CALGARY, AB, Oct. 28, 2021 /CNW/ - Whitecap Resources Inc.
("Whitecap" or the "Company") (TSX: WCP) is pleased to report its
operating and unaudited consolidated financial results for the
three and nine months ended September 30,
2021.
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, 2021 which are available at
www.sedar.com and on our website at www.wcap.ca.
FINANCIAL AND OPERATING HIGHLIGHTS
|
Three months ended
September 30
|
Nine months ended
September 30
|
Financial
($000s except per share amounts)
|
2021
|
2020
|
2021
|
2020
|
Petroleum and natural
gas revenues
|
678,115
|
248,283
|
1,740,527
|
663,067
|
Net income
(loss)
|
1,514,633
|
12,835
|
1,552,826
|
(2,176,924)
|
Basic
($/share)
|
2.40
|
0.03
|
2.64
|
(5.33)
|
Diluted
($/share)
|
2.37
|
0.03
|
2.62
|
(5.33)
|
Funds flow
|
293,741
|
119,320
|
748,072
|
329,231
|
Basic
($/share)
|
0.46
|
0.29
|
1.27
|
0.81
|
Diluted
($/share)
|
0.46
|
0.29
|
1.26
|
0.80
|
Dividends paid or
declared
|
30,807
|
17,454
|
83,772
|
69,808
|
Per share
|
0.05
|
0.04
|
0.14
|
0.17
|
Expenditures on
property, plant and equipment ("PP&E")
|
135,204
|
14,075
|
293,486
|
174,173
|
Total payout ratio
(%) (1)
|
57
|
26
|
50
|
74
|
Property
acquisitions
|
2,646
|
71
|
75,005
|
5,355
|
Property
dispositions
|
(2,287)
|
-
|
(2,354)
|
-
|
Corporate
acquisition
|
68,855
|
268
|
1,848,765
|
18,417
|
Net debt
|
1,313,871
|
1,151,409
|
1,313,871
|
1,151,409
|
Operating
|
|
|
|
|
Average daily
production
|
|
|
|
|
Crude oil
(bbls/d)
|
77,188
|
51,456
|
74,063
|
54,042
|
NGLs
(bbls/d)
|
10,279
|
4,693
|
10,368
|
5,018
|
Natural gas
(Mcf/d)
|
170,807
|
63,191
|
150,979
|
67,441
|
Total (boe/d)
(2)
|
115,935
|
66,681
|
109,594
|
70,300
|
Average realized
price (3)
|
|
|
|
|
Crude oil
($/bbl)
|
81.02
|
47.67
|
73.75
|
40.58
|
NGLs
($/bbl)
|
45.64
|
19.57
|
37.36
|
14.89
|
Natural gas
($/Mcf)
|
3.79
|
2.44
|
3.49
|
2.25
|
Total
($/boe)
|
63.58
|
40.47
|
58.17
|
34.42
|
Netbacks
($/boe)
|
|
|
|
|
Petroleum and natural
gas revenues
|
63.58
|
40.47
|
58.17
|
34.42
|
Tariffs
|
(0.43)
|
(0.49)
|
(0.41)
|
(0.46)
|
Processing & other
income
|
0.83
|
0.99
|
0.77
|
0.75
|
Marketing
revenue
|
4.29
|
0.91
|
3.57
|
0.94
|
Petroleum and
natural gas sales
|
68.27
|
41.88
|
62.10
|
35.65
|
Realized hedging gain
(loss)
|
(6.83)
|
1.65
|
(5.13)
|
4.17
|
Royalties
|
(10.24)
|
(5.61)
|
(9.07)
|
(4.49)
|
Operating
expenses
|
(13.71)
|
(12.02)
|
(13.61)
|
(11.80)
|
Transportation
expenses
|
(2.29)
|
(2.44)
|
(2.23)
|
(2.38)
|
Marketing
expenses
|
(4.32)
|
(0.96)
|
(3.60)
|
(0.93)
|
Operating netbacks
(1)
|
30.88
|
22.50
|
28.46
|
20.22
|
Share information
(000s)
|
|
|
|
|
Common shares
outstanding, end of period
|
631,991
|
408,286
|
631,991
|
408,286
|
Weighted average
basic shares outstanding
|
632,101
|
408,250
|
588,750
|
408,339
|
Weighted average
diluted shares outstanding
|
638,060
|
412,405
|
593,407
|
412,967
|
Notes:
|
(1)
|
Total payout ratio
and operating netbacks do not have a standardized meaning under
GAAP. Refer to non-GAAP measures in this press release for
additional disclosure and assumptions.
