December 16, 2014
WHITECAP PROVIDES REVISED OUTLOOK FOR 2015, MAINTAINS SUSTAINABILITY AND FINANCIAL STRENGTH
CALGARY, ALBERTA – In response to the dramatic drop in crude oil prices over the past six weeks, Whitecap’s Board of Directors and Management felt it prudent and necessary to revise our budget outlook for 2015. Our capital program for 2015 will be reduced by 32% to $245 million from $360 million in order to maintain our financial flexibility and to provide continuous long term sustainability for our shareholders. The capital reduction will allow Whitecap to still grow production per share by 5% in 2015 and maintain the monthly dividend at $0.0625/share all within a total payout ratio of less than 100%.
2015 REVISED CAPITAL SPENDING
The proactive re-alignment of our disciplined 2015 capital program to adjust for the current commodity price environment allows us to focus on the most profitable projects with the highest rate of return within our extensive inventory of drilling locations. The revised capital program balances the need for quick well payouts along with strategic initiatives that are important to our long term sustainability.
We have reduced our 2015 drilling program from 180 (145.2 net) to 99 (81.5 net) wells in addition to deferring $12 million in facility and infrastructure capital. The majority of these reductions/deferrals have been applied in regions that can easily be accelerated should the commodity price environment improve sooner than anticipated. Our revised capital program consists of drilling 53 (45.1 net) Viking horizontal wells in Saskatchewan, 11 (8.6 net) Cardium horizontal wells in southwest Alberta, 19 (16.2 net) Cardium horizontal wells in Pembina, 8 (7.5 net) Dunvegan horizontal wells in northwest Alberta and 8 (4.1 net) horizontal oil wells at Boundary Lake in British Columbia.
The revised capital spending for 2015 will enable us to more effectively apply operational and reservoir enhancements and efficiencies to our future programs. In addition, we anticipate that as a result of the reduced spending, our 2016 base decline rate will decrease to 20% from the previously stated 23%.
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