October 25, 2023


CALGARY, ALBERTA – Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to report its operating and unaudited financial results for the three and nine months ended September 30, 2023.

Selected financial and operating information is outlined below and should be read with Whitecap’s unaudited interim consolidated financial statements and related management’s discussion and analysis for the three and nine months ended September 30, 2023 which are available at www.sedarplus.ca and on our website at www.wcap.ca.

Financial ($ millions except for share amounts

and percentages)

Three months ended Sept. 30

Nine months ended Sept. 30





Petroleum and natural gas revenues





Net income





  Basic ($/share)





  Diluted ($/share)





Funds flow 1





  Basic ($/share) 1





  Diluted ($/share) 1





Dividends declared





  Per share





Expenditures on property, plant and equipment 2





Total payout ratio (%) 1





Net Debt 1










Average daily production





  Crude oil (bbls/d)





  NGLs (bbls/d)





  Natural gas (Mcf/d)





Total (boe/d) 3





Average realized Price 1,4





  Crude oil ($/bbl)





  NGLs ($/bbl)





  Natural gas ($/Mcf)





Petroleum and natural gas revenues ($/boe) 1





Operating Netback ($/boe) 1





  Petroleum and natural gas revenues





  Tariffs 1





  Processing & other income 1





  Marketing revenues 1





Petroleum and natural gas sales 1





  Realized gain/(loss) on commodity contracts 1





  Royalties 1





  Operating expenses 1





  Transportation expenses 1





  Marketing expenses 1





Operating netbacks





Share information (millions)





Common shares outstanding, end of period





Weighted average basic shares outstanding





Weighted average diluted shares outstanding






We are pleased to report Whitecap's strong third quarter operating results that have culminated with the achievement of our $1.3 billion net debt milestone and the planned enhancement to our return of capital framework. Having achieved this milestone, we will now return 75% of free funds flow1 to shareholders which includes a sustainable base dividend ($0.73 per share annually) and share repurchases through our normal course issuer bid ("NCIB"). Since acquiring XTO Energy Canada for $1.9 billion in the third quarter of 2022, we have reduced net debt by over $900 million and, at the same time, have returned $447 million ($0.73 per share) to shareholders through our base dividend and share repurchases.

Whitecap's third quarter production of 157,026 boe/d included 103,042 bbl/d of light oil, condensate and NGLs and 323,903 mcf/d of natural gas. We completed an active third quarter drilling program including the drilling of 76 (63.7 net) wells in our light oil weighted East Division and 13 (11.8 net) wells in our West Division with 100% success.

Funds flow of $466 million ($0.76 per share) increased 12% on a per share basis relative to the second quarter and. after capital expenditures of $282 million, resulted in free funds flow of $184 million ($0.30 per share1). Third quarter dividends of $88 million ($0.15 per share) resulted in approximately 50% of free funds flow being returned to shareholders.

Our full year 2023 guidance is for average production of 157,000 – 159,000 boe/d and capital spending of $900 – $950 million, and we currently expect to be at the low end of our production guidance range and the high end of our capital spending range. In the fourth quarter we plan to bring on a total of 19 (13.2 net) wells across both Divisions, including 5 (5.0 net) Montney wells at Kakwa and Lator and 4 (4.0 net) Duvernay wells at Kaybob, with 10 (9.7 net) wells to be brought on stream in 2024 from our 2023 drilling program.

We provide the following third quarter 2023 financial and operating highlights:

·      Funds Flow. Whitecap’s third quarter funds flow of $466 million ($0.76 per share) benefitted from strong crude oil production and prices, with WTI in Canadian dollars averaging over $110/bbl during the quarter.

·      Liquids Production Outperformance. Since re-allocating portions of our capital program earlier this year to higher netback oil weighted projects, our results have outperformed original expectations with third quarter oil and condensate production of 85,238 bbl/d. Our oil weighted assets across our East Division have continued to achieve strong results, contributing to higher liquids production and funds flow.

·      Return of Capital Focus. Whitecap’s third quarter dividends of $0.15 per share totalled $88 million, with dividends and share repurchases under our NCIB for the nine months ended September 30th, 2023 totalling $296 million ($0.49 per share).

·      Balance Sheet Strength. Quarter end net debt of $1.26 billion equated to a debt to EBITDA ratio of 0.6 times and an EBITDA to interest expense ratio5 of 26.2 times, both well within our debt covenants of not greater than 4.0 times and not less than 3.5 times, respectively. Our balance sheet is in excellent condition, with $3.1 billion of total capacity and a weighted average fixed interest rate of 3.3% on approximately $800 million of our total outstanding debt.


