Ovintiv Inc. has signed a deal to buy a portfolio of assets in the Midland Basin in Texas in an agreement valued at US$4.275 billion in cash and shares.

The company is acquiring the assets from a group of portfolio companies of funds managed by EnCap Investments LP.

Under the terms of the deal, the sellers will receive about 32.6 million shares of Ovintiv common stock and US$3.125 billion in cash. 

To help fund the transaction, Ovintiv says it has signed an agreement to sell its Bakken assets in North Dakota to a portfolio company of funds managed by EnCap for US$825 million.

The deals are expected to close by the end of the second quarter, subject to customary closing conditions and adjustments.

Ovintiv also announced it has raised its quarterly dividend by a nickel to 30 cents per share.

This report by The Canadian Press was first published April 3, 2023.