CALGARY,
AB, July 28, 2022 /CNW/ - Whitecap Resources
Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to report
its operating and unaudited consolidated financial results for the
three and six months ended June 30,
2022.
Selected financial and operating information is outlined below
and should be read with Whitecap's unaudited interim consolidated
financial statements and related Management's Discussion and
Analysis for the three and six months ended June 30, 2022 which are available at
www.sedar.com and on our website at www.wcap.ca.
FINANCIAL AND OPERATING
HIGHLIGHTS
|
|
Three months
ended June 30
|
|
Six months ended
June 30
|
Financial ($000s
except per share amounts)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Petroleum and natural
gas revenues
|
|
1,261,989
|
|
613,520
|
|
2,265,866
|
|
1,062,412
|
Net income
|
|
380,661
|
|
18,558
|
|
1,032,990
|
|
38,193
|
Basic
($/share)
|
|
0.62
|
|
0.03
|
|
1.66
|
|
0.07
|
Diluted
($/share)
|
|
0.61
|
|
0.03
|
|
1.65
|
|
0.07
|
Funds flow
1
|
|
676,642
|
|
266,564
|
|
1,182,333
|
|
454,331
|
Basic ($/share)
1
|
|
1.09
|
|
0.43
|
|
1.90
|
|
0.80
|
Diluted ($/share)
1
|
|
1.08
|
|
0.43
|
|
1.88
|
|
0.79
|
Dividends paid or
declared
|
|
55,634
|
|
28,784
|
|
102,759
|
|
52,965
|
Per share
|
|
0.09
|
|
0.05
|
|
0.17
|
|
0.09
|
Expenditures on
property, plant and equipment 2
|
87,991
|
|
39,420
|
|
299,525
|
|
158,282
|
Total payout ratio (%)
1
|
|
21
|
|
26
|
|
34
|
|
46
|
Net Debt
1
|
|
673,785
|
|
1,389,320
|
|
673,785
|
|
1,389,320
|
Operating
|
|
|
|
|
|
|
|
|
Average daily
production
|
|
|
|
|
|
|
|
|
Crude oil
(bbls/d)
|
|
85,657
|
|
80,071
|
|
84,326
|
|
72,475
|
NGLs
(bbls/d)
|
|
13,465
|
|
11,308
|
|
14,025
|
|
10,413
|
Natural gas
(Mcf/d)
|
|
199,026
|
|
152,521
|
|
204,841
|
|
140,901
|
Total (boe/d)
3
|
|
132,293
|
|
116,799
|
|
132,491
|
|
106,372
|
Average realized Price
4
|
|
|
|
|
|
|
|
|
Crude oil ($/bbl)
5
|
|
133.57
|
|
73.57
|
|
122.98
|
|
69.81
|
NGLs ($/bbl)
5
|
|
66.38
|
|
31.29
|
|
60.31
|
|
33.20
|
Natural gas ($/Mcf)
5
|
|
7.70
|
|
3.26
|
|
6.36
|
|
3.30
|
Petroleum and natural
gas revenues ($/boe) 5
|
104.83
|
|
57.72
|
|
94.49
|
|
55.18
|
Operating Netback
($/boe) 1
|
|
|
|
|
|
|
|
|
Petroleum and natural
gas revenues
|
|
104.83
|
|
57.72
|
|
94.49
|
|
55.18
|
Tariffs
5
|
|
(0.43)
|
|
(0.36)
|
|
(0.47)
|
|
(0.40)
|
Processing & other
income 5
|
|
0.61
|
|
0.61
|
|
0.59
|
|
0.73
|
Marketing revenue
5
|
|
7.09
|
|
3.97
|
|
6.01
|
|
3.18
|
Petroleum and natural
gas sales 5
|
|
112.10
|
|
61.94
|
|
100.62
|
|
58.69
|
Realized loss on
commodity contracts 5
|
(9.66)
|
|
(4.83)
|
|
(8.09)
|
|
(4.19)
|
Royalties
5
|
|
(20.08)
|
|
(9.13)
|
|
(18.31)
|
|
(8.43)
|
Operating expenses
5
|
|
(15.50)
|
|
(13.73)
|
|
(14.63)
|
|
(13.56)
|
Transportation
expenses 5
|
|
(2.25)
|
|
(2.32)
|
|
(2.16)
|
|
(2.20)
|
Marketing expenses
5
|
|
(7.02)
|
|
(4.02)
|
|
(5.95)
|
|
(3.21)
|
Operating
netbacks
|
|
57.59
|
|
27.91
|
|
51.48
|
|
27.10
|
Share information
(000s)
|
|
|
|
|
|
|
|
|
Common shares
outstanding, end of period
|
618,645
|
|
631,304
|
|
618,645
|
|
631,304
|
Weighted average basic
shares outstanding
|
618,449
|
|
615,398
|
|
621,808
|
|
566,716
|
Weighted average
diluted shares outstanding
|
625,063
|
|
621,234
|
|
627,494
|
|
571,863
|
MESSAGE TO SHAREHOLDERS
Whitecap's financial and operating results for the second
quarter were once again ahead of expectations as the Company
maintained operational momentum from the first quarter drilling
