Whitecap Resources Inc. Playbook


Whitecap Resources is a Canadian public oil company based in Calgary, Alberta, with operations in Alberta, Saskatchewan, and British Columbia. Whitecap is an oil weighted growth company that pays a monthly cash dividend to its shareholders while being recognized for storing more CO2 annually than we emit corporately.

Wells Drills Last 2 Years Western Canada

Western Canada Facility List

Area of Operations

Northern Alberta and British Columbia Business Unit

Our Northern Alberta and British Columbia Business Unit “NABC” is comprised of two Regions; Smoky River and Peace River:

Smoky River

The properties in our Smoky River Region include Wapiti, Karr, Simonette, Kakwa and Elmworth all located southwest of Grande Prairie, Alberta. The primary reservoirs being developed are the Dunvegan, Cardium, and Montney resource play, all of which are light sweet (39° – 42° API) oil. These reservoirs are characterized by thick oil columns with significant oil in place. This area utilizes pad-based horizontal drilling and multi-stage fracturing, including extended reach horizontals that exhibit a lower decline profile than in many areas due to the significant oil in place. The Region is comprised of large-scale opportunities and significant inventory setting up Smoky River to provide material future organic growth.

The recent acquisition of Kicking Horse is a continuation of Whitecap’s long-term strategy of selectively consolidating high quality assets in our core operating areas to enhance free funds flow and return of capital to shareholders. The Kicking Horse assets are well positioned in the liquids-rich portion of the Alberta Montney, complement our existing Montney position at Karr and have significant offsetting activity. The Acquisition includes 92 (60.0 net) sections of Montney rights that are 99% operated, with an average working interest of 65%, and provide the potential for further working interest consolidation.

Peace River

Valhalla is Whitecap’s original asset area. It is underpinned by the conventional Montney light oil waterflood pool that continues to outperform our original reserves estimates. In addition, we are actively exploiting Valhalla’s ideally situated infrastructure by expanding our presence in the area through the Charlie Lake and Montney oil resource plays. Boundary Lake is located primarily in northeast British Columbia on the Alberta/British Columbia border, just east of Fort St. John, and is characterized by low base declines, low sustaining capital and a predictable production base within an active waterflood. The key characteristics of this legacy oil pool are high operated working interest, and light 35° API oil. Asset enhancement is on-going with waterflood optimization initiatives and the optimal implementation of horizontal wells. Development and completion design reviews are continually ongoing to further unlock additional resource value.

Central Alberta Business Unit

Our Central Alberta Business Unit “Central AB” is comprised of two Regional Assets; South West Alberta “SWAB” and West Central Alberta “WCAB”:


Our Central Alberta Business Unit represents the bulk of our Cardium and liquids-rich Mannville assets, which are primarily focused in Kaybob, Pembina, Ferrier and Garrington. The key characteristics of these formations are light sweet ~40° API oil with geology and oil resource mapping that is well defined with legacy vertical wells. There is no significant mobile formation water in either formation which results in predictable declines and production profiles. Several of the legacy Cardium pools are under active waterflood which reduces pool declines and increases the percentage of recoverable oil in place. Performance of these waterfloods has been improving with optimization efforts. These assets provide sizeable cashflow generation with the optionality to transition to a growth model.

In addition to these core horizons, further value creation is being generated through tertiary recovery (CO2 flood) in the Viking horizon in Joffre. Whitecap is using its world-class expertise in CO2 EOR and sequestration to maximize value in this pool and continue to drive down our GHG emissions intensity.

Western Saskatchewan Business Unit

Our Western Saskatchewan Business Unit “Western SK” is comprised of two Regional Assets; West Central Saskatchewan “WCSK” and South West Saskatchewan “SWSK”:


