CALGARY, AB,
April 28,
2022 /CNW/ - Whitecap Resources Inc. ("Whitecap" or
the "Company") (TSX: WCP) is pleased to report its operating and
unaudited financial results for the three months ended March 31, 2022.
Selected financial and operating information is outlined below
and should be read with Whitecap's unaudited interim financial
statements and related management's discussion and analysis for the
three months ended March 31, 2022
which are available at www.sedar.com and on our website at
www.wcap.ca.
FINANCIAL AND OPERATING HIGHLIGHTS
|
|
Three months ended
March 31
|
Financial ($000s
except per share amounts)
|
|
|
2022
|
2021
|
Petroleum and natural
gas revenues
|
|
|
1,003,877
|
448,892
|
Net income
|
|
|
652,329
|
19,635
|
Basic ($/share)
|
|
|
1.04
|
0.04
|
Diluted ($/share)
|
|
|
1.03
|
0.04
|
Funds flow
1
|
|
|
505,691
|
187,767
|
Basic ($/share) 1
|
|
|
0.81
|
0.36
|
Diluted ($/share) 1
|
|
|
0.80
|
0.36
|
Dividends paid or
declared
|
|
|
47,125
|
24,181
|
Per
share
|
|
|
0.08
|
0.04
|
Expenditures on
property, plant and equipment 2
|
|
|
211,534
|
118,862
|
Total payout ratio (%)
1
|
|
|
51
|
76
|
Net debt
1
|
|
|
1,093,305
|
1,451,841
|
Operating
|
|
|
|
|
Average daily
production
|
|
|
|
|
Crude oil (bbls/d) 3
|
|
|
82,980
|
64,795
|
NGLs
(bbls/d) 3
|
|
|
14,591
|
9,508
|
Natural gas (Mcf/d) 3
|
|
|
210,720
|
129,151
|
Total (boe/d)
3, 4
|
|
|
132,691
|
95,828
|
Average realized price
5
|
|
|
|
|
Crude oil ($/bbl) 3
|
|
|
111.93
|
65.11
|
NGLs
($/bbl) 3
|
|
|
54.64
|
35.50
|
Natural gas ($/Mcf) 3
|
|
|
5.07
|
3.34
|
Petroleum and natural
gas revenues ($/boe) 3
|
|
|
84.06
|
52.05
|
Operating Netbacks
1 ($/boe)
|
|
|
|
|
Petroleum and natural gas revenues 3
|
|
|
84.06
|
52.05
|
Tariffs 3
|
|
|
(0.52)
|
(0.45)
|
Processing & other income 3
|
|
|
0.57
|
0.89
|
Marketing revenue 3
|
|
|
4.91
|
2.20
|
Petroleum and natural gas sales 3
|
|
|
89.02
|
54.69
|
Realized loss on commodity contracts 3
|
|
|
(6.52)
|
(3.39)
|
Royalties 3
|
|
|
(16.53)
|
(7.56)
|
Operating expenses 3
|
|
|
(13.76)
|
(13.36)
|
Transportation expenses 3
|
|
|
(2.08)
|
(2.05)
|
Marketing expenses 3
|
|
|
(4.88)
|
(2.21)
|
Operating netbacks 1
|
|
|
45.25
|
26.12
|
Share information
(000s)
|
|
|
|
|
Common shares
outstanding, end of period
|
|
|
626,293
|
597,332
|
Weighted average basic
shares outstanding
|
|
|
625,205
|
517,492
|
Weighted average
diluted shares outstanding
|
|
|
632,876
|
523,222
|
MESSAGE TO SHAREHOLDERS
Whitecap's operational momentum continued in the first quarter
of 2022 with record average production of 132,691 boe/d (74%
liquids) which exceeded our expectation of 131,000 boe/d.
Production increased 38% compared to the first quarter of 2021 and
increased 10% compared to the fourth quarter of 2022. We had a very
active first quarter drilling program peaking at twelve rigs
drilling 71 (63.4 net) wells across our four business units and
invested $212 million of development
capital expenditures in the quarter.