|
(2)
|
Disclosure of
production on a per boe basis in this press release consists of the
constituent product types and their respective quantities disclosed
in this table. Refer to oil and gas advisories in this press
release for additional disclosure.
|
(3)
|
Prior to the impact
of hedging activities and tariffs.
|
MESSAGE TO SHAREHOLDERS
Whitecap is pleased to report another exceptional quarter of
operating and financial performance. We achieved average production
in the third quarter of 115,935 boe/d which was 1,935 boe/d higher
than our forecast of 114,000 boe/d as both our base production and
new well results continue to outperform our expectations. We remain
disciplined on capital investments with only $135 million invested in the third quarter
compared to our forecast of $165
million.
Record quarterly funds flow of $294
million ($0.46 per share)
resulted in discretionary funds flow of $128
million after capital investments of $135 million and dividends paid to shareholders
of $31 million. Net income of
$1.5 billion includes an after-tax
impairment reversal of $1.4 billion
due to increases in forward benchmark commodity prices.
We highlight the following third quarter financial and operating
results:
- Operational Excellence. Third quarter production of
115,935 boe/d (75% liquids) was 12% higher on a per share basis
than the prior year quarter and slightly lower than the second
quarter due to previously announced downtime at Weyburn, impacting third quarter production by
approximately 1,600 boe/d (net to Whitecap).
- Significant Free Funds Flow. Record funds flow of
$294 million ($0.46 per share) was 59% higher on a per share
basis than the prior year quarter and resulted in free funds flow
of $159 million in the third quarter.
Operating netback of $30.88/boe was
37% higher than the prior year quarter and 11% higher than the
second quarter.
- Increasing Cash Returns to Shareholders. Whitecap paid
$31 million ($0.05 per share) in dividends during the third
quarter along with repurchasing 3.1 million shares under its normal
course issuer bid ("NCIB"). Year to date, Whitecap has paid
$83.8 million ($0.14 per share) in dividends and repurchased 5.1
million shares under its NCIB at a weighted average price of
$5.98 per share. Since the beginning
of the year, Whitecap has increased its monthly dividend by 58% to
$0.0225 per share.
- Consolidating Core Areas. Whitecap closed the
acquisition of a private company in Southeast Saskatchewan for $67 million. The acquisition adds approximately
1,600 boe/d (94% light oil) and 23 net sections of land (99%
working interest) in the Weir Hill area. Based on current strip
prices, annual run rate operating income on the acquisition is
$32 million.
- Balance Sheet Strength. Whitecap's balance sheet remains
in excellent shape with a debt to EBITDA ratio of 1.2x at the end
of the third quarter and is expected to be 0.9x by the end of the
year, based on strip prices. Whitecap's credit facility is a
secured, covenant-based credit facility with an extendible
four-year term and not subject to annual redeterminations.
Subsequent to the quarter end, Whitecap extended the maturity date
on its credit facility to May 31,
2026 and with strong support from its banking syndicate, has
increased the credit facility to $1.6
billion. The credit facility, when combined with
$595 million of private placement
notes outstanding, results in total credit capacity of $2.2 billion which provides Whitecap with
significant financial flexibility.
OPERATIONS UPDATE
Whitecap has significantly increased its production by 74% to
115,935 boe/d in the third quarter compared to 66,681 boe/d in the
prior year quarter through our strategic acquisitions which closed
in 2021. Our shareholders are now participating in the full
integration and advancement of development opportunities on the
acquired assets in addition to strengthening commodity prices.
Northern Alberta and
BC
The most exciting developments in this business unit are
associated with our Karr and Kakwa Montney assets. Since Whitecap
took over operatorship of the Kakwa asset, we completed and brought
on production 4 (4.0 net) wells with very encouraging results. The
wells averaged 1,195 boe/d (47% liquids) per well over the first 30
days on production which includes a post frac clean-up period and
in aggregate are currently producing 5,300 boe/d (47% liquids).
Average well costs of $10 million
for these four wells are lower than our original expectations, with
our 2022 budget incorporating a 5-10% improvement from our original
estimate of $10.7 million per well
and the potential for further improvements.
