decreases in Ovintiv’s revenue, profitability and future production are highly dependent on the commodity prices the Company receives. Prices are market driven and fluctuate due to factors beyond the Company’s control, such as supply and demand, seasonality and geopolitical and economic factors. The Company’s realized prices generally reflect WTI, NYMEX, Edmonton Condensate and AECO benchmark prices, as well as other downstream benchmarks, including Houston and Dawn. The Company proactively mitigates price risk and optimizes margins by entering into firm transportation contracts to diversify market access to different sales points. Realized prices, excluding the impact of risk management activities, may differ from the benchmarks for many reasons, including quality, location, or production being sold at different market hubs.

Benchmark prices relevant to the Company are shown in the table below.

Benchmark Prices

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Production Volumes and Realized Prices

(1)
Average daily.

(2)
Average per-unit prices, excluding the impact of risk management activities.

(3)
Includes production impacts of acquisitions and divestitures. See Notes 8 and 9 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

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Upstream Product Revenues, Excluding Realized Gains (Losses) on Risk Management

Oil Revenues

2025 versus 2024

Oil revenues were lower by $1,136 million compared to 2024 primarily due to:

•
Lower average oil production volumes of 25.6 Mbbls/d decreased revenues by $704 million. Lower production volumes were primarily due to the sale of the Uinta assets during the first quarter of 2025 (24.6 Mbbls/d); and

•
A decrease of $8.25 per bbl, or 11 percent, in the average realized oil prices which decreased revenues by $432 million. The decrease reflected lower Houston and WTI benchmark prices which were down 15 percent and 14 percent, respectively, partially offset by higher regional pricing relative to the benchmark prices.

NGL Revenues

2025 versus 2024

NGL revenues were higher by $383 million compared to 2024 primarily due to:

•
Higher average plant condensate production volumes of 23.8 Mbbls/d increased revenues by $626 million. Higher production volumes were primarily due to the Montney Acquisition in the first quarter of 2025 (20.2 Mbbls/d) and successful drilling in Montney (5.7 Mbbls/d); and

•
A decrease of $7.96 per bbl, or 12 percent, in the average realized plant condensate prices which decreased revenues by $238 million. The decrease primarily reflected the lower Edmonton Condensate benchmark price which was down 11 percent.

Natural Gas Revenues

2025 versus 2024

Natural gas revenues were higher by $547 million compared to 2024 primarily due to:

•
An increase of $0.66 per Mcf, or 39 percent, in the average realized natural gas prices which increased revenues by $446 million. The increase reflected the higher NYMEX and AECO benchmark prices which were up 51 percent and 29 percent, respectively, and exposure to other downstream benchmark prices relating to the Company’s diversified markets in the Canadian Operations, partially offset by lower regional pricing relative to benchmark prices in the USA Operations; and

•
Higher average natural gas production volumes of 164 MMcf/d increased revenues by $101 million. Higher production volumes were primarily due to the Montney Acquisition in the first quarter of 2025 (190 MMcf/d), and successful drilling in Montney and Permian (89 MMcf/d). The higher production volumes were partially offset by lower production volumes in Montney primarily related to pipeline restrictions and increased third-party plant downtime (51 MMcf/d), the sale of the Uinta and Horn River assets in the first quarter of 2025 (38 MMcf/d), and natural declines in Anadarko (19 MMcf/d).

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Sales of Purchased Product

Revenues from the sale of purchased product relate to activities that provide operational flexibility and cost mitigation for transportation commitments, product type, delivery points and customer diversification within the USA and Canadian Operations segments.

2025 versus 2024

Sales of purchased product decreased $98 million compared to 2024 primarily due to:

•
Lower realized third-party liquids pricing ($397 million);

partially offset by:

•
Higher sales of third-party purchased liquids volumes in the USA Operations ($263 million) and higher realized third-party natural gas pricing ($39 million).

