CALGARY, AB, April 4, 2022 /CNW/ - Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to announce that as part of a 19.1 million share transaction at a price of $10.34 per share, Whitecap has repurchased 10.0 million shares for cancellation by way of a block trade using its normal course issuer bid ("NCIB") and other institutional shareholders have purchased the remaining shares. For the 10.0 million shares that were repurchased by Whitecap using its NCIB the total consideration is $103.4 million. We now have 26.1 million shares remaining on our current NCIB and intend to renew the NCIB for another year when it expires on May 20, 2022.

Since announcing our return of capital strategy in late 2021, we have repurchased 29.2 million common shares which has decreased our future annual dividend obligation by $10.5 million and, therefore, increased the long-term sustainability and growth potential of our dividend. We remain committed to allocating 50% of our 2022 funds flow after capital and dividends towards return of capital to shareholders, while the remaining amount will be allocated towards our balance sheet to maintain financial flexibility.

Based on actual to-date and forward prices, we anticipate achieving our net debt1 target of $800 million or lower by June 30, 2022. This would result in a net debt to funds flow ratio1 of 1.0 times at US$45/bbl WTI and 0.4 times based on forecasted second quarter annualized funds flow. Maintaining low leverage has been a significant competitive advantage for Whitecap, and we plan to retain the financial flexibility to further advance the long-term sustainability of our business.

New Energy Update

Whitecap is in a unique position to be an active participant in supplying current global energy demand while contributing to the transformation to a lower carbon economy. Our New Energy team has continued to advance multiple projects focused on carbon sequestration along with assisting various industry and government working groups to provide input on technical aspects of proposed regulations. Our experience and technical expertise, along with having a dedicated team working towards advancing these initiatives, has so far proven to be valuable.

  • Saskatchewan Hub Update. Whitecap has now signed five memorandums of understanding with industrial parties to support our plans to build a carbon hub in the Regina/Belle Plaine area. Total CO2 emissions from the five sources range from 1.2 million tonnes ("MT") per year to over 3.0 MT per year when including proposed expansions and certain process emissions and are incremental to our existing CO2 supply sources.


  • Alberta Carbon Hub Update. As announced on March 31st, Whitecap, Wolf Midstream, the First Nation Capital Investment Partnership (consisting of Alexander First Nation, Alexis Nakota Sioux Nation, Enoch Cree Nation and Paul First Nation) and Heart Lake First Nation have been selected by the Government of Alberta to enter into an agreement to pursue the development of a carbon hub to transport and permanently sequester CO2 emissions captured from sources in Alberta's Industrial Heartland. The project partnership group will commence a technical evaluation with the goal of moving the project forward in an expedited timeframe given the infrastructure already in place and carbon capture plans by the industrial parties supporting this project, with an in-service date prior to the end of 2024. Initial hub volumes are expected to be between 2.0 and 3.0 MT per year.
Outlook

Whitecap's 2022 production guidance of 130,000 – 132,000 boe/d now represents 12% annual production growth on a per share basis, higher than the 11% per share production growth achieved in 2021. We remain committed to our business plan that will generate substantial returns to our shareholders while continuing to advance our strategy to improve our long-term profitability and sustainability, which also includes New Energy initiatives as we transition to a lower carbon intensive business. 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.

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1 Capital management measure or supplementary financial measure. See "Specified Financial Measures".

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. 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.

In particular, and without limiting the generality of the foregoing, this press release contains forward-looking information with respect to: our intention to renew our NCIB in 2022; the amount by which our future annual dividend obligations have been reduced and the resulting increase in the long-term sustainability and growth potential of our dividend; that we will allocate 50% of our 2022 funds flow after capital and dividends towards returns of capital to shareholders and that the remaining will be allocated towards our balance sheet; our anticipation to reach our net debt target of $800 million or lower by June 30, 2022; our forecast of net debt to funds flow at US$45/bbl WTI; our forecast of net debt to funds flow based on forecast second quarter annualized funds flow; our plan to retain financial flexibility to further advance the long-term sustainability of our business; our ability to contribute to the transformation to a lower carbon economy; our plans to build a carbon hub in the Regina/Belle Plaine area and estimated total CO2 emissions from the industrial parties signed to memorandums of understanding; our goal to move the Alberta carbon hub project forward in an expedited timeframe, the carbon capture plans of the industrial parties supporting the project, the estimated in-service date, and the expected initial hub volumes; our 2022 production guidance and forecast annual production growth on a per share basis; and our belief that our business plans will generate substantial returns to shareholders while continuing to advance our strategy to improve our long-term profitability and sustainability, including our intention to transition to a lower carbon intensive business.

