whitecap resources inc. announces closing of previously announced acquisition, issuance of senior notes and confirms monthly dividend for december

December 14, 2017 

WHITECAP RESOURCES INC. ANNOUNCES CLOSING OF PREVIOUSLY ANNOUNCED ACQUISITION, ISSUANCE OF SENIOR NOTES AND CONFIRMS MONTHLY DIVIDEND FOR DECEMBER

CALGARY, ALBERTA – Whitecap Resources Inc. (“Whitecap” or the “Company”) (TSX: WCP) is pleased to announce that it has now closed its previously announced acquisition of high quality light oil assets in southeast Saskatchewan which includes current production of approximately 14,800 boe/d for cash consideration of $940 million before closing adjustments (the “Acquisition”).

Crude oil prices remain well supported in the US$55 to US$60/bbl WTI range relative to our crude oil price assumption of US$54/bbl WTI used when we announced the Acquisition on November 13, 2017. Whitecap takes a disciplined approach to acquisitions with strict criteria used for evaluation of opportunities that are focused on improving the Company’s near term and long term strength and sustainability. The attributes of the Acquisition include a low production decline rate of 3.7%, high operating netbacks, a long reserve life index and growth opportunities that have strong capital efficiencies. The Acquisition is accretive on all key operational and financial measures and is an underpinning asset that will provide significant free funds flow annually. 

Concurrent with closing of the Acquisition, Whitecap’s borrowing base has been increased to $1.7 billion from $1.3 billion. As part of the $1.7 billion borrowing base increase, Whitecap intends to issue $195 million in senior secured notes which will have an annual coupon rate of 3.9% and mature in 9 years. The closing of the senior secured notes is expected to be on December 20, 2017, at which time Whitecap will then have $595 million of term debt at very attractive long-term fixed interest rates with terms of five, seven and nine years. These notes, combined with the resulting bank credit facility of $1.1 billion, provide Whitecap with $1.7 billion of total borrowing capacity. Whitecap continues to maintain a strong balance sheet with 2018 estimated net debt to funds flow of 1.6 times and considerable financial flexibility with approximately 50% of our net debt under long-term notes and approximately $500 million of unutilized credit capacity based on our estimated 2018 net debt.

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