FROM THE CHAIR & CEO
Producing safe, affordable, secure and reliable energy both profitably and sustainably is a powerful purpose – one that we take seriously. Our products fuel the world and make modern life possible.
Access to safe, affordable, secure, and reliable energy has never been more crucial, as demonstrated by the volatility that characterized 2022. Record inflation, geo-political disruption and continued supply chain disruptions culminated in rising costs across the globe.
Despite the unpredictable macro-environment, our company celebrated many remarkable achievements in 2022. From record free cash flow to increasing our premium inventory locations, we strengthened our resilience and reinforced our ability to deliver durable returns. Our world-class team, combined with our top-tier, multi-basin, multi-product portfolio continued to drive shareholder value.
In addition to these successes, we recently announced a transaction to further progress our durable returns strategy that will see us roughly double both our oil production and premium inventory in the Permian Basin. This transaction checks all the boxes for our shareholders. The deal is accretive to cash flow per share, cash returns to shareholders, net asset value, and inventory life while maintaining our investment grade-rated balance sheet. While we expect a brief period of integration of the new assets, we remain committed to our Scope 1 & 2 emissions target.
Our team is united by a commitment to drive progress and improve lives. This drive, coupled with our values, pushes us to continually enhance our performance. This commitment is a reflection of our history, our high standards, and our vision for the future.
Our 2022 Sustainability Accomplishments:
Delivering on Greenhouse Gas (GHG) Emissions Reductions – We continued our commitment to reduce GHG emissions by achieving a >30% reduction in Scope 1 & 2 GHG intensity at year-end 2022, benchmarked against our 2019 results. We are well on our way to achieving our target of reducing our Scope 1 & 2 GHG emissions intensity by 50% by 2030. Compensation for all our employees is directly tied to our progress in meeting this commitment.
Bolstering our Culture of Inclusion – In alignment with our renewed social commitment, we have continued to look for new ways to promote and enhance our workplace to create an industry and a company where everyone is welcome and valued. In 2022, we made significant progress in this space, updating our benefits package to include an industry-leading family leave policy and committing to disclose extensive gender equality information. We are also updating our recruiting practices to enhance engagement with communities and educational institutions to broaden the diversity of our talent. Our efforts in this space have led to our inaugural inclusion in the Bloomberg Gender-Equality Index.
Ongoing Board Renewal Process – We have been intentional about our Board renewal process. In 2022, we welcomed Board member Ralph Izzo, who marks our sixth new independent director since 2019. Through this process we have added expertise and diversity to our Board.
Strengthening our Safety Culture:
While we are proud of our achievements, we also must acknowledge where we were challenged. Over the course of 2022, the number of safety incidents grew across our industry. Ovintiv was not immune to these challenges; we saw the frequency of serious safety incidents increase across our operations.
Safety is a foundational value at Ovintiv, and as such, we were compelled to respond with urgency. We conducted an extensive company-wide safety review through both an internal task force and an independent third party, Krause Bell Group. Both groups reported directly to the executive leadership team and to our Board, recommending four key initiatives. Our team has immediately begun to put these into action across the organization. Starting in 2023, we incorporated an additional safety metric in our compensation program to directly address serious safety incidents. We are resolute in our commitment to ensuring our employees and partners go home safely every day. This starts by having the right policies and practices in place, incentivizing the right behaviors and reinforcing a culture that prioritizes safe work always. You can read more about our go-forward plan and our approach to safety across our organization in our Safety section.
As we continue to strengthen our commitments and make progress toward achieving our goals, we want to recognize the unwavering efforts of our employees, service providers and partners who are undertaking the day-to-day work to provide the safe, affordable, secure and reliable energy to make modern life possible. At Ovintiv, we are committed to developing our resources safely, efficiently and sustainably, while also generating durable returns for our shareholders.
Thank you for your interest in our company. We trust that you will find this website transparent and helpful in understanding our strategy, performance and ongoing progress.
Chairman of the Board
President & Chief Executive Officer