program resulting in production of 132,293 boe/d and record funds
flow of $677 million or $1.08 per share. After capital expenditures of
only $88 million, the Company
generated $589 million of free funds
flow6 in the second quarter, of which over $175 million was returned to shareholders through
our base dividend ($56 million) and
our normal course issuer bid ("NCIB") ($121
million). Net debt of $674
million at the end of the second quarter was approximately
$125 million lower than our targeted
$800 million of quarter end net
debt.
Whitecap drilled 8 (5.4 net) wells during the second quarter
which included 5 (3.4 net) Montney
wells at Kakwa and 3 (2.0 net) Frobisher wells in Southeast Saskatchewan. We will be increasing
our activity levels in the third quarter and will reach our peak
utilization of eleven rigs by the end of August. We expect activity
levels to modestly decrease through the fourth quarter and then
ramp back up to approximately eleven rigs in the first quarter of
2023 until breakup, which will be adequate for efficient execution
of our capital program including the expanded capital on the XTO
Energy Canada ("XTO") lands.
Since our initial Montney joint
venture in 2019 and the subsequent consolidation of additional
Montney lands in 2021, we have
continued to advance our drilling and completion design and have
modified our well spacing assumptions to achieve strong results to
date in the Montney.
Our most recent four well (2.6 net) 12-33 Montney pad at Kakwa that is jointly held with
XTO was brought on production late in the second quarter and has
produced at an average rate of 2,150 boe/d per well (45% liquids)
in the first 30 days of production. The wells are continuing to
clean up with the pad producing at an average rate of over 10,000
boe/d (40% liquids) over the last seven days prior to being tied
into permanent facilities. Further, our three well (2.4 net) 14-13
pad has now been producing for 180 days at an average rate of 1,832
boe/d per well (33% liquids) which is similar to the average rate
over its first 90 days on production.
These results further validate our assessment of the quality of
the XTO Montney acreage we are acquiring, and we look forward to
deploying our refined drilling and completion design on these
assets.
We highlight the following second quarter 2022 financial and
operating results:
- Production Outperformance. Second quarter production of
132,293 boe/d was higher than our internal forecast of 128,000 –
130,000 boe/d and increased 13% per share compared to Q2/21.
Continued production optimization along with organic drilling
success contributed to results being above our internal
forecast.
- Record Funds Flow. Second quarter funds flow of
$677 million or $1.08 per share was up 35% as compared to the
prior quarter and 151% as compared to Q2/21. Strong operating
netbacks of $57.59 per boe were
driven by favourable commodity prices and strong operational
execution.
- Continued Return of Capital. Dividends paid during the
second quarter were $56 million or
$0.09 per share, which were 20% and
94% higher on a per share basis than Q1/22 and Q2/21, respectively.
Including $121 million of share
repurchases under our NCIB, total capital returned to shareholders
of over $175 million during the
quarter matches our previous quarterly high from Q4/21. We recently
increased our annual dividend by 22% to $0.44 per share.
- Balance Sheet Strength. Quarter end net debt of
$674 million was lower than our
targeted net debt of $800 million.
