10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-39191

Ovintiv Inc.

(Exact name of registrant as specified in its charter)

Delaware	84-4427672
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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

(Address of principal executive offices)

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

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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).  

Yes ☐    No  ☒

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	OVV	New York Stock Exchange

Number of registrant’s shares of common stock outstanding as of May 1, 2020 259,821,141

1

OVINTIV INC.

FORM 10-Q

TABLE OF CONTENTS

	PART I
Item 1.	Financial Statements	6
	Condensed Consolidated Statement of Earnings	6
	Condensed Consolidated Statement of Comprehensive Income	6
	Condensed Consolidated Balance Sheet	7
	Condensed Consolidated Statement of Changes in Shareholders’ Equity	8
	Condensed Consolidated Statement of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	59
Item 4.	Controls and Procedures	61
	PART II
Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3.	Defaults Upon Senior Securities	63
Item 4.	Mine Safety Disclosures	63
Item 5.	Other Information	63
Item 6.	Exhibits	63
Signatures		64

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DEFINITIONS

Unless the context otherwise indicates, references to “Ovintiv,” the “Company” “us,” “we,” “our,” “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 Quarterly Report on Form 10-Q:

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

“ASU” means Accounting Standards Update.

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

“BOE” means barrels of oil equivalent.

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

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

“FASB” means Financial Accounting Standards Board.

“Mbbls/d” means thousand barrels per day.

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

“Mcf” means thousand cubic feet.

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

“MMBOE” means million barrels of oil equivalent.

“MMBtu” means million Btu.

“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.

“SEC” means United States Securities and Exchange Commission.

“SIB” means substantial issuer bid.

“TSX” means Toronto Stock Exchange.

“U.S.”, “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 Quarterly Report on Form 10-Q, 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.

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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. Ovintiv’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 Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS AND RISK

This Quarterly Report on Form 10-Q contains 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 allocation of capital and focus of development plans; growth in long-term shareholder value; vision of being a leading North American energy producer; statements with respect to the Company’s strategic objectives, including capital allocation strategy, shut-in strategy, focus of investment, return of capital to stockholders, 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; ability to deliver free cash flow through a disciplined capital allocation strategy; anticipated cost savings, capital efficiency and sustainability thereof; ability to repeat and deploy successful practices across the Company’s multi-basin portfolio; anticipated commodity prices; success of and benefits from technology and innovation, including cube development approach and advanced completion designs; ability to optimize well and completion designs; 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; potential impacts of an extended period of low commodity prices and responses of the Company thereto; estimates of reserves and resources and potential for negative price related reserve revisions; expected production and product types; statements regarding anticipated cash flow, non-GAAP cash flow margin and leverage ratios; anticipated access to cash, cash equivalents and other methods of funding; anticipated hedging and outcomes of risk management program, including exposure to certain commodity prices and foreign exchange fluctuations, amount of hedged production, market access and physical sales locations; impact of changes in laws and regulations; 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; statements regarding the Company’s operational and financial flexibility, discipline and ability  to respond to evolving market conditions; ability to meet financial obligations, manage debt and financial ratios, finance growth and comply with financial covenants; impact to the Company as a result of changes to its credit rating; access to the Company’s credit facilities; planned dividend and the declaration and payment of future dividends, if any; adequacy of the Company’s provision for taxes and legal claims; projections and statements in respect of funding; 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; expected future interest expense; the Company’s commitments and obligations and anticipated payments thereunder; and the possible impact 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; 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 Ovintiv operates; assumed tax, royalty and regulatory regimes; assumptions contained herein and expectations and projections made in light of, and generally consistent with,

4

Ovintiv’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 business outcomes include: suspension of or changes to guidance, and associated impact to production; ability to generate sufficient cash flow to meet obligations; market and commodity price volatility and associated impact to the Company’s stock price, credit rating, financial condition, reserves and access to liquidity; the impact of COVID-19 to the Company’s operations, including maintaining ordinary staffing levels, securing operational inputs, executing on portions of its business and managing cyber-security risks associated with remote work; ability to secure adequate transportation; potential curtailments of refinery operations, including resulting storage constraints or widening price differentials; variability and discretion of Ovintiv’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; risks associated with decommissioning activities, including timing and costs thereof; the Company’s ability to achieve the anticipated benefits of the Reorganization (as defined below); counterparty and credit risk; impact of changes  in credit rating and access to  liquidity, including costs thereof; fluctuations in currency and interest rates; 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; 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; 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 Ovintiv may refer to from time to time as “partnerships” or “joint ventures” and the funds received in respect thereof which Ovintiv 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 the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “2019 Annual Report on Form 10-K”) and in this Quarterly Report on Form 10-Q, and risks and uncertainties impacting Ovintiv’s business as described from time to time in the Company’s other periodic filings with the SEC.

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 are not exhaustive. Forward-looking statements are made as of the date of this document 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 in this Quarterly Report on Form 10-Q are expressly qualified by these cautionary statements.

The reader should read carefully the risk factors described in Item 1A. Risk Factors of the 2019 Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements.

5

PART I

Item 1. Financial Statements

Condensed Consolidated Statement of Earnings (unaudited)

			Three Months Ended
			March 31,
(US$ millions, except per share amounts)			2020			2019
Revenues		(Note 3)
Product and service revenues		(Note 4)	$	1,570		$	1,572
Gains (losses) on risk management, net		(Note 22)		1,055			(355	)
Sublease revenues		(Note 11)		18			18
Total Revenues				2,643			1,235
Operating Expenses		(Note 3)
Production, mineral and other taxes				52			48
Transportation and processing				396			338
Operating	(Notes 19, 20)			165			165
Purchased product				398			298
Depreciation, depletion and amortization				534			377
Impairments		(Note 10)		277			-
Accretion of asset retirement obligation		(Note 14)		9			9
Administrative	(Notes 18, 19, 20)			53			227
Total Operating Expenses				1,884			1,462
Operating Income (Loss)				759			(227	)
Other (Income) Expenses
Interest		(Note 5)		96			87
Foreign exchange (gain) loss, net		(Notes 6, 22)		116			(37	)
(Gain) loss on divestitures, net				-			1
Other (gains) losses, net		(Notes 8, 12, 20)		(14	)		28
Total Other (Income) Expenses				198			79
Net Earnings (Loss) Before Income Tax				561			(306	)
Income tax expense (recovery)		(Note 7)		140			(61	)
Net Earnings (Loss)			$	421		$	(245	)
Net Earnings (Loss) per Share of Common Stock (1)
Basic & Diluted		(Note 15)	$	1.62		$	(1.00	)
Weighted Average Shares of Common Stock Outstanding (millions) (1)
Basic & Diluted		(Note 15)		259.8			244.3

(1) Net earnings (loss) per share of common stock and weighted average shares of common stock outstanding reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

Condensed Consolidated Statement of Comprehensive Income (unaudited)

		Three Months Ended
		March 31,
(US$ millions)		2020			2019
Net Earnings (Loss)		$	421		$	(245	)
Other Comprehensive Income (Loss), Net of Tax
Foreign currency translation adjustment	(Note 16)		(134	)		34
Pension and other post-employment benefit plans	(Notes 16, 20)		(2	)		(1	)
Other Comprehensive Income (Loss)			(136	)		33
Comprehensive Income (Loss)		$	285		$	(212	)

See accompanying Notes to Condensed Consolidated Financial Statements

6

Condensed Consolidated Balance Sheet (unaudited)

			As at			As at
			March 31,			December 31,
(US$ millions)			2020			2019
Assets
Current Assets
Cash and cash equivalents			$	82		$	190
Accounts receivable and accrued revenues (net of allowances      of $11 million (2019: $3 million)				918			1,235
Risk management		(Notes 21, 22)		958			148
Income tax receivable				283			296
				2,241			1,869
Property, Plant and Equipment, at cost:		(Note 10)
Oil and natural gas properties, based on full cost accounting
Proved properties				50,952			51,210
Unproved properties				3,460			3,714
Other				852			904
Property, plant and equipment				55,264			55,828
Less: Accumulated depreciation, depletion and amortization				(40,184	)		(40,637	)
Property, plant and equipment, net		(Note 3)		15,080			15,191
Other Assets	(Note 3)			1,088			1,213
Risk Management		(Notes 21, 22)		1			2
Deferred Income Taxes				540			601
Goodwill		(Notes 3, 8)		2,555			2,611
		(Note 3)	$	21,505		$	21,487
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities			$	2,049		$	2,239
Current portion of operating lease liabilities				70			78
Income tax payable				1			1
Risk management		(Notes 21, 22)		40			114
				2,160			2,432
Long-Term Debt		(Note 12)		7,006			6,974
Operating Lease Liabilities				883			977
Other Liabilities and Provisions	(Note 13)			402			464
Risk Management		(Notes 21, 22)		81			68
Asset Retirement Obligation		(Note 14)		438			425
Deferred Income Taxes				344			217
				11,314			11,557
Commitments and Contingencies		(Note 24)
Shareholders’ Equity
Share capital - authorized 775 million shares of common stock
2020 issued and outstanding: 259.8 million shares (2019: 259.8 million shares)		(Note 15)		3			7,061
Paid in surplus		(Note 15)		8,460			1,402
Retained earnings				818			421
Accumulated other comprehensive income		(Note 16)		910			1,046
Total Shareholders’ Equity				10,191			9,930
			$	21,505		$	21,487

See accompanying Notes to Condensed Consolidated Financial Statements

7

Condensed Consolidated Statement of Changes in Shareholders’ Equity (unaudited)

Three Months Ended March 31, 2020 (US$ millions)		Share Capital			Paid in Surplus		Retained Earnings			Accumulated Other Comprehensive Income			Total Shareholders’ Equity
Balance, December 31, 2019		$	7,061		$	1,402	$	421		$	1,046		$	9,930
Net Earnings (Loss)			-			-		421			-			421
Dividends on Shares of Common Stock ($0.09375 per share)	(Note 15)		-			-		(24	)		-			(24	)
Other Comprehensive Income (Loss)	(Note 16)		-			-		-			(136	)		(136	)
Reclassification of Share Capital due to the Reorganization	(Note 15)		(7,058	)		7,058		-			-			-
Balance, March 31, 2020		$	3		$	8,460	$	818		$	910		$	10,191

Three Months Ended March 31, 2019 (US$ millions)		Share Capital			Paid in Surplus		Retained Earnings			Accumulated Other Comprehensive Income		Total Shareholders’ Equity
Balance, December 31, 2018		$	4,656		$	1,358	$	435		$	998	$	7,447
Net Earnings (Loss)			-			-		(245	)		-		(245	)
Dividends on Common Shares ($0.09375 per share (1))	(Note 15)		-			-		(28	)		-		(28	)
Common Shares Purchased under Normal     Course Issuer Bid	(Note 15)		(307	)		-		(93	)		-		(400	)
Common Shares Issued	(Notes 8, 15)		3,478			-		-			-		3,478
Other Comprehensive Income (Loss)	(Note 16)		-			-		-			33		33
Impact of Adoption of Topic 842, Leases			-			-		75			-		75
Balance, March 31, 2019		$	7,827		$	1,358	$	144		$	1,031	$	10,360

(1) Dividends per share reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

See accompanying Notes to Condensed Consolidated Financial Statements

8

Condensed Consolidated Statement of Cash Flows (unaudited)

		Three Months Ended
		March 31,
(US$ millions)		2020			2019
Operating Activities
Net earnings (loss)		$	421		$	(245	)
Depreciation, depletion and amortization			534			377
Impairments	(Note 10)		277			-
Accretion of asset retirement obligation	(Note 14)		9			9
Deferred income taxes	(Note 7)		140			(62	)
Unrealized (gain) loss on risk management	(Note 22)		(904	)		427
Unrealized foreign exchange (gain) loss	(Note 6)		101			(25	)
Foreign exchange on settlements	(Note 6)		20			(13	)
(Gain) loss on divestitures, net			-			1
Other			(63	)		(47	)
Net change in other assets and liabilities			(52	)		(11	)
Net change in non-cash working capital	(Note 23)		83			118
Cash From (Used in) Operating Activities			566			529
Investing Activities
Capital expenditures	(Note 3)		(790	)		(736	)
Acquisitions	(Note 9)		(17	)		(22	)
Corporate acquisition, net of cash and restricted cash acquired	(Note 8)		-			94
Proceeds from divestitures	(Note 9)		22			2
Net change in investments and other			130			54
Cash From (Used in) Investing Activities			(655	)		(608	)
Financing Activities
Net issuance (repayment) of revolving long-term debt	(Note 12)		144			-
Repayment of long-term debt	(Note 12)		(89	)		-
Purchase of shares of common stock	(Note 15)		-			(400	)
Dividends on shares of common stock	(Note 15)		(24	)		(28	)
Finance lease payments and other financing arrangements			(22	)		(20	)
Cash From (Used in) Financing Activities			9			(448	)
Foreign Exchange Gain (Loss) on Cash, Cash Equivalents
and Restricted Cash Held in Foreign Currency			(7	)		3
Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash			(87	)		(524	)
Cash, Cash Equivalents and Restricted Cash, Beginning of Year			190			1,058
Cash, Cash Equivalents and Restricted Cash, End of Period		$	103		$	534
Cash, End of Period		$	35		$	66
Cash Equivalents, End of Period			47			413
Restricted Cash, End of Period (1)			21			55
Cash, Cash Equivalents and Restricted Cash, End of Period		$	103		$	534

(1) Restricted cash of $21 million is included in accounts receivable and accrued revenues on the Condensed Consolidated Balance Sheet as at March 31, 2020. The amount, currently held in escrow, relates to accrued and unpaid interest on certain senior notes and will be paid to bondholders on scheduled interest payment dates during the three months ended June 30, 2020.

See accompanying Notes to Condensed Consolidated Financial Statements

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1. Basis of Presentation and Principles of Consolidation

On January 24, 2020, Encana Corporation (“Encana”) completed a corporate reorganization, which included a plan of arrangement (the “Arrangement”) that involved, among other things, a share consolidation by Encana on the basis of one post-consolidation share for each five pre-consolidation shares (the “Share Consolidation”), and Ovintiv Inc. ultimately acquired all of the issued and outstanding common shares of Encana in exchange for shares of common stock of Ovintiv Inc. on a one-for-one basis. Following completion of the Arrangement, Ovintiv Inc. migrated from Canada and became a Delaware corporation, domiciled in the U.S. (the “U.S. Domestication”). The Arrangement and the U.S. Domestication together are referred to as the “Reorganization”. Ovintiv Inc. and its subsidiaries (collectively, “Ovintiv”) continue to carry on the business of the exploration for, the development of, and the production and marketing of oil, NGLs and natural gas, which was previously conducted by Encana and its subsidiaries prior to the completion of the Reorganization. References to the “Company” are to Encana Corporation and its subsidiaries prior to the completion of the Reorganization and to Ovintiv Inc. and its subsidiaries following the completion of the Reorganization.

The Arrangement, as described above, was accounted for as a reorganization of entities under common control. Accordingly, the resulting transactions were recognized using historical carrying amounts. On January 24, 2020, Ovintiv became the reporting entity upon completion of the Reorganization.

In accordance with the Share Consolidation, all common shares and per-share amounts disclosed herein reflect the post-Share Consolidation shares unless otherwise specified; comparative periods have been restated accordingly. References to shares of common stock refer to the shares of common stock of Ovintiv Inc. for any periods after the completion of the Arrangement, and to the common shares of Encana Corporation for any periods before January 24, 2020.

Following the U.S. Domestication, on January 24, 2020, the functional currency of Ovintiv Inc. became U.S. dollars, and accordingly, the financial results herein are consolidated and reported in U.S. dollars.

The interim Condensed Consolidated Financial Statements include the accounts of Ovintiv and entities in which it holds a controlling interest. All intercompany balances and transactions are eliminated on consolidation. Undivided interests in oil and natural gas exploration and production joint ventures and partnerships are consolidated on a proportionate basis. Investments in non-controlled entities over which the Company has the ability to exercise significant influence are accounted for using the equity method.  

The interim Condensed Consolidated Financial Statements are prepared in conformity with U.S. GAAP and the rules and regulations of the SEC. Pursuant to these rules and regulations, certain information and disclosures normally required under U.S. GAAP have been condensed or have been disclosed on an annual basis only. Accordingly, the interim Condensed Consolidated Financial Statements should be read in conjunction with the annual audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2019, which are included in Item 8 of Ovintiv’s 2019 Annual Report on Form 10-K.

The interim Condensed Consolidated Financial Statements have been prepared following the same accounting policies and methods of computation as the annual audited Consolidated Financial Statements for the year ended December 31, 2019, except as noted below in Note 2. The disclosures provided below are incremental to those included with the annual audited Consolidated Financial Statements.

These unaudited interim Condensed Consolidated Financial Statements reflect, in the opinion of Management, all normal and recurring adjustments necessary to present fairly the financial position and results of the Company as at and for the periods presented. Interim condensed consolidated financial results are not necessarily indicative of consolidated financial results expected for the fiscal year.

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2. Recent Accounting Pronouncements

Changes in Accounting Policies and Practices

On January 1, 2020, Ovintiv adopted the following ASUs issued by the FASB, which have not had a material impact on the interim Condensed Consolidated Financial Statements:

• ASU 2017-04, “Simplifying the Test for Goodwill Impairment”. The amendment eliminates the second step of the goodwill impairment test which requires the Company to measure the impairment based on the excess amount of the carrying value of the reporting unit’s goodwill over the implied fair value of its goodwill. Under this amendment, the goodwill impairment will be measured based on the excess amount of the reporting unit’s carrying value over its respective fair value. The amendment has been applied prospectively.

• ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” under Topic 326. The standard amends the impairment model which requires utilizing a forward-looking expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables. The standard requires entities to consider a broader range of information to estimate expected credit losses, resulting in earlier recognition of credit losses. The standard has been applied using the modified retrospective approach.

3. Segmented Information

Ovintiv’s reportable segments are determined based on the following operations and geographic locations:

• USA Operations includes the exploration for, development of, and production of oil, NGLs and natural gas and other related activities within the U.S. cost center.  

• Canadian Operations includes the exploration for, development of, and production of oil, NGLs and natural gas and other related activities within the Canadian cost center.    

• China Operations included the exploration for, development of, and production of oil and other related activities within the China cost center. Effective July 31, 2019, the production sharing contract with China National Offshore Oil Corporation (“CNOOC”) was terminated and the Company exited its China Operations.

• Market Optimization is primarily responsible for the sale of the Company’s proprietary production. These results are reported in the USA and Canadian Operations. Market optimization activities include third-party purchases and sales of product to provide operational flexibility and cost mitigation for transportation commitments, product type, delivery points and customer diversification. These activities are reflected in the Market Optimization segment. Market Optimization sells substantially all of the Company’s upstream production to third-party customers. Transactions between segments are based on market values and are eliminated on consolidation.  

Corporate and Other mainly includes unrealized gains or losses recorded on derivative financial instruments. Once the instruments are settled, the realized gains and losses are recorded in the reporting segment to which the derivative instruments relate. Corporate and Other also includes amounts related to sublease rentals.

11

Results of Operations (For the three months ended March 31)

Segment and Geographic Information

	USA Operations					Canadian Operations				China Operations (1)
	2020			2019		2020		2019		2020		2019
Revenues
Product and service revenues	$	800		$	777	$	351	$	456	$	-	$	13
Gains (losses) on risk management, net		114			52		36		20		-		-
Sublease revenues		-			-		-		-		-		-
Total Revenues		914			829		387		476		-		13
Operating Expenses
Production, mineral and other taxes		48			44		4		4		-		-
Transportation and processing		121			79		213		212		-		-
Operating		139			115		26		37		-		4
Depreciation, depletion and amortization		418			274		109		92		-		-
Impairments		277			-		-		-		-		-
Total Operating Expenses		1,003			512		352		345		-		4
Operating Income (Loss)	$	(89	)	$	317	$	35	$	131	$	-	$	9

	Market Optimization						Corporate & Other						Consolidated
	2020			2019			2020			2019			2020			2019
Revenues
Product and service revenues	$	419		$	326		$	-		$	-		$	1,570		$	1,572
Gains (losses) on risk management, net		1			-			904			(427	)		1,055			(355	)
Sublease revenues		-			-			18			18			18			18
Total Revenues		420			326			922			(409	)		2,643			1,235
Operating Expenses
Production, mineral and other taxes		-			-			-			-			52			48
Transportation and processing		62			47			-			-			396			338
Operating		2			10			(2	)		(1	)		165			165
Purchased product		398			298			-			-			398			298
Depreciation, depletion and amortization		-			-			7			11			534			377
Impairments		-			-			-			-			277			-
Accretion of asset retirement obligation		-			-			9			9			9			9
Administrative		-			-			53			227			53			227
Total Operating Expenses		462			355			67			246			1,884			1,462
Operating Income (Loss)	$	(42	)	$	(29	)	$	855		$	(655	)		759			(227	)
Other (Income) Expenses
Interest														96			87
Foreign exchange (gain) loss, net														116			(37	)
(Gain) loss on divestitures, net														-			1
Other (gains) losses, net														(14	)		28
Total Other (Income) Expenses														198			79
Net Earnings (Loss) Before Income Tax														561			(306	)
Income tax expense (recovery)														140			(61	)
Net Earnings (Loss)													$	421		$	(245	)

(1) The Company terminated its production sharing contract with CNOOC and exited its China Operations effective July 31, 2019.

12

Intersegment Information

							Market Optimization
	Marketing Sales						Upstream Eliminations						Total
For the three months ended March 31,	2020			2019			2020			2019			2020			2019
Revenues	$	2,095		$	1,236		$	(1,675	)	$	(910	)	$	420		$	326
Operating Expenses
Transportation and processing		168			139			(106	)		(92	)		62			47
Operating		2			10			-			-			2			10
Purchased product		1,967			1,116			(1,569	)		(818	)		398			298
Operating Income (Loss)	$	(42	)	$	(29	)	$	-		$	-		$	(42	)	$	(29	)

Capital Expenditures

	Three Months Ended
	March 31,
	2020		2019
USA Operations	$	628	$	577
Canadian Operations		161		157
Corporate & Other		1		2
	$	790	$	736

Costs Incurred

For the year ended December 31, 2019	United States		Canada		Total
Acquisition Costs (1)
Unproved	$	843	$	-	$	843
Proved		5,963		-		5,963
Total Acquisition Costs		6,806		-		6,806
Exploration Costs		5		-		5
Development Costs		2,129		480		2,609
	$	8,940	$	480	$	9,420

(1) Acquisition costs were restated and include the non-cash acquisition of the proved and unproved properties of Newfield Exploration Company in conjunction with the business combination described in Note 8.

Goodwill, Property, Plant and Equipment and Total Assets by Segment

	Goodwill					Property, Plant and Equipment					Total Assets
	As at					As at					As at
	March 31,		December 31,			March 31,		December 31,			March 31,		December 31,
	2020			2019		2020			2019		2020			2019
USA Operations	$	1,938		$	1,938	$	13,696		$	13,757	$	16,229		$	16,613
Canadian Operations		617			673		1,173			1,205		1,949			2,122
Market Optimization		-			-		2			2		272			253
Corporate & Other		-			-		209			227		3,055			2,499
	$	2,555		$	2,611	$	15,080		$	15,191	$	21,505		$	21,487

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4. Revenues from Contracts with Customers

The following tables summarize the Company’s revenues from contracts with customers.

Revenues (For the three months ended March 31)

	USA Operations				Canadian Operations				China Operations (1)
	2020		2019		2020		2019		2020		2019
Revenues from Customers
Product revenues (2)
Oil	$	642	$	609	$	2	$	1	$	-	$	13
NGLs		86		97		179		204		-		-
Natural gas		72		76		172		255		-		-
Service revenues
Gathering and processing		-		1		-		-		-		-
Product and Service Revenues	$	800	$	783	$	353	$	460	$	-	$	13

	Market Optimization				Corporate & Other				Consolidated
	2020		2019		2020		2019		2020		2019
Revenues from Customers
Product revenues (2)
Oil	$	210	$	60	$	-	$	-	$	854	$	683
NGLs		2		3		-		-		267		304
Natural gas		205		253		-		-		449		584
Service revenues
Gathering and processing		-		-		-		-		-		1
Product and Service Revenues	$	417	$	316	$	-	$	-	$	1,570	$	1,572

(1) The Company terminated its production sharing contract with CNOOC and exited its China Operations effective July 31, 2019.

(2) Includes revenues from production and revenues of product purchased from third parties, but excludes intercompany marketing fees transacted between the Company’s operating segments.

The Company’s revenues from contracts with customers consists of product sales including oil, NGLs and natural gas, as well as the provision of gathering and processing services to third parties. The Company had no contract asset or liability balances during the periods presented. As at March 31, 2020, receivables and accrued revenues from contracts with customers were $693 million ($1,095 million as at December 31, 2019).

Product sales are sold under short-term contracts with terms that are less than one year at either fixed or market index prices or under long-term contracts exceeding one year at market index prices.  

The Company’s gathering and processing services are provided on an interruptible basis with transaction prices that are for fixed prices and/or variable consideration. Variable consideration received is related to recovery of plant operating costs or escalation of the fixed price based on a consumer price index. As the service contracts are interruptible, with service provided on an “as available” basis, there are no unsatisfied performance obligations remaining at March 31, 2020.

As at March 31, 2020, all remaining performance obligations are priced at market index prices or are variable volume delivery contracts. As such, the variable consideration is allocated entirely to the wholly unsatisfied performance obligation or promise to deliver units of production, and revenue is recognized at the amount for which the Company has the right to invoice the product delivered. As the period between when the product sales are transferred and Ovintiv receives payments is generally 30 to 60 days, there is no financing element associated with customer contracts. In addition, Ovitniv does not disclose unsatisfied performance obligations for customer contracts with terms less than 12 months or for variable consideration related to unsatisfied performance obligations.

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5. Interest

	Three Months Ended
	March 31,
	2020		2019
Interest Expense on:
Debt	$	89	$	82
Finance leases		3		3
Other		4		2
	$	96	$	87

6. Foreign Exchange (Gain) Loss, Net

	Three Months Ended
	March 31,
	2020			2019
Unrealized Foreign Exchange (Gain) Loss on:
Translation of U.S. dollar financing debt issued from Canada	$	76		$	(93	)
Translation of U.S. dollar risk management contracts issued from Canada		52			(11	)
Translation of intercompany notes		(27	)		79
		101			(25	)
Foreign Exchange on Settlements of:
U.S. dollar financing debt issued from Canada		17			(1	)
U.S. dollar risk management contracts issued from Canada		3			-
Intercompany notes		3			(12	)
Other Monetary Revaluations		(8	)		1
	$	116		$	(37	)

Following the completion of the Reorganization, including the U.S. Domestication, on January 24, 2020 as described in Note 1, the U.S. dollar denominated unsecured notes issued by Encana Corporation from Canada were assumed by Ovintiv Inc., a company incorporated in Delaware with a U.S. dollar functional currency. Accordingly, these U.S. dollar denominated unsecured notes, along with certain intercompany notes, no longer attract foreign exchange translation gains or losses.

7. Income Taxes

	Three Months Ended
	March 31,
	2020			2019
Current Tax
United States	$	-		$	1
Canada		-			-
Other Countries		-			-
Total Current Tax Expense (Recovery)		-			1
Deferred Tax
United States		128			(24	)
Canada		10			(38	)
Other Countries		2			-
Total Deferred Tax Expense (Recovery)		140			(62	)
Income Tax Expense (Recovery)	$	140		$	(61	)
Effective Tax Rate		25.0	%		19.9	%

15

Ovintiv’s interim income tax expense is determined using the estimated annual effective income tax rate applied to year-to-date net earnings before income tax plus the effect of legislative changes and amounts in respect of prior periods. The estimated annual effective income tax rate is impacted by expected annual earnings, income tax related to foreign operations, state tax, the effect of legislative changes, non-taxable capital gains and losses, and tax differences on divestitures and transactions.

During the three months ended March 31, 2020, the deferred tax expense was primarily due to net earnings before income tax in the period. During the three months ended March 31, 2019, the deferred tax recovery was primarily due to a net loss before income tax in the period.

Following the U.S. Domestication as described in Note 1, the applicable statutory rate became the U.S. federal income tax rate. The effective tax rate of 25.0 percent for the three months ended March 31, 2020 is higher than the U.S. federal statutory tax rate of 21 percent primarily due to state taxes and foreign jurisdictional tax rates relative to the U.S. federal statutory tax rate applied to jurisdictional earnings.

The effective tax rate of 19.9 percent for the three months ended March 31, 2019, was lower than the Canadian statutory tax rate of 27 percent primarily due to the impact of the foreign jurisdictional tax rates relative to the Canadian statutory tax rate applied to jurisdictional earnings and partnership tax allocations in excess of funding.

During the three months ended March 31, 2020 and as part of the U.S. Domestication, Ovintiv recognized a capital loss and recorded a deferred income tax benefit in the amount of $1.2 billion for Canadian income tax purposes due to the decline in the Company’s share value compared to the historical tax basis of its properties that were transferred as part of the Reorganization. Ovintiv assessed the realizability of these capital losses against capital gains and concluded that it is more likely than not that the deferred tax asset will not be realizable. Therefore, Ovintiv has recorded a corresponding valuation allowance against the deferred tax asset.  If it is determined the capital loss can be utilized at a future date, a reduction in the valuation allowance will be recorded.

8. Business Combination

Newfield Exploration Company Acquisition

On February 13, 2019, the business combination with Newfield Exploration Company, a Delaware corporation (“Newfield”) was completed pursuant to an Agreement and Plan of Merger with Newfield (the “Merger”). As a result of the Merger, Newfield stockholders received 2.6719 Encana common shares, on a pre-Share Consolidation basis, for each share of Newfield common stock that was issued and outstanding immediately prior to the effective date of the Merger. The Company issued approximately 543.4 million Encana common shares, on a pre-Share Consolidation basis, representing a value of $3.5 billion and paid approximately $5 million in cash in respect of Newfield’s cash-settled incentive awards. Following the acquisition, Newfield’s senior notes totaling $2.45 billion was outstanding. For the three months ended March 31, 2019, transaction costs of approximately $31 million were included in other (gains) losses, net.

Newfield’s operations focused on the exploration and development of oil and gas properties located in Anadarko and Arkoma in Oklahoma, Bakken in North Dakota and Uinta in Utah, as well as offshore oil assets located in China. The results of Newfield’s operations have been included in the Condensed Consolidated Financial Statements as of February 14, 2019.

16

Purchase Price Allocation

The transaction was accounted for under the acquisition method, which requires that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date, with any excess of the purchase price over the estimated fair value of identified net assets acquired recorded as goodwill. The purchase price allocation represents the consideration paid and the fair values of the assets acquired, and liabilities assumed as of the acquisition date.

Purchase Price Allocation
Consideration:
Fair value of Encana's common shares issued (1)	$	3,478
Fair value of Newfield liability awards paid in cash (2)		5
Total Consideration	$	3,483
Assets Acquired:
Cash and cash equivalents	$	46
Accounts receivable and accrued revenues		486
Other current assets		50
Proved properties		5,903
Unproved properties		838
Other property, plant and equipment		22
Restricted cash		53
Other assets		105
Goodwill (3)		25
Liabilities Assumed:
Accounts payable and accrued liabilities (3) (4)		(795	)
Long-term debt		(2,603	)
Operating lease liabilities		(76	)
Other long-term liabilities (3)		(65	)
Asset retirement obligation		(184	)
Deferred income taxes (3)		(322	)
Total Purchase Price	$	3,483

(1) The fair value was based on the NYSE closing price of the pre-Share Consolidation Encana common shares of $6.40 on February 13, 2019.

(2) The fair value was based on a price of $6.50 per notional unit which was determined using a volume-weighted average of the trading price of pre-Share Consolidation Encana common shares on the NYSE on each of the five consecutive trading days ending on the trading day that was three trading days prior to February 13, 2019.

(3) Since the completion of the business combination on February 13, 2019, additional information related to pre-acquisition liabilities and contingencies was obtained resulting in a measurement period adjustment. Changes in the fair value estimates comprised an increase in other liabilities of $16 million, of which approximately $11 million is presented in accounts payable and accrued liabilities and $5 million is presented in other long-term liabilities, a decrease in deferred tax liabilities of $4 million and a corresponding increase in goodwill of $12 million.

(4) In conjunction with the acquisition, various legal claims and actions arising in the normal course of Newfield’s operations were assumed by the Company. On March 29, 2019, Newfield and its wholly-owned subsidiary entered into an Agreement and Mutual Release with Sapura Energy Berhad, formerly known as SapuraKencana Petroleum Berhad, and Sapura Exploration and Production Inc., formerly known as SapuraKencana Energy Inc. (collectively, “Sapura”), and agreed to settle arbitration claims in the amount of $22.5 million arising from Sapura’s purchase of Newfield’s Malaysian business in February 2014. The settlement amount including legal fees was included in the purchase price allocation as part of the current liabilities assumed at the acquisition date. Although the outcome of any remaining legal claims and actions assumed following the acquisition of Newfield cannot be predicted with certainty, the Company does not expect these matters to have a material adverse effect on the Company’s financial position, cash flows or results of operations.

The income approach valuation technique was used for the fair value of assets acquired and liabilities assumed. The carrying amounts of cash and cash equivalents, accounts receivable and accrued revenues, restricted cash, other current assets, and accounts payable and accrued liabilities approximate their fair values due to their nature and/or the short-term maturity of the instruments. The fair values of long-term debt, right-of-use (“ROU”) assets and operating lease liabilities were categorized within Level 2 of the fair value hierarchy and were determined using quoted prices and rates from an available pricing source. The fair values of the proved and unproved properties, other property, plant and equipment, other assets, other long-term liabilities and asset retirement obligation were categorized within Level 3 and were determined using relevant market assumptions, including discount rates, future commodity prices and costs, timing of development activities, projections of oil and gas reserves, and estimates for abandonment and reclamation.

Goodwill arose from the Newfield acquisition primarily from the requirement to recognize deferred taxes on the difference between the fair value of the assets acquired and liabilities assumed and the respective carry-over tax basis. Goodwill is not amortized and is not deductible for tax purposes.

17

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information combines the historical financial results of the Company with Newfield and has been prepared as though the acquisition had occurred on January 1, 2019. The pro forma information is not intended to reflect the actual results of operations that would have occurred if the business combination had been completed at the date indicated. In addition, the pro forma information is not intended to be a projection of the Company’s results of operations for any future period.

Additionally, pro forma earnings were adjusted to exclude transaction-related costs incurred of approximately $69 million and severance payments made to employees which totaled $113 million for the three months ended March 31, 2019. The pro forma financial information does not include any cost savings or other synergies from the Merger or any estimated costs that have been incurred to integrate the assets. Ovintiv’s consolidated results for the three months ended March 31, 2020 include the results from Newfield.

For the three months ended March 31 (US$ millions, except per share amounts)	2019
Revenues	$	1,515
Net Earnings (Loss)	$	(117	)
Net Earnings (Loss) per Share (1)
Basic & Diluted	$	(0.48	)

(1) Net earnings (loss) per share reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

9. Acquisitions and Divestitures

	Three Months Ended
	March 31,
	2020			2019
Acquisitions
USA Operations	$	17		$	22
Total Acquisitions		17			22
Divestitures
USA Operations		(21	)		(3	)
Canadian Operations		(1	)		1
Total Divestitures		(22	)		(2	)
Net Acquisitions & (Divestitures)	$	(5	)	$	20

Acquisitions

For the three months ended March 31, 2020, acquisitions in the USA Operations were $17 million, which primarily included property purchases with oil and liquids rich potential. For the three months ended March 31, 2019, acquisitions in the USA Operations were $22 million which primarily included seismic purchases.

Divestitures

For the three months ended March 31, 2020, divestitures in the USA and Canadian Operations were $21 million and $1 million, respectively, which primarily included the sale of certain properties that did not complement Ovintiv’s existing portfolio of assets.

Amounts received from the Company’s divestiture transactions have been deducted from the respective U.S. and Canadian full cost pools.

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10. Property, Plant and Equipment, Net

	As at March 31, 2020							As at December 31, 2019
			Accumulated							Accumulated
	Cost		DD&A			Net		Cost		DD&A			Net
USA Operations
Proved properties	$	36,731	$	(26,320	)	$	10,411	$	35,870	$	(25,623	)	$	10,247
Unproved properties		3,260		-			3,260		3,491		-			3,491
Other		25		-			25		19		-			19
		40,016		(26,320	)		13,696		39,380		(25,623	)		13,757
Canadian Operations
Proved properties		14,172		(13,215	)		957		15,284		(14,320	)		964
Unproved properties		200		-			200		223		-			223
Other		16		-			16		18		-			18
		14,388		(13,215	)		1,173		15,525		(14,320	)		1,205
Market Optimization		8		(6	)		2		9		(7	)		2
Corporate & Other		852		(643	)		209		914		(687	)		227
	$	55,264	$	(40,184	)	$	15,080	$	55,828	$	(40,637	)	$	15,191

USA and Canadian Operations property, plant and equipment include internal costs directly related to exploration, development and construction activities of $47 million, which have been capitalized during the three months ended March 31, 2020 (2019 - $79 million).

For the three months ended March 31, 2020, the Company recognized before-tax non-cash ceiling test impairments of $277 million (2019 - nil) in the USA Operations. The non-cash ceiling test impairment is included with accumulated DD&A in the table above and primarily resulted from the decline in the 12-month average trailing prices related to NGLs and natural gas, which reduced proved reserves values.

The 12-month average trailing prices used in the ceiling test calculations were based on the benchmark prices presented below. The benchmark prices were adjusted for basis differentials to determine local reference prices, transportation costs and tariffs, heat content and quality.

	Oil & NGLs				Natural Gas
	WTI		Edmonton Condensate		Henry Hub		AECO
	($/bbl)		(C$/bbl)		($/MMBtu)		(C$/MMBtu)
12-Month Average Trailing Reserves Pricing (1)
March 31, 2020	$	56.06	$	70.32	$	2.30	$	1.48
December 31, 2019		55.93		68.80		2.58		1.76
March 31, 2019		62.99		75.86		3.07		1.69

(1) All prices were held constant in all future years when estimating net revenues and reserves.

Finance Lease Arrangements

The Company has two lease arrangements that are accounted for as finance leases, which include an office building and an offshore production platform. As at March 31, 2020, the total carrying value of assets under finance lease was $36 million ($37 million as at December 31, 2019), net of accumulated amortization of $639 million ($677 million as at December 31, 2019). Long-term liabilities for the finance lease arrangements are included in other liabilities and provisions in the Condensed Consolidated Balance Sheet and are disclosed in Note 13.

19

11. Leases

The following table outlines the Company’s estimated future sublease income as at March 31, 2020. All subleases are classified as operating leases.

(undiscounted)	2020		2021		2022		2023		2024		Thereafter		Total
Sublease Income	$	35	$	48	$	43	$	42	$	42	$	511	$	721

For the three months ended March 31, 2020, operating lease income was $13 million (2019 - $13 million) and variable lease income was $5 million (2019 - $3 million).

12. Long-Term Debt

	As at			As at
	March 31,			December 31,
	2020			2019
U.S. Dollar Denominated Debt
Revolving credit and term loan borrowings	$	842		$	698
U.S. Unsecured Notes:
3.90% due November 15, 2021		590			600
5.75% due January 30, 2022		660			750
5.625% due July 1, 2024		1,000			1,000
5.375% due January 1, 2026		700			700
8.125% due September 15, 2030		300			300
7.20% due November 1, 2031		350			350
7.375% due November 1, 2031		500			500
6.50% due August 15, 2034		750			750
6.625% due August 15, 2037		462			462
6.50% due February 1, 2038		505			505
5.15% due November 15, 2041		244			244
Total Principal		6,903			6,859
Increase in Value of Debt Acquired		140			149
Unamortized Debt Discounts and Issuance Costs		(37	)		(34	)
Total Long-Term Debt	$	7,006		$	6,974
Current Portion	$	-		$	-
Long-Term Portion		7,006			6,974
	$	7,006		$	6,974

During the three months ended March 31, 2020, the Company repurchased in the open market approximately $10 million in principal amount of its 3.9 percent senior notes due in November 2021 and approximately $90 million in principal amount of its 5.75 percent senior notes due in January 2022 for an aggregate cash payment of $89 million, plus accrued interest, and recognized a net gain of approximately $11 million which was included in other (gains) losses, net on the Condensed Consolidated Statement of Earnings.

As at March 31, 2020, the Company had outstanding commercial paper of $357 million maturing at various dates with a weighted average interest rate of approximately 2.00 percent. These amounts are supported, and Management expects that they will continue to be supported, by revolving credit facilities that have no repayment requirements within the next year and which expire in 2024. As at March 31, 2020, the Company also had $485 million drawn on its revolving credit facilities.

As at March 31, 2020, total long-term debt had a carrying value of $7,006 million and a fair value of $4,005 million (as at December 31, 2019 - carrying value of $6,974 million and a fair value of $7,657 million). The estimated fair value of long-term borrowings is categorized within Level 2 of the fair value hierarchy and has been determined based on market information of long-term debt with similar terms and maturity, or by discounting future payments of interest and principal at interest rates expected to be available to the Company at period end.

20

13. Other Liabilities and Provisions

	As at		As at
	March 31,		December 31,
	2020		2019
Finance Lease Obligations	$	99	$	121
Unrecognized Tax Benefits		146		159
Pensions and Other Post-Employment Benefits		118		119
Long-Term Incentive Costs (See Note 19)		4		38
Other Derivative Contracts (See Notes 21, 22)		19		7
Other		16		20
	$	402	$	464

14. Asset Retirement Obligation

	As at			As at
	March 31,			December 31,
	2020			2019
Asset Retirement Obligation, Beginning of Year	$	614		$	455
Liabilities Incurred		7			15
Liabilities Acquired (See Note 8)		-			184
Liabilities Settled and Divested		(42	)		(141	)
Change in Estimated Future Cash Outflows		22			47
Accretion Expense		9			37
Foreign Currency Translation		(29	)		17
Asset Retirement Obligation, End of Period	$	581		$	614
Current Portion	$	143		$	189
Long-Term Portion		438			425
	$	581		$	614

15. Share Capital

Authorized

As of January 24, 2020, following the completion of the Reorganization, Ovintiv is authorized to issue 775 million shares of common stock, par value $0.01 per share, and 25 million shares of preferred stock, par value $0.01 per share. No shares of preferred stock are outstanding.

Issued and Outstanding

	As at March 31, 2020					As at December 31, 2019
	Number (millions)		Amount			Number (millions)			Amount
Shares of Common Stock Outstanding, Beginning of Year		259.8	$	7,061			190.5		$	4,656
Shares of Common Stock Purchased		-		-			(39.4	)		(1,073	)
Shares of Common Stock Issued		-		-			108.7			3,478
Reclassification of Share Capital due to the Reorganization (See Note 1)		-		(7,058	)		-			-
Shares of Common Stock Outstanding, End of Period		259.8	$	3			259.8		$	7,061

In conjunction with the Reorganization as described in Note 1, the amount recognized in share capital in excess of Ovintiv’s established par value of $0.01 per share was reclassified to paid in surplus. Accordingly, approximately $7,058 million was reclassified.

21

On February 13, 2019, the Company completed the acquisition of all the issued and outstanding shares of common stock of Newfield whereby Encana issued approximately 543.4 million common shares, on a pre-Share Consolidation basis, to Newfield shareholders (approximately 108.7 million post-Share Consolidation shares), representing a pre-Share Consolidation exchange ratio of 2.6719 Encana common shares for each share of Newfield common stock held. See Note 8 for further information on the business combination.

Substantial Issuer Bid

On June 10, 2019, the Company announced its intention to purchase, for cancellation, up to $213 million of common shares through a substantial issuer bid (“SIB”) which commenced on July 8, 2019. On August 29, 2019, the Company purchased the equivalent of approximately 9.5 million post-Share Consolidation shares at a converted price of $22.50 per share, for an aggregate purchase price of approximately $213 million, of which $257 million was charged to share capital and $44 million was credited to paid in surplus.

The purchase was made in accordance with the terms and conditions of the SIB, with consideration allocated to share capital equivalent to the average carrying amount of the shares, with the excess of the carrying amount over the purchase consideration credited to paid in surplus.

Normal Course Issuer Bid

On February 27, 2019, the Company announced that the TSX accepted the Company’s notice of intention to purchase, for cancellation, the equivalent of up to approximately 29.9 million post-Share Consolidation Encana common shares, pursuant to a NCIB over a 12-month period from March 4, 2019 to March 3, 2020.

During the three months ended March 31, 2019, the Company purchased the equivalent of approximately 11.2 million post-Share Consolidation shares under the NCIB for total consideration of approximately $400 million. Of the amount paid, $307 million was charged to share capital and $93 million was charged to retained earnings.

For the twelve months ended December 31, 2019, the Company purchased the equivalent of approximately 29.9 million post-Share Consolidation shares under the NCIB for total consideration of approximately $1,037 million. Of the amount paid, $816 million was charged to share capital and $221 million was charged to retained earnings.

All purchases were made in accordance with the NCIB at prevailing market prices plus brokerage fees, with consideration allocated to share capital up to the average carrying amount of the shares, with any excess allocated to retained earnings.

Dividends

During the three months ended March 31, 2020, the Company declared and paid dividends of $0.09375 per share of Ovintiv common stock totaling $24 million. For the three months ended March 31, 2019, the Company declared and paid dividends of $0.09375 per common share on a post-Share Consolidation basis totaling $28 million.

On May 7, 2020, the Board of Directors declared a dividend of $0.09375 per share of Ovintiv common stock payable on June 30, 2020 to stockholders of record as of June 15, 2020.

22

Earnings Per Share of Common Stock

The following table presents the computation of net earnings (loss) per share of common stock:

	Three Months Ended
	March 31,
(US$ millions, except per share amounts)	2020		2019
Net Earnings (Loss)	$	421	$	(245	)
Number of Shares of Common Stock (1):
Weighted average shares of common stock outstanding - Basic		259.8		244.3
Effect of dilutive securities		-		-
Weighted Average Shares of Common Stock Outstanding - Diluted		259.8		244.3
Net Earnings (Loss) per Share of Common Stock (1)
Basic & Diluted	$	1.62	$	(1.00	)

(1) Net earnings (loss) per share of common stock and weighted average shares of common stock outstanding reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

Ovintiv Stock Options

Ovintiv has share-based compensation plans that allow employees to purchase shares of common stock of the Company. Option exercise prices are not less than the market value of the shares of common stock on the date the options are granted. All options outstanding as at March 31, 2020 have associated Tandem Stock Appreciation Rights (“TSARs”) attached. In lieu of exercising the option, the associated TSARs give the option holder the right to receive a cash payment equal to the excess of the market price of Ovintiv’s shares of common stock at the time of the exercise over the original grant price. Historically, most holders of options with TSARs have elected to exercise their stock options as a Stock Appreciation Right (“SAR”) in exchange for a cash payment. As a result, outstanding TSARs are not considered potentially dilutive securities.

Ovintiv Restricted Share Units

Ovintiv has a share-based compensation plan whereby eligible employees and Directors are granted Restricted Share Units (“RSUs”). An RSU is a conditional grant to receive the equivalent of a share of common stock upon vesting of the RSUs and in accordance with the terms and conditions of the compensation plan and grant agreements. The Company currently settles vested RSUs in cash. As a result, RSUs are currently not considered potentially dilutive securities.  

16. Accumulated Other Comprehensive Income

	Three Months Ended
	March 31,
	2020			2019
Foreign Currency Translation Adjustment
Balance, Beginning of Year	$	1,004		$	976
Change in Foreign Currency Translation Adjustment		(134	)		34
Balance, End of Period	$	870		$	1,010
Pension and Other Post-Employment Benefit Plans
Balance, Beginning of Year	$	42		$	22
Amounts Reclassified from Other Comprehensive Income:
Reclassification of net actuarial (gains) and losses to net earnings (See Note 20)		(2	)		(1	)
Income taxes		-			-
Balance, End of Period	$	40		$	21
Total Accumulated Other Comprehensive Income	$	910		$	1,031

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17. Variable Interest Entities

Veresen Midstream Limited Partnership

Veresen Midstream Limited Partnership (“VMLP”) provides gathering, compression and processing services under various agreements related to the Company’s development of liquids and natural gas production in the Montney play. As at March 31, 2020, VMLP provides approximately 1,213 MMcf/d of natural gas gathering and compression and 932 MMcf/d of natural gas processing under long-term service agreements with remaining terms ranging from 11 to 25 years and have various renewal terms providing up to a potential maximum of 10 years.

Ovintiv has determined that VMLP is a VIE and that Ovintiv holds variable interests in VMLP. Ovintiv is not the primary beneficiary as the Company does not have the power to direct the activities that most significantly impact VMLP’s economic performance. These key activities relate to the construction, operation, maintenance and marketing of the assets owned by VMLP. The variable interests arise from certain terms under the various long-term service agreements and include: i) a take or pay for volumes in certain agreements; ii) an operating fee of which a portion can be converted into a fixed fee once VMLP assumes operatorship of certain assets; and iii) a potential payout of minimum costs in certain agreements. The potential payout of minimum costs will be assessed in the eighth year of the assets’ service period and is based on whether there is an overall shortfall of total system cash flows from natural gas gathered and compressed under certain agreements. The potential payout amount can be reduced in the event VMLP markets unutilized capacity to third party users. Ovintiv is not required to provide any financial support or guarantees to VMLP.

As a result of Ovintiv’s involvement with VMLP, the maximum total exposure, which represents the potential exposure to Ovintiv in the event the assets under the agreements are deemed worthless, is estimated to be $1,929 million as at March 31, 2020. The estimate comprises the take or pay volume commitments and the potential payout of minimum costs. The take or pay volume commitments associated with certain gathering and processing assets are included in Note 24 under Transportation and Processing. The potential payout requirement is highly uncertain as the amount is contingent on future production estimates, pace of development and the amount of capacity contracted to third parties. As at March 31, 2020, accounts payable and accrued liabilities included $0.4 million related to the take or pay commitment.

18. Restructuring Charges

In February 2019, in conjunction with the Newfield business combination as described in Note 8, the Company announced workforce reductions to better align staffing levels and the organizational structure with the Company’s strategy. During 2019, the Company incurred total restructuring charges of $138 million, before tax, primarily related to severance costs. As at March 31, 2020, $2 million remains accrued and is expected to be paid in 2020.

Restructuring charges are included in administrative expense presented in the Corporate and Other segment in the Condensed Consolidated Statement of Earnings.

	As at			As at
	March 31,			December 31,
	2020			2019
Outstanding Restructuring Accrual, Beginning of Year	$	8		$	-
Restructuring Expenses Incurred		-			138
Restructuring Costs Paid		(6	)		(130	)
Outstanding Restructuring Accrual, End of Period (1)	$	2		$	8

(1) Included in accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheet.

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19. Compensation Plans

Ovintiv has a number of compensation arrangements under which the Company awards various types of long-term incentive grants to eligible employees and Directors. They may include TSARs, SARs, Performance Share Units (“PSUs”), Deferred Share Units (“DSUs”) and RSUs. These compensation arrangements are share-based.  

Ovintiv accounts for TSARs, SARs, PSUs and RSUs as cash-settled share-based payment transactions and, accordingly, accrues compensation costs over the vesting period based on the fair value of the rights determined using the Black-Scholes-Merton and other fair value models.

The following weighted average assumptions were used to determine the fair value of the share units outstanding:  

	As at March 31, 2020		As at March 31, 2019
	US$ Share Units	C$ Share Units	US$ Share Units	C$ Share Units
Risk Free Interest Rate	0.47%	0.47%	1.49%	1.49%
Dividend Yield	13.89%	13.07%	1.04%	1.03%
Expected Volatility Rate (1)	93.81%	93.42%	43.95%	41.92%
Expected Term	2.8 yrs	2.3 yrs	3.0 yrs	2.6 yrs
Market Share Price (2)	US$2.70	C$3.86	US$36.20	C$48.40

(1) Volatility was estimated using historical rates.

(2) Market share price reflects the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

The Company has recognized the following share-based compensation costs:

	Three Months Ended
	March 31,
	2020			2019
Total Compensation Costs of Transactions Classified as Cash-Settled	$	(51	)	$	64
Less: Total Share-Based Compensation Costs Capitalized		13			(18	)
Total Share-Based Compensation Expense (Recovery)	$	(38	)	$	46
Recognized on the Condensed Consolidated Statement of Earnings in:
Operating	$	(12	)	$	14
Administrative		(26	)		32
	$	(38	)	$	46

As at March 31, 2020, the liability for share-based payment transactions totaled $8 million ($78 million as at December 31, 2019), of which $4 million ($40 million as at December 31, 2019) is recognized in accounts payable and accrued liabilities and $4 million ($38 million as at December 31, 2019) is recognized in other liabilities and provisions in the Condensed Consolidated Balance Sheet.

	As at March 31, 2020			As at December 31, 2019
Liability for Cash-Settled Share-Based Payment Transactions:
Unvested		$	7		$	65
Vested			1			13
		$	8		$	78

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The following units were granted primarily in conjunction with the Company’s annual grant of long-term incentive awards. The PSUs and RSUs were granted at the volume-weighted average trading price of shares of Ovintiv common stock for the five days prior to the grant date. The RSUs issued in 2020 vest at one-third of the number granted in each of the years following the grant date, for three years.

Three Months Ended March 31, 2020 (thousands of units)
RSUs	6,350
PSUs	2,166
DSUs	42

20. Pension and Other Post-Employment Benefits

The Company has recognized total benefit plans expense which includes pension benefits and other post-employment benefits (“OPEB”) for the three months ended March 31 as follows:

	Pension Benefits				OPEB					Total
	2020		2019		2020			2019		2020			2019
Net Defined Periodic Benefit Cost	$	-	$	-	$	(1	)	$	6	$	(1	)	$	6
Defined Contribution Plan Expense		8		6		-			-		8			6
Total Benefit Plans Expense	$	8	$	6	$	(1	)	$	6	$	7		$	12

Of the total benefit plans expense, $7 million (2019 - $6 million) was included in operating expense and $2 million (2019 - $2 million) was included in administrative expense. Excluding service costs, net defined periodic benefit gains of $2 million (2019 - losses of $4 million) were recorded in other (gains) losses, net.

The net defined periodic benefit cost for the three months ended March 31 is as follows:

	Defined Benefits						OPEB						Total
	2020			2019			2020			2019			2020			2019
Service Cost	$	-		$	-		$	1		$	2		$	1		$	2
Interest Cost		2			2			-			1			2			3
Expected Return on Plan Assets		(2	)		(2	)		-			-			(2	)		(2	)
Amounts Reclassified from Accumulated Other     Comprehensive Income:
Amortization of net actuarial (gains) and losses		-			-			(2	)		(1	)		(2	)		(1	)
Curtailment		-			-			-			4			-			4
Total Net Defined Periodic Benefit Cost (1)	$	-		$	-		$	(1	)	$	6		$	(1	)	$	6

(1) The components of total net defined periodic benefit cost, excluding the service cost component, are included in other (gains) losses, net.

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21. Fair Value Measurements

The fair values of cash and cash equivalents, accounts receivable and accrued revenues, and accounts payable and accrued liabilities approximate their carrying amounts due to the short-term maturity of those instruments. The fair values of restricted cash and marketable securities included in other assets approximate their carrying amounts due to the nature of the instruments held.

Recurring fair value measurements are performed for risk management assets and liabilities and other derivative contracts, as discussed further in Note 22. These items are carried at fair value in the Condensed Consolidated Balance Sheet and are classified within the three levels of the fair value hierarchy in the following tables.

Fair value changes and settlements for amounts related to risk management assets and liabilities are recognized in revenues and foreign exchange gains and losses according to their purpose.