Our 02/13-1 Montney well at
Karr, which was completed with an optimized frac design, has
produced 275 Mboe (63% liquids) in the 203 days it has been on
production. We will be spudding a 4 well pad at Karr offsetting the
02/13-1 well in the third quarter of 2022.
This business unit also contains our Charlie Lake assets in Northwest Alberta. The 2021 program included 2
(1.7 net) development wells and 1 (0.8 net) extensional test in a
new Charlie Lake horizon. The
two-mile extended reach horizontal ("ERH") development wells
achieved strong results with average IP(180) rates of 1,236 boe/d
(63% liquids) per well on average capital cost per well of
$4.4 million.
Central Alberta
Our Central Alberta business
unit contains more mature assets, and diligent reservoir management
and development design have improved capital efficiencies in this
area. We recently drilled a conceptual horizontal well to initiate
redevelopment into an extension of our Garrington area. The well
was drilled with an advanced horizontal well bore and stimulation
design and has significantly exceeded our expectations with an
IP(60) rate of 682 boe/d (90% liquids) which is 42% above our
budget expectations. We have identified 50 (31.6 net) analogous
drilling locations, primarily two-mile ERH wells, in this area.
We also drilled 2 (2.0 net) two-mile ERH Cardium oil wells in
the Kaybob/Rosevear area on lands acquired in 2021. We modified the
wellbore placement and stimulation based on our advanced reservoir
modelling and experience. These wells have recently been brought on
production, with initial results indicating that our modifications
were effective. Our redesign has resulted in a 25% reduction to
drill and complete costs compared to previous wells.
Western Saskatchewan
The results from our 2021 Viking program have exceeded our
expectations as our team continues to use geological review and
recovery enhancement techniques to improve, and add to, our
drilling inventory. We drilled 37 (32.5 net) Viking wells to date
in 2021, all of which are ERH's. On an IP(180) basis, we have
outperformed our budget expectations by 34% so far this year while
maintaining capital costs.
In Southwest Saskatchewan, we
drilled 27 (20.5 net) wells year to date, highlighted by
significant cost improvements from our Lower Shaunavon program.
Average well costs since we entered the play in 2018 have decreased
approximately 30% to $1.2 million and
spud to rig release times have decreased approximately 30% to 5
days with the potential to further reduce to $1.0 million per well and 4 days,
respectively.
Eastern Saskatchewan
The integration of acquired assets in Southeast Saskatchewan has been seamless and
significant benefits have been realized through strong
collaboration between both prior and new team members. A total of
26 (22.8 net) Frobisher wells have
been drilled in 2021 on these lands by Whitecap and its
predecessors. Of these wells, 16 have more than 180 days of
production history with an average IP(180) rate of 180 boe/d (93%
liquids) which is double the rate of our initial dual leg budget
expectations.
At Weyburn, we made another
step change in the design and optimization of our CO2
enhanced oil recovery ("EOR") development. Year to date, we drilled
6 (3.9 net) wells of which two were injectors. The four producing
wells have average IP(60) rates of 162 bbl/d of crude oil which is
double our budget expectations for a CO2 EOR infill
well. As a result, we increased our long-term production forecasts,
incorporating the improved results into future design of
CO2 flood development programs.
OUTLOOK
The continued operational success and recent corporate
activities are advancing Whitecap towards our short and long-term
targets, within our stated priorities of balance sheet strength,
modest growth (3-5%) and sustainable and growing return of capital
to shareholders through dividends and share buybacks.
We are well on track towards achieving our 2021 average
production of 111,000 – 112,000 boe/d (76% liquids) on development
capital investment of $425 –
$435 million, putting us in a strong
position to achieve our 2022 average production of 121,000 –
123,000 boe/d (73% liquids) on capital spending of $470 - $490
million.
We closed the Weyburn royalty
sale for $188 million on October 26, 2021, further solidifying our balance
sheet strength and our expectation of reaching our net debt target
of $1 billion by year end 2021. Our
balance sheet is in pristine condition with an expected debt to
EBITDA ratio of 0.9x at year end 2021.
In addition to recently increasing our base monthly dividend by
38% to $0.0225 per share, we have
committed to returning 50% of 2022 discretionary funds flow back to
our shareholders through further dividend increases and/or share
buybacks. We will direct the remaining 50% towards our balance
sheet to provide increased financial flexibility for continued
advancement of our business through targeted acquisitions and/or
New Energy initiatives to enhance total shareholder returns.
