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Whitecap Resources Inc. Announces 2013 Second Quarter Results


CALGARY, Aug. 6, 2013 /CNW/ - Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to announce that we have filed on SEDAR our unaudited interim financial statements and related Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2013. 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 Invicta Energy Corp. ("Invicta") acquisition are included from April 30, 2013 to June 30, 2013 and the financial and operating results from the Eagle Lake Viking unit acquisition are included from May 22, 2013 to June 30, 2013 below. The results below do not include the working interest consolidation of Whitecap's Valhalla and Garrington properties that closed on July 31, 2013.


                                                                     

FINANCIAL AND OPERATING HIGHLIGHTS
                      Three months ended June   Six months ended June
                                           30                      30

Financial ($000s                               
except per share
amounts)                 2013            2012      2013          2012

Petroleum and                                  
natural gas sales     105,320          69,565   205,560       126,547

Funds from                                     
operations((1))        65,676          40,132   129,831        73,403

  Basic ($/share)        0.47            0.34      0.96          0.74

  Diluted                                0.33                    0.72
  ($/share)              0.46                      0.95

Net income (loss)      20,143          26,536    25,730        34,214

  Basic ($/share)        0.14            0.22      0.19          0.35

  Diluted                                0.22                    0.34
  ($/share)              0.14                      0.19

Dividends paid or                              
declared               21,644               -    41,155             -

  Per share              0.15               -      0.30             -

Payout ratio (%)(                              
(1))                       33               -        32             -

Development                                    
capital
expenditures           27,905          39,667   102,491       103,414

Property                                       
acquisitions
(net)                 116,585           3,087   118,723         8,920

Corporate                                      
acquisitions           66,450         523,069    66,450       645,622

Net debt                                       
outstanding((1))      357,974         347,639   357,974       347,639
                                                 

Operating                                                            

Average daily                                  
production                                                           

  Crude oil                             8,057                   7,112
  (bbls/d)             10,912                    10,998

  NGLs (bbls/d)         1,500           1,073     1,410           765

  Natural gas                          26,573                  22,766
  (mcf/d)              32,983                    32,059

  Total (boe/d)        17,909          13,559    17,752        11,672

Average realized                               
price                                                                

  Crude oil                             80.88                   84.35
  ($/bbl)               88.87                     86.81

  NGLs ($/bbl)          41.13           52.07     45.94         56.36

  Natural gas                            2.04                    2.14
  ($/mcf)                3.79                      3.59

  Total ($/boe)         64.42           56.31     63.98         59.38

Netback ($/boe)                                                      

  Petroleum and                         56.38                   59.58
  natural gas
  sales                 64.62                     63.98

  Realized                               2.08                    0.59
  hedging gain
  (loss)                 0.38                      0.79

  Royalties            (8.14)          (6.72)    (7.62)        (7.18)

  Operating                           (11.94)                 (11.80)
  expenses            (10.07)                   (10.42)

  Transportation                       (2.27)                  (2.31)
  expenses             (2.63)                    (2.41)

Operating                                      
netbacks((1))           44.16           37.53     44.32         38.88

  General &                            (1.89)                  (1.84)
  administrative       (1.76)                    (1.76)

  Interest &                           (2.81)                  (2.31)
  financing            (2.12)                    (2.16)

Cash netbacks(                                 
(1))                    40.28           32.83     40.40         34.73
                                                                     

Share information                              
(000's)                                                              

Common shares                                  
outstanding, end
of period             149,073         127,091   149,073       127,091

Weighted average                               
basic shares
outstanding           140,239         118,730   134,987        98,851

Weighted average                               
diluted shares
outstanding           142,162         120,915   136,972       101,210
                                                 

Note:

((1) ) Funds from operations, payout ratio, net debt, operating
       netbacks and cash netbacks do not have a standardized meaning
       under GAAP. Refer to non-GAAP measures in this press release.
        

