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Commitments and Contingencies
9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

21.

Commitments and Contingencies

Commitments

The following table outlines the Company’s commitments as at September 30, 2023:

 

 

 

Expected Future Payments

 

(undiscounted)

 

2023

 

 

2024

 

 

2025

 

 

2026

 

 

2027

 

 

Thereafter

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation and Processing

 

$

199

 

 

$

716

 

 

$

601

 

 

$

509

 

 

$

480

 

 

$

2,311

 

 

$

4,816

 

Drilling and Field Services

 

 

133

 

 

 

132

 

 

 

80

 

 

 

2

 

 

 

-

 

 

 

-

 

 

 

347

 

Building Leases & Other Commitments

 

 

3

 

 

 

6

 

 

 

10

 

 

 

6

 

 

 

5

 

 

 

22

 

 

 

52

 

Total

 

$

335

 

 

$

854

 

 

$

691

 

 

$

517

 

 

$

485

 

 

$

2,333

 

 

$

5,215

 

 

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 15. 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.