CALGARY, March 22, 2012 /CNW/ - Whitecap Resources Inc. ("Whitecap", "we", "us", "our" or the "Company") (TSX: WCP) is pleased to announce we have filed on SEDAR our audited financial statements and related Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2011. Selected financial and operational information is outlined below and should be read in conjunction with our audited financial statements, the related MD&A and Annual Information Form ("AIF") which are available for review at www.wcap.ca or www.sedar.com.
FINANCIAL AND OPERATING HIGHLIGHTS
Three months ended
Twelve months ended
|Financial ($000s except per share amounts)||2011||2010||2011||2010|
|Funds from operations(1)||32,962||3,554||87,163||11,260|
|Net Income (loss)||3,228||(4,117)||25,512||(8,321)|
|Development capital expenditures||54,839||15,875||140,384||41,003|
|Corporate and property acquisitions (cash based)||(136)||8,728||213,037||69,548|
|Bank debt and working capital(2)||158,811||29,545||158,811||29,545|
|Crude oil (bbls/d)||4,474||973||3,279||631|
|Natural gas (Mcf/d)||17,150||5,379||12,417||4,141|
|Average realized price|
|Crude oil ($/bbl)||93.92||78.86||92.32||74.89|
|Natural gas ($/Mcf)||3.38||3.78||3.84||4.24|
|Total wells drilled||25.0||5.0||60.0||17.0|
|Working interest wells||19.9||4.1||47.7||10.6|
|Undeveloped land holdings (acres)|
|Common shares, end of period (000s)||72,191||41,826||72,191||41,826|
|Weighted average shares (000s)||72,175||33,033||63,009||23,162|
(1) Refer to Non-GAAP measures in this press release.
(2) Excludes risk management contracts.
Year in review
Our 2011 year was once again a very successful and rewarding one for our shareholders. We continued to demonstrate our ability to generate per share growth in production, cash flow, reserves and net asset value while increasing our exposure to light oil assets and growth projects for the future. Whitecap's achievements over the past year are a direct result of the commitment, focus and dedication of our valued employees, their ability to acquire and develop valuable light oil assets and their determination to generate considerable growth from our entire asset base.
We began the 2011 year geographically focused in three light oil regions of Western Canada: the Peace River Arch area in northwestern Alberta principally concentrating on the Montney Sexsmith oil waterflood asset at Valhalla North, the east Pembina area of west central Alberta growing our horizontal Cardium oil potential, and in the Fosterton area of southwest Saskatchewan developing the Roseray and Cantuar formations.
From an operational perspective we increased our activity markedly over the 17 (10.6 net) wells drilled in 2010 with the drilling of 60 (47.7 net) wells in 2011, of which 100% were successful. We drilled 37 (31.8 net) horizontal multi-fracture light oil Cardium wells in west Central Alberta, 15 (9.5 net) wells at Valhalla North of which 7 (3.5 net) were a continuation of our Montney Sexsmith waterflood program, and 6 (5.2 net) developing the Roseray and Cantuar light oil formations in the Fosterton area of southwest Saskatchewan. We spent a total of $139.3 million of development capital during the year providing significant organic growth from our development drilling program.
Our acquisition initiatives for 2011 included consolidating our working interests and expanding on our existing assets in our core operating areas as well as identifying larger strategic acquisitions with large oil in place and significant growth potential. We closed numerous complementary asset purchases and were successful in two significant corporate acquisitions in 2011. On April 20, 2011 we closed the acquisition of Spry Energy Ltd. which significantly expanded our horizontal Cardium oil production base and drilling inventory for organic growth. Also, on December 15, 2011, we announced the corporate acquisition of Compass Petroleum Ltd. which provides us with continuing growth opportunities in a fourth core oil growth area and a strong footprint into the Dodsland, Saskatchewan Viking horizontal oil resource play for continued growth. These acquisitions have provided Whitecap with a substantial inventory of development and exploitation upside activity for the future.
We provide for you below a summary of our 2011 highlights:
Grew average production 288 percent from 2,014 boe/d in the fourth
quarter of 2010 to 7,806 boe/d in the fourth quarter of 2011 through
strategic oil-weighted acquisitions and internally generated organic
growth. On a fully diluted per share basis, this represents an increase
of 78 percent.
Achieved 2011 average annual production of over 5,600 boe/d, a 295
percent increase on an absolute basis and a 41 percent increase per
fully diluted share, over our 2010 average annual production of 1,433
Our 2011 exit production rate was 8,500 boe/d (67 percent oil and NGLs)
compared to 3,200 boe/d for 2010 (60 percent oil and NGLs), a 166
percent increase resulting from a combination of strategic acquisitions
and an active second half drilling program.
Generated funds from operations of $87.2 million on an operating netback
of $45.97/boe in 2011 compared to funds from operations of $11.3
million and an operating netback of $29.54/boe in the prior year.
Increased proved plus probable reserves by 182 percent to 38.6 MMboe (72
percent oil, 3 percent NGLs) and proved reserves by 210 percent to 25.6
MMboe (72 percent oil, 4 percent NGLs). On a per fully diluted share
basis, increased proved plus probable reserves by 65 percent and proved
reserves by 81 percent.