Our West Central Saskatchewan “WC SK” Business Unit represents our Viking resource oil play. Focus areas are Kerrobert, Plenty, Dodsland, Lucky Hills, Whiteside, and Elrose. The key characteristics of this play are light 38° – 40° API oil, predictable geology and production profiles, as well as consistent and repeatable economics. Lucky Hills and Whiteside are characterized by horizontal primary oil development wells with quick payouts and a high operating netback. The Eagle Lake property is characterized by low decline waterflood supported production from legacy vertical and horizontal infill wells. Additional development is ongoing through the drilling of infill horizontal wells and reactivation of the waterfloods to increase reserve recoveries. Kerrobert is analogous to Eagle Lake with reservoir properties conducive to successful waterflooding. The Kerrobert waterflood is in its infancy of development, relative to Eagle Lake, and as a result has significant upside related to reserve recovery and decline stabilization. The Viking oil play provides some of the fastest project payouts in the industry and provides flexibility on growth requirements, which is further enhanced by lowering declines through our waterflood optimization and expansion initiatives. Further value generation is being created through organic inventory expansion initiatives.


Our Southwest Saskatchewan “SW SK” Business Unit’s assets are concentrated west of Swift Current, Saskatchewan and are characterized by predictable low base decline and medium crude oil (18 – 26° API) production. This asset was incorporated into the Whitecap portfolio opportunistically as an acquisition in 2016 and continues to generate significant free funds flow. Multiple active waterfloods, as well as three established alkaline, surfactant, and polymer “ASP” floods, are sustaining the area with 92% of production coming from enhanced recovery. Additional waterflood and ASP potential exists and will be part of our ongoing enhanced oil recovery “EOR” development programs. The primary formations being targeted in the area are the Atlas, Success, Roseray, and Shaunavon. New areas and pools within the existing SW SK land base are continually being pursued. These properties had not seen significant development prior to Whitecap, and we combine horizontal wells, multi-stage frac technology, and conventional production and EOR optimization efforts to maximize production and oil recovery from these pools

Eastern Saskatchewan Business Unit

Our Eastern Saskatchewan Business Unit “Eastern SK” is comprised of three Regional Assets; Weyburn, South Central Saskatchewan “SCSK”, and South East Saskatchewan “SESK”:


The “Weyburn” property is located south of Weyburn, Saskatchewan. The Weyburn property is the largest Carbon Capture & Utilization Storage “CCUS” project in the world which underpins why Whitecap has one of the lowest emissions intensities in the world along with our commitment to continue to emphasize environmental sustainability as a core value. This internationally recognized, world class project has safely captured over 34 million tonnes of CO2. In 2018, the Weyburn project stored 1.8 million tonnes of CO2 which means we sequester more CO2 than our yearly corporate emissions (direct and indirect), making us a carbon negative company. The primary reservoirs being developed are the Midale and Frobisher. Whitecap has a 65.3% operated working interest in the Weyburn Unit which produces primarily light oil. The Weyburn Unit has been in existence since the 1950’s when it was discovered. Waterflood operations commenced in the 1960’s with a world class CO2 enhanced oil recovery “EOR” development commencing in 2000. Significant expansion opportunities remain to expand the Weyburn CO2 flood and further mitigate a low 3-5% base decline rate in conjunction with a very low maintenance capital requirement.

Whitecap’s world class expertise in CO2 EOR and sequestration provides the foundation to continue to drive down Whitecap’s GHG emissions intensity.


The SCSK and SESK regions were added to the Whitecap portfolio through the acquisition of NAL and TORC. The acquired asset base is comprised of a diverse portfolio consisting of both conventional and unconventional light oil play types. The Conventional Mississippian is characterized by 30°-40° API oil, high netbacks, and low decline which generates significant free cash flow. Properties target the Alida, Frobisher, Midale and Ratcliffe formations which provide evolving opportunities through multi-legged horizontal drilling and well re-entry techniques in areas with stacked flow units. Conventional wells have high deliverability supported by an active regional aquifer and provide robust economics with significant high quality inventory.

The historic conventional Midale play in South East Saskatchewan has evolved in more recent years through horizontal multi-stage fracture stimulation. Delineation drilling has transitioned the Unconventional Midale play to a development focus in several key areas with predictable and repeatable results yielding competitive economics. The key characteristics of this play are 26°-38° API oil, large OOIP, and low recovery factor to date. The Midale formation has favorable reservoir characteristic for waterflooding and several key unconventional pilots are being initiated across our asset base. Additional upside is expected with further play delineation.

