WHITECAP RESOURCES INC. ANNOUNCES RECORD 2022 PER SHARE RESULTS AND STRONG YEAR END RESERVES GROWTH

CALGARY, ALBERTA – Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to report its operating and audited financial results for the quarter and year ended December 31, 2022, and its 2022 year end reserves evaluation.

Selected financial and operating information is outlined below and should be read with Whitecap’s audited annual consolidated financial statements and related management’s discussion and analysis for the three and twelve months ended December 31, 2022 which are available at www.sedar.com and on our website at www.wcap.ca.

Financial ($ millions except for share amounts and percentages)	Three months ended December 31		Twelve months ended December 31
	2022	2021	2022	2021
Petroleum and natural gas revenues	1,116.5	785.8	4,452.9	2,526.3
Net income	318.7	223.8	1,676.1	1,776.7
Basic ($/share)	0.52	0.36	2.72	2.97
Diluted ($/share)	0.52	0.35	2.70	2.95
Funds flow 1	593.6	350.6	2,322.8	1,098.6
Basic ($/share) 1	0.97	0.56	3.77	1.84
Diluted ($/share) 1	0.97	0.55	3.74	1.82
Dividends paid or declared	67.2	42.3	237.2	126.1
Per share	0.11	0.07	0.39	0.21
Expenditures on property, plant and equipment 2	179.0	1354.0	686.5	428.5
Total payout ratio (%) 1	41	51	40	50
Net Debt 1	1,913.1	1,154.6	1,913.1	1,154.6
Operating
Average daily production
Crude oil (bbls/d)	91,812	79,315	86,417	75,387
NGLs (bbls/d)	17,473	10,568	15,521	10,418
Natural gas (Mcf/d)	342,640	180,820	254,708	158,501
Total (boe/d) 3	166,392	120,020	144,389	112,222
Average realized price 1, 4
Crude oil ($/bbl)	102.50	89.40	114.68	77.90
NGLs ($/bbl)	46.84	52.24	55.30	41.16
Natural gas ($/Mcf)	5.56	4.97	5.62	3.91
Petroleum and natural gas revenues ($/boe) 1	72.94	71.17	84.49	61.68
Operating netback ($/boe) 1
Petroleum and natural gas revenues	72.94	71.17	84.49	61.68
Tariffs	(0.49)	(0.48)	(0.46)	(0.43)
Processing & other income	0.77	0.68	0.68	0.74
Marketing revenue	5.93	4.33	5.99	3.78
Petroleum and natural gas sales	79.15	75.70	90.70	65.77
Realized loss on commodity contracts	(1.43)	(8.13)	(4.66)	(5.94)
Royalties	(13.34)	(13.09)	(16.35)	(10.15)
Operating expenses	(14.13)	(13.49)	(14.54)	(13.58)
Transportation expenses	(2.12)	(2.12)	(2.18)	(2.20)
Marketing expenses	(5.87)	(4.34)	(5.94)	(3.80)
Operating netbacks	42.26	34.53	47.03	30.10
Share information (000s)
Common shares outstanding, end of period	608.7	615.8	608.7	615.8
Weighted average basic shares outstanding	610.8	627.8	616.5	598.6
Weighted average diluted shares outstanding	613.8	634.2	621.1	603.1

MESSAGE TO SHAREHOLDERS

2022 was an exceptional year for Whitecap with operational and financial results exceeding expectations. Production in the fourth quarter averaged 166,392 boe/d, ahead of our guidance of 165,000 boe/d despite unexpected downtime due to the extreme cold weather in December. We achieved record annual production of 144,389 boe/d on capital expenditures of $687 million, compared to guidance of 144,000 boe/d and $670 - $690 million, respectively.

Our 2022 year end reserves report highlights efficient and profitable organic growth with proved developed producing ("PDP") reserves per share increasing 19% and with our PDP finding and development ("F&D") cost¹ of $13.20 per boe generating a recycle ratio¹ of 3.6x. We continue to enhance long-term sustainability with total proved ("TP") finding, development and acquisitions ("FD&A") cost¹ of $16.15 per boe generating a recycle ratio of 2.9x and growing TP reserves per share by 49% over the prior year.

The XTO Energy Canada ("XTO") acquisition, which closed on August 31, 2022 for net cash consideration of $1.7 billion, was transformational to Whitecap as it added 32,000 boe/d from the Montney and Duvernay formations in Northwest Alberta and included 672,000 acres of land with over 2,000 drilling locations⁵, significantly increasing the sustainability of our dividend plus growth model.

Our strategy of operational execution enhanced by strategic acquisitions once again resulted in significant per share growth for our shareholders. Compared to the prior year, production per share⁶ increased 25%, funds flow per share increased 105%, free funds flow per share increased 137% and reserves per share also increased significantly in all categories.

