PART I

Item 1. Financial Statements

Condensed Consolidated Statement of Earnings (unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

(US$ millions, except per share amounts)

2021

2020

2021

2020

Revenues

(Note 2)

Product and service revenues

(Note 3)

$

2,720

$

1,326

$

7,440

$

3,919

Gains (losses) on risk management, net

(Note 19)

(950

)

(154 )

(2,176

)

587

Sublease revenues

(Note 9)

19

18

55

53

Total Revenues

1,789

1,190

5,319

4,559

Operating Expenses

(Note 2)

Production, mineral and other taxes

77

47

210

126

Transportation and processing

397

365

1,194

1,129

Operating

(Notes 16, 17)

153

133

466

452

Purchased product

759

322

2,096

1,039

Depreciation, depletion and amortization

297

406

916

1,433

Impairments

(Note 8)

-

1,336

-

4,863

Accretion of asset retirement obligation

5

8

17

26

Administrative

(Notes 15, 16, 17)

101

79

346

297

Total Operating Expenses

1,789

2,696

5,245

9,365

Operating Income (Loss)

-

(1,506 )

74

(4,806 )

Other (Income) Expenses

Interest

(Notes 4, 10)

77

97

263

279

Foreign exchange (gain) loss, net

(Notes 5, 19)

-

(25 )

(15

)

51

Other (gains) losses, net

(Notes 6, 10, 17)

(6

)

(18 )

(31

)

(48 )

Total Other (Income) Expenses

71

54

217

282

Net Earnings (Loss) Before Income Tax

(71

)

(1,560 )

(143

)

(5,088 )

Income tax expense (recovery)

(Note 6)

1

(39 )

(175

)

395

Net Earnings (Loss)

$

(72

)

$

(1,521 )

$

32

$

(5,483 )

Net Earnings (Loss) per Share of Common Stock

(Note 12)

Basic

$

(0.28

)

$

(5.85 )

$

0.12

$

(21.10 )

Diluted

(0.28

)

(5.85 )

0.12

(21.10 )

Weighted Average Shares of Common Stock Outstanding (millions)

(Note 12)

Basic

261.1

259.8

260.7

259.8

Diluted

261.1

259.8

265.3

259.8

Condensed Consolidated Statement of Comprehensive Income (unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

(US$ millions)

2021

2020

2021

2020

Net Earnings (Loss)

$

(72

)

$

(1,521 )

$

32

$

(5,483 )

Other Comprehensive Income (Loss), Net of Tax

Foreign currency translation adjustment

(Note 13)

(48

)

26

(4

)

(21 )

Pension and other post-employment benefit plans

(Notes 13, 17)

(1

)

(2 )

(4

)

(1 )

Other Comprehensive Income (Loss)

(49

)

24

(8

)

(22 )

Comprehensive Income (Loss)

$

(121

)

$

(1,497 )

$

24

$

(5,505 )

See accompanying Notes to Condensed Consolidated Financial Statements

1

Condensed Consolidated Balance Sheet (unaudited)

As at

As at

September 30,

December 31,

(US$ millions)

2021

2020

Assets

Current Assets

Cash and cash equivalents

$

8

$

10

Accounts receivable and accrued revenues (net of allowances

of $3 million (2020: $4 million))

(Note 3)

1,221

928

Risk management

(Notes 18, 19)

1

37

Income tax receivable

(Note 6)

98

272

1,328

1,247

Property, Plant and Equipment, at cost:

(Note 8)

Oil and natural gas properties, based on full cost accounting

Proved properties

54,684

53,883

Unproved properties

2,217

2,962

Other

897

911

Property, plant and equipment

57,798

57,756

Less: Accumulated depreciation, depletion and amortization

(49,208

)

(48,306 )

Property, plant and equipment, net

(Note 2)

8,590

9,450

Other Assets

1,094

1,143

Risk Management

(Notes 18, 19)

-

4

Goodwill

(Note 2)

2,624

2,625

(Note 2)

$

13,636

$

14,469

Liabilities and Shareholders' Equity

Current Liabilities

Accounts payable and accrued liabilities

$

1,866

$

1,704

Current portion of operating lease liabilities

63

68

Income tax payable

4

3

Risk management

(Notes 18, 19)

1,418

130

Current portion of long-term debt

(Note 10)

-

518

3,351

2,423

Long-Term Debt

(Note 10)

4,791

6,367

Operating Lease Liabilities

900

938

Other Liabilities and Provisions

(Note 11)

215

358

Risk Management

(Notes 18, 19)

246

125

Asset Retirement Obligation

336

401

Deferred Income Taxes

-

20

9,839

10,632

Commitments and Contingencies

(Note 21)

Shareholders' Equity

Share capital - authorized 775 million shares of stock

2021 issued and outstanding: 261.1 million shares (2020: 259.8 million shares)

(Note 12)

3

3

Paid in surplus

(Note 12)

8,553

8,531

Retained earnings (Accumulated deficit)

(5,827

)

(5,773 )

Accumulated other comprehensive income

(Note 13)

1,068

1,076

Total Shareholders' Equity

3,797

3,837

$

13,636

$

14,469

See accompanying Notes to Condensed Consolidated Financial Statements

2

Condensed Consolidated Statement of Changes in Shareholders' Equity (unaudited)

Retained

Accumulated

Earnings

Other

Total

Share

Paid in

(Accumulated

Comprehensive

Shareholders'

Three Months Ended September 30, 2021 (US$ millions)

Capital

Surplus

Deficit)

Income

Equity

Balance, June 30, 2021

$

3

$

8,532

$

(5,718

)

$

1,117

$

3,934

Net Earnings (Loss)

-

-

(72

)

-

(72

)

Dividends on Shares of Common Stock ($0.14 per share)

