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

Ovintiv uses derivative financial instruments to manage its exposure to fluctuating commodity prices and 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 (loss).

Commodity price risk arises from the effect that fluctuations in future commodity prices may have on revenues from production. 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.

Oil and NGLs - To partially mitigate oil and NGL commodity price risk, the Company uses WTI- and NGL-based contracts such as options. Ovintiv has also entered into basis swaps to manage against widening price differentials between various production areas, products and price points.

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

Foreign exchange risk arises from changes in foreign currency exchange rates that may affect the fair value or future cash flows from 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 December 31, 2025, the Company does not have any notional U.S. dollar denominated currency swaps.


	Notional Volumes	Term	Average Price	Fair Value

Oil and NGL Contracts			US$/bbl

WTI Three-Way Options
Sold call / bought put / sold put	36.2 Mbbls/d	2026	71.14 / 60.21 / 50.86		48

Basis Contracts (1)		2026			-
Oil and NGLs Fair Value Position					48

Natural Gas Contracts			US$/Mcf

Fixed Price Contracts
AECO Fixed Price	100 MMcf/d	2026	2.33		12

NYMEX Three-Way Options
Sold call / bought put / sold put	462 MMcf/d	2026	6.46 / 3.33 / 2.61		27
Sold call / bought put / sold put	25 MMcf/d	2027	6.16 / 3.50 / 2.50		-

Basis Contracts (2)		2026			-
		2027			3
		2028 - 2030			-


Physical Forward Contracts (3)		2026 - 2037			(15	)
Natural Gas Fair Value Position					27
Total Fair Value Position				$	75

(1)

Ovintiv has entered into oil differential swaps associated with Canadian condensate and WTI.

(2)

Ovintiv has entered into natural gas basis swaps associated with AECO and NYMEX.

(3)

Ovintiv has entered into natural gas physical forward contracts associated with JKM (100 MMcf/d) and Chicago (100 MMcf/d) as described in Note 24.

EARNINGS IMPACT OF REALIZED AND UNREALIZED GAINS (LOSSES) ON RISK MANAGEMENT POSITIONS


For the years ended December 31	2025			2024			2023

Realized Gains (Losses) on Risk Management
Commodity and Other Derivatives:
Revenues (1)	$	166		$	271		$	(43	)
Foreign Currency Derivatives:
Foreign exchange (2)		(98	)		(3	)		(8	)
Interest Rate Derivatives:
Interest rate (3)		-			-			1
	$	68		$	268		$	(50	)

Unrealized Gains (Losses) on Risk Management
Commodity Derivatives:
Revenues	$	6		$	(136	)	$	194
Foreign Currency Derivatives:
Foreign exchange		89			(100	)		21
	$	95		$	(236	)	$	215

Total Realized and Unrealized Gains (Losses) on Risk Management, net
Commodity and Other Derivatives:
Revenues (1)	$	172		$	135		$	151
Foreign Currency Derivatives:
Foreign exchange (2)		(9	)		(103	)		13
Interest Rate Derivatives:
Interest rate (3)		-			-			1
	$	163		$	32		$	165

(1)

There were no realized gains or losses related to other derivative contracts for the year ended December 31, 2025 (2024 - gain of $4 million; 2023 - gain of $1 million).

(2)

Includes a realized foreign exchange loss of approximately $97 million during 2025, related to notional U.S. dollar denominated currency swaps as discussed in Note 5.

(3)

The interest rate swap in 2023 was executed and settled in relation to the senior notes issuance described in Note 15. The gain was recognized in interest expense.

RECONCILIATION OF UNREALIZED RISK MANAGEMENT POSITIONS FROM JANUARY 1 TO DECEMBER 31


	2025						2024			2023
	Fair Value			Total Unrealized Gain (Loss)			Total Unrealized Gain (Loss)			Total Unrealized Gain (Loss)

Fair Value of Contracts, Beginning of Year	$	(20	)
Change in Fair Value of Contracts in Place at Beginning of Year
and Contracts Entered into During the Year		163		$	163		$	32		$	165
Fair Value of Contracts Realized During the Year		(68	)		(68	)		(268	)		50
Fair Value of Contracts, End of Year	$	75		$	95		$	(236	)	$	215

Risk management assets and liabilities arise from the use of derivative financial instruments and are measured at fair value. See Note 24 for a discussion of fair value measurements.


As at December 31	2025		2024

Risk Management Assets
Current	$	86	$	108
Long-term		4		-
		90		108

Risk Management Liabilities
Current		2		107
Long-term		13		21
		15		128
Net Risk Management Assets (Liabilities)	$	75	$	(20	)

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 exchanges and clearing agencies, over-the-counter traded contracts expose Ovintiv to counterparty credit risk. Counterparties to the Company’s derivative financial instruments consist primarily of major financial institutions and companies within the energy industry. 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. Ovintiv actively evaluates the creditworthiness of its counterparties, assigns appropriate credit limits and monitors credit exposures against those assigned limits. As at December 31, 2025, Ovintiv’s maximum exposure of loss due to credit risk from derivative financial instrument assets on a gross and net fair value basis was $91 million and $90 million, respectively, as disclosed in Note 24. The Company had no significant credit derivatives in place and held no collateral at December 31, 2025.

Any cash equivalents include high-grade, short-term securities, placed primarily with financial institutions with 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 December 31, 2025, approximately 94 percent (2024 - 94 percent) of Ovintiv’s accounts receivable and financial derivative credit exposures were with investment grade counterparties.