As at March 31, 2020	Level 1 Quoted Prices in Active Markets		Level 2 Other Observable Inputs		Level 3 Significant Unobservable Inputs		Total Fair Value		Netting (1)			Carrying Amount
Risk Management Assets
Commodity Derivatives:
Current assets	$	9	$	928	$	151	$	1,088	$	(130	)	$	958
Long-term assets		-		5		-		5		(5	)		-
Foreign Currency Derivatives:
Long-term assets		-		1		-		1		-			1
Risk Management Liabilities
Commodity Derivatives:
Current liabilities	$	-	$	137	$	-	$	137	$	(130	)	$	7
Long-term liabilities		-		77		1		78		(5	)		73
Foreign Currency Derivatives:
Current liabilities		-		33		-		33		-			33
Long-term liabilities		-		8		-		8		-			8
Other Derivative Contracts
Current in accounts payable and accrued liabilities	$	-	$	6	$	-	$	6	$	-		$	6
Long-term in other liabilities and provisions		-		19		-		19		-			19

As at December 31, 2019	Level 1 Quoted Prices in Active Markets		Level 2 Other Observable Inputs		Level 3 Significant Unobservable Inputs		Total Fair Value		Netting (1)			Carrying Amount
Risk Management Assets
Commodity Derivatives:
Current assets	$	-	$	202	$	-	$	202	$	(67	)	$	135
Long-term assets		-		6		-		6		(4	)		2
Foreign Currency Derivatives:
Current assets		-		13		-		13		-			13
Risk Management Liabilities
Commodity Derivatives:
Current liabilities	$	1	$	139	$	41	$	181	$	(67	)	$	114
Long-term liabilities		-		61		11		72		(4	)		68
Other Derivative Contracts
Current in accounts payable and accrued liabilities	$	-	$	2	$	-	$	2	$	-		$	2
Long-term in other liabilities and provisions		-		7		-		7		-			7

(1) Netting to offset derivative assets and liabilities where the legal right and intention to offset exists, or where counterparty master netting arrangements contain provisions for net settlement.

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The Company’s Level 1 and Level 2 risk management assets and liabilities consist of commodity fixed price contracts, NYMEX fixed price swaptions, NYMEX three-way options, NYMEX costless collars, NYMEX call options, foreign currency swaps and basis swaps with terms to 2025. Level 2 also includes financial guarantee contracts as discussed in Note 22. The fair values of these contracts are based on a market approach and are estimated using inputs which are either directly or indirectly observable from active markets, such as exchange and other published prices, broker quotes and observable trading activity throughout the term of the instruments.  

Level 3 Fair Value Measurements

As at March 31, 2020, the Company’s Level 3 risk management assets and liabilities consist of WTI three-way options, WTI costless collars and WTI sold payer swaptions with terms to 2021. The WTI three-way options are a combination of a sold call, bought put and a sold put. The WTI costless collars are a combination of a sold call and a bought put. These contracts allow the Company to participate in the upside of commodity prices to the ceiling of the call option and provide the Company with complete (collars) or partial (three-way) downside price protection through the put options. The sold payer swaptions give the counterparty the right to extend to 2021 certain 2020 WTI fixed price swaps. The fair values of these contracts are based on the income approach and are modelled using observable and unobservable inputs such as implied volatility. The unobservable inputs are obtained from third parties whenever possible and reviewed by the Company for reasonableness.

A summary of changes in Level 3 fair value measurements for risk management positions is presented below:

	Three Months Ended
	March 31,
	2020			2019
Balance, Beginning of Year	$	(52	)	$	139
Total Gains (Losses)		242			(100	)
Purchases, Sales, Issuances and Settlements:
Purchases, sales and issuances		-			-
Settlements		(40	)		(20	)
Transfers Out of Level 3		-			-
Balance, End of Period	$	150		$	19
Change in Unrealized Gains (Losses) Related to    Assets and Liabilities Held at End of Period	$	189		$	(80	)

Quantitative information about unobservable inputs used in Level 3 fair value measurements is presented below as at March 31, 2020:

	Valuation Technique	Unobservable Input	Range	Weighted Average (1)
Risk Management - WTI Options	Option Model	Implied Volatility	35% - 86%	63%

(1) Unobservable inputs were weighted by the relative fair value of the instruments.

A 10 percent increase or decrease in implied volatility for the WTI options would cause an approximate corresponding $3 million ($8 million as at December 31, 2019) increase or decrease to net risk management assets and liabilities.

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22. Financial Instruments and Risk Management

A)  Financial Instruments

Ovintiv’s financial assets and liabilities are recognized in cash and cash equivalents, accounts receivable and accrued revenues, other assets, accounts payable and accrued liabilities, risk management assets and liabilities, long-term debt, and other liabilities and provisions.

B)  Risk Management Activities

Ovintiv uses derivative financial instruments to manage its exposure to cash flow variability from commodity prices and fluctuating foreign currency exchange rates. The Company does not apply hedge accounting to any of its derivative financial instruments. As a result, gains and losses from changes in the fair value are recognized in net earnings.

Commodity Price Risk

Commodity price risk arises from the effect that fluctuations in future commodity prices may have on future cash flows. To partially mitigate exposure to commodity price risk, the Company has entered into various derivative financial instruments.  The use of these derivative instruments is governed under formal policies and is subject to limits established by the Board of Directors.

Crude Oil and NGLs - To partially mitigate crude oil and NGL commodity price risk, the Company uses WTI-based contracts such as fixed price contracts, fixed price swaptions, options and costless collars. The Company has also entered into basis swaps to manage against widening price differentials between various production areas and benchmark price points.

Natural Gas - To partially mitigate natural gas commodity price risk, the Company uses NYMEX-based contracts such as fixed price contracts, fixed price swaptions, options and costless collars. The Company has also entered into basis swaps to manage against widening price differentials between various production areas and benchmark price points.

Foreign Exchange Risk

Foreign exchange risk arises from changes in foreign currency exchange rates that may affect the fair value or future cash flows of the Company’s financial assets or liabilities. To partially mitigate the effect of foreign exchange fluctuations on future commodity revenues and expenses, the Company may enter into foreign currency derivative contracts. As at March 31, 2020, the Company has entered into $644 million notional U.S. dollar denominated currency swaps at an average exchange rate of US$0.7451 to C$1, which mature monthly through the remainder of 2020 and $350 million notional U.S. dollar denominated currency swaps at an average exchange rate of US$0.7289 to C$1, which mature monthly throughout 2021.

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Risk Management Positions as at March 31, 2020

	Notional Volumes	Term	Average Price		Fair Value
Crude Oil and NGL Contracts			US$/bbl
Fixed Price Contracts
WTI Fixed Price	140.2 Mbbls/d	2020		45.36	$	625
Propane Fixed Price	12.0 Mbbls/d	2020		21.34		26
Butane Fixed Price	8.0 Mbbls/d	2020		23.54		18
Iso-Butane Fixed Price	3.5 Mbbls/d	2020		24.36		7
WTI Fixed Price Swaptions (1)	10.0 Mbbls/d	2021		58.00		(1	)
WTI Three-Way Options
Sold call / bought put / sold put	26.8 Mbbls/d	2020	61.68 / 53.44 / 43.44			60
WTI Costless Collars
Sold call / bought put	15.0 Mbbls/d	2020	68.71 / 50.00			91
Basis Contracts (2)		2020				(32	)
Other Crude Financial Positions						3
Crude Oil and NGLs Fair Value Position						797
Natural Gas Contracts			US$/Mcf
Fixed Price Contracts
NYMEX Fixed Price	811 MMcf/d	2020		2.65		147
NYMEX Fixed Price	165 MMcf/d	2021		2.51		1
Fixed Price Swaptions (3)
NYMEX Fixed Price Swaptions	330 MMcf/d	2021		2.56		(22	)
NYMEX Fixed Price Swaptions	165 MMcf/d	2022		2.51		(11	)
NYMEX Three-Way Options
Sold call / bought put / sold put	330 MMcf/d	2020	2.72 / 2.60 / 2.25			19
NYMEX Costless Collars
Sold call / bought put	55 MMcf/d	2020	2.88 / 2.50			8
NYMEX Call Options
Sold call	230 MMcf/d	2020		3.25		4
Basis Contracts (4)		2020				(10	)
		2021				(18	)
		2022 - 2025				(33	)
Other Financial Positions						3
Natural Gas Fair Value Position						88
Net Premiums Received on Unexpired Options						(7	)
Other Derivative Contracts
Fair Value Position						(25	)
Foreign Currency Contracts
Fair Value Position (5)		2020 - 2021				(40	)
Total Fair Value Position and Net Premiums Received					$	813

(1) WTI Fixed Price Swaptions give the counterparty the option to extend certain 2020 Fixed Price swaps to 2021.

(2) Ovintiv has entered into crude and NGL differential swaps associated with Midland, Magellan East Houston, Belvieu, Conway, Brent and WTI.

(3) NYMEX Fixed Price Swaptions give the counterparty the option to extend certain 2020 and 2021 Fixed Price swaps to 2021 and 2022, respectively.

(4) Ovintiv has entered into natural gas basis swaps associated with AECO, Dawn, Chicago, Malin, Waha, Houston Ship Channel and NYMEX.

(5) Ovintiv has entered into U.S. dollar denominated fixed-for-floating average currency swaps to protect against fluctuations between the Canadian and U.S. dollars.

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Earnings Impact of Realized and Unrealized Gains (Losses) on Risk Management Positions

	Three Months Ended
	March 31,
	2020			2019
Realized Gains (Losses) on Risk Management
Commodity and Other Derivatives:
Revenues (1)	$	151		$	72
Foreign Currency Derivatives:
Foreign exchange		(3	)		-
	$	148		$	72
Unrealized Gains (Losses) on Risk Management
Commodity and Other Derivatives:
Revenues (2)	$	904		$	(427	)
Foreign Currency Derivatives:
Foreign exchange		(52	)		20
	$	852		$	(407	)
Total Realized and Unrealized Gains (Losses) on Risk Management, net
Commodity and Other Derivatives:
Revenues (1) (2)	$	1,055		$	(355	)
Foreign Currency Derivatives:
Foreign exchange		(55	)		20
	$	1,000		$	(335	)

(1) Includes a realized gain of $1 million (2019 - gain of $2 million) related to other derivative contracts.

(2) Includes an unrealized loss of $17 million (2019 - loss of nil) related to other derivative contracts.

Reconciliation of Unrealized Risk Management Positions from January 1 to March 31

	2020						2019
	Fair Value			Total Unrealized Gain (Loss)			Total Unrealized Gain (Loss)
Fair Value of Contracts, Beginning of Year	$	(41	)
Change in Fair Value of Contracts in Place at Beginning of Year    and Contracts Entered into During the Period		1,000		$	1,000		$	(335	)
Settlement of Other Derivative Contracts		1
Amortization of Option Premiums During the Period		1
Fair Value of Contracts Realized During the Period		(148	)		(148	)		(72	)
Fair Value of Contracts and Net Premiums Received, End of Period	$	813		$	852		$	(407	)

Risk management assets and liabilities arise from the use of derivative financial instruments and are measured at fair value.  See Note 21 for a discussion of fair value measurements.

31

Unrealized Risk Management Positions

	As at		As at
	March 31,		December 31,
	2020		2019
Risk Management Assets
Current	$	958	$	148
Long-term		1		2
		959		150
Risk Management Liabilities
Current		40		114
Long-term		81		68
		121		182
Other Derivative Contracts
Current in accounts payable and accrued liabilities		6		2
Long-term in other liabilities and provisions		19		7
Net Risk Management Assets (Liabilities) and Other Derivative Contracts	$	813	$	(41	)

C)  Credit Risk

Credit risk arises from the potential that the Company may incur a loss if a counterparty to a financial instrument fails to meet its obligation in accordance with agreed terms. While exchange-traded contracts are subject to nominal credit risk due to the financial safeguards established by the NYSE and the TSX, over-the-counter traded contracts expose Ovintiv to counterparty credit risk. This credit risk exposure is mitigated through the use of credit policies approved by the Board of Directors governing the Company’s credit portfolio including credit practices that limit transactions according to counterparties’ credit quality. Mitigation strategies may include master netting arrangements, requesting collateral, purchasing credit insurance and/or transacting credit derivatives. The Company executes commodity derivative financial instruments under master agreements that have netting provisions that provide for offsetting payables against receivables. As a result of netting provisions, the Company’s maximum exposure to loss under derivative financial instruments due to credit risk is limited to the net amounts due from the counterparties under the derivative contracts, as disclosed in Note 21. As at March 31, 2020, the Company had no significant credit derivatives in place and held no collateral.

As at March 31, 2020, cash equivalents include high-grade, short-term securities, placed primarily with financial institutions and companies with strong investment grade ratings. Any foreign currency agreements entered into are with major financial institutions that have investment grade credit ratings.  

A substantial portion of the Company’s accounts receivable are with customers and working interest owners in the oil and gas industry and are subject to normal industry credit risks. As at March 31, 2020, approximately 97 percent (95 percent as at December 31, 2019) of Ovintiv’s accounts receivable and financial derivative credit exposures were with investment grade counterparties.

As at March 31, 2020, Ovintiv had two counterparties whose net settlement position individually accounted for more than 10 percent of the fair value of the outstanding in-the-money net risk management contracts by counterparty. These counterparties accounted for 21 percent and 17 percent of the fair value of the outstanding in-the-money net risk management contracts. As at December 31, 2019, the Company had six counterparties whose net settlement position accounted for 26 percent, 13 percent, 12 percent, 12 percent, 11 percent and 11 percent of the fair value of the outstanding in-the-money net risk management contracts.

During 2015 and 2017, the Company entered into agreements resulting from divestitures, which may require the Company to fulfill certain payment obligations on the take or pay volume commitments assumed by the purchasers. The circumstances that would require the Company to perform under the agreements include events where a purchaser fails to make payment to the guaranteed party and/or a purchaser is subject to an insolvency event. The agreements have remaining terms from one to four years with a fair value recognized of $25 million as at March 31, 2020 ($9 million as at December 31, 2019). The

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maximum potential amount of undiscounted future payments is $118 million as at March 31, 2020, and is considered unlikely.

23. Supplementary Information

Supplemental disclosures to the Condensed Consolidated Statement of Cash Flows are presented below:

A) Net Change in Non-Cash Working Capital

	Three Months Ended
	March 31,
	2020			2019
Operating Activities
Accounts receivable and accrued revenues	$	121		$	174
Accounts payable and accrued liabilities		(31	)		(88	)
Current portion of operating lease liabilities		(1	)		67
Income tax receivable and payable		(6	)		(35	)
	$	83		$	118

B) Non-Cash Activities

	Three Months Ended
	March 31,
	2020			2019
Non-Cash Investing Activities
Asset retirement obligation incurred (See Note 14)	$	7		$	3
Asset retirement obligation change in estimated future cash outflows (See Note 14)		22			-
Property, plant and equipment accruals		150			82
Capitalized long-term incentives		(17	)		(29	)
Property additions/dispositions (swaps)		4			2
New ROU operating lease assets and liabilities		(1	)		(1	)
Non-Cash Financing Activities
Common shares issued in conjunction with the Newfield business    combination (See Note 8)	$	-		$	(3,478	)

24. Commitments and Contingencies

Commitments

The following table outlines the Company’s commitments as at March 31, 2020:

	Expected Future Payments
(undiscounted)	2020		2021		2022		2023		2024		Thereafter		Total
Transportation and Processing	$	518	$	653	$	612	$	507	$	399	$	2,022	$	4,711
Drilling and Field Services		71		6		1		-		-		1		79
Building Leases		10		14		11		7		6		8		56
Total	$	599	$	673	$	624	$	514	$	405	$	2,031	$	4,846

Operating leases with terms greater than one year are not included in the commitments table above. The table above includes short-term leases with contract terms less than 12 months, such as drilling rigs and field office leases, as well as non-lease operating cost components associated with building leases.

Included within transportation and processing in the table above are certain commitments associated with midstream service agreements with VMLP as described in Note 17. Divestiture transactions can reduce certain commitments disclosed above.

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Contingencies

Ovintiv is involved in various legal claims and actions arising in the normal course of the Company’s operations. Although the outcome of these claims cannot be predicted with certainty, the Company does not expect these matters to have a material adverse effect on Ovintiv’s financial position, cash flows or results of operations. Management’s assessment of these matters may change in the future as certain of these matters are in early stages or are subject to a number of uncertainties. For material matters that the Company believes an unfavorable outcome is reasonably possible, the Company discloses the nature and a range of potential exposures. If an unfavorable outcome were to occur, there exists the possibility of a material impact on the Company’s consolidated net earnings or loss for the period in which the effect becomes reasonably estimable. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated. Such accruals are based on the Company’s information known about the matters, estimates of the outcomes of such matters and experience in handling similar matters.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The MD&A is intended to provide a narrative description of the Company’s business from management’s perspective. This MD&A should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and accompanying notes for the period ended March 31, 2020 (“Consolidated Financial Statements”), which are included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and accompanying notes and MD&A for the year ended December 31, 2019, which are included in Items 8 and 7, respectively, of the 2019 Annual Report on Form 10‑K.

On January 24, 2020, Encana Corporation (“Encana”) completed a corporate reorganization, which included a Share Consolidation, as described in Note 1 of the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the Highlights section of this MD&A. Subsequent to the corporate reorganization, Ovintiv Inc. and its subsidiaries (collectively, “Ovintiv”) continue to carry on the business which was previously conducted by Encana and its subsidiaries. References to the “Company” are to Encana Corporation and its subsidiaries prior to the completion of the Reorganization and to Ovintiv Inc. and its subsidiaries following the completion of the Reorganization.

Common industry terms and abbreviations are used throughout this MD&A and are defined in the Definitions, Conversions and Conventions sections of this Quarterly Report on Form 10-Q. This MD&A includes the following sections:

• Executive Overview

• Results of Operations

• Liquidity and Capital Resources

• Non-GAAP Measures

Executive Overview

Strategy

Ovintiv is a leading North American energy producer that is focused on developing its multi-basin portfolio of oil, NGLs and natural gas producing plays. Ovintiv is committed to growing long-term stockholder value through a combination of profitable growth and generating cash flows. The Company is pursuing the key business objectives of preserving balance sheet strength, maximizing profitability through operational and capital efficiencies, returning capital to stockholders through sustainable dividends, and driving cash flow through a disciplined capital allocation strategy by investing in a limited number of core assets with high margin liquids.

In executing its strategy, Ovintiv focuses on its core values of One, Agile and Driven, which guide the organization to be flexible, responsive, innovative and determined. The Company is committed to excellence with a passion to drive corporate financial performance and succeed as a team. Ovintiv rapidly deploys successful ideas and practices across its assets, becoming more efficient as innovative and sustainable improvements are implemented.

Ovintiv continually reviews and evaluates its strategy and changing market conditions. In 2020, Ovintiv continues to focus on sustainable cash flow generation from high margin, scalable, top tier assets located in some of the best plays in North America, referred to as the “Core Assets”. In response to the current low commodity price environment resulting predominantly from the global coronavirus (“COVID-19”) pandemic, coupled with excess oil production from Saudi Arabia and Russia, the Company has revised its capital program for the remainder of 2020 to focus on production from the Core Assets generating the highest returns and/or with the lowest costs, while choosing to cease operating rigs and shut-in production in certain areas. As at March 31, 2020, the Core Assets comprised Permian and Anadarko in the U.S., and Montney in Canada. These top tier assets form a multi-basin portfolio of oil, NGLs and natural gas producing plays enabling flexible and efficient investment of capital that support the Company’s strategy.

For additional information on Ovintiv’s strategy, its reporting segments and the plays in which the Company operates, refer to Items 1 and 2 of the 2019 Annual Report on Form 10-K.

In evaluating its operations and assessing its leverage, Ovintiv reviews performance-based measures such as Non‑GAAP Cash Flow, Non-GAAP Cash Flow Margin, Total Costs and debt-based metrics such as Debt to Adjusted Capitalization and

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Net Debt to Adjusted EBITDA, which are non-GAAP measures and do not have any standardized meaning under U.S. GAAP. These measures may not be similar to measures presented by other issuers and should not be viewed as a substitute for measures reported under U.S. GAAP. Additional information regarding these measures, including reconciliations to the closest GAAP measure, can be found in the Non-GAAP Measures section of this MD&A.

Highlights

During the first quarter of 2020, the Company focused on executing its 2020 capital plan, generating cash from operating activities and maximizing profitability through operational and capital efficiencies. Lower upstream product revenues in the first quarter of 2020 compared to 2019 resulted from lower average realized prices, excluding the impact of risk management activities, partially offset by higher production volumes. Decreases in average realized liquids and natural gas prices of 27 percent and 33 percent, respectively, were primarily due to lower benchmark prices. Total production volumes increased by 22 percent compared to the first quarter of 2019 primarily due to the Newfield acquisition, which was completed on February 13, 2019, and from successful drilling programs. Ovintiv continues to focus on optimizing realized prices from the diversification of the Company’s downstream markets.

Significant Developments

• On January 24, 2020, Encana completed a corporate reorganization, which included a plan of arrangement (the “Arrangement”) that involved, among other things, a share consolidation by Encana on the basis of one post-consolidation share for each five pre-consolidation shares (the “Share Consolidation”), and Ovintiv Inc. ultimately acquired all of the issued and outstanding common shares of Encana in exchange for shares of common stock of Ovintiv Inc. on a one-for-one basis. Following completion of the Arrangement, Ovintiv Inc. migrated from Canada and became a Delaware corporation, domiciled in the U.S. (the “U.S. Domestication”). The Arrangement and the U.S. Domestication together are referred to as the “Reorganization”. Additional information on the Reorganization can be found in Note 1 of the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Financial Results

• Reported net earnings of $421 million, including net gains on risk management in revenues of $1,055 million, before tax, and a non-cash ceiling test impairment of $277 million, before tax.

• Generated cash from operating activities of $566 million, Non-GAAP Cash Flow of $535 million and Non‑GAAP Cash Flow Margin of $10.29 per BOE.

• Paid dividends of $0.09375 per common share totaling $24 million.

• Repurchased in the open market $90 million and $10 million in principal amount of the Company’s senior notes with fixed rates of 5.75 percent and 3.90 percent, respectively, resulting in a gain of $11 million.

• Held cash and cash equivalents of $82 million and had $3.5 billion in available credit facilities which supported the Company’s outstanding commercial paper balance of $357 million as at March 31, 2020.

• Achieved Net Debt to Adjusted EBITDA of 2.0 times.

Capital Investment

• Commenced the Company’s 2020 capital plan with expenditures totaling $790 million of which $632 million, or 80 percent, was directed to the Core Assets.

• Focused on highly efficient capital activity and short-cycle high margin and/or low cost projects providing flexibility to respond to fluctuations in commodity prices.

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Production

• Produced average liquids volumes of 309.8 Mbbls/d, which accounted for 54 percent of total production volumes. Average oil and plant condensate production volumes of 215.2 Mbbls/d were 69 percent of total liquids production volumes.

• Produced average natural gas volumes of 1,569 MMcf/d, which accounted for 46 percent of total production volumes.

Revenues and Operating Expenses

• Focused on market diversification to optimize realized commodity prices and revenues through a combination of derivative financial instruments and physical transportation contracts.

• Incurred Total Costs in the first quarter of 2020 of $12.17 per BOE, a decrease compared to the first quarter of 2019 of $1.27 per BOE. Total Costs includes production, mineral and other taxes, upstream transportation and processing expense, upstream operating expense and administrative expense. Total Costs excludes the impact of long-term incentive costs, restructuring costs and current expected credit losses. Significant items in the first quarter of 2020 impacting Total Costs include:

o Lower upstream transportation and processing expense in the first quarter of 2020 compared to 2019 of $0.50 per BOE primarily due to the higher proportion of total production volumes from the USA Operations, which benefit from lower than average per BOE transportation and processing costs. Production volumes in the USA Operations were higher in the first quarter of 2020 compared to 2019 primarily due to the Newfield acquisition on February 13, 2019; and

o Lower administrative expenses, excluding long-term incentive costs, restructuring costs and current expected credit losses, of $0.50 per BOE and lower upstream operating expenses, excluding long-term incentive costs, of $0.14 per BOE in the first quarter of 2020 compared to 2019 primarily due to synergies achieved in 2019 through workforce reductions and operating efficiencies.

• Preserved operational and administrative synergies achieved in 2019 and enhanced efficiencies through leveraging technology, innovation and scale.

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2020 Outlook

Industry Outlook

Oil Markets

The oil and gas industry is cyclical and commodity prices are inherently volatile. Oil prices during 2020 are expected to reflect global supply and demand dynamics as well as the geopolitical and macroeconomic environment. In March 2020, during the midst of the global COVID-19 pandemic, Saudi Arabia and Russia failed to reach an agreement on production cuts, which intensified the oversupply of oil and contributed to a dramatic decline in oil prices. In April 2020, OPEC and a group of twenty nations (collectively, “OPEC+”) agreed to cut oil production to address the existing imbalance of global supply and demand. OPEC+ is expected to meet again in June to discuss additional measures that may need to be taken to rebalance the global oil market.

Global crude oil demand fell significantly as governments worldwide took action to contain the effects of the COVID-19 pandemic. ​Oil and product storage facilities are filling up at an unprecedented rate as supply materially exceeds demand. As the gap between supply and demand in oil markets has grown increasingly pronounced, the oil and gas industry has responded by reducing capital spending and implementing both coordinated and market-based supply shut-ins, leading to increased price volatility. The re-balancing of global supply and demand and the industry’s return to a more stable commodity price environment is highly dependent on the successful global containment of the virus and the ​pace of economic recovery.

With significant uncertainty amid a highly volatile market environment, oil prices for the remainder of 2020 are expected to fluctuate depending on changes to production cuts amongst OPEC+, as well as the COVID-19 pandemic response efforts and actions taken to stimulate the global economy.

Natural Gas Markets

Natural gas prices in 2020 will be affected by changes in both supply and demand and the effects of seasonal weather. Higher-than-average inventory levels and warmer than normal temperatures during the winter months continued to put downward pressure on U.S. natural gas prices, which remains volatile in Canada and the U.S. from additional demand concerns stemming from the COVID-19 pandemic. Natural gas prices could experience a modest recovery by the end of the second quarter of 2020 due to declines in North American oil production resulting from low oil prices and lower associated natural gas production.

Company Outlook

Despite the current low commodity price environment, Ovintiv is well positioned to deliver on its updated capital plan while generating positive cash flows. In response to the rapid decline in crude oil prices witnessed in early March, the Company took immediate action to reduce its second quarter 2020 capital investments by $300 million. As the effects of the COVID-19 pandemic expanded globally and oil prices continued to decline through the latter half of March, the Company responded by reducing its second quarter capital plans by an additional $200 million, bringing total capital spending reductions to $500 million. Ovintiv has ceased operating ten drilling rigs and intends to cut an additional six rigs in May 2020. The Company will exercise discretion and disciplined capital allocation to adjust its capital spending beyond the second quarter as the current price environment evolves. As the Company expects the current price environment to remain dynamic and volatile in the near-term, the Company will also assess the option to shut-in low-margin production in certain resource plays in response to a prolonged period of low prices. Due to ongoing uncertainty and continued market volatility, the Company has suspended its previously issued 2020 guidance.

The Company enters into derivative financial instruments which mitigate price volatility and help sustain revenues, particularly during periods of lower prices. Accordingly, Ovintiv restructured its remaining 2020 crude oil hedges to provide additional downside price protection. As at April 30, 2020, the Company has hedged approximately 185.0 Mbbls/d, or 94 percent, of expected crude oil and condensate production and 1,196 MMcf/d, or 75 percent, of expected natural gas production for the remainder of the year. Additional information on Ovintiv’s hedging program can be found in Note 22 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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Markets for crude oil and natural gas are exposed to different price risks and are inherently volatile. While the market price for crude oil tends to move in the same direction as the global market, regional differentials may develop. Natural gas prices may vary between geographic regions depending on local supply and demand conditions. Ovintiv proactively utilizes transportation contracts to diversify the Company’s sales markets, thereby reducing significant exposure to any given market. Through a combination of derivative financial instruments and transportation capacity, Ovintiv attempts to limit exposure to regional pricing.

In conjunction with the $500 million reduction in capital investment noted above, Ovintiv also announced its plans to reduce costs by $200 million, an increase over the previously announced $100 million in cost savings. The Company expects that operating costs will be reduced by approximately $115 million and approximately $85 million will come from other cost savings.

Capital Investment

During the first quarter of 2020, the Company spent $790 million, of which $242 million was directed to Permian with 32 net wells drilled, $235 million was directed to Anadarko with 37 net wells drilled and $155 million was directed to Montney with 28 net wells drilled. Ovintiv reduced its second quarter 2020 capital investment by $500 million and expects capital spending to be primarily allocated to the Core Assets with a focus on maximizing returns from high margin liquids, while suspending capital programs in Eagle Ford, Bakken, Uinta and Duvernay. Ovintiv plans to fund the remainder of its 2020 capital investment using cash from operations, cash on hand and funds available from the Company’s credit facilities. As the Company monitors the global economic environment, Ovintiv will continue to evaluate its capital investment plans.

Ovintiv continually strives to improve well performance and lower costs through innovative techniques. Ovintiv's large-scale cube development model utilizes multi-well pads and advanced completion designs to maximize returns and resource recovery from its reservoirs. The impact of Ovintiv’s disciplined capital program and continuous innovation create flexibility to allocate capital in changing commodity markets and to maintain cash flows while preserving the long-term value of the Company’s multi-basin portfolio.

Production

During the first quarter of 2020, average liquids production volumes were 309.8 Mbbls/d, or 54 percent of total production volumes, and average natural gas production volumes were 1,569 MMcf/d, or 46 percent of total production volumes. Full year production volumes are expected to reflect the Company’s reduced capital investment plans and shut-in strategy, which are highly dependent on market conditions.

Operating Expenses

In the first quarter of 2020, Ovintiv announced its commitment to reducing full year 2020 costs by $200 million in response to the low commodity price environment. These cost savings primarily include reductions to operating expenses reflected in Total Costs, as well as a reduction to other expenses discussed below.

In the first quarter of 2020, Total Costs was $12.17 per BOE and is expected to trend downward as activity levels decrease and significant cost saving measures are realized through operational flexibility in response to the low commodity price environment. Total Costs includes production, mineral and other taxes, upstream transportation and processing expense, upstream operating expense and administrative expense, excluding the impact of long-term incentive costs, restructuring costs and current expected credit losses. Upstream transportation and processing expense was $6.40 per BOE, while upstream operating expense and administrative expense, excluding long-term incentive costs, restructuring costs and current expected credit losses, were $3.34 per BOE and $1.42 per BOE, respectively. Ovintiv expects to continue pursuing innovative ways to reduce upstream operating and administrative expenses and expects efficiency improvements and effective supply chain management to maximize cash flows.

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Other Expenses and Impairments

The remaining full year cost savings are expected to include reductions to cash outflows and other expenses, such as interest expense. Following the open market repurchase of $100 million in principal of Ovintiv’s fixed rate senior notes, the Company expects to incur lower interest expense of approximately $3 million on an annualized basis as a result of reduced long-term debt balances and approximately $13 million resulting from lower expected average interest rates on the Company’s Credit Facilities.

Additional information on Ovintiv’s long-term debt and liquidity position can be found in Note 12 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the Liquidity and Capital Resources section of this MD&A, respectively.

If the current low oil price environment persists for an extended period of time, Ovintiv may be subject to additional impairments of its oil and natural gas properties and other long-term assets, such as deferred income tax assets. Additional information on the Company’s ceiling test impairment can be found in the Results of Operations section of this MD&A.

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Results of Operations

Selected Financial Information

	Three months ended March 31,
($ millions)		2020		2019 (1)
Product and Service Revenues
Upstream product revenues		$	1,151	$	1,245
Market optimization			419	326
Service revenues			-	1
Total Product and Service Revenues			1,570		1,572
Gains (Losses) on Risk Management, Net			1,055		(355	)
Sublease Revenues			18		18
Total Revenues			2,643		1,235
Total Operating Expenses (2)			1,884		1,462
Operating Income (Loss)			759		(227	)
Total Other (Income) Expenses			198		79
Net Earnings (Loss) Before Income Tax			561		(306	)
Income Tax Expense (Recovery)			140		(61	)
Net Earnings (Loss)		$	421	$	(245	)

(1) Subsequent to the completion of the Newfield acquisition on February 13, 2019, the post-acquisition results of the operations of Newfield are included in the Company’s interim consolidated results beginning February 14, 2019.

(2) Total Operating Expenses include non-cash items such as DD&A, impairments, accretion of asset retirement obligations and long-term incentive costs.

Revenues

Ovintiv’s revenues are substantially derived from sales of oil, NGLs and natural gas production. Increases or decreases in Ovintiv’s revenue, profitability and future production are highly dependent on the commodity prices the Company receives. Prices are market driven and fluctuate due to factors beyond the Company’s control, such as supply and demand, seasonality and geopolitical and economic factors. The USA Operations realized prices generally reflect WTI and NYMEX benchmark prices, as well as other downstream oil benchmarks, including Houston. The Canadian Operations realized prices are linked to Edmonton Condensate and AECO, as well as other downstream natural gas benchmarks, including Dawn. The other downstream benchmarks reflect the diversification of the Company’s markets. Recent trends in benchmark prices relevant to the Company are shown in the table below.

Benchmark Prices

	Three months ended March 31,
(average for the period)	2020		2019
Oil & NGLs
WTI ($/bbl)	$	46.17	$	54.90
Houston ($/bbl)		49.48		60.82
Edmonton Condensate (C$/bbl)		61.73		67.21
Natural Gas
NYMEX ($/MMBtu)	$	1.95	$	3.15
AECO (C$/Mcf)		2.14		1.94
Dawn (C$/MMBtu)		2.39		3.85

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Production Volumes and Realized Prices

	Three months ended March 31,
	Production Volumes (1)				Realized Prices (2)
	2020		2019			2020		2019
Oil (Mbbls/d, $/bbl)
USA Operations		161.7		123.2		$	43.49	$	54.42
Canadian Operations		0.8		0.3			38.95		37.31
China Operations (3)		-		2.3			-		65.62
Total		162.5		125.8			43.47		54.57
NGLs – Plant Condensate (Mbbls/d, $/bbl)
USA Operations		11.0		6.2			34.54		43.62
Canadian Operations		41.7		38.7			43.99		49.61
Total		52.7		44.9			42.02		48.79
NGLs – Other (Mbbls/d, $/bbl)
USA Operations		77.5		44.6			7.33		17.81
Canadian Operations		17.1		16.1			6.97		20.11
Total		94.6		60.7			7.27		18.41
Total Oil & NGLs (Mbbls/d, $/bbl)
USA Operations		250.2		174.0			31.90		44.64
Canadian Operations		59.6		55.1			33.29		40.95
China Operations (3)		-		2.3			-		65.62
Total		309.8		231.4			32.16		43.97
Natural Gas (MMcf/d, $/Mcf)
USA Operations		568		367			1.41		2.31
Canadian Operations		1,001		1,054			1.86		2.60
Total		1,569		1,421			1.70		2.53
Total Production (MBOE/d, $/BOE)
USA Operations		344.8		235.2			25.46		36.63
Canadian Operations		226.5		230.7			16.98		21.67
China Operations (3)		-		2.3			-		65.62
Total		571.3		468.2			22.10		29.39
Production Mix (%)
Oil & Plant Condensate		38		36
NGLs – Other		16		13
Total Oil & NGLs		54		49
Natural Gas		46		51
Production Growth – Year Over Year (%) (4)
Total Oil & NGLs		34		59
Natural Gas		10		32
Total Production		22		44
Core Assets Production
Oil (Mbbls/d)		111.2		83.2
NGLs – Plant Condensate (Mbbls/d)		46.2		37.9
NGLs – Other (Mbbls/d)		83.6		51.7
Total Oil & NGLs (Mbbls/d)		241.0		172.8
Natural Gas (MMcf/d)		1,405		1,210
Total Production (MBOE/d)		475.3		374.4
% of Total Production		83		80

(1) Average daily.

(2) Average per-unit prices, excluding the impact of risk management activities.

(3) The Company terminated its production sharing contract with China National Offshore Oil Corporation (“CNOOC”) and exited its China Operations effective July 31, 2019. Production from China Operations is presented for the period from February 14, 2019 through July 31, 2019.

(4) Includes production impacts of acquisitions and divestitures.

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Upstream Product Revenues

	Three months ended March 31,
($ millions)	Oil			NGLs - Plant Condensate			NGLs - Other			Natural Gas			Total
2019 Upstream Product Revenues (1)	$	618		$	198		$	100		$	323		$	1,239
Increase (decrease) due to:
Sales prices		(155	)		(33	)		(96	)		(116	)		(400	)
Production volumes		180			36			59			37			312
2020 Upstream Product Revenues	$	643		$	201		$	63		$	244		$	1,151

(1) Revenues for the first quarter of 2019 exclude certain other revenue and royalty adjustments with no associated production volumes of $6 million.

Oil Revenues

Three months ended March 31, 2020 versus March 31, 2019

Oil revenues increased $25 million compared to the first quarter of 2019 primarily due to:

• Higher average oil production volumes of 36.7 Mbbls/d increased revenues by $180 million. Higher volumes were primarily due to the Newfield acquisition on February 13, 2019 (36.8 Mbbls/d) and successful drilling programs in Bakken and Permian (11.4 Mbbls/d), partially offset by natural declines surpassing new production in Eagle Ford and Uinta (10.5 Mbbls/d) and the termination of the Company’s production sharing contract in its China Operations in the third quarter of 2019 (2.3 Mbbls/d); and

• Lower average realized oil prices of $11.10 per bbl, or 20 percent, decreased revenues by $155 million. The decrease reflected lower Houston and WTI benchmark prices which were down 19 percent and 16 percent, respectively, and weakening regional pricing relative to the WTI benchmark price in the USA Operations.

NGL Revenues

Three months ended March 31, 2020 versus March 31, 2019

NGL revenues decreased $34 million compared to the first quarter of 2019 primarily due to:

• Lower average realized other NGL prices of $11.14 per bbl, or 61 percent, decreased revenues by $96 million reflecting lower other NGL benchmark prices in the USA Operations and lower regional pricing; and

• Lower average realized plant condensate prices of $6.77 per bbl, or 14 percent, decreased revenues by $33 million. The decrease reflected lower WTI and Edmonton Condensate benchmark prices which were down 16 percent and eight percent, respectively, as well as declines in regional pricing relative to the Edmonton Condensate and WTI benchmark prices;

partially offset by:

• Higher average other NGL production volumes of 33.9 Mbbls/d increased revenues by $59 million. Higher volumes were primarily due to the Newfield acquisition on February 13, 2019 (18.0 Mbbls/d) and successful drilling programs in Anadarko and Permian (15.3 Mbbls/d); and

• Higher average plant condensate production volumes of 7.8 Mbbls/d increased revenues by $36 million. Higher volumes were primarily due to successful drilling programs in Montney and Anadarko (4.6 Mbbls/d) and the Newfield acquisition on February 13, 2019 (2.8 Mbbls/d).

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Natural Gas Revenues

Three months ended March 31, 2020 versus March 31, 2019

Natural gas revenues decreased $79 million compared to the first quarter of 2019 primarily due to:

• Lower average realized natural gas prices of $0.83 per Mcf, or 33 percent, decreased revenues by $116 million. The decrease reflected lower Dawn and NYMEX benchmark prices which were both down 38 percent, partially offset by a higher proportion of total production volumes in the USA Operations with higher regional pricing resulting from the Newfield acquisition on February 13, 2019 and a higher AECO benchmark price which was up 10 percent; and

• Higher average natural gas production volumes of 148 MMcf/d increased revenues by $37 million primarily due to the Newfield acquisition on February 13, 2019 (191 MMcf/d), successful drilling programs in Permian and Anadarko (64 MMcf/d) and decreased third-party plant downtime and pipeline restrictions in Montney (11 MMcf/d), partially offset by lower gas production due to wells drilled with higher liquids content in Montney (52 MMcf/d), the sale of the Arkoma natural gas assets in the third quarter of 2019 (39 MMcf/d) and natural declines surpassing new production in Duvernay and Eagle Ford (25 MMcf/d).

Gains (Losses) on Risk Management, Net

As a means of managing commodity price volatility, Ovintiv enters into commodity derivative financial instruments on a portion of its expected oil, NGL and natural gas production volumes. The Company’s commodity price mitigation program reduces volatility and helps sustain revenues during periods of lower prices. Additional information on the Company’s commodity price positions as at March 31, 2020 can be found in Note 22 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The following tables provide the effects of the Company’s risk management activities on revenues.

	Three months ended March 31,
($ millions)	2020		2019
Realized Gains (Losses) on Risk Management
Commodity Price (1)
Oil	$	82	$	31
NGLs - Plant Condensate		23		12
NGLs - Other		5		11
Natural Gas		39		16
Other (2)		2		2
Total		151		72
Unrealized Gains (Losses) on Risk Management		904		(427	)
Total Gains (Losses) on Risk Management, Net	$	1,055	$	(355	)
	Three months ended March 31,
(Per-unit)	2020		2019
Realized Gains (Losses) on Risk Management
Commodity Price (1)
Oil ($/bbl)	$	5.52	$	2.77
NGLs - Plant Condensate ($/bbl)	$	4.78	$	2.92
NGLs - Other ($/bbl)	$	0.62	$	2.12
Natural Gas ($/Mcf)	$	0.27	$	0.13
Total ($/BOE)	$	2.86	$	1.68

(1) Includes realized gains and losses related to the USA and Canadian Operations.

(2) Other primarily includes realized gains or losses from Market Optimization and other derivative contracts with no associated production volumes.

Ovintiv recognizes fair value changes from its risk management activities each reporting period. The changes in fair value result from new positions and settlements that occur during each period, as well as the relationship between contract prices and the associated forward curves. Realized gains or losses on risk management activities related to commodity price mitigation are included in the USA Operations, Canadian Operations and Market Optimization revenues as the contracts are cash settled. Unrealized gains or losses on fair value changes of unsettled contracts are included in the Corporate and Other segment.

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Market Optimization Revenues

Market Optimization product revenues relate to activities that provide operational flexibility and cost mitigation for transportation commitments, product type, delivery points and customer diversification. The Company also purchases and sells third-party volumes under long-term marketing arrangements associated with the Company’s previous divestitures.

	Three months ended March 31,
($ millions)	2020		2019
Market Optimization	$	419	$	326

Three months ended March 31, 2020 versus March 31, 2019

Market Optimization product revenues increased $93 million compared to the first quarter of 2019 primarily due to:

• Higher sales of third-party purchased liquid volumes primarily relating to price optimization activities in the USA Operations ($156 million) and higher sales of third-party purchased natural gas volumes primarily relating to long-term marketing arrangements for assets divested in prior years ($34 million);

partially offset by:

• Lower natural gas and oil benchmark prices ($97 million).

Sublease Revenues

Sublease revenues primarily include amounts related to the sublease of office space in The Bow office building recorded in the Corporate and Other segment. Additional information on office sublease income can be found in Note 11 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Operating Expenses

Production, Mineral and Other Taxes

Production, mineral and other taxes include production and property taxes. Production taxes are generally assessed as a percentage of oil, NGLs and natural gas production revenues. Property taxes are generally assessed based on the value of the underlying assets.

	$ millions				$/BOE
Three months ended March 31,	2020		2019		2020		2019
USA Operations	$	48	$	44	$	1.55	$	2.08
Canadian Operations		4		4	$	0.19	$	0.18
Total	$	52	$	48	$	1.01	$	1.14

Three months ended March 31, 2020 versus March 31, 2019

Production, mineral and other taxes increased $4 million compared to the first quarter of 2019 primarily due to:

• Higher production volumes as a result of the Newfield acquisition on February 13, 2019 ($8 million);

partially offset by:

• Lower production tax in Other Upstream Operations as a result of lower production volumes and commodity prices ($4 million).

Transportation and Processing

Transportation and processing expense includes transportation costs incurred to move product from production points to sales points including gathering, compression, pipeline tariffs, trucking and storage costs. Ovintiv also incurs costs related to processing provided by third parties or through ownership interests in processing facilities.

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	$ millions				$/BOE
Three months ended March 31,	2020		2019		2020		2019
USA Operations	$	121	$	79	$	3.84	$	3.74
Canadian Operations		213		212	$	10.29	$	10.20
Upstream Transportation and Processing		334		291	$	6.40	$	6.90
Market Optimization		62		47
Total	$	396	$	338

Three months ended March 31, 2020 versus March 31, 2019

Transportation and processing expense increased $58 million compared to the first quarter of 2019 primarily due to:

• Higher production volumes as a result of the Newfield acquisition on February 13, 2019 and successful drilling in Anadarko ($36 million), rate escalation in certain transportation contracts relating to previously divested assets ($21 million), production volumes from successful drilling in Montney and Permian ($7 million) and higher downstream processing and transportation costs in Montney due to third-party adjustments ($4 million);

partially offset by:

• The sale of the Arkoma natural gas assets in the third quarter of 2019 ($6 million) and the expiration of certain transportation contracts relating to decommissioned and previously divested assets ($4 million).

Upstream transportation and processing decreased $0.50 per BOE compared to the first quarter of 2019 primarily due to a higher proportion of total production volumes in the USA Operations resulting from the Newfield acquisition, which benefit from lower than average per BOE transportation and processing costs.

Operating

Operating expense includes costs paid by the Company, net of amounts capitalized, to operate oil and natural gas properties in which the Company has a working interest. These costs primarily include labor, service contract fees, chemicals, fuel, water hauling, electricity and workovers.

	$ millions							$/BOE
Three months ended March 31,	2020			2019			2020			2019
USA Operations	$	139		$	115		$		4.42	$	5.44
Canadian Operations		26			37		$		1.26	$	1.80
China Operations (1)		-			4		$		-	$	17.93
Upstream Operating Expense (2)		165			156		$		3.17	$	3.70
Market Optimization		2			10
Corporate & Other		(2	)		(1	)
Total	$	165		$	165

(1) The Company terminated its production sharing contract with CNOOC and exited its China Operations effective July 31, 2019. Upstream Operating Expense from China Operations is presented for the period from February 14, 2019 through July 31, 2019.

(2) Upstream Operating Expense per BOE for the first quarter of 2020 includes a recovery of long-term incentive costs of $0.17/BOE (2019 - long-term incentive costs of $0.22/BOE).

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Three months ended March 31, 2020 versus March 31, 2019

Operating expense was unchanged compared to the first quarter of 2019. Impacts to operating expense in the first quarter of 2020 compared to 2019 include:

• The Newfield acquisition on February 13, 2019 and increased activity in Bakken, Anadarko and Uinta ($23 million), as well as lower capitalization of overhead costs, primarily in Permian, Montney, Eagle Ford and Duvernay ($11 million);

partially offset by:

• A recovery of long-term incentive costs resulting from a decrease in the Company’s share price in the first quarter of 2020 compared to long-term incentive costs resulting from an increase in the share price in the first quarter of 2019 ($26 million), as well as the sale of the Arkoma natural gas assets and the termination of the Company’s production sharing contract in its China Operations in the third quarter of 2019 ($7 million).

Additional information on the Company’s long-term incentives can be found in Note 19 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Purchased Product

Purchased product expense includes purchases of oil, NGLs and natural gas from third parties that are used to provide operational flexibility and cost mitigation for transportation commitments, product type, delivery points and customer diversification. The Company also purchases and sells third-party volumes under long-term marketing arrangements associated with the Company’s previous divestitures.

	Three months ended March 31,
($ millions)		2020		2019
Market Optimization		$	398	$	298

Three months ended March 31, 2020 versus March 31, 2019

Purchased product expense increased $100 million compared to the first quarter of 2019 primarily due to:

• Higher third-party purchased liquid volumes primarily relating to price optimization activities in the USA Operations ($158 million) and higher third-party purchased natural gas volumes primarily relating to long-term marketing arrangements for assets divested in prior years ($32 million);

partially offset by:

• Lower natural gas and oil benchmark prices ($90 million).

Depreciation, Depletion & Amortization

Proved properties within each country cost centre are depleted using the unit-of-production method based on proved reserves as discussed in Note 1 to the Consolidated Financial Statements included in Item 8 of the 2019 Annual Report on Form 10-K. Depletion rates are impacted by impairments, acquisitions, divestitures and foreign exchange rates, as well as fluctuations in 12-month average trailing prices which affect proved reserves volumes. Corporate assets are carried at cost and depreciated on a straight-line basis over the estimated service lives of the assets.

Additional information can be found under Upstream Assets and Reserve Estimates in the Critical Accounting Estimates section of the MD&A included in Item 7 of the 2019 Annual Report on Form 10-K.

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	$ millions				$/BOE
Three months ended March 31,	2020		2019		2020		2019
USA Operations	$	418	$	274	$	13.30	$	12.96
Canadian Operations		109		92	$	5.28	$	4.42
Upstream DD&A		527		366	$	10.12	$	8.73
Corporate & Other		7		11
Total	$	534	$	377

Three months ended March 31, 2020 versus March 31, 2019

DD&A increased $157 million compared to the first quarter of 2019 primarily due to:

• Higher production volumes in the USA Operations ($132 million) and higher depletion rates in the Canadian and USA Operations ($19 million and $11 million, respectively).

The depletion rate in the Canadian and USA Operations increased $0.86 per BOE and $0.34 per BOE, respectively, compared to the first quarter of 2019 primarily due to higher capital spending in Anadarko and Montney, and higher transfers of unproved property costs, partially offset by higher reserves volumes.

Impairments

Under full cost accounting, the carrying amount of Ovintiv’s oil and natural gas properties within each country cost centre is subject to a ceiling test performed quarterly. Ceiling test impairments are recognized when the capitalized costs, net of accumulated depletion and the related deferred income taxes, exceed the sum of the estimated after-tax future net cash flows from proved reserves as calculated under SEC requirements using the 12‑month average trailing prices and discounted at 10 percent. The 12-month average trailing price is calculated as the average of the price on the first day of each month within the trailing 12-month period.

In the first quarter of 2020, the Company recognized a before-tax non-cash ceiling test impairment of $277 million in the USA Operations. The non-cash ceiling test impairment primarily resulted from the decline in the 12-month average trailing prices related to NGLs and natural gas, which reduced proved reserves values.

The 12-month average trailing prices used in the ceiling test calculations were based on the benchmark prices below. The benchmark prices were adjusted for basis differentials to determine local reference prices, transportation costs and tariffs, heat content and quality.

	Oil & NGLs				Natural Gas
	WTI ($/bbl)		Edmonton Condensate (C$/bbl)		Henry Hub ($/MMBtu)		AECO (C$/MMBtu)
12-Month Average Trailing Reserves Pricing (1)
March 31, 2020		56.06		70.32		2.30		1.48
December 31, 2019		55.93		68.80		2.58		1.76
March 31, 2019		62.99		75.86		3.07		1.69

(1) All prices were held constant in all future years when estimating net revenues and reserves.

Due to the recent low commodity price environment, further declines in the 12-month average trailing prices are expected and could reduce proved reserves volumes and values and result in the recognition of future ceiling test impairments. However, future ceiling test impairments are difficult to reasonably predict and depend on commodity prices, as well as changes to reserves estimates, future development costs, capitalized costs, unproved property costs transferred to the depletable base of the full cost pool, as well as proceeds received from upstream divestitures which are generally deducted from the Company’s capitalized costs and can reduce the likelihood of ceiling test impairments.

The Company has calculated the estimated effects that certain price changes would have had on its ceiling test impairment for the three months ended March 31, 2020. Using commodity futures prices as at March 31, 2020 for the three months ending June 30, 2020, the estimated 12-month average trailing prices for the period ended March 31, 2020 would have been $47.36

48

per bbl for WTI, C$58.15 per bbl for Edmonton Condensate, $2.08 per MMBtu for Henry Hub and C$1.64 per MMBtu for AECO. Based on these estimated prices, while holding all other inputs and assumptions constant, an additional before-tax ceiling test impairment of $3.7 billion for the USA Operations would have been recognized for the three months ended March 31, 2020. If a low commodity price environment is sustained during the remainder of 2020, further ceiling test impairments and related allowances on deferred tax assets may be recognized.

The additional estimated before-tax ceiling test impairment is partly a result of a 13 percent decrease in proved undeveloped reserves for the USA Operations as certain locations would not be economic at these revised estimated prices. This estimate strictly isolates the potential impact of commodity prices on the Company’s proved reserves volumes and values. If the low commodity price environment continues, further negative price related reserve revisions during the remainder of 2020 may occur, the magnitude of which could be significant.

Due to uncertainties in estimating proved reserves, the additional before-tax ceiling test impairment described and resulting implications may not be indicative of Ovintiv’s future development plans, operating or financial results.

The Company believes that the discounted after-tax future net cash flows from proved reserves required to be used in the ceiling test calculation are not indicative of the fair market value of Ovintiv’s oil and natural gas properties or the future net cash flows expected to be generated from such properties. The discounted after-tax future net cash flows do not consider the fair market value of unamortized unproved properties, or probable or possible liquids and natural gas reserves. In addition, there is no consideration given to the effect of future changes in commodity prices. Ovintiv manages its business using estimates of reserves and resources based on forecast prices and costs. Additional information on the ceiling test calculation can be found in Note 10 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Administrative

Administrative expense represents costs associated with corporate functions provided by Ovintiv staff. Costs primarily include salaries and benefits, general office, information technology, restructuring and long-term incentive costs.

	($ millions)						$/BOE
Three months ended March 31,		2020			2019			2020			2019
Administrative, excluding Long-Term Incentive Costs,
Restructuring Costs and Current Expected Credit Losses		$	74		$	82		$	1.42		$	1.92
Long-term incentive costs			(26	)		32			(0.51	)		0.76
Restructuring costs			-			113			-			2.70
Current expected credit losses (1)			5			-			0.11			-
Total Administrative		$	53		$	227		$	1.02		$	5.38

(1) On January 1, 2020, Ovintiv adopted ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” under Topic 326. Further details on the adoption of ASU 2016-13 can be found in Note 2 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Three months ended March 31, 2020 versus March 31, 2019

Administrative expense in the first quarter of 2020 decreased $174 million compared to the first quarter of 2019 primarily due to restructuring costs incurred in 2019 ($113 million) and a recovery of long-term incentive costs resulting from a decrease in the Company’s share price in the first quarter of 2020 compared to long-term incentive costs resulting from an increase in the share price in the first quarter of 2019 ($58 million).

During 2019, the Company completed workforce reductions in conjunction with the Newfield acquisition to better align staffing levels and the organizational structure. Additional information on restructuring charges can be found in Note 18 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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Other (Income) Expenses

	Three months ended March 31,
($ millions)	2020			2019
Interest	$	96		$	87
Foreign exchange (gain) loss, net		116			(37	)
(Gain) loss on divestitures, net		-			1
Other (gains) losses, net		(14	)		28
Total Other (Income) Expenses	$	198		$	79

Interest

Interest expense primarily includes interest on Ovintiv’s long-term debt arising from U.S. dollar denominated unsecured notes. Additional information on changes in interest can be found in Note 5 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Three months ended March 31, 2020 versus March 31, 2019

Interest expense increased $9 million compared to the first quarter of 2019 due to:

• Higher interest expense on long-term debt primarily relating to the assumption of Newfield’s outstanding senior notes, interest expense relating to amounts drawn on the Company’s credit facilities and issuances under the Company’s U.S. commercial paper (“U.S. CP”) program ($15 million);

partially offset by:

• Lower interest expense resulting from the repayment of the Company’s $500 million senior note in the second quarter of 2019 ($8 million).

Foreign Exchange (Gain) Loss, Net

Foreign exchange gains and losses primarily result from the impact of fluctuations in the Canadian to U.S. dollar exchange rate. Additional information on changes in foreign exchange gains or losses can be found in Note 6 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Following the completion of the Reorganization, including the U.S. Domestication, on January 24, 2020, as described in the Highlights section of this MD&A, the U.S. dollar denominated unsecured notes issued by Encana Corporation from Canada were assumed by Ovintiv Inc., a company incorporated in Delaware with a U.S. dollar functional currency. Accordingly, these U.S. dollar denominated unsecured notes, along with certain intercompany notes, no longer attract foreign exchange translation gains or losses.