Gains (Losses) on Risk Management, Net

As a means of managing commodity price volatility, Ovintiv enters into commodity derivative financial instruments on a portion of its expected oil, NGLs and natural gas production volumes. Additional information on the Company’s commodity price positions as at December 31, 2025, can be found in Note 25 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

The following table provides the effects of the Company’s risk management activities on revenues.

(1)
Other primarily includes realized gains from other derivative contracts with no associated production volumes.

Ovintiv recognizes fair value changes from its risk management activities each reporting period. The changes in fair value result from new positions and settlements that occur during each period, as well as the relationship between contract prices and the associated forward curves. Realized gains or losses on risk management activities related to commodity price mitigation are included in the USA and Canadian Operations’ revenues as the contracts are cash settled. Unrealized gains or losses on fair value changes of unsettled contracts are included in the Corporate and Other segment.

During 2025, the Company entered into physical forward contracts to further mitigate a portion of its exposure to AECO benchmark prices. The Company’s ongoing market diversification strategy shifts a portion of its commodity price exposure to alternative pricing hubs including Japan Korea Marker and Chicago city-gates, commencing in 2026 and 2027, respectively.

Additional information on fair value changes can be found in Note 24 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

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Sublease Revenues

Sublease revenues primarily include amounts related to the sublease of office space in The Bow office building recorded in the Corporate and Other segment. Additional information on office sublease income can be found in Note 14 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Operating Expenses

Production, Mineral and Other Taxes

Production, mineral and other taxes include production and property taxes. Production taxes are generally assessed as a percentage of oil, NGLs and natural gas production revenues. Property taxes are generally assessed based on the value of the underlying assets.

2025 versus 2024

Production, mineral and other taxes decreased $47 million compared to 2024 primarily due to:

•
The Uinta assets sold in the first quarter of 2025 ($32 million), lower oil commodity prices ($27 million) and lower property taxes in Permian ($6 million);

partially offset by:

•
Higher property taxes primarily due to the Montney Acquisition in the first quarter of 2025 ($7 million) and higher effective production tax rates ($6 million).

Transportation and Processing

Transportation and processing expense includes transportation costs incurred to move product from production points to sales points including gathering, compression, pipeline tariffs, trucking and storage costs. Ovintiv also incurs costs related to processing provided by third parties or through ownership interests in processing facilities.

(1)
Other includes pipeline transportation fees associated with previously divested assets in the USA Operations of approximately $3 million (2024 - $50 million) and other third-party transportation and processing fees with no associated production volumes in the Canadian Operations of approximately $36 million (2024 - $36 million).

2025 versus 2024

Transportation and processing expense increased $85 million compared to 2024 primarily due to:

•
Higher production volumes due to the Montney Acquisition during the first quarter of 2025 ($279 million) and higher natural gas production volumes in Permian ($19 million);

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partially offset by:

•
The Uinta and Horn River assets sold in the first quarter of 2025 ($69 million), an expired pipeline transportation contract ($50 million), a higher U.S./Canadian dollar exchange rate ($20 million), lower downstream transportation costs in Montney ($17 million), lower midstream transportation costs in Montney ($15 million), third-party plant turnarounds in Montney in 2024 ($14 million), lower minimum volume commitment costs incurred associated with certain gathering and processing assets in Montney ($13 million), and lower natural gas production volumes in Anadarko ($12 million).

Operating

Operating expense includes costs paid by the Company, net of amounts capitalized, on oil and natural gas properties in which Ovintiv has a working interest. These costs primarily include labor, service contract fees, chemicals, fuel, water hauling, electricity and workovers.

2025 versus 2024

Operating expense decreased $69 million compared to 2024 primarily due to:

•
The sale of the Uinta assets in the first quarter of 2025 ($90 million), increased operational efficiencies in Permian ($17 million) and decreased workover activity in Anadarko ($12 million);

partially offset by:

•
Higher activity due to the Montney Acquisition in the first quarter of 2025 ($37 million) and increased workover activity in Permian ($11 million).

