May 23, 2023


CALGARY, ALBERTA – Whitecap Resources Inc. ("Whitecap") (TSX: WCP) announces that it has received a letter (the "Proposal Letter") from the Canada Revenue Agency (the "CRA") advising that, subject to submissions by Whitecap, the CRA is proposing to reassess a former subsidiary of Whitecap to deny non-capital loss deductions relevant to the calculation of income taxes for the years 2018 and 2019.

In 2014, Whitecap acquired a private entity that held an interest in certain oil and natural gas assets and which had accrued non-capital losses in its business. The proposed reassessment seeks to disallow the deduction of approximately $494 million of these non-capital losses under the Income Tax Act (Canada) for the years 2018 and 2019. If the non-capital losses that have been claimed for the years 2018 and 2019 were ultimately disallowed, it is expected to result in an estimated liability for the previous taxation years of approximately $133 million, excluding interest.

Whitecap will vigorously defend its tax filing position. Whitecap has received advice from its tax advisors that it should be entitled to deduct the non-capital losses and is of the opinion that its tax filings to-date are correct. It is not expected that the Proposal Letter will impact years other than 2018 and 2019.

Whitecap is preparing a response to the Proposal Letter and, failing a resolution of the matter, the CRA may proceed to issue a notice of reassessment. If the CRA reassesses Whitecap as described in the Proposal Letter, Whitecap will have 90 days from the issuance of the notice of reassessment to prepare and file a notice of objection which would be reviewed by the CRA's Appeals Division. At that time, Whitecap would be required to pay 50% of the assessed tax liability and interest.  If the CRA is not in agreement with Whitecap's notice of objection, within a prescribed period, Whitecap would have a right to appeal to the Tax Court of Canada. If a notice of reassessment is received, Whitecap currently estimates that the ultimate resolution of the matter may take two to four years. If Whitecap is ultimately successful in defending its position, then any taxes, interest and penalties paid to the CRA would be refunded plus interest, and if the CRA is successful then any remaining taxes payable plus interest and any penalties would have to be remitted by Whitecap.

Whitecap confirms that the proposed reassessment, if issued, is not expected to affect Whitecap's long-term business strategy or our current monthly dividend, even if the CRA's position was ultimately upheld.

About Whitecap
Whitecap Resources Inc. is an oil-weighted growth company that pays a monthly cash dividend to its shareholders. Our business is focused on profitable production growth combined with sustainable dividends to shareholders. Our objective is to fully fund our capital expenditures and dividend payments within funds flow. For further information about Whitecap, please visit our website at

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

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

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