Quarter end debt to EBITDA ratio7 was 0.5x and EBITDA to
interest expense ratio7 was 43.7x, well within our
covenant limits of not greater than 4.0x and not less than 3.5x,
respectively.
OUTLOOK
Our current asset mix has provided us with long-term operational
success, and we are excited to be adding the XTO assets to our
portfolio. We expect to continue to provide exceptional returns on
capital deployed in each of our core business units.
The XTO acquisition is on track to close before the end of the
third quarter and we continue to forecast average production and
capital expenditures for 2022 of 138,000 – 140,000 boe/d and
$610 - $630
million, respectively. Our preliminary 2023 forecast is for
production to average 168,000 – 174,000 boe/d and capital
expenditures of $900 million to
$1.1 billion.
Our ability to acquire a world class asset with no dilution to
shareholders is a testament to our balance sheet strength and our
ability to generate significant free funds flow. We remain
committed to increasing return of capital to our shareholders by
linking future dividend increases to our net debt milestones and
stress testing our sustainability down to US$50/bbl WTI and C$4.00/GJ AECO.
On behalf of our employees, management team and Board of
Directors, we would like to thank our shareholders for their
support and look forward to updating you on our progress through
the remainder of the year.
CONFERENCE CALL AND WEBCAST
Whitecap has scheduled a conference call and webcast to begin
promptly at 9:00 am MT (11:00 am ET) on Thursday,
July 28, 2022.
The conference call dial-in number is: 1-888-390-0605 or
(587) 880-2175 or (416) 764-8609
A live audio webcast of the conference call will be accessible
on Whitecap's website at www.wcap.ca by selecting
"Investors", then "Presentations & Events".
Shortly after the live webcast, an archived version will be
available.
NOTES
|
1 Funds
flow, funds flow basic ($/share), funds flow diluted ($/share) and
net debt are capital management measures. Total payout ratio is a
supplementary financial measure. Operating Netback is a non-GAAP
financial measure and operating netbacks ($/boe) is a non-GAAP
ratio. Refer to the Specified Financial Measures section in this
press release for additional disclosure and assumptions.
|
2 Also
referred to herein as "capital expenditures".
|
3 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 and Product Type Information
in this press release for additional disclosure.
|
4 Prior to
the impact of risk management activities and tariffs.
|
5
Supplementary financial measure. Refer to the "Supplementary
Financial Measures" section of the Company's MD&A for the three
and six months ended June 30, 2022, which is incorporated herein by
reference, and available on SEDAR at www.sedar.com.
|
6 Free funds
flow is a non-GAAP financial measure. Refer to the Specified
Financial Measures section in this press release for additional
disclosure and assumptions.
|
7 Debt to
EBITDA ratio and EBITDA to interest expense ratio are specified
financial measures that are calculated in accordance with the
financial covenants in our credit agreement.
|
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, including relating to the XTO acquisition and the
Company after completing the XTO acquisition. 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: that we will be increasing our activity levels in
the third quarter; that we will reach a peak of eleven rigs by the
end of August; that activity levels will modestly decrease through
the fourth quarter and then ramp back up to approximately eleven
rigs in the first quarter of 2023 until breakup, which will be
sufficient for efficient execution of our capital program including
the expanded capital on the XTO lands; our assessment of the
quality of the XTO Montney acreage; that we will deploy our refined
drilling and completion designs on the XTO Montney acreage; that we
expect to continue to provide exceptional returns on capital
deployed in each of our core business units; that the XTO
acquisition is expected to close before the end of the third
quarter; our average production and capital expenditure forecasts
for 2022 and 2023; and, that we remain committed to increasing
return of capital to our shareholders, including by linking future
dividend increases to our net debt milestones and stress testing
our sustainability.
