CALGARY, March 3, 2015 /CNW/ - Whitecap Resources
Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to
announce that based on the review of our independent 2014 year end
reserves report, our lenders have agreed to increase Whitecap's
credit facilities by 20% to $1.2
billion from the previous $1.0
billion. The increase is a result of Whitecap's strong
drilling results enhanced by the accretive acquisitions completed
in 2014, which resulted in significant reserves and production
growth which more than offset the recent collapse in commodity
prices. The increase in our credit facilities to $1.2 billion, although not required to execute
our 2015 capital program, provides us with greater financial
flexibility in this low commodity price environment. The next
annual review by our lenders is scheduled for April 30, 2016.
Whitecap's objective, irrespective of commodity prices, is to
provide shareholders with per share growth and sustainable
dividends from our internally generated cash flow, without the use
of a dividend reinvestment plan (DRIP). Our total payout ratio for
2015 is estimated to be 95% and we anticipate maintaining a strong
balance sheet with an estimated 2015 debt to cash flow ratio of
2.0x1.
We completed our first quarter drilling program in late
February, drilling a total of 32 (29.9 net) wells. Operational
results in each of our core areas continue to be very strong with
production for the month of February averaging 39,000 boe/d based
on field estimates, 6% above our initial projections. We have
elected to keep our annual production guidance of 36,000 boe/d for
2015 unchanged at this time and will review it as the year
progresses.
In West Central Saskatchewan we drilled and completed 20 (18.4
net) Viking oil wells with results exceeding our type curves and
estimated drilling and completion costs averaging
$740,000 per well.
We have received approval for our waterflood application and
concurrent Good Production Practice (GPP) for our Nisku light oil pool at Elnora in Southwest
Alberta which will provide us with the option to increase
production from the pool earlier than the original forecast of
July 1, 2015. We are anticipating
full implementation of waterflood injection and central facilities
by early May 2015.
In our Cardium resource plays we drilled a total of 9 (8.5 net)
wells. As a result of our strong production volumes to date, one
drill and two completions have been proactively deferred to post
spring break-up. Preliminary results from our Cardium drilling
program are achieving or exceeding our type curve expectations.
Included in our first quarter program was a down-spacing pilot
program to 6 wells per section in West Pembina. The results from
this program indicate no depletion from offsetting producers. Based
on these results we are investigating a broader implementation of 6
wells per section as well as further down spacing to 8 wells per
section where suitable reservoir parameters exist.
In the Deep Basin in Northwest
Alberta we drilled and completed 3 (3.0 net) wells. Initial
production rates are at or above our type curve expectations, and
declines on our producing wells continue to outperform expectations
resulting in better than expected production volumes. In addition,
we have completed construction of a pipeline in Simonette that will
mitigate third party downtime and is anticipated to improve our
operating netbacks for this area by $7.00/boe.
Whitecap continues to remain focused on balance sheet strength,
cash flow netbacks and capital efficiencies and believe we are well
positioned to not only weather the current low commodity price
environment, but continue to add considerable shareholder value
when commodity prices improve.
Whitecap Resources Inc. is a dividend paying, oil-weighted
company focused on providing sustainable monthly dividends to its
shareholders and per share growth through a combination of
accretive oil-based acquisitions and organic growth on existing and
acquired assets. For further information about Whitecap please
visit our website at www.wcap.ca.
1 2015 price assumptions used are WTI US$52.75/bbl, Edmonton par differential US$6.55/bbl, C$/US$ $0.80 and AECO C$2.50/GJ.
Note Regarding Forward-Looking Statements and Other
Advisories
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", "project", "expect", "goal",
"plan", "intend" or similar words suggesting future outcomes,
statements that actions, events or conditions "may", "would",
"could" or "will" be taken or occur in the future. In particular,
this press release contains forward-looking information relating to
Whitecap's objectives, anticipated total payout ratio, financial
flexibility, anticipated date of the annual credit facility review,
2015 debt to cash flow ratio, 2015 production guidance,
anticipated drilling and completion costs, timing for full
implementation of waterflood injection and central facilities,
future planned production increases and the timing thereof, future
drilling and development plans, decline rates, operating netbacks,
ability to weather the current low commodity price environment and
ability to provide future shareholder value.
The forward-looking information is based on certain key
expectations and assumptions made by our management, including
expectations and assumptions concerning prevailing and future
commodity prices, exchange rates, interest rates, applicable
royalty rates and tax laws; future production rates and estimates
of operating costs; performance of existing and future wells;
reserve and resource 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. 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 securityholders 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 prospective results of operations,
cash flows, total payout ratio and components thereof, all of which
are subject to the same assumptions, risk factors, limitations, and
qualifications as set forth in the above paragraphs. FOFI contained
in this press release was made as of the date hereof and was
provided for the purpose of describing Whitecap's anticipated
future business operations and results. Whitecap disclaims any
intention or obligation to update or revise any FOFI contained in
this press release, whether as a result of new information, future
events or otherwise, unless required pursuant to applicable law.
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.
Non-GAAP Measures
This press 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.
"Operating netbacks" are determined by deducting
royalties, production expenses and transportation and selling
expenses from oil and gas revenue. Operating netbacks are per boe
measures used in operational and capital allocation decisions.
"Cash flow netbacks" are determined by deducting cash
general and administrative and interest expense from operating
netbacks.
"Total payout ratio" is calculated as development capital
plus cash dividends declared divided by funds from operations.
"Debt to cash flow ratio" is calculated as net debt
divided by funds from operations. Net debt is bank debt plus
working capital excluding risk management contract. Funds from
operations are cash flow from operating activities adjusted for
changes in non-cash working capital, transactions costs, and
settlement of decommissioning liabilities.
"Boe" means barrel of oil equivalent on the basis of 6 mcf of
natural gas to 1 bbl of oil. Boes may be misleading, particularly
if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl 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.
SOURCE Whitecap Resources Inc.