Purchased Product

Purchased product expense includes purchases of oil, NGLs and natural gas from third parties that are used to provide operational flexibility and cost mitigation for transportation commitments, product type, delivery points and customer diversification within the USA and Canadian Operations segments.

2025 versus 2024

Purchased product expense decreased $99 million compared to 2024 primarily due to:

•
Lower third-party liquids purchase prices ($396 million);

partially offset by:

•
Higher third-party purchased liquids volumes in the USA Operations ($263 million) and higher third-party natural gas purchase prices ($36 million).

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Depreciation, Depletion & Amortization

Proved properties within each country cost center are depleted using the unit-of-production method based on proved reserves as discussed in Note 1 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Depletion rates are impacted by impairments, acquisitions, divestitures and foreign exchange rates, as well as fluctuations in 12-month average trailing prices which affect proved reserves volumes. Corporate assets are carried at cost and depreciated on a straight-line basis over the estimated service lives of the assets.

Additional information can be found under Upstream Assets and Reserve Estimates in the Critical Accounting Estimates section of this MD&A.

2025 versus 2024

DD&A decreased $111 million compared to 2024 primarily due to:

•
Lower depletion rates and production volumes in the USA Operations primarily due to the sale of the Uinta assets in the first quarter of 2025 ($327 million and $170 million, respectively);

partially offset by:

•
Higher depletion rates and production volumes in the Canadian Operations primarily due to the Montney Acquisition in the first quarter of 2025 ($322 million and $70 million, respectively).

The upstream depletion rate in the USA Operations decreased $2.83 per BOE primarily due to a lower depletable base resulting from the sale of the Uinta assets in the first quarter of 2025. The upstream depletion rate in the Canadian Operations increased $2.89 per BOE primarily due to a higher depletable base resulting from the Montney Acquisition in the first quarter of 2025, partially offset by the ceiling test impairments recognized in the fourth quarter of 2024 and the first and third quarters of 2025.

Ceiling Test Impairment

Under full cost accounting, the carrying amount of Ovintiv’s oil and natural gas properties within each country cost center is subject to a ceiling test performed quarterly. Ceiling test impairments are recognized when the capitalized costs, net of accumulated depletion and the related deferred income taxes, exceed the sum of the estimated after-tax future net cash flows from proved reserves as calculated under SEC requirements using the 12-month average trailing prices and 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.

In 2025, the Company recognized before-tax non-cash ceiling test impairments of $871 million and $49 million in the Canadian Operations and USA Operations, respectively. The non-cash ceiling test impairments primarily resulted from the 12-month average trailing prices used in the ceiling test at March 31, 2025, which were lower than the market prices used for the Montney Acquisition on January 31, 2025, and declines in the 12-month average trailing prices during the year, which reduced proved reserves in both the Canadian and USA Operations.

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The 12-month average trailing prices used in the ceiling test calculations were based on the benchmark prices below. The benchmark prices were adjusted for basis differentials to determine local reference prices, transportation costs and tariffs, heat content and quality.

(1)
All prices were held constant in all future years when estimating net revenues and reserves.

Further declines in the 12‑month average trailing commodity prices could reduce proved reserves values and result in the recognition of future ceiling test impairments. Future ceiling test impairments can also result from changes to reserves estimates, future development costs, capitalized costs and unproved property costs. Moreover, acquisitions of oil and natural gas properties are transacted at market prices, which may be higher than the SEC 12-month average trailing prices at the reporting date and could result in the recognition of a ceiling test impairment. Proceeds received from oil and natural gas divestitures are typically deducted from the Company’s capitalized costs and can reduce the risk of ceiling test impairments.

