UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 20192020

or

Commission file number 001-39191

Ovintiv Inc.

(Exact name of registrant as specified in its charter)

Suite 1700, 370 17^th Street, Denver, Colorado, 80202, U.S.A.

(Address of principal executive offices)

Registrant’s telephone number, including area code (303) 623-2300

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes ☐ No ☒ 

Documents Incorporated by Reference

Portions of registrant’s definitive proxy statement (“Proxy Statement”) for the registrant’s 20202021 annual meeting of stockholders to be held April 29, 202028, 2021 (to be filed with the Securities and Exchange Commission prior to April 29, 2020)28, 2021) are incorporated by reference in Part III of this Annual Report on Form 10-K.

OVINTIV INC.

FORM 10-K

TABLE OF CONTENTS

DEFINITIONS

Unless the context otherwise requires or otherwise expressly stated, all references in this Annual Report on Form 10-K to “Ovintiv,” the “Company,” “us,” “we,” “our” and “ours,” (i) for periods until the Reorganization (as hereinafter defined), refer to Encana Corporation and its consolidated subsidiaries and (ii) for periods after the Reorganization, refer to Ovintiv Inc. and its consolidated subsidiaries. In addition, the following are other abbreviations and definitions of certain terms used within this Annual Report on Form 10-K:

“AECO” means Alberta Energy Company and is the Canadian benchmark price for natural gas.

“ASC” means Accounting Standards Codification.

“ASU” means Accounting Standards Update.

“bbl” or “bbls” means barrel or barrels.

“bbls/d” means barrels per day.

“Bcf” means billion cubic feet.

“Bcf/d” means billion cubic feet per day.

“BOE” means barrels of oil equivalent.

“BOE/d” means barrels of oil equivalent per day.

“Btu” means British thermal units, a measure of heating value.

“DD&A” means depreciation, depletion and amortization expenses.

“FASB” means Financial Accounting Standards Board.

“LIBOR” means London Interbank Offered Rate.

“Mbbls” means thousand barrels.

“Mbbls/d” means thousand barrels per day.

“MBOE” means thousand barrels of oil equivalent.

“MBOE/d” means thousand barrels of oil equivalent per day.

“Mcf” means thousand cubic feet.

“Mcf/d” means thousand cubic feet per day.

“MD&A” means Management’s Discussion and Analysis of Financial Condition and Results of Operations.

“MMbbls” means million barrels.

“MMbbls/d” means million barrels per day.

“MMBOE” means million barrels of oil equivalent.

“MMBOE/d” means million barrels of oil equivalent per day.

“MMBtu” means million Btu.

“MMcf” means million cubic feet.

“MMcf/d” means million cubic feet per day.

“NCIB” means normal course issuer bid.

“NGL” or “NGLs” means natural gas liquids.

“NYMEX” means New York Mercantile Exchange.

“NYSE” means New York Stock Exchange.

“OPEC” means Organization of the Petroleum Exporting Countries.

“SCOOP” means South Central Oklahoma Oil Province.

“SEC” means United States Securities and Exchange Commission.

“SIB” means substantial issuer bid.

“STACK” means Sooner Trend, Anadarko basin, Canadian and Kingfisher counties

“Standardized measure” means the present value of after-tax future net revenues discounted at 10% per annum.

“S&P 400” means Standard and Poor’s MidCap 400 index.

“S&P 500” means Standard and Poor’s 500 index.

“S&P/TSX Composite Index” means Standard and Poor’s index for Canadian equity markets.

“TSX” means Toronto Stock Exchange.

“U.S.” or “United States” or “USA” means United States of America.

“U.S. GAAP” means U.S. Generally Accepted Accounting Principles.

“WTI” means West Texas Intermediate.

CONVERSIONS

In this Annual Report on Form 10-K, a conversion of natural gas volumes to BOE is on the basis of six Mcf to one bbl.  BOE is based on a generic energy equivalency conversion method primarily applicable at the burner tip and does not represent economic value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value, particularly if used in isolation.

CONVENTIONS

Unless otherwise specified, all dollar amounts are expressed in U.S. dollars, all references to “dollars”, “$” or “US$” are to U.S. dollars and all references to “C$” are to Canadian dollars. All amounts are provided on a before tax basis, unless otherwise stated. In addition, all information provided herein is presented on an after royalties basis.

The term “liquids” is used to represent oil, NGLs and condensate. The term “liquids rich” is used to represent natural gas streams with associated liquids volumes. The term “play” is used to describe an area in which hydrocarbon accumulations or prospects of a given type occur. The Company’s focus of development is on hydrocarbon accumulations known to exist over a large areal expanse and/or thick vertical section and are developed using hydraulic fracturing. This type of development typically has a lower geological and/or commercial development risk and lower average decline rate, when compared to conventional development.

The term “core asset” refers to plays that are the focus of the Company’s current capital investment and development plan. The Company continually reviews funding for development of its plays based on strategic fit, profitability and portfolio diversity and, as such, the composition of plays identified as a core asset may change over time.

References to information contained on the Company’s website at www.ovintiv.com are not incorporated by reference into, and does not constitute a part of, this Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS AND RISK

This Annual Report on Form 10-K and documents incorporated herein by reference contain certain forward-looking statements or information (collectively, “forward-looking statements”) within the meaning of applicable securities legislation, including the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include: composition of the Company’s core assets, including the allocation of capital and focus of development plans; growth in long-term shareholder value; vision of being a leading North American resource play company; statements with respect to the Company’s strategic objectives including capital allocation strategy, focus of investment, focus of returning capital to shareholders through sustainable dividends, growth of high margin liquids volumes, operating and capital efficiencies and ability to preserve balance sheet strength; statements regarding the benefits of the Company’s multi-basin portfolio of assets; ability to leverage technology to reduce development risks, enhance capital and operating efficiencies and sustainably enhance margins while minimizing the Company’s environmental footprint; ability to lower costs and improve efficiencies to achieve competitive advantage, including benefits of integrated supply chain model and self-sourcing; ability to repeat and deploy successful practices across the Company’s multi-basin portfolio; balancing commodity portfolio; anticipated

commodity prices; success of and benefits from technology and innovation, including cube development approach,