Achieved finding, development and acquisition ("FD&A") costs of $14.97
per proved plus probable boe and $20.77 per proven boe, excluding
changes in future development costs. FD&A costs were $20.80 per proved
plus probable boe and $27.90 per proven boe, including changes in
future development costs (see Note Regarding FD&A).
Generated an FD&A recycle ratio of 3.1 times on proved plus probable
reserves based on our 2011 operating netback of $45.97/boe.
Successfully closed the Spry acquisition which significantly increased
our presence in the Pembina Cardium light oil resource play.
Invested $139.3 million in field expenditures consisting of $107.5 million for drilling and
completing 60 (47.7 net) wells with a 100 percent success rate, $26.8
million invested in facilities and $5.0 million for land and seismic.
- Increased our de-risked oil development drilling inventory 277 percent from 180 to 679 wells.
We anticipate that our business plan going forward in 2012 will be a continuation of the strategy that we have employed in both 2010 and 2011, targeting high netback light oil growth assets with large oil resource-in-place where horizontal multi-stage fracture technology and secondary recovery methods can be applied to increase resource recovery factors.
Our disciplined approach to growth will remain focused on providing strong per share growth in cash flow, production, reserves and net asset value while using a prudent and responsible level of debt to provide optimal value creation for our shareholders.
We expect to experience moderately improving economic conditions worldwide that bode well for the oil levered energy producers specifically in western Canada. Although we anticipate there to be volatility in the crude oil price complex we do expect oil prices to remain strong throughout the year. We are also of the opinion that the Canadian dollar will remain strong relative to the US currency and that interest rates will remain at the current low levels until a more progressive economic outlook is attained.
The challenge for the producing energy sector is to be ever efficient with its capital and operating expenditures and we believe that with the current low natural gas price environment we are experiencing, services will be available and the cost of these services will remain in check throughout 2012. We at Whitecap are committed to overcoming new and future challenges that may present themselves and are confident in our abilities to deliver strong operational and financial per share results for our Whitecap shareholders in 2012 and into the future.
In closing, I would like to express my complete gratitude to our valued employees and contractors for their commitment and dedication, to our Board of Directors for their guidance and support, and to our shareholders for their belief in our abilities. We remain optimistic and enthused about the future of Whitecap!
ANNUAL AND SPECIAL SHAREHOLDERS MEETING
The Annual and Special Meeting of our Shareholders will be held at 10:30 a.m. on Friday, April 20, 2012, in the Grand Lecture Theatre of the Metropolitan Conference Centre, 333 - 4th Avenue SW, Calgary, Alberta. All shareholders are cordially invited and encouraged to attend.
NOTE REGARDING FD&A
Finding and development costs including acquisitions and dispositions have been presented in this press release. While NI 51-101 requires that the effects of acquisitions and dispositions be excluded, FD&A costs have been presented because acquisitions and dispositions can have a significant impact on the Company's ongoing reserve replacement costs and excluding these amounts could result in an inaccurate portrayal of the Company's cost structure. The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs used to calculate FD&A generally will not reflect total finding and development costs related to reserve additions for that year. The capital expenditures used to calculate FD&A include the announced purchase price of corporate acquisitions rather than the amounts allocated to property, plant and equipment for accounting purposes. The capital expenditures also exclude capitalized administration costs and transaction costs. Refer to our February 13, 2012 press release for further details on our FD&A calculations.
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. In addition, statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves can be profitably produced in the future. 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 our ongoing business plan, strategy and targets, industry conditions, commodity prices, exchange rates, service costs, drilling inventory or development and drilling plans and potential.
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, 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 the terms "funds from operations" and "operating netbacks", which do not have a standardized meaning prescribed by GAAP and therefore may not be comparable with the calculation of similar measures by other companies. Whitecap uses funds from operations and operating netbacks to analyze financial and operating performance. Whitecap believes these benchmarks are key measures of profitability and overall sustainability for the Company. Both of these terms are commonly used in the oil and gas industry. Funds from operations and operating netbacks are not intended to represent operating profits nor should they be viewed as an alternative to cash flow provided by operating activities, net earnings or other measures of financial performance calculated in accordance with GAAP. Funds from operations are calculated as cash flows from operating activities excluding transaction costs less changes in non-cash working capital. Operating netbacks are determined by deducting royalties, production expenses and transportation and selling expenses from oil and gas revenue. The Company calculates funds from operations per share using the same method and shares outstanding that are used in the determination of earnings per share.
|Cash flow from operating activities||79,008||5,635|
|Changes in non-cash working capital||6,702||4,160|
|Settlement of decommissioning liabilities||67||-|
|Funds from operations||87,163||11,260|
"Boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boe's 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.
Grant Fagerheim, President and CEO
Thanh Kang, VP Finance and CFO
Whitecap Resources Inc.
500, 222 - 3 Avenue SW
Calgary, AB, T2P 0B4
Main Phone (403) 266-0767
Fax (403) 266-6975