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Compensation Plans | 12 Months Ended
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Dec. 31, 2025
Share-Based Payment Arrangement [Abstract] |
Compensation Plans |
22. | 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 Stock Appreciation Rights (“SARs”), TSARs, PSUs, Deferred Share Units (“DSUs”) and RSUs. Ovintiv accounts for certain PSUs and RSUs as equity-settled stock-based payment transactions provided there is sufficient common stock held in reserve for issuance. SARs, TSARs and DSUs are accounted for as cash-settled stock-based payment transactions. The Company accrues compensation costs over the vesting period based on the fair value of the rights determined using the Black-Scholes-Merton or other appropriate fair value models. As at December 31, 2025, there were no changes to Ovintiv’s compensation plans and the Company has sufficient common stock held in reserve for issuance in accordance with its equity-settled stock-based compensation plans. The Company has recognized the following share-based compensation costs:
For the years ended December 31 |  | 2025 |  |  | 2024 |  |  | 2023 |
Total Compensation Costs of Transactions Classified as Cash-Settled |  | $ | (1 | ) |  | $ | (1 | ) |  | $ | (22 | )
Total Compensation Costs of Transactions Classified as Equity-Settled |  |  | 80 |  |  |  | 92 |  |  |  | 98 |
Less: Total Share-Based Compensation Costs Capitalized |  |  | (22 | ) |  |  | (25 | ) |  |  | (29 | )
Total Share-Based Compensation Expense (Recovery) |  | $ | 57 |  |  | $ | 66 |  |  | $ | 47 |
Recognized in the Consolidated Statement of Earnings in: |  |  |  |  |  |  |  |  |
Operating |  | $ | 21 |  |  | $ | 26 |  |  | $ | 25 |
Administrative |  |  | 36 |  |  |  | 40 |  |  |  | 22 |
|  | $ | 57 |  |  | $ | 66 |  |  | $ | 47 |
As at December 31, 2025, the liability for cash-settled share-based payment transactions totaled $6 million (2024 ‑ $10 million), which is recognized in accounts payable and accrued liabilities in the Consolidated Balance Sheet. The following sections outline certain information related to Ovintiv’s compensation plans as at December 31, 2025. A) STOCK APPRECIATION RIGHTS U.S. dollar denominated SARs were historically granted to eligible U.S.-based employees, which entitle the employee to receive a cash payment equal to the excess of the market price of Ovintiv’s shares of common stock at the time of exercise over the original grant price of the right. SARs granted vest and are exercisable at 30 percent of the number granted after one year, an additional 30 percent of the number granted after two years, are fully exercisable after three years and expire seven years after the date granted. SARs are classified as a liability and remeasured at the end of each reporting period. The following table summarizes information related to the U.S. dollar denominated SARs:
As at December 31 |  | 2025 |  |  | 2024 |
|  | Outstanding SARs (thousands of units) |  |  | Weighted Average Exercise Price (US$) |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Outstanding SARs (thousands of units) |  |  | Weighted Average Exercise Price (US$) |  |  | Weighted Average Remaining Contractual Life (Years) |
Outstanding, Beginning of Year |  |  | 348 |  |  |  | 40.91 |  |  |  | 0.9 |  |  |  | 496 |  |  |  | 44.77 |  |  |  |
Granted |  |  | - |  |  |  | - |  |  |  |  |  |  | - |  |  |  | - |  |  |  |
Exercised (1) |  |  | (138 | ) |  |  | 33.72 |  |  |  |  |  |  | (31 | ) |  |  | 35.80 |  |  |  |
Forfeited |  |  | - |  |  |  | - |  |  |  |  |  |  | (5 | ) |  |  | 54.35 |  |  |  |
Expired |  |  | (116 | ) |  |  | 54.82 |  |  |  |  |  |  | (112 | ) |  |  | 58.75 |  |  |  |
Outstanding, End of Year (2) |  |  | 94 |  |  |  | 34.36 |  |  |  | 0.2 |  |  |  | 348 |  |  |  | 40.91 |  |  |  | 0.9 |
Vested and Exercisable, End of Year (3) |  |  | 94 |  |  |  | 34.36 |  |  |  | 0.2 |  |  |  | 348 |  |  |  | 40.91 |  |  |  | 0.9 |