precision well targeting and advanced completion designs; reduced dependence on fresh water requirements and anticipated water infrastructure; ability to accelerate activity levels; ability to optimize well and completion designs, including changes to lateral lengths drilled, stage, well spacing and stacking optimization; future well inventory; anticipated drilling, number of drilling rigs and the success thereof; anticipated drilling costs and cycle times; anticipated proceeds and future benefits from various joint venture, partnership and other agreements; expected timing for construction of facilities and costs thereof; expansion of future midstream services; estimates of reserves and resources; expected production and product types; ability to replicate successful test wells to future production; statements regarding anticipated cash flow, non-GAAP cash flow margin and leverage ratios; anticipated cash and cash equivalents; anticipated hedging and outcomes of risk management program, including ability to leverage marketing fundamentals expertise, exposure to certain commodity prices and foreign exchange, amount of hedged production, market access and physical sales locations; impact of changes in laws and regulations, including recent U.S. tax reform and potential changes to free trade agreements; compliance with environmental legislation and claims related to the purported causes and impact of climate change, and the costs therefrom; adequacy of provisions for abandonment and site reclamation costs; financial flexibility and discipline; access to cash and cash equivalents and other methods of funding; ability to meet financial obligations, manage debt and financial ratios, finance growth and compliance with financial covenants; impact to the Company as a result of changes to its credit rating; access to the Company's credit facilities; planned annualized dividend and the declaration and payment of future dividends, if any; statements regarding the Company’s financial flexibility and access to liquidity through commodity cycles; managing capital structure including adjustments to capital spending or dividends, issuing debt or equity, or repaying existing debt; adequacy of the Company's provision for taxes and legal claims; projections and expectation of meeting the targets contained in the Company's corporate guidance; ability to manage cost inflation and expected cost structures, including expected operating, transportation and processing and administrative expenses; competitiveness and pace of growth of the Company’s assets within North America and against its peers; outlook of oil and gas industry generally and impact of geopolitical environment; returns from the Company’s core assets; anticipated capital spending plans and source of funding thereof; anticipated staffing levels; expected future interest expense; the Company’s commitments and obligations and ability to satisfy the same; statements with respect to future ceiling test impairments; and the possible impact and timing of accounting pronouncements, rule changes and standards.

Readers are cautioned against unduly relying on forward-looking statements which, by their nature, involve numerous assumptions, risks and uncertainties that may cause such statements not to occur, or results to differ materially from those expressed or implied. These assumptions include: future commodity prices and differentials; foreign exchange rates; ability to access credit facilities and shelf prospectuses; assumptions contained in the Company’s corporate guidance and as specified herein; data contained in key modeling statistics; availability of attractive hedges and enforceability of risk management program; effectiveness of the Company's drive to productivity and efficiencies; results from innovations; expectation that counterparties will fulfill their obligations under the gathering, midstream and marketing agreements; access to transportation and processing facilities where the Company operates; assumed tax, royalty and regulatory regimes; and expectations and projections made in light of, and generally consistent with, the Company's historical experience and its perception of historical trends, including with respect to the pace of technological development, benefits achieved and general industry expectations.

Risks and uncertainties that may affect these outcomes include: ability to generate sufficient cash flow to meet obligations; commodity price volatility; ability to secure adequate transportation and potential pipeline curtailments; variability and discretion of the Company's board of directors (the “Board of Directors”) to declare and pay dividends, if any; timing and costs of well, facilities and pipeline construction; business interruption, property and casualty losses or unexpected technical difficulties, including impact of weather; counterparty and credit risk; ability to realize the anticipated benefits of acquisitions; ability to achieve the benefits of the Reorganization; actions of OPEC, its members and other state-controlled oil companies relating to oil price and production controls; sustained declines in commodity prices resulting in impairment of assets; impact of a downgrade in credit rating and its impact on access to sources of liquidity; fluctuations in currency and interest rates; risks associated with inflation rates; risks inherent in the Company's corporate guidance; failure to achieve cost and efficiency initiatives; risks inherent in marketing operations; risks associated with technology, including electronic, cyber and physical security breaches; changes in or interpretation of royalty, tax, environmental, greenhouse gas, carbon, accounting and other laws or regulations, including potential environmental liabilities that are not covered by an effective indemnity or insurance; risks associated with existing and potential lawsuits and regulatory actions made against the Company; impact of disputes arising with its partners, including suspension of certain obligations and inability to dispose of

assets or interests in certain arrangements; the Company's ability to acquire or find additional reserves; imprecision of reserves estimates and estimates of recoverable quantities, including future net revenue estimates; land, legal,

regulatory and ownership complexities inherent in Canada, the U.S. and other applicable jurisdictions; risks associated with past and future acquisitions or divestitures of certain assets or other transactions or receipt of amounts contemplated under the transaction agreements (such transactions may include third-party capital investments, farm-outs or partnerships, which the Company may refer to from time to time as “partnerships” or “joint ventures” and the funds received in respect thereof which the Company may refer to from time to time as “proceeds”, “deferred purchase price” and/or “carry capital”, regardless of the legal form) as a result of various conditions not being met; and other risks described in Item 1A. Risk Factors of this Annual Report on Form 10-K and risks and uncertainties impacting the Company's business as described from time to time in the Company's other periodic filings with the SEC incorporated by reference in this Annual Report on Form 10-K.

Although the Company believes the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions, risks and uncertainties referenced above and in the documents incorporated by reference herein are not exhaustive. Forward-looking statements are made as of the date of this document (or, in the case of a document incorporated by reference, the date of such document incorporated by reference) and, except as required by law, the Company undertakes no obligation to update publicly or revise any forward-looking statements. The forward-looking statements contained or incorporated by reference in this Annual Report on Form 10-K are expressly qualified by these cautionary statements.

The reader should read carefully the risk factors described in Item 1A. Risk Factors of this Annual Report on Form 10-K and the documents incorporated by reference in this Annual Report on Form 10-K for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements.

EXPLANATORY NOTE

Pursuant to Rule 12g-3(a) under the Exchange Act, Ovintiv is the successor issuer to Encana, Ovintiv’s common stock is deemed to be registered under Section 12(b) of the Exchange Act, and Ovintiv is subject to the periodic and current reporting requirements of the Exchange Act and the rules and regulations promulgated thereunder. Therefore, financial information and results of operations presented in this Annual Report on Form 10-K relate to Ovintiv Inc. Refer to Items 1 and 2. Business and Properties under Part 1 for further information on this Form 10-K.

PART I

Items 1 and 2. Business and Properties

GENERAL

On January 24, 2020, Encana Corporation (“Encana”) completed a corporate reorganization (the “Reorganization”), which included (i) a plan of arrangement under the Canada Business Corporations Act (the “CBCA”), pursuant to which, among other things, Encana completed a share consolidation on the basis of one post-consolidation share for each five pre-consolidation shares (the “Share Consolidation”) and Ovintiv ultimately acquired all of the issued and outstanding common shares of Encana in exchange for shares of Ovintiv on a one-for-one basis and became the parent company of Encana and its subsidiaries (collectively, the “Arrangement”) and (ii) following completion of the Arrangement, Ovintiv migrated out of Canada and became a Delaware corporation (the “U.S. Domestication”). Ovintiv and its subsidiaries continue to carry on the business previously conducted by Encana and its subsidiaries prior to the completion of the Reorganization.