Strong operational execution and continued strength in commodity
prices resulted in funds flow of $506
million, or $0.80 per share,
up 122% per share compared to the first quarter of 2021 and 45% per
share relative to the fourth quarter of 2021. Free funds flow
6 of $294 million was up
from $69 million in the first quarter
of 2021, resulting in a 253% increase per share. The significant
free funds flow generated allowed us to enhance returns to
shareholders through an accretive acquisition and a base dividend
increase of 33% in the first quarter. We also repurchased for
cancellation 10.0 million common shares subsequent to the quarter
end under our normal course issuer bid ("NCIB"), all previously
announced.
In addition to total capital investments of $392 million and dividends to shareholders of
$47 million in the first quarter,
Whitecap was still able to strengthen its balance sheet by reducing
net debt to $1.1 billion from
$1.2 billion in the fourth quarter of
2021. The balance sheet remains in a strong, defensible position
with total debt capacity of $2.0
billion and a debt to EBITDA ratio 7 of 0.7
times.
We highlight the following first quarter 2022 financial and
operating results:
- Record Production. Average production of 132,691 boe/d
(74% liquids) was up from 120,020 boe/d (75% liquids) in the fourth
quarter of 2021 and 95,828 boe/d (78% liquids) in the first quarter
of 2021. Accretive acquisitions, along with organic drilling
success, contributed to the per share growth of 14% compared to the
first quarter of 2021 and 11% compared to the fourth quarter of
2021.
- Strong Operating Netback Drives Funds Flow. First
quarter operating netback 1 of $45.25/boe increased 73% from the first quarter
of 2021 driven by continued strength in crude oil and natural gas
prices during the quarter. Our strong netbacks, when combined with
the accretive acquisitions completed over the past 18 months and
the strategic use of our NCIB, resulted in a record funds flow of
$506 million or $0.80 per share.
- Return of Capital Priority. Whitecap returned
$47 million in dividends to
shareholders during the first quarter or $0.075 per share. As previously announced, our
monthly dividend was increased by 33% to $0.03 per share with the March dividend, payable
in April, representing an annual increase of $56 million and, subsequent to the first quarter,
we repurchased 10.0 million common shares for $103.4 million under our NCIB. We 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.
- Balance Sheet Strength. Whitecap retains significant
financial flexibility with quarter end net debt of $1.1 billion on total credit capacity of
$2.0 billion. Quarter end debt to
EBITDA ratio 7 was 0.7x and EBITDA to interest expense
ratio 7 was 32.1x, well within our bank covenants of not
greater than 4.0x and not less than 3.5x respectively.
OPERATIONS UPDATE
Whitecap's operational performance through the winter drilling
program was exceptional as the optimization and development
enhancements applied to the acquired assets have continued to
generate positive results. Including the 44 (34.2 net) wells
drilled in the fourth quarter, we have drilled a total of 115 (97.6
net) wells through the winter season up to the end of the first
quarter of 2022 with the following highlights:
- Kakwa Montney. Our three well 14-13 pad was tied into
permanent facilities during the first quarter with the wells
quickly cleaning up and production stabilizing. Over the first 90
days on production, the three wells have averaged 1,831 boe/d (36%
condensate and NGLs) per well, which is more than 75% higher than
our budget expectations of 1,026 boe/d (34% condensate and NGLs).
We are currently drilling the final well of a four-well pad at
Kakwa with the wells expected to be brought on production during
the third quarter. A total of nine (6.0 net) wells are expected to
be brought on production at Kakwa in the second half of 2022.
- Central Alberta Glauconite and Cardium. Whitecap closed
the acquisition of TimberRock Energy Corp. at the start of the
first quarter and drilled a total of four (3.8 net) Glauconite
wells during the quarter. Three of the wells have been on
production for over 30 days, averaging approximately 1,138 boe/d
(74% oil and NGLs) per well, which is above our budget expectations
of 627 boe/d (56% oil and NGLs) over the first 30 days on
production. We have also executed on multiple optimization
opportunities on the acquired assets, including well reactivations
and gathering system optimizations which increase production rates
as well as the percentage of volumes that flow through Whitecap
owned facilities. Subsequent to the quarter, the Company has
secured operatorship of Pembina Cardium Unit No. 11 (55.2% working
interest) and has partner-approved plans to commence development of
the unit utilizing longer laterals and optimized waterflood
technology and configurations which have been proven in our nearby
Cardium developments.