The forward-looking information is based on certain key
expectations and assumptions made by our management, including:
that the parties will be able to satisfy all conditions precedent
to closing the XTO acquisition, including the receipt of all
applicable regulatory approvals, and that the XTO acquisition will
be completed on the terms and timing contemplated herein that we
will continue to conduct our operations in a manner consistent with
past operations, except as specifically noted herein; 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 impact (and the duration
thereof) that the COVID-19 pandemic will have on (i) the demand for
crude oil, NGLs and natural gas, (ii) our supply chain, including
our ability to obtain the equipment and services we require, and
(iii) our ability to produce, transport and/or sell our crude oil,
NGLs and natural gas; 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 between Russia and Ukraine and related sanctions on crude oil,
NGLs and natural gas prices; the impact of rising inflation rates
and interest rates on the North American and world economies and
the corresponding impact on our costs, our profitability, and on
crude oil, NGLs and natural gas prices; future production rates and
estimates of operating costs and development capital, including as
specifically set forth herein; performance of existing and future
wells; anticipated timing and results of capital expenditures /
development capital, including as specifically set forth herein;
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; future dividend levels; the impact of increasing
competition; ability to efficiently integrate assets and employees
acquired through acquisitions, including the XTO acquisition;
ability to market oil and natural gas successfully; our ability to
access capital and the cost and terms thereof, including as
specifically contemplated herein.
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. These include, but are not
limited to: the risk that our anticipated dividend increases and
return of capital framework is delayed or amended; the risk that
any of our material assumptions prove to be materially inaccurate,
including our 2022 and 2023 forecasts; the risks associated with
the oil and gas industry in general such as operational risks in
development, exploration and production; 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, 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; loss of markets;
environmental risks; competition; incorrect assessment of the value
of acquisitions, including the XTO acquisition; failure to complete
or realize the anticipated benefits of acquisitions or
dispositions, including the XTO acquisition; ability 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; and
changes in legislation, including but not limited to tax laws,
production curtailment, royalties and environmental regulations.
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
security holders 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 future-oriented financial
information and financial outlook information (collectively,
"FOFI") about Whitecap's 2022 and 2023 average daily production and
capital expenditures all of which are subject to the same
assumptions, risk factors, limitations, and qualifications as set
forth in the above paragraphs. The actual results of operations of
Whitecap and the resulting financial results will likely vary from
the amounts set forth herein and such variation may be material.
Whitecap and its management believe that the FOFI has been prepared
on a reasonable basis, reflecting management's best estimates and
judgments. However, because this information is subjective and
subject to numerous risks, it should not be relied on as
necessarily indicative of future results. Except as required by
applicable securities laws, Whitecap undertakes no obligation to
update such FOFI. FOFI contained in this press release was made as
of the date of this press release and was provided for the purpose
of providing further information about Whitecap's anticipated
future business operations. Readers are cautioned that the FOFI
contained in this press release should not be used for purposes
other than for which it is disclosed herein.
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 and 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").
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 references in this news release to initial production rates
(Current, IP(30), IP(60), IP(180)) 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 average daily production for the three and six
months ended June 30, 2022 and
June 30, 2021, the average daily
production rate per well for the 12-33 Montney pad at Kakwa IP(30), the aggregate
average rate of production for the 12-33 Montney pad at Kakwa over the last seven days