The Company believes that the discounted after-tax future net cash flows from proved reserves required to be used in the ceiling test calculation are not indicative of the fair market value of Ovintiv’s oil and natural gas properties or the future net cash flows expected to be generated from such properties. The discounted after-tax future net cash flows do not consider the fair market value of unamortized unproved properties, or probable or possible liquids and natural gas reserves. In addition, there is no consideration given to the effect of future changes in commodity prices. Ovintiv manages its business using estimates of reserves and resources based on forecast prices and costs. Additional information on the ceiling test calculation can be found in Note 10 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Administrative

Administrative expense represents costs associated with corporate functions provided by Ovintiv staff. These expenses primarily include salaries and benefits, operating leases, office, information technology, restructuring and long-term incentive costs.

(1)
Includes costs related to The Bow office lease of $111 million (2024 - $116 million), half of which is recovered from sublease revenues.

2025 versus 2024

Administrative expense decreased $34 million compared to 2024 primarily due to:

•
Lower restructuring costs incurred in 2025 ($15 million) and lower legal costs ($15 million).

In October 2024, Ovintiv undertook a plan to reduce its workforce by approximately 10 percent as part of a corporate reorganization. Additional information on restructuring charges and long-term incentive costs can be found in Notes 21 and 22 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

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Other (Income) Expenses

Interest

Interest expense primarily includes interest on Ovintiv’s short-term and long-term debt. Additional information on changes in interest and long-term debt can be found in Notes 4 and 15, respectively, to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

2025 versus 2024

Interest expense decreased $36 million compared to 2024 primarily due to:

•
Lower interest expense resulting from the repayment of the Company’s $600 million senior note in the second quarter of 2025 ($21 million), lower financing fees incurred related to the Montney Acquisition ($7 million) and lower interest expense on short-term borrowings ($7 million).

Foreign Exchange (Gain) Loss, Net

Foreign exchange gains and losses primarily result from the impact of fluctuations in the Canadian to U.S. dollar exchange rate. Additional information on changes in foreign exchange gains or losses can be found in Notes 5 and 25 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Additional information on foreign exchange rates and the effects of foreign exchange rate changes can be found in Item 7A of this Annual Report on Form 10-K.

2025 versus 2024

Net foreign exchange loss of $31 million compared to a gain of $19 million in 2024 primarily due to:

•
Unrealized foreign exchange losses on the translation of intercompany notes compared to gains in 2024 ($99 million), higher realized foreign exchange losses on the settlement of U.S. dollar risk management contracts issued from Canada ($95 million) and losses on other monetary revaluations compared to gains in 2024 ($33 million);

partially offset by:

•
Unrealized foreign exchange gains on the translation of U.S. dollar risk management contracts issued from Canada compared to losses in 2024 ($177 million).

Other (Gains) Losses, Net

Other (gains) losses, net, primarily includes other non-recurring revenues or expenses and may also include items such as interest income, reclamation charges related to decommissioned assets, proceeds related to previously divested assets and adjustments related to other assets.

Other gains in 2025 includes an unrealized gain of $28 million related to the 18.5 million common shares of NuVista purchased in contemplation of the NuVista Acquisition. Other gains also included interest income of $11 million primarily generated from short-term investments (2024 ‑ $7 million).

During 2024, the Company received settlement proceeds of approximately $156 million related to the previous dispositions of certain legacy assets. Accordingly, the Company recognized the total net proceeds of $156 million as a gain within Other (gains) losses, net. Additional information on the net settlement proceeds can be found in Note 8 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

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Income Tax

In 2025, the Company recorded a current income tax recovery in the U.S. of $6 million compared to an expense in 2024, primarily due to lower corporate alternative minimum tax. In Canada, the current income tax expense in 2025 of $48 million was lower than 2024 primarily due to lower earnings subject to current tax.

In 2025, the Company recorded a deferred income tax recovery of $514 million compared to an expense in 2024, primarily due to the recognition of a net deferred tax asset resulting from the commercial restructure described below, higher Canadian ceiling test impairments in 2025 and lower taxes on U.S. earnings.

