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Press release from CNW Group


Thursday, November 25, 2010

WHITECAP RESOURCES INC. PROVIDES UPDATE ON DRILLING SUCCESS AND INCREASES CREDIT FACILITY19:43 EST Thursday, November 25, 2010CALGARY, Nov. 25 /CNW/ - Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX-V: WCP) is pleased to provide shareholders with an update on its recent drilling success and advise of an increase to the Company's credit facility. << Peace River Arch (Valhalla) --------------------------- >>Since acquiring the Valhalla asset in September 2009 which was producing approximately 850 boe/d net to Whitecap's interest, the Company has been the first to apply new horizontal technology to the pool and has drilled five successful horizontal multi-frac wells. We anticipate the property to have a 2010 exit production rate of approximately 1,500 boe/d net or a 76 percent increase year over year.The results of our last two horizontal multi-frac wells in the Montney C oil pool have met or exceeded our expectations. The first well tested over 330 boe/d gross and has now been on production for 20 days averaging 248 boe/d gross. This well is key to our longer term development strategy as it confirms the Montney oil resource is "untapped" in the northern part of the pool as virgin reservoir pressure was encountered. The economic returns using horizontal multi-frac wells are far superior to the returns generated by vertical wells.The last horizontal multi-frac well of 2010 was just recently completed with nine water-based fracture stimulations and is being prepared for production. Based on the flow-back results, this well should produce at rates similar to the previous four horizontal wells, which on average have produced in excess of 200 boe/d. The well is forecast to be on production in late November this year.Our 2010 Valhalla capital program has been focused on the Montney C oil pool. We believe there are significant undeveloped oil resources in other up-hole oil zones which we will look to exploit, in addition to continuing our waterflood development in the Montney C pool in 2011. << West Central Alberta -------------------- >>On the West Central assets that we acquired in late July, we have now drilled our first three Cardium horizontal multi-frac wells and are currently drilling our fourth and last well of 2010.Our first horizontal Cardium oil well (100 percent WI) was completed with eight oil-based fracture stimulations along its 1,120 meter length. Over a 72 hour test period it averaged 1,034 boe/d (free flowing) and at the end of the test period the well was still flowing at 370 boe/d and had recovered 88 percent of its load fluid. This well is anticipated to be on production in late November at initial rates of over 400 boe/d. This well is a follow up to an existing Whitecap producing horizontal Cardium well which is producing 100 boe/d after seven months of production. We have identified 7 to 9 development locations on our 100 percent lands immediately offsetting this well.The second horizontal Cardium oil well (100 percent WI) was drilled to a total depth of 2,722 meters with a 1,284 meter of horizontal section. The well was completed with 15 oil-based fracture stimulations. Flow-back operations have concluded during which time over 40 percent of the load fluid was recovered. The well is currently being prepared for production and is anticipated to be on production in early December.The third horizontal Cardium oil well (50 percent WI) was drilled to a total depth of 3,481 meters with a 1,397 meter horizontal section. Equipment is in place to perform 11 water-based fracture stimulations along its length. The geological sample description indicates the reservoir quality is comparable to analog horizontal wells along this trend that have tested 300 to 900 boe/d. The stimulation and testing of this well is expected to commence following the drilling of the final horizontal Cardium oil well (50 percent WI) which has recently commenced drilling from the same surface location.Combined, these results place Whitecap in a position to achieve our 2010 exit production guidance of 3,200 boe/d. << Facility Increase ----------------- >>As a result of the positive operational accomplishments experienced to date, we are pleased to announce an increase to our credit facility from $55 million to $65 million. This will give the Company greater financial flexibility as we continue the positive momentum achieved to date.Note Regarding Forward-Looking Statements and Other AdvisoriesThis 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, including expected exit production, expected production rates and the timing for bringing new wells on production, our capital expenditure program, drilling and development plans and the timing thereof. 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.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 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. The Company's 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 the Company will derive there from. 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 ( 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.Note: "Boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl. 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.For further information: Grant Fagerheim, President & CEO; or 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