(1) The intrinsic value of option awards exercised and cash-settled during 2025 was $1 million (2024 - nil; 2023 - $1 million). (2) The intrinsic value of option awards outstanding at December 31, 2025, was nil (2024 - $2 million). (3) The intrinsic value of option awards vested and exercisable at December 31, 2025, was nil (2024 - $2 million). The following weighted average assumptions were used to determine the fair value of SARs outstanding:
|  | US$ Share Units
As at December 31 |  | 2025 |  | 2024 |  | 2023
Risk Free Interest Rate |  | 2.55% |  | 2.92% |  | 3.95%
Dividend Yield |  | 3.06% |  | 2.96% |  | 2.73%
Expected Volatility Rate (1) |  | 39.57% |  | 46.02% |  | 52.32%
Expected Term |  | 0.2 yrs |  | 0.7 yrs |  | 1.1 yrs
Market Share Price |  | US$39.19 |  | US$40.50 |  | US$43.92
Weighted Average Grant Date Fair Value |  | US$34.36 |  | US$40.91 |  | US$44.77
(1) Volatility was estimated using historical rates. As at December 31, 2025, and 2024, there were no unvested SARs outstanding and no associated unrecognized compensation costs. B) TANDEM STOCK APPRECIATION RIGHTS All options to purchase shares of common stock historically issued to eligible Canadian-based employees under Ovintiv’s Stock Option Plan have associated TSARs attached. In lieu of exercising the option, the associated TSARs give the option holder the right to purchase shares of common stock of the Company or receive a cash payment equal to the excess of the market price of Ovintiv’s shares of common stock at the time of exercise over the original grant price. TSARs granted vest and are exercisable at 30 percent of the number granted after one year, an additional 30 percent of the number granted after two years, are fully exercisable after three years and expire seven years after the date granted. TSARs are classified as a liability and remeasured at the end of each reporting period. The following table summarizes information related to the TSARs:
As at December 31 |  | 2025 |  |  | 2024 |
|  | Outstanding TSARs (thousands of units) |  |  | Weighted Average Exercise Price (C$) |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Outstanding TSARs (thousands of units) |  |  | Weighted Average Exercise Price (C$) |  |  | Weighted Average Remaining Contractual Life (Years) |
Outstanding, Beginning of Year |  |  | 160 |  |  |  | 54.84 |  |  |  | 0.8 |  |  |  | 262 |  |  |  | 62.45 |  |  |  |
Granted |  |  | - |  |  |  | - |  |  |  |  |  |  | - |  |  |  | - |  |  |  |
Exercised - SARs (1) |  |  | - |  |  |  | - |  |  |  |  |  |  | (20 | ) |  |  | 63.06 |  |  |  |
Exercised - Options (1) |  |  | (83 | ) |  |  | 46.81 |  |  |  |  |  |  | - |  |  |  | - |  |  |  |
Forfeited |  |  | - |  |  |  | - |  |  |  |  |  |  | - |  |  |  | - |  |  |  |
Expired |  |  | (57 | ) |  |  | 68.80 |  |  |  |  |  |  | (82 | ) |  |  | 77.15 |  |  |  |
Outstanding, End of Year (2) |  |  | 20 |  |  |  | 47.70 |  |  |  | 0.2 |  |  |  | 160 |  |  |  | 54.84 |  |  |  | 0.8 |
Vested and Exercisable, End of Year (3) |  |  | 20 |  |  |  | 47.70 |  |  |  | 0.2 |  |  |  | 160 |  |  |  | 54.84 |  |  |  | 0.8 |
(1) The intrinsic value of option awards exercised and cash-settled during 2025 was $1 million (2024 - nil; 2023 - nil). (2) The intrinsic value of option awards outstanding at December 31, 2025, was nil (2024 - $1 million). (3) The intrinsic value of option awards vested and exercisable at December 31, 2025, was nil (2024 - $1 million). The following weighted average assumptions were used to determine the fair value of TSARs outstanding:
|  | C$ Share Units
As at December 31 |  | 2025 |  | 2024 |  | 2023
Risk Free Interest Rate |  | 2.55% |  | 2.92% |  | 3.95%
Dividend Yield |  | 3.12% |  | 2.82% |  | 2.78%
Expected Volatility Rate (1) |  | 38.35% |  | 42.83% |  | 48.87%
Expected Term |  | 0.1 yrs |  | 0.6 yrs |  | 0.9 yrs
Market Share Price |  | C$53.79 |  | C$58.23 |  | C$58.16