Prior to the completion of the Reorganization, Encana was incorporated under the CBCA, having been formed in 2002 through the business combination of two predecessor companies.

Ovintiv is a leading North American resource play company that is focused on developing its multi-basin portfolio of top tier oil and natural gas assets located in the United States and Canada. Ovintiv's operations also include the marketing of oil, NGLs and natural gas. As at December 31, 2019,2020, all of the Company’s reserves and production were located in North America.

On January 24, 2020, Encana Corporation (“Encana”) completed a corporate reorganization (the “Reorganization”), which included among other things, (i) a consolidation of Encana shares on the basis of one post-consolidation share for each five pre-consolidation shares (the “Share Consolidation”). Ovintiv acquired all of the issued and outstanding common shares of Encana in exchange for shares of Ovintiv on a one-for-one basis and becoming the parent company of Encana and its subsidiaries and (ii) Ovintiv subsequently migrating from Canada and becoming a Delaware corporation (the “U.S. Domestication”). Ovintiv and its subsidiaries continue to carry on the business previously conducted by Encana and its subsidiaries prior to the completion of the Reorganization.

Ovintiv’s principal office is located at 370 – 17^th Street, Suite 1700, Denver, Colorado 80202, U.S.A. Ovintiv’s shares of common stock are listed and posted for trading on the NYSE and the TSX under the symbol “OVV”.

Available Information

Ovintiv is subject to the informational requirements of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) and, in accordance with the Exchange Act, it also files reports with and furnishes other information to the SEC. The public may obtain any document Ovintiv files with or furnishes to the SEC from the SEC's Electronic Document Gathering, Analysis, and Retrieval system (“EDGAR”), which can be accessed at www.sec.gov, or via the System for Electronic Document Analysis and Retrieval (“SEDAR”), which can be accessed at www.sedar.com, as well as from commercial document retrieval services.

Copies of this Annual Report on Form 10-K and the documents incorporated herein by reference may be obtained on request without charge from Ovintiv’s Corporate Secretary, 370 – 17^th Street, Suite 1700, Denver, Colorado 80202, U.S.A., telephone: (303) 623-2300. Ovintiv also provides access without charge to all of the Company’s SEC filings, including copies of this Annual Report on Form 10-K and the documents incorporated herein by reference, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after filing or furnishing, on Ovintiv’s website located at www.ovintiv.com.

STRATEGY AND APPROACH

Ovintiv’s visionOvintiv Sustainably Makes Modern Life Possible

Ovintiv is to be a leadingone of the largest producers of oil, natural gas liquids, and natural gas in North American resource play company thatAmerica. The Company is committed to growing long-term stockholder value throughsafely producing products to drive progress and improve lives with respect and responsibility. The Company’s products fuel the world, which in turn supports better education, healthcare and equality opportunities. Ovintiv pioneers innovative ways to provide safe, reliable and affordable energy.

The Company’s culture is unique and powered by innovation, team-work and discipline. Ovintiv has a track record of driving efficiency in every part of the business. The Company’s capital allocation is highly disciplined focus on generating profitable liquids growth as well as generating cash flowsand designed to achieve the Company’s strategic outcomes. Ovintiv benefits from a high-quality multi-basin portfolio which positions the Company in excessthe core of capital expenditures. Objectivessome the best liquids-rich basins in North America. Ovintiv’s asset base provides both geographic and commodity diversity and creates optionality in the Company’s investments, while reducing the concentration of risks.

Key elements that support the execution of the Company’s strategy include:

The following strengths enable Ovintiv to achieve the Company’s strategy of creating stockholder value and generating free cash flow:

Currently, the Company has access to committed credit facilities totaling $4 billion maturing in July 2024, of which $3.4 billion remains available and undrawn as at December 31, 2020. The Company is committed to reducing long-term debt by $1.25 billion by the end of 2021. Since the second quarter of 2020, the Company has reduced long-term debt by $481 million.

REPORTING SEGMENTS

Ovintiv’s operations are focused on the finding and development of oil, NGLs and natural gas reserves. The Company is also focused on creating and capturing additional value through its market optimization segment. The Company conducts a substantial portion of its business through subsidiaries. Ovintiv’s operating and reportable segments are: (i) USA Operations; (ii) Canadian Operations; (iii) China Operations; and (iv)(iii) Market Optimization.

Effective July 31, 2019, the Company terminated its production sharing contract with the China National Offshore Oil Corporation (“CNOOC”) and exited its China Operations. The Company no longer has operations in China.

For additional information regarding the reporting segments, see Note 2 ofto the audited Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K.

OIL AND GAS PROPERTIES AND ACTIVITIES

The following map reflects the location of Ovintiv’s North American landholdings and assets.

The term “core asset” refers“Core assets” refer to plays that have a deep inventory of drilling opportunities and are the primary focus of Ovintiv’s capital investment and development, providing a competitive return profile and free cash flows. efficient profile. Other Upstream Operations comprise base assets that are not part of Ovintiv’s current strategic focus and therefore receive limited capital that is directed to maintenance or high margin locations that generate cash flows and returns.returns.

USA Operations

Overview: In 2019,2020, the USA Operations had total capital investment of approximately $2,134$1,353 million and drilled approximately 236209 net wells predominatelyprimarily in Permian Anadarko, Eagle Ford and Bakken.Anadarko. Production averaged approximately 162.3150.9 Mbbls/d of oil, approximately 78.481.4 Mbbls/d of NGLs and approximately 547529 MMcf/d of natural gas. At December 31, 2019,2020, the USA Operations had an established land position of approximately 1.11.0 million net acres including approximately 207,000182,000 net undeveloped acres. In addition, theThe USA Operations accounted for 7167 percent of production revenues, excluding the impacts of hedging, during 2019 and 70 percent of total proved reserves as at December 31, 2019.2020.

With the acquisition of Newfield Exploration Company (“Newfield”) on February 13, 2019 (the “Newfield acquisition”), the Company acquired new properties in the following plays: Anadarko and Arkoma in Oklahoma, Bakken in North Dakota and Uinta in Utah, as well as offshore oil assets located in China.

Upon completion of the Newfield acquisition, certain plays were re-organized to align to the Company’s current strategic development focus. As a result, Eagle Ford is presented in Other Upstream Operations. Accordingly, comparative information has been reorganized.

