Ovintiv Inc.

Sources of Liquidity

The Company has the flexibility to access cash equivalents and a range of funding alternatives at competitive rates through committed revolving credit facilities as well as debt and equity capital markets. Ovintiv closely monitors the accessibility of cost-effective credit and ensures that sufficient liquidity is in place to fund capital expenditures and dividend payments. In addition, the Company may use cash and cash equivalents, cash from operating activities, or proceeds from asset divestitures to fund its operations and capital allocation framework or to manage its capital structure as discussed below. As at June 30, 2025, $16 million in cash and cash equivalents was held by Canadian subsidiaries. The cash held by Canadian subsidiaries is accessible and may be subject to additional U.S. income taxes and Canadian withholding taxes if repatriated.

The Company’s capital structure consists of total shareholders’ equity plus long-term debt, including any current portion. The Company’s objectives when managing its capital structure are to maintain financial flexibility to preserve Ovintiv’s access to capital markets and its ability to meet financial obligations and finance internally generated growth, as well as potential acquisitions. Ovintiv has a practice of maintaining capital discipline and strategically managing its capital structure by adjusting capital spending, adjusting dividends paid to shareholders, issuing new shares of common stock, purchasing shares of common stock for cancellation or return to treasury, issuing new debt and repaying or repurchasing existing debt.

(1)

Includes three uncommitted demand lines totaling $312 million, net of $180 million in related undrawn letters of credit (2024 - $283 million and $72 million, respectively).

(2)

These measures are defined in the Non-GAAP Measures section of this MD&A.

The Company has full access to two committed revolving U.S. dollar denominated credit facilities totaling $3.5 billion, which include a $2.2 billion revolving credit facility for Ovintiv Inc. and a $1.3 billion revolving credit facility for a Canadian subsidiary (collectively, the “Credit Facilities”). The Credit Facilities, which mature in December 2029, provide financial flexibility and allow the Company to fund its operations or capital investment program. As at June 30, 2025, $150 million was outstanding under the revolving Credit Facilities.

Depending on the Company’s credit rating and market demand, the Company may issue from its two U.S. Commercial Paper (“CP”) programs, which include a $1.5 billion program for Ovintiv Inc. and a $1.0 billion program for a Canadian subsidiary. As at June 30, 2025, the Company had $331 million of commercial paper outstanding under its U.S. CP program maturing at various dates with a weighted average interest rate of approximately 5.03 percent, which is supported by the Company’s Credit Facilities. All of Ovintiv’s credit ratings are investment grade as at June 30, 2025.

The available Credit Facilities, uncommitted demand lines, and cash and cash equivalents, net of outstanding commercial paper, provide Ovintiv with total liquidity of approximately $3.2 billion as at June 30, 2025. As at June 30, 2025, Ovintiv also had approximately $180 million in undrawn letters of credit issued in the normal course of business as collateral security.

Ovintiv has a U.S. shelf registration statement under which the Company may issue from time to time, debt securities, common stock, preferred stock, warrants, units, share purchase contracts and share purchase units in the U.S. The U.S. shelf registration statement expires in March 2026.

The obligations under the Company’s existing debt securities are fully and unconditionally guaranteed on a senior unsecured basis by Ovintiv Canada ULC, an indirect wholly-owned subsidiary of the Company. Additional information on the Company’s Canadian Operations segment and the Bow office lease can be found in the Results of Operations section in this MD&A and in the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, and the MD&A and audited Consolidated Financial Statements and accompanying notes for the year ended December 31, 2024, which are included in Items 7 and 8, respectively, of the 2024 Annual Report on Form 10-K.

Ovintiv is currently in compliance with all financial covenants under the Credit Facilities. Management monitors Debt to Adjusted Capitalization, which is a non-GAAP measure defined in the Non-GAAP Measures section of this MD&A, as a proxy for Ovintiv’s financial covenant under the Credit Facilities, which requires Debt to Adjusted Capitalization to be less than 60 percent. As at June 30, 2025, the Company’s Debt to Adjusted Capitalization was 23 percent. The definitions used in the covenant under the Credit Facilities adjust capitalization for cumulative historical ceiling test impairments recorded in conjunction with the Company’s January 1, 2012 adoption of U.S. GAAP. Additional information on financial covenants can be found in Note 15 to the Consolidated Financial Statements included in Item 8 of the 2024 Annual Report on Form 10‑K.

Sources and Uses of Cash

The following table summarizes the sources and uses of the Company’s cash and cash equivalents.

Operating Activities

Net cash from operating activities in the second quarter and first six months of 2025 was $1,013 million and $1,886 million, respectively, and was primarily a reflection of the impacts from production volumes, average realized commodity prices, realized gains/losses on risk management and changes in non‑cash working capital.

Additional detail on changes in non-cash working capital can be found in Note 20 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Ovintiv expects it will continue to meet the payment terms of its suppliers.

Non-GAAP Cash Flow in the second quarter and first six months of 2025 was $913 million and $1,917 million, respectively, and was primarily impacted by the items affecting cash from operating activities which are discussed below and in the Results of Operations section of this MD&A.