Three months ended March 31, 2020 versus March 31, 2019

In the first quarter of 2020, Ovintiv recorded a net foreign exchange loss of $116 million compared to a gain in 2019 of $37 million primarily due to:

• Unrealized foreign exchange losses on the translation of U.S. dollar financing debt and risk management contracts issued from Canada compared to gains in 2019 ($169 million and $63 million, respectively) and realized foreign exchange losses on the translation of U.S. dollar financing debt issued from Canada compared to gains in 2019 ($18 million);

partially offset by:

• Unrealized foreign exchange gains on the translation of intercompany notes compared to losses in 2019 ($106 million).

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Other (Gains) Losses, Net

Other (gains) losses, net, primarily includes other non-recurring revenues or expenses and may also include items such as interest income, interest received from tax authorities, transaction costs relating to acquisitions, reclamation charges relating to decommissioned assets, gains on debt repurchases and adjustments related to other assets.

Other gains in the first quarter of 2020 primarily includes a gain of $11 million relating to the repurchase of the Company’s fixed long-term debt on the open market as discussed in the Liquidity and Capital Resources section of this MD&A.

Other losses in the first quarter of 2019 primarily included legal fees and transaction costs related to the Newfield acquisition of $31 million, partially offset by interest income on short-term investments of $6 million.

Income Tax

	Three months ended March 31,
($ millions)	2020		2019
Current Income Tax Expense (Recovery)	$	-	$	1
Deferred Income Tax Expense (Recovery)		140		(62	)
Income Tax Expense (Recovery)	$	140	$	(61	)
Effective Tax Rate	25.0%		19.9%

Income Tax Expense (Recovery)

Three months ended March 31, 2020 versus March 31, 2019

In the first quarter of 2020, Ovintiv recorded an income tax expense of $140 million compared to an income tax recovery of $61 million in 2019, primarily due to net earnings of $561 million before income tax in the first quarter of 2020, compared to a net loss before income tax of $306 million in 2019.

Effective Tax Rate

Ovintiv’s interim income tax expense is determined using the estimated annual effective income tax rate applied to year‑to‑date net earnings before income tax plus the effect of legislative changes and amounts in respect of prior periods. The estimated annual effective income tax rate is primarily impacted by expected annual earnings, income tax related to foreign operations, state tax, the effect of legislative changes, non-taxable capital gains and losses, and tax differences on divestitures and transactions.

Following the U.S. Domestication as described in the Highlights section of this MD&A, the applicable statutory rate became the U.S. federal income tax rate. The Company’s effective tax rate of 25 percent in the first quarter of 2020 is higher than the U.S. federal statutory tax rate of 21 percent primarily due to state taxes and foreign jurisdictional tax rates relative to the U.S. federal statutory tax rate applied to jurisdictional earnings.

During the three months ended March 31, 2020 and as part of the U.S. Domestication, Ovintiv recognized a capital loss and recorded a deferred income tax benefit in the amount of $1.2 billion for Canadian income tax purposes due to the decline in the Company’s share value compared to the historical tax basis of its properties that were transferred as part of the Reorganization. Ovintiv assessed the realizability of these capital losses against capital gains and concluded that it is more likely than not that the deferred tax asset will not be realizable. Therefore, Ovintiv has recorded a corresponding valuation allowance against the deferred tax asset. If it is determined that the capital loss can be utilized at a future date, a reduction in the valuation allowance will be recorded.

Ovintiv is evaluating the various stimulus and fiscal measures announced in the U.S. and Canada in response to the COVID-19 pandemic, including the U.S. Coronavirus Aid, Relief and Economic Security (CARES) Act and the Canada Emergency Wage Subsidy (CEWS) legislation. The tax impacts from these measures are currently not expected to be material on the Company’s tax or financial position.

The determination of income and other tax liabilities of the Company and its subsidiaries requires interpretation of complex domestic and foreign tax laws and regulations, that are subject to change. The Company’s interpretation of taxation laws may

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differ from the interpretation of the tax authorities. As a result, there are tax matters under review for which the timing of resolution is uncertain. The Company believes that the provision for income taxes is adequate.

Liquidity and Capital Resources

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 or to manage its capital structure as discussed below. At March 31, 2020, $65 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, purchasing shares for cancellation, issuing new debt, repaying or repurchasing existing debt.

	As at March 31,
($ millions, except as indicated)	2020			2019
Cash and Cash Equivalents	$	82		$	479
Available Credit Facilities (1)		3,515			4,000
Available Uncommitted Demand Lines (2)		190			183
Issuance of U.S. Commercial Paper		(357	)		-
Total Liquidity	$	3,430		$	4,662
Long-Term Debt, including current portion (3)	$	7,006		$	6,799
Total Shareholders’ Equity (4)	$	10,191		$	10,360
Debt to Capitalization (%) (5)		41			40
Debt to Adjusted Capitalization (%) (6)		28			27

(1) Includes available credit facilities of $2.165 billion (2019 - $1.5 billion) in the U.S. and $1.35 billion (2019 - $2.5 billion) in Canada as at March 31, 2020 (collectively, the “Credit Facilities”).

(2) Includes three uncommitted demand lines totaling $313 million, net of $123 million in undrawn letters of credit (2019 - $326 million and $143 million, respectively).

(3) Long-Term Debt as at March 31, 2020, includes outstanding U.S. CP totaling $357 million and $485 million drawn on the Credit Facilities.

(4) Shareholders’ Equity reflects the common shares purchased, for cancellation, under the Company’s 2019 NCIB and substantial issuer bid programs.

(5) Calculated as long-term debt, including the current portion, divided by shareholders’ equity plus long-term debt, including the current portion.

(6) A non-GAAP measure which is defined in the Non-GAAP Measures section of this MD&A.

The Company has access to two committed revolving U.S. dollar denominated credit facilities totaling $4.0 billion, which include a $2.5 billion revolving credit facility for Ovintiv Inc. and a $1.5 billion revolving credit facility for a Canadian subsidiary. These facilities mature in July 2024, and are fully revolving up to maturity. The Credit Facilities provide financial flexibility and allow the Company to fund its operations, development activities or capital programs. At March 31, 2020, $335 million and $150 million were outstanding under the revolving credit facility for Ovintiv Inc. and for the Canadian subsidiary, respectively.

During the first quarter of 2020, as a result of the recent economic downturn from the COVID-19 pandemic and falling oil prices, Ovintiv received updates to its credit ratings. Ovintiv remains investment grade which reflects the Company’s strong liquidity position within a volatile and low commodity price environment. Ovintiv has full access to its Credit Facilities and the credit rating updates have not impacted the Company’s ability to fund its operations, development activities or its reduced capital program. While Ovintiv currently maintains an investment grade credit rating, further reductions in the Company’s credit ratings could increase the cost of short-term borrowings on the existing Credit Facilities or other sources of liquidity. A

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prolonged period of low commodity prices and the global impact of the COVID-19 pandemic, could impact the Company’s credit ratings in the future.

As at March 31, 2020, the Company had $357 million of commercial paper outstanding under its U.S. CP programs with an average remaining term of approximately 11 days and a weighted average interest rate of approximately 2.00 percent, which is supported by the Company’s Credit Facilities. Ovintiv’s access to its U.S. CP programs is market-driven and in the current low commodity price environment, market access is not available. As the Company’s outstanding commercial paper comes due in the second quarter of 2020, it is expected to be repaid using advances from the Company’s Credit Facilities. Depending on the Company’s credit rating and market demand, the Company may regain access to its two U.S. CP programs, which include a $1.5 billion program for Ovintiv Inc. and a $1.0 billion program for a Canadian subsidiary.

The Credit Facilities and uncommitted demand lines, together with cash and cash equivalents less any outstanding commercial paper, provide Ovintiv with total liquidity of $3.4 billion. At March 31, 2020, Ovintiv also had approximately $123 million in undrawn letters of credit issued in the normal course of business primarily as collateral security, related to transportation arrangements and to support future abandonment liabilities. Further downgrades in the Company’s credit ratings could trigger additional collateral requirements to support existing agreements and such amounts could be material.

In the first quarter of 2020, Ovintiv filed a U.S. shelf registration statement and a Canadian shelf prospectus, 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. and/or Canada. At March 31, 2020, $6.0 billion remained accessible under the Canadian shelf prospectus. The ability to issue securities under the U.S. shelf registration statement or Canadian shelf prospectus is dependent upon market conditions and securities law requirements.

Ovintiv is currently in compliance with, and expects that it will continue to be 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 March 31, 2020, the Company’s Debt to Adjusted Capitalization was 28 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. Ovintiv does not expect the current COVID-19 pandemic to impact the Company’s ability to remain in compliance with its financial covenants under the Credit Facilities. Additional information on financial covenants can be found in Note 15 to the Consolidated Financial Statements included in Item 8 of the 2019 Annual Report on Form 10‑K.

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Sources and Uses of Cash

In the first quarter of 2020, Ovintiv primarily generated cash through operating activities. The following table summarizes the sources and uses of the Company’s cash and cash equivalents.

		Three months ended March 31,
($ millions)	Activity Type	2020			2019
Sources of Cash, Cash Equivalents and Restricted Cash
Cash from operating activities	Operating	$	566		$	529
Proceeds from divestitures	Investing		22			2
Corporate acquisition, net of cash and restricted cash acquired	Investing		-			94
Net issuance of revolving long-term debt	Financing		144			-
Other	Investing		130			54
			862			679
Uses of Cash and Cash Equivalents
Capital expenditures	Investing		790			736
Acquisitions	Investing		17			22
Repayment of long-term debt (1)	Financing		89			-
Purchase of shares of common stock	Financing		-			400
Dividends on shares of common stock	Financing		24			28
Other	Financing		22			20
			942			1,206
Foreign Exchange Gain (Loss) on Cash, Cash Equivalents     and Restricted Cash Held in Foreign Currency			(7	)		3
Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash		$	(87	)	$	(524	)

(1) Includes open market repurchases.

Operating Activities

Cash from operating activities in the first quarter of 2020 was $566 million and was primarily a reflection of the impacts from lower average realized commodity prices, partially offset by increases in production volumes, the Newfield acquisition, the effects of the commodity price mitigation program and changes in non‑cash working capital.

Additional detail on changes in non-cash working capital can be found in Note 23 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 first quarter of 2020 was $535 million 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.

Three months ended March 31, 2020 versus March 31, 2019

Net cash from operating activities increased $37 million compared to the first quarter of 2019 primarily due to:

• Higher production volumes ($312 million), restructuring costs incurred in 2019 ($113 million), higher realized gains on risk management in revenues ($79 million), lower administrative expense, excluding non-cash long-term incentive costs and current expected credit losses ($66 million) and acquisition costs incurred in 2019 ($31 million);

partially offset by:

• Lower realized commodity prices ($400 million), higher transportation and processing expense ($58 million), changes in non-cash working capital ($35 million), decommissioning costs ($31 million) and higher interest on long-term debt ($13 million).

54

Investing Activities

Cash used in investing activities in the first quarter of 2020 was $655 million primarily due to capital expenditures. Capital expenditures increased $54 million compared to the first quarter of 2019 due to the timing of the Company’s capital program, including higher capital expenditures relating to the Anadarko asset acquired in the Newfield acquisition ($88 million).

Corporate acquisition in the first quarter of 2019 was $94 million, which reflected the net cash acquired upon the Newfield business combination.

Acquisitions in the first quarter of 2020 were $17 million, which primarily included property purchases with liquids-rich potential. Acquisitions in the first quarter of 2019 were $22 million which primarily included seismic purchases.

Divestitures in the first quarter of 2020 and 2019 were $22 million and $2 million, respectively, which primarily included the sale of certain properties that did not complement Ovintiv’s existing portfolio of assets.

Capital expenditures and acquisition and divestiture activity are summarized in Notes 3, 8 and 9 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 the Company’s strategy to enhance liquidity, strengthen its balance sheet and return value to shareholders through the purchase of common shares.

Net cash from financing activities in the first quarter of 2020 was $9 million compared to net cash used of $448 million in 2019. The change was primarily due to the purchase of common shares under a NCIB ($400 million) in the first quarter of 2019 as discussed in more detail below and the net issuance of revolving long-term debt in the first quarter of 2020 ($144 million), partially offset by the open market repurchase of long-term debt in the first quarter of 2020 ($89 million) as discussed below.

From time to time, Ovintiv may seek to retire or purchase the Company’s outstanding debt through cash purchases and/or exchanges for other debt or equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. In the first quarter of 2020, the Company repurchased, in the open market, approximately $90 million in principal amount of its 5.75 percent senior notes due January 2022 and approximately $10 million in principal amount of its 3.90 percent senior notes due in November 2021 for an aggregate cash payment of $89 million, plus accrued interest, and recognized a net gain of approximately $11 million. The Company utilized cash on hand and cash from implementing cost savings initiatives to complete these open market repurchases.

The Company’s long-term debt totaled $7,006 million at March 31, 2020 and $6,974 million at December 31, 2019. There was no current portion outstanding at March 31, 2020 or December 31, 2019. Ovintiv has no long-term debt maturities until November 2021 and, as at March 31, 2020, over 80 percent of the Company’s debt is not due until 2024 and beyond. For additional information on long-term debt, refer to Note 12 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Dividends

Ovintiv pays quarterly dividends to stockholders at the discretion of the Board of Directors.

	Three months ended March 31,
($ millions, except as indicated)		2020		2019
Dividend Payments		$	24	$	28
Dividend Payments ($/share) (1)		$	0.09375	$	0.09375

(1) Dividend payments per share reflect the Share Consolidation. Accordingly, the comparative period has been restated.

Dividends paid in the first quarter of 2020 decreased $4 million compared to the first quarter of 2019 due to common shares purchased, for cancellation, under the Company’s substantial issuer bid and NCIB programs.

55

On May 7, 2020, the Board of Directors declared a dividend of $0.09375 per share of Ovintiv common stock payable on June 30, 2020 to stockholders of record as of June 15, 2020.

Normal Course Issuer Bid

In the first quarter of 2019, the Company used cash on hand of approximately $400 million to purchase, for cancellation, approximately 55.9 million common shares, on a pre-Share Consolidation basis or approximately 11.2 million common shares on a post-Share Consolidation basis. For additional information on the NCIB, refer to Note 15 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Off-Balance Sheet Arrangements

For information on off-balance sheet arrangements and transactions, refer to the Off-Balance Sheet Arrangements section of the MD&A included in Item 7 of the 2019 Annual Report on Form 10-K.

Commitments and Contingencies

For information on commitments and contingencies, refer to Notes 8 and 24 to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

56

Non-GAAP Measures

Certain measures in this document do not have any standardized meaning as prescribed by U.S. GAAP and, therefore, are considered non-GAAP measures. These measures may not be comparable to similar measures presented by other issuers and should not be viewed as a substitute for measures reported under U.S. GAAP. These measures are commonly used in the oil and gas industry and by Ovintiv to provide shareholders and potential investors with additional information regarding the Company’s liquidity and its ability to generate funds to finance its operations. Non-GAAP measures include: Non-GAAP Cash Flow, Non-GAAP Cash Flow Margin, Total Costs, Debt to Adjusted Capitalization and Net Debt to Adjusted EBITDA. Management’s use of these measures is discussed further below.

Non-GAAP Cash Flow and Non-GAAP Cash Flow Margin

Non-GAAP Cash Flow is a non-GAAP measure defined as cash from (used in) operating activities excluding net change in other assets and liabilities, net change in non-cash working capital and current tax on sale of assets.

Non-GAAP Cash Flow Margin is a non-GAAP measure defined as Non-GAAP Cash Flow per BOE of production.

Management believes these measures are useful to the Company and its investors as a measure of operating and financial performance across periods and against other companies in the industry, and are an indication of the Company’s ability to generate cash to finance capital programs, to service debt and to meet other financial obligations. These measures are used, along with other measures, in the calculation of certain performance targets for the Company’s management and employees.

	Three months ended March 31,
($ millions, except as indicated)	2020			2019
Cash From (Used in) Operating Activities	$	566		$	529
(Add back) deduct:
Net change in other assets and liabilities		(52	)		(11	)
Net change in non-cash working capital		83			118
Current tax on sale of assets		-			-
Non-GAAP Cash Flow (1)	$	535		$	422
Production Volumes (MMBOE)		52.0			42.1
Non-GAAP Cash Flow Margin ($/BOE)	$	10.29		$	10.02

(1) The first quarter of 2019 includes restructuring costs of $113 million and acquisition costs of $31 million.

Total Costs

Total Costs is a non-GAAP measure defined as the summation of production, mineral and other taxes, upstream transportation and processing expense, upstream operating expense and administrative expense, excluding the impact of long‑term incentive costs, restructuring costs and current expected credit losses. Management believes this measure is useful to the Company and its investors as a measure of operational efficiency across periods.

	Three months ended March 31,
($ millions, except as indicated)	2020			2019
Production, Mineral and Other Taxes	$	52		$	48
Upstream Transportation and Processing		334			291
Upstream Operating		165			156
Administrative		53			227
Deduct (add back):
Long-term incentive costs		(35	)		41
Restructuring costs		-			113
Current expected credit losses		5			-
Total Costs	$	634		$	568
Divided by:
Production Volumes (MMBOE)		52.0			42.1
Total Costs ($/BOE) (1)	$	12.17		$	13.44

(1) Calculated using whole dollars and volumes.

57

Debt to Adjusted Capitalization

Debt to Adjusted Capitalization is a non-GAAP measure which adjusts capitalization for historical ceiling test impairments that were recorded as at December 31, 2011. Management monitors Debt to Adjusted Capitalization as a proxy for the Company’s financial covenant under the Credit Facilities which require debt to adjusted capitalization to be less than 60 percent. Adjusted Capitalization includes debt, total shareholders’ equity and an equity adjustment for cumulative historical ceiling test impairments recorded as at December 31, 2011 in conjunction with the Company’s January 1, 2012 adoption of U.S. GAAP.

($ millions, except as indicated)	March 31, 2020		December 31, 2019
Long-Term Debt, including current portion	$	7,006	$	6,974
Total Shareholders’ Equity		10,191		9,930
Equity Adjustment for Impairments at December 31, 2011		7,746		7,746
Adjusted Capitalization	$	24,943	$	24,650
Debt to Adjusted Capitalization	28%		28%

Net Debt to Adjusted EBITDA

Net Debt to Adjusted EBITDA is a non-GAAP measure whereby Net Debt is defined as long-term debt, including the current portion, less cash and cash equivalents and Adjusted EBITDA is defined as trailing 12-month net earnings (loss) before income taxes, DD&A, impairments, accretion of asset retirement obligation, interest, unrealized gains/losses on risk management, foreign exchange gains/losses, gains/losses on divestitures and other gains/losses.

Management believes this measure is useful to the Company and its investors as a measure of financial leverage and the Company’s ability to service its debt and other financial obligations. This measure is used, along with other measures, in the calculation of certain financial performance targets for the Company’s management and employees.

($ millions, except as indicated)	March 31, 2020			December 31, 2019
Long-Term Debt, including current portion	$	7,006		$	6,974
Less:
Cash and cash equivalents		82			190
Net Debt		6,924			6,784
Net Earnings		900			234
Add back (deduct):
Depreciation, depletion and amortization		2,172			2,015
Impairments		277			-
Accretion of asset retirement obligation		37			37
Interest		391			382
Unrealized (gains) losses on risk management		(601	)		730
Foreign exchange (gain) loss, net		34			(119	)
(Gain) loss on divestitures, net		(4	)		(3	)
Other (gains) losses, net		(19	)		23
Income tax expense (recovery)		282			81
Adjusted EBITDA (trailing 12-month) (1)	$	3,469		$	3,380
Net Debt to Adjusted EBITDA (times)		2.0			2.0

(1) Adjusted EBITDA for 2019 only includes Newfield’s results of operations for the post-acquisition period from February 14, 2019 to December 31, 2019.

58

Item 3: Quantitative and Qualitative Disclosures About Market Risk

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about Ovitniv’s potential exposure to market risks. The term “market risk” refers to the Company’s risk of loss arising from adverse changes in oil, NGL and natural gas prices, foreign currency exchange rates and interest rates. The following disclosures are not meant to be precise indicators of expected future losses but rather indicators of reasonably possible losses. The forward-looking information provides indicators of how the Company views and manages ongoing market risk exposures.

COMMODITY PRICE RISK

Commodity price risk arises from the effect fluctuations in future commodity prices, including oil, NGLs and natural gas, may have on future revenues, expenses and cash flows. Realized pricing is primarily driven by the prevailing worldwide price for crude oil and spot market prices applicable to the Company’s natural gas production. Pricing for oil and natural gas production is volatile and unpredictable as discussed in Part 1, Item 2 of this Quarterly Report on Form 10-Q in the Executive Overview section in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Item 1A. “Risk Factors” of the 2019 Annual Report on Form 10-K. To partially mitigate exposure to commodity price risk, the Company may enter into various derivative financial instruments including futures, forwards, swaps, options and costless collars. The use of these derivative instruments is governed under formal policies and is subject to limits established by the Board of Directors and may vary from time to time. Both exchange traded and over-the-counter traded derivative instruments may be subject to margin-deposit requirements, and the Company may be required from time to time to deposit cash or provide letters of credit with exchange brokers or counterparties to satisfy these margin requirements. For additional information relating to the Company’s derivative and financial instruments, see Note 22 under Part I, Item 1 of this Quarterly Report on Form 10-Q.

The table below summarizes the sensitivity of the fair value of the Company’s risk management positions to fluctuations in commodity prices, with all other variables held constant. The Company has used a 10 percent variability to assess the potential impact of commodity price changes. Fluctuations in commodity prices could have resulted in unrealized gains (losses) impacting pre-tax net earnings as follows:

	March 31, 2020
(US$ millions)	10% Price Increase			10% Price Decrease
Crude oil price	$	(131	)	$	128
NGL price		(9	)		9
Natural gas price		(68	)		58

FOREIGN EXCHANGE RISK

Foreign exchange risk arises from changes in foreign exchange rates that may affect the fair value or future cash flows of the Company’s financial assets or liabilities. As Ovintiv operates primarily in the United States and Canada, fluctuations in the exchange rate between the U.S. and Canadian dollars can have a significant effect on the Company’s reported results.

The table below summarizes selected foreign exchange impacts on the Company’s financial results when compared to the same periods in 2019.

	$ millions			$/BOE
Increase (Decrease) in:
Capital Investment	$	(2	)
Transportation and Processing Expense (1)		(2	)	$	(0.04	)
Operating Expense (1)		(1	)		(0.01	)
Administrative Expense		(2	)		(0.03	)
Depreciation, Depletion and Amortization (1)		(1	)		(0.02	)

(1) Reflects upstream operations.

59

Foreign exchange gains and losses also arise when monetary assets and monetary liabilities denominated in foreign currencies are translated and settled, and primarily include:

• U.S. dollar denominated financing debt issued from Canada

• U.S. dollar denominated risk management assets and liabilities held in Canada

• U.S. dollar denominated cash and short-term investments held in Canada

• Foreign denominated intercompany loans

To partially mitigate the effect of foreign exchange fluctuations on future commodity revenues and expenses, the Company may enter into foreign currency derivative contracts. As at March 31, 2020, Ovintiv has entered into $644 million notional U.S. dollar denominated currency swaps at an average exchange rate of US$0.7451 to C$1, which mature monthly through the remainder of 2020 and $350 million notional U.S. dollar denominated currency swaps at an average exchange rate of US$0.7289 to C$1, which mature monthly throughout 2021.

As at March 31, 2020, Ovintiv had $225 million in U.S. dollar long-term debt and $140 million in U.S. dollar finance lease obligations issued from Canada that were subject to foreign exchange exposure.

The table below summarizes the sensitivity to foreign exchange rate fluctuations, with all other variables held constant. The Company has used a 10 percent variability to assess the potential impact from Canadian to U.S. foreign currency exchange rate changes. Fluctuations in foreign currency exchange rates could have resulted in unrealized gains (losses) impacting pre-tax net earnings as follows:

	March 31, 2020
(US$ millions)	10% Rate Increase			10% Rate Decrease
Foreign currency exchange	$	(18	)	$	22

INTEREST RATE RISK

Interest rate risk arises from changes in market interest rates that may affect the fair value or future cash flows from the Company’s financial assets or liabilities. The Company may partially mitigate its exposure to interest rate changes by holding a mix of both fixed and floating rate debt and may also enter into interest rate derivatives to partially mitigate effects of fluctuations in market interest rates.

As at March 31, 2020, the Company had floating rate revolving credit and term loan borrowings of $842 million. Accordingly, the sensitivity in net earnings for each one percent change in interest rates on floating rate revolving credit and term loan borrowings was $7 million.

60

Item 4: Controls and Procedures

DISCLOSURE CONTROLS AND PROCEDURES

Ovintiv’s Chief Executive Officer and Chief Financial Officer performed an evaluation of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”). The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is accumulated and communicated to the Company’s management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2020.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in Ovintiv’s internal control over financial reporting during the first quarter of 2020 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

61

PART II

Item 1. Legal Proceedings

Please refer to Item 3 of the 2019 Annual Report on Form 10-K and Note 24 of Ovintiv’s Condensed Consolidated Financial Statements under Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in Item 1A. Risk Factors of the 2019 Annual Report on Form 10-K. These risks, which could materially affect our business, financial condition and/or operating results, are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also adversely affect our business, financial condition and/or operating results. The risk factor set forth below should be read together with the risk factors described in the 2019 Annual Report on Form 10-K.

A pandemic, epidemic or other widespread outbreak of an infectious disease, such as the ongoing outbreak of COVID-19, could affect the operation of our business.

On March 11, 2020, the World Health Organization escalated the status of the COVID-19 outbreak from epidemic to pandemic. In an effort to mitigate the spread of COVID-19, governmental authorities in the United States, Canada and around the world have implemented, among other measures, limitations on cross-border travel, restrictions on mass gatherings, stay-at-home orders and mandatory closures of non-essential businesses. In the event such restrictions remain in place for an extended period of time, the Company’s ability to maintain ordinary staffing levels, secure operational inputs, and execute on portions of its business could be impacted. Although the Company has contingency plans in place to manage the potential workplace impacts of global outbreaks, including COVID-19, restrictions implemented by governments in jurisdictions in which the Company operates could prevent employees, contractors or suppliers from accessing the Company’s properties or performing critical services, or negatively impact the availability of the Company’s key personnel. In addition, as a significant subset of the Company’s employees has and may continue to work remotely, the Company may experience a higher rate of cyber-attacks and exposure to vulnerabilities related to digital technologies.

Concerns over the prolonged negative effects of the COVID-19 pandemic on economic and business prospects across the world, along with actions taken by members of OPEC and other oil exporting nations in response, have contributed to increased market and oil price volatility and diminished expectations for the performance of the global economy. The COVID-19 pandemic has resulted in, and may continue to result in, significant market uncertainty, including substantial fluctuations in currency exchange rates, inflation, interest rates, counterparty credit and performance risk, and general levels of investing and consumption. An extended period of decreased global demand and/or oversupply of production may result in refiners curtailing operations or refinery utilization rates, which could contribute to storage constraints or a widening of price differentials in jurisdictions in which the Company operates. Further, low commodity prices could impact the value and amount of the Company’s reserves and result in the recognition of future ceiling test impairments.

The full impact of the COVID-19 pandemic is uncertain and will depend on a number of factors, including the location and severity of the virus's spread and the effectiveness of mitigation actions taken by governmental authorities. Ongoing market uncertainty and an extended period of low commodity prices could result in changes to the Company's spending and operating plans, substantial fluctuations in the Company’s stock price and credit ratings, and affect the Company's financial condition, operations and access to liquidity.

62

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No	Description
10.1*	First Amendment to the Encana (USA) Deferred Compensation Plan amended and restated effective April 1, 2018, dated as of January 24, 2020.
10.2*	Ovintiv U.S. Retirement Plan amended and restated effective January 27, 2020.
10.3*	Offer of employment dated June 10, 2013.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Schema Document.
101.CAL	Inline XBRL Calculation Linkbase Document.
101.DEF	Inline XBRL Definition Linkbase Document.
101.LAB	Inline XBRL Label Linkbase Document.
101.PRE	Inline XBRL Presentation Linkbase Document.
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, has been formatted in Inline XBRL.

* Management contract or compensatory arrangement

63

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Ovintiv Inc.
By:	/s/ Corey D. Code
	Name:	Corey D. Code
	Title:	Executive Vice-President & Chief Financial Officer

Dated: May 8, 2020

64

EX-10.1

Exhibit 10.1

First Amendment

to The

Encana (USA) Deferred Compensation Plan

(Amended and Restated Effective April 1, 2018)

1.Plan Sponsor:  Ovintiv Services Inc. (the “Plan Sponsor”).

2.Amendment of Plan:  Pursuant to the authority of the undersigned and the provisions of Section 7.1 of the Encana (USA) Deferred Compensation Plan (the “Plan”), the following Amendment to the Plan is adopted, effective January 24, 2020.

A.Section 1.1 of the Plan is amended to read as follows:

1.1Name of Plan.  The name of this plan is the “Ovintiv U.S. Deferred Compensation Plan.”

B.Section 1.4 of the Plan is amended to read as follows:

1.4Company.  For purposes of this Plan, “Company” means Ovintiv Services Inc. (f/k/a Encana Services Company Ltd., which was the successor employer to Alenco Inc.) and any successor employer thereof.

C.Section 1.5 of the Plan is amended to read as follows:

1.5Participating Employers.  The Company is a “Participating Employer” in the Plan. Each subsidiary or affiliate of the Company that employs one or more Participants shall also be a Participating Employer. Each Participating Employer shall pay the cost of the benefits to which a Participant is entitled under the Plan attributable to service with that employer, and its share of the other expenses of the Plan, in each case in such amounts as are determined by the Company in its sole discretion. The Participating Employers are Ovintiv Services Inc. (f/k/a Encana Services Company Ltd.), Ovintiv USA Inc. (f/k/a Encana Oil & Gas (USA)) and, Ovintiv Inc. (including any payments made by Alenco Inc.).

3.Terms and Conditions of Plan:  Except for the above amendment, all terms and conditions of the Plan are unamended and shall remain in full force and effect.

***Signature Page Follows***

First Amendment to the Encana (USA) Deferred Compensation Plan3/20201

3.Execution:  This First Amendment has been executed on the date set forth below.

Ovintiv Services Inc.

Plan Sponsor

By: /s/ Mike Williams

Title: Chair, Management Pension Benefits Committee

Date: April 6, 2020

14171580_v2

First Amendment to the Encana (USA) Deferred Compensation Plan3/20202

EX-10.2

Exhibit 10.2

Ovintiv U.S. Retirement Plan

Amended and Restated Effective January 27, 2020

Ovintiv U.S. Retirement Plan

Table of Contents

Introduction 1

Article 1. Definitions 2

1.1 Account2

1.2 Administrator2

1.3 Affiliated Group2

1.4 Annual Additions2

1.5 Annuity Starting Date2

1.6 Application for Benefits3

1.7 Automatic Participant3

1.8 Beneficiary3

1.9 Cash-Out Limit3

1.10 Catch‑Up Contributions3

1.11 Code3

1.12 Committee3

1.13 Compensation3

1.14 Date of Employment3

1.15 Date of Reemployment3

1.16 Death3

1.17 Deferral Contributions4

1.18 Deferral Account4

1.19 Disability4

1.20 Early Retirement Age4

1.21 Effective Date4

1.22 Elapsed Time Basis4

1.23 Eligible Employee5

1.24 Employee5

1.25 Employee Stock Ownership Plan or ESOP component5

1.26 Employer5

1.27 Employer Contributions5

1.28 Employer Contribution Account6

1.29 Employer Stock Dividends6

1.30 Employer Stock6

1.31 Employer Stock Fund6

1.32 ERISA6

1.33 ESOP Participant6

1.34 Excess Deferrals6

1.35 Five-Taxable-Year Period6

1.36 Investment Manager6

1.37 Leave of Absence6

1.38 Limitation Year6

1.39 Maternity Leave or Paternity Leave7

1.40 Normal Retirement Age7

Ovintiv U.S. Retirement Plan1/27/2020    i

1.41 Ovintiv Inc.7

1.42 One-Year Period of Severance7

1.43 Participant7

1.44 Participating Employer7

1.45 Plan7

1.46 Plan Year7

1.47 Pre-Tax Contributions7

1.48 Qualified Distribution7

1.49 Qualified Joint and Survivor Annuity7

1.50 Qualified Matching Contribution Account8

1.51 Qualified Nonelective Contribution Account8

1.52 Qualified Nonelective Contributions or QNECs8

1.53 Qualified Optional Survivor Annuity8

1.54 Qualified Preretirement Survivor Annuity8

1.55 Regulation8

1.56 Required Distribution Date8

1.57 Rollover Account8

1.58 Rollover Contributions8

1.59 Roth Contributions8

1.60 Safe Harbor Matching Contributions9

1.61 Safe Harbor Matching Contribution Account9

1.62 Safe Harbor Plan9

1.63 Severance from Service Date9

1.64 Sponsor9

1.65 Spouse9

1.66 Suspense Account9

1.67 Testing Compensation9

1.68 Transfer Account11

1.69 Transferee Plan11

1.70 Trust Agreement11

1.71 Trust Fund11

1.72 Trustee11

1.73 Valuation Date11

1.74 Year of Service11

Article 2. Eligibility and Participation 12

2.1 Eligibility to Participate12

2.2 Eligibility to Receive Safe Harbor Matching Contribution and Employer Contribution12

2.3 Reinstatement of Participation12

2.4 Termination of Participation12

Article 3. Contributions 13

3.1 Deferral Contributions13

3.2 Safe Harbor Matching Contributions14

3.3 Employer Contributions14

3.4 Supplemental Contributions14

3.5 Qualified Nonelective Contributions14

Ovintiv U.S. Retirement Plan1/27/2020    ii

3.6 Rollover Contributions14

Article 4. Service and Vesting 16

4.1 Service Counting Method16

4.2 Service with Participating and Predecessor Employers16

4.3 Vested Benefits16

4.4 Forfeitures17

4.5 Reinstatement of Vesting Service upon Reemployment17

4.6 Restoration of Forfeited Amounts upon Reemployment17

Article 5. Accounts AND ESOP PROVISIONS 19

5.1 Participant Accounts19

5.2 Valuation and Adjustment of Accounts19

5.3 Disposition of Forfeitures or Suspense Account19

5.4 Directed Investments20

5.5 Statements21

5.6 Employer Stock Dividend Reinvestment Option21

5.7 Voting or Tendering Employer Stock Fund22

Article 6. LIMITATIONS ON BENEFITS 24

6.1 Average Deferral Percentage Limitations24

6.2 Average Contribution Percentage Limitations24

6.3 Elective Deferral Limitation24

6.4 Annual Additions Limitation25

Article 7. distribution of plan benefits 26

7.1 Distribution Events26

7.2 Amount of Distribution26

7.3 Form of Distribution26

7.4 Timing of Distribution28

7.5 Notice29

7.6 Required Minimum Distributions29

7.7 Death Benefits29

7.8 Determination of Beneficiary31

7.9 Rollover of Plan Distributions33

7.10 Qualified Domestic Relations Orders34

Article 8. Loans; Hardship and in-service withdrawals 36

8.1 Participant Loans36

8.2 In-Service Withdrawals36

8.3 Hardship Withdrawals36

Article 9. application for benefits 39

9.1 Applying for Benefits39

9.2 Denial of Benefits39

Ovintiv U.S. Retirement Plan1/27/2020    iii

9.3 Exhaustion of Remedies; Limitation of Actions41

Article 10. administration of the plan 42

10.1 Administrator42

10.2 Organization and Procedures42

10.3 Powers and Duties42

10.4 Consultation with Agents43

10.5 Finality of Action43

10.6 Indemnification44

10.7 Payment of Plan Expenses44

Article 11. the trust fund 45

11.1 The Trustee45

11.2 The Trust Fund45

11.3 Reversion of Assets45

Article 12. plan fiduciaries 46

12.1 Fiduciaries46

12.2 Fiduciary Responsibilities46

12.3 Investment Managers47

Article 13. amendment, termination and merger 48

13.1 Plan Amendment48

13.2 Vesting Amendments48

13.3 Plan Termination49

13.4 Plan Merger or Transfer of Assets50

Article 14. Top Heavy Provisions 51

14.1 Top-Heavy Definitions51

14.2 Determination of Top-Heavy Status51

14.3 Change in Vesting Schedule52

14.4 Minimum Contribution52

Article 15. general provisions 54

15.1 Interpretation54

15.2 Liability for Participant Representations54

15.3 Governing Law54

15.4 Participating Employers54

15.5 Missing Participants and Beneficiaries55

15.6 Incapacity of Participant or Beneficiary55

15.7 Assignment and Alienation56

15.8 Participant Rights56

15.9 Effect on Employment Status56

15.10 Qualified Military Service56

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Schedule A - Participating Employers 59

Schedule B - Imputed Service for Predecessor and Related Employers 60

Schedule C - Protected Benefits 61

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Ovintiv U.S. Retirement Plan
(Amended and Restated Effective January 27, 2020)

Introduction

Alenco Inc. originally established the Encana (USA) Retirement Plan (the “Plan”), (formerly known as the Encana (USA) 401(k) Plan and the Encana International (USA) Inc. 401(k) Plan) effective September 1, 1999.  The Plan was most recently amended and restated effective March 14, 2014 in connection with the merger of the Encana (USA) Money Purchase Plan and an amendment to qualify a portion of the Plan as an employee stock ownership plan (“ESOP”) pursuant to Code Section 4975(e)(7), both effective March 14, 2014.  Encana Services Company Ltd. became the Plan sponsor effective January 1, 2014.  Encana Services Company Ltd. was renamed Ovintiv Services Inc. effective January 24, 2020. The Plan is now amended, restated, and renamed the Ovintiv U.S. Retirement Plan, effective January 27, 2020. This amendment and restatement supersedes all other restatements to the Plan.  The ESOP component of the Plan is intended to invest primarily in employer securities, within the meaning of Code Section 409(l), and the ESOP and profit sharing components under the Plan are intended to constitute a single plan under Treasury Regulation 1.414(l)-1(b)(1).

The Plan is intended to qualify under Code Sections 401(a) and 501(a) and is created and maintained for the exclusive benefit of eligible employees and their beneficiaries to provide them with a means to accumulate retirement savings, to provide retirement funds, and to provide benefits in the event of an employee’s death or disability.  

The Plan includes this document and Schedules A, B and C, as may be amended from time to time without the necessity of a formal Plan amendment.

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Article 1.Definitions

When used in this Plan, the following capitalized terms have the meanings set forth below unless a different meaning is plainly required by the context:

1.1 Account

means the individual account established in the name of each Participant reflecting the portion of the Employer’s and the Participant’s contributions, and the net earnings or losses thereon, and which will, to the extent applicable, consist of the accounts designated under Section 5.1.

1.2 Administrator

means the Sponsor or any committee or individual appointed by the Sponsor to administer the Plan as provided in Article 10.

1.3 Affiliated Group

means any group of corporations or other business organizations of which the Employer is a member, determined by using tests established under Code Sections 414(b), (c), (m) and (o), modified for purposes of Code Section 415 only by Code Section 415(h).

1.4 Annual Additions

means, for each Limitation Year, the sum of―

(a) the contributions by the Employer and other members of the Affiliated Group to this Plan or any other qualified defined contribution retirement plan that are allocated for the benefit of a Participant, including any forfeitures;

(b) any Participant contributions to this Plan or to any other such plan (other than contributions made pursuant to Code Section 414(v)); and

(c) for purposes of the dollar limitation on Annual Additions, any contributions by the Employer and other members of the Affiliated Group allocated to a medical expense reimbursement account that is established under Code Section 401(h) for a Participant under any pension or annuity plan, or, in the case of a key employee as defined in Code Section 416, any contribution by the Employer and other members of the Affiliated Group allocated on the Participant’s behalf to a separate account in a funded welfare benefit plan established for the purpose of providing post-retirement medical benefits.

Anything herein to the contrary notwithstanding, Annual Additions do not include any investment earnings allocable to a Participant, any Rollover Contributions or amounts transferred directly to a trustee from another qualified plan, contributions of amounts previously distributed to former employees who are reemployed, payments of principal and interest on Plan loans, dividends or gains on sale of Employer Stock held by the Employee Stock Ownership Plan.

1.5 Annuity Starting Date

means the first day of the first period for which the Plan pays an amount as an annuity or in any other form.  

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1.6 Application for Benefits

means the administrative method and procedures established by the Administrator in order for a Participant to receive benefits hereunder, including any electronic methods prescribed by the Administrator.

1.7 Automatic Participant

means an Employee who is automatically enrolled in the Plan and remains automatically enrolled, as provided in Section 2.1 and Section 3.1(b).

1.8 Beneficiary

means any individual, trust, estate, or other recipient properly designated by the Participant pursuant to the procedures required by the Administrator to receive Death benefits payable hereunder, on either a primary or contingent basis.

1.9 Cash-Out Limit

means $1,000 calculated as of the time of distribution or any other time.  The value of a Participant’s vested Account for purposes of applying the Cash-Out Limit will be determined by including the portion of the account balance that is attributable to Rollover Contributions (and earnings allocable thereto).

1.10 Catch‑Up Contributions

means contributions to the Plan that are intended to qualify as catch-up contributions pursuant to Code Section 414(v).

1.11 Code

means the Internal Revenue Code of 1986, as now in effect and as may be amended from time to time.

1.12 Committee

means the Sponsor’s Management Pension Benefits Committee.

1.13 Compensation

means the amount paid or made available by the Employer to an Eligible Employee for that portion of a Plan Year during which the Eligible Employee is a Participant in the Plan that represents the Eligible Employee’s base pay, including amounts that are not included in the Participant’s gross income due to an election under Code Section 125, 132(f)(4), or 402(e)(3).  Compensation will not exceed the limitation under Code Section 401(a)(17), which is $200,000, as adjusted by the Commissioner for increases in the cost of living in accordance with Code Section 401(a)(17).  This limit does not apply with respect to Deferral Contributions.  The cost of living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year.  If a determination period consists of fewer than 12 months, the Code Section 401(a)(17) limitation will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.

1.14 Date of Employment

means the date on which an Employee first begins service with the Employer.

1.15 Date of Reemployment

means the date on which an Employee recommences service with the Employer.

1.16 Death

means the Participant’s death for which a certificate or declaration of death is issued, and may include the Participant’s disappearance, as determined in the sole discretion of the Administrator.

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1.17 Deferral Contributions

means the contributions to the Trust Fund made by the Employer on behalf of a Participant pursuant to the Participant’s deferral election under Section 3.1, including all Pre-Tax Contributions and Roth Contributions, and including Catch‑Up Contributions.

1.18 Deferral Account

means the individual account established in the name of each Participant reflecting the Participant’s Deferral Contributions, and the net earnings and losses thereon.  

1.19 Disability

refers to a condition in which a Participant is determined to qualify for benefits under the long-term disability plan sponsored by the Employer under which the Participant is covered.  

1.20 Early Retirement Age

means age 55.

1.21 Effective Date

means September 1, 1999.  The Effective Date of this restatement is January 27, 2020.  If an earlier effective date for a provision in this restated Plan applies, the provision will be effective as of the earlier effective date notwithstanding the general January 27, 2020 effective date.

1.22 Elapsed Time Basis

means the method of crediting service based on Elapsed Time.  Elapsed Time means an Employee’s service with the Employer beginning on the Employee’s Date of Employment or, if the Employee has experienced a One-Year Period of Severance, beginning on the Employee’s Date of Reemployment.  In determining an Employee’s Elapsed Time, the following rules apply:

(a) Elapsed Time continues until an Employee’s Severance from Service Date.

(b) There is no Severance from Service Date if an Employee retires, resigns or is discharged, but then is reemployed by the Employer within 12 months.

(c) There is no Severance from Service Date if an Employee who is on a Leave of Absence separates from service for a reason other than retirement, resignation, discharge or death and within 12 months of the date of the Leave of Absence, the Employee is then reemployed by the Employer.

(d) Elapsed Time is measured in days and aggregated in full and fractional years, with 30 days equaling one month and 12 months equaling one year; provided, however, that a Participant will not receive multiple credit for Elapsed Time with respect to any single period.

(e) If an Employee has a Severance from Service Date, then is reemployed by the Employer, a new period of Elapsed Time begins, which is aggregated with the Employee’s prior periods of Elapsed Time, except in the case of an Employee who incurs five consecutive One-Year Periods of Severance, in which case a new period of Elapsed Time begins which is not aggregated with the Employee’s prior periods of Elapsed Time.

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1.23 Eligible Employee

means any Employee, but does not include:

(a) any Employee included in a unit of Employees covered by a collective bargaining agreement between the Employer and the Employee representative, the negotiation of which retirement benefits were the subject of good faith bargaining, unless the Employer and the Employee representative have agreed to allow such Employees to participate in the Plan pursuant to the terms of the collective bargaining agreement covering such Employees;

(b) any Employee who is a nonresident alien who receives no earned income from the Employer that constitutes income from sources within the United States;

(c) any Employee who is an expatriate covered by the Employer’s retirement plan in the Employee’s country of residence;

(d) any Employee who is classified by the Employer as an intern; and

(e) any Employee of an Employer with respect to any period prior to the date that the Employer has adopted this Plan with respect to its Employees.

1.24 Employee

means any individual who is a common law employee of the Employer and is classified as an employee of the Employer on the basis of the Employer’s customary practices consistently applied.  Notwithstanding anything herein to the contrary, the term Employee does not include any individual who is classified as an agent, consultant, independent contractor or self-employed individual who has entered into an agency, consulting, independent contractor or other similar arrangement with the Employer, including a leased employee, regardless of whether such person is later determined by a court or governmental agency to have an employee relationship with the Employer.

1.25 Employee Stock Ownership Plan or ESOP component

means the Employer Stock Fund.  The portion of the Plan assets consisting of the Employer Stock Fund will be a stock bonus plan under Code Section 401(a), that is intended to qualify as an employee stock ownership plan under Code Section 4975(e)(7).  The ESOP component is maintained as a portion of the Plan as authorized by Regulations Section 54.4975‑11(a)(5).  The remaining part of the Plan is intended to be a profit sharing plan that meets the requirements for qualification under Code Section 401(a) and 401(k).  Together the ESOP component and the profit sharing component constitute the entire Plan and are intended to be a single plan under Regulations Section 1.414(l)-1(b)(1).

1.26 Employer

means the Sponsor and any member of the Affiliated Group that adopts this Plan on behalf of its Eligible Employees with the consent of the Sponsor or the Administrator as a Participating Employer.  

1.27 Employer Contributions

means contributions to the Trust Fund made by the Employer under Section 3.3 on behalf of a Participant.

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1.28 Employer Contribution Account

means the individual account established in the name of each Participant reflecting the Participant’s Employer Contributions, and the net earnings or losses thereon.

1.29 Employer Stock Dividends

means the dividends paid on the shares of common stock of Ovintiv Inc.

1.30 Employer Stock

means the shares of common stock of Ovintiv Inc., which is a “qualifying employer security” of the Employer within the meaning of Section 409(p).

1.31 Employer Stock Fund

means the investment fund designated for investment in Employer Stock.

1.32 ERISA

means the Employee Retirement Income Security Act of 1974, as now in effect and as thereafter amended from time to time, and any regulations issued thereunder.

1.33 ESOP Participant

means any Participant who has any portion of his or her Account invested in the Employer Stock Fund.

1.34 Excess Deferrals

means, for any Plan Year, Deferral Contributions (excluding Catch‑Up Contributions) in excess of the limitation on elective deferrals under Code Section 402(g), as may be adjusted pursuant to Code Section 402(g)(4), or Deferral Contributions (excluding Catch‑Up Contributions) designated by the Participant as being in excess of the limitation.

1.35 Five-Taxable-Year Period

means the period of five consecutive taxable years beginning on the earlier of (a) the first day of the first taxable year in which the Participant makes a Roth Contribution to his or her Roth Contribution subaccount under this Plan or, (b) if a Rollover Contribution was made to the Participant’s Roth Contribution subaccount in this Plan from Roth contributions from another qualified plan not sponsored by the Sponsor, the first day of the first taxable year for which the Participant made a Roth contribution to such other qualified plan.

1.36 Investment Manager

means the individual or entity, if any, appointed by the Administrator to manage any portion or all of the assets of the Trust Fund.

1.37 Leave of Absence

means any absence of not over 12 months approved by the Employer in accordance with reasonable nondiscriminatory standards and policies consistently applied by the Employer, including any absence from work for service in the U.S. armed forces (other than career military service).  Any Leave of Absence must be given in advance and may be canceled at any time in the discretion of the Employer to the extent permitted by applicable law.

1.38 Limitation Year

means the Plan Year.  If the Plan is terminated effective as of a date other than the last day of the Plan’s Limitation Year, the Plan will be treated as if the Plan was amended to change its Limitation Year to end on the effective date of the Plan termination.  As a result of this deemed amendment, the Code Section 415(c)(1)(A) dollar limit will be prorated under the short limitation year rules.

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1.39 Maternity Leave or Paternity Leave

means any absence from work because of (i) the pregnancy of the Employee, (ii) the birth of a child of the Employee, (iii) the placement of a child with the Employee in connection with the adoption of such child by the Employee, or (iv) the need to care for such child for a period beginning immediately following such birth or placement.  The Employee may be required to furnish information necessary to establish that the absence was for one of the reasons specified in this section and the number of days for which there was such an absence.

1.40 Normal Retirement Age

means age 65.

1.41 Ovintiv Inc.

means Ovintiv Inc. and any successor thereto.

1.42 One-Year Period of Severance

means a 12-consecutive-month period beginning on a Participant’s Severance from Service Date or any anniversary of that date during which the Participant does not perform services for the Employer.  Solely for purposes of determining whether, for vesting purposes, a Participant has incurred a One-Year Period of Severance, if an Employee experiences a Severance from Service Date for Maternity Leave or Paternity Leave, then “first anniversary of his Severance from Service Date” will be substituted for “Severance from Service Date” in the preceding sentence.

1.43 Participant

means an Eligible Employee who has entered the Plan in accordance with the provisions of Article 2.  An Employee who becomes a Participant will remain a Participant under the Plan until the Trustee has fully distributed the Participant’s Account.

1.44 Participating Employer

means each entity that adopts the Plan in accordance with Section 15.4 and is listed as a Participating Employer, and not an excluded entity, in Schedule A as updated from time to time.

1.45 Plan

means the Ovintiv U.S. Retirement Plan, including any subsequent amendments hereto.

1.46 Plan Year

means the 12-month period ending on December 31st.  

1.47 Pre-Tax Contributions

means contributions that are intended to qualify as pre-tax contributions pursuant to Code Section 401(k).

1.48 Qualified Distribution

means a distribution from a Participant’s Roth Contributions subaccount that (a) is made on or after the date a Participant attains age 59½, on or after the Participant’s death, or on account of the Participant’s disability (as that term is defined in Code Section 72(m)); and (b) is made after the Five-Taxable-Year Period.

1.49 Qualified Joint and Survivor Annuity

means―

(a) in the case of a Participant who is married as of the Annuity Starting Date, an immediate annuity that is purchasable with the applicable portion of the Participant’s nonforfeitable Account, if any, and provides a life annuity for the Participant and a survivor annuity payable for the remaining life of the Participant’s Spouse equal to 50% of the amount of the annuity payable during the life of the Participant; or

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(b) in the case of a Participant who is not married as of the Annuity Starting Date, an immediate life annuity for the Participant that is purchasable with the applicable portion of the Participant’s nonforfeitable Account, if any.  

1.50 Qualified Matching Contribution Account

means the individual account established in the name of each Participant reflecting his qualified matching contributions, and the net earnings or losses thereon.

1.51 Qualified Nonelective Contribution Account

means the individual account established in the name of each Participant reflecting the Participant’s Qualified Nonelective Contributions, and the net earnings or losses thereon.

1.52 Qualified Nonelective Contributions or QNECs

means the contributions (other than qualifying matching contributions) to the Trust Fund that may be made by the Employer on behalf of a Participant for the purpose of making corrections pursuant to the Employee Plans Compliance Resolution System.

1.53 Qualified Optional Survivor Annuity

means an annuity that is the actuarial equivalent of a Qualified Joint and Survivor Annuity for a married Participant, which provides a life annuity for the Participant and a survivor annuity payable for the remaining life of the Participant’s Spouse equal to 75% of the amount of the annuity payable during the life of the Participant.

1.54 Qualified Preretirement Survivor Annuity

means a survivor annuity for the life of the Spouse of a Participant that is purchasable with 50% of the Participant’s nonforfeitable Transfer Account (determined as of the date of the Participant’s death), if any.

1.55 Regulation

means any rule or regulation promulgated under Code Section 7805 by the Secretary of the Department of the Treasury, or the Secretary’s delegate.

1.56 Required Distribution Date

means the April 1st of the calendar year following―

(a) in the case of a Participant who is a 5% owner (within the meaning of Code Section 416(i)), the calendar year in which a Participant attains age 72 (70½ prior to January 1, 2020), and

(b) in the case of a Participant who is not a 5% owner, the later of the calendar year in which occurs the Participant’s severance from employment with the Employer or the calendar year in which the Participant attains age 72 (70½ prior to January 1, 2020).

1.57 Rollover Account

means the individual account established in the name of each Eligible Employee, if applicable, reflecting the Participant’s Rollover Contributions, and the net earnings or losses thereon, including any subaccounts necessary in order to reflect different types of pre-tax and after-tax Rollover Contributions and other types of rollovers.

1.58 Rollover Contributions

means the contributions to the Trust Fund made by an Eligible Employee pursuant to Section 3.6.

1.59 Roth Contributions

means contributions that are intended to qualify as after-tax contributions pursuant to Code Section 402A.

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1.60 Safe Harbor Matching Contributions

means contributions to the Trust Fund made by the Employer under Section 3.2 on behalf of a Participant that are intended to satisfy the matching requirements for the plan to be a Safe Harbor Plan.

1.61 Safe Harbor Matching Contribution Account

means the individual account established in the name of each Participant reflecting the Participant’s Safe Harbor Matching Contributions, and the net earnings or losses thereon.

1.62 Safe Harbor Plan

means a qualified plan that, with respect to nondiscrimination testing, meets the requirements set forth in Code Section 401(k)(12) and underlying Regulations and the requirements set forth in Code Section 401(m)(11) and underlying Regulations for safe harbor 401(k) plans.

1.63 Severance from Service Date

occurs on the earlier of―

(a) a termination of employment or service on account of retirement, resignation, discharge or Death, or

(b) the first anniversary of the date the Participant terminated employment or service on account of any reason other than the reasons set forth above, such as vacation, holiday, sickness, Disability, Leave of Absence or layoff.

1.64 Sponsor

means Ovintiv Services Inc., and any successor thereto.

1.65 Spouse

means an individual who qualifies as a Participant’s spouse under federal tax law, including a common law spouse where applicable.

1.66 Suspense Account

means the account established to reflect any amounts allocated or accrued on behalf of a Participant in excess of the limitations under Code Section 415 or other unallocated amounts under the Plan that are not forfeitures.

1.67 Testing Compensation

means the Employee’s wages within the meaning of Code Section 3401(a) (for purposes of income tax withholding at the source), plus amounts that would  be included in wages but for an election under Code Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b), plus all other payments of compensation to an Employee by the Employer (in the course of the Employer’s trade or business) for which the Employer is required to furnish the Employee with a Form W-2 under Code Sections 6041(d), 6051(a)(3) and 6052.  Testing Compensation must be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2)).  Except as provided below in this Section 1.67, such amounts must be actually paid or made available to the Employee during the Limitation Year (or, if earlier, includible in the gross income of the Employee within the Limitation Year) and prior to the Employee’s severance from employment with the Employer.