We are expecting continued strength in both crude oil and
natural gas prices for the fourth quarter of 2021 and into 2022.
Fossil fuel energy continues to be critical for meeting global
energy demand especially as we move into the colder winter season
and will remain an important part of the energy transition for many
years to come. Whitecap is well positioned to participate in the
strong pricing environment while responsibly developing and
producing our assets.
On behalf of our management team and Board of Directors, we
would like to thank our shareholders for their ongoing support and
look forward to providing updates as we progress through the
remainder of the year and into 2022.
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,
October 28, 2021.
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.
Note Regarding Forward-Looking Statements
This press release contains forward-looking statements and
forward-looking information (collectively "forward-looking
information") within the meaning of applicable securities laws
relating to the Company's plans and other aspects of our
anticipated future operations, management focus, strategies,
financial, operating and production results and business
opportunities. Forward-looking information typically uses words
such as "anticipate", "believe", "continue", "trend", "sustain",
"project", "expect", "forecast", "budget", "goal", "guidance",
"plan", "objective", "strategy", "target", "intend", "estimate",
"potential", or similar words suggesting future outcomes,
statements that actions, events or conditions "may", "would",
"could" or "will" be taken or occur in the future, including
statements about our strategy, plans, focus, objectives, priorities
and position; the anticipated benefits of the Southeast Saskatchewan acquisition; our
expected debt to EBITDA ratio of 0.9x by year end 2021 based on
strip prices; estimated $10.7 million
per well costs, ability to reduce such original estimate by 5-10%
and potential for further improvements with the Karr and Kakwa
assets; timing to spud a 4 well pad at Karr; potential to further
reduce well costs to $1.0 million per
well and spud to rig release times to 4 days in Whitecap's Lower
Shaunavon program; the anticipated benefits of future
CO2 flood well designs; that operational success and
corporate activities will translate to meet short and long term
targets; our 2021 average production and capital spending; our 2022
average production and capital spending; our expectation to reach
$1.0 billion net debt by year end
2021; our anticipation to direct 50% of 2022 discretionary funds
flow to shareholders and 50% towards our balance sheet and the
benefits to be derived therefrom; the expected strength in crude
oil and natural gas prices in the fourth quarter of 2021 and into
2022; and that fossil fuel energy will remain an important part of
the energy transition for many years to come.
The forward-looking information is based on certain key
expectations and assumptions made by our management, including
expectations and assumptions concerning prevailing commodity
prices, exchange rates, interest rates, applicable royalty rates
and tax laws; the impact (and the duration thereof) that the
COVID-19 pandemic will have on (i) the demand for crude oil, NGLs
and natural gas, (ii) our supply chain, including our ability to
obtain the equipment and services we require, and (iii) our ability
to produce, transport and/or sell our crude oil, NGLs and natural
gas; future production rates and estimates of operating costs;
performance of existing and future wells; reserve volumes;
anticipated timing and results of capital expenditures; the success
obtained in drilling new wells; the sufficiency of budgeted capital
expenditures in carrying out planned activities; the timing,
location and extent of future drilling operations; the state of the
economy and the exploration and production business; results of
operations; performance; business prospects and opportunities; the
availability and cost of financing, labour and services; the impact
of increasing competition; ability to efficiently integrate assets
and employees acquired through acquisitions, ability to market oil
and natural gas successfully and our ability to access capital.
Although we believe that the expectations and assumptions on
which such forward-looking information is based are reasonable,
undue reliance should not be placed on the forward-looking
information because Whitecap can give no assurance that they will
prove to be correct. Since forward-looking information addresses
future events and conditions, by its very nature they involve
inherent risks and uncertainties. These include, but are not
limited to: the risks associated with the oil and gas industry in
general such as operational risks in development, exploration and
production; pandemics and epidemics; delays or changes in plans
with respect to exploration or development projects or capital
expenditures; the uncertainty of estimates and projections relating
to reserves, production, costs and expenses; health, safety and
environmental risks; commodity price and exchange rate
fluctuations; interest rate fluctuations; marketing and
transportation; loss of markets; environmental risks; competition;
incorrect assessment of the value of acquisitions; failure to
complete or realize the anticipated benefits of acquisitions or
dispositions; ability to access sufficient capital from internal
and external sources; failure to obtain required regulatory and
other approvals; reliance on third parties and pipeline systems;
and changes in legislation, including but not limited to tax laws,
production curtailment, royalties and environmental regulations.