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, inflation 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; the ability of OPEC+ nations and other major producers of crude oil to adjust crude oil production levels and thereby manage world crude oil prices; the impact (and the duration thereof) of the ongoing military actions between Russia and Ukraine on crude oil, NGLs and natural gas prices; 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 ability of Whitecap to achieve the benefits of the NCIB; 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; inflation 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 Whitecap's forecast second quarter 2022 funds flow, net debt target  net debt to funds flow ratio at US$45/bbl WTI and net debt to funds flow ratio based on forecast second quarter annualized funds flow, 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 herein and such variation may be material. Whitecap and its management believe that the FOFI has been prepared on a reasonable 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
Boe Presentation

"Boe" means barrel of oil equivalent. All boe conversions in this press release are derived by converting gas to oil at the ratio of six thousand cubic feet ("Mcf") of natural gas to one barrel ("Bbl") of oil. Boe may be misleading, particularly if used in isolation. A Boe conversion rate of 1 Bbl : 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 Bbl : 6 Mcf, utilizing a conversion ratio of 1 Bbl : 6 Mcf may be misleading as an indication of value.

Production & Product Type Information

This press release includes references to crude oil, light and medium crude oil, tight oil, NGLs, shale gas, conventional natural gas, natural gas and average daily production.

National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101") includes condensate within the natural gas liquids ("NGLs") product type. The Company has disclosed condensate as combined with crude oil and separately from other natural gas liquids since the price of condensate as compared to other natural gas liquids is currently significantly higher and the Company believes that this crude oil and condensate presentation provides a more accurate description of its operations and results therefrom. Crude oil therefore refers to light, medium and tight oil and condensate. NGLs refers to ethane, propane, butane and pentane combined. Natural gas refers to conventional natural gas and shale gas combined.

The Company's forecast average daily production for 2022, disclosed in this press release consists of the following product types, as defined in NI 51-101 and using a conversion ratio of 1 Bbl : 6 Mcf where applicable:



2022

   Light and medium crude oil (bbls/d)


78,280 - 79,420

   Tight oil (bbls/d)


4,290 - 4,350

Crude oil (bbls/d)


82,570 - 83,770




NGLs (bbls/d)


11,790 – 12,090




   Shale gas (Mcf/d)


62,760 - 63,640

   Conventional natural gas (Mcf/d)


151,080 - 153,200

Natural gas (Mcf/d)


213,840 - 216,840




Total (boe/d)


130,000 - 132,000

 

SPECIFIED FINANCIAL MEASURES

This press release includes various specified financial measures as further described below. These 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.

"Funds Flow" is a capital management measure and is a key measure of operating performance as it demonstrates Whitecap's ability to generate the cash necessary to pay dividends, repay debt, make capital investments, and/or to repurchase common shares under the Company's NCIB. Management believes that by excluding the temporary impact of changes in non-cash operating working capital, funds flow provides a useful measure of Whitecap's ability to generate cash that is not subject to short-term movements in non-cash operating working capital. Funds flow is not a standardized measure and, therefore, may not be comparable with the calculation of similar measures by other entities. See Note 5(e) (ii) "Capital Management – Funds Flow" in the Company's audited annual consolidated financial statements for the year ended December 31, 2021 for a detailed calculation of funds flow for the periods set forth therein.

"Net Debt" is a capital management measure and is key to assessing the Company's liquidity. See Note 5(e)(i) "Capital Management – Net Debt and Total Capitalization" in the Company's audited annual consolidated financial statements for the year ended December 31, 2021 for a detailed calculation of net debt for the periods set forth therein.

"Net Debt to Funds Flow Ratio" is a supplementary financial measure determined by dividing net debt by funds flow. Net debt to funds flow is not a standardized measure and, therefore, may not be comparable with the calculation of similar measures by other entities.

PER SHARE AMOUNTS

Per share amounts noted in this press release are based on fully diluted shares outstanding.

SOURCE Whitecap Resources Inc.

Copyright 2022 Canada NewsWire

Whitecap Resources (TSX:WCP)
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