Net cash from operating activities decreased $7 million compared to the second quarter of 2024 primarily due to:

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Lower realized liquids commodity prices ($263 million), lower oil production volumes ($181 million), lower realized gains on risk management in revenues ($36 million) and higher transportation and processing expense ($22 million);

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Higher NGLs and natural gas production volumes ($193 million), higher realized natural gas commodity prices ($158 million), changes in non-cash working capital ($74 million), lower operating expense, excluding non-cash long-term incentive costs ($19 million), lower production, mineral and other taxes ($16 million), and lower interest expense ($8 million).

Net cash from operating activities increased $207 million compared to the first six months of 2024 primarily due to:

•

Changes in non-cash working capital ($318 million), higher NGLs and natural gas production volumes ($309 million), higher realized natural gas commodity prices ($277 million), lower operating expense, excluding non-cash long-term incentive costs ($59 million), lower production, mineral and other taxes ($12 million), lower administrative expense, excluding non-cash long-term incentive costs ($11 million) and lower interest expense ($10 million);

•

Lower oil production volumes ($330 million), lower realized liquids commodity prices ($323 million), higher realized foreign exchange losses on the settlement of U.S. dollar risk management contracts issued from Canada ($97 million), lower realized gains on risk management in revenues ($52 million) and an increase in current income tax expense ($14 million).

Investing Activities

Cash used in investing activities in the first six months of 2025 was $1,453 million primarily due to the Montney Acquisition and capital expenditures, partially offset by the sale of the Company’s Uinta assets. Capital expenditures, and acquisition and divestiture activities are summarized in Notes 3 and 8, respectively, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q.

Capital expenditures decreased $75 million compared to the first six months of 2024, primarily due to decreased capital activity resulting from the sale of the Uinta assets in the first quarter of 2025, and decreased capital activity and increased efficiencies in Permian, partially offset by increased capital activity in Anadarko and increased capital activity in Montney due to the Montney Acquisition in the first quarter of 2025.

Acquisitions in the first six months of 2025 were $2,313 million, which primarily included the Montney Acquisition. Acquisitions in the first six months of 2024 were $195 million, which primarily included property purchases with oil and liquids-rich potential in the USA Operations.

Divestitures in the first six months of 2025 were $1,896 million, which primarily included the sale of the Uinta assets in Utah.

Additional information regarding the Montney Acquisition and the sale of the Uinta assets can be found in Note 8 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Financing Activities

Net cash used in financing activities has been impacted by Ovintiv’s strategic objective to return value to shareholders by repaying existing debt, purchasing shares of common stock and paying dividends.

Net cash used in financing activities in the first six months of 2025 increased $168 million compared to 2024. The increase was primarily due to the repayment of the Company’s May 2025 senior notes during the second quarter of 2025 ($600 million), partially offset by decreased purchases of shares of common stock ($287 million) and an increase in the net issuance of revolving debt in 2025 compared to 2024 ($131 million).

In May 2025, Ovintiv redeemed its $600 million, 5.65 percent senior notes due May 15, 2025, with cash on hand and proceeds from short-term borrowings. The Company’s long-term debt, including the current portion of $940 million, totaled $5,333 million at June 30, 2025. The Company’s long-term debt at December 31, 2024, including the current portion of $600 million, totaled $5,453 million. As at June 30, 2025, the Company has $459 million of fixed rate long-term debt due within the next year.

In support of the Company’s commitment to enhancing shareholder value, Ovintiv utilizes its capital allocation framework to provide competitive returns to shareholders while strengthening its balance sheet. Ovintiv resumed its share buyback program in the second quarter of 2025 following a temporary pause, as discussed below, and expects to continue to deliver shareholder returns through share buybacks.

For additional information on long-term debt, refer to Note 11 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Further details on the Company’s debt-based metrics can be found in the Non-GAAP measures section of this MD&A.

Dividends

The Company pays quarterly dividends to common shareholders at the discretion of the Board of Directors.

On July 24, 2025, the Board of Directors declared a dividend of $0.30 per share of common stock payable on September 29, 2025, to common shareholders of record as of September 15, 2025.

Normal Course Issuer Bid

On September 26, 2024, the Company announced it had received regulatory approval for the renewal of its NCIB program, which enables the Company to purchase, for cancellation or return to treasury, up to approximately 25.9 million shares of common stock over a 12-month period from October 3, 2024 to October 2, 2025. The Company expects to continue to execute the NCIB program in conjunction with its capital allocation framework.

The Company’s share buyback program was temporarily paused in the fourth quarter of 2024 to recover the transaction proceeds differential between the Montney Acquisition and the Uinta divestiture of $377 million. Following the recovery of the transaction proceeds differential, Ovintiv resumed its share buyback program under the NCIB in the second quarter of 2025 and purchased, for cancellation, approximately 4.1 million shares of common stock for total consideration of approximately $147 million. For additional information on the NCIB, refer to Note 13 to the Consolidated Financial Statements included in Part I, Item 1 and Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds” of this Quarterly Report on Form 10‑Q.

Material Cash Requirements

For information on material cash requirements, refer to the Material Cash Requirements section of the MD&A included in Item 7 of the 2024 Annual Report on Form 10-K.

Commitments and Contingencies

For information on commitments and contingencies, refer to Note 21 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Critical Accounting Estimates

There have been no significant changes to the Company’s critical accounting policies and use of estimates from the disclosures reported in the Critical Accounting Estimates section of the MD&A included in Item 7 of the 2024 Annual Report on Form 10‑K.