During 2019, the Company divested of approximately 140,000 net acres in Arkoma for proceeds of $155 million, after closing adjustments.

The following tables summarize the USA Operations landholdings, producing wells and daily production as at and for the periods indicated.

Permian

Permian is an oil play located in west Texas in Midland, Martin, Howard, Glasscock and Upton counties. The primaryproperties within the play are characterized by exposure of up to 10 potential producing horizons spanning approximately 3,000 feet of stratigraphy or stacked pay, an extensive production history and developed infrastructure. At December 31, 2020, the Company controlled approximately 108,000 net acres in the play. The current focus of development is on the development of the Spraberry and Wolfcamp formations in the Midland basin, where Ovintiv holds a large position. At December 31, 2019, the Company controlled approximately 110,000 net acres in the play. The properties are characterized by exposure of up to 11 potential producing horizons spanning approximately 4,000 feet of stratigraphy or stacked pay, an extensive production history and developed infrastructure. In 2019,2020, production averaged approximately 64.763.2 Mbbls/d of oil, approximately 22.325.3 Mbbls/d of NGLs and approximately 106124 MMcf/d of natural gas.

During 2019, theThe Company continued to focusis focused on capturing efficiency improvements and maximizing resource recovery by accessing layers of the stacked pay simultaneously using the cube development model. This approach utilizes multi-well pads, multi-rig spreads and frac spreads running in parallel to optimize cycle times and increase capital efficiency, while minimizing the surface footprint. The Company focused on capturing operationalalso captured efficiencies through optimizing wellbore designsSimul-Frac techniques, which is the process of fracking pairs of wells at the same time instead of a single well. The Company’s focus on innovation and maximizing usage of recycled water from its centralized water infrastructure to reduce costs.efficiency reduced cycle times and decreased drilling and completions costs by approximately 21 percent. During 2019,2020, the Company drilled 114102 horizontal net wells with lateral lengths ranging from approximately 6,200 to 12,500 feet at a measured average total depth of approximately 17,800 feet with well spacing ranging from approximately 500 to 1,000 feet. As Ovintiv continues to optimize well and completion designs, lateral lengths drilled, stage and well spacing may change.wells.

Oil and natural gas facilities include field gathering systems, storage batteries, saltwater disposal systems, separation equipment and pumping units. The majority of Ovintiv’s acreage and associated oil production is dedicated to a pipeline gathering agreement, which has a total remaining term of 1413 years includingwith optional renewal terms. In the event of pipeline capacity constraints, Ovintiv’s oil production is trucked by avarious third party.parties. Natural gas is delivered by the Company to the purchaser’s meter and pipeline interconnection point in the field.

Anadarko

Anadarko is a liquids rich play located in west-central Oklahoma in Blaine, Canadian, Custer, Dewey, Garvin, Grady, Kingfisher, Major, McClain and McClainStephens counties. The majority of the Anadarko properties are located in the black oil window of the STACK which comprises the Woodford, Meramec and Osage formations spanning up to 800 feet of stratigraphy and in the SCOOP which comprises the Woodford, Sycamore, Caney and Springer formations spanning up to 1,150 feet of stratigraphy. At December 31, 2019, the Company controlled approximately 386,000 net acres in the play. The play is characterized by exposure to up to eight geologic horizons which include silt, shale and carbonate formations providingwhich provide multiple potential horizontal oil and gas targets making the play ideal for cube development and long laterals and cube development. From February 14, 2019 tolaterals. At December 31, 2019, production averaged2020, the Company controlled approximately 44.4 Mbbls/d of oil, approximately 44.3 Mbbls/d of NGLs and approximately 316 MMcf/d of natural gas.

354,000 net acres in the play. The current focus of development is on the liquids weighted portions of the basin, including the Woodford, Springer, Meramec and MississippianCaney targets. During 2020, production averaged approximately 43.0 Mbbls/d of oil, approximately 45.8 Mbbls/d of NGLs and approximately 331 MMcf/d of natural gas.

Since acquiring the asset in February 2019, the Company has utilized its cube development model to optimize completioncompletions design and well spacing, which has resulted in reducing the cycle times and decreased drilling and

completion costs by approximately 2042 percent. In addition, the Company implementedOperational initiatives have also contributed to cost reductions and efficiencies including Simul-Frac techniques, optimizing gas lift, self-sourced consumables, including sand and chemicals, to improve supply reliability reduce costsand the utilization of wet sand in completion activities. and minimize its environmental footprint.

During 2019,2020, the Company drilled 7471 horizontal net wells with lateral lengths ranging from approximately 5,000 to 10,000 feet at a measured average total depth of approximately 18,800 feet with well spacing ranging from approximately 660 to 1,300 feet. As the Company continues to optimize well and completion designs, lateral lengths drilled, stage and well spacing may change.  wells.

The play has significant existing infrastructure and is located within close proximityhas ample access to marketsmajor production hubs, including Cushing, Oklahoma, the U.S. Gulf Coast, Mont Belvieu, Texas and Mont Belvieu.Conway, Kansas and a number of Mid-Continent natural gas market pipelines. Oil and natural gas production are gathered at various production facilities, with the majority of the oil subsequently transported to sales points by pipeline.pipeline or sold at and trucked from tank batteries. The majority of Ovintiv’s acreage and associated production is dedicated to various long-term gathering and processing agreements with various third parties, which have remaining terms ranging from fivefour to 1211 years.

Other Upstream Operations

Eagle Ford

Eagle Ford is an oil play located in south Texas in Karnes and Atascosa counties. The focus is on the development of the thickest portion of the Eagle Ford shale in the Karnes Trough, where Ovintiv holds a largely contiguous position. At December 31, 2019,2020, the Company controlled approximately 42,000 net acres in the play. Ovintiv is focused on developing the lower Eagle Ford, as well as optimizing targets in the upper Eagle Ford, expanding development activity in the Austin Chalk and delineation of Graben, exclusively using horizontal drilling. During 2019,2020, the Company drilled approximately 3318 net wells in the area with lateral lengths ranging from approximately 2,500 to 7,200 feet with an average measured total depth of approximately 16,600 feet. As Ovintiv continues to optimize development and apply advanced completions designs, lateral lengths drilled, cluster spacing and well spacing may change.wells. Production averaged approximately 25.317.7 Mbbls/d of oil, approximately 7.25.2 Mbbls/d of NGLs and approximately 4331 MMcf/d of natural gas during the year.