Testing Compensation is also subject to the following:

(a)Other Included Compensation.  Testing Compensation includes:

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(1) Amounts earned during a Plan Year but paid during the first few weeks of the following Plan Year because of the timing of pay periods and pay dates, provided that such amounts are included on a uniform and consistent basis in the Testing Compensation of all similarly situated Participants for the Plan Year in which such amounts were earned and no compensation is included in more than one Limitation Year;

(2) Back pay within the meaning of Regulation Section 1.415(c)-2(g)(8), for the Plan Year to which the back pay relates, to the extent the back pay represents wages and compensation that would otherwise be included in Testing Compensation; and

(3) Amounts that would have been included in Testing Compensation if the amounts had been paid prior to the Employee’s severance from employment date, provided the amounts are paid by 2½ months after a severance from employment, and the amounts are:

(A) Regular compensation for services performed during regular working hours, or compensation for services performed outside the regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments;

(B) Payments for accrued bona fide sick, vacation, or other leave, but only if the Employee would have been able to use the leave had employment continued; and

(C) Differential wage payments, which are payments made by the Employer to an individual with respect to any period during which the individual is performing qualified military service within the meaning of Code Section 414(u) for a period of more than 30 days, and which represent all or a portion of the wages that the individual would have received from the Employer if the individual had been performing services for the Employer.

(b) Compensation Limit.

Testing Compensation will not exceed the limitation under Code Section 401(a)(17), which is $200,000, as adjusted by the Commissioner for increases in the cost of living in accordance with Code Section 401(a)(17).  The cost of living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year.  If a determination period consists of fewer than 12 months, the Code Section 401(a)(17) limitation will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.

(c) Definition for Nondiscrimination Testing.  

Notwithstanding the foregoing, for purposes of applying the nondiscrimination tests of Section 6.1 and 6.2,and any other applicable nondiscrimination testing, Testing Compensation means any definition of

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compensation that satisfies the requirements for a nondiscriminatory definition under Code Section 414(s), as determined by the Administrator.

1.68 Transfer Account

means a separate account maintained for a Participant consisting of all contributions allocated to the Participant under the Transferee Plan, and the income, expenses, gains, and losses allocated thereto, in accordance with the Transferee Plan, and transferred to the Plan to effect the merger of the Transferee Plan into the Plan, effective as of March 14, 2014.

1.69 Transferee Plan

means the Encana (USA) Money Purchase Plan.

1.70 Trust Agreement

means the agreement with the Trustee providing for the Trust Fund in which Plan contributions are held by the Trustee.

1.71 Trust Fund

means the assets of the Plan held under the Trust Agreement.

1.72 Trustee

means the trustee or trustees by whom the Accounts and assets of the Plan are held pursuant to the Trust Agreement as provided in Article 11.

1.73 Valuation Date

means the date as of which the Trust Fund is valued and the Account maintained on behalf of each Participant or Beneficiary is adjusted as provided hereunder.  The Trust Fund will be valued on each trading date with respect to investment assets or funds whose value is determined on any day that the financial markets are open.  For all other assets, the Trust Fund will be valued as of the last day of the Plan Year and on such additional dates as the Administrator deems appropriate.

1.74 Year of Service

means 12 months of service with the Employer, or with a predecessor employer as provided in Section 4.2(b), calculated in accordance with the Elapsed Time Basis. Only for purposes of determining the vested benefit under Section 4.3, a Year of Service also includes service with any employer who is a member of the Affiliated Group, but only for service performed during the time that the employer was a member of the Affiliated Group, calculated in accordance with the Elapsed Time Basis.

*  *  *  *  End of Article 1  *  *  *  *

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Article 2.Eligibility and Participation

2.1 Eligibility to Participate.

Each Eligible Employee is eligible to become a Participant as of such Employee’s Date of Employment or Date of Reemployment, as applicable.  Any Eligible Employee who (1) becomes a Participant on or after April 1, 2014, and (2) does not elect to make or elect to decline to make a Deferral Contribution as provided under Section 3.1 will become an “Automatic Participant” as provided in this paragraph and under Section 3.1(b), effective as soon as administratively practicable after his or her eligibility date.  Each Automatic Participant will receive a notification prior to his or her automatic participation.  Such notification will indicate that the Automatic Participant may cancel his or her automatic participation effective immediately or effective as of any future payroll period upon giving proper notice in accordance with administrative rules and procedures established by the Administrator.  An Automatic Participant who elects a different Deferral Contribution, including zero percent (0%), will no longer be considered an Automatic Participant and will no longer be subject to the automatic enrollment provisions.

2.2 Eligibility to Receive Safe Harbor Matching Contribution and Employer Contribution.

Each Participant who is an Eligible Employee during such Plan Year is eligible to share in the allocation of Safe Harbor Matching Contributions and Employer Contributions.

2.3 Reinstatement of Participation.

2.4

Reemployment of Eligible Employee.  

In the event a Participant who ceases to be an Eligible Employee again becomes an Eligible Employee, such Employee will be eligible to make Deferral Contributions and share in the allocation of Safe Harbor Matching Contributions and Employer Contributions as soon as administratively feasible after the Participant again becomes an Eligible Employee and completes the enrollment process.

Reclassification as an Eligible Employee.  

In the event an Employee who is not an Eligible Employee becomes an Eligible Employee, such Employee will be eligible to make Deferral Contributions and share in the allocation of Safe Harbor Matching Contributions and Employer Contributions as soon as administratively feasible after the Employee first becomes an Eligible Employee, provided such Employee completes the enrollment process.

2.5 Termination of Participation.

A Participant ceases to be a Participant as of the date the Participant has received a complete distribution of the Participant’s Account; provided, however, that for purposes of an individual’s eligibility to make and share in the allocation of contributions under the Plan, the other relevant Plan provisions apply and the individual’s designation as a Participant for purposes of this Section 2.4 has no bearing.

*  *  *  *  End of Article 2  *  *  *  *

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Article 3.Contributions

3.1 Deferral Contributions.

Each Participant may elect to have the Employer deduct, in whole or partial percentages (carried to the 1/10th), from 1% up to 75% (plus Catch-Up Contributions) of the Participant’s Compensation (without regard to Code Section 401(a)(17)) or a flat dollar amount (not to exceed 75% of the Participant’s Compensation), that would otherwise be payable to him or her in cash for the Plan Year, limited to the amount available after any other applicable withholdings, and to have such amount contributed on the Participant’s behalf to the Plan as a Deferral Contribution.  The deferral amount cannot exceed the dollar limitation outlined in Section 6.3(a).  The Participant must specify whether the Deferral Contributions made pursuant to this Section 3.1 are Pre-Tax Contributions, Roth Contributions, or a combination of both and, once made, the participant may change his or her designation on a prospective basis.  If the Participant fails to so designate, the Plan will treat all Deferral Contributions as Pre-Tax Contributions.  Deferral Contributions are subject to the following:

Method of Election.  

A Participant may elect to make, modify, or discontinue the Participant’s Deferral Contributions by filing notice with the Administrator, or its representative, in accordance with procedures established by the Administrator; provided, however, in no event may a Participant’s deferral election apply to Compensation that is currently available to the Participant.  A Participant’s election to make, modify or discontinue the Participant’s Deferral Contribution election will be effective as soon as administratively feasible following receipt of the Participant’s request to make, modify or discontinue such contributions by the Administrator or its representative.  Anything herein to the contrary notwithstanding, if the Administrator determines that a Participant’s Deferral Contributions will exceed any limitations of this Plan that apply to such contributions, the Administrator may at any time amend the Participant’s Deferral Contribution election to the extent necessary to adhere to such limitations.  Participants will be notified of any changes to deferral elections that are made by the Administrator.

Automatic Enrollment.  

An Automatic Participant will have Deferral Contributions automatically reduce his or her Compensation by 5% each payroll period.  Alternatively, such Automatic Participant may elect a different percentage Deferral Contribution.  The automatic Deferral Contributions will be Pre-Tax Contributions unless the Automatic Participant specifies otherwise.

Catch-Up Contributions.  

All employees who are eligible to make Deferral Contributions and who have attained or will attain age 50 before the close of the Plan Year are eligible to make Catch-Up Contributions for the Plan Year in accordance with, and subject to the limitations of, Code Section 414(v).  Notwithstanding anything to the contrary in the Plan, Catch-Up Contributions will not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code Sections 402(g) and 415.  The Plan will not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Code Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by reason of the making of Catch-Up Contributions.  The Participant will designate whether the

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Catch-Up Contributions will be treated as Pre-Tax Contributions or Roth Contributions.  If a Participant fails to so designate, the Plan will treat such contribution as Pre‑Tax Contributions.

3.2 Safe Harbor Matching Contributions.

Safe Harbor Matching Contribution.  

The Employer will make a Safe Harbor Matching Contribution on behalf of each Participant at the rate of 100% of the amount of a Participant’s Deferral Contributions that do not exceed 5% of the Participant’s Compensation per payroll period.  The Employer may make a discretionary additional Safe Harbor Matching Contribution, provided that the total amount of Safe Harbor Matching Contributions will not exceed 6% of the Participant’s Compensation per payroll period.

Safe Harbor Election.  

The Employer elects that the Plan qualify as a Safe Harbor Plan.

3.3 Employer Contributions.

The Employer will make an Employer Contribution on behalf of each Participant who is an Eligible Employee equal to 8% of the Participant’s Compensation for each payroll period.

3.4 Supplemental Contributions.

The Employer may make such contributions as are necessary to restore the amounts previously forfeited by Participants for whom such restoration is required pursuant to Section 4.6.

3.5 Qualified Nonelective Contributions.

The Employer may, for any Plan Year, make QNECs on behalf of Participants in such amount when necessary.  QNECs are 100% vested and nonforfeitable when contributed to the Plan and are subject to the same “Distribution Restrictions” imposed on Deferral Contributions.  Distribution Restrictions means that the Participant may not receive a distribution of the specified contributions (nor earnings on those contributions) except in the event of:  the Participant’s death, disability, termination of employment, or attainment of age 59½, financial hardship satisfying the requirements of Code Section 401(k) and applicable Regulations, and a Plan termination without establishment of a successor defined contribution plan (other than an ESOP).  To the extent permitted by law, the Employer may designate which Participants are to receive allocations of QNECs, and the method by which they are intended to be allocated to Participants.

3.6 Rollover Contributions.

Under such rules and procedures as the Administrator may establish, any Eligible Employee may contribute all or a portion of the distribution received from another qualified plan or individual retirement account or annuity if the amount contributed satisfies the requirements for an “eligible rollover distribution” pursuant to Code Section 402(c) or 408(d)(3).  Rollover Contributions may include pre-tax and/or after-tax contributions; however, rollover contributions will not be accepted from amounts that reflect SIMPLE IRA contributions under Code Section 408(p), SEP IRA contributions under Code Section 408(k), Roth IRA contributions under Code Section 408A, or designated Roth accounts from a plan qualified under Code Section 403(b) or 457(b).

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Prior to accepting a Rollover Contribution from a designated Roth account from another plan qualified under Code Section 401(a), the Administrator will require the transferring plan to provide a statement indicating the first year of the Five‑Taxable‑Year Period and the portion of the distribution that is attributable to investment in the contract under Code Section 72, or alternatively, that the distribution is a Qualified Distribution.

All such Rollover Contributions must be received by the Trustee on or before the 60th day after the day on which the Participant receives or is deemed to receive the distribution unless such rollover is a direct transfer of an eligible rollover distribution within the meaning of Code Section 401(a)(31).  The Administrator may require such information as it may deem necessary to determine whether a distribution to a Participant satisfies the requirements of this Section 3.6.

*  *  *  *  End of Article 3  *  *  *  *

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Article 4.Service and Vesting

4.1 Service Counting Method.

For all service counting purposes under the Plan, all Eligible Employees will be credited with service pursuant to the Elapsed Time Basis.

4.2 Service with Participating and Predecessor Employers.

Participating Employers.  

In the event an Employee is transferred between the Participating Employers listed on Schedule A, the Employee will retain his or her accumulated service and eligibility.  No such transfer will result in a Severance from Service Date under the Plan, and the Participating Employer to which the Employee is transferred will become obligated with respect to such Employee in the same manner as was the Participating Employer from whom the Employee was transferred.

Predecessor Employers.  

Service with a predecessor employer listed in Schedule B, completed as of the dates specified in Schedule B, will be taken into account for all service counting purposes under the Plan.  In the event the Employer merges with or acquires a company, the Employer will determine in a nondiscriminatory manner whether the service earned by the employees of the other company who will work for the Employer or a Participating Employer will be treated as service with the Employer or the Participating Employer, as applicable, for purposes of service counting under the Plan.

4.3 Vested Benefits.

A Participant’s Account will be nonforfeitable to the extent the Account is vested, determined as follows:

Fully Vested Accounts.  

Except as otherwise provided under Section 4.3(b), a Participant will be 100% vested at all times in the value of his or her Accounts, which value will be determined as of the most recent Valuation Date.

Employer Contribution Accounts.  

Except as otherwise provided in Schedule C to the Plan, a Participant’s vested percentage in his or her Employer Contribution Account and the portion of a Participant’s Transfer Account which represents employer contributions will be determined under the following vesting schedule:

Years of Service	Vested Percentage
Fewer than 3 Years of Service	0%
At least 3 Years of Service	100%

Events Fully Vesting Participant Accounts.  

Notwithstanding the foregoing, a Participant’s vested percentage in his or her Employer Contribution Account and any other Accounts will be 100% upon occurrence of the following events:

(1) the Participant incurring a Disability prior to the Participant’s termination of employment from the Employer, such full vesting to apply only with respect

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to contributions through the date of the event, and not with respect to future contributions;

(2) the Participant’s termination of employment due to Death;

(3) the termination of the Plan or, with respect to the affected Employees, the partial termination or complete discontinuation of contributions by the Employer, such full vesting to apply only with respect to contributions through the date of the event, and not with respect to future contributions;

(4) the Participant’s Death while performing qualified military service within the meaning of Code Section 414(u); or

(5) the Participant reaching Early Retirement Age or Normal Retirement Age prior to the Participant’s termination of employment from the Employer.

4.4 Forfeitures.

A Participant who terminates employment for reasons other than Death or Disability and who is not 100% vested in his or her Account will forfeit an amount equal to the unvested portion of the Participant’s Employer Contribution Account or other Account not 100% vested upon the earlier of five consecutive One‑Year Periods of Severance or a complete distribution of the Participant’s vested Account.  A Participant who terminates employment for reasons other than Death or Disability and who is not vested in any portion of his or her Account will be deemed to have received a distribution hereunder.  Forfeited amounts may be restored upon reemployment pursuant to Section 4.6.

4.5 Reinstatement of Vesting Service upon Reemployment.

(a) If a Participant has one or more One-Year Periods of Severance but fewer than five One-Year Periods of Severance (whether before or after becoming eligible to participate in the Plan) at the Participant’s Date of Reemployment, the Participant will receive credit for vesting purposes for all Years of Service completed prior to and after the Participant’s One-Year Periods of Severance with respect to the Participant’s entire Account.

(b) If a Participant incurs five consecutive One-Year Periods of Severance at the Participant’s Date of Reemployment, future service after the Date of Reemployment will not be credited for vesting service purposes on the Participant’s Account accrued prior to the five consecutive One‑Year Periods of Severance.  Such future service will be credited for vesting purposes only to amounts accrued after the Date of Reemployment.

4.6 Restoration of Forfeited Amounts upon Reemployment.

If a Participant who has received a lump sum distribution on account of terminating employment again becomes an Employee prior to the occurrence of five consecutive One-Year Periods of Severance, the Participant will be given the opportunity (to be exercised within five years after the date the individual again becomes an Employee) to re‑contribute the full amount of the prior distribution from the Plan and have restored any amounts forfeited pursuant to Section 4.4, without interest.  If such individual fails to contribute the full amount of the distribution, any

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previously forfeited amounts will not be restored.  If the Participant was deemed to have received a lump sum distribution, and again becomes an Employee prior to the occurrence of five consecutive One-Year Periods of Severance, the previously forfeited amounts will be restored automatically, without interest.  Any restoration will be made back to the same accounts from which the amounts were forfeited.

*  *  *  *  End of Article 4  *  *  *  *

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Article 5.Accounts AND ESOP PROVISIONS

5.1 Participant Accounts.

A Participant’s Account may consist of the following accounts reflecting the portion of the Employer’s and the Participant’s contributions, and the net earnings or losses thereon:

(a) A Deferral Account.  

(b) A Safe Harbor Matching Contribution Account.

(c) A Non-Safe Harbor Matching Contribution Account.

(d) An Employer Contribution Account.

(e) A Qualified Nonelective Contribution Account.

(f) A Rollover Account.

(g) A Transfer Account.

(h) Any other account established pursuant to Schedule C.

Multiple subaccounts of any type may be established if required by the Plan or if considered advisable by the Administrator.  A reference herein to any type of account includes all of the Participant’s subaccounts of that type.  Except as expressly provided herein to the contrary, the Trust Fund will be held and invested on a commingled basis; accounts and subaccounts will be for bookkeeping purposes only; and, except as may be provided with respect to Trust Fund assets that are invested in segregated funds at the direction of Participants, the establishment of Accounts will not require any segregation of the assets of the Trust Fund.

5.2 Valuation and Adjustment of Accounts.

As of each Valuation Date, the Trustee will determine the total net worth of the Trust Fund.  The valuation of the Trust Fund will be at its fair market value as of the Valuation Date.  Except as otherwise may be provided with respect to Trust Fund assets that are invested in segregated funds at the direction of Participants, the Administrator will adjust the Account of each Participant to reflect the effect of distributions, transfers, withdrawals, income, realized and unrealized profit and losses, contributions, and all other transactions with respect to the Trust Fund since the next preceding Valuation Date in accordance with generally accepted valuation methods consistently followed and uniformly applied.  With respect to the Participant’s Roth Contribution subaccounts, the Administrator will maintain a record of the Participant’s investment in the contract with Code Section 72 and the date the Participant first contributed to his or her Roth subaccount for purposes of determining when the Five‑Taxable‑Year Period begins.

5.3 Disposition of Forfeitures or Suspense Account.

Any portion of a Participant’s Account that is forfeited pursuant to any applicable provision under the Plan will be used to restore any amounts previously forfeited by Participants for whom such restoration is required under any applicable Plan provision.  If any forfeitures for a Plan Year remain after

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the restoration of all required amounts, the remaining forfeitures will, at the discretion of the Administrator, be used for any of the following purposes:  (i) to reduce the Employer’s contributions on behalf of Participants for the Plan Year(s) including and following the Plan Year in which occurs the event giving rise to the forfeitures, (ii) to pay the reasonable expenses of administering the Plan, and (iii) upon the election of the Employer, to be allocated to Participants as of the last day of the Plan Year or the following Plan Year as Employer Contributions.  Forfeitures under this Plan will be available without regard to which Employer contributed such assets.  The allocation method of this Section 5.3 will also apply with respect to the disposition of any Suspense Account.

5.4 Directed Investments.

Participant Instructions.  

Subject to the provisions of this Section 5.4, a Participant will, by providing appropriate instructions to the Administrator, or its representative, be entitled to direct the Trustee as to the percentage of any Participant and Employer contributions, and any contributions previously allocated to the Participant’s Account, to be invested in one or more of the types of investments made available for investment by Participants as determined by the Administrator.  All Participant investment instructions are subject to the procedures required by the Administrator; however, Participants will be allowed to direct their investments at least quarterly.

Trustee Investment Pursuant to Instructions.  

As soon as administratively practicable, the Trustee will invest the applicable portions of the contributions that have been made on behalf of Participants, and the earnings and losses thereon, in accordance with all proper investment instructions received from Participants.  To the extent that a Participant does not direct the investment of the amounts that are credited to the Participant’s Account, or the applicable portion thereof, the Participant’s Account will be invested by the Trustee in qualified default investment alternative (“QDIA”), as provided in ERISA Section 404(c)(5), and will be deemed to be invested pursuant to the Participant’s instructions.  A Participant’s investment instructions will remain in effect until such time as is administratively practicable following receipt by the Trustee of a Participant’s proper request changing or revoking the Participant’s instructions then in effect pursuant to this Section 5.4.  Notwithstanding the foregoing, the Trustee will not be bound to comply with any investment direction if, in the Trustee’s sole discretion, such investment might adversely affect the tax qualification of the Plan or might otherwise be in violation of any applicable law.

ERISA Section 404(c).  

This Plan is intended to satisfy the requirements of ERISA Section 404(c) relating to participant-directed investment plans, and each Participant assumes all risk associated with any decrease in value resulting from Participant investment decisions.  Neither the Administrator, the Trustee, the Sponsor nor the Employer is liable for investments made in compliance with a Participant’s directions and they are under no duty or obligation to review or evaluate such investment directions by any Participant.  Each Participant assumes all risk connected with any decrease in the value of any funds in which his or her Account is invested.  

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Selection of Investment Options.  

The Administrator will from time to time establish all such rules and procedures that it determines to be necessary or appropriate for the proper administration of the investment options, including QDIAs, available to Participants.  The Administrator will from time to time, in its sole discretion, determine the different investment choices available for investment by Participants, which must include at least three investment options (not counting the Employer Stock Fund).  To the extent the Administrator eliminates any investment options, provides any new investment options or otherwise modifies the investment options that are available for investment under the Plan, the Administrator may impose such limitations, including the suspension of Participant directed investments and other benefits, rights and features under the Plan, as it deems necessary or appropriate for the proper administration of the investment options that are available to Participants.  Neither the Administrator nor the Trustee will be bound to comply with any investment direction delivered to them if, in their sole discretion, such investment might adversely affect the tax qualification of the Plan or might otherwise be in violation of any applicable law.

Investments in Employer Stock; Diversification.  

The Employer Stock Fund must be one of the investment options available for investment by Participants under the Plan, but only with respect to the Safe Harbor Matching Contributions Account.  The Employer Stock Fund is not an available investment option for any other Accounts.  Notwithstanding the foregoing, the Employer Stock Fund must be one of the investment options available for investment in other Accounts with respect to Participants who were previously invested in the Employer Stock Fund in such Accounts, but for each Participant such investment may be limited to the extent of the amount of such Participant’s previous investments in the Employer Stock Fund, and only with respect to the Participant’s transfers among investment options and not with respect to contributions.  Safe Harbor Matching Contributions are initially automatically invested in the Employer Stock Fund, but the Participant may thereafter divest out of the Employer Stock Fund at any time.  

5.5 Statements.

The Administrator will furnish on a quarterly basis and upon a Participant’s written request (up to one statement in any 12-month period), or upon such other more frequent intervals as determined by the Administrator, a statement to each Participant and Beneficiary of the net earnings or losses credited to or charged against the Participant’s Account, the amount of any annual contributions and forfeitures allocated to such Account, and the total vested and nonvested value of such Account.

5.6 Employer Stock Dividend Reinvestment Option.

Election.  

Each ESOP Participant will be given an election with respect to Employer Stock Dividends as paid by the ESOP as to:

(1) receiving the Employer Stock Dividends directly in cash or having the Employer Stock Dividends be contributed to the Participant’s Account in the Employee Stock Ownership Plan and then distributed in cash to the Participant not later than 90 days after the close of the Plan Year in which the Employer Stock Dividends are paid; or

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(2) reinvesting the Employer Stock Dividends in the Participant’s Account into additional Employer Stock.

Manner of Election.  

The election will be provided in a manner that satisfies the following requirements:

(1) A Participant must be given a reasonable opportunity before an Employer Stock Dividend is paid or distributed to the Participant in which to make the election.

(2) A Participant must have a reasonable opportunity to change an Employer Stock Dividend election at least annually.

(3) If there is a change in the Plan terms governing the manner in which the Employer Stock Dividends are paid or distributed to Participants, a Participant must be given a reasonable opportunity to make an election under the new Plan terms prior to the date on which the first Employer Stock Dividend subject to the new Plan terms is paid or distributed.

(4) If a Participant fails to make an affirmative dividend election, the Participant will be treated as reinvesting the Employer Stock Dividends in the Participant’s Account.

(5) The election and procedure must meet any other applicable provisions of Code Section 404(k) and Internal Revenue Service Notice 2002-2.

5.7 Voting or Tendering Employer Stock Fund.

Each ESOP Participant (or, in the event of the ESOP Participant’s Death, his or her Beneficiary) is, for purposes of this Section 5.7, hereby designated a “named fiduciary,” within the meaning of Section 403(a)(1) of ERISA effective as of the date he or she is first allocated shares of the Employer Stock Fund, with respect to his or her proportionate share of all shares of Employer Stock held in the Employee Stock Ownership Plan.

Voting Rights.  

Each ESOP Participant (or Beneficiary) has the right, effective upon the first allocation of shares of the Employer Stock Fund to his or her Account, to the extent of his or her proportionate share (as determined in the last sentence of this paragraph) of the shares of Employer Stock (of whatever class and whether or not allocated) held in the Employee Stock Ownership Plan, to instruct the Trustee in writing as to the manner in which to vote such shares at any stockholders’ meeting of Ovintiv Inc. The Administrator will use its best efforts to timely distribute or cause to be distributed to each ESOP Participant (or Beneficiary) the information distributed to stockholders of Ovintiv Inc. in connection with any such stockholders’ meeting, together with a form whereby the ESOP Participant will provide confidential instructions to the Trustee on how such shares of Employer Stock will be voted on each such matter.  Upon timely receipt of such instructions, the Trustee will, on each such matter, vote as directed the appropriate number of shares (including fractional shares) of Employer Stock. If, and to the extent that, the Trustee has not received timely instructions from any individual given a right to instruct the Trustee with

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respect to certain shares by this paragraph, the Trustee will treat the lack of instructions as intended by such individual to not vote such shares.  Notwithstanding the foregoing, the voting of all shares of Employer Stock will be made in accordance with ERISA, its regulations, and other guidance of general applicability issued thereunder.  The instructions received by the Trustee from individual ESOP Participants (or Beneficiaries) will be held by the Trustee in strict confidence and will not be divulged or released to any person, including officers or employees of the Employer or any entity in the Affiliated Group; provided, however, that, to the extent necessary for the operation of the Plan, such instructions may be relayed by the Trustee to a recordkeeper, auditor or other person providing services to the Plan if such person (i) is not the Employer or an entity in the Affiliated Group, and (ii) agrees not to divulge such directions to any other person, including employees, officers and directors of the Employer and any entity in the Affiliated Companies.  The proportionate share of any ESOP Participant (or Beneficiary) of shares of Employer Stock held in the Employer Stock Fund is a fraction, the numerator of which is the number of shares described in the first sentence of this paragraph (a) that are held in such individual’s Account and for which he or she provides instructions to the Trustee, and the denominator of which is the number of such shares in all such Accounts for which instructions are provided to the ESOP.

Rights on Tender or Exchange Offer.  

Each ESOP Participant (or Beneficiary) has the right, to the extent of the ESOP Participant’s proportionate share (as determined in the last sentence of Section 5.7(a)) of the shares of Employer Stock (of whatever class and whether or not allocated) held in the Employee Stock Ownership Plan, to instruct the Trustee in writing as to the manner in which to respond to a tender or exchange offer with respect to such shares. The Administrator will use its best efforts to timely distribute or cause to be distributed to each such Participant (or Beneficiary) the information distributed to stockholders of Ovintiv Inc. in connection with any such tender or exchange offer. Upon timely receipt of such instructions, the Trustee will respond as instructed with respect to such shares of such Employer Stock.  If, and to the extent that, the Trustee has not received timely instructions from any individual given a right to instruct the Trustee with respect to certain shares by this paragraph, such individual will be deemed to have timely instructed the Trustee not to tender or exchange such shares. The instructions received by the Trustee from individual Participants (or Beneficiaries) will be held by the Trustee in strict confidence and will not be divulged or released to any person, including officers or employees of the Employer or any entity in the Affiliated Group; provided, however, that, to the extent necessary for the operation of the Plan, such instructions may be relayed by the Trustee to a recordkeeper, auditor or other person providing services to the Plan if such person (i) is not the Employer or an entity in the Affiliated Group, and (ii) agrees not to divulge such instructions to any other person, including employees, officers and directors of the Employer and any entity in the Affiliated Group.

*  *  *  *  End of Article 5  *  *  *  *

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Article 6.LIMITATIONS ON BENEFITS

6.1 Average Deferral Percentage Limitations.

The average deferral percentage test of Code Section 401(k)(3) will be deemed satisfied by virtue of the Plan’s design and operation as a Safe Harbor Plan.

6.2 Average Contribution Percentage Limitations.

The average contribution percentage test of Code Section 401(m)(1) will be deemed satisfied by virtue of the Plan’s design and operation as a Safe Harbor Plan.

6.3 Elective Deferral Limitation.

General Rule.  

A Participant’s Deferral Contributions (excluding Catch‑Up Contributions) for any Plan Year, when aggregated with any other elective deferrals within the meaning of Code Section 402(g)(3) to any plans maintained by any member of the Affiliated Group, may not exceed the dollar limitation of Code Section 402(g)(1), or such other limit as adjusted by law or in accordance with Regulations for changes in the cost of living.  If the Administrator determines a Participant’s Deferral Contributions (excluding Catch‑Up Contributions) would be Excess Deferrals, the Administrator may suspend the Participant’s Deferral Contributions (excluding Catch‑Up Contributions, subject to the limit on Catch‑Up Contributions) until the following January 1.  If a Participant’s Deferral Contributions (excluding Catch‑Up Contributions) should exceed the dollar limitation of Code Section 402(g)(1) when aggregated with any other elective deferrals made to any plans that are not maintained by the Affiliated Group, the Participant may assign to this Plan any excess elective Deferral Contributions made during a taxable year of the Participant by notifying the Administrator in writing, on or before April 1 following the calendar year when the Excess Deferrals are made, of the amount of the Excess Deferrals to be assigned to the Plan.

Distribution of Excess Deferrals.  

If, after the close of a calendar year, the Administrator determines a Participant has Excess Deferrals or if the Administrator receives a timely claim of Excess Deferrals from the Participant, it will distribute the Excess Deferrals no later than April 15th of the calendar year following the calendar year in which the Excess Deferrals occurred, or if later, the calendar year in which the Excess Deferrals were discovered.

Distribution of Pre-Tax Contributions and Roth Contributions.  

The Participant may elect, under procedures established by the Administrator, whether distribution of Excess Deferrals will first be made from the Participant’s Pre-Tax Contributions, Roth Contributions or a combination of both Pre-Tax Contributions and Roth Contributions to the extent such contributions were made during the Plan Year in which the Excess Deferral occurred.  If no election is made, the Administrator will distribute Excess Deferrals pro rata, based on the amount of Pre-Tax Contributions and Roth Contributions made during the Plan Year in which the Excess Deferral occurred.  A distribution of Excess Deferrals from a Participant’s Account related to Roth Contributions will not be treated as a Qualified Distribution.

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Determination of Allocable Income or Loss.  

The Administrator will adjust Excess Deferrals to be distributed under this Section 6.3 for income or loss up to the end of the taxable year for which the Excess Deferrals occurred.  The Administrator may use any reasonable method for computing the income or loss allocable to the Excess Deferrals, provided that the method does not violate Code Section 401(a)(4) and is used consistently for allocating income or loss to Participant Accounts and for all corrective distributions under the Plan for the Plan Year.

6.4 Annual Additions Limitation.

General Rule.  

The maximum Annual Additions credited to the Account of any Participant for any Limitation Year under this Plan, when aggregated with the Annual Additions to any other qualified defined contribution retirement plan maintained by the Employer or any other member of the Affiliated Group, will not exceed an amount equal to the lesser of:

(1) 100% of the Participant’s Testing Compensation for the Limitation Year, or

(2) $40,000, as adjusted for cost of living changes under Code Section 415.

Excess Annual Additions.  

Excess Annual Additions allocated to a Participant’s Account will be corrected only through the Employee Plans Compliance Resolution System.

Incorporation by Reference to Limitations.  

To the extent any provisions of the Plan conflict with Code Section 415 or the applicable Regulations, Code Section 415 and the applicable Regulations govern.

*  *  *  *  End of Article 6  *  *  *  *

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Article 7.distribution of plan benefits

7.1 Distribution Events.

A Participant is eligible for a distribution upon Disability or severance from employment with the Employer.  A Participant’s Beneficiary or estate, as applicable, is eligible for a distribution upon the Participant’s Death.  An alternate payee is eligible for a distribution upon qualification of a domestic relations order (as if a Participant eligible for immediate distribution).

7.2 Amount of Distribution.

Upon a distribution event, a Participant or the Participant’s Beneficiary will become entitled to the vested value of the Participant’s Account determined as of the Valuation Date coinciding with the distribution date (or if the distribution date is not a Valuation Date, as of the immediately preceding Valuation Date).

7.3 Form of Distribution.

In General.  

Except as otherwise provided in Schedule C, Section 7.4(a), or Section 7.3(b), the Participant’s Account determined under Section 7.2 will be distributed to the Participant (or Beneficiary) in cash (or, in the discretion of the Administrator, in kind) and in one or more of the following forms as elected by the Participant (or Beneficiary):

(1) Single Lump Sum.  A single lump sum payment.

(2) Installment Payments.  Substantially equal payments in monthly, quarterly, semi‑annual, annual or other installments over a fixed reasonable period of time, but not exceeding the life expectancy of the Participant or the joint life expectancy of the Participant and the Participant’s Spouse or Beneficiary.  A Participant (or Beneficiary) who has elected to receive installment payments may, at any time, elect to accelerate the payment of all, or any portion, of the Participant’s unpaid vested Account.

(3) Partial Distributions.  A Participant may from time to time request a partial payment (subject to any Administrator limitations or requirements) of any portion of the Participant’s Account.

(4) Annuity.  An immediate annuity that is purchasable with the Participant's vested Account and provides a life annuity for the Participant or a joint and survivor annuity payable over the joint lives of the Participant and the Participant's Beneficiary.

Notwithstanding the foregoing, if a Participant’s Account contains a Transfer Account, in order to elect one of the optional forms of payment under this Section 7.3(a) the Participant must complete a valid waiver under Section 7.3(b)(3) .  Notwithstanding anything in the Plan to the contrary, with respect to distributions from a Participant’s Account invested in the Employer Stock Fund, the Participant may elect in the manner required by the Administrator to receive such distribution in Employer Stock to the extent so invested.

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Transfer Account.  

Except as otherwise provided in Section 7.4(a), a Participant’s Account that contains a Transfer Account will be distributed to the Participant in the normal form of distribution described under Section 7.3(b)(1) or, in the payment form described under Section 7.3(b)(2), or if the Participant makes a valid waiver election pursuant to Section 7.3(b)(3)(C), then the Participant may elect one or more of the optional forms of benefit available under Section 7.3(a).

(1) Normal Form of Distribution:  Qualified Joint and Survivor Annuity.  The normal form of distribution for a Participant who has a Transfer Account is a Qualified Joint and Survivor Annuity.  The Administrator may, in its discretion, distribute to the Participant an annuity contract purchased on behalf of the Participant.

(2) Qualified Optional Survivor Annuity.   A Participant who has a Transfer Account may elect to receive a Qualified Optional Survivor Annuity in place of the normal form of payment under Section 7.3(b)(1) without completing a waiver under Section 7.3(b)(3).

(3) Distribution Election; Waiver of Qualified Joint and Survivor Annuity.  A Participant may elect to receive a distribution of his or her Transfer Account at any time following the date the Participant separates from service with the Employer, subject to the provisions of Section 7.4.  The Participant’s election will be irrevocable.

(A) Benefit Notice.  Not earlier than 180 days before the Participant’s Annuity Starting Date, the Administrator will provide the Participant a written explanation of the terms and conditions of the Qualified Joint and Survivor Annuity; the optional methods of distribution available under the Plan, including the material features and relative values of those methods; the Participant’s right to defer distribution of his or her Account, if any; the Participant’s right to make, and the effect of, an election to waive the Qualified Joint and Survivor Annuity form of benefit; the rights of the Participant’s Spouse regarding the waiver election; and the Participant’s right to make, and the effect of, a revocation of a waiver election.  A Participant may elect (with any applicable Spousal consent) to waive any requirement that the written notice be provided at least 30 days before the Annuity Starting Date if the distribution commences more than seven days after such notice is provided.

(B) Distribution in Accordance with Participant’s Election.  If a Participant makes an election under this Section 7.3(b)(3), the Administrator will direct the Trustee to distribute the Participant’s vested Account in accordance with that election.  The Participant will make an election in such manner as approved by the Administrator at any time before the Trustee otherwise would distribute a Participant’s Account in accordance with the requirements of this Article 7.

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(C) Waiver of Annuity.  A Participant may receive a distribution of his or her vested Account without regard to the annuity provisions if the Participant’s election effectively waives the Qualified Joint and Survivor Annuity.  A married Participant’s waiver election is not valid unless:

(i) the Participant’s Spouse (to whom the survivor annuity is payable under the Qualified Joint and Survivor Annuity) has consented in writing to the waiver election, the Spouse’s consent acknowledges the effect of the election, and a notary public or the Administrator (or the Administrator’s representative) witnesses the Spouse’s consent;

(ii) the Spouse consents to the alternate form of distribution designated by the Participant or to any change in that designated form of distribution; and

(iii) the Spouse consents to the Participant’s designation of a Beneficiary other than the Spouse or to any change in the Participant’s Beneficiary designation.

(D) Exceptions to Spousal Consent.  The Administrator may accept as valid a waiver election which does not satisfy the spousal consent requirements if the Administrator establishes the Participant does not have a Spouse, the Participant’s Spouse is not able to be located, the Participant is legally separated or has been abandoned (within the meaning of applicable state law) and the Participant has a court order to that effect, or other circumstances exist under which the Secretary of the Treasury will excuse the consent requirement.

(E) Scope of Spousal Consent.  The Spouse may execute a blanket consent to any form of distribution designation made by the Participant, if the Spouse acknowledges the right to limit that consent to a specific designation but, in writing, waives that right.

(F) Revocation of Waiver.  The Spouse’s consent to a waiver of the Qualified Joint and Survivor Annuity is irrevocable, unless the Participant revokes the waiver election.  A Participant is entitled to revoke a waiver of the Qualified Joint and Survivor Annuity or to make a new waiver an unlimited number of times during the election period.

7.4 Timing of Distribution.

Except as otherwise provided in Schedule C to the Plan, the total amount that a Participant is entitled to receive under this Article 7 will be distributed as follows:

Amount Does Not Exceed the Cash-Out Limit.  

If the Participant’s vested Account balance as of the Participant’s severance from employment does not exceed the Cash-

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Out Limit, the Administrator will direct the Trustee to distribute the vested value directly to such Participant (or Beneficiary) without the consent of the Participant as soon as administratively feasible after the Participant’s severance from employment.

Amount Exceeds the Cash-Out Limit.  

If the Participant’s vested Account balance as of the Participant’s severance from employment exceeds the Cash‑Out Limit, the Participant (or Beneficiary) may elect to have the vested value paid to him or her as soon as administratively feasible following the date selected by the Participant on an Application for Benefits, but in no event later than the Participant’s Required Distribution Date.  The form of payment will be one of the forms available under Section 7.3.  Unless the Participant (or Beneficiary) elects otherwise (or is deemed to elect to defer by a failure to elect distribution) and subject to Section 7.6, the distribution of the Participant’s vested Account will commence no later than the 60th day after the latest of the close of the Plan Year in which the Participant separates from service with the Employer, attains Normal Retirement Age, or reaches the 10th anniversary of the year in which the Participant began participation in the Plan.  However, if the amount of the distribution cannot be ascertained by the applicable distribution date or if it is not possible to make such distribution because the Administrator is unable to locate the Participant (or Beneficiary) after making reasonable efforts to do so, in accordance with Regulation Section 1.401(a)-14(d), a payment retroactive to such distribution date may be made no later than 60 days after the earliest date on which the amount of such payment can be ascertained or the date on which the Participant is located, whichever applies.

7.5 Notice.

The Administrator will provide notice to the Participant not earlier than 180 days before the Participant’s distribution date.  The notice will explain the optional methods of distribution from the Plan, including the material features and relative values of those methods, the Participant’s right to defer distribution until the Participant attains the Participant’s Required Distribution Date, the consequences of the Participant’s failure to defer and the Participant’s right to consider whether to elect a distribution for a period of at least 30 days.  Such distribution may commence fewer than 30 days after the benefit notice is given, provided that the Participant, after receiving the notice, affirmatively elects a distribution.

7.6 Required Minimum Distributions.

Notwithstanding anything herein to the contrary, all distributions under the Plan must be made starting no later than the Required Distribution Date, and determined and made in accordance with the requirements of Code Section 401(a)(9) and Regulation Sections 1.401(a)(9)-1 through 1.401(a)(9)-9, including the incidental death benefit requirement in Code Section 401(a)(9)(G).  The requirements of Code Section 401(a)(9) and the Regulations take precedence over any inconsistent provision in the Plan.

7.7 Death Benefits.

In general.  

Except as otherwise provided in Section 7.7(b), the Participant’s Account will be distributed to the Participant’s Beneficiary upon the Participant’s Death as follows:

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(1) Distribution to Beneficiary.  The value of the Death benefit will be determined as of the Valuation Date coinciding with the distribution date (or if the distribution date is not a Valuation Date, as of the immediately preceding Valuation Date).  The Participant’s Beneficiary will be entitled to receive the benefit determined as described in Section 7.2 and in a form that would have been available to the Participant (had he or she terminated) under Section 7.3.  

(2) Required Timing of Distribution.  The amount to which a Beneficiary is entitled under this Article 7 will be distributed to the Beneficiary as soon as administratively feasible following the submission of an Application for Benefits by the Beneficiary following the Participant’s Death, subject to the automatic cash-out provisions of Section 7.4(a).  In no event will the Death benefit commence later than the end of the Plan Year that includes the first anniversary of the Participant’s Death; provided, however, in the case of a spousal Beneficiary, the distribution date may be deferred until the end of the Plan Year in which the Participant would have attained age 72 (70½ for Deaths prior to January 1, 2020).  Notwithstanding the foregoing, the requirements of Section 7.6 apply.

Transfer Account.  

A Participant’s Transfer Account will be distributed to the Participant’s Beneficiary upon the Participant’s Death as provided under Sections 7.7(b)(1) or 7.7(b)(2), as applicable.

(1) Unmarried Participants.  If an unmarried Participant dies, the Administrator will direct the Trustee to distribute the nonforfeitable portion of the Participant’s Transfer Account to the Participant’s Beneficiary.  

(A) Account Does Not Exceed Cash-Out Limit.  If the Participant’s nonforfeitable Account does not exceed the Cash-Out Limit, the Administrator will direct the Trustee to make a single lump sum payment to the Participant’s Beneficiary.

(B) Account Exceeds the Cash-Out Limit.  If the Participant’s nonforfeitable Account exceeds the Cash-Out limit, the Participant’s nonforfeitable Transfer Account will be payable to the Participant’s Beneficiary in the form elected by the Beneficiary, which form will either be a single lump sum payment or annual installments, at the time elected by the Beneficiary but in compliance with Section 7.6.

(2) Married Participants.  If a married Participant dies prior to the Participant’s Annuity Starting Date, the Administrator will direct the Trustee to distribute the nonforfeitable portion of the Participant’s Transfer Account to the Participant’s Spouse in the form of a Qualified Preretirement Survivor Annuity, unless the Participant has a valid waiver election in effect.  The Administrator may, in its discretion, distribute to the Spouse such annuity contract purchased on behalf of the Spouse.

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(A) Account Does Not Exceed Cash-Out Limit.  If the Participant’s nonforfeitable Account does not exceed the Cash-Out Limit:

(i) The Administrator will direct the Trustee to make a single lump sum payment to the Participant’s Spouse, the portion of the nonforfeitable Transfer Account that would have otherwise been payable as a Qualified Preretirement Survivor Annuity, in lieu of the Qualified Preretirement Survivor Annuity.

(ii) The Administrator will direct the Trustee to make a single lump sum payment to the Participant’s Beneficiary of the remaining portion of the Participant’s nonforfeitable Transfer Account.

(B) Account Exceeds Cash-Out Limit.  If the Participant’s nonforfeitable Account exceeds the Cash-Out Limit:

(i) The Participant’s Spouse will be entitled to elect to have the Trustee commence distribution of the nonforfeitable Transfer Account in the form of a Qualified Preretirement Survivor Annuity with respect to 50% of the participant’s nonforfeitable Transfer Account, at any time following the date of the Participant’s death, but not later than as required under Section 7.6.  The Spouse will be entitled to elect a single lump sum payment or annual installments (that satisfy any minimum distribution requirements under Section 7.6) in lieu of the Qualified Preretirement Survivor Annuity.  In the absence of an election by the Spouse, the Administrator will direct the Trustee to distribute the Qualified Preretirement Survivor Annuity 60 days following the close of the Plan Year in which the Participant’s death occurred.

(ii) The portion of the Participant’s nonforfeitable Transfer Account not payable to the Spouse as a Qualified Preretirement Survivor Annuity will be payable to the Participant’s Beneficiary in the form elected by the Beneficiary, which form will be either a single lump sum payment or annual installments, at the time elected by the Beneficiary but in compliance with any minimum distribution requirements under Section 7.6.

7.8 Determination of Beneficiary.

Each Participant has the right to designate a Beneficiary in the manner prescribed for such designation by the Administrator and in accordance with the following rules:

Spouse as Beneficiary; Consent.  

In all cases, the Participant’s Beneficiary will be the Participant’s Spouse, unless (1) the Beneficiary is otherwise determined pursuant

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to Section 7.8(d), or (2) the Participant elects to name a different Beneficiary (or Beneficiaries) and the Participant’s Spouse consents to such election.  The Spouse’s consent must be in writing, must acknowledge the effect of the election, must be witnessed by a Plan representative or a notary public, and must meet one of the following requirements:

(1) the consent names a specific Beneficiary that cannot be changed without the additional consent of the Spouse in a form meeting the requirements of this Section 7.8;

(2) the consent specifically provides that the Participant may change the designation of a Beneficiary without any further consent by the Spouse, and the Spouse acknowledges in the consent that the Spouse is giving up the right to limit his or her consent to a specific Beneficiary; or

(3) the consent specifically provides that the Participant may change the designation of a Beneficiary, with such change being limited to a change among certain Beneficiaries, without any further consent by the Spouse, and the Spouse acknowledges in the consent that the Spouse is giving up the right to limit his or her consent to a specific Beneficiary.

Exceptions.  

A Spouse’s consent will not be required if it is established to the satisfaction of the Administrator that the required consent cannot be obtained because (1) the Participant does not have a Spouse; (2) the Spouse cannot be located; or (3) other circumstances exist under which the Secretary of the Treasury excuses the consent requirement.  If the Spouse is not legally competent to give consent, the Spouse’s legal guardian may give consent.  A valid election made by the Participant may be revoked by the Participant in the manner required by the Administrator without the consent of the Spouse at any time.  Any new election must comply with the requirements of this Section 7.8.  A consent by a former Spouse will not be applicable to a new Spouse.

Presumed Designation of Beneficiary.  

If there is no Beneficiary designated, no Beneficiary living at the time of a Participant’s Death, or if a non-Spouse Beneficiary disclaims any benefit under the Plan in the manner required by the Administrator, the Spouse is the Beneficiary.  If there is no Spouse, or if the Spouse disclaims any benefit under the Plan, the Beneficiary is, in the following order of priority; provided, however, that with respect to (1) and (2), such individuals are then living:  (1)  the Participant’s children (including adopted children), in equal shares by right of representation (one share for each surviving child and one share for each child who predeceases the Participant with living descendants); (2)  the Participant’s surviving parents, in equal shares; and (3)  the Participant’s estate.  The Administrator’s determination of the persons who qualify as Beneficiaries under this Plan will be binding on all interested parties.

Effect of Dissolution of Marriage.  

Dissolution of marriage terminates the Participant’s Beneficiary designation, or presumed designation, of the Participant’s former Spouse as the Participant’s Beneficiary.  

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(1) If, prior to payment of benefits upon the Participant’s Death, documentation of the Participant’s dissolution of marriage, as issued by a court of competent jurisdiction, is received and accepted by the Administrator, the Participant’s former Spouse will be deemed to have predeceased the Participant, and no heirs or other Beneficiaries of the Participant’s former Spouse will receive benefits as a Beneficiary, unless such heirs are specifically designated in the Participant’s Beneficiary designation under the Plan.

(2) Section 7.8(d)(1) will not apply if, prior to distribution of the vested portion of the Participant’s Accounts, either of the following occurs:

(A) The Participant completes a properly completed Beneficiary designation in the manner required by the Administrator, dated after the date of the dissolution of marriage that designates the Participant’s former Spouse as a Beneficiary.  

(B) The Plan receives a Qualified Domestic Relations Order, as defined in Section 7.10, directing that the Participant’s former Spouse be treated as the Participant’s Spouse under the Plan.  

Any such payment will be a distribution for the account of such Participant and the Participant’s Beneficiary and will, to the extent thereof, be a complete discharge of any liability under the Plan to the Participant’s estate or any beneficiary.  In the event of a dispute with respect to the determination of Beneficiaries as a result of the operation of this Section 7.8(d), the Administrator may solicit a court of competent jurisdiction for a determination of a rightful beneficiary.  If such request is made to a court, the Trustee will retain within the Plan or transfer to the court any portion of the Participant’s Accounts in dispute until the rendering of a final determination by the court.  The decision of the Administrator will be final and binding on all interested parties, and the Administrator will be under no duty to investigate further the intent of the Participant with respect to the designation of any Beneficiary.

Governing Designation.  

The Beneficiary designation that the Participant completes and submits under the Plan will apply with respect to all Accounts under the Plan maintained on behalf of the Participant.  Each proper Beneficiary designation effectively revokes all prior Beneficiary designations made by the same Participant.  No successor Beneficiary designations made by a Beneficiary will be recognized under the Plan.

Slayers.  

Notwithstanding anything in the Plan to the contrary, in the event that the death of the Participant or any Beneficiary is the result of the criminal act involving any other Beneficiary, such Beneficiary convicted of such criminal act will not be entitled to receive any undistributed amounts credited to Participant’s Account.

7.9 Rollover of Plan Distributions.

Notwithstanding any provision of the Plan to the contrary that would limit a Distributee’s election under this Section 7.9, a Distributee may elect to have all or any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee.  The election regarding a direct

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rollover will be made at the time and in the manner prescribed by the Administrator.  The Administrator may restrict such direct rollovers to a minimum amount, as determined by the Administrator in a uniform and nondiscriminatory manner.  For purposes of this Section 7.9 only:

Distributee

means a Participant, former Participant, a Beneficiary of a Participant or former Participant, or an “alternate payee” as defined under Code Section 414(p).

Eligible Rollover Distribution

means any distribution of all or any portion of the balance to the credit of the Distributee.  However, an Eligible Rollover Distribution does not include:  (1) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s Beneficiary; (2) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for a specified period of ten years or more; (3) any distribution to the extent the distribution is required under Code Section 401(a)(9); (4) any portion of any distribution that is not includible in gross income, as determined without regard to the exclusion for net unrealized appreciation of employer securities (except relating to designated Roth contributions); (5) any amount that is distributed on account of hardship; (6) corrective distributions; and (7) permissible withdrawals under Code Section 414(w).

Eligible Retirement Plan

means:  (1) an individual retirement account described in Code Section 408(a); (2) an individual retirement annuity described in Code Section 408(b); (3) an individual retirement plan described in Code Section 408A (for amounts that are designated Roth contributions); (4) an annuity plan described in Code Section 403(a); (5) a qualified trust described in Code Section 401(a); (6) an annuity contract described in Code Section 403(b) and (7) an eligible plan under Code Section 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from the Plan.  For a Distributee who is a non-Spouse Beneficiary, Eligible Retirement Plan means only an arrangement described in item (1), (2), or (3) that is treated as an inherited IRA pursuant to Code Section 402(c)(11).  With respect to distribution of amounts that are designated Roth contributions, an Eligible Retirement Plan means only an otherwise permitted plan that also provides for Roth contributions and agrees to separately account for amounts rolled over, including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not includible in the distribution.

7.10 Qualified Domestic Relations Orders.

All rights and benefits, including elections, provided to a Participant in this Plan will be subject to the rights afforded to any “alternate payee” under a “qualified domestic relations order” (QDRO) as those terms are defined in Code Section 414(p), provided, however, that such order meets the requirements of Code Section 414(p).

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Determination of Qualification.  

The Administrator will establish reasonable written procedures to determine the qualified status of domestic relations orders and to administer distributions made thereunder in a manner consistent with the requirements of Code Section 414(p).

Immediate Distribution.  

Notwithstanding any provision of this Plan to the contrary, the distribution of all or the portion of a Participant’s vested Account that is assigned to an alternate payee under a QDRO will commence as soon as administratively practicable after the later of the following dates:  (1) the date on which the Administrator determines that the domestic relations order pertaining to the alternate payee is a QDRO, or (2) the date specified in the QDRO; provided, however, that if the amount of the Participant’s vested Account to be distributed to the alternate payee exceeds the Cash-Out Limit, the Administrator will not, without the prior written consent of the alternate payee, commence the distribution of the amount to be distributed to the alternate payee prior to the Participant’s “earliest retirement age” as that term is defined in Code Section 414(p)(4).

Fees or Expenses.  

Fees or expenses incurred by the Plan in the course of determining whether a domestic relations order is a QDRO and in the administration of distributions made pursuant to a QDRO will be allocated to the Account of the Participant prior to segregation of any portion of the benefits on behalf of the alternate payee, and will be applied proportionately to the benefits allocated between the Participant and the alternate payee unless the QDRO provides for a different application.

Distributions made pursuant to this Section 7.10 will completely discharge the Plan of its obligations with respect to the Participant and each alternate payee to the extent of any such distributions.

*  *  *  *  End of Article 7  *  *  *  *

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Article 8.Loans; Hardship and in-service withdrawals

8.1 Participant Loans.

The Administrator may adopt a loan policy pursuant to which a Participant may request a loan and the Trustee may make such a loan. Any loan policy must comply with the loan provisions of Code Sections 72(p) and 4975(d)(1).  Loans are not available from the Transfer Account.

8.2 In-Service Withdrawals.

Except as otherwise provided in Schedule C, a Participant may request an in-service withdrawal as provided in this Section 8.2.  A Participant’s request for an in-service withdrawal must be filed in the manner required by the Administrator.  The Administrator will thereafter notify the Trustee of the total dollar amount to be withdrawn, and the Trustee will disburse the withdrawn amount, less any required tax withholding amount, directly to the Participant as soon as administratively feasible following receipt of such notice.  All in-service withdrawals will be made in accordance with the administrative rules and procedures as adopted by the Administrator.

Age 59½ Withdrawal.  

A Participant who has attained age 59½ and who is then employed by the Employer is permitted to withdraw all or a portion of the Participant’s vested Account (other than the Participant’s Transfer Account).

Withdrawal from Rollover Account.  

A Participant who is employed by the Employer is permitted to withdraw all or a portion of the Participant’s Rollover Account.

Withdrawal from After-Tax Account.  

A Participant who is employed by the Employer and who has after-tax contributions that were transferred into the Plan from another plan pursuant to a plan merger or transfer of assets, is permitted to withdraw all or a portion of the Participant’s after-tax account.

Deemed Severance Distribution.  

A Participant who is called to active military duty and who is otherwise eligible, is entitled to an in-service withdrawal of his or her Deferral Account in the form of a deemed severance distribution as defined in Code Section 414(u)(12).

Qualified Reservist Distribution.  

A Participant who is called to active military duty and who is otherwise eligible, is entitled to an in-service withdrawal of his or her Deferral Account in the form of a Qualified Reservist Distribution as defined in Code Section 72(t)(2)(G)(iii).

Transfer Account.  

A Participant who has attained Normal Retirement Age and who is then employed by the Employer is permitted to withdraw all or a portion of the Participant’s vested Transfer Account.