Weighted Average Grant Date Fair Value |  | C$47.70 |  | C$54.84 |  | C$62.45
(1) Volatility was estimated using historical rates. As at December 31, 2025, and 2024, there were no unvested TSARs outstanding and no associated unrecognized compensation costs. C) PERFORMA NCE SHARE UNITS PSUs are granted to eligible employees, which entitle the employee to receive, upon vesting, one share of Ovintiv common stock for each PSU held or a cash equivalent, at the discretion of the Company. PSUs vest three years from the date granted, provided the employee remains actively employed with Ovintiv on the vesting date. Based on the performance assessment, up to a maximum of two times the original PSU grant may be eligible to vest in respect of the year being measured. The ultimate value of the PSUs will depend upon Ovintiv’s performance relative to predetermined strategic milestones as well as the performance of a specified peer group over a three-year period. The following tables summarize information related to the PSUs:
As at December 31 |  | 2025 |  |  |  | 2024 |
U.S. Dollar Denominated Outstanding PSUs |  | Units (thousands) |  |  | Weighted Average Grant Date Fair Value (US$) |  |  |  | Units (thousands) |  |  | Weighted Average Grant Date Fair Value (US$) |
Unvested and Outstanding, Beginning of Year |  |  | 943 |  |  |  | 46.86 |  |  |  |  | 1,307 |  |  |  | 33.91 |
Granted |  |  | 426 |  |  |  | 39.68 |  |  |  |  | 416 |  |  |  | 43.90 |
Vested and Released (1) |  |  | (319 | ) |  |  | 46.67 |  |  |  |  | (761 | ) |  |  | 23.08 |
Units, in Lieu of Dividends |  |  | 30 |  |  |  | 43.90 |  |  |  |  | 28 |  |  |  | 46.13 |
Forfeited |  |  | (51 | ) |  |  | 46.17 |  |  |  |  | (47 | ) |  |  | 44.80 |
Unvested and Outstanding, End of Year |  |  | 1,029 |  |  |  | 43.89 |  |  |  |  | 943 |  |  |  | 46.86 |
As at December 31 |  | 2025 |  |  |  | 2024 |
Canadian Dollar Denominated Outstanding PSUs |  | Units (thousands) |  |  | Weighted Average Grant Date Fair Value (C$) |  |  |  | Units (thousands) |  |  | Weighted Average Grant Date Fair Value (C$) |
Unvested and Outstanding, Beginning of Year |  |  | 365 |  |  |  | 62.10 |  |  |  |  | 487 |  |  |  | 45.30 |
Granted |  |  | 159 |  |  |  | 56.32 |  |  |  |  | 149 |  |  |  | 59.49 |
Vested and Released (1) |  |  | (145 | ) |  |  | 59.02 |  |  |  |  | (259 | ) |  |  | 29.04 |
Units, in Lieu of Dividends |  |  | 11 |  |  |  | 60.85 |  |  |  |  | 10 |  |  |  | 62.10 |
Forfeited |  |  | (26 | ) |  |  | 60.81 |  |  |  |  | (22 | ) |  |  | 62.40 |
Unvested and Outstanding, End of Year |  |  | 364 |  |  |  | 60.85 |  |  |  |  | 365 |  |  |  | 62.10 |
(1) During the year ended December 31, 2025, performance shares that vested and were cash-settled resulted in payments of $17 million (2024 ‑ $36 million; 2023 - $22 million). As at December 31, 2025, there were approximately $22 million of unrecognized compensation costs (2024 ‑ $22 million) related to unvested PSUs. The costs are expected to be recognized over a weighted average period of 1.7 years. D) DEFERRED SHARE UNITS The Company has in place a program whereby Directors and certain key employees are issued DSUs, which vest immediately, are equivalent in value to a share of Ovintiv common stock and are settled in cash. DSUs are classified as a liability and remeasured at the end of each reporting period based on the change in fair value of the Company’s common stock. Under the DSU Plan, employees have the option to convert either 25 or 50 percent of their annual bonus award into DSUs. The number of DSUs converted is based on the value of the award divided by the closing value of Ovintiv’s share price at the end of the performance period of the bonus award. For both Directors and employees, DSUs can only be redeemed following departure from Ovintiv in accordance with the terms of the respective DSU Plan and must be redeemed prior to December 15 th of the year following the departure from Ovintiv. The following table summarizes information related to the DSUs:
