Whitecap Resources 2021 budget they expect to deploy capital expenditures of approximately $280 – $300 million to generate average production of approximately 100,000 boe/d.

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Whitecap Resources 2021 Budget Summary

Whitecap Resources 2021 budget program comprises of drilling 100 (81.6 net) horizontal wells including 53 (47.2 net) extended reach horizontal (“ERH”) wells and 8 (5.9 net) horizontal injection wells. In addition to our drill, complete, equip and tie-in costs, we will be investing approximately $67 million on enhanced oil recovery (“EOR”) operations and optimizations as well as health, safety, and environmental initiatives throughout the year. This continued focus on enhancing our base assets through EOR capital will allow us to maintain, and potentially improve upon, our low base production decline rate of approximately 17% for 2021.

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Whitecap Resources 2021 March Budget Update

Whitecap Resources Inc. Increases 2021 Production Guidance with no Increase to Capital Spending

INCREASED PRODUCTION GUIDANCE

As a result of our better than anticpated operational results, we are now expecting 2021 production to average 102,000 – 103,000 boe/d from the previous 100,000 boe/d, an increase of 3% with no increase to our previously released full year capital 2021 budget of $280 – $300 million. The production increase provides for an incremental $16 – $24 million of free funds flow based on our current funds flow netback of approximately $22/boe, based on US$60/bbl WTI and C$2.50/GJ AECO.

OPERATIONS UPDATE

The start of 2021 has been exceptional with the seamless integration of both NAL Resources Limited and TORC Oil & Gas Ltd. and our strong operational performance to date on the combined assets. Improvements to our base production decline, in combination with outstanding results from our first quarter drilling program, are expected to drive first quarter average production of approximately 94,000 – 95,000 boe/d compared to our prior forecast of 90,000 – 92,000 boe/d, a 4% improvement.

In Eastern Saskatchewan, our operated Weyburn CO₂flood is outperforming expectations, where optimization work and CO₂ utilization has resulted in significant production enhancements and further decline rate mitigation. The Frobisher multi-leg horizontal wells drilled in the first quarter are achieving IP(30) rates that are 22% better than our budget expectations.

In Western Saskatchewan, we continue to make improvements to our legacy light oil Viking assets, where on average, the first quarter capital program is achieving 33% higher IP(30) rates than our budget expectations. In addition, many of our properties’ base declines are seeing the benefits of increased waterflood support and reduced line pressures due to a slower development pace.

In Central Alberta, the capital program was executed as expected and well performance is in line with budget expectations.

In Northern Alberta and British Columbia, we have completed the drilling and completion of 9 (6.1 net) wells with most wells expected to come on production within the next couple of weeks. Of note, our non-operated (50% working interest) Karr Montney well came on production on March 22, 2021 and is still cleaning up but inflow is better than expected. Our operated (65% working interest) Karr Montney well is currently being tied in and is expected to be on production in early April.

About Whitecap Resources

Whitecap Eastern Saskatchewan

This business unit includes our Weyburn property in addition to the TORC and NAL southeast Saskatchewan assets where we anticipate spending 30% of our capital budget which includes drilling 16 (11.0 net) wells.

At Weyburn, we will be following up on our very successful northeast CO₂ flood pilot expansion by drilling 6 (3.9 net) wells in the second half of 2021. This includes two CO₂ water-alternating-gas (“WAG”) injectors and $29 million for CO₂ purchases. The TORC acquisition has increased our working interest in the Weyburn Unit CO₂ flood by 3.2% to 65.3%.

In southeast Saskatchewan, we anticipate drilling 10 (7.1 net) wells in the second half of the year, including 5 (2.1 net) non-operated wells. The operated activity is focused on assets where we can optimize economic returns by using our extensive experience with fracture stimulation design, extended reach horizontal drilling and EOR schemes.

Prior to closing, the TORC team completed a very active and successful January and February capital program where they drilled 25 (23.2 net) wells. On average, early well results are significantly exceeding our budget expectations.

Whitecap Western Saskatchewan

This business unit includes our light oil Viking assets, as well as our southwest Saskatchewan properties, where we anticipate spending 28% of our capital budget drilling a total of 61 (52.5 net) wells.

In the first quarter, we will be drilling 38 (33.0 net) wells including 26 (22.5 net) Viking wells, 6 (5.6 net) Atlas wells and 4 (4.0 net) Lower Shaunavon horizontal oil wells. Capital efficiencies in our lower Shaunavon drilling program have been exceptional with average drill times down 30% and costs down 15%. Most of the gains can be attributed to a new wellbore design that has improved our meters per day drilled significantly.

Our second half 2021 program includes 23 (19.5 net) drills with 12 (9.5 net) wells in southwest Saskatchewan and 11 (10.0 net) Viking ERH oil wells. The 2021 southwest Saskatchewan program includes the drilling 3 (2.0 net) horizontal water injectors to mitigate production declines and increase resource recovery.

Whitecap Central Alberta

This business unit consists primarily of the combined Whitecap, NAL and TORC Cardium light oil assets in Alberta and the liquids rich Ellerslie asset where we anticipate spending 15% of our capital budget drilling 13 (11.0 net) wells.

We will have drilled 6 (4.8 net) wells in Central Alberta by the end of the first quarter, all of which are expected to be on production prior to break-up. This includes 4 (3.7 net) Cardium oil producers, 1 (0.9 net) horizontal injector in West Pembina and 1 (0.2 net) non-operated Ellerslie liquids rich gas well.

The second half capital program of 7 (6.2 net) wells includes 2 (1.7 net) ERH Cardium wells with two-mile laterals in our new Kaybob/Rosevear area. This area has suitable characteristics to apply ERH wellbores in combination with our optimized fracture stimulation design and placement which has proven successful in enhancing the economics in many analogous areas. The remaining drills will be 2 (2.0 net) 2-mile ERH Cardium oil wells in Olds and Garrington, 1 (0.8 net) horizontal liquids rich Ellerslie gas well and 2 (1.7 net) ERH wells in West Pembina, one of which will be a waterflood injector.

Capital allocation to the acquired assets from TORC and NAL is focused on accelerating the evaluation of the potential for enhancement of the existing inventory by utilizing methods and technology that Whitecap has repeatedly applied with success in analogous areas.

Whitecap Northern Alberta & British Columbia

This business unit consists of our Boundary Lake, Deep Basin, Peace River Arch and Sturgeon assets where we expect to spend 23% of our capital budget drilling 10 (7.1 net) wells.

We will have an active first quarter in the area drilling 9 (6.1 net) wells including 6 (3.6 net) Cardium wells in Wapiti and 3 (2.5 net) Charlie Lake wells in our Valhalla area of which 6 (5.5 net) are ERH wells ranging from 1.5 to 2.0 miles in lateral length.

In the Wapiti program, we realized a step change in our drilling times and costs, decreasing both by approximately 20%. The gains were primarily through drilling design optimization and the benefits of multi well pad efficiencies. We anticipate these savings to be carried forward to future programs.

In addition to the drilling program, we participated in the completion of 1 (0.50 net) non-operated Montney oil well which was drilled in the fourth quarter of 2020. This well, along with the 1 (0.65 net) operated well which was completed in the fourth quarter of 2020, are in the process of being tied in and are expected to be on production by early April 2021. Production test results from both wells have been very encouraging.