September 27, 2022


CALGARY, ALBERTA – Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to announce its 2023 capital investment budget of $900 - $950 million and average production guidance of 170,000 – 172,000 boe/d1 (64% liquids), resulting in significant free funds flow for elevated shareholder returns in 2023. 

We plan to drill 253 (214.2 net) wells across our three business units (Central Alberta, Northern Alberta & B.C., and Saskatchewan), which is expected to drive annual production per share growth of 21%. The Northern Alberta & B.C. business unit will be the main source of production growth, in particular the Montney assets from the recent XTO acquisition, where extremely efficient production additions are enhanced by strong netbacks at current commodity prices. The projected growth is underpinned by our current portfolio of light oil and natural gas projects and our enhanced oil recovery (“EOR”) assets which are characterized by low production declines and stable cash flows representing 21% of total corporate production.

The 2023 budget has average production at the mid-point and capital investment at the low end of our preliminary guidance which is expected to result in increased free funds flow and returns to shareholders. At current strip prices we anticipate reaching our first net debt2 milestone of $1.8 billion prior to year-end 20223, which is expected to trigger a 25% - 30% dividend increase and upon our final net debt milestone of $1.3 billion being reached, we expect to return 75% of free funds flow back to shareholders. This includes an anticipated $0.73 per share annual base dividend that is 66% higher than our current annual dividend of $0.44 per share.

With the closing of the XTO acquisition as press released on August 31, 2022, our funds flow2 forecast has increased meaningfully to average $550 million per quarter in 2023 which is significantly more than our forecast average capital requirement of $230 million per quarter in 2023. The significant free funds flow generated allows us to achieve our debt milestones at an accelerated pace. 

Our balance sheet remains in excellent shape with current net debt of approximately $2.2 billion on total capacity of $3.1 billion equating to a debt to EBITDA ratio4 of 0.9 times. Our balance sheet continues to significantly strengthen once we reach our net debt milestone of $1.3 billion resulting in $1.8 billion of liquidity and a debt to EBITDA ratio of 0.6 times.

Highlights of the 2023 budget include:

·      Significant Free Funds Flow. At US$80/bbl WTI crude oil and C$5.00/GJ AECO natural gas prices, we forecast funds flow of approximately $2.2 billion, or $3.47 per share2, resulting in free funds flow2 of $1.2 billion, or $1.98 per share2. Every US$5.00/bbl change in WTI impacts our free funds flow by $110 million and every $0.50/GJ change in AECO impacts our free funds flow by $45 million.

·      Elevated Shareholder Returns. We are committed to our return of capital framework and upon achieving our net debt milestone of $1.3 billion in mid-2023, we expect that our base dividend will be increased to $0.73 per share which represents a yield of approximately 9% based on our current share price. With 75% of free funds flow being returned to shareholders, we have the flexibility to further supplement the targeted $0.73 per share dividend with share repurchases and/or special dividends.

·      21% Production per Share Growth. 2023 is expected to represent our third consecutive year of double-digit production per share growth while maintaining a responsible level of debt. Our ability over the last three years to identify, execute and extract value on accretive acquisitions results in annual production growth that is higher than our targeted organic growth range of 3% - 5% per share.


Our capital program of $900 - $950 million is comprised of drilling 253 (214.2 net) wells across our three business units and includes approximately $130 million being allocated to infrastructure investments, $150 million to EOR projects and $10 million to advance our New Energy initiatives.

Our 2023 production guidance includes 91,000 – 92,000 bbl/d of oil, 18,000 – 19,000 bbl/d of NGLs, and 360,000 – 370,000 Mcf/d of natural gas, which allows us to capture upside across the various commodities. Our natural gas portfolio has increased six-fold from approximately 60,000 Mcf/d in Q4/2020 and is currently exposed to AECO pricing with approximately 60% of physical volumes under contract to end users. Although we are confident that upcoming expansions on the NGTL5 system will help to alleviate price volatility, we are actively pursuing natural gas price diversification strategies to mitigate future natural gas pricing risk.

Further budget details are as follows:

·      Northern Alberta & B.C. We plan to invest approximately $420 million to drill 40 (36.0 net) wells, including 23 (21.5 net) Montney wells in the Kakwa region, 8 (5.6 net) Charlie Lake wells in the Peace River Arch and 3 (3.0 net) Duvernay wells at Kaybob. We also plan to incur approximately $63 million of facility and optimization capital for our Montney development, which includes water disposal facilities at Kakwa and infrastructure buildout. The infrastructure capital will provide for continued growth opportunities and improve profitability in the area through operational efficiencies as well as operating and completion cost reductions. We plan to run two drilling rigs for the balance of 2023 across the business unit with a third rig being added in the third quarter of 2023.