(thousands of units) |  | U.S. Dollar Denominated Outstanding DSUs |  |  | Canadian Dollar Denominated Outstanding DSUs |
As at December 31 |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Vested and Outstanding, Beginning of Year |  |  | 24 |  |  |  | 18 |  |  |  | 146 |  |  |  | 147 |
Granted |  |  | 5 |  |  |  | 5 |  |  |  | 2 |  |  |  | 2 |
Converted from Bonus Awards |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Units, in Lieu of Dividends |  |  | - |  |  |  | 1 |  |  |  | 4 |  |  |  | 4 |
Redeemed (1) |  |  | (2 | ) |  |  | - |  |  |  | (34 | ) |  |  | (7 | )
Vested and Outstanding, End of Year (2) |  |  | 27 |  |  |  | 24 |  |  |  | 118 |  |  |  | 146 |
(1) During the year ended December 31, 2025, deferred shares that vested and were cash-settled resulted in payments of $2 million (2024 ‑ nil; 2023 ‑ $2 million). (2) The intrinsic value of deferred shares outstanding at December 31, 2025, was $6 million (2024 - $7 million). E) RESTRICTED SHARE UNITS RSUs are granted to eligible employees and Directors. An RSU is a conditional grant to receive a share of Ovintiv common stock or a cash equivalent at the Company’s discretion upon vesting of the RSUs and in accordance with the terms and conditions of the RSU Plans and grant agreements. RSUs issued to employees vest over their three-year service period. RSUs issued to Directors fully vest on the grant date and have no required term of service. RSUs issued to Directors before May 2022 are settled three years from the date granted or following the Director’s departure from Ovintiv, whichever is earlier. Beginning with the RSUs issued in May 2022, all RSU awards issued to Directors are equity-settled immediately upon issuance. The following tables summarize information related to the RSUs:
As at December 31 |  | 2025 |  |  |  | 2024 |
U.S. Dollar Denominated Outstanding RSUs |  | Units (thousands) |  |  | Weighted Average Grant Date Fair Value (US$) |  |  |  | Units (thousands) |  |  | Weighted Average Grant Date Fair Value (US$) |
Unvested and Outstanding, Beginning of Year |  |  | 1,878 |  |  |  | 47.24 |  |  |  |  | 2,225 |  |  |  | 39.11 |
Granted |  |  | 1,131 |  |  |  | 38.78 |  |  |  |  | 1,050 |  |  |  | 49.30 |
Units, in Lieu of Dividends |  |  | 58 |  |  |  | 42.83 |  |  |  |  | 55 |  |  |  | 47.06 |
Vested and Released (1) |  |  | (903 | ) |  |  | 46.31 |  |  |  |  | (1,269 | ) |  |  | 34.87 |
Forfeited |  |  | (197 | ) |  |  | 45.77 |  |  |  |  | (183 | ) |  |  | 46.61 |
Unvested and Outstanding, End of Year |  |  | 1,967 |  |  |  | 42.82 |  |  |  |  | 1,878 |  |  |  | 47.24 |
As at December 31 |  | 2025 |  |  |  | 2024 |
Canadian Dollar Denominated Outstanding RSUs |  | Units (thousands) |  |  | Weighted Average Grant Date Fair Value (C$) |  |  |  | Units (thousands) |  |  | Weighted Average Grant Date Fair Value (C$) |
Unvested and Outstanding, Beginning of Year |  |  | 798 |  |  |  | 63.47 |  |  |  |  | 982 |  |  |  | 51.93 |
Granted |  |  | 486 |  |  |  | 55.89 |  |  |  |  | 420 |  |  |  | 67.13 |
Units, in Lieu of Dividends |  |  | 26 |  |  |  | 59.96 |  |  |  |  | 23 |  |  |  | 63.43 |
Vested and Released (1) |  |  | (409 | ) |  |  | 61.92 |  |  |  |  | (550 | ) |  |  | 45.80 |
Forfeited |  |  | (33 | ) |  |  | 60.52 |  |  |  |  | (77 | ) |  |  | 63.12 |
Unvested and Outstanding, End of Year |  |  | 868 |  |  |  | 59.96 |  |  |  |  | 798 |  |  |  | 63.47 |
(1) During the year ended December 31, 2025, restricted shares that vested and were cash-settled resulted in payments of $5 million (2024 ‑ $7 million; 2023 - $18 million). As at December 31, 2025, there were approximately $39 million of unrecognized compensation costs (2024 ‑ $40 million) related to unvested RSUs. The costs are expected to be recognized over a weighted average period of 1.3 years.

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