Our actual results, performance or achievement could differ
materially from those expressed in, or implied by, the
forward-looking information and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
information will transpire or occur, or if any of them do so, what
benefits that we will derive therefrom. Management has included the
above summary of assumptions and risks related to forward-looking
information provided in this press release in order to provide
security holders with a more complete perspective on our future
operations and such information may not be appropriate for other
purposes.
Readers are cautioned that the foregoing lists of factors are
not exhaustive. Additional information on these and other factors
that could affect our operations or financial results are included
in reports on file with applicable securities regulatory
authorities and may be accessed through the SEDAR website
(www.sedar.com).
These forward-looking statements are made as of the date of this
press release and we disclaim any intent or obligation to update
publicly any forward-looking information, whether as a result of
new information, future events or results or otherwise, other than
as required by applicable securities laws.
This press release contains future-oriented financial
information and financial outlook information (collectively,
"FOFI") about run rate operating income on the Southeast Saskatchewan acquisition; Whitecap's
2021 capital investments; 2021 year-end net debt; 2022 capital
investments; total credit capacity; and debt to EBITDA ratio, all
of which are subject to the same assumptions, risk factors,
limitations, and qualifications as set forth in the above
paragraphs. The actual results of operations of Whitecap and the
resulting financial results will likely vary from the amounts set
forth in this presentation and such variation may be material.
Whitecap and its management believe that the FOFI has been prepared
on a reasonably basis, reflecting management's best estimates and
judgments. However, because this information is subjective and
subject to numerous risks, it should not be relied on as
necessarily indicative of future results. Except as required by
applicable securities laws, Whitecap undertakes no obligation to
update such FOFI. FOFI contained in this press release was made as
of the date of this press release and was provided for the purpose
of providing further information about Whitecap's anticipated
future business operations. Readers are cautioned that the FOFI
contained in this press release should not be used for purposes
other than for which it is disclosed herein.
Oil and Gas Advisories
References to crude oil or natural gas production in this press
release refer to the light and medium crude oil and conventional
natural gas, respectively, product types as defined in National
Instrument 51-101, Standards of Disclosure for Oil and Gas
Activities ("NI 51-101").
"Boe" means barrel of oil equivalent based on 6 mcf
of natural gas to 1 bbl of oil. Boe may be misleading, particularly
if used in isolation. A boe conversion ratio of 6:1 is based on an
energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. In addition, given that the value ratio based on the
current price of crude oil as compared to natural gas is
significantly different from the energy equivalency of 6:1,
utilizing a conversion on a 6:1 basis may be misleading as an
indication of value.
Production Rates
Any references in this news release to initial production rates
(Current, IP(30), IP(60), IP(180)) are useful in confirming the
presence of hydrocarbons, however, such rates are not determinative
of the rates at which such wells will continue production and
decline thereafter. While encouraging, readers are cautioned not to
place reliance on such rates in calculating the aggregate
production for Whitecap.
Drilling Locations
This press release discloses drilling inventory in three
categories: (i) proved locations; (ii) probable locations; and
(iii) unbooked locations. Proved locations and probable locations
are derived from McDaniel's reserves evaluation effective
December 31, 2020 and account for
drilling locations that have associated proved and/or probable
reserves, as applicable. Unbooked locations are internal estimates
based on our prospective acreage and an assumption as to the number
of wells that can be drilled per section based on industry practice
and internal review. Unbooked locations do not have attributed
reserves or resources. Of the 50 (31.6 net) Garrington drilling
locations identified herein, 4 (3.0 net) are proved locations, 2
(1.0 net) are probable locations, and 44 (27.6 net) are unbooked
locations. Unbooked locations have been identified by management as
an estimation of our multi-year drilling activities based on
evaluation of applicable geologic, seismic, engineering, production
and reserves information. There is no certainty that we will drill
all unbooked drilling locations and if drilled there is no
certainty that such locations will result in additional oil and gas
reserves, resources or production. The drilling locations on which
we drill wells will ultimately depend upon the availability of
capital, regulatory approvals, seasonal restrictions, oil and
natural gas prices, costs, actual drilling results, additional
reservoir information that is obtained and other factors. While
certain of the unbooked drilling locations have been de-risked by
drilling existing wells in relative close proximity to such
unbooked drilling locations, other unbooked drilling locations are
farther away from existing wells where management has less
information about the characteristics of the reservoir and
therefore there is more uncertainty whether wells will be drilled
in such locations and if drilled there is more uncertainty that
such wells will result in additional oil and gas reserves,
resources or production.