- Southeast Saskatchewan Conventional. The Company drilled
a total of 18 (17.7 net) Mississippian conventional wells over the
winter drilling program, achieving strong results on both legacy
and acquired acreage. The average production rate over the first 30
days of 223 bbls/d of oil per well is 45% above our budget
expectations, and we have 289 (258.4 net) locations of similar
quality remaining in inventory.
BOARD OF DIRECTOR NOMINEE
Whitecap is pleased to announce that Chandra A. Henry will stand for election as an
independent director to our Board of Directors at the upcoming
Annual and Special Meeting of the Shareholders ("Annual Meeting")
on May 18, 2022. Ms. Henry has more
than 20 years of progressive experience in finance, treasury, risk,
taxation and operations within the financial services industry and
is currently the Chief Financial Officer of Longbow Capital Inc., a
private equity firm investing in the North American energy markets.
Upon being elected, Ms. Henry will serve as a member of the Audit
Committee as well as the Sustainability & Advocacy
Committee.
Ms. Henry has a Bachelor of Commerce degree, has earned the
Chartered Professional Accountant (CPA, CA), Chartered Financial
Analyst (CFA) and Institute of Corporate Directors (ICD.D)
designations, and is a Fundamentals of Sustainability Accounting
(FSA) level 2 candidate. Ms. Henry currently sits on the board of
directors of two energy companies.
Whitecap is also announcing that Ms. Heather J. Culbert is retiring from our Board of
Directors and is not seeking re-election at the upcoming Annual
Meeting. Our Board of Directors and management team would like to
thank Heather for her contributions and guidance as a director
since 2017.
OUTLOOK
Whitecap has had an excellent start to 2022 and is well
positioned to maintain operational momentum through the remainder
of the year. We remain optimistic that commodity prices will
continue to be strong and our team and our assets will be able to
provide substantial returns on capital we deploy. As we continue to
generate record funds flow, we anticipate achieving our near-term
target net debt of approximately $800
million by the end of the second quarter of 2022 providing
us with significant financial flexibility to increase shareholder
returns.
Market conditions have improved dramatically since the release
of our initial 2022 budget in October
2021 with 2022 WTI strip prices increasing by approximately
US$25/bbl and 2022 AECO strip prices
increasing over C$2.00/GJ. We now
forecast 2022 funds flow of $2.2
billion and discretionary funds flow (after capital and
dividends) of $1.4 billion at current
strip prices.
So far in 2022, our operations have been impacted by cost
inflation, labour shortages and supply constraints from our service
providers, and we expect these pressures will continue through the
balance of the year. As a result of our strong operational success,
we have offset the impact of these challenges through the first
four months of 2022 and our annual production guidance of 130,000 -
132,000 boe/d and capital expenditure budget of $510 - $530 million
remains unchanged at this time. We will continue to actively
monitor inflationary pressures and supply chain logistical
challenges and their impact on our business to assess our
profitability and sustainability as we make capital allocation
decisions over the remainder of the year and into 2023.
On behalf of our employees, management team and Board of
Directors, we would like to thank our shareholders for their
support and look forward to updating you on our progress throughout
the year.
CONFERENCE CALL AND WEBCAST
Whitecap has scheduled a conference call and webcast to begin
promptly at 9:00 am MT (11:00 am ET) on Thursday,
April 28, 2022.
The conference call dial-in number is: 1-888-390-0605 or
(587) 880-2175 or (416) 764-8609
A live audio webcast of the conference call will be accessible
on Whitecap's website at www.wcap.ca by selecting
"Investors", then "Presentations & Events".
Shortly after the live webcast, an archived version will be
available.