During 2025, Ovintiv restructured its existing arrangement with a subsidiary of Mitsubishi Corporation for ownership and development of the Cutbank Ridge lands within the Montney area of British Columbia. This commercial restructure is designed to enhance alignment between the two companies and streamline administrative processes. Additionally, the restructure resulted in a capital loss utilization and a corresponding reduction in the valuation allowance, as well as the recognition of a net deferred tax asset.

The determination of income and other tax liabilities of the Company and its subsidiaries requires interpretation of complex domestic and foreign tax laws and regulations, that are subject to change. The Company’s interpretation of tax laws may differ from the interpretation of the tax authorities. As a result, there are tax matters under review for which the timing of resolution is uncertain. The Company believes that the provision for income taxes is adequate.

Additional information on income taxes can be found in Note 6 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

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Liquidity and Capital Resources

Sources of Liquidity

The Company has the flexibility to access cash equivalents and a range of funding alternatives at competitive rates through committed revolving credit facilities as well as debt and equity capital markets. Ovintiv closely monitors the accessibility of cost-effective credit and ensures that sufficient liquidity is in place to fund capital expenditures and dividend payments. In addition, the Company may use cash and cash equivalents, cash from operating activities, or proceeds from asset divestitures to fund its operations and shareholder return framework or to manage its capital structure as discussed below. At December 31, 2025, $33 million in cash and cash equivalents was held by Canadian subsidiaries. The cash held by Canadian subsidiaries is accessible and may be subject to additional U.S. income taxes and Canadian withholding taxes if repatriated.

The Company’s capital structure consists of total shareholders’ equity plus long-term debt, including any current portion. The Company’s objectives when managing its capital structure are to maintain financial flexibility to preserve Ovintiv’s access to capital markets and its ability to meet financial obligations and finance internally generated growth, as well as potential acquisitions. Ovintiv has a practice of maintaining capital discipline and strategically managing its capital structure by adjusting capital spending, adjusting dividends paid to shareholders, issuing new shares of common stock, purchasing shares of common stock for cancellation or return to treasury, issuing new debt and repaying or repurchasing existing debt.

(1)
Includes three uncommitted demand lines totaling $310 million, net of $185 million in related undrawn letters of credit (2024 - $295 million and $204 million, respectively).

(2)
The Term Credit Agreement, discussed below, is in place to facilitate the NuVista Acquisition.

(3)
These measures are defined in the Non-GAAP Measures section of this MD&A.

The Company has full access to two committed revolving U.S. dollar denominated credit facilities totaling $3.5 billion, which include a $2.2 billion revolving credit facility for Ovintiv Inc. and a $1.3 billion revolving credit facility for a Canadian subsidiary (collectively, the “Credit Facilities”). The Credit Facilities, which mature in December 2029, provide financial flexibility and allow the Company to fund its operations or capital investment program. At December 31, 2025, there were no outstanding amounts under the revolving Credit Facilities.

Depending on the Company’s credit rating and market demand, the Company may issue from its two U.S. commercial paper (“CP”) programs, which include a $1.5 billion program for Ovintiv Inc. and a $1.0 billion program for a Canadian subsidiary. As at December 31, 2025, the Company had $351 million outstanding under its U.S. CP program maturing at various dates with a weighted average interest rate of approximately 4.37 percent, which is supported by the Company’s Credit Facilities. All of Ovintiv’s credit ratings are investment grade as at December 31, 2025.

On November 25, 2025, the Company entered into a $1.2 billion Two-Year Term Credit Agreement (“Term Credit Agreement”) to fund the cash component of its previously announced NuVista Acquisition. As at December 31, 2025, the Company had no outstanding borrowings under the Term Credit Agreement.

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As at December 31, 2025, the available Credit Facilities, Term Credit Agreement, uncommitted demand lines, and cash and cash equivalents, net of outstanding commercial paper, provide Ovintiv with total liquidity of approximately $4.5 billion. Ovintiv also had approximately $185 million in undrawn letters of credit issued in the normal course of business as collateral security.

