December 15, 2015
whitecap provides revised outlook for 2016 and confirms monthly dividend
December 15, 2015
CALGARY, ALBERTA - Whitecap Resources Inc. ("Whitecap" or the "Company") announces that in response to the downward pressure on commodity prices its Management and Board of Directors have elected to reduce its 2016 capital program by 27% to $150 million from $205 million previously announced on November 10, 2015. The revised capital program is designed to maintain financial flexibility and to prudently develop our high quality asset base through this volatile commodity price cycle.
REVISED 2016 GUIDANCE
The continuous alignment of our capital program to reflect reduced cash flows as a result of lower commodity prices is necessary for us to achieve a total payout ratio of less than 100% and to maintain a strong financial position as we navigate through what could be another challenging year for the industry in 2016. We are now reducing our crude oil price forecast to US$40/bbl WTI in Q1/2016, US$45/bbl WTI in Q2/2016 and US$50/bbl WTI in 2H/2016.
Our focused 2016 capital program is reduced by 27% to $150 million from $205 million and our production guidance is 3% lower at 40,100 boe/d compared to 41,500 boe/d. We have the option to increase our capital program should we experience stronger commodity prices later in the year. The revised 2016 capital program of 88 (83.5 net) wells which is down 20 (20.0 net) wells, includes the following:
- 66 (64.1 net) horizontal Viking light oil wells in west central Saskatchewan. This reduced program will be focused on areas outside of our developing waterfloods so that we can use this period of lower development to optimize our waterfloods which will support shallower declines and increased recoveries in the future.
- 11 (10.5 net) Cardium light oil wells in West Pembina including advancement of our operated waterfloods in the area.
- 7 (5.2 net) light oil horizontal wells in the Deep Basin with a primary focus on maintaining a competitive advantage in our Wapiti Cardium core area.
- 2 (2.0 net) wells in the Ferrier area of southwest Alberta. These wells have been high-graded to offset successful waterfloods and with third party facility constraints being removed, will provide some of the most robust economics in our portfolio.
- 2 (1.6 net) wells in Boundary Lake in Q1/2016 as a continuation of our fourth quarter 2015 drilling program.
The 2016 revised budget is as follows:
| 2016 Revised | 2016 Previous | % Change | |
|---|---|---|---|
| Average production (boe/d) |
40,100 |
41,500 |
(3%) |
| % Oil + NGLs |
77% |
77% |
- |
| Funds flow ($MM) |
374 |
437 |
(14%) |
| Cash netbacks ($/boe) |
25.50 |
28.80 |
(11%) |
| Development capital spending ($MM) |
150 |
205 |
(27%) |
| Wells drilled (gross #) |
88 |
108 |
(19%) |
| Total dividends |
226 |
226 |
- |
| $ Per share (basic) |
0.75 |
0.75 |
- |
| Total payout ratio |
100% |
99% |
1% |
| Net debt to funds flow |
2.2x |
1.9x |
16% |
| WTI (US$/bbl) |
46.25 |
50.00 |
(8%) |
| CAD/USD exchange rate |
0.75 |
0.75 |
- |
| Edmonton Par differential (C$/bbl) |
($4.00) |
($4.00) |
- |
| AECO gas price (C$/GJ) |
2.40 |
2.75 |
(13%) |
