The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group


Thursday, March 24, 2011

WHITECAP ANNOUNCES YEAR END RESULTS09:00 EDT Thursday, March 24, 2011CALGARY, March 24 /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, 2010. Selected financial and operational information is outlined below and should be read in conjunction with our audited financial statements and the related MD&A which are available for review at or AND OPERATING HIGHLIGHTSOur 2010 year end results include approximately six months of production from the reverse take-over of Spitfire Energy Ltd. and five months of production from the acquisition of Onyx 2006 Inc. << ------------------------------------------------------------------------- Three months ended Twelve months ended December 31, December 31, ------------------------------------------------------------------------- Financial ($000s except per share amounts) 2010 2009 2010 2009 ------------------------------------------------------------------------- Total revenues 9,746 3,731 25,991 4,799 Funds from operations 3,681 1,258 11,706 997 Basic & diluted ($/share) 0.11 0.08 0.51 0.21 Net loss (4,361) (512) (9,623) (1,224) Basic & diluted ($/share) (0.13) (0.03) (0.42) (0.26) Development capital expenditures 15,870 411 41,579 429 Corporate and property acquisitions (cash based) 8,728 (39) 52,572 56,511 Bank debt and working capital(1) 29,545 10,315 29,545 10,315 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Operating ------------------------------------------------------------------------- Production Crude oil (bbls/d) 973 308 631 105 Natural gas (Mcf/d) 5,379 2,470 4,141 855 NGLs (bbls/d) 145 86 112 28 ------------------------------------------------------------------------- Total (boe/d) 2,014 806 1,433 275 ------------------------------------------------------------------------- Average realized price Crude oil ($/bbl) 78.86 74.98 74.89 73.99 Natural gas ($/Mcf) 3.78 5.10 4.24 4.55 NGLs ($/bbl) 60.12 56.52 56.95 54.32 ------------------------------------------------------------------------- Total ($/boe) 52.59 50.34 49.68 47.82 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Operating Netbacks(2) 27.62 24.37 29.54 24.96 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total wells drilled 5.0 - 17.0 - Working interest wells 4.1 - 10.6 - Success rate 100% - 100% - Undeveloped land holdings (acres) Gross 66,973 11,280 66,973 11,280 Net 46,228 4,111 46,228 4,111 Common shares, end of period (000s) 41,826 15,312 41,826 15,312 Weighted average shares (000s) 23,162 4,721 23,162 4,721 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Notes: (1) Excludes risk management contracts. (2) Our operating netbacks in 2010 were negatively impacted by a one-time 13th month adjustment on our Valhalla non-operated facility for approximately $1 million. Excluding this one-time adjustment, our operating netbacks would have been $33.03/boe for the three months ended December 31, 2010 and $31.45/boe for the year ended December 31, 2010. >>Year in review2010 was an eventful and exceptional year for us. We began the year with a well-defined strategy to increase our exposure to light oil value and growth opportunities. Our execution was purposeful and disciplined as we increased our leverage to oil production as well as assembling an inventory of oil opportunities for future growth.The successful results of this past year are directly attributable to the strength and vision of our employees. Their ability to identify and capture valuable light oil based assets and generate a considerable inventory of light oil development wells has provided us with an enviable oil platform from which to grow. We are geographically concentrated in three regions in Western Canada; being the Peace River Arch area of northwestern Alberta, the Pembina area of west central Alberta and the Fosterton area of southwest Saskatchewan.We started 2010 as a private company producing approximately 900 boe/d (45% oil & NGLs) from our Valhalla North asset. In June, we completed a reverse takeover of Spitfire Energy Ltd., a publicly traded company which provided us with an additional 360 boe/d (85% oil) of production and resulted in us becoming a publicly traded entity on the TSX Venture Exchange. In July, we acquired Onyx 2006 Inc., a private company with assets that included 600 boe/d (50% oil and NGLs) focused in the Pembina Cardium area and which provided us with a third core area from which to grow. These acquisitions and our strong internal performance have provided us with a substantial amount of development and exploitation upside in areas that are accessible year round. Our aggressive but disciplined approach to growth and our graduation to the Toronto Stock Exchange on October 18, 2010 have allowed us to build a strong institutional shareholder base.Highlights << - Grew our average production 150 percent from 806 boe/d in the fourth quarter of 2009 to 2,014 boe/d in the fourth quarter of 2010 through strategic oil-weighted acquisitions and internally generated growth. - Our 2010 exit production rate was 3,200 boe/d (60 percent oil and NGLs) compared to 731 boe/d for 2009 (46 percent oil and NGLs), a 338 percent increase as a result of an active second half drilling program. - Generated cash flow of $11.7 million on operating netback of $29.54/boe in 2010 compared to cash flow of $1.0 million and operating netback of $24.96/boe in the prior year. - Invested $40.3 million in field expenditures consisting of $36.9 million for drilling, completing and the tie-in of 17 (10.6 net) wells with a 100 percent success rate, $2.1 million recompleting and optimizing 18 wells and $1.3 million for land, seismic and our waterflood simulation study. - Completed two significant oil-weighted corporate acquisitions and eight minor property acquisitions in our three core areas totaling $92 million. - Increased our drilling inventory three-fold from 60 to 180 wells of which 96 percent are oil opportunities. - Increased proved plus probable gross reserves by 169 percent to 13.7 MMboe (65 percent oil and NGLs) and proved gross reserves by 192 percent to 8.3 MMboe (64 percent oil and NGLs). - Achieved finding, development and acquisition ("FD&A") costs of $14.52 per proved plus probable boe, excluding changes in future development costs, generating a recycle ratio of 2.5 times based on our current operating netback of $35.50/boe. >>Looking AheadWe anticipate that our business plan going forward will not alter dramatically from our 2010 plan. We will remain focused on large oil resource-in-place assets where application of advancing horizontal frac technology is significantly improving operating results and increasing reserve recovery factors. We will continue to measure our success by our growth in production, reserves, net asset value and cash flow on a per share basis. As well, our financing strategy will again be designed to support value creation through the turbulent commodity price environment that we are currently experiencing and expect to continue for the remainder of the year.ANNUAL GENERAL MEETINGThe Annual and General Meeting of our Shareholders will be held at 10:30 a.m. on Tuesday, May 17, 2011, in the Strand/Tivoli Room of the Metropolitan Conference Centre, 333 - 4th Avenue SW, Calgary, Alberta. All shareholders are cordially invited and encouraged to attend.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. 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 and strategy and 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 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 ( 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.Non-GAAP MeasuresThis press release contains the terms "funds from operations" and "operating netbacks", which do not have a standardized meaning prescribed by Canadian 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 feels 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 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."Boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boes 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 and 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