On February 3, 2026, the Company closed the NuVista Acquisition, whereby it issued approximately 30.1 million shares of Ovintiv common stock and paid cash consideration of approximately $1.2 billion (C$1.6 billion), which was funded with proceeds from the Term Credit Agreement. Additionally, Ovintiv assumed NuVista’s debt, totaling approximately $282 million (C$385 million), which was subsequently repaid using proceeds from short-term borrowings and cash on hand.

Additional information on the Term Credit Agreement and NuVista Acquisition can be found in Notes 15 and 28, respectively, to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Ovintiv has a U.S. shelf registration statement under which the Company may issue from time to time, debt securities, common stock, preferred stock, warrants, units, share purchase contracts and share purchase units in the U.S. The U.S. shelf registration statement expires in March 2026 and is intended to be renewed by the Company.

The obligations under the Company’s existing debt securities are fully and unconditionally guaranteed on a senior unsecured basis by Ovintiv Canada ULC, an indirect wholly-owned subsidiary of the Company. Additional information on the Company’s Canadian Operations segment and the Bow office lease can be found in the Results of Operations section in this MD&A and in the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.

Ovintiv is currently in compliance with all financial covenants under the Credit Facilities and Term Credit Agreement. Management monitors Debt to Adjusted Capitalization, which is a non-GAAP measure defined in the Non-GAAP Measures section of this MD&A, as a proxy for Ovintiv’s financial covenant under the Credit Facilities and Term Credit Agreement, which requires Debt to Adjusted Capitalization to be less than 60 percent. As at December 31, 2025, the Company’s Debt to Adjusted Capitalization was 22 percent. The definitions used in the covenant under the Credit Facilities and Term Credit Agreement adjust capitalization for cumulative historical ceiling test impairments recorded in conjunction with the Company’s January 1, 2012, adoption of U.S. GAAP. Additional information on financial covenants can be found in Note 15 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Sources and Uses of Cash

The following table summarizes the sources and uses of the Company’s cash and cash equivalents.

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Operating Activities

Net cash from operating activities in 2025 was $3,652 million and was primarily a reflection of the impacts from production volumes, average realized commodity prices, realized gains/losses on risk management and changes in non‑cash working capital.

Additional detail on changes in non-cash working capital can be found in Note 26 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Ovintiv expects it will continue to meet the payment terms of its suppliers.

Non-GAAP Cash Flow in 2025 was $3,785 million and was primarily impacted by the items affecting cash from operating activities which are discussed below and in the Results of Operations section of this MD&A.

2025 versus 2024

Net cash from operating activities decreased $69 million compared to 2024 primarily due to:

•
Lower realized liquids commodity prices ($713 million), lower oil production volumes ($704 million), lower realized gains on risk management in revenues ($105 million), higher realized foreign exchange losses on the settlement of U.S. dollar risk management contracts issued from Canada ($95 million), and higher transportation and processing expense ($85 million);

partially offset by:

•
Higher NGLs and natural gas production volumes ($765 million), higher realized natural gas commodity prices ($446 million), changes in non-cash working capital ($154 million), lower operating expense, excluding non-cash long-term incentive costs ($70 million), lower production, mineral and other taxes ($47 million), lower administrative expense, excluding non-cash long-term incentive costs ($40 million), lower current income tax expense ($40 million) and lower interest expense ($35 million).

Investing Activities

The Company’s primary investing activities are capital expenditures, acquisitions and proceeds from divestitures, which are summarized in Notes 2 and 8 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.

2025 and 2024

Net cash used in investing activities in 2025 was $2,884 million primarily due to the Montney Acquisition and capital expenditures, partially offset by the sale of the Company’s Uinta assets. Capital expenditures decreased $156 million compared to 2024 primarily due to decreased capital activity resulting from the sale of the Uinta assets in the first quarter of 2025, and decreased capital activity and increased efficiencies in Permian, partially offset by increased capital activity in Montney primarily due to the Montney Acquisition in the first quarter of 2025 and increased capital activity in Anadarko.