NOTES
1
|
Operating Netback is a
non-GAAP financial measure and operating netbacks ($/boe) is a
non-GAAP ratio. Total payout ratio is a supplementary financial
measure. Funds flow, funds flow basic ($/share), funds flow diluted
($/share) and net debt are capital management measures. Refer to
Specified Financial Measures in this press release for additional
disclosure and assumptions.
|
2
|
Also referred to herein
as "capital expenditures".
|
3
|
Supplementary financial
measure. Refer to "Supplementary Financial Measures" section of the
Company's MD&A for the three months ended March 31, 2022, which
is incorporated herein by reference, and available on SEDAR at
www.sedar.com.
|
4
|
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 Barrel of Oil Equivalency and Production,
Initial Production Rates & Product Type Information in this
press release for additional disclosure.
|
5
|
Prior to the impact of
risk management activities and tariffs.
|
6
|
Free funds flow is a
non-GAAP financial measure and free funds flow per share is a
non-GAAP ratio. Refer to Specified Financial Measures in this press
release for additional disclosure and assumptions.
|
7
|
Debt to EBITDA ratio
and EBITDA to interest expense ratio are specified financial
measures that are calculated in accordance with the financial
covenants in our credit agreement.
|
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.
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 when it expires in
May 2022; the timing of bringing
wells at Kakwa on production; the number of wells we plan to bring
on production in the second half of 2022; our plans to commence
development of the Pembina Cardium Unit No. 11 and the details
thereof; that Ms. Henry will be elected to our Board of Directors
and serve as a member of the Audit Committee as well as the
Sustainability & Advocacy Committee upon being elected; that we
are well positioned to maintain operational momentum through the
remainder of the year; that commodity prices will continue to be
strong; our belief that our team and our assets will be able to
provide substantial returns on capital we deploy; that we will
continue to generate record funds flow; our anticipation that we
will achieve our near-term net debt target of $800 million by the end of the second quarter
providing us with significant financial flexibility to increase
shareholder returns; our anticipation for 2022 funds flow of
$2.2 billion and discretionary funds
flow of $1.4 billion at current strip
prices; our expectation that cost inflation, labour shortages and
supply constraints from our service providers will continue through
the balance of the year; that we will continue to actively monitor
inflationary pressures and supply chain logistical challenges and
their impact on our business; and our forecast capital expenditures
and average daily production for 2022 by product type and in
total.
The forward-looking information is based on certain key
expectations and assumptions made by our management, including;
that we will continue to conduct our operations in a manner
consistent with past operations; the general continuance or
improvement in current industry conditions; the continuance of
existing (and in certain circumstances, the implementation of
proposed) tax, royalty and regulatory regimes; 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 and related sanctions 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; future dividend levels; 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 and the
cost and terms thereof.
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; risks associated with
increasing costs, whether due to high inflation rates, supply chain
disruptions or other factors; 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 on acceptable terms or at all; 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 annual dividend increase, second quarter
2022 net debt target and 2022 funds flow, discretionary funds flow,
and capital expenditures 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
Barrel of Oil Equivalency
"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.
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 & Associates Consultants Ltd.'s
reserves evaluation effective December 31,
2021 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 289 (258.4 net) similar quality Southeast Saskatchewan conventional drilling
locations identified herein, 95 (89.2 net) are proved locations, 23
(20.5 net) are probable locations, and 171 (148.7 net) are unbooked
locations. Unbooked locations consist of drilling locations that
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 of these
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, Initial Production
Rates & Product Type Information
References to petroleum, crude oil, natural gas liquids
("NGLs"), natural gas and average daily production in this press
release refer to the light and medium crude oil, tight crude oil,
conventional natural gas, shale gas and NGLs product types, as
applicable, as defined in National Instrument 51-101 ("NI
51-101").
NI 51-101 includes condensate within the NGLs product type. The
Company has disclosed condensate as combined with crude oil and
separately from other NGLs since the price of condensate as
compared to other NGLs 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 oil, medium oil,
tight oil and condensate. NGLs refers to ethane, propane, butane
and pentane combined. Natural gas refers to conventional natural
gas and shale gas combined.
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.