8.3 Hardship Withdrawals.

In accordance with the limitations of this Section 8.3 and such other rules and restrictions imposed by the Administrator, prior to a Participant’s attainment of age 59½, a Participant will be permitted to withdraw for reasons of hardship all or a portion of the Participant’s previously undistributed Deferral Account, Qualified Nonelective Contribution Account, Qualified Matching Contribution Account and Safe Harbor Matching

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Contribution Account, including earnings on all such accounts (other than the portion of the Account used as security for a Plan loan) if the withdrawal is made on account of an immediate and heavy financial need of the Participant and the distribution is necessary to satisfy that financial need.  The Administrator will direct the Trustee to make the hardship distribution as soon as administratively practicable after the Participant makes a valid request for the hardship withdrawal in the manner required by the Administrator.

Immediate and Heavy Financial Need.  

A distribution will be deemed to be necessary to satisfy the immediate and heavy financial need of the Participant only if the distribution is made on account of any one of the following:

(1) expenses for medical care, or to obtain such medical care, for the Participant, the Participant’s Spouse, the Participant’s dependents (as defined in Code Section 152, without regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B)), or the Participant’s Beneficiary that would be deductible under Code Section 213(d) (determined without regard to whether the expenses exceed 7.5% of adjusted gross income);

(2) payments for tuition, related educational fees and room and board expenses, for the next 12 months of post-secondary education for the Participant, the Participant’s Spouse, children, dependents (as defined in Code Section 152, without regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B)), or Beneficiary;

(3) costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;

(4) payments needed to prevent either the eviction of the Participant from the Participant’s principal residence or the foreclosure on the mortgage of the Participant’s principal residence;

(5) payments for burial or funeral expenses of the Participant’s deceased parent, Spouse, children, dependents (as defined in Code Section 152, without regard to Code Section 152(d)(1)(B)), or Beneficiary;

(6) expenses for the repair of damage to the Participant’s principal residence that would qualify for the casualty deduction under Code Section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income), and for taxable years beginning on or after January 1, 2018, without regard to Code Section 165(h)(5); or

(7) expenses and losses (including loss of income) incurred by the Participant on account of a disaster declared by the Federal Emergency Management Agency (“FEMA”) under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, provided that the Participant’s principal residence or principal place of employment at the time of the disaster is located in the area designated by FEMA as eligible for assistance with respect to the disaster; or

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(8) such other reasons as deemed by the Regulations to satisfy an immediate and heavy financial need of the Participant under the “safe harbor” standard.

Satisfaction of Need.  

Any hardship withdrawal from the Plan will be deemed to meet the requirement that the distribution is necessary to satisfy that financial need if:

(1) the amount of the hardship withdrawal does not exceed the amount of the immediate and heavy financial need of the Participant (including any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution);

(2) for hardship withdrawals made prior to July 1, 2019, the Participant obtains all other distributions and all nontaxable loans available under all plans of the Employer before receiving a hardship withdrawal;

(3) for hardship withdrawals made on or after July 1, 2019, the Participant obtains all other distributions except nontaxable loans available under all plans of the Employer before receiving a hardship withdrawal;

(4) for hardship withdrawals made prior to July 1, 2019, the Participant’s Deferral Contributions and any other employee contributions to all deferred compensation plans of the Employer are suspended for six months following the date the Participant receives the hardship withdrawal and requires an affirmative Participant election in order to be reinstated thereafter.  Notwithstanding the foregoing, effective July 1, 2019, any Participant in the midst of such a six-month hardship suspension will have the suspension lifted effective immediately, and such Participant may make an affirmative election to reinstate deferrals at any time; and

(5) for hardship withdrawals made on or after January 1, 2020, the Participant represents in writing (which may be electronic) that the Participant has insufficient cash or other liquid assets to satisfy the need.

*  *  *  *  End of Article 8  *  *  *  *

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Article 9.application for benefits

9.1 Applying for Benefits.

A Participant may request a distribution by submitting a properly completed Application for Benefits.  The Administrator will establish such additional rules and procedures that it determines to be necessary or appropriate for the proper payment of Plan benefits.

9.2 Denial of Benefits.

The following claims procedures are generally applicable to claims filed under the Plan.  To the extent required by law and to the extent the Administrator is ruling on a claim for benefits on account of a Disability, the Plan will follow, with respect to that claim, claims procedures required by law for plans providing disability benefits.

General Procedures.  

(1) Filing a Claim.  All claims must be filed in writing by the Participant, Beneficiary or the authorized representative of the claimant (any of these, the “claimant”) by completing the procedures that the Administrator requires.  The procedures will be reasonable and may include the completion of forms and the submission of documents and additional information.  For purposes of this Section 9.2, a request for a Plan loan or an in-service withdrawal will be considered a claim.

(2) Review of Claim.  The Administrator will review all materials and decide whether to approve or deny the claim.  If a claim is denied in whole or in part, the Administrator will provide written notice of denial to the claimant within a reasonable period of time no later than 90 days after the Administrator receives the claim, unless special circumstances require an extension of time for processing the claim.  If an extension is required, the Administrator will notify the claimant in writing before the end of the 90-day period and indicate the special circumstances requiring an extension of time and the date by which the Administrator expects to render a decision on the claim.  The extension will not exceed an additional 90 days.  The notice of denial must be written in a manner calculated to be understood by the claimant and must include the following:

(A) the specific reason(s) for the adverse determination;

(B) specific references to pertinent Plan provisions on which the adverse determination is based;

(C) a description of any additional material or information necessary for the claimant to perfect his or her claim and the reason why such material or information is necessary; and

(D) a description of the Plan’s review procedures and time limits applicable to such procedures, including a statement of the claimant’s

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right to bring a civil action under ERISA Section 502(a) following an adverse determination on review.

(3) Appeal Process.  If the claimant wishes a review of the denied claim, the claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.  The claimant may submit to the Administrator in writing any issues, documents, records, comments or other information the claimant may have regarding his or her claim for benefits under the Plan.  Such request for an appeal must be made by the claimant in writing within 60 days after receipt of notice that the claim has been denied by the Administrator.

A document, record or other information will be considered “relevant” to a claim if such document, record or other information (A) was relied upon in making the benefit determination, (B) was submitted, considered or generated in the course of making the benefit determination, without regard to whether such document, record or other information was relied upon in making the benefit determination, or (C) demonstrates compliance with the administrative processes and safeguards required pursuant to ensure and to verify that benefit claim determinations are made in accordance with the Plan and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated claimants.

(4) Review of Appeal.  The Administrator will make its decision on review solely on the basis of the written record, including documents and written materials submitted by the claimant.  The Administrator will make a decision on the review within a reasonable period of time, not later than 60 days after the Administrator receives the claimant’s written request for review unless special circumstances require additional time for review of the claim.  If an extension is required, the Administrator will notify the claimant in writing before the end of the 60-day period and indicate the special circumstances requiring an extension of time and the date by which the Administrator expects to render a decision on the claim.  The extension will not exceed an additional 60 days.  The decision on review will be written in a manner calculated to be understood by the claimant.  If the claim is denied, the written notice will include the following:

(A) the specific reason(s) for the adverse determination;

(B) specific references to pertinent Plan provisions on which the adverse determination is based;

(C) a statement that the claimant will be entitled, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits (as “relevant” is defined in this Section 9.2); and

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(D) a statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

Administrator’s Full Discretion.  

The Administrator and its designated claims administrator and appeals administrator, if any, have full discretion and power to decide all claims and reviews of denied claims, including determining eligibility, status and the rights of all individuals under the Plan and construing any and all terms of the Plan.  Following the approval of a claim for benefits, the Administrator has the authority to construe and administer the Plan in a manner that is consistent with the payment of benefits in accordance with the approved claim.

Electronic Notification.  

Any notification from the Administrator, claims administrator or appeals administrator to the claimant under this Section 9.2 may be made electronically, provided that such notification complies with Department of Labor Regulation Sections 2520.104b-1(c)(1)(i), (iii), and (iv).

9.3 Exhaustion of Remedies; Limitation of Actions.

In the event of any dispute over benefits under this Plan, all remedies available to the disputing individual under this Article 9 must be exhausted before legal recourse of any type is sought.  No legal action at law or in equity may be filed against the Plan, the Sponsor, any Participating Employer, the Administrator or its delegate relating to any dispute over benefits under this Plan more than 180 days after the date of the Administrator’s (or its delegate’s) final determination under the claims review process described in this Article 9.

*  *  *  *  End of Article 9  *  *  *  *

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Article 10.administration of the plan

10.1 Administrator.

The Administrator will supervise and administer the operation of this Plan and has all powers necessary to accomplish that purpose, including the power to make rules and regulations pertaining to the administration of this Plan.  The Sponsor has designated the Committee to act as the Administrator.  Any member of the Committee may resign by delivering written notice to the Sponsor.  Until such time as the Sponsor has appointed the members of the Committee, or in the event that all Committee members have resigned, the Sponsor will serve as the Administrator.  An Employee will be deemed to have resigned as Administrator or as a member of the Administrator upon separation from service with the Employer.  Vacancies due to resignation, death, removal, or other causes will be filled by the Sponsor.  The Sponsor is entitled to remove the Administrator at any time, with or without cause.

10.2 Organization and Procedures.

The Committee is established and organized in accordance with its mandate or charter and must follow such procedures as outlined in the mandate or charter.

10.3 Powers and Duties.

The Committee administers the Plan in accordance with its terms, and has all powers necessary to carry out the provisions of the Plan not otherwise reserved to the Sponsor or the Trustee.  Not in limitation, but in amplification of the powers and duties specified in this Plan, and in accordance with its mandate or charter, the Committee has the power and duty, in the Committee’s full and complete discretion, to:

(a) Appoint subcommittees with such powers, whether discretionary or otherwise, as the Committee determines, consistent with the terms of the Plan.

(b) Authorize or delegate its authority to one or more members of the Committee, an employee or any agent to execute or deliver any instrument or make any payment on behalf of the Committee.

(c) Interpret the provisions of the Plan in the Committee’s total and complete discretion.  The Committee will be the sole judge of the standard of proof required in any case and the application and interpretation of the Plan, and decisions of the Committee are final and binding on all parties.  All questions or controversies of whatsoever character arising in any manner or between any parties or persons in connection with the Plan or its operation, whether as to any claim or appeal for benefits as to the construction of the language of the Plan or any rules and regulations adopted by the Committee, or as to any writing, decision, instrument or account in connection with the operation of the Plan, will be submitted to the Committee for decision.  Any decision by the Committee on appeal of a denied claim is binding on all persons dealing with the Plan or claiming any benefit hereunder, except to the extent such decision may be determined to be arbitrary or capricious by a court having jurisdiction over such matter.

(d) Develop and maintain an investment policy for the purposes of the following:  defining and assigning the responsibilities of all involved parties; establishing and

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communicating to all involved parties the objectives for establishing an investment program suitable to the long-term goals and investment objectives of the Plan; formulating policies for selecting investment management and investment accounts within the investment program; and establishing objectives for prudently monitoring and evaluating the performance of the investment program.

(e) Adopt and enforce the rules and procedures and to designate the manner for Participants to make elections, all as are necessary for the operation and administration of the Plan and consistent with its provisions.  When designating procedures, the Committee will consider all of the substantive legal requirements, such as requirements that an election be “in writing,” and will designate procedures reasonably calculated to satisfy such requirements.

(f) Determine all questions relating to eligibility, benefits and other rights of employees, Participants and beneficiaries under the Plan.

(g) Keep all records necessary for the operation and administration of the Plan, to the extent such records are not kept by the Trustee, or to require its delegates or designates to keep records with respect to the authorities and responsibilities delegated to such.

(h) To cause the Plan to be in compliance with all reporting and disclosure obligations under Part 1 of Title I of ERISA.

(i) To perform due diligence as necessary and appropriate with respect to transactions involving the Plan.

(j) To appoint one or more persons or entities to be investment managers (as defined in Section 3(3)) of ERISA) with respect to part or all of the Trust Fund, by notifying the Trustee in writing of the appointment of any such investment manager and of the part of the Trust Fund which the investment manager will manage, and to remove an investment manager at any time, for any reason, by written notice to the investment manager and the Trustee.

(k) Delegate or employ agents, advisers and counsel (who may also be persons employed by the Employer), direct them to exercise the powers of the Committee and monitor their continued performance and, as the Committee deems appropriate, terminate the services of such agents, advisers and counsel.

10.4 Consultation with Agents.

The Administrator has the right to employ such agents, clerical, accounting and other services, and such lawyers and accountants as may be necessary for the purpose of administering the Plan.  The Administrator has the right to employ the Trustee to perform recordkeeping and such other services on behalf of the Plan.  Such costs may be paid for out of the assets of the Plan and will in such case constitute an operating expense of the Plan.

10.5 Finality of Action.

All acts and determinations of the Administrator are binding and conclusive upon Participants, Beneficiaries, Employees, and the Trustee.  The Employer may

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deem its records conclusively to be correct as to the matters reflected therein with respect to information furnished by an Employee.

10.6 Indemnification.

To the extent permitted by ERISA, the Employer agrees to indemnify and defend to the fullest extent permitted by law all persons who are, were, or may be employees of the Employer or members of the Committee, subject to the provisions of the Committee’s mandate or charter and any separate applicable indemnification agreement.

10.7 Payment of Plan Expenses.

General Rule.  

No employee will be compensated for services performed in connection with the administration of the Plan.  However, all reasonable expenses of employees incurred in connection with the administration of the Plan will be paid from the Trust Fund unless otherwise paid by the Employer.  Until otherwise paid, the Trust Fund will at all times be liable for the payment of all administrative expenses, and the election of the Employer to pay any such expense will not be construed as creating any such liability on the part of the Employer.

Charges to Participant Accounts.  

The Administrator may, except as prohibited by applicable law, charge a Participant’s Account for any reasonable Plan expenses directly related to that Account, including, but not limited to the following categories of fees or expenses:  distribution, loan, acceptance of rollover, QDRO, “lost participant” search, account maintenance, brokerage accounts investment management and benefit calculations.  The Administrator may charge a Participant’s Account for the reasonable expenses incurred in connection with the maintenance of or a distribution from that Account even if the charging of such expenses would result in the elimination of the Participant’s Account or in the Participant’s not receiving an actual distribution.  However, if the actual Account expenses exceed the Participant’s Account balance, the Administrator will not charge the Participant outside of the Plan for such excess expenses.  The Administrator may charge reasonable Plan expenses to the Accounts of Participants who are no longer employed with the Employer, even if the Administrator does not charge Plan expenses to the Accounts of Participants who are currently employed with the Employer, provided it is done in a uniform and nondiscriminatory manner.

*  *  *  *  End of Article 10  *  *  *  *

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Article 11.the trust fund

11.1 The Trustee.

The Sponsor will select a Trustee to hold, invest and distribute any assets of the Plan which are held in the Trust Fund in accordance with the terms of the Trust Agreement which will be executed by the Sponsor and the Trustee under such terms and conditions, not in contravention of the provisions of this Plan, as the Sponsor and Trustee may elect.  The fiduciary responsibilities of the Trustee will be as set forth in the Trust Agreement entered into by and between the Sponsor and the Trustee.  The Sponsor from time to time may change the Trustee and the Trust Agreement, provided that no amendment which affects the duties or responsibilities of the Trustee will be effective without the consent of the Trustee.

11.2 The Trust Fund.

The Trust Fund will be used only to pay benefits as provided in the Plan and such other payments as directed by the Administrator.  All reasonable and necessary expenses incurred in the administration of the Plan and Trust Fund will be paid from the Trust Fund to the extent that such costs and expenses are not paid by the Employer.

11.3 Reversion of Assets.

Except as provided by the terms of this Section 11.3, no assets of the Trust Fund will ever revert to, or be used or enjoyed by, the Employer or any successor of the Employer, nor will any such funds or assets ever be used other than for the benefit of Participants or Beneficiaries.  Exceptions are as follows:

Mistake of Fact.  

In the event the Administrator determines that the Employer has contributed any amount under Article 3 to the Trustee by mistake of fact, the Administrator will direct the Trustee in writing to return to the Employer, within one year after the payment of the contribution, the lesser of the amount actually contributed by such mistake of fact or its then current value.

Deductibility.  

All contributions hereunder are made on the condition that they are deductible under Code Section 404.  If the Internal Revenue Service determines that any portion of the Employer’s contributions under Article 3 for a Plan Year is not deductible, to the extent that the deduction is disallowed, the Administrator will direct the Trustee to return the lesser of such amount or its then current value to the Employer within one year following the disallowance of the deduction.

Termination.  

Upon termination of the Plan after satisfaction of all fixed and contingent liabilities or obligations to persons entitled to benefits upon termination of the Plan, any fund or property remaining in the Trust Fund will revert to the Employer, provided such reversion does not contravene any provision of law.

*  *  *  *  End of Article 11  *  *  *  *

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Article 12.plan fiduciaries

12.1 Fiduciaries.

The named fiduciary with respect to the Plan and Trust Agreement will be the Administrator.  The Trustee will be a Plan fiduciary with respect to the Plan and Trust Agreement to the extent the Trustee exercises discretionary authority, responsibility or control with respect to management of the Plan or Plan assets or administration of the Plan.  Any Investment Manager will be a Plan fiduciary with respect to the Plan and Trust Agreement, but will not be a named fiduciary.  The fiduciaries of this Plan and Trust Agreement will have only those powers, duties, responsibilities and obligations as are specifically provided for by the Plan and Trust Agreement.

12.2 Fiduciary Responsibilities.

Administrator.  

The Administrator has responsibility and authority to control the operation and administration of the Plan and as further set forth in Article 12.

Trustee.  

The Trustee will hold the assets of the Trust Fund in trust and will be responsible for all functions specifically assigned to it by the Plan and Trust Agreement.  The Trustee has exclusive responsibility for the management and control of that portion, if any, of the Trust Fund which is not made subject to the management and control of an Investment Manager, a Participant or the Administrator.  The Trustee has no other responsibilities unless otherwise provided in the Trust Agreement.  To the extent that the Trust Fund or any portion thereof is subject to the management and control of an Investment Manager or the Administrator, the Trustee (1) will not have exclusive management and control over the Trust Fund, (2) will not invest or otherwise manage and control that portion of the Trust Fund, and (3) will take investment action only upon the instructions of such Investment Manager or the Administrator properly given as herein provided.  Purchase and sale orders may be placed by such Investment Manager directly with brokers and dealers without the intervention of the Trustee and, in such event, the Trustee’s sole obligation will be to make payment for purchased securities and deliver those that have been sold when advised of the transaction.  The Trustee has no liability to any person for any action taken or omitted in accordance with any directions given by such Investment Manager herein, or for the failure of such Investment Manager to give such directions.

Sponsor.  

The Sponsor will be responsible for all functions assigned or reserved to it under the Plan and Trust Agreement.  Any authority so assigned or reserved to the Sponsor will be exercised by resolution of its duly authorized governing body, and will become effective with respect to the Trustee only with its consent and upon written notice to the Trustee.  By way of illustration, and not by limitation, the Sponsor will have authority and responsibility for (1) the designation of named fiduciaries, (2) the appointment, removal and replacement of the Trustee, and (3) the exercise of all fiduciary functions provided in the Plan and Trust Agreement or necessary to the operation of the Plan, except such functions as are assigned to other named fiduciaries or to an Investment Manager.  Not as Plan fiduciary, but rather as “settlor” of the Plan, by way of illustration, and not by limitation, the Sponsor will

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have authority and responsibility for the design of the Plan, the qualification under applicable law of the Plan and Trust Agreement, and any amendments thereto, and the funding of the Plan with respect to its Employees.

This Section 12.2 is intended to allocate to each fiduciary the individual responsibility for the prudent execution of the functions assigned to it, and none of such responsibilities or any other responsibilities will be shared by two or more of such fiduciaries unless such sharing is provided by a specific provision of the Plan and Trust Agreement.  Whenever one fiduciary is required to follow the directions of another fiduciary, the two fiduciaries will not be deemed to have been assigned a shared responsibility, but the responsibility of the fiduciary giving the directions will be deemed the fiduciary’s sole responsibility, and the responsibility of the fiduciary receiving those directions will be to follow them insofar as such instructions are on their face proper under applicable law.  A fiduciary may employ one or more persons to render advice concerning responsibility such fiduciary has been allocated under the Plan and Trust Agreement.  To the extent that fiduciary responsibilities are so allocated to an Investment Manager, such responsibilities are so allocated solely to such Investment Manager alone, to be exercised by such Investment Manager alone and not in conjunction with any fiduciary, and the Trustee is under no obligation to manage any asset of the Trust Fund that is subject to the management of such Investment Manager.

12.3 Investment Managers.

The Administrator may appoint a qualified Investment Manager to manage any portion or all of the assets of the Trust Fund.  For the purpose of this Plan and Trust Agreement, a qualified Investment Manager means an individual, firm or corporation that has been so appointed to serve as Investment Manager hereunder and that is and has acknowledged in writing that it is (a) a fiduciary with respect to the Plan, (b) bonded as required by ERISA, and (c) is registered as an investment adviser under the Investment Advisers Act of 1940, but excluding any investment adviser described in ERISA Section 3(38)(B)(ii), or an investment adviser described in ERISA Section 3(38)(B)(ii), or a bank as defined in the Investment Advisers Act of 1940, or an insurance company qualified to manage or dispose of assets of pension plans and licensed to conduct business in more than one state.  Any Investment Manager so appointed will have sole responsibility for the investment of the portion of the Trust Fund to be managed and controlled by such Investment Manager.

*  *  *  *  End of Article 12  *  *  *  *

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Article 13.amendment, termination and merger

13.1 Plan Amendment.

Power to Amend.  

The Sponsor may amend the Plan at any time and from time to time.  In addition, the Committee may amend the Plan at any time and from time to time if such amendment is for any necessary or appropriate clerical changes to Plan documentation, or to add new Participating Employers to the Plan under Section 15.4.  The attached Schedules to the Plan may be updated without formal amendment.  Any amendment may be made retroactively effective to the extent permitted by applicable law.

Limitation to Scope of Amendments.  

Except to the extent required to qualify this Plan and the Trust Agreement under Code Sections 401(a) and 501, or as a condition of continued qualification thereunder, no amendment will be made which would have any of the following effects:

(1) deprive any Participant or Beneficiary of the right to receive any benefits attributable to service before the amendment to which such individual may be entitled; or

(2) except as provided in Article 11, permit any part of the Trust Fund to revert to the Employer or permit any part of the Trust Fund, other than such part as may be required to pay taxes or administration expenses, to be used for or diverted for any purpose other than the exclusive benefit of Participants or their Beneficiaries.

13.2 Vesting Amendments.

In the event the Sponsor adopts an amendment changing the vesting schedule described in the Plan, or any other amendment that directly or indirectly affects the computation of a Participant’s vested Account, any Participant who has completed at least three Years of Service may elect to have the Participant’s vested Account determined in accordance with the vesting schedule in effect immediately prior to the effective date of the amendment.  Notwithstanding the preceding sentence, no election need be provided for any Participant whose vested Account under the Plan, as amended, at any time cannot be less than such Account determined without regard to such amendment.  Such election must be in writing and be filed with the Administrator by the latest of (a) 60 days after the amendment is adopted, (b) 60 days after the amendment becomes effective, or (c) 60 days after written notice of the amendment is issued to the Participant by the Administrator.  The Participant must have completed the required three Years of Service by the latest date on which an election may be filed hereunder.  Notwithstanding anything in the Plan to the contrary, the vested portion of a Participant’s Accounts will be at least equal to the portion the Participant would have been entitled had the Participant ceased to be an Employee immediately prior to the date such amendment is adopted or the effective date of such amendment, whichever is later.

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13.3 Plan Termination.

Sponsor Rights.  

Although the Sponsor expects to continue the Plan and the contributions to the Trust Fund indefinitely, the Sponsor may terminate the Plan and all further contributions to the Trust Fund for any reason and at any time.  

No Liability for Future Contributions.  

Although each contributing Employer expects to continue the Plan and the contributions to the Trust Fund indefinitely, the Employer may, with respect to its Employees, terminate the Plan and all further contributions to the Trust Fund for any reason and at any time.  The liability of the Employer to contribute to the Trust Fund will automatically terminate upon its being legally dissolved.  Any such termination of the Plan by a contributing Employer will not affect the continuation of the Plan by any other contributing Employer.

Partial Termination, Vesting.  

In the event of the partial termination of the Plan, the rights of each Participant affected by such termination to the amounts credited to the Participant’s Account as of the date of such termination will be vested.  Such amounts will be distributed in accordance with the provisions of this Plan.

Trust Fund, Vesting and Distribution.  

Upon the termination of the Plan or the complete discontinuance of contributions to the Trust Fund, the Administrator will notify the Trustee of such event in writing.  The Trust Fund will continue until all funds are distributed in accordance with the terms of the Plan.  All provisions of the Plan and Trust Agreement will remain in force, other than the provisions relating to Employer contributions, until all funds are distributed from the Trust Fund.  Each affected Participant will be fully vested in the Participant’s Account as of the date of such termination or discontinuance.  Anything herein to the contrary notwithstanding, the Trustee and the Administrator may, at any time after the Plan has been completely terminated, terminate the Trust Fund.  Upon termination of the Trust Fund, the amount credited to the Account of each Participant and Beneficiary will be distributed to the individual absolutely and free of trust or transferred to another plan maintained by the Employer’s Affiliated Group.

Allocation of Suspense Account.  

Any funds held in the Suspense Account at the time of the termination of the Plan or discontinuance of contributions will be allocated among the Participants for whom an Account is being held in the manner set forth in Section 5.3 to the extent such allocation does not exceed the limits of Article 6.

Trustee Fees.  

The Trustee’s fees and expenses of administering the Trust Fund and other expenses incident to the termination and distribution of the Trust Fund incurred after the termination of this Plan and the Trust Agreement will be paid from the Trust Fund unless otherwise paid by the Employer.  Until otherwise paid, the Trust Fund will at all times remain solely liable for the payment of all fees and expenses incident to the termination.

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13.4 Plan Merger or Transfer of Assets.

Transfer of Assets.  

This Plan will not be merged into, or consolidated with, nor will any assets or liabilities be transferred to, any pension or retirement plan under circumstances resulting in a transfer of assets or liabilities from this Plan to any other plan unless immediately after any such merger, consolidation or transfer each Participant would (if the Plan then terminated) receive a benefit after the merger, consolidation or transfer that would be equal to or greater than the benefit the Participant would have been entitled to receive immediately before such merger, consolidation or transfer (if the Plan had then terminated).  Subject to the foregoing and the applicable requirements of Code Section 411(d)(6), the Administrator may, in its discretion, direct the Trustee to (1) transfer all or a specified portion of the Trust Fund to any other trust forming part of another qualified plan, or (2) accept a transfer to the Trust Fund of all or a specified portion of the assets of a trust forming part of another qualified plan.  Any transfer of assets to another trust will be in complete satisfaction of all liabilities relating to the amounts so transferred.

Distributions.  

Subject to an election by the Administrator to transfer the Accounts of any affected Participant to another trust forming part of a qualified plan as provided in Section 13.4(a), the Administrator may, in its discretion, permit in a uniform and nondiscriminatory manner the Accounts of affected Participants to be distributed, with the Participant’s consent as provided in Article 7, in a lump sum in connection with a corporate transaction that results in the Participant’s “severance from employment” as permitted in accordance with Code Section 401(k).

*  *  *  *  End of Article 13  *  *  *  *

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Article 14.Top Heavy Provisions

14.1 Top-Heavy Definitions.

For purposes of this Article 14, the following terms have the following meanings.

Determination Date

means the last day of the preceding Plan Year or, in the case of the first Plan Year, the last day of such Plan Year.

Key Employee

means any Participant who, at any time during the Plan Year, has been (1) an officer of the Employer having Testing Compensation greater than 50% of the amount in effect under Code Section 415(b)(1)(A); (2) a 5% owner of the Employer; or (3) a 1% owner of the Employer having Testing Compensation from the Employer of more than $150,000 without application of the Code Section 401(a)(17) limitation.  The determination of who is a Key Employee will be made in accordance with Code Section 416(i)(1) and related Regulations.  No more than 50 Employees, or, if lesser, the greater of three Employees or 10% of the Employees, will be treated as officers.

Non-Key Employee

means any Participant who is an Employee on the last day of the Plan Year and who is not a Key Employee, regardless of the Hours of Service or Compensation earned by such Employee during the Plan Year.

Permissive Aggregation Group

means the Required Aggregation Group combined with any other plan maintained by the Employer, provided that the resulting combination group would continue to satisfy the requirements of Code Sections 401(a)(4) and 410 once such other plan is taken into account.  The Administrator will determine which plan or plans maintained by the Employer will be taken into account in determining the Permissive Aggregation Group.

Required Aggregation Group

means (1) each plan of the Employer in which a Key Employee is a participant, and (2) each other plan of the Employer that enables any plan described in clause (1) to meet the requirements of Code Section 401(a)(4) or 410.

14.2 Determination of Top-Heavy Status.

Top-Heavy Plan Determination.  

This Plan will be deemed to be a “Top-Heavy Plan” within the meaning of Code Section 416(g) if, as of the Determination Date, the top-heavy determination percentage determined under Section 14.2(b) exceeds 60%.  This Plan will not be considered a Top-Heavy Plan for any Plan Year in which the Plan is part of a Required or Permissive Aggregation Group that is not a Top-Heavy Plan.  

Top-Heavy Determination Percentage.  

The top-heavy determination percentage will be derived as of the Determination Date by dividing (1) the sum of the Accounts of Key Employees under this Plan (plus the aggregate present value of cumulative accrued benefits for Key Employees under a defined contribution or defined benefit plan that is part of a Required or Permissive Aggregation Group) by (2) a similar sum determined for all Eligible Employees.  For purposes of determining the Account of

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any Employee (or the present value of the cumulative accrued benefit for any Employee in a defined contribution or defined benefit plan), such Accounts or present value will be increased by the aggregate distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Code Section 416(g)(2) during the one-year period ending on the Determination Date.  The preceding sentence will also apply to distributions under a terminated plan that, had it not been terminated, would have been aggregated with the Plan under Code Section 416(g)(2)(A)(i).  In the case of a distribution made for a reason other than separation from service, Death or Disability, this provision will be applied by substituting “five-year period” for “one-year period.”

Look-Back Period.  

If any Employee is a Non-Key Employee for any Plan Year, but was a Key Employee for any prior Plan Year, such Employee’s Accounts (and the present value of the cumulative accrued benefit for any such Employee in a defined contribution or defined benefit plan) will not be taken into account for purposes of determining whether this Plan is a Top‑Heavy Plan.  If an Employee has not performed any services for the Employer at any time during the one-year period ending on the Determination Date, such Employee’s Accounts (and the present value of the cumulative accrued benefit for any such Employee in a defined contribution or defined benefit plan) will not be taken into account for the purposes of determining whether the Plan is a Top-Heavy Plan.

14.3 Change in Vesting Schedule.

To the extent the vesting provisions of the Plan are not more generous, if this Plan is deemed a Top-Heavy Plan for a Plan Year, then the vesting under the Plan will be at least as generous as the following schedule, or if more generous, the vesting schedule otherwise set forth in the Plan:

Years of Service	Vested Percentage
Fewer than 2 Years of Service	0%
At least 2 Years of Service, but fewer than 3 Years of Service	20%
At least 3 Years of Service, but fewer than 4 Years of Service	40%
At least 4 Years of Service, but fewer than 5 Years of Service	60%
At least 5 Years of Service, but fewer than 6 Years of Service	80%
At least 6 Years of Service	100%

14.4 Minimum Contribution.

Amount of Contribution.  

For any Plan Year in which the Plan is a Top‑Heavy Plan, the Employer will contribute to the Account of each non-Key Employee an amount equal to (1) the lesser of 3% of the Non-Key Employee’s Testing Compensation or

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the largest percentage of Testing Compensation contributed on behalf of any Key Employee for such Plan Year (determining such largest percentage by taking into account all contributions including Safe Harbor Matching Contributions and Employer Contributions for such Plan Year made by the Employer to such Key Employee’s Account) minus (2) any Employer contribution for such Plan Year for such Non-Key Employee that may have been made as of the Determination Date (including Safe Harbor Matching Contributions and Employer Contributions for such Plan Year made by the Employer).

Eligible Employees.  

The minimum contribution will be made on behalf of each Participant who is a Non-Key Employee regardless of whether the Non-Key Employee has attained any minimum level of service for accrual purposes or compensation for the Plan Year.  

Coordination with Other Plan.  

If any Participant in this Plan is also covered by another defined contribution plan or defined benefit plan sponsored by the Employer, then for each year this Plan is a Top-Heavy Plan, the Participant’s receipt of a minimum guaranteed benefit under the other defined contribution plan or the defined benefit plan in accordance with Code Section 416(c)(1) will satisfy the minimum contribution requirement.

*  *  *  *  End of Article 14  *  *  *  *

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Article 15.general provisions

15.1 Interpretation.

Consistency.  

If any provision of this Plan or the Trust Agreement may be susceptible to more than one interpretation, the interpretation that will always be given to such provision will be consistent with this Plan and the Trust Agreement being an employees’ plan and trust agreement within the meaning of Code Sections 401(a) and 501, or as replaced by any sections of like intent and purpose.

Severability.

In case any provisions of this Plan is held illegal or invalid for any reason, said illegality or invalidity will not affect the remaining provisions of this Plan, and this Plan will be construed and enforced as if said illegal or invalid provisions had never been inserted herein.

Number and Gender.  

Unless the context otherwise requires, words denoting the singular number may, and where necessary will, be construed as denoting the plural number, and pronouns in the masculine gender include the feminine gender and pronouns in the neuter gender include the masculine and feminine gender.

Descriptive Headings.  

The headings of the Plan are inserted for convenience of reference only and has no bearing upon the meaning of the provisions hereof.

15.2 Liability for Participant Representations.

The Employer, the Administrator and the Trustee will be discharged from any liability in acting upon any representations by any individual of any fact affecting the individual’s status under this Plan or upon any notice, request, consent, letter, telegram, or other document believed by them, or any of them, to be genuine, and to have been signed or sent by the proper person.

15.3 Governing Law.

The Plan will be construed, regulated and administered under the laws of the State of Colorado, except that if any such laws are superseded by any applicable federal law or statute, such federal law or statute will apply.

15.4 Participating Employers.

Rights of Participating Employer.  

Notwithstanding any provision in this Plan to the contrary, any entity that adopts this Plan participates in the Plan as a “Participating Employer,” as set forth in Schedule A, effective as of the date of such adoption.  Subject to such Participating Employer’s right to withdraw from the Plan, the Participating Employer has no power or obligation to amend or consent to any amendment made by the Sponsor, and agrees to be bound by all the provisions, conditions, and limitations of the Plan, as amended from time to time, as fully as if the Participating Employer was an original party to the Plan.  For the purpose of this Plan, each Participating Employer, by adopting the Plan, irrevocably designates the Sponsor as its agent.

Withdrawal and Removal.  

A Participating Employer, by action of its board of directors or other governing body, may withdraw from the Plan at any time upon

Ovintiv U.S. Retirement Plan1/27/2020   54

prior notice in writing to the Administrator (the effective date of such withdrawal being the “withdrawal date”), and will thereupon cease to be a Participating Employer for all purposes of the Plan.  The Administrator may remove an adopting Participating Employer from the Plan at any time upon prior notice in writing to the Participating Employer (the effective date of such withdrawal being the “removal date”), and will thereupon cease to be a Participating Employer for all purposes of the Plan.

15.5 Missing Participants and Beneficiaries.

An individual for whom benefits are being held by the Trustee will keep the Administrator notified of the individual’s current mailing address.  The Administrator, the Trustee and the Employer will be discharged from any liability resulting from the failure to pay benefits as they become due if the Administrator has notified the individual at the last address of record.  If benefits are to be paid to an individual who cannot be located after six months following the date the Administrator first attempts to locate the individual, the Administrator may take either or none of the following actions, in addition to any other actions the Administrator may deem reasonable, at its discretion:

Forfeiture.  

The individual’s Account may be forfeited and applied as provided in Article 4.  If the individual is later located, the vested portion of the Account will be reinstated and distributed in accordance with the terms of the Plan.

Distribution to Established Account.  

The Administrator may direct the Trustee to distribute the Account by establishing an individually-designated account for such individual (for example, a savings account or individual retirement account), by purchasing an annuity for the individual, by transferring the account on behalf of such individual to an ongoing plan of the Employer, or by any other method deemed proper by the Administrator.

15.6 Incapacity of Participant or Beneficiary.

If any Participant or Beneficiary entitled to receive a distribution under this Plan is, as determined by the Administrator in a uniform and nondiscriminatory manner, unable to apply such distributions to his or her own best interest, whether because of illness, accident or other incapacity (mental, physical or legal), the Administrator may, in its discretion, direct the Trustee to make distributions in one or more of the following ways:

(a) directly to the Participant or Beneficiary;

(b) to the duly appointed legal guardian or conservator of the Participant or Beneficiary;

(c) to the Spouse of the Participant or Beneficiary;

(d) to a custodian under any applicable Uniform Gifts to Minors Act or Uniform Transfers to Minors Act;

(e) to an adult relative or friend of the Participant or Beneficiary, or to one residing with the Participant or Beneficiary, pursuant to appropriate legal appointment (including durable power of attorney) for the benefit of the Participant or Beneficiary.

Ovintiv U.S. Retirement Plan1/27/2020   55

Any such payment will be a distribution for the account of such Participant or Beneficiary and will, to the extent thereof, be a complete discharge of any liability under the Plan to such Participant or Beneficiary.  The Administrator’s reliance on the written instrument of agency governing a relationship between the Participant or Beneficiary entitled to distribution and the person to whom the Administrator directs distribution will be fully protected as though the Administrator made such distribution directly to the Participant or Beneficiary as a competent person.  In the absence of actual knowledge to the contrary, the Administrator may assume that the instrument of agency was validly executed, that the Participant or Beneficiary was competent at the time of execution and that at the time of reliance, the agency has not been amended or terminated.  The decision of the Administrator is final and binding on all interested parties, and the Administrator is under no duty to see to the proper application of the funds.

15.7 Assignment and Alienation.

The Trust Fund is established for the purpose of providing for the support of the Participants upon their retirement and for the support of their families.  Except in the case of any (a) Plan loan under Section 8.1, (b) federal tax lien, (c) qualified domestic relations order under Section 7.10, (d) breach of a Participant’s fiduciary obligations to the Plan, or (e) other event described in Section 401(a)(13) and the Regulations thereunder, no right or interest of any individual in any part of the Trust Fund will be transferable or assignable or be subject to alienation, anticipation, or encumbrance, and no such right or interest will be subject to garnishment, attachment, execution, or levy of any kind.

15.8 Participant Rights.

The sole rights of a Participant under this Plan will be to have this Plan administered according to its provisions, to receive whatever benefits the Participant may be entitled to hereunder, and, subject to any spousal Death benefit requirements, to name the Beneficiary to receive any Death benefits to which such person may be entitled.

15.9 Effect on Employment Status.

The adoption and maintenance of this Plan will not be construed as creating any contract of employment between the Employer and any Participant.  This Plan does not affect the right of the Employer to deal with its Employees in all respects, including their hiring, discharge, compensation, and conditions of employment.  No individual will be discharged, fired, suspended, expelled, disciplined, or discriminated against for exercising any right under this Plan or for giving information or testimony in any inquiry or proceeding relating to the Plan’s administration.

15.10 Qualified Military Service.

The Plan will comply with the requirements of Code Section 414(u) with respect to each Participant who is absent from service because of “qualified military service” (as defined in Code Section 414(u)(5)) provided that the Participant returns to employment within such period after the end of the qualified military service as is prescribed under Code Section 414(u) (or other federal law cited therein).  Accordingly, any such Participant will receive Employer Contributions, will be permitted to make additional Deferral Contributions after the Participant’s reemployment, will receive Safe Harbor Matching Contributions on such Deferral Contributions and will receive

Ovintiv U.S. Retirement Plan1/27/2020   56

QMACs and QNECs if any were made for the period of qualified military service, and will receive service credit for the period of qualified military service as required under Code Section 414(u).

*  *  *  *  End of Article 15  *  *  *  *

Ovintiv U.S. Retirement Plan1/27/2020   57

IN WITNESS WHEREOF, the Sponsor has caused the Ovintiv U.S. Retirement Plan to be executed in the name of and on behalf of the Sponsor, effective January 27, 2020.

Ovintiv Services Inc.

Sponsor

By: /s/ Mike Williams

Title: Chair,Management Pension Benefits Committee

Date: April 6, 2020

Ovintiv U.S. Retirement Plan1/27/2020   58

Ovintiv U.S. Retirement Plan

Schedule A -
Participating Employers

(in addition to the Sponsor)

Employer	Date of Participation
Ovintiv USA Inc. (f/k/a Encana Oil & Gas (USA) Inc.)	January 1, 2014
Encana Corporation (including any payments made through a payroll services agreement with Alenco Inc.)	June 1, 2018 through January 23, 2020
Ovintiv Inc. (including any payments made through a payroll services agreement with Alenco Inc.)	January 24, 2020
Newfield Exploration Company (n/k/a Ovintiv Exploration Inc.)	April 1, 2019 through December 31, 2019
Other employers prior to the Effective Date may have participated as provided in previous documents.

* * * * End of Schedule A * * * *

Ovintiv U.S. Retirement Plan – Schedule A1/27/2020   59

Ovintiv U.S. Retirement Plan

Schedule B -
Imputed Service for Predecessor and Related Employers

Employer: Imputed Service Credit

Newfield Exploration Company (n/k/a Ovintiv Exploration Inc.):  Service performed for Newfield Exploration Company (n/k/a Ovintiv Exploration Inc.) before April 1, 2019.

* * * * End of Schedule B * * * *

Ovintiv U.S. Retirement Plan – Schedule B1/27/2020   60

Ovintiv U.S. Retirement Plan

Schedule C -
Protected Benefits

I.Protected Benefits for Athlon Plan Accounts

This section applies to the accounts transferred to the Plan from the Athlon 401(k) Plan (the “Athlon Plan”) in connection with the merger of the Athlon Plan into the Plan effective as of December 31, 2015.  Any account(s) transferred from the Athlon Plan will be called the Participant’s “Athlon Account(s)” and will be entitled to the protected benefit features contained in this Section II of Schedule C.  The Athlon Accounts will be subject to the regular provisions of the Plan as modified by this Section II of Schedule C.

Participant Accounts

Pursuant to Section 5.1(h) of the Plan, an Athlon Account (defined above) also qualifies as a Participant Account for those Participants who have an Athlon Account as a result of the merger.

Optional Forms

In addition to the optional forms of distribution available under Section 7.3 of the Plan, Athlon Accounts may be distributed in the following optional forms:

Fixed Payment Installment Option.  The fixed payment installment option is an optional form of benefit under which the Participant elects to receive a specified dollar amount each year.  The annual payment may be paid in annual, semi-annual, quarterly, or monthly installments as elected by the Participant.  The Participant may elect to receive additional payments.  The amount payable must satisfy minimum distribution requirements.

II.Protected Benefits for Newfield Plan Accounts

This section applies to the accounts transferred to the Plan from the Newfield Exploration Company 401(k) Plan (the “Newfield Plan”) in connection with the merger of the Newfield Plan into the Plan effective as of July 1, 2019.  Any account(s) transferred from the Newfield Plan will be called the Participant’s “Newfield Account(s)” and will be entitled to the protected benefit features contained in this Section III of Schedule C.  The Newfield Accounts will be subject to the regular provisions of the Plan as modified by this Section III of Schedule C.

Participant Accounts

Pursuant to Section 5.1(h) of the Plan, a Newfield Account (defined above) also qualifies as a Participant Account for those Participants who have a Newfield Account as a result of the merger.

Ovintiv U.S. Retirement Plan – Schedule C1/27/2020   61

Pursuant to Section 5.1(h) of the Plan, a Participant’s Newfield Account may include an account containing non safe-harbor employer matching contributions (“Newfield Employer Match Account”).  Any Newfield Employer Match Account will qualify as a component of a Participant Account and will be maintained under the Plan, with no further contributions permitted as of April 1, 2019.

Pursuant to Section 5.1(h) of the Plan, a Participant’s Newfield Account may include an account containing voluntary after-tax employee contributions (“Newfield After-Tax Account”).  Such a Newfield After-Tax Account will qualify as a component of a Participant Account and will be maintained under the Plan, with no further contributions permitted as of April 1, 2019.

* * * * End of Schedule C * * * *

14150757_v8

Ovintiv U.S. Retirement Plan – Schedule C1/27/2020   62

EX-10.3

Exhibit 10.3

June 10, 2013

Douglas J. Suttles

XXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXX

Dear Doug:

On behalf of Encana Corporation ("Encana") we are pleased to offer you employment with Encana, and appointment as President & Chief Executive Officer, based in Calgary, and reporting to Encana's Board of Directors (the "Board"). In addition to your appointment as President & Chief Executive Officer of Encana, you agree to the anticipated appointment as a director and officer of Encana or any of Encana's affiliates for no additional remuneration.

Start Date

Your employment with Encana will commence shortly following obtaining all necessary approvals to work in Canada and we expect that start date to be June 10, 2013. For the purpose of this letter we will refer to your start date within Encana as the "Start Date".

Compensation and Benefits

All compensation items in this offer letter are in Canadian dollars, and will be less required withholdings. Your annual base salary, annual allowance, and cash bonus will be paid in accordance with Encana's usual payroll practices. In addition, your annual base salary, performance, and other compensation items will be reviewed annually by the Board, commencing in 2014.

Encana offers you the following compensation package:

1. Your annual base salary will be $1,000,000 paid semi-monthly. Your annual base salary, as adjusted from time to time, shall be referred to as the "Annual Salary".

2. You will receive an annual allowance of $36,000 (the "Annual Allowance"), paid semi­ monthly.

3. You are eligible for Company provided parking in an assigned stall in THE BOW with an associated taxable benefit of $595 per month for 2013. Alternately, you may elect a taxable cash allowance of $490 per month.

4. You will participate in Encana's annual High Performance Results Program ("HPR"), with an annual target of 125% of your Annual Salary. The payment and amount of your HPR award will be determined by the Board, based on its assessment of your achievement with respect to individual performance and Encana performance targets, and such award being subject to Board discretion. As a participant in the HPR program, you have the potential to receive from zero to

Encana Corporation

500 Centre Street SE PO Box 2850 Calgary AB T2P 2S5 CANADA 403.645.2000 encana.com

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two (2) times your HPR target. Your HPR award for 2013 will be prorated to reflect the portion of 2013 worked from the Start Date to year end.

5. You are eligible to participate in Encana's Long-Term Incentive Program ("LTI") which is granted annually, normally in February. Encana provides a portfolio approach and upon your starting with Encana you will receive an LTI award with an expected value of $6,000,000, which is not prorated. The grant will be as follows:

(a) You will receive a grant of stock options with attached tandem stock appreciation rights ("Options") with a Black Scholes value of $1,500,000. These Options will vest in increments of 30% on the first anniversary of the grant date, 30% on the second anniversary of the grant date and the remaining 40% will vest on the third anniversary of the grant date. You must be actively employed at the time of vesting to exercise your Options. This grant is subject to the terms of the Employee Stock Option Plan and your acceptance of the terms of the Grant Agreement. Given that a trading blackout for Encana has been implemented with respect to those having knowledge of your anticipated employment, the grant will be effective on the second Toronto Stock Exchange ("TSX") trading day immediately following the end of the blackout, and will be based on the closing price per common share on the TSX on the first trading day following the end of the blackout. The grant date is anticipated to be June 13, 2013.

(b) You will receive a grant of Performance Share Units ("PSUs") with a grant date value of $3,000,000. A PSU is a conditional grant to receive a cash payment, following the fulfillment of a time-based and a performance-based restriction. The PSU grant will cliff vest on the third anniversary of the grant date (the "PSU Vesting Date"). The performance criteria for vesting of PSUs granted shall be Encana's Total Shareholder Return relative to that of the PSU Performance Peer Group as measured over the Performance Period. Dividends accumulate on the PSUs earned during the performance period. You must be actively employed on the PSU Vesting Date to receive the value of any vested PSUs. This PSU grant is subject to the terms of the PSU Plan and your acceptance of the terms of the PSU Grant Agreement. Given the aforementioned trading blackout, the grant will be effective on the second TSX trading day immediately following the end of the blackout, and will be based on the closing price per common share on the TSX on the first trading day following the end of the blackout. The grant date is anticipated to be June 13, 2013.

(c) You will receive a grant of Restricted Share Units ("RSUs") with a grant date value of $1,500,000. An RSU is a conditional grant to receive Encana common shares or the cash equivalent (as determined by Encana in its discretion), following fulfillment of a time-based restriction. The RSU grant will vest 100% on the third anniversary of the grant date (the "RSU Vesting Date") and will accrue dividends on a quarterly basis. You must be actively employed on the RSU Vesting Date to receive the value of any vested RSUs. This RSU grant is subject to the terms of the RSU Plan and your

3

acceptance of the terms of the RSU Grant Agreement. Given the aforementioned trading blackout, the grant will be effective on the second TSX trading dayfollowing the end of such blackout and will be based on the closing price per common share on the TSX on the first trading day following the end of the blackout. The grant date is anticipated to be June 13, 2013.

6. In addition, you will receive a one-time LTI award with an expected value of $5,250,000 as follows:

(a) You will receive a grant of options with a Black Scholes value of $2,625,000 and with a five (5) year term. The options will vest as follows:

(i) 100% of these options shall cliff vest on the fourth (4^th) anniversary of the Start Date if the price of Encana common shares has increased by 30% over the closing price of Encana common shares on the TSX on the grant date ("Start Date Value"). Given the aforementioned trading blackout, the grant will be effective on the second TSX trading day following the end of such blackout, and will be based on the closing price per common share on the TSX on the first trading day following the end of the blackout. In determining whether such increased share price threshold has been achieved, the closing price of Encana common shares on the TSX for the thirty (30) trading days immediately prior to the fourth (4^th) anniversary of the Start Date must be at least 30% greater than the Start Date Value; or

(ii) 50% of these options shall vest on the second (2^nd) anniversary of Start Date if the increase in the price of Encana common shares (calculated as per paragraph (a) above) is achieved during the thirty (30) trading days immediately prior to the second (2^nd) anniversary of the Start Date. In such circumstances, and subject to continued employment, the remaining 50% of these options shall vest on the fourth (4^th) anniversary of the Start Date if the increase in the price of Encana common shares (calculated as per paragraph (a) above) is achieved during the thirty (30) trading days immediately prior to the fourth (4^th) anniversary of the Start Date.

The grand date is anticipated to be June 13, 2013.

(b) You will receive a PSU grant with an expected value of $2,625,000. Terms of this PSU grant are identical to the terms described in 5(b) above.

7. You will be provided with a one-time payment of $750,000 to assist with your relocation and to obtain housing. The payment is subject to full repayment by you upon your resignation or termination for Cause within two (2) years of Start Date.

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8. Participation in Encana's comprehensive benefits program, which includes participation in Encana's Defined Contribution Pension Plan, flexible Benefits Plan and Investment Plan with employer match, all of which are described in the attached summary.

9. As a senior executive with Encana you will be provided with:

(a) Access to financial planning (in respect of the 2013 year Encana will reimburse you for financial planning/accounting/cross-border tax advice up to $25,000). For the years thereafter, you will need to fund any financial planning from the annual allowance provided to you by Encana.

(b) An annual Comprehensive Medical Assessment (up to a maximum of $5, 000).

10. Eleven (11) observed statutory holidays per calendar year.

11. Vacation eligibility in accordance with Encana's vacation policy with a current eligibility of six (6) weeks per year and time off as described in the enclosed brochure. Actual vacation eligibility for 2013 will be pro-rated.

12. You will be provided with a Corporate Membership in the Calgary Golf and Country Club. Encana will pay the annual membership fees and this is a taxable benefit to you. Fees include the Members Dues, Club Storage, Men's Lockers and Range Fees. Charges that will not be covered by Encana include food and beverages, family and guest green fees and other miscellaneous items. You are required to reimburse Encana for any personal expenses which may be charged to the monthly account. Spousal membership and dues will be at your cost.

Encana evaluates its compensation and benefits programs from time to time and therefore the terms of these programs, including those outlined above, are subject to change during the course of your employment.

Relocation Assistance

You are required to relocate to Calgary, Alberta for the position of President & Chief Executive Officer with Encana. Encana will provide you with temporary suitable accommodation (at Encana's cost) in Calgary until you find an appropriate residence. Encana will pay for the temporary suitable accommodation for a maximum of twelve (12) months after the Start Date. In addition, Encana will pay directly to service providers or reimburse you for all reasonable costs of relocation to Calgary including moving, storage, travel, home search and other relocation related activity. During the course of your employment with Encana, Encana will pay the cost of two (2) round trip business class flights per year for yourself and your family to visit the U.S.

Company Policies

As an Encana employee, and as President & Chief Executive Officer, you are required to abide by all of Encana's policies, including codes of conduct, share ownership guidelines, and anti-hedging policies.

5

Non-Competition and Non-Solicitation

As an officer of Encana and a director and officer of our affiliates (Encana and our affiliates are collectively ("Encana")) you will occupy a position of trust and confidence and will maintain close working relationships with our customers, suppliers and employees. In consideration of this offer of employment and compensation referenced herein, you agree that during your employment with us and for one (1) year following the cessation of your employment (regardless of the reason for cessation), you will not, directly or indirectly, individually or in concert with or through any other person, own, manage, operate, control, be employed by, be a director of, work on behalf of, assist (financially or otherwise), provide consulting or any other services for, or be interested or connected in any manner with the ownership, management, operation, promotion or control of any person which is engaged in any related business which is the same as or similar to the business of Encana (a "Related Business") in the provinces of Alberta, British Columbia and Nova Scotia, and the states of Texas, Louisiana, Wyoming, and Colorado.

As a further term of this offer of employment, you agree that during your employment with us and for

two (2) years following the cessation of your employment (regard less of the reason for cessation), you will not directly or indirectly solicit, induce or divert any customer, supplier or employee of Encana to terminate his or her employment or relationship with Encana, or influence or attempt to influence any of the customers or suppliers to transfer his, her or its business from Encana to any person or company engaged in a Related Business.

The parties acknowledge that that these provisions are reasonable and are required to protect Encana's business interests, and in the event that any provision is declared unenforceable or invalid that such portion(s) shall be severed from this offer and the remaining provisions shall remain in force and binding.

Indemnity Agreement

As an officer of Encana and as a director and officer of our affiliates, Encana will enter into our standard indemnity agreement with you, and you will have the protections afforded to other senior executives through our directors and officers insurance.

Termination of Employment

Encana wishes to provide certain protections to you if your employment is terminated without Cause ("Cause" is defined as anything that would constitute "just cause" for the summary dismissal of your employment at common law), or there is Good Reason ("Good Reason" is defined as a material adverse change in your employment terms following a Change of Control) and you elect to leave Encana as a result of the Good Reason. In such a circumstance, and subject to you resigning from all roles that you hold as an officer and director of Encana and its affiliates and signing a full and final release (in a form satisfactory to Encana), Encana will pay you in a lump sum a severance payment calculated as follows:

(a) two (2) times your then Annual Salary;

(b) two (2) times your then Annual Allowance;

6

(c) two (2) times Encana's annual cost of group benefits;

(d) two (2) times (i) the average of the HPR awards paid to you over preceding years, not to exceed three (3) years, or (ii) if your employment is terminated prior to the first anniversary of your Start Date, then your target bonus.

You will enter into our standard change of control agreement which provides protection in the event of termination for Good Reason following a Change of Control. In the event you elect to leave for Good Reason following a Change of Control you would be paid the severance as if your employment had been terminated without Cause, and your one-time grant (pursuant to Sections 6(a) and (b) of this offer letter) of Options and PSUs will accelerate and vest at target performance. Any additional LTI grants (other than the initial grant) to you will vest and be treated in accordance with their respective plans.