Whitecap's 2024 budget reflects our focus on long-term sustainability and profitability to drive increasing returns for shareholders. Our Board of Directors has approved a capital budget of $1.0 – $1.2 billion which includes the drilling of approximately 258 (222.7 net) wells and is expected to generate average production of 162,000 – 168,000 boe/d or 5% production per share growth6 at the mid-point. Our forecast production growth in 2024 represents meaningful progress towards our organic production growth target of 200,000 boe/d by the end of 2027.

Our asset base is split into two divisions - East and West. Our East Division is primarily comprised of low decline/high netback light oil weighted assets that generate significant operating free funds flow. Our West Division has substantial high-quality liquids-rich inventory in the Montney and Duvernay and will be the source of our corporate production growth, with increasing free funds flow capabilities as even greater scale is achieved and continual efficiency improvements are realized. The combined asset base is unique and can sustainably support strong return of capital to shareholders while capitalizing on growth opportunities for increased profitability over the long term.

We expect to allocate approximately $600 million to the West Division, $500 million to the East Division and a nominal $7 million to our New Energy projects to advance our four carbon hubs across Alberta and Saskatchewan towards final investment decisions. It is important to note that included in our capital budget are investments in facilities and infrastructure totaling $165 million that will support incremental production growth capacity in 2024 and beyond. We also plan on spending $150 million on enhanced oil recovery ("EOR") projects in our East Division. These capital plans for infrastructure and EOR are up 27% and 38% relative to 2023, respectively.

West Division
Driven by our extensive top tier unconventional inventory in the Montney and Duvernay, where most of our capital investments will be allocated, our West Division will be the primary source of production growth for 2024 and beyond, growing production from approximately 70,000 boe/d currently to 110,000 boe/d by the end of 2027. The West Division has 3,022 (2,701 net) drilling locations7 across 800,000 (700,000 net) undeveloped acres (over 75% comprised of Montney and Duvernay lands) which we believe can support an average 10% divisional production growth rate for 25 years.

Our 2024 unconventional drilling program is designed to run two rigs continuously throughout the year, with plans to spud 17 (15.2 net) unconventional Montney wells and 11 (11.0 net) Duvernay wells at Kaybob. In addition, we plan on drilling 14 (12.0 net) wells at Valhalla and Wapiti in 2024.

The majority of our unconventional Montney development will be focused in the Musreau area as our infrastructure buildout, including a 20,000 boe/d battery, is expected to be completed in the second quarter of 2024. The facilities portion of our 2024 capital program in the West Division has increased by 45% relative to 2023 and includes the completion of the Musreau battery, as well as initial engineering work for future new-build or facility expansions and additional gathering lines at Kaybob.

Our Montney assets at Musreau are located just north of our main Kakwa development where results continue to prove the deliverability of our asset base. In the third quarter, we brought 3 (3.0 net) wells on production with initial 30-day production rates of approximately 1,600 boe/d per well (31% liquids) which is consistent with our historical results in the area. We are looking forward to our development program at Musreau, where high liquids rates are expected to drive strong economics.

During the third quarter, we also completed and brought on production 2 (2.0 net) Montney wells at Berland which were drilled by the previous operator in 2019 and left uncompleted. The wells have been on for over 30 days and post the clean-up period, current production rates are above expectations at 1,000 boe/d per well (65% liquids). We do not have any wells at Berland planned for 2024, however, we are encouraged by these early production rates and, given existing infrastructure in the area, the return characteristics of this asset may compete for future capital allocation.

The extensive technical review we had undertaken prior to our initial Duvernay drilling program is proving to be beneficial as results from our first 3 (3.0 net) wells at Kaybob are strong. Average production over the first 90 days is approximately 1,500 boe/d per well (39% liquids) which is above our internal expectations including liquids production of 580 bbl/d that is approximately 15% higher than initial expectations. Higher liquids production as well as a quicker clean-up period are contributing to the strong economics of these wells, which are expected to reach half-cycle payout in approximately 10 months (or two months quicker than forecast) at current strip prices8.

We most recently brought our next 4 (4.0 net) Duvernay wells on production in mid-October and are very encouraged with initial rates. Our plans include an additional 11 (11.0 net) wells in 2024, and we forecast that utilization of our 100% owned 15-07 gas processing facility will increase to 70% in 2024. Increased utilization of this facility improves the profitability of our Duvernay assets and with continued successful development, we forecast the facility to be over 90% utilized by the end of 2025.

East Division
Our 2024 capital program in the East Division is focused on long-term sustainability and free funds flow generation, with plans to drill approximately 215 (184.1 net) wells. The East Division has 3,562 (2,974 net) drilling locations across 500,000 (400,000 net) undeveloped acres, which we believe can support holding production flat at approximately 90,000 boe/d for the next 10 years, while generating significant free funds flow.