The Torquay/Three Forks land base is largely undeveloped but has been delineated and ready for full scale development. The play is characterized by 40° API oil, high netback, with well defined resource mapping. Further value generation will come through infrastructure expansion, optimization of completion design, and drilling efficiencies.

2021 Guidance


Whitecap’s second quarter results were exceptional across all areas of the business, achieving record production of 116,799 boe/d which was 4% above our forecast of 112,000 boe/d, on capital investments of $39 million, which was approximately 30% below our forecast of $55 – $60 million. The record production in the second quarter includes 153 MMcf/d of natural gas, which is expected to increase as we continue to grow our Montney production in the second half of the year and in 2022. Our second quarter funds flow netback of $25.07/boe was 15% higher than the first quarter and resulted in funds flow of $267 million ($0.43 per share). Funds flow per share increased 126% compared to the prior year quarter and 19% compared to the first quarter of 2021.

Second quarter capital spending was moderate due to break-up conditions and the majority of capital spending was to bring the remaining wells drilled during the first quarter on production. Late in the second quarter we spudded 3 (2.5 net) wells to get a head start on our optimized second half program which includes 57 (42.2 net) wells.

Our second quarter production outperformance is mainly due to accelerated on production timing and higher than forecasted production rates from our first quarter drilling program on our Frobisher conventional assets in Eastern Saskatchewan, our Viking and Lower Shaunavon assets in Western Saskatchewan and our Charlie Lake assets in our Northwest Alberta and B.C. business unit. In addition, the base declines in some of our legacy and waterflood supported areas in Central Alberta and Western Saskatchewan were lower than forecasted.

We highlight the following second quarter financial and operating results:

  • Production Momentum Continues. Second quarter production of 116,799 boe/d compared to 70,807 boe/d in the prior year quarter, which represents an increase of 65% on an absolute basis and 9% per share. Compared to first quarter production of 95,828 boe/d, it increased 22% on an absolute basis and 3% per share.
  • Significant Funds Flow. Whitecap generated funds flow of $267 million in the second quarter, or $0.43 per share, compared to $0.19 per share in the prior year quarter and $0.36 per share in the first quarter of 2021. After capital investments, we generated $227 million of free funds flow during the second quarter.
  • Increasing Returns to Shareholders. As press released on May 17, 2021, the monthly dividend was increased 8% to $0.01625 per share effective with the June dividend payable in July 2021. With increasing funds flow, a strong balance sheet and low decline asset base, return of capital to shareholders remains a priority for Whitecap. During the quarter, Whitecap repurchased 2.0 million common shares under its NCIB to offset share awards at a weighted average price of $5.57 per share.
  • Balance Sheet Strength Maintained. Net debt of $1.4 billion on total credit capacity of $2.0 billion results in significant financial flexibility with approximately $0.6 billion of unused capacity. The Company’s credit facilities have two financial covenants being debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) not exceeding 4.0 times and EBITDA to interest not less than 3.5 times. Whitecap’s second quarter debt to EBITDA ratio was 1.4 times and EBITDA to interest ratio was 20.6 times. For additional details refer to Note 10 “Long-Term Debt” in the unaudited interim consolidated financial statements for the period ending June 30, 2021.


With the NAL, TORC and the Kicking Horse acquisitions closed, Whitecap’s sustainable business model is now even stronger. Disciplined acquisitions that enhance our per share metrics and improve our free funds flow profile are an important part of our strategy and we will continue to evaluate these opportunities.

Subsequent to the quarter end, we closed the acquisition of a private company with operations in Southeast Saskatchewan (the “Acquisition”). The Acquisition consolidates our land position in the Weir Hill area adding 23 net sections of land (99% working interest), where our conventional Frobisher drilling results so far this year have yielded top decile results. Assets from the Acquisition are forecasted to average 1,600 boe/d (94% light oil) in the second half of 2021. The total purchase price was $67 million, which equates to 2.3x operating income and a 29% free funds flow yield at US$65/bbl WTI.

With production momentum from recent operational outperformance and the Acquisition which is partially offset by unplanned downtime at Weyburn, we are increasing our 2021 average production guidance to 110,000 – 111,000 boe/d (76% liquids), a 3% increase from the previous guidance of 108,000 boe/d (76% liquids). Capital spending is unchanged at $355 – $375 million.