·      Saskatchewan. We plan to invest approximately $330 million to drill 180 (153.0 net) wells, including 54 (49.5 net) conventional Mississippian wells in southeast Saskatchewan, 44 (30.1 net) wells in southwest Saskatchewan, 20 (13.9 net) of which are conventional targets, 53 (51.9 net) Viking wells in west central Saskatchewan, and 19 (14.0 net) wells at Weyburn, comprised of 9 (7.6 net) producers and 10 (6.4 net) injectors. The Saskatchewan business unit is expected to generate significant free funds flow for the Company in 2023, with our current development plans focused on a more moderate growth profile which will further improve free funds flow and long-term sustainability. We plan to run between five and six drilling rigs across Saskatchewan in 2023, excluding the spring breakup time period.

·      Central Alberta. We plan to invest approximately $153 million to drill 33 (25.2 net) wells, including 11 (9.9 net) Glauconite wells and 21 (14.3 net) Cardium wells. The Central Alberta business unit has achieved recent success through refined development plans, including ERH ("extended reach horizontal") wells, along with production optimization through owned facilities. A total of 29 (21.9 net) ERH wells are planned for 2023 with the business unit planning to run between two and three drilling rigs.

·      New Energy. We plan to invest approximately $10 million on pre-FID ("final investment decision") work for our proposed Alberta and Saskatchewan Carbon Hubs in 2023. Spending on our Alberta Hub will consist of the remaining portion of our evaluation well that will be spud this December along with 3D seismic and other field development planning. Spending on our Saskatchewan Hub will consist of an evaluation well planned for the first quarter and pre-FID work. First CO2 injection is planned for late-2024 for both carbon sequestration hubs.


Our 2023 budget takes a balanced approach to near-term free funds flow generation and increasing returns to shareholders along with the continued focus on maximizing profitability and shareholder returns over the long term.  Our balance sheet is strong and will be further enhanced over the course of 2023 to ensure the Company maintains the financial flexibility to further improve our long-term profitability and sustainability. Once our $1.3 billion net debt milestone is reached, we expect to return 75% of free funds flow to shareholders in the form of additional dividends along with share buybacks. Including the base dividend in 2023, this is expected to equate to approximately $2.0 billion ($3.30/share)6 over the next three years3.

Our 2023 budget also reinforces our commitment to being a strong corporate citizen with total royalties and income taxes being paid to Provincial and Federal governments forecasted at over $1.1 billion. This is in addition to the various initiatives and programs that Whitecap and our employees support each and every year in the communities that we operate in.

We remain constructive on the outlook for commodity prices given years of underinvestment in energy and the ongoing geopolitical issues but remain disciplined in our approach to organic production growth and committed to responsible use of leverage to increase returns for our shareholders.

Conference Call and Webcast

Whitecap has scheduled a conference call and webcast to begin promptly at 8:00 am MT (10:00 am ET) on Wednesday, September 28, 2022.

The conference call dial-in number is: 1-888-390-0605 or (587) 880-2175 or (416) 764-8609

A live webcast of the conference call will be accessible on Whitecap's website at by selecting "Investors", then "Presentations & Events". Shortly after the live webcast, an archived version will be available for approximately 14 days.

For further information:

Grant Fagerheim, President & CEO
Thanh Kang, Senior Vice President & CFO

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

1   Disclosure of production on a per boe basis in this press release consists of the constituent product types and their respective quantities disclosed herein. Refer to Barrel of Oil Equivalency and Production and Product Type Information in this press release for additional disclosure.
2   Funds flow, funds flow per share (diluted), and net debt are capital management measures. Free funds flow is a non-GAAP financial measure and free funds flow per share (diluted) is a non-GAAP ratio. Refer to the Specified Financial Measures section in this press release for additional disclosure and assumptions.
3    See Note Regarding Forward Looking Statements for underlying commodity price and exchange rate assumptions.
4    Debt to EBITDA ratio is a specified financial measure that is calculated in accordance with the financial covenants in our credit agreements.
5   TC Energy's Nova Gas Transmission Line.
6   Assumes 618.8 million fully diluted shares outstanding.

Refer to full press release for forward-looking statements and advisories.

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