August 26, 2019

Whitecap Resources Inc. Strengthens Balance Sheet - Adjusts 2019 Capital Expenditures

CALGARY, ALBERTA – Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) announces that it has elected to exercise a more cautious approach for the balance of 2019 by reducing the Company’s 2019 second half capital expenditures program by 17% to $250 million from $300 million to provide greater optionality and improve near term free funds flow. Our full year 2019 capital expenditure program is now anticipated to be $400 million which is $50 million lower than our previous guidance of $450 million.

Our 2019 average production guidance of 70,000 to 72,000 boe/d remains unchanged despite the reduction in capital expenditures. We now anticipate growing production 6% to 74,000 to 75,000 boe/d in the fourth quarter of 2019 from the second quarter average production of 70,611 boe/d. On strip pricing, anticipated 2019 free funds flow is approximately $135 million with a total payout ratio of 80% compared to $95 million and a total payout ratio of 86% prior to the reduced capital program.

The objective of our 2019 budget was to protect our balance sheet, reduce net debt and maintain the current dividend by having a disciplined first half 2019 capital program and a flexible second half 2019 program. In the first half of 2019, we were able to reduce net debt by $106.6 million and not only maintain the dividend but provide a modest but sustainable 5.6% increase for our shareholders. Our continued disciplined approach to capital spending in the second half of 2019 will further strengthen our balance sheet going into a period of significant global economic uncertainty. We believe the reduction to our capital program is prudent given the continuing U.S. / China trade wars and recessionary concerns in 2020.

We applaud the Alberta Government’s recent decision to extend crude oil curtailments by one year along with raising the amount of a producer’s output that is exempt from curtailment to 20,000 bbls/d from 10,000 bbls/d. These enhancements will provide more value to all Albertans for their natural resources while allowing Whitecap to allocate capital investment to our highest rate of return projects without the risk of the associated production being restricted.

Our long-term strategy is prioritized to protect the balance sheet first, maintain a sustainable dividend second and generate a moderate growth rate while retaining future financial optionality to enhance shareholder returns. We operate essentially all of our assets and have a comprehensive understanding of our high-quality drilling inventory and therefore have the operational and financial flexibility to accelerate our capital program in 2020 to respond to more stable market conditions and will ensure capital expenditures and dividend payments are well funded by funds flow and our balance sheet strength is maintained.

We are also pleased to advise that we have fixed $200 million of bank debt at a very attractive long-term effective interest rate of 3.25% per annum for five years. This is incremental to the $595 million of debt termed out to 2022 - 2026 at an average fixed rate of 3.63% per annum. Whitecap continues to have a strong balance sheet with net debt at $1.2 billion on debt capacity of $1.77 billion.

On behalf of our Board of Directors and the Whitecap management team, we would like to thank our shareholders for their ongoing support.

For further information:

Grant Fagerheim, President & CEO or Thanh Kang, CFO

Whitecap Resources Inc.
3800, 525 – 8th Avenue SW
Calgary, AB T2P 1G1
Phone: (403) 266-0767

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