At current strip commodity prices, Whitecap is on track to deliver significant free funds flow and discretionary funds flow (after capital and dividends) in 2021, with $243 million of discretionary funds flow generated so far in 2021. We anticipate that our net debt will be $1.2 billion or lower by the end of the year resulting in $800 million of unutilized credit capacity and a debt to EBITDA ratio of 1.2 times.

Our preliminary production outlook for 2022 has been increased to 122,000 boe/d to incorporate the Acquisition, while our preliminary capital spending outlook remains at $560 – $580 million. At US$55 – $65/bbl WTI, we would generate $400 – $650 million of free funds flow and $280 – $530 million of discretionary funds flow after the $0.195 per share annual dividend, which allows us to have zero debt in three years. The sustainability of our business model continues to improve and our break-even of US$44/bbl WTI allows us to cover sustaining capital and the dividend with unhedged funds flow.

We continue to prioritize balance sheet strength and return of capital to shareholders, along with taking a disciplined approach to transactions which further strengthen our asset base and provide increased shareholder returns into the future.

On behalf of our management team and Board of Directors, we would like to thank our shareholders for their ongoing support and look forward to providing updates as we progress through the remainder of the year.

Whitecap 2022 production of 130,000 and capital spending $530 million

2021 was a transformational year for Whitecap, with the successful execution and integration of approximately $2.0 billion of strategic acquisitions during the cyclical lows of the recent commodity price cycle which have now significantly improved the profitability and sustainability of our business. This combined with the efficient execution of our $428 million development capital program resulted in record annual production of 112,222 boe/d (76% liquids) and production in the fourth quarter of 120,020 boe/d (75% liquids), driving record annual funds flow of $1.1 billion or $1.82 per share, an increase from the prior year of 153% and 72% respectively.

In 2021, free funds flow1 after capital totaled $670 million or $1.11 per share, an increase from the prior year of 182% and 92% respectively. This allowed us to increase our dividend by 58% in 2021 and repurchase over 24 million common shares for total capital returned to shareholders1 of $290 million compared to $98 million in the prior year, an increase of 196%. 

Whitecap’s balance sheet is in excellent condition with debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio1 of 0.9x in 2021. We have significant financial flexibility and liquidity with year end net debt of $1.2 billion on total capacity of $2 billion. All our remaining debt has been termed out and the average cost of borrowing is low at 3.25%.

We highlight the following 2021 financial and operating results:

  • Transformational Acquisitions. Successfully completed and integrated four corporate acquisitions and two asset acquisitions, resulting in record annual production of 112,222 boe/d compared to 68,662 boe/d in the prior year, an increase of 63% and 11% per share. The acquisitions consolidated our core areas, increasing working interests and providing for financial and operational synergies to increase profitability.
  • Free Funds Flow Generation. In 2021, Whitecap generated $544 million of discretionary funds flow1 after development capital of $428 million and dividends of $126 million. The combination of low decline assets that reduce maintenance capital requirements and high impact assets that generate quick capital payouts will allow Whitecap’s balanced portfolio to drive continued profitability into the future.
  • Return of Capital Strategy. Whitecap increased its base dividend three times in 2021, from $0.171 per share annually up to $0.27 per share annually. The top priority for our return of capital strategy is a sustainable and growing base dividend in combination with the targeted use of our normal course issuer bid (“NCIB”). In 2021, we repurchased 24.3 million shares at an average share price of $6.75 for a total investment of $164.2 million. We intend to renew the NCIB for another year upon expiry on May 20, 2022.
  • Balance Sheet Strength. Whitecap’s year end debt to EBITDA ratio was 0.9x and EBIDTA to interest ratio was 26.1x well within our bank covenants of not greater than 4.0x and not less than 3.5x respectively. Year end net debt of $1.2 billion on total capacity of $2.0 billion provides significant financial flexibility.
  • Significant Focus on Asset Retirement Obligations. Whitecap is a strong steward of the environment and with an ongoing focus on reducing our environmental footprint we are pleased to report that we abandoned a total of 369 wells in 2021, an increase of 344% from the prior year.