In the event that a payment made hereunder would constitute an "excess parachute payment" that is subject to Section 280G of the Internal Revenue Code of 1986, as amended, such payment shall be reduced to the highest level such that the payment no longer constitutes an "excess parachute payment", and the amount of such reduction shall be forfeited. The determination of whether any payment under this offer letter or change of control agreement is an "excess parachute payment" shall be made by the Board in its sole discretion and in good faith.

Additional Terms and Conditions

In addition to the above, this offer is expressly subject to each of the conditions outlined below. Should these terms not be satisfied (such satisfaction to be determined by Encana) on or prior to the Start Date, this offer will be null and void and of no force and effect from its inception:

▪ You agree that in accepting this offer you must be, and remain, eligible to work in Canada throughout your employment.

▪ You agree to Encana obtaining satisfactory information regarding your work history and qualifications, including reference checks.

▪ Approval by Encana's Board of Directors of your appointment as President & Chief Executive Officer and as a director of Encana.

Please contact me directly to confirm your acceptance of this offer or if you have any questions. Your written acceptance of this offer must be received by Encana within five (5) business days of the date indicated on this letter. Should you choose to accept our offer, please sign and return the duplicate copy of this letter to XXXXXXXXXXXX, Vice-President, Human Resources in the enclosed envelope along with the enclosed forms. Please be reminded that the terms and conditions of this offer are confidential to you and are not to be disclosed.

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I look forward to your acceptance and believe that you will find your career at Encana bothchallenging and professionally rewarding.

Sincerely,

ENCANA CORPORATION

/s/ Clayton Woitas

Clayton Woitas

Interim President & Chief Executive Officer

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Douglas J. Suttles, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ovintiv Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 8, 2020

/s/ Douglas J. Suttles

Douglas J. Suttles
Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Corey D. Code, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ovintiv Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying offiwcer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 8, 2020

/s/ Corey D. Code

Corey D. Code
Executive Vice-President & Chief Financial Officer
(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ovintiv Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Douglas J. Suttles, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.  

By: /s/ Douglas J. Suttles

Douglas J. Suttles

Chief Executive Officer

Dated: May 8, 2020

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ovintiv Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Corey D. Code, Executive Vice-President & Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.  

By: /s/ Corey D. Code

Corey D. Code

Executive Vice-President & Chief Financial Officer

Dated: May 8, 2020

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Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

21. Fair Value Measurements

The fair values of cash and cash equivalents, accounts receivable and accrued revenues, and accounts payable and accrued liabilities approximate their carrying amounts due to the short-term maturity of those instruments. The fair values of restricted cash and marketable securities included in other assets approximate their carrying amounts due to the nature of the instruments held.

Recurring fair value measurements are performed for risk management assets and liabilities and other derivative contracts, as discussed further in Note 22. These items are carried at fair value in the Condensed Consolidated Balance Sheet and are classified within the three levels of the fair value hierarchy in the following tables.

Fair value changes and settlements for amounts related to risk management assets and liabilities are recognized in revenues and foreign exchange gains and losses according to their purpose.

As at March 31, 2020	Level 1 Quoted Prices in Active Markets		Level 2 Other Observable Inputs		Level 3 Significant Unobservable Inputs		Total Fair Value		Netting (1)			Carrying Amount
Risk Management Assets
Commodity Derivatives:
Current assets	$	9	$	928	$	151	$	1,088	$	(130	)	$	958
Long-term assets		-		5		-		5		(5	)		-
Foreign Currency Derivatives:
Long-term assets		-		1		-		1		-			1
Risk Management Liabilities
Commodity Derivatives:
Current liabilities	$	-	$	137	$	-	$	137	$	(130	)	$	7
Long-term liabilities		-		77		1		78		(5	)		73
Foreign Currency Derivatives:
Current liabilities		-		33		-		33		-			33
Long-term liabilities		-		8		-		8		-			8
Other Derivative Contracts
Current in accounts payable and accrued liabilities	$	-	$	6	$	-	$	6	$	-		$	6
Long-term in other liabilities and provisions		-		19		-		19		-			19

As at December 31, 2019	Level 1 Quoted Prices in Active Markets		Level 2 Other Observable Inputs		Level 3 Significant Unobservable Inputs		Total Fair Value		Netting (1)			Carrying Amount
Risk Management Assets
Commodity Derivatives:
Current assets	$	-	$	202	$	-	$	202	$	(67	)	$	135
Long-term assets		-		6		-		6		(4	)		2
Foreign Currency Derivatives:
Current assets		-		13		-		13		-			13
Risk Management Liabilities
Commodity Derivatives:
Current liabilities	$	1	$	139	$	41	$	181	$	(67	)	$	114
Long-term liabilities		-		61		11		72		(4	)		68
Other Derivative Contracts
Current in accounts payable and accrued liabilities	$	-	$	2	$	-	$	2	$	-		$	2
Long-term in other liabilities and provisions		-		7		-		7		-			7

(1) Netting to offset derivative assets and liabilities where the legal right and intention to offset exists, or where counterparty master netting arrangements contain provisions for net settlement.

The Company’s Level 1 and Level 2 risk management assets and liabilities consist of commodity fixed price contracts, NYMEX fixed price swaptions, NYMEX three-way options, NYMEX costless collars, NYMEX call options, foreign currency swaps and basis swaps with terms to 2025. Level 2 also includes financial guarantee contracts as discussed in Note 22. The fair values of these contracts are based on a market approach and are estimated using inputs which are either directly or indirectly observable from active markets, such as exchange and other published prices, broker quotes and observable trading activity throughout the term of the instruments.  

Level 3 Fair Value Measurements

As at March 31, 2020, the Company’s Level 3 risk management assets and liabilities consist of WTI three-way options, WTI costless collars and WTI sold payer swaptions with terms to 2021. The WTI three-way options are a combination of a sold call, bought put and a sold put. The WTI costless collars are a combination of a sold call and a bought put. These contracts allow the Company to participate in the upside of commodity prices to the ceiling of the call option and provide the Company with complete (collars) or partial (three-way) downside price protection through the put options. The sold payer swaptions give the counterparty the right to extend to 2021 certain 2020 WTI fixed price swaps. The fair values of these contracts are based on the income approach and are modelled using observable and unobservable inputs such as implied volatility. The unobservable inputs are obtained from third parties whenever possible and reviewed by the Company for reasonableness.

A summary of changes in Level 3 fair value measurements for risk management positions is presented below:

	Three Months Ended
	March 31,
	2020			2019
Balance, Beginning of Year	$	(52	)	$	139
Total Gains (Losses)		242			(100	)
Purchases, Sales, Issuances and Settlements:
Purchases, sales and issuances		-			-
Settlements		(40	)		(20	)
Transfers Out of Level 3		-			-
Balance, End of Period	$	150		$	19
Change in Unrealized Gains (Losses) Related to    Assets and Liabilities Held at End of Period	$	189		$	(80	)

Quantitative information about unobservable inputs used in Level 3 fair value measurements is presented below as at March 31, 2020:

	Valuation Technique	Unobservable Input	Range	Weighted Average (1)
Risk Management - WTI Options	Option Model	Implied Volatility	35% - 86%	63%

(1) Unobservable inputs were weighted by the relative fair value of the instruments.

A 10 percent increase or decrease in implied volatility for the WTI options would cause an approximate corresponding $3 million ($8 million as at December 31, 2019) increase or decrease to net risk management assets and liabilities.

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Variable Interest Entities

3 Months Ended

Mar. 31, 2020

Variable Interest Entity Not Primary Beneficiary Disclosures [Abstract]

Variable Interest Entities

17. Variable Interest Entities

Veresen Midstream Limited Partnership

Veresen Midstream Limited Partnership (“VMLP”) provides gathering, compression and processing services under various agreements related to the Company’s development of liquids and natural gas production in the Montney play. As at March 31, 2020, VMLP provides approximately 1,213 MMcf/d of natural gas gathering and compression and 932 MMcf/d of natural gas processing under long-term service agreements with remaining terms ranging from 11 to 25 years and have various renewal terms providing up to a potential maximum of 10 years.

Ovintiv has determined that VMLP is a VIE and that Ovintiv holds variable interests in VMLP. Ovintiv is not the primary beneficiary as the Company does not have the power to direct the activities that most significantly impact VMLP’s economic performance. These key activities relate to the construction, operation, maintenance and marketing of the assets owned by VMLP. The variable interests arise from certain terms under the various long-term service agreements and include: i) a take or pay for volumes in certain agreements; ii) an operating fee of which a portion can be converted into a fixed fee once VMLP assumes operatorship of certain assets; and iii) a potential payout of minimum costs in certain agreements. The potential payout of minimum costs will be assessed in the eighth year of the assets’ service period and is based on whether there is an overall shortfall of total system cash flows from natural gas gathered and compressed under certain agreements. The potential payout amount can be reduced in the event VMLP markets unutilized capacity to third party users. Ovintiv is not required to provide any financial support or guarantees to VMLP.

As a result of Ovintiv’s involvement with VMLP, the maximum total exposure, which represents the potential exposure to Ovintiv in the event the assets under the agreements are deemed worthless, is estimated to be $1,929 million as at March 31, 2020. The estimate comprises the take or pay volume commitments and the potential payout of minimum costs. The take or pay volume commitments associated with certain gathering and processing assets are included in Note 24 under Transportation and Processing. The potential payout requirement is highly uncertain as the amount is contingent on future production estimates, pace of development and the amount of capacity contracted to third parties. As at March 31, 2020, accounts payable and accrued liabilities included $0.4 million related to the take or pay commitment.

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Other Liabilities and Provisions

3 Months Ended

Mar. 31, 2020

Other Liabilities Disclosure [Abstract]

Other Liabilities and Provisions

13. Other Liabilities and Provisions

	As at		As at
	March 31,		December 31,
	2020		2019
Finance Lease Obligations	$	99	$	121
Unrecognized Tax Benefits		146		159
Pensions and Other Post-Employment Benefits		118		119
Long-Term Incentive Costs (See Note 19)		4		38
Other Derivative Contracts (See Notes 21, 22)		19		7
Other		16		20
	$	402	$	464

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Acquisitions and Divestitures (Tables)

3 Months Ended

Mar. 31, 2020

Acquisitions And Divestitures [Abstract]

Schedule of Net Acquisitions & (Divestitures)

	Three Months Ended
	March 31,
	2020			2019
Acquisitions
USA Operations	$	17		$	22
Total Acquisitions		17			22
Divestitures
USA Operations		(21	)		(3	)
Canadian Operations		(1	)		1
Total Divestitures		(22	)		(2	)
Net Acquisitions & (Divestitures)	$	(5	)	$	20

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Other Liabilities and Provisions (Tables)

3 Months Ended

Mar. 31, 2020

Other Liabilities Disclosure [Abstract]

Schedule of Other Liabilities and Provisions

	As at		As at
	March 31,		December 31,
	2020		2019
Finance Lease Obligations	$	99	$	121
Unrecognized Tax Benefits		146		159
Pensions and Other Post-Employment Benefits		118		119
Long-Term Incentive Costs (See Note 19)		4		38
Other Derivative Contracts (See Notes 21, 22)		19		7
Other		16		20
	$	402	$	464

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Restructuring Charges (Tables)

3 Months Ended

Mar. 31, 2020

Restructuring Charges [Abstract]

Schedule of Change in Restructuring Accrual

	As at			As at
	March 31,			December 31,
	2020			2019
Outstanding Restructuring Accrual, Beginning of Year	$	8		$	-
Restructuring Expenses Incurred		-			138
Restructuring Costs Paid		(6	)		(130	)
Outstanding Restructuring Accrual, End of Period (1)	$	2		$	8

(1) Included in accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheet.

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Pension and Other Post-Employment Benefits (Defined Periodic Pension And OPEB Expense) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Service Cost	$ 1	$ 2
Interest Cost	2	3
Expected Return on Plan Assets	(2)	(2)
Amortization of net actuarial (gains) and losses	(2)	(1)
Curtailment	0	4
Total Net Defined Periodic Benefit Cost	(1)	6
Defined Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service Cost	0	0
Interest Cost	2	2
Expected Return on Plan Assets	(2)	(2)
Amortization of net actuarial (gains) and losses	0	0
Curtailment	0	0
Total Net Defined Periodic Benefit Cost	0	0
OPEB [Member]
Defined Benefit Plan Disclosure [Line Items]
Service Cost	1	2
Interest Cost	0	1
Expected Return on Plan Assets	0	0
Amortization of net actuarial (gains) and losses	(2)	(1)
Curtailment	0	4
Total Net Defined Periodic Benefit Cost	$ (1)	$ 6

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Business Combination (Narrative) (Details) - Newfield Exploration Company [Member] shares in Millions, $ in Millions			3 Months Ended
		Feb. 13, 2019 USD ($) shares	Mar. 31, 2019 USD ($)
Business Acquisition [Line Items]
Business acquisition completed date		Feb. 13, 2019
Payments to acquire businesses		$ 3,483
Business acquisition, payment in cash	[1]	5
Business acquisition transaction costs			$ 31
Business acquisition related costs			69
Business acquisition severance payments			$ 113
Senior Notes [Member]
Business Acquisition [Line Items]
Business acquisition, senior notes remain outstanding		$ 2,450
Pre-Share Consolidation Basis [Member]
Business Acquisition [Line Items]
Business Acquisition Stock Exchange Ratio		2.6719
Business acquisition, number of shares issued | shares		543.4

[1] The fair value was based on a price of $6.50 per notional unit which was determined using a volume-weighted average of the trading price of pre-Share Consolidation Encana common shares on the NYSE on each of the five consecutive trading days ending on the trading day that was three trading days prior to February 13, 2019.

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Supplementary Information (Non-Cash Activity) (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]
Asset retirement obligation incurred	$ 7	$ 3	$ 15
Asset retirement obligation change in estimated future cash outflows	22	0	$ 47
Property, plant and equipment accruals	150	82
Capitalized long-term incentives	(17)	(29)
Property additions/dispositions	4	2
New ROU operating lease assets and liabilities	(1)	(1)
Newfield Exploration Company [Member]
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]
Common shares issued in conjunction with the Newfield business combination (See Note 8)	$ 0	$ (3,478)

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Interest (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Interest Expense [Abstract]
Interest Expense on Debt	$ 89	$ 82
Interest on Finance Leases	3	3
Interest - Other	4	2
Interest	$ 96	$ 87

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Compensation Plans (Liability For Share-Based Payment Transactions) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Liability for Unvested Cash-Settled Share-Based Payment Transactions	$ 7	$ 65
Liability for Vested Cash-Settled Share-Based Payment Transactions	1	13
Liability for Cash-Settled Share-Based Payment Transactions	$ 8	$ 78

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Financial Instruments and Risk Management (Earnings Impact of Realized and Unrealized Gains (Losses) On Risk Management Positions) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Realized Gain (Loss) on Derivatives	$ 148	$ 72
Unrealized Gain (Loss) on Derivatives	852	(407)
Realized and Unrealized Gain (Loss) on Risk Management	1,000	(335)
Revenue [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized Gain (Loss) on Derivatives	151	72
Unrealized Gain (Loss) on Derivatives	904	(427)
Realized and Unrealized Gain (Loss) on Risk Management	1,055	(355)
Foreign Currency Gain (Loss) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized Gain (Loss) on Derivatives	(3)	0
Unrealized Gain (Loss) on Derivatives	(52)	20
Realized and Unrealized Gain (Loss) on Risk Management	$ (55)	$ 20

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Fair Value Measurements (Quantitative Information About Unobservable Inputs Used In Level 3) (Details) - WTI Options [Member] - Option Model [Member]	3 Months Ended
	Mar. 31, 2020
Minimum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Inputs Commodity Price Volatility	35.00%
Maximum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Inputs Commodity Price Volatility	86.00%
Weighted Average [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Inputs Commodity Price Volatility	63.00%

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Segmented Information (Costs Incurred) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Acquisition Costs
Unproved	$ 843
Proved	5,963
Total Acquisition Costs	6,806
Exploration Costs	5
Development Costs	2,609
Costs Incurred	9,420
United States [Member]
Acquisition Costs
Unproved	843
Proved	5,963
Total Acquisition Costs	6,806
Exploration Costs	5
Development Costs	2,129
Costs Incurred	8,940
Canada [Member]
Acquisition Costs
Unproved	0
Proved	0
Total Acquisition Costs	0
Exploration Costs	0
Development Costs	480
Costs Incurred	$ 480

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Basis of Presentation and Principles of Consolidation (Narative) (Details)	Jan. 24, 2020
Accounting Policies [Abstract]
Share consolidation ratio	20.00%
Consolidation share conversion, description	one post-consolidation share for each five pre-consolidation shares
Issued and outstanding common shares in exchange for common stock, ratio	100.00%
Common stock exchange, description	one-for-one basis

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Schedule Of Fair Value, Assets And Liabilities Measured On Recurring Basis

Fair value changes and settlements for amounts related to risk management assets and liabilities are recognized in revenues and foreign exchange gains and losses according to their purpose.

As at March 31, 2020	Level 1 Quoted Prices in Active Markets		Level 2 Other Observable Inputs		Level 3 Significant Unobservable Inputs		Total Fair Value		Netting (1)			Carrying Amount
Risk Management Assets
Commodity Derivatives:
Current assets	$	9	$	928	$	151	$	1,088	$	(130	)	$	958
Long-term assets		-		5		-		5		(5	)		-
Foreign Currency Derivatives:
Long-term assets		-		1		-		1		-			1
Risk Management Liabilities
Commodity Derivatives:
Current liabilities	$	-	$	137	$	-	$	137	$	(130	)	$	7
Long-term liabilities		-		77		1		78		(5	)		73
Foreign Currency Derivatives:
Current liabilities		-		33		-		33		-			33
Long-term liabilities		-		8		-		8		-			8
Other Derivative Contracts
Current in accounts payable and accrued liabilities	$	-	$	6	$	-	$	6	$	-		$	6
Long-term in other liabilities and provisions		-		19		-		19		-			19

As at December 31, 2019	Level 1 Quoted Prices in Active Markets		Level 2 Other Observable Inputs		Level 3 Significant Unobservable Inputs		Total Fair Value		Netting (1)			Carrying Amount
Risk Management Assets
Commodity Derivatives:
Current assets	$	-	$	202	$	-	$	202	$	(67	)	$	135
Long-term assets		-		6		-		6		(4	)		2
Foreign Currency Derivatives:
Current assets		-		13		-		13		-			13
Risk Management Liabilities
Commodity Derivatives:
Current liabilities	$	1	$	139	$	41	$	181	$	(67	)	$	114
Long-term liabilities		-		61		11		72		(4	)		68
Other Derivative Contracts
Current in accounts payable and accrued liabilities	$	-	$	2	$	-	$	2	$	-		$	2
Long-term in other liabilities and provisions		-		7		-		7		-			7

(1) Netting to offset derivative assets and liabilities where the legal right and intention to offset exists, or where counterparty master netting arrangements contain provisions for net settlement.

Summary Of Changes In Level 3 Fair Value Measurements for Risk Management Positions

A summary of changes in Level 3 fair value measurements for risk management positions is presented below:

	Three Months Ended
	March 31,
	2020			2019
Balance, Beginning of Year	$	(52	)	$	139
Total Gains (Losses)		242			(100	)
Purchases, Sales, Issuances and Settlements:
Purchases, sales and issuances		-			-
Settlements		(40	)		(20	)
Transfers Out of Level 3		-			-
Balance, End of Period	$	150		$	19
Change in Unrealized Gains (Losses) Related to    Assets and Liabilities Held at End of Period	$	189		$	(80	)

Quantitative Information About Unobservable Inputs Used In Level 3

Quantitative information about unobservable inputs used in Level 3 fair value measurements is presented below as at March 31, 2020:

	Valuation Technique	Unobservable Input	Range	Weighted Average (1)
Risk Management - WTI Options	Option Model	Implied Volatility	35% - 86%	63%

(1) Unobservable inputs were weighted by the relative fair value of the instruments.

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Asset Retirement Obligation (Schedule of Asset Retirement Obligation) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Asset Retirement Obligation Disclosure [Abstract]
Current Portion	$ 143	$ 189
Long-Term Portion	438	425
Asset Retirement Obligation, Total	$ 581	$ 614	$ 455

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Acquisitions and Divestitures (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items]
Divestitures	$ 22	$ 2
USA Operations [Member] | Operating Segments [Member]
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items]
Acquisitions	17	22
Divestitures	21	3
Canadian Operations [Member] | Operating Segments [Member]
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items]
Divestitures	$ 1	$ (1)

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Leases (Schedule of Estimated Future Sublease Income) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Leases [Abstract]
2020	$ 35
2021	48
2022	43
2023	42
2024	42
Thereafter	511
Total	$ 721

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]
Balance, Beginning of Year, Foreign currency translation adjustment	$ 1,004	$ 976
Change in Foreign Currency Translation Adjustment	(134)	34
Balance, End of Period, Foreign currency translation adjustment	870	1,010
Pension and Other Post-Employment Benefit Plans
Balance, Beginning of Year	42	22
Amounts Reclassified from Other Comprehensive Income:
Reclassification of net actuarial (gains) and losses to net earnings	(2)	(1)
Income taxes	0	0
Balance, End of Period	40	21
Total Accumulated Other Comprehensive Income	$ 910	$ 1,031	$ 1,046

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Acquisitions and Divestitures

3 Months Ended

Mar. 31, 2020

Acquisitions And Divestitures [Abstract]

Acquisitions and Divestitures

9. Acquisitions and Divestitures

	Three Months Ended
	March 31,
	2020			2019
Acquisitions
USA Operations	$	17		$	22
Total Acquisitions		17			22
Divestitures
USA Operations		(21	)		(3	)
Canadian Operations		(1	)		1
Total Divestitures		(22	)		(2	)
Net Acquisitions & (Divestitures)	$	(5	)	$	20

Acquisitions

For the three months ended March 31, 2020, acquisitions in the USA Operations were $17 million, which primarily included property purchases with oil and liquids rich potential. For the three months ended March 31, 2019, acquisitions in the USA Operations were $22 million which primarily included seismic purchases.

Divestitures

For the three months ended March 31, 2020, divestitures in the USA and Canadian Operations were $21 million and $1 million, respectively, which primarily included the sale of certain properties that did not complement Ovintiv’s existing portfolio of assets.

Amounts received from the Company’s divestiture transactions have been deducted from the respective U.S. and Canadian full cost pools.

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Interest

3 Months Ended

Mar. 31, 2020

Interest Expense [Abstract]

Interest

5. Interest

	Three Months Ended
	March 31,
	2020		2019
Interest Expense on:
Debt	$	89	$	82
Finance leases		3		3
Other		4		2
	$	96	$	87

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Condensed Consolidated Statement Of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions		3 Months Ended
		Mar. 31, 2020	Mar. 31, 2019
Revenues
Product and service revenues		$ 1,570	$ 1,572
Gains (losses) on risk management, net		1,055	(355)
Sublease revenues		18	18
Total Revenues		2,643	1,235
Operating Expenses
Production, mineral and other taxes		52	48
Transportation and processing		396	338
Operating		165	165
Purchased product		398	298
Depreciation, depletion and amortization		534	377
Impairments		277	0
Accretion of asset retirement obligation		9	9
Administrative		53	227
Total Operating Expenses		1,884	1,462
Operating Income (Loss)		759	(227)
Other (Income) Expenses
Interest		96	87
Foreign exchange (gain) loss, net		116	(37)
(Gain) loss on divestitures, net		0	1
Other (gains) losses, net		(14)	28
Total Other (Income) Expenses		198	79
Net Earnings (Loss) Before Income Tax		561	(306)
Income tax expense (recovery)		140	(61)
Net Earnings (Loss)		$ 421	$ (245)
Net Earnings (Loss) per Share of Common Stock
Basic & Diluted	[1]	$ 1.62	$ (1.00)
Weighted Average Shares of Common Stock Outstanding (millions)
Basic & Diluted	[1]	259.8	244.3

[1] Net earnings (loss) per share of common stock and weighted average shares of common stock outstanding reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

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Condensed Consolidated Statement Of Changes In Shareholders' Equity (unaudited) - USD ($) $ in Millions	Total	Normal Course Issuer Bid [Member]	Share Capital [Member]	Share Capital [Member] Normal Course Issuer Bid [Member]	Paid In Surplus [Member]	Retained Earnings [Member]	Retained Earnings [Member] Normal Course Issuer Bid [Member]	Accumulated Other Comprehensive Income [Member]
Balance, Beginning of Period at Dec. 31, 2018	$ 7,447		$ 4,656		$ 1,358	$ 435		$ 998
Net Earnings (Loss)	(245)					(245)
Dividends on Shares of Common Stock	(28)					(28)
Common Shares Purchased		$ (400)		$ (307)			$ (93)
Common Shares Issued	3,478		3,478
Other Comprehensive Income (Loss)	33							33
Impact of Adoption of Topic 842, Leases | Topic 842, Leases [Member]	75					75
Balance, End of Period at Mar. 31, 2019	10,360		7,827		1,358	144		1,031
Balance, Beginning of Period at Dec. 31, 2018	7,447		4,656		1,358	435		998
Common Shares Purchased	(1,073)	$ (1,037)		$ (816)			$ (221)
Common Shares Issued	3,478
Reclassification of Share Capital due to the Reorganization	0
Balance, End of Period at Dec. 31, 2019	9,930		7,061		1,402	421		1,046
Net Earnings (Loss)	421		0		0	421		0
Dividends on Shares of Common Stock	(24)		0		0	(24)		0
Common Shares Purchased	0
Common Shares Issued	0
Other Comprehensive Income (Loss)	(136)		0		0	0		(136)
Reclassification of Share Capital due to the Reorganization	(7,058)		(7,058)		7,058
Balance, End of Period at Mar. 31, 2020	$ 10,191		$ 3		$ 8,460	$ 818		$ 910

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Financial Instruments and Risk Management

3 Months Ended

Mar. 31, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Financial Instruments and Risk Management

22. Financial Instruments and Risk Management

A)  Financial Instruments

Ovintiv’s financial assets and liabilities are recognized in cash and cash equivalents, accounts receivable and accrued revenues, other assets, accounts payable and accrued liabilities, risk management assets and liabilities, long-term debt, and other liabilities and provisions.

B)  Risk Management Activities

Ovintiv uses derivative financial instruments to manage its exposure to cash flow variability from commodity prices and fluctuating foreign currency exchange rates. The Company does not apply hedge accounting to any of its derivative financial instruments. As a result, gains and losses from changes in the fair value are recognized in net earnings.

Commodity Price Risk

Commodity price risk arises from the effect that fluctuations in future commodity prices may have on future cash flows. To partially mitigate exposure to commodity price risk, the Company has entered into various derivative financial instruments.  The use of these derivative instruments is governed under formal policies and is subject to limits established by the Board of Directors.

Crude Oil and NGLs - To partially mitigate crude oil and NGL commodity price risk, the Company uses WTI-based contracts such as fixed price contracts, fixed price swaptions, options and costless collars. The Company has also entered into basis swaps to manage against widening price differentials between various production areas and benchmark price points.

Natural Gas - To partially mitigate natural gas commodity price risk, the Company uses NYMEX-based contracts such as fixed price contracts, fixed price swaptions, options and costless collars. The Company has also entered into basis swaps to manage against widening price differentials between various production areas and benchmark price points.

Foreign Exchange Risk

Foreign exchange risk arises from changes in foreign currency exchange rates that may affect the fair value or future cash flows of the Company’s financial assets or liabilities. To partially mitigate the effect of foreign exchange fluctuations on future commodity revenues and expenses, the Company may enter into foreign currency derivative contracts. As at March 31, 2020, the Company has entered into $644 million notional U.S. dollar denominated currency swaps at an average exchange rate of US$0.7451 to C$1, which mature monthly through the remainder of 2020 and $350 million notional U.S. dollar denominated currency swaps at an average exchange rate of US$0.7289 to C$1, which mature monthly throughout 2021.

Risk Management Positions as at March 31, 2020

	Notional Volumes	Term	Average Price		Fair Value
Crude Oil and NGL Contracts			US$/bbl
Fixed Price Contracts
WTI Fixed Price	140.2 Mbbls/d	2020		45.36	$	625
Propane Fixed Price	12.0 Mbbls/d	2020		21.34		26
Butane Fixed Price	8.0 Mbbls/d	2020		23.54		18
Iso-Butane Fixed Price	3.5 Mbbls/d	2020		24.36		7
WTI Fixed Price Swaptions (1)	10.0 Mbbls/d	2021		58.00		(1	)
WTI Three-Way Options
Sold call / bought put / sold put	26.8 Mbbls/d	2020	61.68 / 53.44 / 43.44			60
WTI Costless Collars
Sold call / bought put	15.0 Mbbls/d	2020	68.71 / 50.00			91
Basis Contracts (2)		2020				(32	)
Other Crude Financial Positions						3
Crude Oil and NGLs Fair Value Position						797
Natural Gas Contracts			US$/Mcf
Fixed Price Contracts
NYMEX Fixed Price	811 MMcf/d	2020		2.65		147
NYMEX Fixed Price	165 MMcf/d	2021		2.51		1
Fixed Price Swaptions (3)
NYMEX Fixed Price Swaptions	330 MMcf/d	2021		2.56		(22	)
NYMEX Fixed Price Swaptions	165 MMcf/d	2022		2.51		(11	)
NYMEX Three-Way Options
Sold call / bought put / sold put	330 MMcf/d	2020	2.72 / 2.60 / 2.25			19
NYMEX Costless Collars
Sold call / bought put	55 MMcf/d	2020	2.88 / 2.50			8
NYMEX Call Options
Sold call	230 MMcf/d	2020		3.25		4
Basis Contracts (4)		2020				(10	)
		2021				(18	)
		2022 - 2025				(33	)
Other Financial Positions						3
Natural Gas Fair Value Position						88
Net Premiums Received on Unexpired Options						(7	)
Other Derivative Contracts
Fair Value Position						(25	)
Foreign Currency Contracts
Fair Value Position (5)		2020 - 2021				(40	)
Total Fair Value Position and Net Premiums Received					$	813

(1) WTI Fixed Price Swaptions give the counterparty the option to extend certain 2020 Fixed Price swaps to 2021.

(2) Ovintiv has entered into crude and NGL differential swaps associated with Midland, Magellan East Houston, Belvieu, Conway, Brent and WTI.

(3) NYMEX Fixed Price Swaptions give the counterparty the option to extend certain 2020 and 2021 Fixed Price swaps to 2021 and 2022, respectively.

(4) Ovintiv has entered into natural gas basis swaps associated with AECO, Dawn, Chicago, Malin, Waha, Houston Ship Channel and NYMEX.

(5) Ovintiv has entered into U.S. dollar denominated fixed-for-floating average currency swaps to protect against fluctuations between the Canadian and U.S. dollars.

Earnings Impact of Realized and Unrealized Gains (Losses) on Risk Management Positions

	Three Months Ended
	March 31,
	2020			2019
Realized Gains (Losses) on Risk Management
Commodity and Other Derivatives:
Revenues (1)	$	151		$	72
Foreign Currency Derivatives:
Foreign exchange		(3	)		-
	$	148		$	72
Unrealized Gains (Losses) on Risk Management
Commodity and Other Derivatives:
Revenues (2)	$	904		$	(427	)
Foreign Currency Derivatives:
Foreign exchange		(52	)		20
	$	852		$	(407	)
Total Realized and Unrealized Gains (Losses) on Risk Management, net
Commodity and Other Derivatives:
Revenues (1) (2)	$	1,055		$	(355	)
Foreign Currency Derivatives:
Foreign exchange		(55	)		20
	$	1,000		$	(335	)

(1) Includes a realized gain of $1 million (2019 - gain of $2 million) related to other derivative contracts.

(2) Includes an unrealized loss of $17 million (2019 - loss of nil) related to other derivative contracts.

Reconciliation of Unrealized Risk Management Positions from January 1 to March 31

	2020						2019
	Fair Value			Total Unrealized Gain (Loss)			Total Unrealized Gain (Loss)
Fair Value of Contracts, Beginning of Year	$	(41	)
Change in Fair Value of Contracts in Place at Beginning of Year    and Contracts Entered into During the Period		1,000		$	1,000		$	(335	)
Settlement of Other Derivative Contracts		1
Amortization of Option Premiums During the Period		1
Fair Value of Contracts Realized During the Period		(148	)		(148	)		(72	)
Fair Value of Contracts and Net Premiums Received, End of Period	$	813		$	852		$	(407	)

Risk management assets and liabilities arise from the use of derivative financial instruments and are measured at fair value.  See Note 21 for a discussion of fair value measurements.

Unrealized Risk Management Positions

	As at		As at
	March 31,		December 31,
	2020		2019
Risk Management Assets
Current	$	958	$	148
Long-term		1		2
		959		150
Risk Management Liabilities
Current		40		114
Long-term		81		68
		121		182
Other Derivative Contracts
Current in accounts payable and accrued liabilities		6		2
Long-term in other liabilities and provisions		19		7
Net Risk Management Assets (Liabilities) and Other Derivative Contracts	$	813	$	(41	)

C)  Credit Risk

Credit risk arises from the potential that the Company may incur a loss if a counterparty to a financial instrument fails to meet its obligation in accordance with agreed terms. While exchange-traded contracts are subject to nominal credit risk due to the financial safeguards established by the NYSE and the TSX, over-the-counter traded contracts expose Ovintiv to counterparty credit risk. This credit risk exposure is mitigated through the use of credit policies approved by the Board of Directors governing the Company’s credit portfolio including credit practices that limit transactions according to counterparties’ credit quality. Mitigation strategies may include master netting arrangements, requesting collateral, purchasing credit insurance and/or transacting credit derivatives. The Company executes commodity derivative financial instruments under master agreements that have netting provisions that provide for offsetting payables against receivables. As a result of netting provisions, the Company’s maximum exposure to loss under derivative financial instruments due to credit risk is limited to the net amounts due from the counterparties under the derivative contracts, as disclosed in Note 21. As at March 31, 2020, the Company had no significant credit derivatives in place and held no collateral.

As at March 31, 2020, cash equivalents include high-grade, short-term securities, placed primarily with financial institutions and companies with strong investment grade ratings. Any foreign currency agreements entered into are with major financial institutions that have investment grade credit ratings.  

A substantial portion of the Company’s accounts receivable are with customers and working interest owners in the oil and gas industry and are subject to normal industry credit risks. As at March 31, 2020, approximately 97 percent (95 percent as at December 31, 2019) of Ovintiv’s accounts receivable and financial derivative credit exposures were with investment grade counterparties.

As at March 31, 2020, Ovintiv had two counterparties whose net settlement position individually accounted for more than 10 percent of the fair value of the outstanding in-the-money net risk management contracts by counterparty. These counterparties accounted for 21 percent and 17 percent of the fair value of the outstanding in-the-money net risk management contracts. As at December 31, 2019, the Company had six counterparties whose net settlement position accounted for 26 percent, 13 percent, 12 percent, 12 percent, 11 percent and 11 percent of the fair value of the outstanding in-the-money net risk management contracts.

During 2015 and 2017, the Company entered into agreements resulting from divestitures, which may require the Company to fulfill certain payment obligations on the take or pay volume commitments assumed by the purchasers. The circumstances that would require the Company to perform under the agreements include events where a purchaser fails to make payment to the guaranteed party and/or a purchaser is subject to an insolvency event. The agreements have remaining terms from one to four years with a fair value recognized of $25 million as at March 31, 2020 ($9 million as at December 31, 2019). The

maximum potential amount of undiscounted future payments is $118 million as at March 31, 2020, and is considered unlikely.

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Segmented Information (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Segment and Geographic Information

Results of Operations (For the three months ended March 31)

Segment and Geographic Information

	USA Operations					Canadian Operations				China Operations (1)
	2020			2019		2020		2019		2020		2019
Revenues
Product and service revenues	$	800		$	777	$	351	$	456	$	-	$	13
Gains (losses) on risk management, net		114			52		36		20		-		-
Sublease revenues		-			-		-		-		-		-
Total Revenues		914			829		387		476		-		13
Operating Expenses
Production, mineral and other taxes		48			44		4		4		-		-
Transportation and processing		121			79		213		212		-		-
Operating		139			115		26		37		-		4
Depreciation, depletion and amortization		418			274		109		92		-		-
Impairments		277			-		-		-		-		-
Total Operating Expenses		1,003			512		352		345		-		4
Operating Income (Loss)	$	(89	)	$	317	$	35	$	131	$	-	$	9

	Market Optimization						Corporate & Other						Consolidated
	2020			2019			2020			2019			2020			2019
Revenues
Product and service revenues	$	419		$	326		$	-		$	-		$	1,570		$	1,572
Gains (losses) on risk management, net		1			-			904			(427	)		1,055			(355	)
Sublease revenues		-			-			18			18			18			18
Total Revenues		420			326			922			(409	)		2,643			1,235
Operating Expenses
Production, mineral and other taxes		-			-			-			-			52			48
Transportation and processing		62			47			-			-			396			338
Operating		2			10			(2	)		(1	)		165			165
Purchased product		398			298			-			-			398			298
Depreciation, depletion and amortization		-			-			7			11			534			377
Impairments		-			-			-			-			277			-
Accretion of asset retirement obligation		-			-			9			9			9			9
Administrative		-			-			53			227			53			227
Total Operating Expenses		462			355			67			246			1,884			1,462
Operating Income (Loss)	$	(42	)	$	(29	)	$	855		$	(655	)		759			(227	)
Other (Income) Expenses
Interest														96			87
Foreign exchange (gain) loss, net														116			(37	)
(Gain) loss on divestitures, net														-			1
Other (gains) losses, net														(14	)		28
Total Other (Income) Expenses														198			79
Net Earnings (Loss) Before Income Tax														561			(306	)
Income tax expense (recovery)														140			(61	)
Net Earnings (Loss)													$	421		$	(245	)

(1) The Company terminated its production sharing contract with CNOOC and exited its China Operations effective July 31, 2019.

Schedule of Marketing Intersegment Eliminations

Intersegment Information

							Market Optimization
	Marketing Sales						Upstream Eliminations						Total
For the three months ended March 31,	2020			2019			2020			2019			2020			2019
Revenues	$	2,095		$	1,236		$	(1,675	)	$	(910	)	$	420		$	326
Operating Expenses
Transportation and processing		168			139			(106	)		(92	)		62			47
Operating		2			10			-			-			2			10
Purchased product		1,967			1,116			(1,569	)		(818	)		398			298
Operating Income (Loss)	$	(42	)	$	(29	)	$	-		$	-		$	(42	)	$	(29	)

Capital Expenditures

Capital Expenditures

	Three Months Ended
	March 31,
	2020		2019
USA Operations	$	628	$	577
Canadian Operations		161		157
Corporate & Other		1		2
	$	790	$	736

Costs Incurred

Costs Incurred

For the year ended December 31, 2019	United States		Canada		Total
Acquisition Costs (1)
Unproved	$	843	$	-	$	843
Proved		5,963		-		5,963
Total Acquisition Costs		6,806		-		6,806
Exploration Costs		5		-		5
Development Costs		2,129		480		2,609
	$	8,940	$	480	$	9,420

(1) Acquisition costs were restated and include the non-cash acquisition of the proved and unproved properties of Newfield Exploration Company in conjunction with the business combination described in Note 8.

Goodwill, Property, Plant and Equipment and Total Assets By Segment

Goodwill, Property, Plant and Equipment and Total Assets by Segment

	Goodwill					Property, Plant and Equipment					Total Assets
	As at					As at					As at
	March 31,		December 31,			March 31,		December 31,			March 31,		December 31,
	2020			2019		2020			2019		2020			2019
USA Operations	$	1,938		$	1,938	$	13,696		$	13,757	$	16,229		$	16,613
Canadian Operations		617			673		1,173			1,205		1,949			2,122
Market Optimization		-			-		2			2		272			253
Corporate & Other		-			-		209			227		3,055			2,499
	$	2,555		$	2,611	$	15,080		$	15,191	$	21,505		$	21,487

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Provision For Income Taxes

	Three Months Ended
	March 31,
	2020			2019
Current Tax
United States	$	-		$	1
Canada		-			-
Other Countries		-			-
Total Current Tax Expense (Recovery)		-			1
Deferred Tax
United States		128			(24	)
Canada		10			(38	)
Other Countries		2			-
Total Deferred Tax Expense (Recovery)		140			(62	)
Income Tax Expense (Recovery)	$	140		$	(61	)
Effective Tax Rate		25.0	%		19.9	%

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments

The following table outlines the Company’s commitments as at March 31, 2020:

	Expected Future Payments
(undiscounted)	2020		2021		2022		2023		2024		Thereafter		Total
Transportation and Processing	$	518	$	653	$	612	$	507	$	399	$	2,022	$	4,711
Drilling and Field Services		71		6		1		-		-		1		79
Building Leases		10		14		11		7		6		8		56
Total	$	599	$	673	$	624	$	514	$	405	$	2,031	$	4,846

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Pension and Other Post-Employment Benefits (Tables)

3 Months Ended

Mar. 31, 2020

General Discussion Of Pension And Other Postretirement Benefits [Abstract]

Total Benefit Plans Expense Recognized

The Company has recognized total benefit plans expense which includes pension benefits and other post-employment benefits (“OPEB”) for the three months ended March 31 as follows:

	Pension Benefits				OPEB					Total
	2020		2019		2020			2019		2020			2019
Net Defined Periodic Benefit Cost	$	-	$	-	$	(1	)	$	6	$	(1	)	$	6
Defined Contribution Plan Expense		8		6		-			-		8			6
Total Benefit Plans Expense	$	8	$	6	$	(1	)	$	6	$	7		$	12

Schedule of Net Defined Periodic Benefit Cost

The net defined periodic benefit cost for the three months ended March 31 is as follows:

	Defined Benefits						OPEB						Total
	2020			2019			2020			2019			2020			2019
Service Cost	$	-		$	-		$	1		$	2		$	1		$	2
Interest Cost		2			2			-			1			2			3
Expected Return on Plan Assets		(2	)		(2	)		-			-			(2	)		(2	)
Amounts Reclassified from Accumulated Other     Comprehensive Income:
Amortization of net actuarial (gains) and losses		-			-			(2	)		(1	)		(2	)		(1	)
Curtailment		-			-			-			4			-			4
Total Net Defined Periodic Benefit Cost (1)	$	-		$	-		$	(1	)	$	6		$	(1	)	$	6

(1) The components of total net defined periodic benefit cost, excluding the service cost component, are included in other (gains) losses, net.

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Segmented Information (Capital Expenditures) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Segment Reporting Information [Line Items]
Capital Expenditures	$ 790	$ 736
Operating Segments [Member] | USA Operations [Member]
Segment Reporting Information [Line Items]
Capital Expenditures	628	577
Operating Segments [Member] | Canadian Operations [Member]
Segment Reporting Information [Line Items]
Capital Expenditures	161	157
Corporate & Other [Member]
Segment Reporting Information [Line Items]
Capital Expenditures	$ 1	$ 2

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Share Capital (Narrative) (Details)					3 Months Ended		12 Months Ended
	May 07, 2020 $ / shares	Jan. 24, 2020 USD ($) $ / shares shares	Aug. 29, 2019 USD ($) $ / shares shares	Feb. 13, 2019 shares	Mar. 31, 2020 USD ($) $ / shares shares	Mar. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) shares	Jun. 10, 2019 USD ($)	Feb. 27, 2019 shares
Class Of Stock [Line Items]
Common stock, shares authorized | shares		775,000,000			775,000,000		775,000,000
Common stock, par value | $ / shares		$ 0.01
Preferred stock, shares authorized | shares		25,000,000
Preferred stock, par value | $ / shares		$ 0.01
Reclassification of Share Capital due to the Reorganization		$ (7,058,000,000)			$ (7,058,000,000)		$ 0
Common Shares Purchased, Shares | shares					0		39,400,000
Common Shares Purchased, value					$ 0		$ 1,073,000,000
Payments for Repurchase of Common Stock					0	$ 400,000,000
Dividends on Common Shares					$ 24,000,000	$ 28,000,000
Common Stock, Dividends, Per Share, Paid | $ / shares					$ 0.09375	$ 0.09375
Common Stock, Dividends, Per Share, Declared | $ / shares					$ 0.09375	$ 0.09375
Subsequent Event [Member]
Class Of Stock [Line Items]
Dividends Payable, Date Declared	May 07, 2020
Common Stock, Dividends, Per Share, Declared | $ / shares	$ 0.09375
Dividends Payable, Date to be Paid	Jun. 30, 2020
Dividends Payable, Date of Record	Jun. 15, 2020
Share Capital [Member]
Class Of Stock [Line Items]
Reclassification of Share Capital due to the Reorganization					$ (7,058,000,000)
Dividends on Common Shares					0
Paid In Surplus [Member]
Class Of Stock [Line Items]
Reclassification of Share Capital due to the Reorganization					7,058,000,000
Dividends on Common Shares					0
Retained Earnings [Member]
Class Of Stock [Line Items]
Dividends on Common Shares					$ 24,000,000	$ 28,000,000
Substantial Issuer Bid [Member]
Class Of Stock [Line Items]
Common Shares Purchased, Shares | shares			9,500,000
Common stock purchase price | $ / shares			$ 22.50
Common Shares Purchased, value			$ 213,000,000
Substantial Issuer Bid [Member] | Maximum [Member]
Class Of Stock [Line Items]
Stock Repurchase Program, Authorized Amount								$ 213,000,000
Substantial Issuer Bid [Member] | Share Capital [Member]
Class Of Stock [Line Items]
Common Shares Purchased, value			257,000,000
Substantial Issuer Bid [Member] | Paid In Surplus [Member]
Class Of Stock [Line Items]
Common Shares Purchased, value			$ (44,000,000)
Normal Course Issuer Bid [Member]
Class Of Stock [Line Items]
Common Shares Purchased, Shares | shares						11,200,000	29,900,000
Common Shares Purchased, value						$ 400,000,000	$ 1,037,000,000
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | shares									29,900,000
Payments for Repurchase of Common Stock						400,000,000
Normal Course Issuer Bid [Member] | Share Capital [Member]
Class Of Stock [Line Items]
Common Shares Purchased, value						307,000,000	816,000,000
Normal Course Issuer Bid [Member] | Retained Earnings [Member]
Class Of Stock [Line Items]
Common Shares Purchased, value						$ 93,000,000	$ 221,000,000
Newfield Exploration Company [Member]
Class Of Stock [Line Items]
Stock Issued During Period, Value, Acquisitions | shares				108,700,000
Newfield Exploration Company [Member] | Pre-Share Consolidation Basis [Member]
Class Of Stock [Line Items]
Stock Issued During Period, Value, Acquisitions | shares				543,400,000
Business Acquisition Stock Exchange Ratio				2.6719

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Property, Plant And Equipment, Net (Schedule Of Property, Plant And Equipment) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	$ 55,264	$ 55,828
Less: Accumulated depreciation, depletion and amortization	(40,184)	(40,637)
Property, plant and equipment, net	15,080	15,191
Operating Segments [Member] | USA Operations [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	40,016	39,380
Less: Accumulated depreciation, depletion and amortization	(26,320)	(25,623)
Property, plant and equipment, net	13,696	13,757
Operating Segments [Member] | Canadian Operations [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	14,388	15,525
Less: Accumulated depreciation, depletion and amortization	(13,215)	(14,320)
Property, plant and equipment, net	1,173	1,205
Operating Segments [Member] | Market Optimization [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	2	2
Corporate & Other [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	209	227
Proved Properties [Member] | Operating Segments [Member] | USA Operations [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	36,731	35,870
Less: Accumulated depreciation, depletion and amortization	(26,320)	(25,623)
Property, plant and equipment, net	10,411	10,247
Proved Properties [Member] | Operating Segments [Member] | Canadian Operations [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	14,172	15,284
Less: Accumulated depreciation, depletion and amortization	(13,215)	(14,320)
Property, plant and equipment, net	957	964
Unproved Properties [Member] | Operating Segments [Member] | USA Operations [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	3,260	3,491
Less: Accumulated depreciation, depletion and amortization	0	0
Property, plant and equipment, net	3,260	3,491
Unproved Properties [Member] | Operating Segments [Member] | Canadian Operations [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	200	223
Less: Accumulated depreciation, depletion and amortization	0	0
Property, plant and equipment, net	200	223
Other Capitalized Property Plant and Equipment [Member] | Operating Segments [Member] | USA Operations [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	25	19
Less: Accumulated depreciation, depletion and amortization	0	0
Property, plant and equipment, net	25	19
Other Capitalized Property Plant and Equipment [Member] | Operating Segments [Member] | Canadian Operations [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	16	18
Less: Accumulated depreciation, depletion and amortization	0
Property, plant and equipment, net	16	18
Other Capitalized Property Plant and Equipment [Member] | Operating Segments [Member] | Market Optimization [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	8	9
Less: Accumulated depreciation, depletion and amortization	(6)	(7)
Property, plant and equipment, net	2	2
Other Capitalized Property Plant and Equipment [Member] | Corporate & Other [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Cost	852	914
Less: Accumulated depreciation, depletion and amortization	(643)	(687)
Property, plant and equipment, net	$ 209	$ 227

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Leases (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Operating lease income	$ 13	$ 13
Variable lease income	$ 5	$ 3

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Variable Interest Entities (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($) MMcf	Dec. 31, 2019 USD ($)
Variable Interest Entity [Line Items]
Accounts payable and accrued liabilities, current	$ 2,049.0	$ 2,239.0
Veresen Midstream Limited Partnership [Member]
Variable Interest Entity [Line Items]
Variable interest entity, financial support, term of assessment	8 years
Variable interest entity, reporting entity involvement, maximum loss exposure, amount	$ 1,929.0
Veresen Midstream Limited Partnership [Member] | Take or Pay Commitment [Member]
Variable Interest Entity [Line Items]
Accounts payable and accrued liabilities, current	$ 0.4
Veresen Midstream Limited Partnership [Member] | Natural gas gathering and compression [Member]
Variable Interest Entity [Line Items]
Contracted capacity volumes | MMcf	1,213
Veresen Midstream Limited Partnership [Member] | Natural gas processing [Member]
Variable Interest Entity [Line Items]
Contracted capacity volumes | MMcf	932
Veresen Midstream Limited Partnership [Member] | Minimum [Member]
Variable Interest Entity [Line Items]
Length of remaining terms, in years	11 years
Veresen Midstream Limited Partnership [Member] | Maximum [Member]
Variable Interest Entity [Line Items]
Length of remaining terms, in years	25 years
Length of renewal term, in years	10 years

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Condensed Consolidated Statement of Comprehensive Income (unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net Earnings (Loss)	$ 421	$ (245)
Other Comprehensive Income (Loss), Net of Tax
Foreign currency translation adjustment	(134)	34
Pension and other post-employment benefit plans	(2)	(1)
Other Comprehensive Income (Loss)	(136)	33
Comprehensive Income (Loss)	$ 285	$ (212)

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Condensed Consolidated Statement Of Changes In Shareholders' Equity (Parenthetical) (unaudited) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement Of Stockholders Equity [Abstract]
Dividends on Common Shares, per share	$ 0.09375	$ 0.09375

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Business Combination

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Business Combination

8. Business Combination

Newfield Exploration Company Acquisition

On February 13, 2019, the business combination with Newfield Exploration Company, a Delaware corporation (“Newfield”) was completed pursuant to an Agreement and Plan of Merger with Newfield (the “Merger”). As a result of the Merger, Newfield stockholders received 2.6719 Encana common shares, on a pre-Share Consolidation basis, for each share of Newfield common stock that was issued and outstanding immediately prior to the effective date of the Merger. The Company issued approximately 543.4 million Encana common shares, on a pre-Share Consolidation basis, representing a value of $3.5 billion and paid approximately $5 million in cash in respect of Newfield’s cash-settled incentive awards. Following the acquisition, Newfield’s senior notes totaling $2.45 billion was outstanding. For the three months ended March 31, 2019, transaction costs of approximately $31 million were included in other (gains) losses, net.

Newfield’s operations focused on the exploration and development of oil and gas properties located in Anadarko and Arkoma in Oklahoma, Bakken in North Dakota and Uinta in Utah, as well as offshore oil assets located in China. The results of Newfield’s operations have been included in the Condensed Consolidated Financial Statements as of February 14, 2019.

Purchase Price Allocation

The transaction was accounted for under the acquisition method, which requires that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date, with any excess of the purchase price over the estimated fair value of identified net assets acquired recorded as goodwill. The purchase price allocation represents the consideration paid and the fair values of the assets acquired, and liabilities assumed as of the acquisition date.

Purchase Price Allocation
Consideration:
Fair value of Encana's common shares issued (1)	$	3,478
Fair value of Newfield liability awards paid in cash (2)		5
Total Consideration	$	3,483
Assets Acquired:
Cash and cash equivalents	$	46
Accounts receivable and accrued revenues		486
Other current assets		50
Proved properties		5,903
Unproved properties		838
Other property, plant and equipment		22
Restricted cash		53
Other assets		105
Goodwill (3)		25
Liabilities Assumed:
Accounts payable and accrued liabilities (3) (4)		(795	)
Long-term debt		(2,603	)
Operating lease liabilities		(76	)
Other long-term liabilities (3)		(65	)
Asset retirement obligation		(184	)
Deferred income taxes (3)		(322	)
Total Purchase Price	$	3,483

(1) The fair value was based on the NYSE closing price of the pre-Share Consolidation Encana common shares of $6.40 on February 13, 2019.

(2) The fair value was based on a price of $6.50 per notional unit which was determined using a volume-weighted average of the trading price of pre-Share Consolidation Encana common shares on the NYSE on each of the five consecutive trading days ending on the trading day that was three trading days prior to February 13, 2019.

(3) Since the completion of the business combination on February 13, 2019, additional information related to pre-acquisition liabilities and contingencies was obtained resulting in a measurement period adjustment. Changes in the fair value estimates comprised an increase in other liabilities of $16 million, of which approximately $11 million is presented in accounts payable and accrued liabilities and $5 million is presented in other long-term liabilities, a decrease in deferred tax liabilities of $4 million and a corresponding increase in goodwill of $12 million.

(4) In conjunction with the acquisition, various legal claims and actions arising in the normal course of Newfield’s operations were assumed by the Company. On March 29, 2019, Newfield and its wholly-owned subsidiary entered into an Agreement and Mutual Release with Sapura Energy Berhad, formerly known as SapuraKencana Petroleum Berhad, and Sapura Exploration and Production Inc., formerly known as SapuraKencana Energy Inc. (collectively, “Sapura”), and agreed to settle arbitration claims in the amount of $22.5 million arising from Sapura’s purchase of Newfield’s Malaysian business in February 2014. The settlement amount including legal fees was included in the purchase price allocation as part of the current liabilities assumed at the acquisition date. Although the outcome of any remaining legal claims and actions assumed following the acquisition of Newfield cannot be predicted with certainty, the Company does not expect these matters to have a material adverse effect on the Company’s financial position, cash flows or results of operations.

The income approach valuation technique was used for the fair value of assets acquired and liabilities assumed. The carrying amounts of cash and cash equivalents, accounts receivable and accrued revenues, restricted cash, other current assets, and accounts payable and accrued liabilities approximate their fair values due to their nature and/or the short-term maturity of the instruments. The fair values of long-term debt, right-of-use (“ROU”) assets and operating lease liabilities were categorized within Level 2 of the fair value hierarchy and were determined using quoted prices and rates from an available pricing source. The fair values of the proved and unproved properties, other property, plant and equipment, other assets, other long-term liabilities and asset retirement obligation were categorized within Level 3 and were determined using relevant market assumptions, including discount rates, future commodity prices and costs, timing of development activities, projections of oil and gas reserves, and estimates for abandonment and reclamation.

