Whitecap Announces Record 2012 Third Quarter Production and Cash Flow

Whitecap Announces Record 2012 Third Quarter Production and Cash Flow 
CALGARY, Nov. 6, 2012 /CNW/ - Whitecap Resources Inc. ("Whitecap", "we", "us", 
"our" or the "Company") (TSX: WCP) is pleased to announce we have filed on 
SEDAR our unaudited financial statements and related Management's Discussion 
and Analysis ("MD&A") for the three and nine months ended September 30, 2012. 
Selected financial and operational information is outlined below and should be 
read in conjunction with Whitecap's unaudited interim financial statements and 
related MD&A which are available for review at www.sedar.com and on our 
website at www.wcap.ca. 
The financial and operating results from the Compass Petroleum Ltd. 
("Compass") acquisition are included from February 10, 2012 to September 30, 
2012 and the financial and operating results from the Midway Energy Ltd. 
("Midway") acquisition are included from April 20, 2012 to September 30, 2012 
below. 
FINANCIAL AND OPERATING HIGHLIGHTS 


                                                                       
                                 Three months ended   Nine months ended
                                       September 30        September 30

Financial ($000s except per                                    
share amounts)                      2012       2011      2012      2011

Petroleum and natural gas                                      
sales                             85,327     38,543   211,874    89,399

Funds from operations((1))        56,894     26,059   130,297    54,201

  Basic ($/share)                   0.45       0.36      1.20      0.90

  Diluted ($/share)                 0.44       0.35      1.18      0.88

Net income (loss)                 10,678     10,063    44,892    22,284

  Basic ($/share)                   0.08       0.14      0.41      0.37

  Diluted ($/share)                 0.08       0.14      0.41      0.36

Development capital                                            
expenditures                      74,749     44,694   178,159    85,555

Net property acquisitions          (101)      6,405     8,819    41,519

Corporate acquisitions                 -          -   645,622   219,692

Bank debt and working capital(                                 
(2))                             366,899    137,045   366,899   137,045

Operating                                                              

Production                                                             

  Crude oil (bbls/d)               9,672      3,805     7,971     2,876

  NGLs (bbls/d)                    1,183        355       906       253

  Natural gas (Mcf/d)             29,642     13,951    25,075    10,822

  Total (boe/d)                   15,795      6,485    13,056     4,933

Average realized price                                                 

  Crude oil ($/bbl)                83.32      89.90     84.09     92.14

  NGLs ($/bbl)                     42.26      68.69     50.18     68.54

  Natural gas ($/Mcf)               2.41       3.92      2.25      4.08

  Total ($/boe)                    58.72      64.60     59.23     66.38

Netback                                                                

  Petroleum and natural gas        58.72      64.60     59.23     66.38
  sales                                                        

  Realized hedging gain             3.30       4.15      1.69      0.55

  Royalties                       (5.80)     (7.81)    (6.72)    (8.50)

  Operating expenses             (10.84)    (11.95)   (11.41)   (11.85)

  Transportation expenses         (2.41)     (2.29)    (2.35)    (2.18)

Operating netbacks((1))            42.97      46.70     40.44     44.40

  General & administrative        (1.75)     (1.22)    (1.80)    (2.01)

  Interest & financing            (2.06)     (1.92)    (2.21)    (2.14)

Cash netbacks((1))                 39.16      43.56     36.43     40.25
                                                                       

Total wells drilled                 41.0       18.0      84.0      35.0

Working interest wells              32.3       14.0      64.8      27.9

Success rate                        100%       100%      100%      100%

Undeveloped land holdings                                      
(acres)                                                                

  Gross                          273,663    105,722   273,663   105,722

  Net                            207,130     75,092   207,130    75,092

Weighted average shares -                                      
basic (000s)                     127,094     72,167   108,334    59,921

Weighted average shares -                                      
fully diluted (000s)             129,233     74,131   110,711    61,883

Notes:

((1))Refer to Non-GAAP measures in this press release.
((2))Excludes risk management contracts.

Message to our shareholders

Whitecap is pleased to report record third quarter 2012 production and funds 
from operations. Our activities in the third quarter were focused primarily on 
efficiently executing our planned capital program on both our existing and 
acquired assets which we closed in the first half of 2012. We achieved our 
third quarter production guidance of between 15,500 to 16,000 boe/d while 
spending approximately $5 million less capital than anticipated, despite wet 
field operating conditions in July which delayed much of our program. We 
realized an operating netback of $42.97 per boe compared to our second quarter 
2012 operating netback of $37.53 per boe, a 14% increase as we begin to 
achieve operating synergies from the acquired assets.

