April 11, 2016
WHITECAP RESOURCES INC. ANNOUNCES INCREASED 2016 GUIDANCE AND REVISED DIVIDEND
CALGARY, ALBERTA -Whitecap Resources Inc. ("Whitecap" or the "Company") announces an increase to its 2016 capital program by $78 million to $148 million from the previous guidance of $70 million. The increased capital program will be funded by reducing the monthly dividend to $0.0233 per share ($0.28 per share annually) from the current monthly dividend level of $0.0375 per share ($0.45 per share annually) and increased funds flow. This proactive reallocation of funds flow will better position our Company to capture improving economics from recovering commodity prices by increasing capital towards profitable growth.
Crude oil prices have recovered significantly from hitting a low of US$26/bbl in mid-February and are currently trading at approximately US$40/bbl. This price recovery combined with lower cost of services and our strong capital efficiency gains now allow us to achieve an acceptable level of return on capital employed which is the primary focus of our long term strategy. We have the ability to quickly increase or decrease our capital program as we operate essentially all of our core assets and have a deep understanding of our high quality drilling inventory. This ability to quickly adapt to the current commodity price environment ensures that our funds flow allocation between capital expenditures and dividends optimizes shareholder returns. The $78 million increase to the capital program to a total of $148 million will be spent on strong netback light oil projects in the 2H/2016 drilling an additional 47 (44.6 net) wells including 28 (26.6 net) Viking light oil wells in west central Saskatchewan, 10 (10 net) Cardium light oil wells in West Pembina and Ferrier, 5 (4.0 net) light oil horizontal wells in the Deep Basin, 2 (2.0 net) wells in Boundary Lake and 2 (2.0 net) wells at Elnora for a full year 2016 drilling program of 71 (67.8 net) wells.
The allocation of capital spending across our core assets is designed to optimally balance high cash netbacks with short payout production additions, reduction of our base declines, maintenance and optimization of our high quality inventory and strategic initiatives that allow us to quantify and enhance financial performance beyond the current budget cycle.