Whitecap generated record funds flow of over $2.3 billion, and after capital expenditures of $687 million, had free funds flow¹ of $1.6 billion. 2022 was also another year of significant capital returns to shareholders. We started 2022 with a monthly dividend of $0.0225 per share and increased it by 63% to end 2022 at $0.0367 per share. Subsequent to year end, we increased the monthly dividend by another 32% to $0.0483 per share. We also repurchased 25 million common shares at an average price of $9.72 per share for total capital returned to shareholders (dividends plus share repurchases) of $480 million in 2022.

After the closing of the XTO acquisition, net debt was $2.2 billion and was quickly reduced to $1.9 billion (13%) within four months with the significant free funds flow generated by our consolidated asset base. Subsequent to year end, we further reduced net debt to $1.5 billion through the disposition of several non-strategic assets.

We highlight the following fourth quarter and full year 2022 financial and operating results:

·      Record Funds Flow. Whitecap generated $2.3 billion of funds flow in 2022 ($3.74 per share), the highest in the Company's thirteen-year history and 82% higher than the second highest funds flow per share year in 2014. Fourth quarter funds flow of $594 million ($0.97 per share) was the second highest quarterly funds flow in Company history and was the first full quarter that included the acquired XTO assets. Full year and fourth quarter 2022 operating netback of $47.03 per boe and $42.26 per boe, respectively, were 56% and 22% higher than the full year and fourth quarter of 2021, respectively.

·      Strong Operational Performance. Full year 2022 average production of 144,389 boe/d was a 25% increase on a per share basis over 2021, while fourth quarter production of 166,392 boe/d was up 15% over the third quarter and 43% over the fourth quarter of 2021, both on a per share basis. Asset level outperformance continued in the fourth quarter with average production exceeding fourth quarter guidance of 165,000 boe/d, despite extreme cold weather that reduced our production by approximately 10,000 boe/d for five days in December.

·      Return of Capital Strategy. Shareholder returns totalled $480 million in 2022, including $237 million in base dividends plus $243 million of share repurchases. Our current annual base dividend of $0.58 per share is 49% higher than the $0.39 per share paid in 2022, which was already 86% higher than our base dividend of $0.21 per share paid in 2021. We remain focused on sustainable increases to our base dividend supplemented by share repurchases and/or special dividends to meet our return of capital framework.

·      Balance Sheet Strength. Whitecap’s year end net debt of $1.9 billion equates to a debt to EBITDA ratio⁷ of 0.7x and EBITDA to interest expense ratio⁷ of 45.4x, both well within our bank covenants of not greater than 4.0x and not less than 3.5x respectively. Net debt has been reduced to $1.5 billion on total debt capacity of $3.1 billion with the closing of three non-strategic asset dispositions subsequent to year end, further strengthening the Company's balance sheet. 

2022 Year End Reserves

Our 2022 year end reserves were excellent across all categories and metrics as strong operational execution was enhanced by our successful acquisition strategy. We continue to see significant synergies through the integration of assets acquired since late 2020 and, when combined with operational outperformance, has led to increased profitability for our shareholders.

The strategic acquisitions completed in 2022, most notably the XTO acquisition with assets in the Montney and Duvernay, have further enhanced our unconventional asset base, adding multi-decade growth potential to complement our low decline, high netback conventional oil asset base. Pro forma the recent dispositions, we now have 6,584 (5,675 net) drilling locations⁵ of which only 36% of such locations have been booked in our reserve report, which provides us with over 25 years of profitable and sustainable growth in production and funds flow.

 We highlight the following 2022 year end reserve report results:

·         Focused on Per Share Results. PDP reserves increased 18% to 377.2 million boe, TP reserves increased 47% to 803.5 million boe and total proved plus probable ("TPP") reserves increased 58% to 1,218.3 million boe, compared to the prior year. On a per share basis, PDP reserves increased 19%, TP reserves increased 49% and TPP reserves increased 61%.

·         Long-Term Sustainability. PDP, TP and TPP reserve life index ("RLI") of 6.2 years, 13.2 years and 20.1 years, respectively, reflects our unique asset base, which combines low decline, long life oil weighted assets with a deep inventory of unconventional high impact assets, providing for long-term sustainable and profitable growth.

·         Profitable Growth Drives Strong Recycle Ratios. Our TP FD&A cost of $16.15 per boe and TPP FD&A cost of $12.28 per boe generated recycle ratios of 2.9x and 3.8x, respectively. Our PDP F&D cost of $13.20 per boe generated a recycle ratio of 3.6x and reflects strong operational execution by our teams in 2022. Our TP and TPP recycle ratios increased 32% and 43%, respectively as compared to 2021.

