In a news release, North American energy producer Ovintiv Inc. (OVV:TSX; OVV:NYSE) announced that "it has restructured its crude oil derivatives positions to provide additional downside protection for the balance of 2020."
The company also stated that it is now planning to further reduce its Q2/20 investments by an additional $200 million thus bringing the total scheduled capital reductions in the quarter to $500 million.
The firm's CEO Doug Suttles commented, "We have built our company with tremendous flexibility and optionality for volatile and uncertain times like we are currently experiencing. We are using and expect to continue to use this flexibility as market conditions evolve."
"We have created more certainty in our cash flow by restructuring oil hedges and further reducing second quarter capital spending. We will have additional details when we report our first quarter earnings and operating results," Suttles added.
The firm stated that its strong hedging position serves to protect cash flow and that it is now substantially hedged on benchmark (NYMEX WTI and NYMEX Henry Hub) oil risk for the near term. More specifically, the company advised that "for Q2/20 206 Mbbls/d is hedged at an average price of $42.09 per barrel."
The company commented that downside oil price risk is further reduced with its updated cumulative hedging positions and that settlements in 2020 for natural gas products are expected to further supplement oil hedge revenues.[NLINSERT]
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