Acquisitions in 2025 were $2,537 million, which primarily included the Montney Acquisition. Acquisitions in 2024 were $205 million which primarily included property purchases with oil and liquids-rich potential in the USA Operations.

Proceeds from divestitures in 2025 were $1,927 million, which primarily included the sale of the Uinta assets in Utah. Proceeds from divestitures in 2024 were $7 million, which included certain properties that did not complement Ovintiv’s existing portfolio of assets. Proceeds from divestitures in 2024 also included total net settlement proceeds of approximately $156 million related to the previous dispositions of certain legacy assets.

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Financing Activities

Net cash used in financing activities has been impacted by Ovintiv’s strategic objective to return value to shareholders by repaying existing debt, purchasing shares of common stock and paying dividends.

2025 versus 2024

Net cash used in financing activities in 2025 decreased $469 million compared to 2024. The decrease was primarily due to the net issuance of revolving debt in 2025 compared to net repayments in 2024 ($635 million), decreased purchases of shares of common stock ($290 million) and a property acquisition payable in 2025 ($123 million), partially offset by the repayment of the Company’s May 2025 senior notes during the second quarter of 2025 ($600 million).

In May 2025, Ovintiv redeemed its $600 million, 5.65 percent senior notes due May 15, 2025, with cash on hand and proceeds from short-term borrowings. The Company’s long-term debt, including the current portion of $810 million, totaled $5,202 million at December 31, 2025. The Company’s long-term debt at December 31, 2024, totaled $5,453 million, including the current portion of $600 million.

In January 2026, the Company redeemed its $459 million, 5.375 percent senior notes due January 1, 2026, with cash on hand and proceeds from short-term borrowings. Following this repayment, the Company has no fixed rate long-term debt due until 2028 and beyond.

From time to time, Ovintiv may seek to retire or repurchase the Company’s outstanding debt through cash purchases and/or exchanges for other debt or equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors.

In support of the Company’s commitment to enhancing shareholder value, Ovintiv utilizes its shareholder return framework to provide competitive returns to shareholders. As discussed in the Significant Developments and Subsequent Events section of this MD&A, the Company announced an update to its shareholder return framework, which it expects to implement immediately. The new framework commits to returning between 50 percent and 100 percent of annual Non‑GAAP Cash Flow in excess of capital expenditures through base dividends and share buybacks. The Company expects its dividend levels to remain unchanged.

For additional information on long-term debt, refer to Note 15 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Dividends

The Company pays quarterly dividends to common shareholders at the discretion of the Board of Directors.

On February 23, 2026, the Board of Directors declared a dividend of $0.30 per share of common stock payable on March 31, 2026, to common shareholders of record as of March 13, 2026. Shares of common stock issued in conjunction with the NuVista Acquisition are eligible to receive the dividend declared on February 23, 2026.

Normal Course Issuer Bid

On September 29, 2025, the Company announced it had received regulatory approval for the renewal of its NCIB program, which enables the Company to purchase, for cancellation or return to treasury, up to approximately 22.3 million shares of common stock over a 12-month period from October 3, 2025, to October 2, 2026. The Company expects to execute the renewed NCIB program in conjunction with its new shareholder return framework.

During 2025, under the previous NCIB program, which extended from October 3, 2024, to October 2, 2025, the Company purchased for cancellation, approximately 7.8 million shares of common stock for total consideration of approximately $307 million.

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For additional information on the NCIB, refer to Note 18 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Material Cash Requirements

Ovintiv’s material cash requirements include various contractual obligations arising from long-term debt, operating leases, risk management liabilities and asset retirement obligations which are recognized in the Company’s Consolidated Balance Sheet. The Company expects to fund long-term material cash requirements primarily with cash from operating activities.

Interest payments include scheduled cash payments on long-term debt and other obligations. Additional information can be found in Note 15 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.