The Company's average daily production for the three months
ended March 31, 2022, December 31, 2021 and March 31, 2021, our forecast average daily
production for the first quarter and full year 2022, our Kakwa IP90
rates per well, our Kakwa budgeted IP90 rates, our Central Alberta
Glauconite IP30 rates per well; our Central Alberta Glauconite
budgeted IP30 rates, and our Southeast
Saskatchewan conventional IP30 rates per well 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
Forecast
|
Q1/22
|
Q4/21
|
Q1/21
|
Light and medium oil (bbls/d)
|
78,280 -
79,420
|
82,622
|
78,814
|
64,705
|
Tight oil (bbls/d)
|
4,290 -
4,350
|
358
|
501
|
90
|
Crude oil
(bbls/d)
|
82,570 -
83,770
|
82,980
|
79,315
|
64,795
|
|
|
|
|
|
NGLs
(bbls/d)
|
11,790 –
12,090
|
14,591
|
10,568
|
9,508
|
|
|
|
|
|
Shale gas (Mcf/d)
|
62,760 -
63,640
|
51,605
|
42,993
|
299
|
Conventional natural gas (Mcf/d)
|
151,080 -
153,200
|
159,115
|
137,827
|
128,852
|
Natural gas
(Mcf/d)
|
213,840 -
216,840
|
210,720
|
180,820
|
129,151
|
|
|
|
|
|
Total
(boe/d)
|
130,000 -
132,000
|
132,691
|
120,020
|
95,828
|
|
Kakwa IP90 per
well
|
Kakwa Budget
IP90
|
Glauc. IP30 per
well
|
Glauc. Budget
IP30
|
Light and medium oil (bbls/d)
|
-
|
-
|
735
|
223
|
Tight oil (bbls/d)
|
530
|
277
|
-
|
-
|
Crude oil
(bbls/d)
|
530
|
277
|
735
|
223
|
|
|
|
|
|
NGLs
(bbls/d)
|
125
|
72
|
105
|
126
|
|
|
|
|
|
Shale gas (Mcf/d)
|
7,053
|
4,060
|
-
|
-
|
Conventional natural gas (Mcf/d)
|
-
|
-
|
1,189
|
1,665
|
Natural gas
(Mcf/d)
|
7,053
|
4,060
|
1,189
|
1,665
|
|
|
|
|
|
Total
(boe/d)
|
1,831
|
1,026
|
1,138
|
627
|
|
|
|
Q1/22
Forecast
|
SE Sask conv. IP30
per
well
|
Light and medium oil (bbls/d)
|
|
|
78,850
|
223
|
Tight oil (bbls/d)
|
|
|
4,320
|
-
|
Crude oil
(bbls/d)
|
|
|
83,170
|
223
|
|
|
|
|
|
NGLs
(bbls/d)
|
|
|
11,940
|
-
|
|
|
|
|
|
Shale gas (Mcf/d)
|
|
|
63,200
|
-
|
Conventional natural gas (Mcf/d)
|
|
|
152,140
|
-
|
Natural gas
(Mcf/d)
|
|
|
215,340
|
-
|
|
|
|
|
|
Total
(boe/d)
|
|
|
131,000
|
223
|
SPECIFIED FINANCIAL MEASURES
This press release includes various specified financial
measures, including non-GAAP financial measures, non-GAAP ratios,
capital management measures and supplementary financial measures as
further described herein. These financial measures are not
standardized financial measures under International Financial
Reporting Standards ("IFRS" or, alternatively, "GAAP") and,
therefore, may not be comparable with the calculation of similar
financial measures disclosed by other companies.
"Discretionary funds flow" is a non-GAAP financial
measure calculated as 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. Discretionary
funds flow is not a standardized financial measure under IFRS and,
therefore, may not be comparable with the calculation of similar
financial measures disclosed by other entities. The most directly
comparable financial measure to discretionary funds flow disclosed
in the primary financial statements is cash flow from operating
activities.