Goodwill arose from the Newfield acquisition primarily from the requirement to recognize deferred taxes on the difference between the fair value of the assets acquired and liabilities assumed and the respective carry-over tax basis. Goodwill is not amortized and is not deductible for tax purposes.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information combines the historical financial results of the Company with Newfield and has been prepared as though the acquisition had occurred on January 1, 2019. The pro forma information is not intended to reflect the actual results of operations that would have occurred if the business combination had been completed at the date indicated. In addition, the pro forma information is not intended to be a projection of the Company’s results of operations for any future period.

Additionally, pro forma earnings were adjusted to exclude transaction-related costs incurred of approximately $69 million and severance payments made to employees which totaled $113 million for the three months ended March 31, 2019. The pro forma financial information does not include any cost savings or other synergies from the Merger or any estimated costs that have been incurred to integrate the assets. Ovintiv’s consolidated results for the three months ended March 31, 2020 include the results from Newfield.

For the three months ended March 31 (US$ millions, except per share amounts)	2019
Revenues	$	1,515
Net Earnings (Loss)	$	(117	)
Net Earnings (Loss) per Share (1)
Basic & Diluted	$	(0.48	)

(1) Net earnings (loss) per share reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

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Revenues from Contracts with Customers

3 Months Ended

Mar. 31, 2020

Revenue From Contract With Customer [Abstract]

Revenues from Contracts with Customers

4. Revenues from Contracts with Customers

The following tables summarize the Company’s revenues from contracts with customers.

Revenues (For the three months ended March 31)

	USA Operations				Canadian Operations				China Operations (1)
	2020		2019		2020		2019		2020		2019
Revenues from Customers
Product revenues (2)
Oil	$	642	$	609	$	2	$	1	$	-	$	13
NGLs		86		97		179		204		-		-
Natural gas		72		76		172		255		-		-
Service revenues
Gathering and processing		-		1		-		-		-		-
Product and Service Revenues	$	800	$	783	$	353	$	460	$	-	$	13

	Market Optimization				Corporate & Other				Consolidated
	2020		2019		2020		2019		2020		2019
Revenues from Customers
Product revenues (2)
Oil	$	210	$	60	$	-	$	-	$	854	$	683
NGLs		2		3		-		-		267		304
Natural gas		205		253		-		-		449		584
Service revenues
Gathering and processing		-		-		-		-		-		1
Product and Service Revenues	$	417	$	316	$	-	$	-	$	1,570	$	1,572

(1) The Company terminated its production sharing contract with CNOOC and exited its China Operations effective July 31, 2019.

(2) Includes revenues from production and revenues of product purchased from third parties, but excludes intercompany marketing fees transacted between the Company’s operating segments.

The Company’s revenues from contracts with customers consists of product sales including oil, NGLs and natural gas, as well as the provision of gathering and processing services to third parties. The Company had no contract asset or liability balances during the periods presented. As at March 31, 2020, receivables and accrued revenues from contracts with customers were $693 million ($1,095 million as at December 31, 2019).

Product sales are sold under short-term contracts with terms that are less than one year at either fixed or market index prices or under long-term contracts exceeding one year at market index prices.  

The Company’s gathering and processing services are provided on an interruptible basis with transaction prices that are for fixed prices and/or variable consideration. Variable consideration received is related to recovery of plant operating costs or escalation of the fixed price based on a consumer price index. As the service contracts are interruptible, with service provided on an “as available” basis, there are no unsatisfied performance obligations remaining at March 31, 2020.

As at March 31, 2020, all remaining performance obligations are priced at market index prices or are variable volume delivery contracts. As such, the variable consideration is allocated entirely to the wholly unsatisfied performance obligation or promise to deliver units of production, and revenue is recognized at the amount for which the Company has the right to invoice the product delivered. As the period between when the product sales are transferred and Ovintiv receives payments is generally 30 to 60 days, there is no financing element associated with customer contracts. In addition, Ovitniv does not disclose unsatisfied performance obligations for customer contracts with terms less than 12 months or for variable consideration related to unsatisfied performance obligations.

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Business Combination (Tables)

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Schedule of Purchase Price Allocations

The transaction was accounted for under the acquisition method, which requires that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date, with any excess of the purchase price over the estimated fair value of identified net assets acquired recorded as goodwill. The purchase price allocation represents the consideration paid and the fair values of the assets acquired, and liabilities assumed as of the acquisition date.

Purchase Price Allocation
Consideration:
Fair value of Encana's common shares issued (1)	$	3,478
Fair value of Newfield liability awards paid in cash (2)		5
Total Consideration	$	3,483
Assets Acquired:
Cash and cash equivalents	$	46
Accounts receivable and accrued revenues		486
Other current assets		50
Proved properties		5,903
Unproved properties		838
Other property, plant and equipment		22
Restricted cash		53
Other assets		105
Goodwill (3)		25
Liabilities Assumed:
Accounts payable and accrued liabilities (3) (4)		(795	)
Long-term debt		(2,603	)
Operating lease liabilities		(76	)
Other long-term liabilities (3)		(65	)
Asset retirement obligation		(184	)
Deferred income taxes (3)		(322	)
Total Purchase Price	$	3,483

(1) The fair value was based on the NYSE closing price of the pre-Share Consolidation Encana common shares of $6.40 on February 13, 2019.

(2) The fair value was based on a price of $6.50 per notional unit which was determined using a volume-weighted average of the trading price of pre-Share Consolidation Encana common shares on the NYSE on each of the five consecutive trading days ending on the trading day that was three trading days prior to February 13, 2019.

(3) Since the completion of the business combination on February 13, 2019, additional information related to pre-acquisition liabilities and contingencies was obtained resulting in a measurement period adjustment. Changes in the fair value estimates comprised an increase in other liabilities of $16 million, of which approximately $11 million is presented in accounts payable and accrued liabilities and $5 million is presented in other long-term liabilities, a decrease in deferred tax liabilities of $4 million and a corresponding increase in goodwill of $12 million.

(4) In conjunction with the acquisition, various legal claims and actions arising in the normal course of Newfield’s operations were assumed by the Company. On March 29, 2019, Newfield and its wholly-owned subsidiary entered into an Agreement and Mutual Release with Sapura Energy Berhad, formerly known as SapuraKencana Petroleum Berhad, and Sapura Exploration and Production Inc., formerly known as SapuraKencana Energy Inc. (collectively, “Sapura”), and agreed to settle arbitration claims in the amount of $22.5 million arising from Sapura’s purchase of Newfield’s Malaysian business in February 2014. The settlement amount including legal fees was included in the purchase price allocation as part of the current liabilities assumed at the acquisition date. Although the outcome of any remaining legal claims and actions assumed following the acquisition of Newfield cannot be predicted with certainty, the Company does not expect these matters to have a material adverse effect on the Company’s financial position, cash flows or results of operations.

Schedule of Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information combines the historical financial results of the Company with Newfield and has been prepared as though the acquisition had occurred on January 1, 2019. The pro forma information is not intended to reflect the actual results of operations that would have occurred if the business combination had been completed at the date indicated. In addition, the pro forma information is not intended to be a projection of the Company’s results of operations for any future period.

Additionally, pro forma earnings were adjusted to exclude transaction-related costs incurred of approximately $69 million and severance payments made to employees which totaled $113 million for the three months ended March 31, 2019. The pro forma financial information does not include any cost savings or other synergies from the Merger or any estimated costs that have been incurred to integrate the assets. Ovintiv’s consolidated results for the three months ended March 31, 2020 include the results from Newfield.

For the three months ended March 31 (US$ millions, except per share amounts)	2019
Revenues	$	1,515
Net Earnings (Loss)	$	(117	)
Net Earnings (Loss) per Share (1)
Basic & Diluted	$	(0.48	)

(1) Net earnings (loss) per share reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

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Supplementary Information

3 Months Ended

Mar. 31, 2020

Supplemental Cash Flow Elements [Abstract]

Supplementary Information

23. Supplementary Information

Supplemental disclosures to the Condensed Consolidated Statement of Cash Flows are presented below:

A) Net Change in Non-Cash Working Capital

	Three Months Ended
	March 31,
	2020			2019
Operating Activities
Accounts receivable and accrued revenues	$	121		$	174
Accounts payable and accrued liabilities		(31	)		(88	)
Current portion of operating lease liabilities		(1	)		67
Income tax receivable and payable		(6	)		(35	)
	$	83		$	118

B) Non-Cash Activities

	Three Months Ended
	March 31,
	2020			2019
Non-Cash Investing Activities
Asset retirement obligation incurred (See Note 14)	$	7		$	3
Asset retirement obligation change in estimated future cash outflows (See Note 14)		22			-
Property, plant and equipment accruals		150			82
Capitalized long-term incentives		(17	)		(29	)
Property additions/dispositions (swaps)		4			2
New ROU operating lease assets and liabilities		(1	)		(1	)
Non-Cash Financing Activities
Common shares issued in conjunction with the Newfield business    combination (See Note 8)	$	-		$	(3,478	)

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Revenues from Contracts with Customers (Tables)

3 Months Ended

Mar. 31, 2020

Disaggregation Of Revenue [Abstract]

Disaggregation of Revenue

Revenues (For the three months ended March 31)

	USA Operations				Canadian Operations				China Operations (1)
	2020		2019		2020		2019		2020		2019
Revenues from Customers
Product revenues (2)
Oil	$	642	$	609	$	2	$	1	$	-	$	13
NGLs		86		97		179		204		-		-
Natural gas		72		76		172		255		-		-
Service revenues
Gathering and processing		-		1		-		-		-		-
Product and Service Revenues	$	800	$	783	$	353	$	460	$	-	$	13

	Market Optimization				Corporate & Other				Consolidated
	2020		2019		2020		2019		2020		2019
Revenues from Customers
Product revenues (2)
Oil	$	210	$	60	$	-	$	-	$	854	$	683
NGLs		2		3		-		-		267		304
Natural gas		205		253		-		-		449		584
Service revenues
Gathering and processing		-		-		-		-		-		1
Product and Service Revenues	$	417	$	316	$	-	$	-	$	1,570	$	1,572

(1) The Company terminated its production sharing contract with CNOOC and exited its China Operations effective July 31, 2019.

(2) Includes revenues from production and revenues of product purchased from third parties, but excludes intercompany marketing fees transacted between the Company’s operating segments.

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2020

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Accumulated Other Comprehensive Income

16. Accumulated Other Comprehensive Income

	Three Months Ended
	March 31,
	2020			2019
Foreign Currency Translation Adjustment
Balance, Beginning of Year	$	1,004		$	976
Change in Foreign Currency Translation Adjustment		(134	)		34
Balance, End of Period	$	870		$	1,010
Pension and Other Post-Employment Benefit Plans
Balance, Beginning of Year	$	42		$	22
Amounts Reclassified from Other Comprehensive Income:
Reclassification of net actuarial (gains) and losses to net earnings (See Note 20)		(2	)		(1	)
Income taxes		-			-
Balance, End of Period	$	40		$	21
Total Accumulated Other Comprehensive Income	$	910		$	1,031

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Long-Term Debt

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Long-Term Debt

12. Long-Term Debt

	As at			As at
	March 31,			December 31,
	2020			2019
U.S. Dollar Denominated Debt
Revolving credit and term loan borrowings	$	842		$	698
U.S. Unsecured Notes:
3.90% due November 15, 2021		590			600
5.75% due January 30, 2022		660			750
5.625% due July 1, 2024		1,000			1,000
5.375% due January 1, 2026		700			700
8.125% due September 15, 2030		300			300
7.20% due November 1, 2031		350			350
7.375% due November 1, 2031		500			500
6.50% due August 15, 2034		750			750
6.625% due August 15, 2037		462			462
6.50% due February 1, 2038		505			505
5.15% due November 15, 2041		244			244
Total Principal		6,903			6,859
Increase in Value of Debt Acquired		140			149
Unamortized Debt Discounts and Issuance Costs		(37	)		(34	)
Total Long-Term Debt	$	7,006		$	6,974
Current Portion	$	-		$	-
Long-Term Portion		7,006			6,974
	$	7,006		$	6,974

During the three months ended March 31, 2020, the Company repurchased in the open market approximately $10 million in principal amount of its 3.9 percent senior notes due in November 2021 and approximately $90 million in principal amount of its 5.75 percent senior notes due in January 2022 for an aggregate cash payment of $89 million, plus accrued interest, and recognized a net gain of approximately $11 million which was included in other (gains) losses, net on the Condensed Consolidated Statement of Earnings.

As at March 31, 2020, the Company had outstanding commercial paper of $357 million maturing at various dates with a weighted average interest rate of approximately 2.00 percent. These amounts are supported, and Management expects that they will continue to be supported, by revolving credit facilities that have no repayment requirements within the next year and which expire in 2024. As at March 31, 2020, the Company also had $485 million drawn on its revolving credit facilities.

As at March 31, 2020, total long-term debt had a carrying value of $7,006 million and a fair value of $4,005 million (as at December 31, 2019 - carrying value of $6,974 million and a fair value of $7,657 million). The estimated fair value of long-term borrowings is categorized within Level 2 of the fair value hierarchy and has been determined based on market information of long-term debt with similar terms and maturity, or by discounting future payments of interest and principal at interest rates expected to be available to the Company at period end.

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Pension and Other Post-Employment Benefits

3 Months Ended

Mar. 31, 2020

General Discussion Of Pension And Other Postretirement Benefits [Abstract]

Pension and Other Post-Employment Benefits

20. Pension and Other Post-Employment Benefits

The Company has recognized total benefit plans expense which includes pension benefits and other post-employment benefits (“OPEB”) for the three months ended March 31 as follows:

	Pension Benefits				OPEB					Total
	2020		2019		2020			2019		2020			2019
Net Defined Periodic Benefit Cost	$	-	$	-	$	(1	)	$	6	$	(1	)	$	6
Defined Contribution Plan Expense		8		6		-			-		8			6
Total Benefit Plans Expense	$	8	$	6	$	(1	)	$	6	$	7		$	12

Of the total benefit plans expense, $7 million (2019 - $6 million) was included in operating expense and $2 million (2019 - $2 million) was included in administrative expense. Excluding service costs, net defined periodic benefit gains of $2 million (2019 - losses of $4 million) were recorded in other (gains) losses, net.

The net defined periodic benefit cost for the three months ended March 31 is as follows:

	Defined Benefits						OPEB						Total
	2020			2019			2020			2019			2020			2019
Service Cost	$	-		$	-		$	1		$	2		$	1		$	2
Interest Cost		2			2			-			1			2			3
Expected Return on Plan Assets		(2	)		(2	)		-			-			(2	)		(2	)
Amounts Reclassified from Accumulated Other     Comprehensive Income:
Amortization of net actuarial (gains) and losses		-			-			(2	)		(1	)		(2	)		(1	)
Curtailment		-			-			-			4			-			4
Total Net Defined Periodic Benefit Cost (1)	$	-		$	-		$	(1	)	$	6		$	(1	)	$	6

(1) The components of total net defined periodic benefit cost, excluding the service cost component, are included in other (gains) losses, net.

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Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Schedule of Weighted Average Assumptions Used to Fair Value Share Units

	As at March 31, 2020		As at March 31, 2019
	US$ Share Units	C$ Share Units	US$ Share Units	C$ Share Units
Risk Free Interest Rate	0.47%	0.47%	1.49%	1.49%
Dividend Yield	13.89%	13.07%	1.04%	1.03%
Expected Volatility Rate (1)	93.81%	93.42%	43.95%	41.92%
Expected Term	2.8 yrs	2.3 yrs	3.0 yrs	2.6 yrs
Market Share Price (2)	US$2.70	C$3.86	US$36.20	C$48.40

(1) Volatility was estimated using historical rates.

(2) Market share price reflects the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

Amounts Recognized For Share-Based Payment Transactions

	Three Months Ended
	March 31,
	2020			2019
Total Compensation Costs of Transactions Classified as Cash-Settled	$	(51	)	$	64
Less: Total Share-Based Compensation Costs Capitalized		13			(18	)
Total Share-Based Compensation Expense (Recovery)	$	(38	)	$	46
Recognized on the Condensed Consolidated Statement of Earnings in:
Operating	$	(12	)	$	14
Administrative		(26	)		32
	$	(38	)	$	46

Liability for Share-Based Payment Transactions

	As at March 31, 2020			As at December 31, 2019
Liability for Cash-Settled Share-Based Payment Transactions:
Unvested		$	7		$	65
Vested			1			13
		$	8		$	78

Schedule of Share-based Compensation Activity

Three Months Ended March 31, 2020 (thousands of units)
RSUs	6,350
PSUs	2,166
DSUs	42

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Property, Plant And Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2020

Property Plant And Equipment [Abstract]

Schedule Of Property, Plant And Equipment

	As at March 31, 2020							As at December 31, 2019
			Accumulated							Accumulated
	Cost		DD&A			Net		Cost		DD&A			Net
USA Operations
Proved properties	$	36,731	$	(26,320	)	$	10,411	$	35,870	$	(25,623	)	$	10,247
Unproved properties		3,260		-			3,260		3,491		-			3,491
Other		25		-			25		19		-			19
		40,016		(26,320	)		13,696		39,380		(25,623	)		13,757
Canadian Operations
Proved properties		14,172		(13,215	)		957		15,284		(14,320	)		964
Unproved properties		200		-			200		223		-			223
Other		16		-			16		18		-			18
		14,388		(13,215	)		1,173		15,525		(14,320	)		1,205
Market Optimization		8		(6	)		2		9		(7	)		2
Corporate & Other		852		(643	)		209		914		(687	)		227
	$	55,264	$	(40,184	)	$	15,080	$	55,828	$	(40,637	)	$	15,191

Schedule of Twelve Month Average Trailing Reserves Prices

The 12-month average trailing prices used in the ceiling test calculations were based on the benchmark prices presented below. The benchmark prices were adjusted for basis differentials to determine local reference prices, transportation costs and tariffs, heat content and quality.

	Oil & NGLs				Natural Gas
	WTI		Edmonton Condensate		Henry Hub		AECO
	($/bbl)		(C$/bbl)		($/MMBtu)		(C$/MMBtu)
12-Month Average Trailing Reserves Pricing (1)
March 31, 2020	$	56.06	$	70.32	$	2.30	$	1.48
December 31, 2019		55.93		68.80		2.58		1.76
March 31, 2019		62.99		75.86		3.07		1.69

(1) All prices were held constant in all future years when estimating net revenues and reserves.

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Asset Retirement Obligation (Tables)

3 Months Ended

Mar. 31, 2020

Asset Retirement Obligation Disclosure [Abstract]

Schedule of Change In Asset Retirement Obligation

	As at			As at
	March 31,			December 31,
	2020			2019
Asset Retirement Obligation, Beginning of Year	$	614		$	455
Liabilities Incurred		7			15
Liabilities Acquired (See Note 8)		-			184
Liabilities Settled and Divested		(42	)		(141	)
Change in Estimated Future Cash Outflows		22			47
Accretion Expense		9			37
Foreign Currency Translation		(29	)		17
Asset Retirement Obligation, End of Period	$	581		$	614
Current Portion	$	143		$	189
Long-Term Portion		438			425
	$	581		$	614

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Financial Instruments and Risk Management (Reconciliation of Unrealized Risk Management Positions) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Derivative [Line Items]
Fair Value of Contracts, Beginning of Year	$ (41)
Settlement of Other Derivative Contracts	1
Amortization of Option Premiums During the Period	1
Fair Value of Contracts Realized During the Period	(148)	$ (72)
Fair Value of Contracts and Net Premiums Received, End of Period	813
Unrealized Gain (Loss) on Derivatives	852	(407)
Commodity Contract [Member]
Derivative [Line Items]
Increase (Decrease) in Derivative Assets and Liabilities	$ 1,000	$ (335)

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Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Ten Percent Change in Implied Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Increase (Decrease) in Risk Management Assets and Liabilities	$ 3	$ 8

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Pension and Other Post-Employment Benefits (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Pension and Other Postretirement (Benefit) Expense	$ 7	$ 12
Operating Expense [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension and Other Postretirement (Benefit) Expense	7	6
Administrative Expense [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension and Other Postretirement (Benefit) Expense	2	2
Other Nonoperating Income (Expense) [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension and Other Postretirement (Benefit) Expense	$ (2)	$ 4

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Tax Disclosure [Line Items]
Effective Tax Rate	25.00%	19.90%
Deferred income tax benefit	$ (140)	$ 62
Canada [Member]
Income Tax Disclosure [Line Items]
Statutory Tax Rate		27.00%
Deferred income tax benefit	$ 1,200
United States [Member]
Income Tax Disclosure [Line Items]
Statutory Tax Rate	21.00%

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Commitments and Contingencies (Details) $ in Millions	Mar. 31, 2020 USD ($)
Long-term Commitment [Line Items]
Building Leases, Future Minimum Payments, Remainder of Fiscal Year	$ 10
Building Leases, Future Minimum Payments, Due in Two Years	14
Building Leases, Future Minimum Payments, Due in Three Years	11
Building Leases, Future Minimum Payments, Due in Four Years	7
Building Leases, Future Minimum Payments, Due in Five Years	6
Building Leases, Future Minimum Payments, Due Thereafter	8
Building Leases, Future Minimum Payments Due	56
Total Commitment, Due Remainder of Fiscal Year	599
Total Commitment, Due in Second Year	673
Total Commitment, Due in Third Year	624
Total Commitment, Due in Fourth Year	514
Total Commitment, Due in Fifth Year	405
Total Commitment, Due Thereafter	2,031
Total Commitment	4,846
Transportation And Processing Commitments [Member]
Long-term Commitment [Line Items]
Purchase Obligation,Remainder of Fiscal Year	518
Purchase Obligation, Due in Second Year	653
Purchase Obligation, Due in Third Year	612
Purchase Obligation, Due in Fourth Year	507
Purchase Obligation, Due in Fifth Year	399
Purchase Obligation, Due Thereafter	2,022
Purchase Obligation	4,711
Drilling And Field Services Commitments [Member]
Long-term Commitment [Line Items]
Purchase Obligation,Remainder of Fiscal Year	71
Purchase Obligation, Due in Second Year	6
Purchase Obligation, Due in Third Year	1
Purchase Obligation, Due in Fourth Year	0
Purchase Obligation, Due in Fifth Year	0
Purchase Obligation, Due Thereafter	1
Purchase Obligation	$ 79

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Revenues from Contracts with Customers (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Revenue From Contract With Customer [Abstract]
Contract with customer, asset net	$ 0	$ 0
Contract with customer, liability	0	0
Receivables & accrued revenues from contracts with customers	693	$ 1,095
Revenue, remaining performance obligation	$ 0

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Compensation Plans (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Liability for cash-settled share-based payment transactions	$ 8	$ 78
Liability for share-based payment recognized in accounts payable and accrued liabilities	4	40
Liability for share-based payment recognized in other liabilities and provisions	$ 4	$ 38
Restricted Share Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested on number granted in each of the years	33.33%
Shares vesting period	3 years

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Asset Retirement Obligation (Schedule of Change In Asset Retirement Obligation) (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Asset Retirement Obligation Disclosure [Abstract]
Asset Retirement Obligation, Beginning of Year	$ 614	$ 455	$ 455
Liabilities Incurred	7	3	15
Liabilities Acquired (See Note 8)	0		184
Liabilities Settled and Divested	(42)		(141)
Change in Estimated Future Cash Outflows	22	0	47
Accretion of asset retirement obligation	9	$ 9	37
Foreign Currency Translation	(29)		17
Asset Retirement Obligation, End of Period	$ 581		$ 614

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Acquisitions and Divestitures (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items]
Acquisitions	$ 17	$ 22
Divestitures	(22)	(2)
Net Acquisitions and Divestitures	(5)	20
Operating Segments [Member] | USA Operations [Member]
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items]
Acquisitions	17	22
Divestitures	(21)	(3)
Operating Segments [Member] | Canadian Operations [Member]
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items]
Divestitures	$ (1)	$ 1

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Property, Plant And Equipment, Net (Schedule of Twelve Month Average Trailing Reserves Prices) (Details)		3 Months Ended		12 Months Ended
		Mar. 31, 2020 $ / bbl $ / bbl $ / MMBTU $ / MMBTU	Mar. 31, 2019 $ / bbl $ / bbl $ / MMBTU $ / MMBTU	Dec. 31, 2019 $ / bbl $ / bbl $ / MMBTU $ / MMBTU
Oil and NGLs [Member] | WTI [Member]
Property, Plant and Equipment [Line Items]
12-Month Average Trailing Reserves Pricing | $ / bbl	[1]	56.06	62.99	55.93
Oil and NGLs [Member] | Edmonton Condensate [Member]
Property, Plant and Equipment [Line Items]
12-Month Average Trailing Reserves Pricing | $ / bbl	[1]	70.32	75.86	68.80
Natural Gas [Member] | Henry Hub [Member]
Property, Plant and Equipment [Line Items]
12-Month Average Trailing Reserves Pricing | $ / MMBTU	[1]	2.30	3.07	2.58
Natural Gas [Member] | AECO [Member]
Property, Plant and Equipment [Line Items]
12-Month Average Trailing Reserves Pricing | $ / MMBTU	[1]	1.48	1.69	1.76

[1] All prices were held constant in all future years when estimating net revenues and reserves

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Share Capital (Earnings Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
		Mar. 31, 2020	Mar. 31, 2019
Class Of Stock Disclosures [Abstract]
Net Earnings (Loss)		$ 421	$ (245)
Weighted average shares of common stock outstanding - Basic		259.8	244.3
Effect of dilutive securities		0	0
Weighted Average Shares of Common Stock Outstanding - Diluted		259.8	244.3
Net Earnings (Loss) per Common Share Basic & Diluted	[1]	$ 1.62	$ (1.00)

[1] Net earnings (loss) per share of common stock and weighted average shares of common stock outstanding reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

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Restructuring Charges (Schedule of Change in Restructuring Accrual) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Restructuring Charges [Abstract]
Outstanding Restructuring Accrual, Beginning of Year	$ 8	$ 0
Restructuring Expenses Incurred	0	138
Restructuring Costs Paid	(6)	(130)
Outstanding Restructuring Accrual, End of Period	$ 2	$ 8

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Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Aggregate cash payment for repurchased debt	$ 89	$ 0
Recognized net gain on debt	11
Outstanding commercial paper	357
Long-term debt carrying value	7,006		$ 6,974
Long-term debt, fair value	$ 4,005		$ 7,657
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Expiration year	2024
Line of credit	$ 485
Commercial Paper [Member]
Debt Instrument [Line Items]
Weighted average interest rate	2.00%
Senior Notes, Due November 2021 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.90%
Senior Notes, Due January 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.75%
3.9% Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument, maturity month and year	2021-11
3.9% Senior Notes [Member] | Senior Notes, Due November 2021 [Member]
Debt Instrument [Line Items]
Principal amount of repurchased senior notes	$ 10
5.75% Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument, maturity month and year	2022-01
5.75% Senior Notes [Member] | Senior Notes, Due January 2022 [Member]
Debt Instrument [Line Items]
Principal amount of repurchased senior notes	$ 90

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Segmented Information (Segment and Geographical Information) (Details) - USD ($) $ in Millions	3 Months Ended			12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019		Dec. 31, 2019
Segment Reporting Information [Line Items]
Product and service revenues	$ 1,570	$ 1,572
Gains (losses) on risk management, net	1,055	(355)
Sublease revenues	18	18
Total Revenues	2,643	1,235
Production, mineral and other taxes	52	48
Transportation and processing	396	338
Operating	165	165
Purchased product	398	298
Depreciation, depletion and amortization	534	377
Impairments	277	0
Accretion of asset retirement obligation	9	9		$ 37
Administrative	53	227
Total Operating Expenses	1,884	1,462
Operating Income (Loss)	759	(227)
Interest	96	87
Foreign exchange (gain) loss, net	116	(37)
(Gain) loss on divestitures, net	0	1
Other (gains) losses, net	(14)	28
Total Other (Income) Expenses	198	79
Net Earnings (Loss) Before Income Tax	561	(306)
Income tax expense (recovery)	140	(61)
Net Earnings (Loss)	421	(245)
Corporate & Other [Member]
Segment Reporting Information [Line Items]
Product and service revenues	0	0
Gains (losses) on risk management, net	904	(427)
Sublease revenues	18	18
Total Revenues	922	(409)
Production, mineral and other taxes	0	0
Transportation and processing	0	0
Operating	(2)	(1)
Purchased product	0	0
Depreciation, depletion and amortization	7	11
Impairments	0	0
Accretion of asset retirement obligation	9	9
Administrative	53	227
Total Operating Expenses	67	246
Operating Income (Loss)	855	(655)
USA Operations [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Product and service revenues	800	777
Gains (losses) on risk management, net	114	52
Sublease revenues	0	0
Total Revenues	914	829
Production, mineral and other taxes	48	44
Transportation and processing	121	79
Operating	139	115
Depreciation, depletion and amortization	418	274
Impairments	277	0
Total Operating Expenses	1,003	512
Operating Income (Loss)	(89)	317
Canadian Operations [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Product and service revenues	351	456
Gains (losses) on risk management, net	36	20
Sublease revenues	0	0
Total Revenues	387	476
Production, mineral and other taxes	4	4
Transportation and processing	213	212
Operating	26	37
Depreciation, depletion and amortization	109	92
Impairments	0	0
Total Operating Expenses	352	345
Operating Income (Loss)	35	131
China Operations [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Product and service revenues	0	13	[1]
Gains (losses) on risk management, net	0	0	[1]
Sublease revenues	0	0	[1]
Total Revenues	0	13	[1]
Production, mineral and other taxes	0	0	[1]
Transportation and processing	0	0	[1]
Operating	0	4	[1]
Depreciation, depletion and amortization	0	0	[1]
Impairments	0	0	[1]
Total Operating Expenses	0	4	[1]
Operating Income (Loss)	0	9	[1]
Market Optimization [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Product and service revenues	419	326
Gains (losses) on risk management, net	1	0
Sublease revenues	0	0
Total Revenues	420	326
Production, mineral and other taxes	0	0
Transportation and processing	62	47
Operating	2	10
Purchased product	398	298
Depreciation, depletion and amortization	0	0
Impairments	0	0
Accretion of asset retirement obligation	0	0
Administrative	0	0
Total Operating Expenses	462	355
Operating Income (Loss)	$ (42)	$ (29)

[1] The Company terminated its production sharing contract with CNOOC and exited its China Operations effective July 31, 2019.

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Financial Instruments and Risk Management (Tables)

3 Months Ended

Mar. 31, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Risk Management Positions

	Notional Volumes	Term	Average Price		Fair Value
Crude Oil and NGL Contracts			US$/bbl
Fixed Price Contracts
WTI Fixed Price	140.2 Mbbls/d	2020		45.36	$	625
Propane Fixed Price	12.0 Mbbls/d	2020		21.34		26
Butane Fixed Price	8.0 Mbbls/d	2020		23.54		18
Iso-Butane Fixed Price	3.5 Mbbls/d	2020		24.36		7
WTI Fixed Price Swaptions (1)	10.0 Mbbls/d	2021		58.00		(1	)
WTI Three-Way Options
Sold call / bought put / sold put	26.8 Mbbls/d	2020	61.68 / 53.44 / 43.44			60
WTI Costless Collars
Sold call / bought put	15.0 Mbbls/d	2020	68.71 / 50.00			91
Basis Contracts (2)		2020				(32	)
Other Crude Financial Positions						3
Crude Oil and NGLs Fair Value Position						797
Natural Gas Contracts			US$/Mcf
Fixed Price Contracts
NYMEX Fixed Price	811 MMcf/d	2020		2.65		147
NYMEX Fixed Price	165 MMcf/d	2021		2.51		1
Fixed Price Swaptions (3)
NYMEX Fixed Price Swaptions	330 MMcf/d	2021		2.56		(22	)
NYMEX Fixed Price Swaptions	165 MMcf/d	2022		2.51		(11	)
NYMEX Three-Way Options
Sold call / bought put / sold put	330 MMcf/d	2020	2.72 / 2.60 / 2.25			19
NYMEX Costless Collars
Sold call / bought put	55 MMcf/d	2020	2.88 / 2.50			8
NYMEX Call Options
Sold call	230 MMcf/d	2020		3.25		4
Basis Contracts (4)		2020				(10	)
		2021				(18	)
		2022 - 2025				(33	)
Other Financial Positions						3
Natural Gas Fair Value Position						88
Net Premiums Received on Unexpired Options						(7	)
Other Derivative Contracts
Fair Value Position						(25	)
Foreign Currency Contracts
Fair Value Position (5)		2020 - 2021				(40	)
Total Fair Value Position and Net Premiums Received					$	813

(1) WTI Fixed Price Swaptions give the counterparty the option to extend certain 2020 Fixed Price swaps to 2021.

(2) Ovintiv has entered into crude and NGL differential swaps associated with Midland, Magellan East Houston, Belvieu, Conway, Brent and WTI.

(3) NYMEX Fixed Price Swaptions give the counterparty the option to extend certain 2020 and 2021 Fixed Price swaps to 2021 and 2022, respectively.

(4) Ovintiv has entered into natural gas basis swaps associated with AECO, Dawn, Chicago, Malin, Waha, Houston Ship Channel and NYMEX.

(5) Ovintiv has entered into U.S. dollar denominated fixed-for-floating average currency swaps to protect against fluctuations between the Canadian and U.S. dollars.

Earnings Impact of Realized and Unrealized Gains (Losses) On Risk Management Positions

	Three Months Ended
	March 31,
	2020			2019
Realized Gains (Losses) on Risk Management
Commodity and Other Derivatives:
Revenues (1)	$	151		$	72
Foreign Currency Derivatives:
Foreign exchange		(3	)		-
	$	148		$	72
Unrealized Gains (Losses) on Risk Management
Commodity and Other Derivatives:
Revenues (2)	$	904		$	(427	)
Foreign Currency Derivatives:
Foreign exchange		(52	)		20
	$	852		$	(407	)
Total Realized and Unrealized Gains (Losses) on Risk Management, net
Commodity and Other Derivatives:
Revenues (1) (2)	$	1,055		$	(355	)
Foreign Currency Derivatives:
Foreign exchange		(55	)		20
	$	1,000		$	(335	)

(1) Includes a realized gain of $1 million (2019 - gain of $2 million) related to other derivative contracts.

(2) Includes an unrealized loss of $17 million (2019 - loss of nil) related to other derivative contracts.

Reconciliation of Unrealized Risk Management Positions

	2020						2019
	Fair Value			Total Unrealized Gain (Loss)			Total Unrealized Gain (Loss)
Fair Value of Contracts, Beginning of Year	$	(41	)
Change in Fair Value of Contracts in Place at Beginning of Year    and Contracts Entered into During the Period		1,000		$	1,000		$	(335	)
Settlement of Other Derivative Contracts		1
Amortization of Option Premiums During the Period		1
Fair Value of Contracts Realized During the Period		(148	)		(148	)		(72	)
Fair Value of Contracts and Net Premiums Received, End of Period	$	813		$	852		$	(407	)

Unrealized Risk Management Positions

	As at		As at
	March 31,		December 31,
	2020		2019
Risk Management Assets
Current	$	958	$	148
Long-term		1		2
		959		150
Risk Management Liabilities
Current		40		114
Long-term		81		68
		121		182
Other Derivative Contracts
Current in accounts payable and accrued liabilities		6		2
Long-term in other liabilities and provisions		19		7
Net Risk Management Assets (Liabilities) and Other Derivative Contracts	$	813	$	(41	)

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Basis of Presentation and Principles of Consolidation (Policies)

3 Months Ended

Mar. 31, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation and Principles of Consolidation

On January 24, 2020, Encana Corporation (“Encana”) completed a corporate reorganization, which included a plan of arrangement (the “Arrangement”) that involved, among other things, a share consolidation by Encana on the basis of one post-consolidation share for each five pre-consolidation shares (the “Share Consolidation”), and Ovintiv Inc. ultimately acquired all of the issued and outstanding common shares of Encana in exchange for shares of common stock of Ovintiv Inc. on a one-for-one basis. Following completion of the Arrangement, Ovintiv Inc. migrated from Canada and became a Delaware corporation, domiciled in the U.S. (the “U.S. Domestication”). The Arrangement and the U.S. Domestication together are referred to as the “Reorganization”. Ovintiv Inc. and its subsidiaries (collectively, “Ovintiv”) continue to carry on the business of the exploration for, the development of, and the production and marketing of oil, NGLs and natural gas, which was previously conducted by Encana and its subsidiaries prior to the completion of the Reorganization. References to the “Company” are to Encana Corporation and its subsidiaries prior to the completion of the Reorganization and to Ovintiv Inc. and its subsidiaries following the completion of the Reorganization.

The Arrangement, as described above, was accounted for as a reorganization of entities under common control. Accordingly, the resulting transactions were recognized using historical carrying amounts. On January 24, 2020, Ovintiv became the reporting entity upon completion of the Reorganization.

In accordance with the Share Consolidation, all common shares and per-share amounts disclosed herein reflect the post-Share Consolidation shares unless otherwise specified; comparative periods have been restated accordingly. References to shares of common stock refer to the shares of common stock of Ovintiv Inc. for any periods after the completion of the Arrangement, and to the common shares of Encana Corporation for any periods before January 24, 2020.

Following the U.S. Domestication, on January 24, 2020, the functional currency of Ovintiv Inc. became U.S. dollars, and accordingly, the financial results herein are consolidated and reported in U.S. dollars.

The interim Condensed Consolidated Financial Statements include the accounts of Ovintiv and entities in which it holds a controlling interest. All intercompany balances and transactions are eliminated on consolidation. Undivided interests in oil and natural gas exploration and production joint ventures and partnerships are consolidated on a proportionate basis. Investments in non-controlled entities over which the Company has the ability to exercise significant influence are accounted for using the equity method.  

The interim Condensed Consolidated Financial Statements are prepared in conformity with U.S. GAAP and the rules and regulations of the SEC. Pursuant to these rules and regulations, certain information and disclosures normally required under U.S. GAAP have been condensed or have been disclosed on an annual basis only. Accordingly, the interim Condensed Consolidated Financial Statements should be read in conjunction with the annual audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2019, which are included in Item 8 of Ovintiv’s 2019 Annual Report on Form 10-K.

The interim Condensed Consolidated Financial Statements have been prepared following the same accounting policies and methods of computation as the annual audited Consolidated Financial Statements for the year ended December 31, 2019, except as noted below in Note 2. The disclosures provided below are incremental to those included with the annual audited Consolidated Financial Statements.

These unaudited interim Condensed Consolidated Financial Statements reflect, in the opinion of Management, all normal and recurring adjustments necessary to present fairly the financial position and results of the Company as at and for the periods presented. Interim condensed consolidated financial results are not necessarily indicative of consolidated financial results expected for the fiscal year.

Recent Accounting Pronouncements

2. Recent Accounting Pronouncements

Changes in Accounting Policies and Practices

On January 1, 2020, Ovintiv adopted the following ASUs issued by the FASB, which have not had a material impact on the interim Condensed Consolidated Financial Statements:

• ASU 2017-04, “Simplifying the Test for Goodwill Impairment”. The amendment eliminates the second step of the goodwill impairment test which requires the Company to measure the impairment based on the excess amount of the carrying value of the reporting unit’s goodwill over the implied fair value of its goodwill. Under this amendment, the goodwill impairment will be measured based on the excess amount of the reporting unit’s carrying value over its respective fair value. The amendment has been applied prospectively.

• ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” under Topic 326. The standard amends the impairment model which requires utilizing a forward-looking expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables. The standard requires entities to consider a broader range of information to estimate expected credit losses, resulting in earlier recognition of credit losses. The standard has been applied using the modified retrospective approach.

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Foreign Exchange (Gain) Loss, Net (Tables)

3 Months Ended

Mar. 31, 2020

Foreign Currency [Abstract]

Foreign Exchange (Gain) Loss, Net

	Three Months Ended
	March 31,
	2020			2019
Unrealized Foreign Exchange (Gain) Loss on:
Translation of U.S. dollar financing debt issued from Canada	$	76		$	(93	)
Translation of U.S. dollar risk management contracts issued from Canada		52			(11	)
Translation of intercompany notes		(27	)		79
		101			(25	)
Foreign Exchange on Settlements of:
U.S. dollar financing debt issued from Canada		17			(1	)
U.S. dollar risk management contracts issued from Canada		3			-
Intercompany notes		3			(12	)
Other Monetary Revaluations		(8	)		1
	$	116		$	(37	)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 01, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Entity Registrant Name	Ovintiv Inc.
Entity Central Index Key	0001792580
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		259,821,141
Trading Symbol	OVV
Document Quarterly Report	true
Document Transition Report	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity File Number	001-39191
Entity Tax Identification Number	84-4427672
Entity Address, Address Line One	Suite 1700
Entity Address, Address Line Two	370 17th Street
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Country	US
Entity Address, Postal Zip Code	80202
City Area Code	303
Local Phone Number	623-2300
Entity Incorporation, State or Country Code	DE
Title of 12(b) Security	Common Shares
Security Exchange Name	NYSE

XML

Property, Plant And Equipment, Net

3 Months Ended

Mar. 31, 2020

Property Plant And Equipment [Abstract]

Property, Plant And Equipment, Net

10. Property, Plant and Equipment, Net

	As at March 31, 2020							As at December 31, 2019
			Accumulated							Accumulated
	Cost		DD&A			Net		Cost		DD&A			Net
USA Operations
Proved properties	$	36,731	$	(26,320	)	$	10,411	$	35,870	$	(25,623	)	$	10,247
Unproved properties		3,260		-			3,260		3,491		-			3,491
Other		25		-			25		19		-			19
		40,016		(26,320	)		13,696		39,380		(25,623	)		13,757
Canadian Operations
Proved properties		14,172		(13,215	)		957		15,284		(14,320	)		964
Unproved properties		200		-			200		223		-			223
Other		16		-			16		18		-			18
		14,388		(13,215	)		1,173		15,525		(14,320	)		1,205
Market Optimization		8		(6	)		2		9		(7	)		2
Corporate & Other		852		(643	)		209		914		(687	)		227
	$	55,264	$	(40,184	)	$	15,080	$	55,828	$	(40,637	)	$	15,191

USA and Canadian Operations property, plant and equipment include internal costs directly related to exploration, development and construction activities of $47 million, which have been capitalized during the three months ended March 31, 2020 (2019 - $79 million).

For the three months ended March 31, 2020, the Company recognized before-tax non-cash ceiling test impairments of $277 million (2019 - nil) in the USA Operations. The non-cash ceiling test impairment is included with accumulated DD&A in the table above and primarily resulted from the decline in the 12-month average trailing prices related to NGLs and natural gas, which reduced proved reserves values.

The 12-month average trailing prices used in the ceiling test calculations were based on the benchmark prices presented below. The benchmark prices were adjusted for basis differentials to determine local reference prices, transportation costs and tariffs, heat content and quality.

	Oil & NGLs				Natural Gas
	WTI		Edmonton Condensate		Henry Hub		AECO
	($/bbl)		(C$/bbl)		($/MMBtu)		(C$/MMBtu)
12-Month Average Trailing Reserves Pricing (1)
March 31, 2020	$	56.06	$	70.32	$	2.30	$	1.48
December 31, 2019		55.93		68.80		2.58		1.76
March 31, 2019		62.99		75.86		3.07		1.69

(1) All prices were held constant in all future years when estimating net revenues and reserves.

Finance Lease Arrangements

The Company has two lease arrangements that are accounted for as finance leases, which include an office building and an offshore production platform. As at March 31, 2020, the total carrying value of assets under finance lease was $36 million ($37 million as at December 31, 2019), net of accumulated amortization of $639 million ($677 million as at December 31, 2019). Long-term liabilities for the finance lease arrangements are included in other liabilities and provisions in the Condensed Consolidated Balance Sheet and are disclosed in Note 13.

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Condensed Consolidated Balance Sheet (Parenthetical) (unaudited) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Statement Of Financial Position [Abstract]
Allowances for accounts receivable and accrued revenues	$ 11	$ 3
Common Stock, Shares, Authorized	775,000,000	775,000,000
Common Stock, Shares, Issued	259,800,000	259,800,000
Common Stock, Shares, Outstanding	259,800,000	259,800,000

XML

Foreign Exchange (Gain) Loss, Net

3 Months Ended

Mar. 31, 2020

Foreign Currency [Abstract]

Foreign Exchange (Gain) Loss, Net

6. Foreign Exchange (Gain) Loss, Net

	Three Months Ended
	March 31,
	2020			2019
Unrealized Foreign Exchange (Gain) Loss on:
Translation of U.S. dollar financing debt issued from Canada	$	76		$	(93	)
Translation of U.S. dollar risk management contracts issued from Canada		52			(11	)
Translation of intercompany notes		(27	)		79
		101			(25	)
Foreign Exchange on Settlements of:
U.S. dollar financing debt issued from Canada		17			(1	)
U.S. dollar risk management contracts issued from Canada		3			-
Intercompany notes		3			(12	)
Other Monetary Revaluations		(8	)		1
	$	116		$	(37	)

Following the completion of the Reorganization, including the U.S. Domestication, on January 24, 2020 as described in Note 1, the U.S. dollar denominated unsecured notes issued by Encana Corporation from Canada were assumed by Ovintiv Inc., a company incorporated in Delaware with a U.S. dollar functional currency. Accordingly, these U.S. dollar denominated unsecured notes, along with certain intercompany notes, no longer attract foreign exchange translation gains or losses.

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Basis of Presentation and Principles of Consolidation

3 Months Ended

Mar. 31, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation and Principles of Consolidation

1. Basis of Presentation and Principles of Consolidation

On January 24, 2020, Encana Corporation (“Encana”) completed a corporate reorganization, which included a plan of arrangement (the “Arrangement”) that involved, among other things, a share consolidation by Encana on the basis of one post-consolidation share for each five pre-consolidation shares (the “Share Consolidation”), and Ovintiv Inc. ultimately acquired all of the issued and outstanding common shares of Encana in exchange for shares of common stock of Ovintiv Inc. on a one-for-one basis. Following completion of the Arrangement, Ovintiv Inc. migrated from Canada and became a Delaware corporation, domiciled in the U.S. (the “U.S. Domestication”). The Arrangement and the U.S. Domestication together are referred to as the “Reorganization”. Ovintiv Inc. and its subsidiaries (collectively, “Ovintiv”) continue to carry on the business of the exploration for, the development of, and the production and marketing of oil, NGLs and natural gas, which was previously conducted by Encana and its subsidiaries prior to the completion of the Reorganization. References to the “Company” are to Encana Corporation and its subsidiaries prior to the completion of the Reorganization and to Ovintiv Inc. and its subsidiaries following the completion of the Reorganization.

The Arrangement, as described above, was accounted for as a reorganization of entities under common control. Accordingly, the resulting transactions were recognized using historical carrying amounts. On January 24, 2020, Ovintiv became the reporting entity upon completion of the Reorganization.

In accordance with the Share Consolidation, all common shares and per-share amounts disclosed herein reflect the post-Share Consolidation shares unless otherwise specified; comparative periods have been restated accordingly. References to shares of common stock refer to the shares of common stock of Ovintiv Inc. for any periods after the completion of the Arrangement, and to the common shares of Encana Corporation for any periods before January 24, 2020.

Following the U.S. Domestication, on January 24, 2020, the functional currency of Ovintiv Inc. became U.S. dollars, and accordingly, the financial results herein are consolidated and reported in U.S. dollars.

The interim Condensed Consolidated Financial Statements include the accounts of Ovintiv and entities in which it holds a controlling interest. All intercompany balances and transactions are eliminated on consolidation. Undivided interests in oil and natural gas exploration and production joint ventures and partnerships are consolidated on a proportionate basis. Investments in non-controlled entities over which the Company has the ability to exercise significant influence are accounted for using the equity method.  

The interim Condensed Consolidated Financial Statements are prepared in conformity with U.S. GAAP and the rules and regulations of the SEC. Pursuant to these rules and regulations, certain information and disclosures normally required under U.S. GAAP have been condensed or have been disclosed on an annual basis only. Accordingly, the interim Condensed Consolidated Financial Statements should be read in conjunction with the annual audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2019, which are included in Item 8 of Ovintiv’s 2019 Annual Report on Form 10-K.

The interim Condensed Consolidated Financial Statements have been prepared following the same accounting policies and methods of computation as the annual audited Consolidated Financial Statements for the year ended December 31, 2019, except as noted below in Note 2. The disclosures provided below are incremental to those included with the annual audited Consolidated Financial Statements.

These unaudited interim Condensed Consolidated Financial Statements reflect, in the opinion of Management, all normal and recurring adjustments necessary to present fairly the financial position and results of the Company as at and for the periods presented. Interim condensed consolidated financial results are not necessarily indicative of consolidated financial results expected for the fiscal year.

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2020

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Accounting Pronouncements

2. Recent Accounting Pronouncements

Changes in Accounting Policies and Practices

On January 1, 2020, Ovintiv adopted the following ASUs issued by the FASB, which have not had a material impact on the interim Condensed Consolidated Financial Statements:

• ASU 2017-04, “Simplifying the Test for Goodwill Impairment”. The amendment eliminates the second step of the goodwill impairment test which requires the Company to measure the impairment based on the excess amount of the carrying value of the reporting unit’s goodwill over the implied fair value of its goodwill. Under this amendment, the goodwill impairment will be measured based on the excess amount of the reporting unit’s carrying value over its respective fair value. The amendment has been applied prospectively.

• ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” under Topic 326. The standard amends the impairment model which requires utilizing a forward-looking expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables. The standard requires entities to consider a broader range of information to estimate expected credit losses, resulting in earlier recognition of credit losses. The standard has been applied using the modified retrospective approach.

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Restructuring Charges

3 Months Ended

Mar. 31, 2020

Restructuring Charges [Abstract]

Restructuring Charges

18. Restructuring Charges

In February 2019, in conjunction with the Newfield business combination as described in Note 8, the Company announced workforce reductions to better align staffing levels and the organizational structure with the Company’s strategy. During 2019, the Company incurred total restructuring charges of $138 million, before tax, primarily related to severance costs. As at March 31, 2020, $2 million remains accrued and is expected to be paid in 2020.

Restructuring charges are included in administrative expense presented in the Corporate and Other segment in the Condensed Consolidated Statement of Earnings.

	As at			As at
	March 31,			December 31,
	2020			2019
Outstanding Restructuring Accrual, Beginning of Year	$	8		$	-
Restructuring Expenses Incurred		-			138
Restructuring Costs Paid		(6	)		(130	)
Outstanding Restructuring Accrual, End of Period (1)	$	2		$	8

(1) Included in accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheet.

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Asset Retirement Obligation

3 Months Ended

Mar. 31, 2020

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation

14. Asset Retirement Obligation

	As at			As at
	March 31,			December 31,
	2020			2019
Asset Retirement Obligation, Beginning of Year	$	614		$	455
Liabilities Incurred		7			15
Liabilities Acquired (See Note 8)		-			184
Liabilities Settled and Divested		(42	)		(141	)
Change in Estimated Future Cash Outflows		22			47
Accretion Expense		9			37
Foreign Currency Translation		(29	)		17
Asset Retirement Obligation, End of Period	$	581		$	614
Current Portion	$	143		$	189
Long-Term Portion		438			425
	$	581		$	614

XML

Business Combination - Schedule of Purchase Price Allocations (Details) - USD ($) $ in Millions		Feb. 13, 2019	Mar. 31, 2020	Dec. 31, 2019
Assets Acquired:
Goodwill			$ 2,555	$ 2,611
Newfield Exploration Company [Member]
Consideration:
Fair value of Encana's common shares issued	[1]	$ 3,478
Business acquisition, payment in cash	[2]	5
Total Consideration		3,483
Assets Acquired:
Cash and cash equivalents		46
Accounts receivable and accrued revenues		486
Other current assets		50
Restricted cash		53
Other assets		105
Goodwill	[3]	25
Liabilities Assumed:
Accounts payable and accrued liabilities	[3],[4]	(795)
Long-term debt		(2,603)
Operating lease liabilities		(76)
Other long-term liabilities	[3]	(65)
Asset retirement obligation		(184)
Deferred income taxes	[3]	(322)
Total Purchase Price		3,483
Proved Properties [Member] | Newfield Exploration Company [Member]
Assets Acquired:
Property, plant and equipment, net		5,903
Unproved Properties [Member] | Newfield Exploration Company [Member]
Assets Acquired:
Property, plant and equipment, net		838
Other Property, Plant and Equipment [Member] | Newfield Exploration Company [Member]
Assets Acquired:
Property, plant and equipment, net		$ 22

[1] The fair value was based on the NYSE closing price of the pre-Share Consolidation Encana common shares of $6.40 on February 13, 2019.

[2] The fair value was based on a price of $6.50 per notional unit which was determined using a volume-weighted average of the trading price of pre-Share Consolidation Encana common shares on the NYSE on each of the five consecutive trading days ending on the trading day that was three trading days prior to February 13, 2019.

[3] Since the completion of the business combination on February 13, 2019, additional information related to pre-acquisition liabilities and contingencies was obtained resulting in a measurement period adjustment. Changes in the fair value estimates comprised an increase in other liabilities of $16 million, of which approximately $11 million is presented in accounts payable and accrued liabilities and $5 million is presented in other long-term liabilities, a decrease in deferred tax liabilities of $4 million and a corresponding increase in goodwill of $12 million.

[4] In conjunction with the acquisition, various legal claims and actions arising in the normal course of Newfield’s operations were assumed by the Company. On March 29, 2019, Newfield and its wholly-owned subsidiary entered into an Agreement and Mutual Release with Sapura Energy Berhad, formerly known as SapuraKencana Petroleum Berhad, and Sapura Exploration and Production Inc., formerly known as SapuraKencana Energy Inc. (collectively, “Sapura”), and agreed to settle arbitration claims in the amount of $22.5 million arising from Sapura’s purchase of Newfield’s Malaysian business in February 2014. The settlement amount including legal fees was included in the purchase price allocation as part of the current liabilities assumed at the acquisition date. Although the outcome of any remaining legal claims and actions assumed following the acquisition of Newfield cannot be predicted with certainty, the Company does not expect these matters to have a material adverse effect on the Company’s financial position, cash flows or results of operations.