During 2019,2020, the Company continued to focus on precision well targeting, spacing and stacking optimization and improving completions designs. Performance improvements were achieved from optimizing wellbore designs, pumping high volumes of thin fluid and proppant with tight cluster spacing of less than 20 feet, resulting in increased well productivity and optimized capital efficiency. The Company also focused on maintaining cost controlscapturing operational and production efficiencies through optimizing artificial gas lift technology, innovative techniques that alleviate frac impacts to reduce workover costs and automation of well control automation, optimizing artificial lift systems and streamlining well interventions.processes.

The play is located within close proximity to markets and has a well-developed infrastructure. Oil and natural gas production is gathered at various production facilities, with the majority of the oil subsequently transported to sales points by pipeline. Ovintiv has access to firm natural gas gathering capacity of up to approximately 5045 MMcf/d and firm processing capacity of up to approximately 80 MMcf/d with third parties with remaining terms of less than sixfive years, and owns oil processing capacity of 50.050 Mbbls/d. Ovintiv may also utilizesutilize interruptible capacity arrangements for excess production.

Bakken

Bakken is an oil play located in North Dakota primarily in McKenzie and Dunn counties, and in Montana in Richland county. The focus of development includes targets in the Bakken and Three Forks formations. During 2020, the Companycontinued to focus on maximizing resource recovery through spacing and stacking optimization. Ovintiv also focused on improving operational design related to casing and completions which reduced costs and improved well performance.

At December 31, 2019,2020, the Company controlled approximately 72,00070,000 net acres in the play. During 2019,2020, the Company drilled approximately 1210 net wells in the area with lateral lengths ranging from approximately 9,500 to 10,200 feet with an average measured total depth of approximately 21,500 feet. From February 14, 2019 to December 31, 2019, productionwells. Production averaged approximately 14.016.1 Mbbls/d of oil, approximately 3.74.3 Mbbls/d of NGLs and approximately 2328 MMcf/d of natural gas.

The majority of Ovintiv’s acreage and associated production is dedicated to various long-terma gathering and processing agreements with various third parties,agreement, which havehas a remaining termsterm of less than two years.one year. Ovintiv uses a combination of pipeline and truck to transport oil to sales points. Ovintiv also utilizes interruptible capacity arrangements for excess production.

Uinta

Uinta is an oil play located in central Utah primarily in Duchesne and Uintah counties. Uinta provides a deep inventory of multiple stacked oil horizons including the Wasatch and Lower Green River formations which includes the Uteland Butte and Castle Peak, with approximately 4,000 feet of oil saturated reservoir rock across Ovintiv’s acreage.rock. At December 31, 2019,2020, the Company controlled approximately 222,000207,000 net acres in the play. During 2019,2020, the Company drilled approximately twoeight net wells in the area with lateral lengths thatwells. Production averaged approximately 9,700 feet with an average measured total depth of approximately 19,300 feet. From February 14, 2019 to December 31, 2019, production averaged approximately 13.910.7 Mbbls/d of oil, approximately 0.70.6 Mbbls/d of NGLs and approximately 1311 MMcf/d of natural gas.

All of Ovintiv’s oilDuring 2020, the Company applied its cube development model, drilling eight wells on two pads, and focused on capturingefficiencies through Simul-Frac techniques.

Oil production from Uinta is waxy ranging from yellow to black and is transported primarily by truck due to sales points underthe high heat pour point characteristics of the crude. The Company has crude oil volume minimum volume delivery commitments with two refineriesone refinery in the Salt Lake City area with remaining terms expiring in 2020 and 2025. Oil production in excess of the minimum volume commitments are sold monthly in spot markets or transported by rail to other markets such as the Gulf Coast provided that economics are favorable.

Canadian Operations

Overview: In 2019,2020, the Canadian Operations had total capital investment of approximately $480$380 million and drilled approximately 9274 net wells predominatelyprimarily in Montney and Duvernay.Montney. Production averaged approximately 59.756.6 Mbbls/d of oil and NGLs and approximately 1,0301,000 MMcf/d of natural gas. At December 31, 2019,2020, the Canadian Operations had an established land position in Canada of approximately 1.71.5 million net acres including approximately 1.1 million981,000 net undeveloped acres. In addition, theThe Canadian Operations accounted for 2833 percent of production revenues, excluding the impacts of hedging, during 2019 and 30 percent of total proved reserves as at December 31, 2019.2020.

During 2019,In September 2020, the Company terminated its joint venture with PetroChina Canada Ltd. (“PCC”). As part of the termination, the partners agreed to partition the Duvernay was reorganized to be includedacreage and associated infrastructure. As a result, Ovintiv holds a 100 percent working interest in Other Upstream Operations to alignthe assets retained associated with the Company’s current strategic development focus. Accordingly, comparative information has been reorganized.joint venture.

The following tables summarize the Canadian Operations landholdings, producing wells and daily production as at and for the periods indicated.

Montney

Montney is primarily a condensate rich natural gas play located in northeast British Columbia and northwest Alberta. WhileThe play includes properties that are primarily located in the Montney formation, where Ovintiv is currently targeting the development of condensate rich locations, in the Montney formation, the acreage comprising the Montney playbut also includes landholdings with incremental producing formations such as Cadomin and Doig. In 2019, total production from the play averaged approximately 52.1 Mbbls/d of oil and NGLs and approximately 931 MMcf/d of natural gas. As at December 31, 2019, the Company controlled approximately 789,000 net acres in the play.

During 2019, the Company continued to focus development in theThe Montney formation which is characterized by up to six stacked horizons spanning over 1,000 feet of stratigraphy and is being developed exclusively with horizontal well technology. At December 31, 2019,In 2020, total production from the Company held a large position in the Montney formation of approximately 483,000 net acres, including 256,000 net undeveloped acres and during the year productionplay averaged approximately 51.951.1 Mbbls/d of oil and NGLs and approximately 892918 MMcf/d of natural gas. As at December 31, 2020, the Company controlled approximately 754,000 net acres and 385,000 net undeveloped acres in the play.

Ovintiv utilizes the cube development approach which has provided sustained efficiencies resulting in reduced cycle times and well costs. This development approach utilizes multi-well pads, multiple drilling rigs and completions spreads simultaneously, and advances technology to optimize well spacing and completions intensity. During 2019, the Company2020, cost reductions and efficiencies were obtained through trimming down wellsite design and enhancing gas lift through innovative automation technology. The Company’s focus on innovation and efficiency increased frac size while maintaining drilling and completions costs per well through efficiencies, lower cycle times, maximizing uselateral lengths of recycled water and leveraging its integrated supply chain.wells drilled by approximately 11 percent. In 2019,2020, the Company drilled approximately 8473 net horizontal wells with lateral lengths ranging from approximately 5,000 to 13,000 feet and inter-well spacing ranging from approximately 650 to 990 feet. As Ovintiv continues to optimize well and completion designs, lateral lengths drilled and well spacing may change.wells.