"Free funds flow" is a non-GAAP financial
measure calculated as 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. Free funds flow is
not a standardized financial measure under IFRS and, therefore, may
not be comparable with the calculation of similar financial
measures disclosed by other entities. The most directly comparable
financial measure to free funds flow disclosed in the Company's
primary financial statements is cash flow from operating
activities.
"Funds flow", "funds flow basic ($/share)" and
"funds flow diluted ($/share)" are capital management
measures and are key measures of operating performance as they
demonstrate Whitecap's ability to generate the cash necessary to
pay dividends, repay debt, make capital investments, and/or to
repurchase common shares under the Company's NCIB. Management
believes that by excluding the temporary impact of changes in
non-cash operating working capital, funds flow, funds flow basic
($/share) and funds flow diluted ($/share) provide useful measures
of Whitecap's ability to generate cash that are not subject to
short-term movements in non-cash operating working capital.
Whitecap reports funds flow in total and on a per share basis
(basic and diluted), which is calculated by dividing funds flow by
the weighted average number of basic shares and weighted average
number of diluted shares outstanding for the relevant period. See
Note 5(e) (ii) "Capital Management – Funds Flow" in the Company's
unaudited interim consolidated financial statements for the three
months ended March 31, 2022 for a
detailed calculation.
"Net Debt" is a capital management measure that
management considers to be key to assessing the Company's
liquidity. See Note 5(e) (i) "Capital Management – Net Debt and
Total Capitalization" to the Company's unaudited interim
consolidated financial statements for the three months ended
March 31, 2022 for a detailed
calculation.
"Operating netback" is a non-GAAP financial measure
determined by adding marketing revenue and processing & other
income, deducting realized losses on commodity risk management
contracts or adding realized gains on commodity risk management
contracts and deducting tariffs, royalties, operating expenses,
transportation expenses and marketing expenses from petroleum and
natural gas revenues. The most directly comparable financial
measure to operating netback disclosed in the Company's primary
financial statements is petroleum and natural gas sales. Operating
netback is a measure used in operational and capital allocation
decisions. Operating netback is not a standardized financial
measure under IFRS and, therefore, may not be comparable with the
calculation of similar financial measures disclosed by other
entities. Refer to "Operating Netbacks" section of the Company's
MD&A for the three months ended March
31, 2022, which is incorporated herein by reference, and
available on SEDAR at www.sedar.com.
"Operating netback per boe" is a non-GAAP ratio
calculated by dividing operating netbacks by the total production
for the period. Operating netback is a non-GAAP financial measure
component of operating netback per boe. Operating netback per boe
is not a standardized financial measure under IFRS and, therefore,
may not be comparable with the calculation of similar financial
measures disclosed by other entities. Presenting operating netback
on a per boe basis allows management to better analyze performance
against prior periods on a comparable basis.
"Total payout ratio" is a supplementary financial measure
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.
The following table reconciles cash flow from operating
activities to funds flow, and free funds flow:
|
|
|
Three Months Ended
March 31
|
($000s)
|
|
|
2022
|
2021
|
Cash flow from
operating activities
|
|
|
390,550
|
217,145
|
Net changes in non-cash
working capital
|
|
|
115,141
|
(29,378)
|
Funds flow
(1)
|
|
|
505,691
|
187,767
|
Expenditures on
PP&E
|
|
|
211,534
|
118,862
|
Free funds
flow
|
|
|
294,157
|
68,905
|
Funds flow per share,
basic (1)
|
|
|
0.81
|
0.36
|
Funds flow per share,
diluted (1)
|
|
|
0.80
|
0.36
|
Free funds flow per
share, basic
|
|
|
0.47
|
0.13
|
Free funds flow per
share, diluted
|
|
|
0.46
|
0.13
|
Dividends paid or
declared per share
|
|
|
0.08
|
0.04
|
|
|
|
|
|
|
Note:
|
|
(1)
|
Refer to Note 5(e) (ii)
"Capital Management – Funds Flow" in the Company's unaudited
interim consolidated financial statements for the
three months ended March 31, 2022.
|
Per Share Amounts
Per share amounts noted in this press release are based on fully
diluted shares outstanding.
SOURCE Whitecap Resources Inc.