January 05, 2017

Whitecap Resources Inc. Announces Closing of Senior Secured Notes and Provides Operational Update

January 5, 2017


CALGARY, ALBERTA – Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to announce that it has closed an issuance of Cdn$200 million senior secured notes which have an annual coupon rate of 3.46% and mature on January 5, 2022. The notes were issued by way of a private placement, pursuant to a note purchase and private shelf agreement, and rank equally with Whitecap’s obligations under its bank facilities. Proceeds from the notes will be used to repay a portion of Whitecap’s outstanding bank debt.

The issuance of the senior notes expands Whitecap’s borrowing capacity to $1.3 billion from $1.1 billion and enhances our capital structure by diversifying our debt at a very attractive long term fixed interest rate. This provides more predictability to our free cash flow, strengthens our financial flexibility and improves the overall sustainability of our dividend-growth model. Whitecap remains well positioned to execute on our business plan with an estimated Q4/16 net debt to funds flow ratio of 1.8x and is targeted to decrease to 1.3x in 2017. 

The senior secured notes may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption from such registration. Whitecap has not registered and will not register the senior secured notes under the U.S. Securities Act of 1933, as amended. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the senior secured notes in any state in which such offer, solicitation or sale would be unlawful.

Operational Update

Drilling activity increased significantly in Q4/16 with up to seven drilling rigs operating and 56 (49.6 net) horizontal oil wells drilled in the quarter. We had a late start to our Q4/16 program, due to unseasonably wet weather, however the exceptional production results achieved, particularly at Boundary Lake and our recently acquired southwest Saskatchewan assets, were able to offset the timing delays and positions us to achieve strong Q1/17 results. Whitecap was able to achieve Q4/16 average production of 50,600 boe/d (based on field estimates) which is 600 boe/d above our guidance of 50,000 boe/d. Full year average production for 2016 is anticipated to be 45,838 boe/d which is 338 boe/d above our earlier guidance of 45,500 boe/d. Development capital spending for full year 2016 is anticipated to be within guidance of $175 million.

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