(Note 12)

-

-

(37

)

-

(37

)

Equity-Settled Compensation Costs

-

21

-

-

21

Other Comprehensive Income (Loss)

(Note 13)

-

-

-

(49

)

(49

)

Balance, September 30, 2021

$

3

$

8,553

$

(5,827

)

$

1,068

$

3,797

Retained

Accumulated

Earnings

Other

Total

Share

Paid in

(Accumulated

Comprehensive

Shareholders'

Three Months Ended September 30, 2020 (US$ millions)

Capital

Surplus

Deficit)

Income

Equity

Balance, June 30, 2020

$

3

$

8,460

$

(3,590 )

$

1,000

$

5,873

Net Earnings (Loss)

-

-

(1,521 )

-

(1,521 )

Dividends on Shares of Common Stock ($0.09375 per share)

(Note 12)

-

-

(24 )

-

(24 )

Other Comprehensive Income (Loss)

(Note 13)

-

-

-

24

24

Balance, September 30, 2020

$

3

$

8,460

$

(5,135 )

$

1,024

$

4,352

See accompanying Notes to Condensed Consolidated Financial Statements

3

Condensed Consolidated Statement of Changes in Shareholders' Equity (unaudited)

Retained

Accumulated

Earnings

Other

Total

Share

Paid in

(Accumulated

Comprehensive

Shareholders'

Nine Months Ended September 30, 2021 (US$ millions)

Capital

Surplus

Deficit)

Income

Equity

Balance, December 31, 2020

$

3

$

8,531

$

(5,773

)

$

1,076

$

3,837

Net Earnings (Loss)

-

-

32

-

32

Dividends on Shares of Common Stock ($0.3275 per share)

(Note 12)

-

-

(86

)

-

(86

)

Equity-Settled Compensation Costs

-

22

-

-

22

Other Comprehensive Income (Loss)

(Note 13)

-

-

-

(8

)

(8

)

Balance, September 30, 2021

$

3

$

8,553

$

(5,827

)

$

1,068

$

3,797

Retained

Accumulated

Earnings

Other

Total

Share

Paid in

(Accumulated

Comprehensive

Shareholders'

Nine Months Ended September 30, 2020 (US$ millions)

Capital

Surplus

Deficit)

Income

Equity

Balance, December 31, 2019

$

7,061

$

1,402

$

421

$

1,046

$

9,930

Net Earnings (Loss)

-

-

(5,483 )

-

(5,483 )

Dividends on Shares of Common Stock ($0.28125 per share)

(Note 12)

-

-

(73 )

-

(73 )

Other Comprehensive Income (Loss)

(Note 13)

-

-

-

(22 )

(22 )

Reclassification of Share Capital

(Note 12)

(7,058 )

7,058

-

-

-

Balance, September 30, 2020

$

3

$

8,460

$

(5,135 )

$

1,024

$

4,352

See accompanying Notes to Condensed Consolidated Financial Statements

4

Condensed Consolidated Statement of Cash Flows (unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

(US$ millions)

2021

2020

2021

2020

Operating Activities

Net earnings (loss)

$

(72

)

$

(1,521 )

$

32

$

(5,483 )

Depreciation, depletion and amortization

297

406

916

1,433

Impairments

(Note 8)

-

1,336

-

4,863

Accretion of asset retirement obligation

5

8

17

26

Deferred income taxes

(Note 6)

1

(42 )

(19

)

393

Unrealized (gain) loss on risk management

(Note 19)

579

243

1,426

18

Unrealized foreign exchange (gain) loss

(Note 5)

14

(21 )

20

30

Foreign exchange on settlements

(Note 5)

(3

)

(2 )

(12

)

18

Other

24

(9 )

88

(61 )

Net change in other assets and liabilities

(10

)

(47 )

(21

)

(167 )

Net change in non-cash working capital

(Note 20)

(23

)

142

(58

)

106

Cash From (Used in) Operating Activities

812

493

2,389

1,176

Investing Activities

Capital expenditures

(Note 2)

(365

)

(351 )

(1,098

)

(1,393 )

Acquisitions

(Note 7)

-

(1 )

(3

)

(19 )

Proceeds from divestitures

(Note 7)

(8

)

39

1,017

69

Net change in investments and other

6

68

(36

)

(74 )

Cash From (Used in) Investing Activities

(367

)

(245 )

(120

)

(1,417 )

Financing Activities

Net issuance (repayment) of revolving long-term debt

(Note 10)

-

(100 )

(950

)

452

Repayment of long-term debt

(Note 10)

(518

)

(109 )

(1,137

)

(224 )

Dividends on shares of common stock

(Note 12)

(37

)

(24 )

(86

)

(73 )

Finance lease payments and other

(2

)

(23 )

(98

)

(67 )

Cash From (Used in) Financing Activities

(557

)

(256 )

(2,271

)

88

Foreign Exchange Gain (Loss) on Cash, Cash Equivalents

and Restricted Cash Held in Foreign Currency

(2

)

1

-

(5 )

Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash

(114

)

(7 )

(2

)

(158 )

Cash, Cash Equivalents and Restricted Cash, Beginning of Period

122

39

10

190

Cash, Cash Equivalents and Restricted Cash, End of Period

$

8

$

32

$

8

$

32

Cash, End of Period

$

7

$

22

$

7

$

22

Cash Equivalents, End of Period

1

10

1

10

Restricted Cash, End of Period

-

-

-

-

Cash, Cash Equivalents and Restricted Cash, End of Period

$

8

$

32

$

8

$

32

Supplementary Cash Flow Information

(Note 20)

See accompanying Notes to Condensed Consolidated Financial Statements

5

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Ovintiv Inc. published this content on 02 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 November 2021 21:31:08 UTC.