Ovintiv has access to natural gas processing capacity of approximately 1,4001,565 MMcf/d, of which approximately 1,2001,350 MMcf/d is under contract with third parties under varying terms and duration and approximately 215 MMcf/d of processing capacity which is owned by the Company. Ovintiv also has access to gathering and compression capacity of approximately 1,6001,550 MMcf/d, of which approximately 1,5001,450 MMcf/d is under contract with third parties under varying terms and duration and approximately 100 MMcf/d is owned by the Company. In addition, Ovintiv has access to liquids handling capacity of approximately 100120 Mbbls/d of which approximately 7090 Mbbls/d is contracted with third parties under varying terms and duration, and approximately 30 Mbbls/d is owned by the Company.

The Company has a partnership agreement In October 2020, access to processing capacity under contract with a subsidiarythird parties increased by 170 MMcf/d for natural gas and 20 Mbbls/d for liquids related to the commencement of Mitsubishi Corporation (“Mitsubishi”) to jointly develop certain lands that are predominately in the Montney formation. Under the agreement, Mitsubishi agreed to invest C$2.9 billion for a 40 percent partnership interest. During 2019, the Company received the final investment from Mitsubishi, satisfying the commitment under the agreement. Pipestone Processing Facility.

Other Upstream Operations:

Duvernay

Duvernay is a liquids rich shale play located in west central Alberta and includes properties that are primarily located in the Duvernay formation, which extends across the Simonette, Pinto, Edson and Willesden Green properties, but also holds potential in other overlapping formations such as the Montney. As at December 31, 2019,2020, the Company controlled approximately 245,000248,000 net acres, including 194,000198,000 net undeveloped acres in the play.

Ovintiv is currently targeting the development of liquids rich locations in the Simonette area using multi-well pad horizontal drilling technology. During 2019, the Company continued to focus on efficient development to fill existing processing capacity, reducing drilling days and increasing lateral lengths drilled to maximize capital efficiency. The Company drilled approximately sevenone net wellswell during the year and production averaged approximately 7.65.5 Mbbls/d of oil and NGLs and approximately 5741 MMcf/d of natural gas.

Ovintiv holds an approximate 50.1 percent ownership in threeowns two Simonette natural gas processing plants and the associated gathering and compression, of which Ovintiv’s share of natural gas processing capacity is approximately 10395 MMcf/d with liquids production capacity of approximately 18.0 Mbbls/d.

WheatlandIn September 2020, the Company terminated its joint venture with PCC. As part of the termination, the partners agreed to partition the Duvernay acreage and associated infrastructure. As a result, Ovintiv holds a 100 percent working interest in the assets retained associated with the joint venture.

Wheatland is located in southern Alberta and includes producing horizons primarily in the coals and sands of the Cretaceous Edmonton and Belly River Groups. As at December 31, 2019, the Company had approximately 430 net producing wells and controlled approximately 153,000 net acres in the play. In 2019, natural gas production averaged approximately 5 MMcf/d.

Horn River

Horn River is located in northeast British Columbia, where development was historically in the Horn River Basin shales (Muskwa, Otter Park and Evie), which are upwards of 500 feet thick. In 2019,2020, the Company’s natural gas production averaged approximately 37 MMcf/d. As at December 31, 2019,2020, the Company had approximately 48 net producing horizontal wells and controlled approximately 156,000196,000 net acres in the Horn River Basin shales.play. Ovintiv owns an interest in natural gas compression capacity in Horn River of approximately 285 MMcf/d at various facilities in the area. Ovintiv has a take or pay commitment under the Cabin plant natural gas processing arrangement with a third party, which has a remaining term of 1413 years.

Deep PanukeWheatland

Ovintiv ownsWheatland is located in southern Alberta and operatesincludes producing horizons primarily in the Deep Panukecoals and sands of the Cretaceous Edmonton and Belly River Groups. As at December 31, 2020, the Company had approximately 427 net producing wells and controlled approximately 143,000 net acres in the play. In 2020, natural gas field located offshore Nova Scotia, which isproduction averaged approximately 250 kilometres southeast of Halifax on the Scotian shelf. The offshore Production Field Centre (“PFC”) utilized for operations is under a lease arrangement which has an initial term that expires in 2021.4 MMcf/d.

In May 2018, the Company permanently ceased production at Deep Panuke and commenced decommissioning activities during 2019. The Company anticipates decommissioning activities for the PFC and wells to be completed in 2020.

PROVED RESERVES AND OTHER OIL AND GAS INFORMATION

The process of estimating oil, NGLs and natural gas reserves is complex and requires significant judgment. The Company’s estimates of proved reserves and associated future net cash flows were evaluated and prepared by the Company’s internal qualified reserves evaluators (“QREs”) and are the responsibility of management. As a result, Ovintiv has developed internal policies that prescribe procedures and standards to be followed for preparing, estimating and recording reserves in compliance with SEC definitions and regulations. Ovintiv’s policies assign responsibilities for compliance in booking reserves and require that reserve estimates be made by its QREs. QRE is defined as a registered professional licensed to practice engineering, geology, geophysics and an individual who has a minimum of five years practical experience, with at least three recent years of experience in the evaluation of reserves.

Ovintiv’s Vice-President, Corporate Reserves & Chief Reservoir EngineeringGroup, which consists of five staff, report into the Vice-President, Business Development, Strategy and eight other staff (collectively,Reserves who reports to the “CorporatePresident of the Company. The Corporate Reserves Group”) under this individual’s direction, overseeGroup is responsible for overseeing the internal preparation, review and approval of the reserves estimates. The Corporate Reserves Group reports to the Executive Vice-President, Land & Explorationestimates and is separate and independent from the preparation of reserves estimates, which are performed within operations who report to Ovintiv’s Executive Vice-President & Chief Operating Officer. The Corporate Reserves Group maintains Ovintiv’s internal policies that prescribe procedures and standards to be followed for preparing, estimating and recording reserves, which includes updating the Company’s reserves manual, and also conductsconducting periodic internal audits of the procedures, records and controls relating to the preparation of reserves estimates. Ovintiv’s QREs receive ongoing education on the fundamentals of SEC definitions and reserves reporting through the review of the Company’s reserves manual and internal training programs administered by the Corporate Reserves Group. The Corporate Reserves Group also oversees the engagement of independent qualified reserves evaluators (“IQREs”) or independent qualified reserves auditors (“IQRAs”), if any, retained by the Company.