Dividend Increase

We have successfully integrated our strategic acquisitions and with both strong operational execution to date and commodity prices higher than forecast, Whitecap is well positioned to deliver significant free funds flow in 2022 and beyond. We forecast generating $2.0 billion of funds flow based on current strip prices which translates to approximately $1.5 billion of free funds flow in 2022.

Given our priority to return capital to shareholders, our Board of Directors has approved a 33% increase to our monthly dividend to $0.03 per share, from $0.0225 per share previously, which equates to $0.36 per share on an annual basis. The increase will take effect beginning with the March dividend, payable in April 2022. Inclusive of the dividend increase, Whitecap expects to fully fund its go forward capital programs and the increased dividend with funds flow down to US$45/bbl WTI. The annualized dividend of $226 million represents only 11% of forecasted 2022 funds flow.

New Energy

Whitecap advanced many initiatives related to our involvement in the energy transition during 2021, most notably signing two memorandums of understanding with large industrial parties in the Regina/Belle Plaine area for transportation and permanent sequestration of captured CO2. Potential captured emissions from these two sources are estimated at 0.8 – 1.5 million tonnes of CO2 per year which will support our plans to build a carbon/hydrogen hub in this area to further assist decarbonization efforts at other large industrial sites. Whitecap’s experience and technical expertise with permanently sequestering 38 million tonnes of CO2 at the Weyburn project make us a natural and trustworthy fit for carbon sequestration.

We continue to advance several new initiatives towards commercialization and ultimately new revenue sources for the Company. Recent developments include:

  • Joffre CO2 Credit Generation. During the first quarter of 2022, we successfully applied for our Joffre CO2 EOR project to be included in Alberta’s Technology Innovation and Emissions Reduction (“TIER”) program as well as extended our contract with our CO2 supply source. Our CO2 cost is linked to WTI and beginning in 2023 we expect to fully offset the cost of CO2 with credits generated under the TIER program at a crude oil price of approximately US$80/bbl or lower.
  • Saskatchewan Carbon Hub Update. We now have in place three signed memorandums of understanding for our carbon hub in the Regina/Belle Plaine area. Aggregate potential CO2 emissions from the three sources range from 0.9 to 1.6 million tonnes of CO2 per year.
  • Alberta Carbon Hub Announcement. Wolf Midstream (“Wolf”), Whitecap, First Nation Capital Investment Partnership (consisting of Alexander First Nation, Alexis Nakota Sioux Nation, Enoch Cree Nation and Paul First Nation) and Heart Lake First Nation recently announced a proposal to manage a saline aquifer carbon sequestration hub which would serve all industrial facilities in the Alberta Industrial Heartland region. We believe that our experience with carbon sequestration, along with Wolf’s experience operating the Alberta Carbon Trunk Line, and our collective ability to provide a timely, low cost decarbonization solution will be an attractive option for area facilities, including the industrial parties such as Air Products, that have already offered support to the project.

Sustainability Linked Loan

We are also pleased to announce that we are transitioning to a Sustainability Linked Loan (“SLL”) on our credit facility with our bank syndicate that includes pricing adjustments related to two key emission reduction performance targets. There is no change to our existing pricing grid and covenants. The SLL has a cumulative pricing adjustment of 5 basis points to the applicable margin, as well as a pricing adjustment of up to 1 basis point to the standby fee that can result in price increases or decreases depending on performance. Whitecap’s Key Performance Indicators (“KPIs”) for this loan are a 15% reduction to its scope 1 and 2 greenhouse gas emissions intensity by 2025, and a 30% reduction to its methane emissions intensity by 2025. Both KPIs utilize 2020 emissions intensity as the baseline. This SLL is a continuation of our commitment towards environment, social and governance best practices and by linking sustainability performance targets to our credit facility there is a direct financial benefit to meeting our emission reduction goals.


Whitecap is well positioned to take advantage of the current market environment, with a business plan that will generate substantial returns to our shareholders while continuing to advance our strategy to improve our long-term profitability and sustainability, which also includes new energy initiatives as we transition to a lower carbon business. Our guidance for 2022 average production of 130,000 – 132,000 boe/d (73% liquids) and capital spending of $510 – $530 million is unchanged. 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 throughout the year.

Whitecap News