WHITECAP RESOURCES INC. PROVIDES OPERATIONAL UPDATE, ENTERS INTO NEW UNSECURED CREDIT FACILITY AND RELEASES INVESTMENT GRADE CREDIT RATING
Operations Update
Whitecap has had excellent operational success in the first half of 2024 and the outperformance continues in the third quarter with our base level of production exceeding expectations along with our team's ability to mitigate downtime during planned and unplanned events. The operational success achieved year to date is forecasted to result in annual production close to the high end of our 167,000 – 172,000 boe/d1 guidance.
Development of our unconventional
We recently brought on production our 11-34B three well
At Lator, we are completing the first and drilling the second of our two well delineation program with results expected in the first quarter of 2025. These wells will be informative to our upcoming development in this area. As well, we are moving forward with the completion of our detailed engineering and design work and obtaining the required regulatory approvals for our new Lator facility after our final investment decision was made earlier this summer.
With regards to our conventional assets, they have continued to perform well in the third quarter, with our operations team focused on capital reduction and inventory enhancement initiatives. We recently finished drilling our second monobore well in the Glauconite and have realized 10% cost savings per well. We plan to drill up to two additional monobore Glauconite wells prior to year end.
In
Corporate Update
Whitecap is pleased to announce a public investment grade credit rating of BBB (low), with a stable trend, by
Concurrent with the release of our public investment grade credit rating, Whitecap entered into a new
The New Facility along with our investment grade credit rating allows us to access the investment grade bond market to diversify our debt structure into a deeper market that provides for longer tenors and a lower cost of funding for Whitecap. We view the investment grade bond market as an important part of our capital structure going forward.
NOTES
1 |
Disclosure of production on a per boe basis in this press release consists of the constituent product types and their respective quantities disclosed herein. Refer to Barrel of Oil Equivalency and Production, Initial Production Rates & Product Type Information in this press release for additional disclosure. |
2 |
Total debt to EBITDA ratio, EBITDA to interest expense ratio and debt to capitalization are specified financial measures that are calculated in accordance with the financial covenants in our New Facility. |
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 forecasts for average daily production (including by product type) for 2024; our belief that with laterals offset vertically by 15 metres at our five-well
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 except as specifically noted herein or as previously disclosed (and for greater certainty, the forward-looking information contained herein excludes the potential impact of any acquisitions or dispositions that we may complete in the future that has not been previously disclosed); 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 and forecast commodity prices, exchange rates, interest rates, inflation rates, applicable royalty rates and tax laws, including the assumptions specifically set forth herein; 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 in the
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 it involves inherent risks and uncertainties. These include, but are not limited to: the risk that the funds that we ultimately return to shareholders through dividends and/or share repurchases is less than currently anticipated and/or is delayed, whether due to the risks identified herein or otherwise; the risk that any of our material assumptions prove to be materially inaccurate, including our 2024 forecast (including for commodity prices and exchange rates); the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, including the risk that weather events such as wildfires, flooding, droughts or extreme hot or cold temperatures forces us to shut-in production or otherwise adversely affects our operations; 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, high interest 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 risks; 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; the risk that going forward we may be unable 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; changes in legislation, including but not limited to tax laws, production curtailment, royalties and environmental (including emissions and "greenwashing") regulations; the risk that we do not successfully defend against previously disclosed and ongoing reassessments received from the
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.sedarplus.ca).
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.
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.
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"), except as noted below.
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 reference in this news release to initial production rates (IP(90) and IP(120)) 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 forecast average daily production for 2024 (midpoint), the average daily production rate per well for our first 8 (8.0 net)
Whitecap Corporate / Initial Production Rates |
|
2024 Guidance
( |
Musreau IP(120) |
Kaybob IP(90) per |
Light and medium oil (bbls/d) |
|
75,200 |
- |
- |
Tight oil (bbls/d) |
|
14,800 |
1,050 |
352 |
Crude oil (bbls/d) |
|
90,000 |
1,050 |
352 |
|
|
|
|
|
NGLs (bbls/d) |
|
18,000 |
62 |
140 |
|
|
|
|
|
Shale gas (Mcf/d) |
|
220,000 |
2,770 |
5,615 |
Conventional natural gas (Mcf/d) |
|
149,000 |
- |
- |
Natural gas (Mcf/d) |
|
369,000 |
2,770 |
5,615 |
|
|
|
|
|
Total (boe/d) |
|
169,500 |
1,573 |
1,428 |
SOURCE