Message to our shareholders

Whitecap is pleased to report strong second quarter operational and financial 
results for our second reporting period as a dividend-growth company. From an 
operational perspective we continue to focus on capital program execution with 
attention to capital efficiencies and drill to on-stream times. Despite some 
delays from the regular seasonal spring break-up weather we were able to 
achieve better than projected production volumes at 17,909 boe/d while 
realizing strong operating and cash netbacks of $44.16 per boe and $40.28 per 
boe respectively.

During the quarter we were once again 100 percent successful with our capital 
program drilling 12 (8.8 net) horizontal oil wells while spending 
approximately $3.0 million less than projected at a total cost of $27.9 
million. Our drilling activity included 6 (5.1 net) Cardium oil wells at 
Garrington including 2 extended reach horizontal wells that have provided 
better than anticipated production results to date. We also drilled 1 (1.0 
net) Cardium well in the greater Pembina area and 3 (1.3 net) successful 
Viking oil wells at Lucky Hills. Our current cost to drill and complete our 
Viking horizontal wells at Lucky Hills is now less than $800,000 per well. 
Lastly, we drilled 2 (1.4 net) wells in the Peace River Arch area of Alberta, 
1 horizontal Montney well at Valhalla North and 1 Dunvegan oil well at 
Elmworth.

In the second quarter we continued to execute on our dividend-growth strategy 
with funds from operations of $65.7 million, development capital spending of 
$27.9 million and dividend payments of $21.6 million which results in a total 
payout ratio of 75 percent without the use of a dividend reinvestment plan. We 
anticipate our second half 2013 total payout ratio to be 86 percent. We are 
pleased to report that we also strengthened the long term sustainability of 
the dividend growth strategy by successfully closing the Invicta corporate 
Viking acquisition and the Eagle Lake Viking unit asset acquisition in the 
second quarter. Subsequent to the quarter end we were also successful in 
closing the working interest consolidation of our Valhalla North and 
Garrington oil properties on July 31, 2013. With each of these acquisitions we 
anticipate spending less than 60 percent of each asset's annual cash flow to 
grow the production 5 - 10 percent, generating significant excess free cash 
flow and providing our shareholders with the potential for dividend increases 
longer term.

We highlight the following accomplishments in the second quarter of 2013:
    --  Grew average second quarter 2013 production to a record 17,909
        boe/d from 13,559 boe/d in the second quarter of 2012, an
        increase of 32 percent. On a fully diluted per share basis,
        this represents an increase of 12 percent.
    --  Generated funds from operations of $65.7 million ($0.46 per
        fully diluted share) compared to $40.1 million ($0.33 per fully
        diluted share) in the second quarter of 2012, an increase of 64
        percent. On a fully diluted per share basis, this represents an
        increase of 39 percent.
    --  Realized an operating netback of $44.16 per boe and a cash
        netback of $40.28 per boe in the second quarter of 2013. The
        strong cash netback is attributed to the increased realized
        price per boe, continued reduction in G&A per boe and field
        optimizations to reduce operating costs.
    --  Increased our Viking oil presence by successfully closing the
        acquisition of Invicta for $0.2 million in cash, the issuance
        of 4.8 million common shares and successfully closing the
        acquisition of the Eagle Lake Viking unit acquisition for
        $110.0 million.
    --  Invested $27.9 million in field expenditures, drilling 12 (8.8
        net) wells with a 100 percent success rate.
    --  Continued to strengthen our price risk management program and

mitigate price volatility: o Our forecasted crude oil production net of royalties is currently


    85 percent hedged at an average floor price of C$97.46 per barrel
    for the remainder of 2013, 74 percent at an average floor price of
    C$94.34 per barrel for 2014 and 15 percent at an average floor

price of C$90.52 per barrel for 2015. o Our forecasted natural gas production net of royalties is currently


    43 percent hedged at an average floor price of C$3.33 per Mcf for
    the remainder of 2013 and 12 percent at an average floor price of
    C$3.69 per Mcf for 2014.
    --  Whitecap maintained monthly dividends of $0.05 per share,
        totaling $0.15 per share for the second quarter, and our board
        of directors approved a 5 percent increase to the monthly
        dividend to $0.0525 per share starting with our October 2013
        dividend.