XML

Supplementary Information (Net Change in Non-Cash Working Capital) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Supplemental Cash Flow Elements [Abstract]
Accounts receivable and accrued revenues	$ 121	$ 174
Accounts payable and accrued liabilities	(31)	(88)
Current portion of operating lease liabilities	(1)	67
Income tax receivable and payable	(6)	(35)
Net change in non-cash working capital	$ 83	$ 118

XML

Fair Value Measurements (Schedule Of Fair Value, Assets And Liabilities Measured On Recurring Basis) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Net, Current	$ 958	$ 148
Risk Management Assets, Net, Long-term	1	2
Risk Management Liabilities, Net, Current	40	114
Risk Management Liabilities, Net, Long-term	81	68
Guarantor Obligations, Current Carrying Value	25	9
Other Liabilities and Provisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	19	7
Other Liabilities and Provisions [Member] | Carrying Amount [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	19	7
Other Liabilities and Provisions [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	0	0
Other Liabilities and Provisions [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	19	7
Other Liabilities and Provisions [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	0	0
Accounts Payable and Accrued Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	6	2
Accounts Payable and Accrued Liabilities [Member] | Carrying Amount [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	6	2
Accounts Payable and Accrued Liabilities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	0	0
Accounts Payable and Accrued Liabilities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	6	2
Accounts Payable and Accrued Liabilities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Guarantor Obligations, Current Carrying Value	0	0
Commodity Derivatives [Member] | Other Current Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	1,088	202
Risk Management Assets, Gross Liabilities	(130)	(67)
Risk Management Assets, Net, Current	958	135
Commodity Derivatives [Member] | Other Current Assets [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	9	0
Commodity Derivatives [Member] | Other Current Assets [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	928	202
Commodity Derivatives [Member] | Other Current Assets [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	151	0
Commodity Derivatives [Member] | Other Noncurrent Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	5	6
Risk Management Assets, Gross Liabilities	(5)	(4)
Risk Management Assets, Net, Long-term	0	2
Commodity Derivatives [Member] | Other Noncurrent Assets [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	0	0
Commodity Derivatives [Member] | Other Noncurrent Assets [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	5	6
Commodity Derivatives [Member] | Other Noncurrent Assets [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	0	0
Commodity Derivatives [Member] | Other Current Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	137	181
Risk Management Liabilities, Gross Assets	(130)	(67)
Risk Management Liabilities, Net, Current	7	114
Commodity Derivatives [Member] | Other Current Liabilities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	0	1
Commodity Derivatives [Member] | Other Current Liabilities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	137	139
Commodity Derivatives [Member] | Other Current Liabilities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	0	41
Commodity Derivatives [Member] | Other Liabilities and Provisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	78	72
Risk Management Liabilities, Gross Assets	(5)	(4)
Risk Management Liabilities, Net, Long-term	73	68
Commodity Derivatives [Member] | Other Liabilities and Provisions [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	0	0
Commodity Derivatives [Member] | Other Liabilities and Provisions [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	77	61
Commodity Derivatives [Member] | Other Liabilities and Provisions [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	1	11
Foreign Currency Derivatives [Member] | Other Current Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets		13
Risk Management Assets, Gross Liabilities		0
Risk Management Assets, Net, Current		13
Foreign Currency Derivatives [Member] | Other Current Assets [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets		0
Foreign Currency Derivatives [Member] | Other Current Assets [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets		13
Foreign Currency Derivatives [Member] | Other Current Assets [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets		$ 0
Foreign Currency Derivatives [Member] | Other Noncurrent Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	1
Risk Management Assets, Gross Liabilities	0
Risk Management Assets, Net, Long-term	1
Foreign Currency Derivatives [Member] | Other Noncurrent Assets [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	0
Foreign Currency Derivatives [Member] | Other Noncurrent Assets [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	1
Foreign Currency Derivatives [Member] | Other Noncurrent Assets [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Assets, Gross assets	0
Foreign Currency Derivatives [Member] | Other Current Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	33
Risk Management Liabilities, Gross Assets	0
Risk Management Liabilities, Net, Current	33
Foreign Currency Derivatives [Member] | Other Current Liabilities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	0
Foreign Currency Derivatives [Member] | Other Current Liabilities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	33
Foreign Currency Derivatives [Member] | Other Current Liabilities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	0
Foreign Currency Derivatives [Member] | Other Liabilities and Provisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	8
Risk Management Liabilities, Gross Assets	0
Risk Management Liabilities, Net, Long-term	8
Foreign Currency Derivatives [Member] | Other Liabilities and Provisions [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	0
Foreign Currency Derivatives [Member] | Other Liabilities and Provisions [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	8
Foreign Currency Derivatives [Member] | Other Liabilities and Provisions [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk Management Liabilities, Gross liabilities	$ 0

XML

Financial Instruments and Risk Management (Risk Management Positions) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($) $ / bbl $ / Mcf MMcf MBbls
Derivative [Line Items]
Net Premiums Received on Unexpired Options	$ (7)
Other Derivative Contracts, Net	(25)
Foreign Currency Swaps, at Fair value, Net	(40)
Total Fair Value Position and Net Premiums Received	$ 813
Oil [Member] | WTI Fixed Price Contracts Maturing 2020 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MBbls	140.2
Term	Dec. 31, 2020
Average Price, Fixed Price Contracts | $ / bbl	45.36
Price Risk Derivatives, at Fair Value, Net	$ 625
Oil [Member] | WTI Three-Way Options Maturing 2020 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MBbls	26.8
Term	Dec. 31, 2020
Price Risk Derivatives, at Fair Value, Net	$ 60
Oil [Member] | WTI Three-Way Options Maturing 2020 [Member] | Sold [Member] | Put Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / bbl	43.44
Oil [Member] | WTI Three-Way Options Maturing 2020 [Member] | Sold [Member] | Call Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / bbl	61.68
Oil [Member] | WTI Three-Way Options Maturing 2020 [Member] | Bought [Member] | Put Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / bbl	53.44
Oil [Member] | WTI Fixed Price Swaptions Maturing 2021 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MBbls	10.0
Term	Dec. 31, 2021
Average Price, Fixed Price Contracts | $ / bbl	58.00
Price Risk Derivatives, at Fair Value, Net	$ (1)
Oil [Member] | West Texas Intermediate Costless Collars Maturing 2020 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MBbls	15.0
Term	Dec. 31, 2020
Price Risk Derivatives, at Fair Value, Net	$ 91
Oil [Member] | West Texas Intermediate Costless Collars Maturing 2020 [Member] | Sold [Member] | Call Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / bbl	68.71
Oil [Member] | West Texas Intermediate Costless Collars Maturing 2020 [Member] | Bought [Member] | Put Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / bbl	50.00
Natural Gas Liquids [Member] | Propane Fixed Price Contracts Maturing 2020 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MBbls	12.0
Term	Dec. 31, 2020
Average Price, Fixed Price Contracts | $ / bbl	21.34
Price Risk Derivatives, at Fair Value, Net	$ 26
Natural Gas Liquids [Member] | Iso-Butane Fixed Price Contracts Maturing 2020 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MBbls	3.5
Term	Dec. 31, 2020
Average Price, Fixed Price Contracts | $ / bbl	24.36
Price Risk Derivatives, at Fair Value, Net	$ 7
Natural Gas Liquids [Member] | Butane Fixed Price Contracts Maturing 2020 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MBbls	8.0
Term	Dec. 31, 2020
Average Price, Fixed Price Contracts | $ / bbl	23.54
Price Risk Derivatives, at Fair Value, Net	$ 18
Natural Gas [Member] | Fair Value Position Excluding Unexpired Options [Member]
Derivative [Line Items]
Price Risk Derivatives, at Fair Value, Net	$ 88
Natural Gas [Member] | NYMEX Costless Collars Maturing 2020 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MMcf	55
Term	Dec. 31, 2020
Price Risk Derivatives, at Fair Value, Net	$ 8
Natural Gas [Member] | NYMEX Costless Collars Maturing 2020 [Member] | Sold [Member] | Call Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / Mcf	2.88
Natural Gas [Member] | NYMEX Costless Collars Maturing 2020 [Member] | Bought [Member] | Put Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / Mcf	2.50
Natural Gas [Member] | Basis Contracts Maturing 2020 [Member]
Derivative [Line Items]
Term	Dec. 31, 2020
Price Risk Derivatives, at Fair Value, Net	$ (10)
Natural Gas [Member] | NYMEX Fixed Price Contracts Maturing 2020 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MMcf	811
Term	Dec. 31, 2020
Average Price, Fixed Price Contracts | $ / Mcf	2.65
Price Risk Derivatives, at Fair Value, Net	$ 147
Natural Gas [Member] | NYMEX Fixed Price Contracts Maturing 2021 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MMcf	165
Term	Dec. 31, 2021
Average Price, Fixed Price Contracts | $ / Mcf	2.51
Price Risk Derivatives, at Fair Value, Net	$ 1
Natural Gas [Member] | NYMEX Fixed Price Swaptions Maturing 2021 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MMcf	330
Term	Dec. 31, 2021
Average Price, Fixed Price Contracts | $ / Mcf	2.56
Price Risk Derivatives, at Fair Value, Net	$ (22)
Natural Gas [Member] | Basis Contracts Maturing 2021 [Member]
Derivative [Line Items]
Term	Dec. 31, 2021
Price Risk Derivatives, at Fair Value, Net	$ (18)
Natural Gas [Member] | Basis Contracts Maturing 2022 to 2025 [Member]
Derivative [Line Items]
Price Risk Derivatives, at Fair Value, Net	$ (33)
Natural Gas [Member] | NYMEX Fixed Price Swaptions Maturing 2022 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MMcf	165
Term	Dec. 31, 2022
Average Price, Fixed Price Contracts | $ / Mcf	2.51
Price Risk Derivatives, at Fair Value, Net	$ (11)
Natural Gas [Member] | NYMEX Three-Way Options Maturing 2020 [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MMcf	330
Term	Dec. 31, 2020
Price Risk Derivatives, at Fair Value, Net	$ 19
Natural Gas [Member] | NYMEX Three-Way Options Maturing 2020 [Member] | Sold [Member] | Put Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / Mcf	2.25
Natural Gas [Member] | NYMEX Three-Way Options Maturing 2020 [Member] | Sold [Member] | Call Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / Mcf	2.72
Natural Gas [Member] | NYMEX Three-Way Options Maturing 2020 [Member] | Bought [Member] | Put Option [Member]
Derivative [Line Items]
Average Price, Options/Collars | $ / Mcf	2.60
Natural Gas [Member] | NYMEX Call Options Maturing 2020 [Member] | Sold [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volumes/day | MMcf	230
Term	Dec. 31, 2020
Price Risk Derivatives, at Fair Value, Net	$ 4
Average Price, Options/Collars | $ / Mcf	3.25
Natural Gas [Member] | Other Financial Positions [Member]
Derivative [Line Items]
Price Risk Derivatives, at Fair Value, Net	$ 3
Oil and NGLs [Member]
Derivative [Line Items]
Price Risk Derivatives, at Fair Value, Net	$ 797
Oil and NGLs [Member] | Basis Contracts Maturing 2020 [Member]
Derivative [Line Items]
Term	Dec. 31, 2020
Price Risk Derivatives, at Fair Value, Net	$ (32)
Oil and NGLs [Member] | Other Crude Financial Positions [Member]
Derivative [Line Items]
Price Risk Derivatives, at Fair Value, Net	$ 3
Minimum [Member] | Foreign Currency Contracts Maturing 2020 - 2021 [Member]
Derivative [Line Items]
Term	Dec. 31, 2020
Minimum [Member] | Natural Gas [Member] | Basis Contracts Maturing 2022 to 2025 [Member]
Derivative [Line Items]
Term	Jan. 01, 2022
Maximum [Member] | Foreign Currency Contracts Maturing 2020 - 2021 [Member]
Derivative [Line Items]
Term	Dec. 31, 2021
Maximum [Member] | Natural Gas [Member] | Basis Contracts Maturing 2022 to 2025 [Member]
Derivative [Line Items]
Term	Dec. 31, 2025

XML

Compensation Plans (Schedule of Share-based Compensation, Activity) (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2020 shares
Performance Share Units (PSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	2,166
Deferred Share Units (DSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	42
Restricted Share Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	6,350

XML

Foreign Exchange (Gain) Loss, Net (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Schedule Of Foreign Exchange Transactions [Line Items]
Unrealized Foreign Exchange (Gain) Loss	$ 101	$ (25)
Foreign Exchange (Gain) Loss, Net	116	(37)
Translation of U.S. Dollar Debt Issued From Canada [Member]
Schedule Of Foreign Exchange Transactions [Line Items]
Unrealized Foreign Exchange (Gain) Loss	76	(93)
Foreign Exchange on Settlements	17	(1)
Translation of U.S. Dollar Risk Management Contracts Issued From Canada [Member]
Schedule Of Foreign Exchange Transactions [Line Items]
Unrealized Foreign Exchange (Gain) Loss	52	(11)
Foreign Exchange on Settlements	3	0
Translation of Intercompany Notes [Member]
Schedule Of Foreign Exchange Transactions [Line Items]
Unrealized Foreign Exchange (Gain) Loss	(27)	79
Foreign Exchange on Settlements	3	(12)
Other Monetary Revaluations [Member]
Schedule Of Foreign Exchange Transactions [Line Items]
Foreign Exchange on Settlements	$ (8)	$ 1

XML

Segmented Information (Goodwill, Property, Plant and Equipment and Total Assets By Segment) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Segment Reporting, Asset Reconciling Item [Line Items]
Goodwill	$ 2,555	$ 2,611
Property, Plant and Equipment	15,080	15,191
Total Assets	21,505	21,487
Operating Segments [Member] | USA Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Goodwill	1,938	1,938
Property, Plant and Equipment	13,696	13,757
Total Assets	16,229	16,613
Operating Segments [Member] | Canadian Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Goodwill	617	673
Property, Plant and Equipment	1,173	1,205
Total Assets	1,949	2,122
Operating Segments [Member] | Market Optimization [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Goodwill	0	0
Property, Plant and Equipment	2	2
Total Assets	272	253
Corporate & Other [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Goodwill	0	0
Property, Plant and Equipment	209	227
Total Assets	$ 3,055	$ 2,499

XML

Compensation Plans (Schedule of Weighted Average Assumptions Used to Fair Value Share Units) (Details)	3 Months Ended
	Mar. 31, 2020 $ / shares	Mar. 31, 2019 $ / shares	Mar. 31, 2020 $ / shares	Mar. 31, 2019 $ / shares
United States Of America Dollars [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair Value Assumptions, Risk Free Interest Rate	0.47%	1.49%
Fair Value Assumptions, Dividend Yield	13.89%	1.04%
Fair Value Assumptions, Expected Volatility Rate	93.81%	43.95%
Fair Value Assumptions, Expected Term	2 years 9 months 18 days	3 years
Market Share Price	$ 2.70	$ 36.20
Canadian Dollar [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair Value Assumptions, Risk Free Interest Rate	0.47%	1.49%
Fair Value Assumptions, Dividend Yield	13.07%	1.03%
Fair Value Assumptions, Expected Volatility Rate	93.42%	41.92%
Fair Value Assumptions, Expected Term	2 years 3 months 18 days	2 years 7 months 6 days
Market Share Price			$ 3.86	$ 48.40

XML

Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule Of Long-Term Debt

	As at			As at
	March 31,			December 31,
	2020			2019
U.S. Dollar Denominated Debt
Revolving credit and term loan borrowings	$	842		$	698
U.S. Unsecured Notes:
3.90% due November 15, 2021		590			600
5.75% due January 30, 2022		660			750
5.625% due July 1, 2024		1,000			1,000
5.375% due January 1, 2026		700			700
8.125% due September 15, 2030		300			300
7.20% due November 1, 2031		350			350
7.375% due November 1, 2031		500			500
6.50% due August 15, 2034		750			750
6.625% due August 15, 2037		462			462
6.50% due February 1, 2038		505			505
5.15% due November 15, 2041		244			244
Total Principal		6,903			6,859
Increase in Value of Debt Acquired		140			149
Unamortized Debt Discounts and Issuance Costs		(37	)		(34	)
Total Long-Term Debt	$	7,006		$	6,974
Current Portion	$	-		$	-
Long-Term Portion		7,006			6,974
	$	7,006		$	6,974

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2020

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income

	Three Months Ended
	March 31,
	2020			2019
Foreign Currency Translation Adjustment
Balance, Beginning of Year	$	1,004		$	976
Change in Foreign Currency Translation Adjustment		(134	)		34
Balance, End of Period	$	870		$	1,010
Pension and Other Post-Employment Benefit Plans
Balance, Beginning of Year	$	42		$	22
Amounts Reclassified from Other Comprehensive Income:
Reclassification of net actuarial (gains) and losses to net earnings (See Note 20)		(2	)		(1	)
Income taxes		-			-
Balance, End of Period	$	40		$	21
Total Accumulated Other Comprehensive Income	$	910		$	1,031

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Compensation Plans

3 Months Ended

Mar. 31, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Compensation Plans

19. Compensation Plans

Ovintiv has a number of compensation arrangements under which the Company awards various types of long-term incentive grants to eligible employees and Directors. They may include TSARs, SARs, Performance Share Units (“PSUs”), Deferred Share Units (“DSUs”) and RSUs. These compensation arrangements are share-based.  

Ovintiv accounts for TSARs, SARs, PSUs and RSUs as cash-settled share-based payment transactions and, accordingly, accrues compensation costs over the vesting period based on the fair value of the rights determined using the Black-Scholes-Merton and other fair value models.

The following weighted average assumptions were used to determine the fair value of the share units outstanding:  

	As at March 31, 2020		As at March 31, 2019
	US$ Share Units	C$ Share Units	US$ Share Units	C$ Share Units
Risk Free Interest Rate	0.47%	0.47%	1.49%	1.49%
Dividend Yield	13.89%	13.07%	1.04%	1.03%
Expected Volatility Rate (1)	93.81%	93.42%	43.95%	41.92%
Expected Term	2.8 yrs	2.3 yrs	3.0 yrs	2.6 yrs
Market Share Price (2)	US$2.70	C$3.86	US$36.20	C$48.40

(1) Volatility was estimated using historical rates.

(2) Market share price reflects the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

The Company has recognized the following share-based compensation costs:

	Three Months Ended
	March 31,
	2020			2019
Total Compensation Costs of Transactions Classified as Cash-Settled	$	(51	)	$	64
Less: Total Share-Based Compensation Costs Capitalized		13			(18	)
Total Share-Based Compensation Expense (Recovery)	$	(38	)	$	46
Recognized on the Condensed Consolidated Statement of Earnings in:
Operating	$	(12	)	$	14
Administrative		(26	)		32
	$	(38	)	$	46

As at March 31, 2020, the liability for share-based payment transactions totaled $8 million ($78 million as at December 31, 2019), of which $4 million ($40 million as at December 31, 2019) is recognized in accounts payable and accrued liabilities and $4 million ($38 million as at December 31, 2019) is recognized in other liabilities and provisions in the Condensed Consolidated Balance Sheet.

	As at March 31, 2020			As at December 31, 2019
Liability for Cash-Settled Share-Based Payment Transactions:
Unvested		$	7		$	65
Vested			1			13
		$	8		$	78

The following units were granted primarily in conjunction with the Company’s annual grant of long-term incentive awards. The PSUs and RSUs were granted at the volume-weighted average trading price of shares of Ovintiv common stock for the five days prior to the grant date. The RSUs issued in 2020 vest at one-third of the number granted in each of the years following the grant date, for three years.

Three Months Ended March 31, 2020 (thousands of units)
RSUs	6,350
PSUs	2,166
DSUs	42

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Share Capital

3 Months Ended

Mar. 31, 2020

Class Of Stock Disclosures [Abstract]

Share Capital

15. Share Capital

Authorized

As of January 24, 2020, following the completion of the Reorganization, Ovintiv is authorized to issue 775 million shares of common stock, par value $0.01 per share, and 25 million shares of preferred stock, par value $0.01 per share. No shares of preferred stock are outstanding.

Issued and Outstanding

	As at March 31, 2020					As at December 31, 2019
	Number (millions)		Amount			Number (millions)			Amount
Shares of Common Stock Outstanding, Beginning of Year		259.8	$	7,061			190.5		$	4,656
Shares of Common Stock Purchased		-		-			(39.4	)		(1,073	)
Shares of Common Stock Issued		-		-			108.7			3,478
Reclassification of Share Capital due to the Reorganization (See Note 1)		-		(7,058	)		-			-
Shares of Common Stock Outstanding, End of Period		259.8	$	3			259.8		$	7,061

In conjunction with the Reorganization as described in Note 1, the amount recognized in share capital in excess of Ovintiv’s established par value of $0.01 per share was reclassified to paid in surplus. Accordingly, approximately $7,058 million was reclassified.

On February 13, 2019, the Company completed the acquisition of all the issued and outstanding shares of common stock of Newfield whereby Encana issued approximately 543.4 million common shares, on a pre-Share Consolidation basis, to Newfield shareholders (approximately 108.7 million post-Share Consolidation shares), representing a pre-Share Consolidation exchange ratio of 2.6719 Encana common shares for each share of Newfield common stock held. See Note 8 for further information on the business combination.

Substantial Issuer Bid

On June 10, 2019, the Company announced its intention to purchase, for cancellation, up to $213 million of common shares through a substantial issuer bid (“SIB”) which commenced on July 8, 2019. On August 29, 2019, the Company purchased the equivalent of approximately 9.5 million post-Share Consolidation shares at a converted price of $22.50 per share, for an aggregate purchase price of approximately $213 million, of which $257 million was charged to share capital and $44 million was credited to paid in surplus.

The purchase was made in accordance with the terms and conditions of the SIB, with consideration allocated to share capital equivalent to the average carrying amount of the shares, with the excess of the carrying amount over the purchase consideration credited to paid in surplus.

Normal Course Issuer Bid

On February 27, 2019, the Company announced that the TSX accepted the Company’s notice of intention to purchase, for cancellation, the equivalent of up to approximately 29.9 million post-Share Consolidation Encana common shares, pursuant to a NCIB over a 12-month period from March 4, 2019 to March 3, 2020.

During the three months ended March 31, 2019, the Company purchased the equivalent of approximately 11.2 million post-Share Consolidation shares under the NCIB for total consideration of approximately $400 million. Of the amount paid, $307 million was charged to share capital and $93 million was charged to retained earnings.

For the twelve months ended December 31, 2019, the Company purchased the equivalent of approximately 29.9 million post-Share Consolidation shares under the NCIB for total consideration of approximately $1,037 million. Of the amount paid, $816 million was charged to share capital and $221 million was charged to retained earnings.

All purchases were made in accordance with the NCIB at prevailing market prices plus brokerage fees, with consideration allocated to share capital up to the average carrying amount of the shares, with any excess allocated to retained earnings.

Dividends

During the three months ended March 31, 2020, the Company declared and paid dividends of $0.09375 per share of Ovintiv common stock totaling $24 million. For the three months ended March 31, 2019, the Company declared and paid dividends of $0.09375 per common share on a post-Share Consolidation basis totaling $28 million.

On May 7, 2020, the Board of Directors declared a dividend of $0.09375 per share of Ovintiv common stock payable on June 30, 2020 to stockholders of record as of June 15, 2020.

Earnings Per Share of Common Stock

The following table presents the computation of net earnings (loss) per share of common stock:

	Three Months Ended
	March 31,
(US$ millions, except per share amounts)	2020		2019
Net Earnings (Loss)	$	421	$	(245	)
Number of Shares of Common Stock (1):
Weighted average shares of common stock outstanding - Basic		259.8		244.3
Effect of dilutive securities		-		-
Weighted Average Shares of Common Stock Outstanding - Diluted		259.8		244.3
Net Earnings (Loss) per Share of Common Stock (1)
Basic & Diluted	$	1.62	$	(1.00	)

(1) Net earnings (loss) per share of common stock and weighted average shares of common stock outstanding reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

Ovintiv Stock Options

Ovintiv has share-based compensation plans that allow employees to purchase shares of common stock of the Company. Option exercise prices are not less than the market value of the shares of common stock on the date the options are granted. All options outstanding as at March 31, 2020 have associated Tandem Stock Appreciation Rights (“TSARs”) attached. In lieu of exercising the option, the associated TSARs give the option holder the right to receive a cash payment equal to the excess of the market price of Ovintiv’s shares of common stock at the time of the exercise over the original grant price. Historically, most holders of options with TSARs have elected to exercise their stock options as a Stock Appreciation Right (“SAR”) in exchange for a cash payment. As a result, outstanding TSARs are not considered potentially dilutive securities.

Ovintiv Restricted Share Units

Ovintiv has a share-based compensation plan whereby eligible employees and Directors are granted Restricted Share Units (“RSUs”). An RSU is a conditional grant to receive the equivalent of a share of common stock upon vesting of the RSUs and in accordance with the terms and conditions of the compensation plan and grant agreements. The Company currently settles vested RSUs in cash. As a result, RSUs are currently not considered potentially dilutive securities.  

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Pension and Other Post-Employment Benefits (Total Benefit Plan Expense Recognized) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Net Defined Periodic Benefit Cost	$ (1)	$ 6
Defined Contribution Plan Expense	8	6
Total Benefit Plans Expense	7	12
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Net Defined Periodic Benefit Cost	0	0
Defined Contribution Plan Expense	8	6
Total Benefit Plans Expense	8	6
OPEB [Member]
Defined Benefit Plan Disclosure [Line Items]
Net Defined Periodic Benefit Cost	(1)	6
Defined Contribution Plan Expense	0	0
Total Benefit Plans Expense	$ (1)	$ 6

XML

Income Taxes (Provision For Income Taxes) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Total Current Tax Expense (Recovery)	$ 0	$ 1
Total Deferred Tax Expense (Recovery)	140	(62)
Income Tax Expense (Recovery)	$ 140	$ (61)
Effective Tax Rate	25.00%	19.90%
United States [Member]
Total Current Tax Expense (Recovery)	$ 0	$ 1
Total Deferred Tax Expense (Recovery)	128	(24)
Canada [Member]
Total Current Tax Expense (Recovery)	0	0
Total Deferred Tax Expense (Recovery)	10	(38)
Other Countries [Member]
Total Current Tax Expense (Recovery)	0	0
Total Deferred Tax Expense (Recovery)	$ 2	$ 0

XML

Revenues from Contracts with Customers (Disaggregation of Revenue) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Product revenues	$ 1,570	$ 1,572
Operating Segments [Member] | USA Operations Excluding Intercompany Segment Transactions [Member]
Disaggregation of Revenue [Line Items]
Product revenues	800	783
Operating Segments [Member] | Canadian Operations Excluding Intercompany Segment Transactions [Member]
Disaggregation of Revenue [Line Items]
Product revenues	353	460
Operating Segments [Member] | China Operations Excluding Intercompany Segment Transactions [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	13
Operating Segments [Member] | Market Optimization Excluding Intercompany Segment Transactions [Member]
Disaggregation of Revenue [Line Items]
Product revenues	417	316
Corporate & Other [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	0
Oil [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	854	683
Oil [Member] | Operating Segments [Member] | USA Operations Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	642	609
Oil [Member] | Operating Segments [Member] | Canadian Operations Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	2	1
Oil [Member] | Operating Segments [Member] | China Operations Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	13
Oil [Member] | Operating Segments [Member] | Market Optimization Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	210	60
Oil [Member] | Corporate & Other [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	0
Natural Gas Liquids [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	267	304
Natural Gas Liquids [Member] | Operating Segments [Member] | USA Operations Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	86	97
Natural Gas Liquids [Member] | Operating Segments [Member] | Canadian Operations Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	179	204
Natural Gas Liquids [Member] | Operating Segments [Member] | China Operations Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	0
Natural Gas Liquids [Member] | Operating Segments [Member] | Market Optimization Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	2	3
Natural Gas Liquids [Member] | Corporate & Other [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	0
Natural Gas [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	449	584
Natural Gas [Member] | Operating Segments [Member] | USA Operations Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	72	76
Natural Gas [Member] | Operating Segments [Member] | Canadian Operations Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	172	255
Natural Gas [Member] | Operating Segments [Member] | China Operations Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	0
Natural Gas [Member] | Operating Segments [Member] | Market Optimization Excluding Intercompany Segment Transactions [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	205	253
Natural Gas [Member] | Corporate & Other [Member] | Product Revenues Including Sale of Product Purchased from Third Parties [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	0
Natural Gas Gathering and Processing [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	1
Natural Gas Gathering and Processing [Member] | Operating Segments [Member] | USA Operations Excluding Intercompany Segment Transactions [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	1
Natural Gas Gathering and Processing [Member] | Operating Segments [Member] | Canadian Operations Excluding Intercompany Segment Transactions [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	0
Natural Gas Gathering and Processing [Member] | Operating Segments [Member] | China Operations Excluding Intercompany Segment Transactions [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	0
Natural Gas Gathering and Processing [Member] | Operating Segments [Member] | Market Optimization Excluding Intercompany Segment Transactions [Member]
Disaggregation of Revenue [Line Items]
Product revenues	0	0
Natural Gas Gathering and Processing [Member] | Corporate & Other [Member]
Disaggregation of Revenue [Line Items]
Product revenues	$ 0	$ 0

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Compensation Plans (Amounts Recognized For Share-Based Payment Transactions) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Compensation Costs of Transactions Classified as Cash-Settled	$ (51)	$ 64
Less: Total Share-Based Compensation Costs Capitalized	13	(18)
Total Share-Based Compensation Expense	(38)	46
Operating Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Share-Based Compensation Expense	(12)	14
Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Share-Based Compensation Expense	$ (26)	$ 32

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Business Combination - Schedule of Purchase Price Allocations (Parenthetical) (Details) - Newfield Exploration Company [Member] - USD ($) $ / shares in Units, $ in Millions	Mar. 29, 2019	Feb. 13, 2019
Business Acquisition [Line Items]
Business acquisition price per share		$ 6.40
Business acquisition Fair value notional share price		$ 6.50
Business acquisition consecutive trading days		5 days
Increase in other liabilities		$ 16.0
Decrease in deferred tax liabilities		4.0
Increase in goodwill		12.0
Sapura [Member]
Business Acquisition [Line Items]
Legal settlements paid	$ 22.5
Accounts Payable and Accrued Liabilities [Member]
Business Acquisition [Line Items]
Increase in other liabilities		11.0
Other Long-term Liabilities [Member]
Business Acquisition [Line Items]
Increase in other liabilities		$ 5.0

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Financial Instruments and Risk Management (Unrealized Risk Management Positions) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Derivatives, Fair Value [Line Items]
Risk Management, Current asset	$ 958	$ 148
Risk Management, Long-term asset	1	2
Risk Management, Total asset	959	150
Risk Management, Current liability	40	114
Risk Management, Long-term liability	81	68
Risk Management, Total liability	121	182
Guarantor Obligations, Current Carrying Value	25	9
Risk Management and Other Derivative Guarantee, at Fair Value, Net	813	(41)
Accounts Payable and Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Guarantor Obligations, Current Carrying Value	6	2
Other Liabilities and Provisions [Member]
Derivatives, Fair Value [Line Items]
Guarantor Obligations, Current Carrying Value	$ 19	$ 7

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Fair Value Measurements (Summary Of Changes In Level 3 Fair Value Measurements for Risk Management Positions) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract]
Balance, Beginning Balance	$ (52)	$ 139
Total Gains (Losses)	242	(100)
Purchases, sales and issuances	0	0
Settlements	(40)	(20)
Transfers Out of Level 3	0	0
Balance, Ending Balance	150	19
Change in Unrealized Gains (Losses) Related to Assets and Liabilities Held at End of Period	$ 189	$ (80)

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Financial Instruments and Risk Management (Narrative) (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2020 USD ($) contract item $ / $	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) item
Derivative [Line Items]
Realized Gain (Loss) on Derivatives	$ 148,000,000	$ 72,000,000
Unrealized Gain (Loss) on Derivatives	$ 852,000,000	(407,000,000)
Number of credit risk derivatives held | contract	0
Collateral balances	$ 0
Concentration risk, percentage	97.00%		95.00%
Number of counterparties with more than 10% of fair value of outstanding risk management contracts | item	2		6
Guarantor Obligations, Term	one to four years
Guarantor Obligations, Current Carrying Value	$ 25,000,000		$ 9,000,000
Guarantor Obligations, Maximum Exposure, Undiscounted	$ 118,000,000
Counterparty One [Member]
Derivative [Line Items]
Percent Of The Fair Value Of Outstanding In The Money Net Risk Management Contracts	21.00%		26.00%
Counterparty Two [Member]
Derivative [Line Items]
Percent Of The Fair Value Of Outstanding In The Money Net Risk Management Contracts	17.00%		13.00%
Counterparty Three [Member]
Derivative [Line Items]
Percent Of The Fair Value Of Outstanding In The Money Net Risk Management Contracts			12.00%
Counterparty Four [Member]
Derivative [Line Items]
Percent Of The Fair Value Of Outstanding In The Money Net Risk Management Contracts			12.00%
Counterparty Five [Member]
Derivative [Line Items]
Percent Of The Fair Value Of Outstanding In The Money Net Risk Management Contracts			11.00%
Counterparty Six [Member]
Derivative [Line Items]
Percent Of The Fair Value Of Outstanding In The Money Net Risk Management Contracts			11.00%
Revenue [Member]
Derivative [Line Items]
Realized Gain (Loss) on Derivatives	$ 151,000,000	72,000,000
Unrealized Gain (Loss) on Derivatives	904,000,000	$ (427,000,000)
Currency Swaps, Maturing Remainder Of Fiscal Year [Member]
Derivative [Line Items]
Foreign currency swap, contract amount outstanding	$ 644,000,000
Derivative, average forward exchange rate | $ / $	0.7451
Currency Swaps, Maturing In Two Years [Member]
Derivative [Line Items]
Foreign currency swap, contract amount outstanding	$ 350,000,000
Derivative, average forward exchange rate | $ / $	0.7289
Other Derivative Contracts [Member] | Revenue [Member]
Derivative [Line Items]
Realized Gain (Loss) on Derivatives	$ 1,000,000		$ 2,000,000
Unrealized Gain (Loss) on Derivatives	$ (17,000,000)		$ 0

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Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Schedule of Estimated Future Sublease Income

The following table outlines the Company’s estimated future sublease income as at March 31, 2020. All subleases are classified as operating leases.

(undiscounted)	2020		2021		2022		2023		2024		Thereafter		Total
Sublease Income	$	35	$	48	$	43	$	42	$	42	$	511	$	721

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Share Capital (Tables)

3 Months Ended

Mar. 31, 2020

Class Of Stock Disclosures [Abstract]

Schedule of Common Stock Issued and Outstanding

	As at March 31, 2020					As at December 31, 2019
	Number (millions)		Amount			Number (millions)			Amount
Shares of Common Stock Outstanding, Beginning of Year		259.8	$	7,061			190.5		$	4,656
Shares of Common Stock Purchased		-		-			(39.4	)		(1,073	)
Shares of Common Stock Issued		-		-			108.7			3,478
Reclassification of Share Capital due to the Reorganization (See Note 1)		-		(7,058	)		-			-
Shares of Common Stock Outstanding, End of Period		259.8	$	3			259.8		$	7,061

Earnings Per Common Share

	Three Months Ended
	March 31,
(US$ millions, except per share amounts)	2020		2019
Net Earnings (Loss)	$	421	$	(245	)
Number of Shares of Common Stock (1):
Weighted average shares of common stock outstanding - Basic		259.8		244.3
Effect of dilutive securities		-		-
Weighted Average Shares of Common Stock Outstanding - Diluted		259.8		244.3
Net Earnings (Loss) per Share of Common Stock (1)
Basic & Diluted	$	1.62	$	(1.00	)

(1) Net earnings (loss) per share of common stock and weighted average shares of common stock outstanding reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.

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Restructuring Charges (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	Feb. 28, 2019	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Restructuring Charges [Abstract]
Restructuring Charges		$ 0	$ 138
Restructuring and Related Activities, Initiation Date	Feb. 01, 2019
Restructuring Reserve		$ 2	$ 8	$ 0

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Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Revolving credit and term loan borrowings	$ 842	$ 698
Total Principal	6,903	6,859
Increase in Value of Debt Acquired	140	149
Unamortized Debt Discounts and Issuance Costs	(37)	(34)
Total Long-Term Debt	7,006	6,974
Current Portion	0	0
Long-Term Debt	7,006	6,974
3.90% Unsecured Notes [Member] | Unsecured Notes, Due November 15, 2021 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 590	$ 600
Debt Instrument, Interest Rate, Stated Percentage	3.90%	3.90%
Debt Instrument, Maturity Date	Nov. 15, 2021	Nov. 15, 2021
5.75% Unsecured Notes [Member] | Unsecured Notes, Due January 30, 2022 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 660	$ 750
Debt Instrument, Interest Rate, Stated Percentage	5.75%	5.75%
Debt Instrument, Maturity Date	Jan. 30, 2022	Jan. 30, 2022
5.625% Unsecured Notes [Member] | Unsecured Notes, Due July 1, 2024 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 1,000	$ 1,000
Debt Instrument, Interest Rate, Stated Percentage	5.625%	5.625%
Debt Instrument, Maturity Date	Jul. 01, 2024	Jul. 01, 2024
5.375% Unsecured Notes [Member] | Unsecured Notes, Due Jan 1, 2026 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 700	$ 700
Debt Instrument, Interest Rate, Stated Percentage	5.375%	5.375%
Debt Instrument, Maturity Date	Jan. 01, 2026	Jan. 01, 2026
8.125% Unsecured Notes [Member] | Unsecured Notes, Due September 15, 2030 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 300	$ 300
Debt Instrument, Interest Rate, Stated Percentage	8.125%	8.125%
Debt Instrument, Maturity Date	Sep. 15, 2030	Sep. 15, 2030
7.20% Unsecured Notes [Member] | Unsecured Notes, Due November 1, 2031 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 350	$ 350
Debt Instrument, Interest Rate, Stated Percentage	7.20%	7.20%
Debt Instrument, Maturity Date	Nov. 01, 2031	Nov. 01, 2031
7.375% Unsecured Notes [Member] | Unsecured Notes, Due November 1, 2031 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 500	$ 500
Debt Instrument, Interest Rate, Stated Percentage	7.375%	7.375%
Debt Instrument, Maturity Date	Nov. 01, 2031	Nov. 01, 2031
6.50% Unsecured Notes [Member] | Unsecured Notes, Due August 15, 2034 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 750	$ 750
Debt Instrument, Interest Rate, Stated Percentage	6.50%	6.50%
Debt Instrument, Maturity Date	Aug. 15, 2034	Aug. 15, 2034
6.50% Unsecured Notes [Member] | Unsecured Notes, Due February 1, 2038 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 505	$ 505
Debt Instrument, Interest Rate, Stated Percentage	6.50%	6.50%
Debt Instrument, Maturity Date	Feb. 01, 2038	Feb. 01, 2038
6.625% Unsecured Notes [Member] | Unsecured Notes, Due August 15, 2037 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 462	$ 462
Debt Instrument, Interest Rate, Stated Percentage	6.625%	6.625%
Debt Instrument, Maturity Date	Aug. 15, 2037	Aug. 15, 2037
5.15% Unsecured Notes [Member] | Unsecured Notes, Due November 15, 2041 [Member]
Debt Instrument [Line Items]
Unsecured Debt	$ 244	$ 244
Debt Instrument, Interest Rate, Stated Percentage	5.15%	5.15%
Debt Instrument, Maturity Date	Nov. 15, 2041	Nov. 15, 2041

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Other Liabilities and Provisions (Schedule of Other Liabilities and Provisions) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Other Liabilities And Provisions [Line Items]
Obligation under Finance Lease	$ 99	$ 121
Pensions and Other Post-Employment Benefits	118	119
Long-Term Incentives	4	38
Other Derivative Contracts, Liabilities	25	9
Other	16	20
Other Liabilities and Provisions	402	464
Other Liabilities and Provisions [Member]
Other Liabilities And Provisions [Line Items]
Unrecognized Tax Benefits	146	159
Other Derivative Contracts, Liabilities	$ 19	$ 7

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Business Combination - Schedule of Unaudited Pro Forma Financial Information (Details) - Newfield Exploration Company [Member] $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) $ / shares
Business Acquisition [Line Items]
Revenues	$ 1,515
Net Earnings (Loss)	$ (117)
Net Earnings (Loss) per Share (1)
Basic & Diluted | $ / shares	$ (0.48)

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Property, Plant And Equipment, Net (Narrative) (Details) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2020 USD ($) Lease	Dec. 31, 2019 USD ($)
Property, Plant and Equipment [Line Items]
Internal Costs Capitalized	$ 47	$ 79
Property, Plant and Equipment, Net	15,080	15,191
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 40,184	40,637
Number of finance lease arrangements | Lease	2
Assets Held under Capital Leases [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Net	$ 36	37
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	639	677
Operating Segments [Member] | USA Operations [Member]
Property, Plant and Equipment [Line Items]
Impairments	277	0
Property, Plant and Equipment, Net	13,696	13,757
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 26,320	$ 25,623

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Share Capital (Schedule of Common Stock Issued and Outstanding) (Details) - USD ($) shares in Millions, $ in Millions		3 Months Ended		12 Months Ended
	Jan. 24, 2020	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Class Of Stock Disclosures [Abstract]
Shares of Common Stock Outstanding, Beginning of Year		259.8	190.5	190.5
Shares of Common Stock Purchased		0.0		(39.4)
Shares of Common Stock Issued		0.0		108.7
Shares of Common Stock Outstanding, End of Period		259.8		259.8
Shares of Common Stock Outstanding, Beginning of Year		$ 7,061	$ 4,656	$ 4,656
Shares of Common Stock Purchased		0		(1,073)
Common Shares Issued		0	$ 3,478	3,478
Reclassification of Share Capital due to the Reorganization (See Note 1)	$ (7,058)	(7,058)		0
Shares of Common Stock Outstanding, End of Period		$ 3		$ 7,061

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Segmented Information (Schedule of Marketing Intersegment Eliminations) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Product Information [Line Items]
Revenues	$ 2,643	$ 1,235
Transportation and processing	396	338
Operating	165	165
Purchased product	398	298
Operating Income (Loss)	759	(227)
Market Optimization [Member] | Operating Segments [Member]
Product Information [Line Items]
Revenues	420	326
Transportation and processing	62	47
Operating	2	10
Purchased product	398	298
Operating Income (Loss)	(42)	(29)
Market Optimization [Member] | Reportable Subsegments [Member] | Marketing Sales [Member]
Product Information [Line Items]
Revenues	2,095	1,236
Transportation and processing	168	139
Operating	2	10
Purchased product	1,967	1,116
Operating Income (Loss)	(42)	(29)
Market Optimization [Member] | Intersubsegment Eliminations [Member]
Product Information [Line Items]
Revenues	(1,675)	(910)
Transportation and processing	(106)	(92)
Operating	0	0
Purchased product	(1,569)	(818)
Operating Income (Loss)	$ 0	$ 0

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Supplementary Information (Tables)

3 Months Ended

Mar. 31, 2020

Supplemental Cash Flow Elements [Abstract]

Net Change in Non-Cash Working Capital

A) Net Change in Non-Cash Working Capital

	Three Months Ended
	March 31,
	2020			2019
Operating Activities
Accounts receivable and accrued revenues	$	121		$	174
Accounts payable and accrued liabilities		(31	)		(88	)
Current portion of operating lease liabilities		(1	)		67
Income tax receivable and payable		(6	)		(35	)
	$	83		$	118

Non-Cash Activities

B) Non-Cash Activities

	Three Months Ended
	March 31,
	2020			2019
Non-Cash Investing Activities
Asset retirement obligation incurred (See Note 14)	$	7		$	3
Asset retirement obligation change in estimated future cash outflows (See Note 14)		22			-
Property, plant and equipment accruals		150			82
Capitalized long-term incentives		(17	)		(29	)
Property additions/dispositions (swaps)		4			2
New ROU operating lease assets and liabilities		(1	)		(1	)
Non-Cash Financing Activities
Common shares issued in conjunction with the Newfield business    combination (See Note 8)	$	-		$	(3,478	)

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

24. Commitments and Contingencies

Commitments

The following table outlines the Company’s commitments as at March 31, 2020:

	Expected Future Payments
(undiscounted)	2020		2021		2022		2023		2024		Thereafter		Total
Transportation and Processing	$	518	$	653	$	612	$	507	$	399	$	2,022	$	4,711
Drilling and Field Services		71		6		1		-		-		1		79
Building Leases		10		14		11		7		6		8		56
Total	$	599	$	673	$	624	$	514	$	405	$	2,031	$	4,846

Operating leases with terms greater than one year are not included in the commitments table above. The table above includes short-term leases with contract terms less than 12 months, such as drilling rigs and field office leases, as well as non-lease operating cost components associated with building leases.

Included within transportation and processing in the table above are certain commitments associated with midstream service agreements with VMLP as described in Note 17. Divestiture transactions can reduce certain commitments disclosed above.

Contingencies

Ovintiv is involved in various legal claims and actions arising in the normal course of the Company’s operations. Although the outcome of these claims cannot be predicted with certainty, the Company does not expect these matters to have a material adverse effect on Ovintiv’s financial position, cash flows or results of operations. Management’s assessment of these matters may change in the future as certain of these matters are in early stages or are subject to a number of uncertainties. For material matters that the Company believes an unfavorable outcome is reasonably possible, the Company discloses the nature and a range of potential exposures. If an unfavorable outcome were to occur, there exists the possibility of a material impact on the Company’s consolidated net earnings or loss for the period in which the effect becomes reasonably estimable. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated. Such accruals are based on the Company’s information known about the matters, estimates of the outcomes of such matters and experience in handling similar matters.

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Interest (Tables)

3 Months Ended

Mar. 31, 2020

Interest Expense [Abstract]

Schedule of Interest Expense

	Three Months Ended
	March 31,
	2020		2019
Interest Expense on:
Debt	$	89	$	82
Finance leases		3		3
Other		4		2
	$	96	$	87

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Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

	Three Months Ended
	March 31,
	2020			2019
Current Tax
United States	$	-		$	1
Canada		-			-
Other Countries		-			-
Total Current Tax Expense (Recovery)		-			1
Deferred Tax
United States		128			(24	)
Canada		10			(38	)
Other Countries		2			-
Total Deferred Tax Expense (Recovery)		140			(62	)
Income Tax Expense (Recovery)	$	140		$	(61	)
Effective Tax Rate		25.0	%		19.9	%

Ovintiv’s interim income tax expense is determined using the estimated annual effective income tax rate applied to year-to-date net earnings before income tax plus the effect of legislative changes and amounts in respect of prior periods. The estimated annual effective income tax rate is impacted by expected annual earnings, income tax related to foreign operations, state tax, the effect of legislative changes, non-taxable capital gains and losses, and tax differences on divestitures and transactions.

During the three months ended March 31, 2020, the deferred tax expense was primarily due to net earnings before income tax in the period. During the three months ended March 31, 2019, the deferred tax recovery was primarily due to a net loss before income tax in the period.

Following the U.S. Domestication as described in Note 1, the applicable statutory rate became the U.S. federal income tax rate. The effective tax rate of 25.0 percent for the three months ended March 31, 2020 is higher than the U.S. federal statutory tax rate of 21 percent primarily due to state taxes and foreign jurisdictional tax rates relative to the U.S. federal statutory tax rate applied to jurisdictional earnings.

The effective tax rate of 19.9 percent for the three months ended March 31, 2019, was lower than the Canadian statutory tax rate of 27 percent primarily due to the impact of the foreign jurisdictional tax rates relative to the Canadian statutory tax rate applied to jurisdictional earnings and partnership tax allocations in excess of funding.

During the three months ended March 31, 2020 and as part of the U.S. Domestication, Ovintiv recognized a capital loss and recorded a deferred income tax benefit in the amount of $1.2 billion for Canadian income tax purposes due to the decline in the Company’s share value compared to the historical tax basis of its properties that were transferred as part of the Reorganization. Ovintiv assessed the realizability of these capital losses against capital gains and concluded that it is more likely than not that the deferred tax asset will not be realizable. Therefore, Ovintiv has recorded a corresponding valuation allowance against the deferred tax asset.  If it is determined the capital loss can be utilized at a future date, a reduction in the valuation allowance will be recorded.

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Condensed Consolidated Statement Of Cash Flows (unaudited) - USD ($) $ in Millions		3 Months Ended		12 Months Ended
		Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Operating Activities
Net earnings (loss)		$ 421	$ (245)
Depreciation, depletion and amortization		534	377
Impairments		277	0
Accretion of asset retirement obligation		9	9	$ 37
Deferred income taxes		140	(62)
Unrealized (gain) loss on risk management		(904)	427
Unrealized foreign exchange (gain) loss		101	(25)
Foreign exchange on settlements		20	(13)
(Gain) loss on divestitures, net		0	1
Other		(63)	(47)
Net change in other assets and liabilities		(52)	(11)
Net change in non-cash working capital		83	118
Cash From (Used in) Operating Activities		566	529
Investing Activities
Capital expenditures		(790)	(736)
Acquisitions		(17)	(22)
Corporate acquisition, net of cash and restricted cash acquired		0	94
Proceeds from divestitures		22	2
Net change in investments and other		130	54
Cash From (Used in) Investing Activities		(655)	(608)
Financing Activities
Net issuance (repayment) of revolving long-term debt		144	0
Repayment of long-term debt		(89)	0
Purchase of shares of common stock		0	(400)
Dividends on shares of common stock		(24)	(28)
Finance lease payments and other financing arrangements		(22)	(20)
Cash From (Used in) Financing Activities		9	(448)
Foreign Exchange Gain (Loss) on Cash, Cash Equivalents and Restricted Cash Held in Foreign Currency		(7)	3
Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash		(87)	(524)
Cash, Cash Equivalents and Restricted Cash, Beginning of Year		190	1,058	1,058
Cash, Cash Equivalents and Restricted Cash, End of Period		103	534	$ 190
Cash, End of Period		35	66
Cash Equivalents, End of Period		47	413
Restricted Cash, End of Period (1)	[1]	$ 21	$ 55

[1] Restricted cash of $21 million is included in accounts receivable and accrued revenues on the Condensed Consolidated Balance Sheet as at March 31, 2020. The amount, currently held in escrow, relates to accrued and unpaid interest on certain senior notes and will be paid to bondholders on scheduled interest payment dates during the three months ended June 30, 2020.

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Segmented Information

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Segmented Information

3. Segmented Information

Ovintiv’s reportable segments are determined based on the following operations and geographic locations:

• USA Operations includes the exploration for, development of, and production of oil, NGLs and natural gas and other related activities within the U.S. cost center.  

• Canadian Operations includes the exploration for, development of, and production of oil, NGLs and natural gas and other related activities within the Canadian cost center.    

• China Operations included the exploration for, development of, and production of oil and other related activities within the China cost center. Effective July 31, 2019, the production sharing contract with China National Offshore Oil Corporation (“CNOOC”) was terminated and the Company exited its China Operations.

• Market Optimization is primarily responsible for the sale of the Company’s proprietary production. These results are reported in the USA and Canadian Operations. Market optimization activities include third-party purchases and sales of product to provide operational flexibility and cost mitigation for transportation commitments, product type, delivery points and customer diversification. These activities are reflected in the Market Optimization segment. Market Optimization sells substantially all of the Company’s upstream production to third-party customers. Transactions between segments are based on market values and are eliminated on consolidation.  

Corporate and Other mainly includes unrealized gains or losses recorded on derivative financial instruments. Once the instruments are settled, the realized gains and losses are recorded in the reporting segment to which the derivative instruments relate. Corporate and Other also includes amounts related to sublease rentals.

Results of Operations (For the three months ended March 31)

Segment and Geographic Information

	USA Operations					Canadian Operations				China Operations (1)
	2020			2019		2020		2019		2020		2019
Revenues
Product and service revenues	$	800		$	777	$	351	$	456	$	-	$	13
Gains (losses) on risk management, net		114			52		36		20		-		-
Sublease revenues		-			-		-		-		-		-
Total Revenues		914			829		387		476		-		13
Operating Expenses
Production, mineral and other taxes		48			44		4		4		-		-
Transportation and processing		121			79		213		212		-		-
Operating		139			115		26		37		-		4
Depreciation, depletion and amortization		418			274		109		92		-		-
Impairments		277			-		-		-		-		-
Total Operating Expenses		1,003			512		352		345		-		4
Operating Income (Loss)	$	(89	)	$	317	$	35	$	131	$	-	$	9

	Market Optimization						Corporate & Other						Consolidated
	2020			2019			2020			2019			2020			2019
Revenues
Product and service revenues	$	419		$	326		$	-		$	-		$	1,570		$	1,572
Gains (losses) on risk management, net		1			-			904			(427	)		1,055			(355	)
Sublease revenues		-			-			18			18			18			18
Total Revenues		420			326			922			(409	)		2,643			1,235
Operating Expenses
Production, mineral and other taxes		-			-			-			-			52			48
Transportation and processing		62			47			-			-			396			338
Operating		2			10			(2	)		(1	)		165			165
Purchased product		398			298			-			-			398			298
Depreciation, depletion and amortization		-			-			7			11			534			377
Impairments		-			-			-			-			277			-
Accretion of asset retirement obligation		-			-			9			9			9			9
Administrative		-			-			53			227			53			227
Total Operating Expenses		462			355			67			246			1,884			1,462
Operating Income (Loss)	$	(42	)	$	(29	)	$	855		$	(655	)		759			(227	)
Other (Income) Expenses
Interest														96			87
Foreign exchange (gain) loss, net														116			(37	)
(Gain) loss on divestitures, net														-			1
Other (gains) losses, net														(14	)		28
Total Other (Income) Expenses														198			79
Net Earnings (Loss) Before Income Tax														561			(306	)
Income tax expense (recovery)														140			(61	)
Net Earnings (Loss)													$	421		$	(245	)

(1) The Company terminated its production sharing contract with CNOOC and exited its China Operations effective July 31, 2019.

Intersegment Information

							Market Optimization
	Marketing Sales						Upstream Eliminations						Total
For the three months ended March 31,	2020			2019			2020			2019			2020			2019
Revenues	$	2,095		$	1,236		$	(1,675	)	$	(910	)	$	420		$	326
Operating Expenses
Transportation and processing		168			139			(106	)		(92	)		62			47
Operating		2			10			-			-			2			10
Purchased product		1,967			1,116			(1,569	)		(818	)		398			298
Operating Income (Loss)	$	(42	)	$	(29	)	$	-		$	-		$	(42	)	$	(29	)

Capital Expenditures

	Three Months Ended
	March 31,
	2020		2019
USA Operations	$	628	$	577
Canadian Operations		161		157
Corporate & Other		1		2
	$	790	$	736

Costs Incurred

For the year ended December 31, 2019	United States		Canada		Total
Acquisition Costs (1)
Unproved	$	843	$	-	$	843
Proved		5,963		-		5,963
Total Acquisition Costs		6,806		-		6,806
Exploration Costs		5		-		5
Development Costs		2,129		480		2,609
	$	8,940	$	480	$	9,420

(1) Acquisition costs were restated and include the non-cash acquisition of the proved and unproved properties of Newfield Exploration Company in conjunction with the business combination described in Note 8.

Goodwill, Property, Plant and Equipment and Total Assets by Segment

	Goodwill					Property, Plant and Equipment					Total Assets
	As at					As at					As at
	March 31,		December 31,			March 31,		December 31,			March 31,		December 31,
	2020			2019		2020			2019		2020			2019
USA Operations	$	1,938		$	1,938	$	13,696		$	13,757	$	16,229		$	16,613
Canadian Operations		617			673		1,173			1,205		1,949			2,122
Market Optimization		-			-		2			2		272			253
Corporate & Other		-			-		209			227		3,055			2,499
	$	2,555		$	2,611	$	15,080		$	15,191	$	21,505		$	21,487

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Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

11. Leases

The following table outlines the Company’s estimated future sublease income as at March 31, 2020. All subleases are classified as operating leases.

(undiscounted)	2020		2021		2022		2023		2024		Thereafter		Total
Sublease Income	$	35	$	48	$	43	$	42	$	42	$	511	$	721

For the three months ended March 31, 2020, operating lease income was $13 million (2019 - $13 million) and variable lease income was $5 million (2019 - $3 million).

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Condensed Consolidated Balance Sheet (unaudited) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Current Assets
Cash and cash equivalents	$ 82	$ 190
Accounts receivable and accrued revenues (net of allowances of $11 million (2019: $3 million)	918	1,235
Risk management	958	148
Income tax receivable	283	296
Total Current Assets	2,241	1,869
Oil and natural gas properties, based on full cost accounting
Proved properties	50,952	51,210
Unproved properties	3,460	3,714
Other	852	904
Property, plant and equipment	55,264	55,828
Less: Accumulated depreciation, depletion and amortization	(40,184)	(40,637)
Property, plant and equipment, net	15,080	15,191
Other Assets	1,088	1,213
Risk Management	1	2
Deferred Income Taxes	540	601
Goodwill	2,555	2,611
Total Assets	21,505	21,487
Current Liabilities
Accounts payable and accrued liabilities	2,049	2,239
Current portion of operating lease liabilities	70	78
Income tax payable	1	1
Risk management	40	114
Total Current Liabilities	2,160	2,432
Long-Term Debt	7,006	6,974
Operating Lease Liabilities	883	977
Other Liabilities and Provisions	402	464
Risk Management	81	68
Asset Retirement Obligation	438	425
Deferred Income Taxes	344	217
Total Liabilities	11,314	11,557
Commitments and Contingencies
Shareholders’ Equity
2020 issued and outstanding: 259.8 million shares (2019: 259.8 million shares)	3	7,061
Paid in surplus	8,460	1,402
Retained earnings	818	421
Accumulated other comprehensive income	910	1,046
Total Shareholders’ Equity	10,191	9,930
Total Liabilities and Shareholders' Equity	$ 21,505	$ 21,487