·         Growing Net Present Value per Share. PDP NPV, using a 10% discount rate¹, increased by 42% to $10.67 per share, TP NPV increased by 77% to $19.08 per share and TPP NPV increased by 81% to $27.60 per share, as compared to the prior year. The NPV calculations performed by McDaniel used an average 2023-2027 WTI price of US$78.51/bbl (three consultants average).

Outlook

Our focus in 2023 is continued operational execution to achieve our production guidance of 160,000 – 162,000 boe/d (13% production per share growth) and our capital expenditure guidance of $900 - $950 million.

Our 2023 financial milestones we look forward to reporting to shareholders on are (1) achieving net debt of $1.3 billion which represents a debt to EBITDA ratio of 1.0x at a stress test price deck of US$50/bbl WTI and $3.50/GJ AECO, (2) further increasing our monthly dividend by 26% to $0.0608 per share ($0.73 per share/annum), and (3) returning 75% of free funds flow back to shareholders which includes our targeted annual dividend of $0.73 per share.

Our balance sheet is in excellent shape, with net debt currently at $1.5 billion which represents a debt to EBITDA ratio of 0.7x at current strip prices⁸ and provides us with $1.6 billion of undrawn capacity. Our balance sheet will continue to strengthen further to approximately $1.0 - $1.2 billion by year end 2023.

Over the next five years, we are targeting organic production growth to 200,000 boe/d, which is forecasted to generate over $4.5 billion of free funds flow (~$7.35 per share) at US$75/bbl WTI and $3.50/GJ AECO.

Our strategy is to provide shareholders with sustainable production per share growth (3% - 8% per year) combined with a stable and growing dividend. Beyond 2023, we will continue to look for opportunities to enhance our organic growth plans and long-term value through business development initiatives.

On behalf of our employees, management team and Board of Directors, we would like to thank our shareholders for their support and look forward to updating you on our progress throughout the year. 

NOTES
¹    Funds flow, funds flow basic ($/share), funds flow diluted ($/share) and net debt are capital management measures. Total payout ratio, average realized price, petroleum and natural gas revenues, and NPV (10% discount rate) per share figures are supplementary financial measures. Operating netback and free funds flow are non-GAAP financial measures. Operating netbacks ($/boe), F&D costs, FD&A costs, recycle ratio and free funds flow per share are non-GAAP ratios. Refer to the Specified Financial Measures section in this press release for additional disclosure and assumptions.
²   Also referred to herein as "capital expenditures".
³   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.
⁴   Prior to the impact of risk management activities and tariffs.
⁵   Disclosure of drilling locations in this press release consists of proved, probable and unbooked locations and their respective quantities on a gross and net basis as disclosed herein. Refer to Drilling Locations in this press release for additional disclosure.
⁶   Production per share is the Company's total crude oil, NGL and natural gas production volumes for the applicable period divided by the weighted average number of diluted shares outstanding for the applicable period. Production per share growth is determined in comparison to the applicable comparative period.
⁷    Debt to EBITDA ratio and EBITDA to interest expense ratio are specified financial measures that are calculated in accordance with the financial covenants in our credit agreement.
⁸   Based on the following commodity pricing and exchange rate assumptions: WTI of US$76/bbl, USD/CAD of $1.35 and AECO of C$2.49/GJ.

2022 RESERVES REVIEW
Our 2022 year end reserves were evaluated by independent reserves evaluator McDaniel & Associates Consultants Ltd. ("McDaniel") in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") as of December 31, 2022. The reserves evaluation was based on the average forecast pricing of McDaniel, GLJ Ltd. and Sproule Associates Limited and foreign exchange rates at January 1, 2023 which is available on McDaniel’s website at www.mcdan.com.

Reserves included are Company share reserves which are the Company’s total working interest reserves before the deduction of any royalties and including any royalty interests payable to the Company. Reserves related to the dispositions that closed subsequent to December 31, 2022, are included. Additional reserve information as required under NI 51-101 will be included in our Annual Information Form which will be filed on SEDAR. The numbers in the tables below may not add due to rounding.

Summary of Reserves
Reserves as at December 31, 2022

	Company Share Reserves
Description	Light & Medium Oil (Mbbl)	Tight Crude Oil (Mbbl)	Conventional Natural Gas (MMcf)
Proved developed producing	220,371	324	377,396
Proved developed non-producing	2,941	727	6,172
Proved undeveloped	106,514	9,393	190,648
Total proved	329,827	10,444	574,216
Probable	119,065	8,851	242,773
Total proved plus probable	448,892	19,295	816,989

Description	Shale Gas (MMcf)	Natural Gas Liquids Mbbl)	Total (Mboe)
Proved developed producing	266,241	49,224	377,192
Proved developed non-producing	47,926	4,101	16,786
Proved undeveloped	944,099	104,466	409,498
Total proved	1,258,266	157,791	803,475
Probable	877,640	100,163	414,815
Total proved plus probable	2,135,906	257,954	1,218,291