2024 development capital in the East Division will be focused on both short-cycle, high netback, light oil weighted Cardium, Frobisher, Glauconite, Shaunavon and Viking assets along with increased spending on long-term EOR initiatives across the asset base. In the current oil price environment8, the short-cycle light oil weighted Frobisher and Viking assets have an average half-cycle payout of only five months, highlighting the robust economics of these assets. Our technical team continues to test and implement several development initiatives such as extended reach horizontals ("ERH") and multi-leg laterals in each of our play types. Upon success, these initiatives will further enhance the long-term sustainability of our asset base.

In Eastern Saskatchewan, we plan to drill 48 (43.3 net) conventional Mississippian wells, the majority of which will target the Frobisher formation. Our 2023 Mississippian program has been very successful to-date with well design changes expected to further enhance long-term value in the play. Our well design changes have focused on increasing reservoir contact with longer lateral lengths, as well as lateral additions into secondary zones within the Frobisher formation. The majority of our 2024 Mississippian program will be dual and triple-leg laterals.

In Western Saskatchewan, we plan to drill 91 (81.7 net) Viking wells and 28 (24.1 net) wells in Southwest Saskatchewan primarily targeting the Lower Shaunavon and Success formations. The evolution of our Viking program continues as we drilled an open hole multi-lateral pilot well in the Elrose area in the third quarter. Drilling was executed successfully, and the well was brought on production in October. We look forward to the results and the potential expansion of these technical advancements to our drilling inventory across our Viking and other conventional assets.

For 2024, we plan to spend $150 million on EOR initiatives primarily at our Weyburn carbon dioxide ("CO2") EOR project as well as our Southwest Saskatchewan, Viking, and West Pembina EOR assets. During the third quarter, we signed a CO2 purchase and sale extension agreement with SaskPower to December 31, 2034, for CO2 supply to the Weyburn project. The Weyburn project provides significant benefits to various stakeholders beyond the strong free cash flow generating capabilities of the asset. We plan to drill 19 (12.7 net) wells at Weyburn in 2024, 11 (7.5 net) producers and 8 (5.2 net) injectors.

Our Central Alberta Cardium and Glauconite programs have also benefited from greater use of extended lateral lengths and increased utilization of owned and operated infrastructure. Of the 29 (22.5 net) wells planned for Central Alberta in 2024, 27 (20.5 net) are ERH wells. Continued success with ERH wells will improve the current and long-term profitability of our Central Alberta assets.


In 2024 we are expecting commodity prices to remain robust but volatile, given the macro environment. We believe that crude oil prices will remain strong due to continued growth in worldwide demand combined with limited production growth as a result of global underinvestment in our sector over the past several years. The incremental pipeline capacity that the Trans Mountain Expansion Project will provide when fully operational in early 2024 will ensure that Canadian crude oil price realizations remain strong with improving price differentials.

On the natural gas side, we look forward to the completion of LNG Canada in 2025, the country's first LNG project that, along with other recently announced projects, will provide additional market diversification for Canadian natural gas. These incremental projects will also advance Canada's leadership role in moving towards a lower carbon economy.

Our disciplined capital budget for 2024 is expected to generate $1.8 billion of funds flow and $700 million of free funds flow after capital expenditures, based on current strip prices8. We have also stress tested our budget down to US$50/bbl WTI and $3.00/GJ AECO to ensure that our dividend and maintenance capital are fully funded. Our balance sheet continues to strengthen with net debt currently less than $1.3 billion and decreasing to $1 billion in 2024 (Debt/EBITDA5 ratio of 0.5x) which provides us with significant financial flexibility for enhanced shareholder returns.

We look forward to the continued execution and profitable development of our strong asset base through 2024 and for many years to come. Our balanced portfolio of high-quality drilling opportunities supports our anticipated strong free funds flow generation and sustainable organic production growth to 200,000 boe/d by the end of 2027. Through technological advancements, efficiency improvements and acreage optimizations, our teams are constantly improving the long-term profitability of our remaining drilling inventory to support our targeted 3% – 8% organic production growth rate for at least the next 25 years.

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 the remainder of this year and an exciting 2024 and beyond.

1    Funds flow, funds flow basic ($/share), funds flow diluted ($/share) and net debt are capital management measures. Total payout ratio, average realized price and per boe disclosure figures are supplementary financial measures. Operating netback and free funds flow are non-GAAP financial measures. Operating netbacks ($/boe) and free funds flow diluted ($/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" and "capital spending".
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, Initial Production Rates and Product Type Information in this press release for additional disclosure.
4   Prior to the impact of risk management activities and tariffs.
5   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.
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 adjusted for acquisitions and dispositions.
7   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.
8   Based on the following strip commodity pricing and exchange rate assumptions for the fourth quarter of 2023: US$84/bbl WTI, $2.60/GJ AECO, USD/CAD of $1.37. And for 2024: US$79/bbl WTI, $2.85/GJ AECO, USD/CAD of $1.37.


Whitecap has scheduled a conference call and webcast to begin promptly at 9:00 am MT (11:00 am ET) on Thursday, October 26, 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
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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