Here is the article.
Despite a massive push toward renewables, the oil and gas industry remains the most vital component to the global energy mix. This puts Ovintiv Inc. (NYSE:OVV) in a good position.
Originally known as Encana, the company was the largest energy company and the largest natural gas producer in Canada before relocating to the U.S. in 2020 and rebranding as Ovintiv.
America and the world still need more energy. First, the high-energy density of oil and gas provides substantial energy relative to their volume, making them ideal for applications like transportation. Second, the existing infrastructure for oil and gas extraction, refining and distribution is extensive and represents a significant investment. Third, oil and gas are economically important, contributing to job creation, tax revenues and economic stability in many regions. These traits alone will keep the industry viable for at least another generation. Global energy demand is rising, especially in developing economies, and oil and gas will continue to play a crucial role alongside renewable energy sources. I think that will be the case even in the U.S., where regulations seem to be tightening.
Ovintivs production
At the end of 2022, Ovintiv had proven reserves north of 2.3 billion barrels of oil equivalent. Further, the company is expected to produce in the range of 520,000 to 546,000 BOE per day for 2023. Of that, approximately 26% is petroleum, 25% is natural gas liquids and 49% is natural gas.
That means 598 million barrels of oil, at $74 for Brent, which equates to nearly $50 billion. That alone is 5 times Ovintivs market capitalization. Then add the value of natural gas and liquid natural gas to tack on another $17 billion and $27 billion respectively. Collectively, this comes out to a stockpile worth nearly $100 billion. The current market capitalization is around $10 billion.
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