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".
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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:
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2022
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Light and
medium crude oil (bbls/d)
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78,280 -
79,420
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Tight oil
(bbls/d)
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4,290 -
4,350
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Crude oil
(bbls/d)
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82,570 -
83,770
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NGLs
(bbls/d)
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11,790 –
12,090
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Shale gas
(Mcf/d)
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62,760 -
63,640
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Conventional natural gas (Mcf/d)
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151,080 -
153,200
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Natural gas
(Mcf/d)
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213,840 -
216,840
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Total
(boe/d)
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130,000 -
132,000
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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.