During the quarter we were 100% successful with the drilling of 41 (32.3 net) 
horizontal oil wells spending $74.7 million. We drilled two (1.5 net) 
horizontal wells at Valhalla North in the Peace River Arch area of Alberta, 12 
(7.8 net) Cardium wells in greater Pembina area, seven (6.0 net) Cardium wells 
at Garrington on the recently acquired Midway assets, 17 (16.2 net) wells in 
the Lucky Hills Viking play in western Saskatchewan that were acquired in 
February this year and three (0.8 net) wells on our non-core assets.

The growth and capital efficiencies we have experienced from the first half 
acquisitions on both the Lucky Hills Viking and Garrington Cardium plays have 
exceeded our initial projections. We have spent less capital per well in both 
areas and have production rates that are better than the type curves we were 
anticipating. These results along with the operational performances in our 
other two core areas have allowed us to spend less capital, achieve our target 
production guidance, generate more cash flow than planned and therefore have 
approximately $9 million less net debt at the end of the third quarter than we 
were forecasting. All good!

We highlight the following accomplishments in the third quarter of 2012:
    --  Grew average production 144% in the third quarter of 2012 to
        15,795 boe/d (69% oil and NGLs) from 6,485 boe/d (64% oil and
        NGLs) in the prior year through strategic oil weighted
        acquisitions and organic growth on existing and acquired
        properties. On a fully diluted per share basis, this represents
        an increase of 38%.
    --  Generated funds from operations of $56.9 million in the third
        quarter of 2012 compared to $26.1 million 2011, a 118%
        increase. On a fully diluted per share basis, this represents
        an increase of 26% despite lower average realized commodity
        prices.
    --  Achieved an operating netback of $42.97 per boe in the third
        quarter of 2012 by reducing operating costs by 9% to $10.84 per
        boe and realizing a hedging gain of $4.8 million through our
        risk management program.
    --  Hedged 62% of forecast production, net of royalties, for the
        fourth quarter of 2012 at an average floor price of $97.99/bbl
        for crude oil and $2.72/mcf for natural gas.
    --  Invested $74.7 million in field expenditures, drilling 41 (32.3
        net) wells with a 100% success rate.

Subsequent to the quarter end we continued to increase our balance sheet 
strength and flexibility by expanding our credit facility to $450 million and 
disposing of non-core assets for gross cash proceeds of $56.4 million.

Our focus remains on building a long term sustainable light oil company that 
can provide shareholders with superior returns on their investment. We 
re-emphasize our commitment to per share value growth in production, cash 
flow, reserves and economic returns on our capital investments. Our outlook 
for 2013 includes the conversion to a sustainable dividend growth strategy 
that we plan to discuss in more detail when we release our 2013 capital budget 
sometime in the next few weeks.

To our shareholders who continue to support and are interested in our Whitecap 
story, we thank you and look forward to providing you with value growth into 
2013 and beyond.

Note Regarding Forward Looking Statements and Other Advisories

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. 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, strategy and targets, industry conditions, commodity prices, capital 
spending, production and cash flow, exit production rate, anticipated fourth 
quarter annualized debt to cash flow, drilling inventory or development and 
drilling plans, potential growth and our planned dividend strategy.

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 
efficiently integrate assets and employees acquired through acquisitions, 
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 (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.

Non-GAAP Measures

This press release contains the terms "funds from operations", "operating 
netbacks" and "and cash netbacks", which do not have a standardized meaning 
prescribed by GAAP and therefore may not be comparable with the calculation of 
similar measures by other companies. Whitecap uses funds from operations, 
operating netbacks and cash netbacks to analyze financial and operating 
performance. Whitecap believes 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, 
operating netbacks and cash 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 excluding transaction costs 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. Cash netbacks are determined by deducting general and 
administrative and interest and financing expenses from the operating netback. 
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.
                                        
                                Three months ended   Nine months ended
                                      September 30        September 30

($000s)                           2012        2011      2012      2011

  Cash flow from operating      44,099      24,909    89,846    51,496
  activities

  Changes in non-cash working   12,524       1,076    36,433     1,360
  capital

  Transaction costs                147          53     3,361     1,324

  Settlement of                    124          21       657        21
  decommissioning liabilities

  Funds from operations         56,894      26,059   130,297    54,201
                                                                

"Boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 
bbl of oil. Boe's 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. In addition, given that the value ratio based on 
the current price of crude oil as compared to natural gas is significantly 
different from the energy equivalency of 6: 1, utilizing a conversion on a 6:1 
basis may be misleading as an indication of value.



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

SOURCE: Whitecap Resources Inc.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/November2012/06/c5591.html

CO: Whitecap Resources Inc.
ST: Alberta
NI: OIL ERN 

-0- Nov/06/2012 23:00 GMT


 
Press spacebar to pause and continue. Press esc to stop.