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Press release from CNW Group

Whitecap Resources Inc. Provides Update on its Light Oil Operational Success

Monday, September 12, 2011

Whitecap Resources Inc. Provides Update on its Light Oil Operational Success19:07 EDT Monday, September 12, 2011CALGARY, Sept. 12, 2011 /CNW/ - Whitecap Resources Inc. ("Whitecap", "we", "us", "our" or the "Company") (TSX: WCP) is pleased to provide shareholders with an update on its operational success to date.A total of 40 oil wells are planned for the second half of 2011, of which 14 wells have been drilled thus far with a 100% success rate and an additional four wells planned prior to the end of the third quarter.Of the 14 wells drilled, 10 are on production and are performing, on average, better than our forecasted rates. As a result, Whitecap's base production is approximately 7,000 to 7,100 boe/d with an additional 300 boe/d to be added in the near term. The Company remains on target to meet or exceed our 2011 exit production guidance of 8,200 to 8,300 boe/d.West Central Alberta - Pembina (Cardium light oil) Since the second quarter, we have utilized two drilling rigs continuously and will continue to do so for the balance of the year and into 2012 for our Cardium drilling program. Year to date we have drilled 18 (16.4 net) horizontal Cardium oil wells and for the balance of the year we anticipate drilling an additional 19 (14.2 net) Cardium oil wells.We continue to optimize our multi-stage fracture stimulations and are currently utilizing a water-based foam fluid system. Detailed technical analysis in conjunction with our growing operational expertise has resulted in both capital efficiency and productivity improvements. The average 30 day rate from our most recent five horizontal Cardium wells in East Pembina increased to 290 boe/d, 15% over previous wells drilled. Our total well costs, with an average of 18 fracture stimulations each, have decreased 19% to less than $2.2 million from a previous average of $2.7 million per horizontal Cardium oil well.We are continuing to evaluate the applicability of reduced spacing and waterflood schemes for our Cardium lands and plan to implement pilot schemes in 2012. Positive results from these pilots have the potential to more than double Whitecap's current inventory of Cardium horizontal locations.Peace River Arch - Valhalla (Montney light oil) Subsequent to the second quarter, we have drilled three (1.5 net) horizontal wells in the Montney Sexsmith oil pool. The first well was completed with 12 fracture stimulations and averaged 533 boe/d over its first 10 days of production. This once again confirms the Sexsmith reservoir is of adequate quality to allow for an effective expansion of the waterflood over the entire pool. In addition, the first well from our 2011 Montney Sexsmith drilling program continues to produce at a restricted rate of 650 boe/d after four months.The other two wells drilled in the third quarter were drilled from a single surface location and will be completed sequentially over the next two weeks. These two wells drilled in the third quarter as well as the three Montney Sexsmith wells planned for the remainder of 2011 are all part of the expansion of the Valhalla Montney Sexsmith waterflood.The first phase of the waterflood expansion has commenced and will carry over into the first quarter of 2012. Our waterflood results to date combined with our full field simulation model indicates that we will more than double the ultimate oil recovery in the Montney Sexsmith from our current bookings.We have had a "fit for purpose" drilling rig working continuously in Valhalla and as a result drilling costs have come down by 6% per well to $3 million gross and we continue to optimize our multi-stage fracturing process, further reducing our completion costs by 6% per well to $1.5 million gross. Our working interest in Valhalla is 50% and on a net basis drilling and completion costs are $2.3 million per well.For the balance of the year we anticipate drilling an additional three (1.5 net) horizontal Montney Sexsmith oil wells, one (0.5 net) horizontal Middle Montney oil well, one (0.5 net) vertical exploratory oil well and potentially three (2.5 net) additional shallower horizontal oil wells.SW Saskatchewan - Fosterton (Roseray light oil)A total of 4 (3.5 net) wells are expected to be drilled before year end which includes one horizontal well and three vertical wells. These wells will further evaluate and develop the Roseray and Cantuar oil formations. One of these wells is targeting the extension of a pool which could result in several follow-up development wells. As well, minor modifications were made to the Fosterton facilities in addition to increasing the water disposal capacity which has resulted in a 33% increase in production. Whitecap is finalizing its plans for a major facility expansion based on the encouraging results to date.We are pleased with our results to date in our key growth areas and look forward to updating our shareholders as we progress through the remainder of 2011 and into 2012.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, business development plans, performance and opportunities, plans to bring wells on-stream and the timing thereof, financial, operating and production guidance and business opportunities, our capital expenditure program, drilling and development plans and the timing thereof and ultimate oil recovery. 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 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.Note: "Boe" means barrel of oil equivalent on the basis of 6 thousand cubic feet ("mcf") of natural gas to 1 bbl. 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 & CEO orThanh Kang, VP Finance & CFO Whitecap Resources Inc. 500, 222 - 3 Avenue SW Calgary, AB T2P 0B4 Main Phone (403) 266-0767 Fax (403) 266-6975