prior to being tied into permanent facilities, the average daily
production rate per well for the 14-13 pad IP(180), and the
forecast average daily production for the Company for the full year
2022 and 2023 disclosed in this press release consists of the
following product types, as defined in NI 51-101 and using a
conversion ratio of 1 Bbl : 6 Mcf where applicable:
Initial Production
Rates
|
12-33
IP(30) per
well
|
12-33
Seven
Day
Aggregate
|
14-13
IP(180) per
well
|
Light and medium oil
(bbls/d)
|
-
|
-
|
-
|
Tight oil/condensate
(bbls/d)
|
855
|
3,555
|
474
|
Crude oil
(bbls/d)
|
855
|
3,555
|
474
|
|
|
|
|
NGLs
(bbls/d)
|
107
|
445
|
138
|
|
|
|
|
Shale gas
(Mcf/d)
|
7,130
|
36,000
|
7,318
|
Conventional natural
gas (Mcf/d)
|
-
|
-
|
-
|
Natural gas
(Mcf/d)
|
7,130
|
36,000
|
7,318
|
|
|
|
|
Total
(boe/d)
|
2,150
|
10,000
|
1,832
|
Whitecap
Corporate
|
2022
|
2023
|
Light and medium oil
(bbls/d)
|
78,280 -
79,420
|
80,750 –
81,750
|
Tight oil/condensate
(bbls/d)
|
6,065 –
6,125
|
13,800 –
14,400
|
Crude oil
(bbls/d)
|
84,345 –
85,545
|
94,550 –
96,150
|
|
|
|
NGLs
(bbls/d)
|
12,465 –
12,765
|
15,400 –
15,960
|
|
|
|
Shale gas
(Mcf/d)
|
96,060 –
96,940
|
195,400 –
210,440
|
Conventional natural
gas (Mcf/d)
|
151,080 -
153,200
|
152,900 –
160,900
|
Natural gas
(Mcf/d)
|
247,140 –
250,140
|
348,300 –
371,340
|
|
|
|
Total
(boe/d)
|
138,000 –
140,000
|
168,000 –
174,000
|
|
Three Months Ended
June 30th
|
Six Months Ended
June 30th
|
Whitecap
Corporate
|
2022
|
2021
|
2022
|
2021
|
Light and medium oil
(bbls/d)
|
85,364
|
79,214
|
84,001
|
72,000
|
Tight oil/condensate
(bbls/d)
|
293
|
857
|
325
|
475
|
Crude oil
(bbls/d)
|
85,657
|
80,071
|
84,326
|
72,475
|
|
|
|
|
|
NGLs
(bbls/d)
|
13,465
|
11,308
|
14,025
|
10,413
|
|
|
|
|
|
Shale gas
(Mcf/d)
|
50,250
|
11,489
|
50,923
|
5,925
|
Conventional natural
gas (Mcf/d)
|
148,776
|
141,032
|
153,918
|
134,976
|
Natural gas
(Mcf/d)
|
199,026
|
152,521
|
204,841
|
140,901
|
|
|
|
|
|
Total
(boe/d)
|
132,293
|
116,799
|
132,491
|
106,372
|
SPECIFIED FINANCIAL MEASURES
This press release includes various specified financial
measures, including non-GAAP financial measures, non-GAAP ratios,
capital management measures and supplementary financial measures as
further described herein. These financial measures are not
standardized financial measures under International Financial
Reporting Standards ("IFRS" or, alternatively, "GAAP") and,
therefore, may not be comparable with the calculation of similar
financial measures disclosed by other companies.
"Free funds flow" is a non-GAAP financial
measure calculated as funds flow less expenditures on
PP&E. Management believes that free funds flow provides a
useful measure of Whitecap's ability to increase returns to
shareholders and to grow the Company's business. Free funds flow is
not a standardized financial measure under IFRS and, therefore, may
not be comparable with the calculation of similar financial
measures disclosed by other entities. The most directly comparable
financial measure to free funds flow disclosed in the Company's
primary financial statements is cash flow from operating
activities. Refer to the "Cash Flow from Operating Activities,
Funds Flow and Payout Ratios" section of our management's
discussion and analysis for the three and six months ended
June 30, 2022 which is incorporated
herein by reference, and available on SEDAR at www.sedar.com.
"Funds flow", "funds flow basic ($/share)" and "funds
flow diluted ($/share)" are capital management measures and are
key measures of operating performance as they demonstrate
Whitecap's ability to generate the cash necessary to pay dividends,
repay debt, make capital investments, and/or to repurchase common
shares under the Company's NCIB. Management believes that by
excluding the temporary impact of changes in non-cash operating
working capital, funds flow, funds flow basic ($/share) and funds
flow diluted ($/share) provide useful measures of Whitecap's
ability to generate cash that are not subject to short-term
movements in non-cash operating working capital. Whitecap reports
funds flow in total and on a per share basis (basic and diluted),
which is calculated by dividing funds flow by the weighted average
number of basic shares and weighted average number of diluted
shares outstanding for the relevant period. See Note 5(e)(ii)
"Capital Management – Funds Flow" in the Company's unaudited
interim consolidated financial statements for the three and six
months ended June 30, 2022 for
additional disclosures.
"Net Debt" is a capital management measure that
management considers to be key to assessing the Company's
liquidity. See Note 5(e)(i) "Capital Management – Net Debt and
Total Capitalization" in the Company's unaudited interim
consolidated financial statements for the three and six months
ended June 30, 2022 for additional
disclosures.