Operating leases include drilling rigs, compressors, office and buildings, certain land easements and various equipment utilized in the development and production of oil, NGLs and natural gas, as well as The Bow building. As at December 31, 2025, the Company subleased approximately 50 percent of The Bow office space under the lease agreement. Additional information on leases can be found in Note 14 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Risk management liabilities represent Ovintiv’s net liability positions with counterparties. Additional information can be found in Note 25 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.

Contractual commitments relating to transportation and processing commitments, and drilling and field services can be found in Note 27 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.

Further to the commitments discussed above, Ovintiv also has various obligations that become payable if certain future events occur relating to take or pay arrangements and payout of minimum costs as described in Notes 20 and 27 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

In addition, the Company has obligations to fund the disposal of long-lived assets upon their abandonment as well as its obligations to fund its defined benefit pension and other post-employment benefit plans as described in Notes 17 and 23, respectively, to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10‑K.

Other than the items discussed above, there are no other transactions, arrangements, or relationships with unconsolidated entities or persons that are reasonably likely to materially affect the Company’s liquidity or the availability of, or requirements for, capital resources.

Contingencies

For information on contingencies, refer to Note 27 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

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Accounting Policies and Estimates

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. For a discussion of the Company’s significant accounting policies refer to Note 1 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates. Management considers the following to be its most critical accounting estimates that involve judgment. The following discussion outlines the accounting policies and practices involving the use of estimates that are critical to determining Ovintiv’s financial results. Changes in the estimates and assumptions discussed below could materially affect the amount or timing of the financial results of the Company.

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Non-GAAP Measures

Certain measures in this document do not have any standardized meaning as prescribed by U.S. GAAP and, therefore, are considered non-GAAP measures. These measures may not be comparable to similar measures presented by other issuers and should not be viewed as a substitute for measures reported under U.S. GAAP. These measures are commonly used in the oil and gas industry and by Ovintiv to provide shareholders and potential investors with additional information regarding the Company’s liquidity and its ability to generate funds to finance its operations. Non-GAAP measures include: Non-GAAP Cash Flow, Debt to Adjusted Capitalization, Debt to EBITDA and Debt to Adjusted EBITDA. Management’s use of these measures is discussed further below.

Cash from Operating Activities and Non-GAAP Cash Flow

Non-GAAP Cash Flow is a non-GAAP measure defined as cash from (used in) operating activities excluding net change in other assets and liabilities, and net change in non-cash working capital.

Management believes this measure is useful to the Company and its investors as a measure of operating and financial performance across periods and against other companies in the industry, and is an indication of the Company’s ability to generate cash to finance capital investment programs, to service debt and to meet other financial obligations. This measure is used, along with other measures, in the calculation of certain performance targets for the Company’s management and employees.

Debt to Capitalization and Debt to Adjusted Capitalization

Debt to Adjusted Capitalization is a non-GAAP measure which adjusts capitalization for historical ceiling test impairments that were recorded as at December 31, 2011. Management monitors Debt to Adjusted Capitalization as a proxy for the Company’s financial covenant under the Credit Facilities and Term Credit Agreement which require Debt to Adjusted Capitalization to be less than 60 percent. Adjusted Capitalization includes debt, total shareholders’ equity and an equity adjustment for cumulative historical ceiling test impairments recorded as at December 31, 2011, in conjunction with the Company’s January 1, 2012 adoption of U.S. GAAP.

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Debt to EBITDA and Debt to Adjusted EBITDA

Debt to EBITDA and Debt to Adjusted EBITDA are non-GAAP measures. EBITDA is defined as trailing 12‑month net earnings (loss) before income taxes, depreciation, depletion and amortization, and interest. Adjusted EBITDA is EBITDA adjusted for impairments, accretion of asset retirement obligation, unrealized gains/losses on risk management, foreign exchange gains/losses, gains/losses on divestitures and other gains/losses.

Management believes these measures are useful to the Company and its investors as a measure of financial leverage and the Company’s ability to service its debt and other financial obligations. These measures are used, along with other measures, in the calculation of certain financial performance targets for the Company’s management and employees.

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