Net Present Values of Future Net Revenue
Summary of Before Tax Net Present Values of Future Net Revenue (Forecast Pricing)
As at December 31, 2022

	Before Tax Net Present Value ($ millions) (1)
	Discount Rate
Reserves Category	0%	5%	10%	15%	20%
Proved Developed Producing	9,551	7,916	6,563	5,638	4,984
Proved developed non-producing	491	407	353	315	286
Proved undeveloped	9,962	6,728	4,813	3,584	2,747
Total Proved	20,004	15,051	11,729	9,537	8,016
Total Probable	14,061	7,967	5,240	3,754	2,845
Total Proved + Probable	34,065	23,018	16,969	13,291	10,861

⁽¹⁾  Includes abandonment and reclamation costs as defined in NI 51-101 for all of our facilities, pipelines and wells including those without reserves assigned.

Future Development Costs ("FDC")

FDC reflects the best estimate of the capital cost to develop and produce reserves. FDC associated with our TP reserves at year end 2022 is $6.3 billion undiscounted ($4.6 billion discounted at 10%).

Also included in FDC are 1,584 (1,359 net) proved booked drilling locations and 367 (304 net) probable booked drilling locations.

($ millions)	Total Proved	Total Proved plus Probable
2023	862	906
2024	1,164	1,214
2025	1,284	1,433
2026	1,132	1,275
2027	930	1,263
Remainder	940	2,216
Total FDC, Undiscounted	6,312	8,307
Total FDC, Discounted at 10%	4,576	5,797

Performance Measures (Including FDC)

The following table highlights F&D and FD&A costs and associated recycle ratios, including FDC, based on the evaluation of our petroleum and natural gas reserves prepared by McDaniel:

	2022	2021	2020	Three Year Weighted Average
Proved Developed Producing
F&D costs (1)	$13.20	$16.28	$21.87	$16.28
F&D recycle ratio (2)	3.6x	1.8x	0.9x	2.3x
FD&A costs (3)	$27.34	$14.95	$19.25	$21.10
FD&A recycle ratio (2)	1.7x	2.0x	1.1x	1.7x
Total Proved
F&D costs (1)	$16.90	$5.05	$3.61	$10.30
F&D recycle ratio (2)	2.8x	5.9x	5.7x	4.4x
FD&A costs (3)	$16.15	$13.67	$14.74	$15.06
FD&A recycle ratio (2)	2.9x	2.2x	1.4x	2.4x
Total Proved Plus Probable
F&D costs (1)	$19.53	$4.63	$19.16	$14.86
F&D recycle ratio (2)	2.4x	6.4x	1.1x	3.4x
FD&A costs (3)	$12.28	$11.22	$12.51	$12.00
FD&A recycle ratio (2)	3.8x	2.7x	1.7x	3.0x

⁽¹⁾     F&D costs are calculated as the sum of development capital of $669.9million (excluding corporate and capitalized G&A) plus the change in FDC for the period of -$34.0 million (PDP), $200.5 million (TP) and $278.5 million (TPP), divided by the change in reserves volumes that are characterized as development for the period.
⁽²⁾     Recycle ratio is calculated as operating netback divided by F&D or FD&A costs. Our operating netback in 2022 was $47.03/boe.
⁽³⁾    FD&A costs are calculated as the sum of development capital of $669.9 million (excluding corporate and capitalized G&A) plus acquisition capital of $2,349.5 million plus the change in FDC for the period of $10.7 million (PDP), $1,791.1 million (TP) and $2,862.9 million (TPP), divided by the change in total reserves volumes, other than from production, for the period.

Production Replacement Ratio and Reserve Life Index

The following table highlights our production replacement ratio and reserve life index ("RLI") based on the evaluation of our petroleum and natural gas reserves prepared by McDaniel:

	2022	2021	2020	Three Year Weighted Average
Proved Developed Producing
Production replacement (1)	208%	372%	34%	226%
RLI (years) (2)	6.2	7.3	9.0	7.2
Total Proved
Production replacement (1)	589%	545%	101%	471%
RLI (years) (2)	13.2	12.5	15.6	13.5
Total Proved Plus Probable
Production replacement (1)	952%	737%	100%	712%
RLI (years) (2)	20.1	17.6	21.8	19.7

⁽¹⁾     Production replacement ratio is calculated as total reserve additions (including acquisitions net of dispositions) divided by annual production. Whitecap’s production averaged 144,389 boe/d in 2022.
⁽²⁾    RLI is calculated as total Company share reserves divided by the annualized fourth quarter actual production of 166,392 boe/d.

CONFERENCE CALL AND WEBCAST

Whitecap has scheduled a conference call and webcast to begin promptly at 9:00 am MT (11:00 am ET) on Thursday, February 23, 2023.

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 www.wcap.ca 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
or
Thanh Kang, Senior Vice President & CFO

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

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