"Operating netback" is a non-GAAP financial measure
determined by adding marketing revenues and processing & other
income, deducting realized losses on commodity risk management
contracts or adding realized gains on commodity risk management
contracts and deducting tariffs, royalties, operating expenses,
transportation expenses and marketing expenses from petroleum and
natural gas revenues. The most directly comparable financial
measure to operating netback disclosed in the Company's primary
financial statements is petroleum and natural gas sales. Operating
netback is a measure used in operational and capital allocation
decisions. Operating netback is not a standardized financial
measure under IFRS and, therefore, may not be comparable with the
calculation of similar financial measures disclosed by other
entities. For further information, refer to the "Operating
Netbacks" sections of our management's discussion and analysis for
the three and six months ended June 30,
2022 which is incorporated herein by reference, and
available on SEDAR at www.sedar.com. A reconciliation of operating
netback to petroleum and natural gas revenues is set out below:
|
Three months ended
June 30,
|
Six months ended
June 30,
|
Operating Netbacks
($000s)
|
2022
|
2021
|
2022
|
2021
|
Petroleum and natural
gas revenues
|
1,261,989
|
613,520
|
2,265,866
|
1,062,412
|
Tariffs
|
(5,136)
|
(3,792)
|
(11,386)
|
(7,714)
|
Processing & other
income
|
7,396
|
6,441
|
14,231
|
14,126
|
Marketing
revenues
|
85,372
|
42,217
|
144,043
|
61,211
|
Petroleum and natural
gas sales
|
1,349,621
|
658,386
|
2,412,754
|
1,130,035
|
Realized loss on
commodity contracts
|
(116,257)
|
(51,390)
|
(194,094)
|
(80,644)
|
Royalties
|
(241,732)
|
(97,013)
|
(439,085)
|
(162,227)
|
Operating
expenses
|
(186,583)
|
(145,886)
|
(350,857)
|
(261,074)
|
Transportation
expenses
|
(27,035)
|
(24,626)
|
(51,857)
|
(42,289)
|
Marketing
expenses
|
(84,462)
|
(42,684)
|
(142,795)
|
(61,787)
|
Operating
netbacks
|
693,552
|
296,787
|
1,234,066
|
522,014
|
"Operating netback per boe" is a non-GAAP ratio
calculated by dividing operating netbacks by the total production
for the period. Operating netback is a non-GAAP financial measure
component of operating netback per boe. Operating netback per boe
is not a standardized financial measure under IFRS and, therefore
may not be comparable with the calculation of similar financial
measures disclosed by other entities. Presenting operating netback
on a per boe basis allows management to better analyze performance
against prior periods on a comparable basis.
"Total payout ratio" is a supplementary financial
measure calculated as dividends paid or declared plus expenditures
on PP&E, divided by funds flow. Management believes that total
payout ratio provides a useful measure of Whitecap's capital
reinvestment and dividend policy, as a percentage of the amount of
funds flow.
The following table reconciles cash flow from operating
activities to funds flow and free funds flow:
|
Three months ended
June 30,
|
Six months ended
June 30,
|
($000s)
|
2022
|
2021
|
2022
|
2021
|
Cash flow from
operating activities
|
676,779
|
283,981
|
1,067,329
|
501,126
|
Net change in non-cash
working capital items
|
(137)
|
(17,417)
|
115,004
|
(46,795)
|
Funds flow
|
676,642
|
266,564
|
1,182,333
|
454,331
|
Expenditures on
PP&E
|
87,991
|
39,420
|
299,525
|
158,282
|
Free funds
flow
|
588,651
|
227,144
|
882,808
|
296,049
|
Dividends paid or
declared
|
55,634
|
28,784
|
102,759
|
52,965
|
Total payout ratio
(%)
|
21
|
26
|
34
|
46
|
Funds flow per share,
basic
|
1.09
|
0.43
|
1.90
|
0.80
|
Funds flow per share,
diluted
|
1.08
|
0.43
|
1.88
|
0.79
|
Dividends paid or
declared per share
|
0.09
|
0.05
|
0.17
|
0.09
|
Per Share Amounts
Per share amounts noted in this press release are based on fully
diluted shares outstanding.
SOURCE Whitecap Resources Inc.