As a member of the Corporate Reserves Group, the Company’s Director, Corporate Reserves reports to Ovintiv’s Vice-President, Corporate Reserves & Chief Reservoir Engineering and is primarily responsible for overseeing the preparation of proved reserves estimates. The Director, Corporate Reserves has a Bachelor of Science with a degree in Petroleum Engineering from the UniversityColorado School of Alberta,Mines and is a member of the Association of Professional Engineers and Geoscientists of Alberta (APEGA) and the Society of Petroleum Evaluation Engineers (Calgary(Denver Chapter).

Annually, each play is reviewed in detail by the QREs, the Corporate Reserves Group, the Company’s executive officers and an internal Reserves Review Committee, as appropriate. The Corporate Reserves Group also conducts a separate review to ensure the effectiveness of the disclosure controls and that the reserves estimates are free from material misstatement. The final reserves estimates are reviewed by Ovintiv’s Reserves Committee of the Board of Directors (the “Reserves Committee”), for approval by the Board of Directors. The Reserves Committee comprises directors that are independent and familiar with estimating oil and gas reserves and disclosure requirements. The Reserves Committee provides additional oversight to the Company’s reserves process, meeting with management periodically to review the reserves process, the portfolio of properties, results and related disclosures. The Reserves Committee is also responsible for reviewing the qualifications and appointment of IQREs or IQRAs, if any, retained by the Company, including recommending the selection of such IQREs or IQRAs to the Board of Directors for its approval, and will meet with such IQREs or IQRAs to review their reports.

For year-ended December 31, 2019,2020, the Company involved IQRAs to audit the Company’s internal oil and gas reserve estimates for certain properties. In 2019,2020, Netherland, Sewell & Associates, Inc. audited 5214 percent of the Company’s estimated U.S. proved reserve volumes and McDaniel & Associates Consultants Ltd. audited 27both four percent of the Company’s estimated U.S. proved reserve volumes and 38 percent of the Company’s estimated Canadian proved reserve volumes. An audit of reserves is an examination of a company’s oil and gas reserves by an independent petroleum consultant that is conducted for the purpose of expressing an opinion as to whether such estimates, in aggregate, are reasonable and have been estimated and presented in conformity with generally accepted petroleum engineering and evaluation methods and procedures.

Proved oil and gas reserves are those quantities of oil, natural gas and NGLs which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from known reservoirs under existing economic conditions, operating methods and government regulations. To be considered proved, oil and gas reserves must be economically producible before contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain. Also, the project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years.

The Company’s reserve estimates are conducted from fundamental petrophysical, geological, engineering, financial and accounting data. Reserves are estimated based on production decline analysis, analogy to producing offsets, detailed reservoir modeling, volumetric calculations or a combination of these methods, in all cases having regard to economic considerations and using technologies that have been demonstrated in the field to yield repeatable and consistent results as defined in the SEC regulations. Data used in reserves assessments may include information obtained directly from the subsurface through wellbores such as well logs, reservoir core samples, fluid samples, static and dynamic pressure information, production test data, and surveillance and performance information. Reserves are estimated based on production decline analysis, analogy to producing offsets, detailed reservoir modeling, volumetric calculations or a combination of these methods, based on the unique circumstances of each reservoir and the dataset available at the time of the estimate. The tools used to interpret the data may include proprietary and commercially available reservoir modeling and simulation software. Reservoir parameters from analogous reservoirs may be used as appropriate. In the case of producing reserves, the emphasis is on decline analysis where volumetric analysis is considered to limit forecasts to reasonable levels. Non-producingUndeveloped reserves are estimated by analogy to producing offsets, with consideration of volumetric estimates of in place quantities. All locations to which proved undeveloped reserves have been assigned are subject to a development plan adopted by the Company’s management. The tools used to interpretIn all cases, the data included proprietary and commercially available reservoir modeling and simulation software. Reservoir parameters from analogous reservoirs were used to increase the quality of and confidenceCompany’s reserve estimates consider technologies that have been demonstrated in the reserves estimates when available. The method or combination of methods usedfield to estimateyield repeatable and consistent results, having regard to economic considerations, as defined in the reserves of each reservoir are based on the unique circumstances of each reservoir and the dataset available at the time of the estimate.SEC regulations.

In general, estimates of economically recoverable reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, marketability of crude oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies, and future operating costs, all of which may vary materially from actual results. For those reasons, among others, estimates of the economically recoverable crude oil and natural gas reserves attributable to any particular group of properties and estimates of future net revenues associated with reserves may vary and such variations may be material. The actual production, revenues, taxes and development, and operating expenditures with respect to the reserves associated with the Company's properties may vary from the information presented herein, and such variations could be material.

The SEC regulations require that proved reserves be estimated using existing economic conditions (constant pricing). Based on this methodology, the Company’s reserves have been calculated utilizing the 12-month average trailing historical price for each of the years presented prior to the effective date of the report. The 12-month average is calculated as an unweighted average of the first-day-of-the-month price for each month. The reservesreserve estimates provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.

Ovintiv does not file any estimates of total net proved reserves with any U.S. federal authority or agency other than the SEC and the Department of Energy (“DOE”). Reserve estimates filed with the SEC correspond with the estimates of the Company’s reserves contained in its reports. Reserve estimates, for the Company’s U.S. assets, are filed with the DOE and are based upon the same underlying technical and economic assumptions as the estimates of Ovintiv’s reserves that are filed with the SEC, however, the DOE requires reports to include the interests of all owners in wells that Ovintiv operates and to exclude all interests in wells that Ovintiv does not operate. Ovintiv is also required to provide reserves data prepared in accordance with Canadian securities regulatory requirements, specifically National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) which is filed concurrently on SEDAR at www.sedar.com under Ovintiv’s issuer profile. The primary differences between NI 51-101 reporting requirements and SEC requirements include the disclosure of proved and probable reserves estimated using forecast prices and costs, presentation of reserves and production before royalties and more granular product type disclosures. The reserves data prepared in accordance with NI 51-101 do not form part of this Annual Report on Form 10-K.

The reserves and other oil and gas information set forth below has an effective date of December 31, 20192020 and was prepared as of January 14, 2020.2021. The audit reports prepared by the IQRAs are attached in Exhibits 99.1 and 99.2 of this Annual Report on Form 10-K.

The following table is a summary of the Company’s proved reserves and estimates of future net cash flows and discounted future net cash flows from proved reserves information relating to proved reserves which can also be found in Note 29 of28 to Ovintiv’s audited Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K.