Production
|
Crude oil
(bbls/d)
|
NGLs
(bbls/d)
|
Natural
gas (Mcf/d)
|
Total
(boe/d) (1)
|
Q3 2021
Forecast
|
75,900
|
10,100
|
168,000
|
114,000
|
Weyburn
downtime
|
1,600
|
|
|
1,600
|
Southeast
Saskatchewan Acquisition
|
1,500
|
32
|
408
|
1,600
|
Kakwa 30 day average
per well
|
502
|
57
|
3,816
|
1,195
|
Kakwa current average
per well
|
2,226
|
254
|
16,920
|
5,300
|
Charlie Lake IP(180)
per well
|
587
|
192
|
2,742
|
1,236
|
Garrington
IP(60)
|
580
|
34
|
408
|
682
|
Frobisher IP(180) per
well
|
162
|
6
|
72
|
180
|
2021
Guidance
|
74,600 –
75,200
|
10,100 –
10,400
|
157,800 –
158,400
|
111,000 –
112,000
|
2022
Guidance
|
78,000 –
79,200
|
10,300 –
10,600
|
196,200 –
199,200
|
121,000 –
123,000
|
Note:
|
(1)
|
Disclosure of
production on a per boe basis of amounts in the above table in this
press release consists of the constituent product types and their
respective quantities disclosed in this table.
|
|
Crude oil
(Mbbl)
|
NGLs
(Mbbl)
|
Natural
gas (MMcf)
|
Total
(Mboe) (1)
|
02/13-01 Karr Montney
Well
|
155
|
18
|
612
|
275
|
Note:
|
(1)
|
Disclosure of
production on a per boe basis of amounts in the above table in this
press release consists of the constituent product types and their
respective quantities disclosed in this table.
|
Non-GAAP Measures
This press release includes non-GAAP measures as further
described herein. These non-GAAP measures do not have a
standardized meaning prescribed by International Financial
Reporting Standards ("IFRS" or, alternatively, "GAAP") and,
therefore, may not be comparable with the calculation of similar
measures by other companies. See the Company's Management's
Discussion and Analysis of financial condition and results of
operation for the period ended September 30,
2021 for a reconciliation of the non-GAAP measures.
"Debt to EBITDA" is calculated in accordance with
the Company's credit agreements, copies of which may be accessed
through the SEDAR website (www.sedar.com).
"Discretionary funds flow" represents funds flow
less expenditures on PP&E and dividends. Management believes
that discretionary funds flow provides a useful measure of
Whitecap's ability to increase returns to shareholders and to grow
the Company's business.
"Free funds flow" represents funds flow less
expenditures on PP&E. Management believes that free funds flow
provides a useful measure of Whitecap's ability to increase returns
to shareholders and to grow the Company's business. Previously,
Whitecap also deducted dividends paid or declared in the
calculation of free funds flow. The Company believes the change in
presentation better allows comparison with both dividend paying and
non-dividend paying peers.
"Run rate operating income" is determined by adding
marketing revenue and processing & other income, deducting
realized hedging losses or adding realized hedging gains and
deducting tariffs, royalties, operating expenses, transportation
expenses and marketing expenses from petroleum and natural gas
revenues that are projected over the following twelve months based
on forward commodity prices.
"Operating netbacks" are determined by adding marketing
revenue and processing & other income, deducting realized
hedging losses or adding realized hedging gains and deducting
tariffs, royalties, operating expenses, transportation expenses and
marketing expenses from petroleum and natural gas revenues.
Operating netbacks are per boe measures used in operational and
capital allocation decisions. Presenting operating netbacks on a
per boe basis allows management to better analyze performance
against prior periods on a comparative basis.
"Total payout ratio" is calculated as dividends paid or
declared plus expenditures on PP&E, divided by funds flow.
Management believes that total payout ratio provides a useful
measure of Whitecap's capital reinvestment and dividend policy, as
a percentage of the amount of funds flow.
Per Share Amounts
Per share amounts noted in this press release are on a fully
diluted basis.
SOURCE Whitecap Resources Inc.