Subsequent to the quarter end, we successfully closed the previously announced 
working interest consolidation of our Valhalla and Garrington properties for 
$173.6 million in cash, funded partially through a bought deal financing of 
$170.0 million and the issuance of 17.2 million common shares. This 
complementary acquisition adds a significant amount of longer term, low risk, 
high netback upside potential in the Montney and Cardium light oil core areas 
that we currently operate.

Thank-you once again to our shareholders who continue to support us as we 
advance our disciplined approach to providing consistent long-term total 
shareholder returns through production and cash flow growth along with a 
meaningful monthly dividend.

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 focus, payout ratio, future dividends and dividend policy, 
industry conditions, commodity prices, capital spending, production and cash 
flow, risk management program, drilling inventory or development and drilling 
plans, potential growth, the benefits to be obtained from the Invicta,  Eagle 
Lake Viking unit acquisitions and our working interest consolidation of our 
Valhalla North and Garrington oil properties.

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 includes non-GAAP measures as further described herein. These 
non-GAAP measures do not have a standardized meaning prescribed by 
International Financial Reporting Standards ("IFRS or, alternatively, "GAAP") 
and therefore may not be comparable with the calculation of similar measures 
by other companies.

"Funds from operations" represents cash flow from operating activities 
adjusted for changes in non-cash working capital, transaction costs and asset 
retirement settlements. Management considers funds from operations and funds 
from operations per share to be key measures as they demonstrate Whitecap's 
ability to generate the cash necessary to pay dividends, repay debt, fund 
asset retirement obligations and make capital investments. Management believes 
that by excluding the temporary impact of changes in non-cash operating 
working capital, funds from operations provides a useful measure of Whitecap's 
ability to generate cash that is not subject to short-term movements in 
non-cash operating working capital.

The following table reconciles cash flow from operating activities (a GAAP 
measure) to funds from operations (a non-GAAP measure):
                                                              
                              Three months ended    Six months ended
                                        June 30,            June 30,

($000s)                        2013        2012       2013     2012

Cash flow from operating      55,903      10,828   115,241   45,748
activities

Changes in non-cash working    9,221      26,588    13,972   23,908
capital

Transaction costs                322       2,650       322    3,214

Settlement of decommissioning    230          66       296      533
liabilities

Funds from operations         65,676      40,132   129,831   73,403

Cash dividends declared       21,644           -    41,155        -

Payout ratio                     33%           -       32%        -
                                                            

"Operating netbacks" are determined by deducting royalties, production 
expenses and transportation and selling expenses from oil and gas revenue. 
Operating netbacks are per boe measures used in operational and capital 
allocation decisions.

"Cash netbacks" are determined by deducting cash general and administrative 
and interest expense from Operating netbacks.

"Cash dividends per share" represents cash dividends declared per share by 
Whitecap.

"Payout ratio" is calculated as cash dividends declared divided by funds from 
operations.

"Total payout ratio" is calculated as development capital plus cash dividends 
declared divided by funds from operations.

"Net debt" is calculated as bank debt plus working capital deficiency adjusted 
for risk management contracts. Net debt is used by management to analyze the 
financial position and leverage of Whitecap.

The following table reconciles bank debt (a GAAP measure) to net debt (a 
non-GAAP measure):
                                                        

June 30, December 31, ($000s) 2013 2012

Bank debt 369,680 310,700

Current liabilities 92,136 104,903

Current assets (92,609) (82,272)

Risk management (11,233) 10,663 contracts

Net Debt 357,974 343,994

"Boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. 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. 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/August2013/06/c4368.html

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

-0- Aug/06/2013 23:00 GMT

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