Proved Reserves

The table below summarizes the Company’s total proved reserves by oil, NGLs and natural gas and by geographic area for the year ended December 31, 20192020 and other summary operating data.

Changes to the Company’s proved reserves during 20192020 are summarized in the table below:

In 2019,2020, the Company’s proved reserves of 2,188.8 MMBOE increased 973.1decreased by 196.3 MMBOE from 20182019 primarily due to extensions and discoveries of 605.3 MMBOE from successful drilling and delineation of the Permian, Anadarko, Montney, Eagle Ford, Bakken and Duvernay. Approximately 64 percent of the 2019 extensions and discoveries were crude oil, condensate and NGLs. Revisions of previous estimates of 158.7 MMBOE included negative revisions from changes in the approved development plan of 97.5382.2 MMBOE and lower 12-month average trailing price of 118.4167.1 MMBOE, which waspartially offset by positive forecast changes other than price of 57.3 MMBOE resultingrevisions from well performance and development strategy.strategy changes of 182.0 MMBOE and from infill drilling locations of 2.4 MMBOE. Extensions and discoveries of 377.5 MMBOE were the result of successful drilling and technical delineation, as well as new proved undeveloped locations resulting from development plan changes in the Permian, Montney, Anadarko and Uinta. Approximately 66 percent of the 2020 extensions and discoveries were crude oil, condensate and NGLs.

Production for 2020 was 199.0 MMBOE. Purchases of 796.654.3 MMBOE were primarily due toproperties with oil and liquids rich potential in the acquisitionPermian and as a result of Newfield properties. Production for 2019 was 206.2 MMBOE.the partition of certain Duvernay shale assets between Ovintiv and PCC. Sales of 64.1 MMBOE were primarily due to the divestiture of Arkoma.properties in Anadarko and Permian, as well as the partition of certain Duvernay shale assets between Ovintiv and PCC.

Proved reserves are estimated based on the average beginning-of-month prices during the 12-month period for the respective year. The average prices used to compute proved reserves at December 31, 20192020 were WTI: $55.9339.62 per bbl, Edmonton Condensate: C$68.8049.77 per bbl, Henry Hub: $2.581.98 per MMBtu, and AECO: C$1.762.13 per MMBtu. Prices for natural gas, oil and NGLs are inherently volatile.

Proved Undeveloped Reserves

Changes to the Company’s proved undeveloped reserves during 20192020 are summarized in the table below:

As of December 31, 2019,2020, there were no proved undeveloped reserves that will remain undeveloped for five years or more.

Extensions and discoveries of 551.0344.1 MMBOE of proved undeveloped reserves were the result of successful drilling and technical delineation, as well as new proved undeveloped locations resulting from development plan changes in the Permian, Montney, Anadarko Montney, Eagle Ford, Bakken and Duvernay.Uinta. Revisions of previousprior estimates of proved undeveloped reserves of 464.1 MMBOE were revised down by 108.6 MMBOE primarily due to development plan changes and the removal of proved undeveloped locations of 97.5382.2 MMBOE resulting fromas well as lower 12-month average trailing price of 148.3 MMBOE. Development plan changes in the development plan related

relate to Permian, Montney, Eagle Ford, and Duvernay, where specific locations that were previously planned to be drilled within five years but were subsequently shifted to a later development timeframe or removed and replaced with different locations that are included in extensions and discoveries. In addition,The downward revisions were partly offset by positive revisions of previous estimates included a positive revision of 6410.2.2 MMBOE

from increasedimproved well performance and 11.72.2 MMBOE from infill drilling locations in the Eagle Ford. Lower average beginning-of-month prices during the 12-month period reduced the proved undeveloped reserves by 33.0 MMBOE.locations.

Conversions of proved undeveloped reserves to proved developed status were 132.6157.3 MMBOE, equating to 2214 percent of the total prior year-end proved undeveloped reserves. Approximately 4765 percent of proved undeveloped reserves conversions occurred primarily in Canadathe Permian and Anadarko in Montneythe U.S. and Duvernay and 5335 percent occurred in the U.S.Montney in Permian and Eagle Ford.Canada. The Company spent approximately $1,069$1,269 million to develop proved undeveloped reserves in 2019,2020, of which approximately 2581 percent related to the U.S. properties and 19 percent related to the Canadian propertiesproperties.

Throughout 2020, the oil and 75gas industry was adversely impacted by the global COVID-19 pandemic which caused the deterioration in the worldwide demand and the failure of Saudi Arabia and Russia to reach an agreement on production cuts resulting in a price war which caused supply to materially exceed demand of hydrocarbons. In response, Ovintiv revised its 2020 capital budget of approximately $2.7 billion downward by approximately $0.9 billion, or 33 percent. The reduction to capital spend and corresponding decrease in planned drilling activity resulted in a 32 percent related to the U.S. properties.reduction of proved undeveloped locations and a proved undeveloped conversion ratio of 14 percent, as at December 31, 2020. However, Ovintiv’s five-year rolling average proved undeveloped conversion ratio is above 20 percent.

Purchases of proved undeveloped reserves of 234.341.4 MMBOE were dueand sales of proved undeveloped reserves of 30.7 MMBOE relate primarily to properties in the acquisitionPermian and the partition of Newfield properties.certain Duvernay shale assets between Ovintiv and PCC.

Sales Volumes, Prices and Production Costs

The following table summarizes the Company’s production by final product sold, average sales price, and production cost per BOE for each of the last three years by geographic area:

- Midland county in Permian: 2020 - 8.1 MMbbls of oil, 4.4 MMbbls of NGLs and 23 Bcf of natural gas; 2019 - 10.2 MMbbls of oil, 4.2 MMbbls of NGLs and 22 Bcf of natural gas; and 2018 - 9.4 MMbbls of oil, 3.5 MMbbls of NGLs and 17 Bcf of natural gas.

- Stack in Anadarko: 2019 - 13.2 MMbbls of oil, 10.0 MMbbls of NGLs and 72 Bcf of natural gas.

Drilling and other exploratory and development activities ^{(1, 2)}

The following tables summarize the Company’s gross participation and net interest in wells drilled for the periods indicated by geographic area.

Drilling and other exploratory and development activities ^{(1, 2)}

The following table summarizes the number of wells in the process of drilling or in active completion stages and the number of wells suspended or waiting on completion by geographic area at December 31, 2019.2020.

Oil and gas properties, wells, operations, and acreage

The following table summarizes the number of producing wells and wells mechanically capable of production by geographic area at December 31, 2019.2020.

The following table summarizes the Company’s developed, undeveloped and total landholdings by geographic area as at December 31, 2019.  2020.