Whitecap Resources Inc. announces fourth quarter and year end 2013 results

 Whitecap Resources Inc. announces fourth quarter and year end 2013 results  CALGARY, March 20, 2014 /CNW/ - Whitecap Resources Inc. ("Whitecap" or the  "Company") (TSX: WCP) is pleased to announce that we have filed on SEDAR our  audited financial statements and related Management's Discussion and Analysis  ("MD&A") for the year ended December 31, 2013. Selected financial and  operational information is outlined below and should be read in conjunction  with Whitecap's audited financial statements and related MD&A and Annual  Information Form ("AIF") which will be available for review at www.sedar.com  and on our website at www.wcap.ca.  FINANCIAL AND OPERATING HIGHLIGHTS                                                                 Twelve months                                     Three months ended               ended                                            December 31         December 31     Financial($000s except        per share amounts)           2013             2012    2013        2012     Petroleum and natural         gas sales                 122,185           93,896 467,095     305,770     Funds from operations         (1)                        66,640           63,588 278,801     193,885            Basic ($/share)       0.39             0.50    1.86        1.71            Diluted                                                    1.68            ($/share)             0.39             0.49    1.84     Net income (loss)         (1,469)            7,579  40,428      52,471            Basic ($/share)     (0.01)             0.06    0.27        0.46            Diluted                                                    0.45            ($/share)           (0.01)             0.06    0.27     Dividends paid or             declared                   26,847                -  92,978           -            Per share             0.16                -    0.61           -     Basic payout ratio (%)        (1)                            40                -      33           -     Development capital           expenditures               21,988           67,563 189,994     245,726     Property acquisitions         (net)                      53,817          (4,977) 371,820       3,842     Corporate acquisitions          -                -  66,450     645,622     Net debt outstanding(1)   401,177          343,994 401,177     343,994     Operating                                                                  Average daily                 production                                                                        Crude oil                                                 8,612            (bbls/d)            12,585           10,520  11,870            NGLs (bbls/d)        2,159            1,274   1,713         998            Natural gas                                              26,650            (Mcf/d)             43,902           31,341  37,117            Total (boe/d)       22,061           17,018  19,769      14,052     Average realized price                                                            Crude oil                                                 83.22            ($/bbl)              83.32            81.31   90.09            NGLs ($/bbl)         53.57            46.01   49.42       48.76            Natural gas                                                2.58            ($/Mcf)               3.74             3.37    3.36            Total ($/boe)        60.20            59.97   64.73       59.46     Netback ($/boe)                                                                   Petroleum and                                             59.46            natural gas            sales                60.20            59.97   64.73            Realized hedging                                           2.49            gain (loss)         (2.32)             4.32  (1.63)            Royalties           (8.46)           (7.04)  (8.28)      (6.82)            Operating                                               (10.97)            expenses           (10.05)           (9.95)  (9.96)            Transportation                                           (2.36)            expenses            (2.49)           (2.38)  (2.40)     Operating netbacks(1)       36.88            44.92   42.46       41.80            General &                                                (1.80)            administrative      (1.61)           (1.78)  (1.67)            Interest &                                               (2.31)            financing           (2.44)           (2.53)  (2.15)     Cash netbacks(1)            32.83            40.61   38.64       37.69                                                                                Share information             (000's)                      2013             2012    2013        2012     Common shares                 outstanding, end of     period                    172,292          127,900 172,292     127,900     Weighted average basic        shares outstanding        169,629          127,303 150,189     113,102     Weighted average              diluted shares     outstanding               171,533          129,806 151,914     115,484     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  We are very pleased to report our operational and financial results for 2013  which have exceeded our initial projections. Our transition to a  dividend-growth company from a pure growth entity has been successful and has  benefited our shareholders providing them with a total shareholder return of  55% in 2013. As a result of our team's abilities to deliver strong operational  results supplemented with value adding acquisitions, we were able to exceed  our objectives of providing our shareholders with growth of 3% to 5% on a  fully diluted share basis and an initial monthly dividend of $0.05/share  ($0.60/share annualized) all within internally generated cash flow. We are  happy to report that on a fully diluted basis, cash flow per share increased  10% to $1.84/share, production per share increased 7% to 130 boe per million  shares and we were able to increase our monthly dividend by 13% to  $0.0567/share ($0.68/share annualized) from the initial $0.05/share  ($0.60/share annualized). We were able to achieve this with a total payout  ratio of 102% demonstrating our team's commitment to financial discipline.  The 2013 capital program was 100% successful with the drilling of 100 (73.3  net) wells including 50 (37.1 net) targeting the Viking in west central  Saskatchewan, 41 (28.8 net) targeting the Cardium in west central Alberta, 7  (5.4 net) wells targeting both the Montney and Dunvegan in the Peace River  Arch area of northwest Alberta and 2 (2.0 net) wells in southwest Saskatchewan  for a total 2013 capital program of $190 million.  In addition, we acquired strategic assets which were complementary to our  existing core areas for a total purchase price of $473.9 million, increasing  our light oil drilling inventory 147% to 2,103 low risk development locations  at the end of 2013 from 850 locations at the start of the year for future cash  flow and production per share growth. Whitecap was also able to monetize $35.6  million of non-core assets to bring further focus to our concentrated light  oil asset base and at the same time improve our financial flexibility.  Our total capital program provided strong returns for our shareholders  increasing our proved reserves by 55% to 94.6 MMboe (72% oil and NGLs) at a  cost of $23.36/boe and proved plus probable reserves by 51% to 132.5 MMboe  (71% oil and NGLs) at a cost of $18.31/boe resulting in a recycle ratio of  2.3x. We were also able to increase the net present value of our proved plus  probable before tax reserves discounted at 10% to $13.33/share from  $10.31/share in 2012, an increase of 29%.  We highlight the following accomplishments in 2013:         --  Achieved record average annual production of 19,769 (69% oil             and NGLs) compared to 14,052 boe/d (68% oil and NGLs) in 2012,             an increase of 41% on an absolute basis and 7% on a fully             diluted share basis.         --  Generated annual funds from operations ("FFO") of $278.8             million ($1.84 per fully diluted share) compared to $193.9             million ($1.68 per fully diluted share) in 2012, an increase of             44% on an absolute basis and 10% on a fully diluted share             basis.         --  Increased proved plus probable reserves by 51% to 132.5 MMboe             (71% oil and NGLs) and proved reserves by 55% to 94.6 MMboe             (72% oil and NGLs). On a fully diluted share basis increased             proved plus probable reserves by 16% and proved reserves by             19%.         --  Achieved finding and development ("F&D") costs of $17.21 per             proved plus probable boe and finding, development and             acquisition ("FD&A") costs of $18.31 per proved plus probable             boe, including changes in future development costs. This             results in an F&D recycle ratio of 2.5x and an FD&A recycle             ratio of 2.3x based on our 2013 operating netback of $42.46 per             boe.         --  Invested $190.0 million in capital expenditures in 2013 which             includes the drilling of 100 (73.3 net) wells with a 100%             success rate with exceptionally strong capital efficiencies. In             addition, we successfully closed and integrated approximately             $473.9 million of complementary acquisitions during 2013, which             were within our core light oil plays.         --  Increased the predictability of our cash flows for dividend             payments and capital reinvestment through an active hedging             program.       o Our forecasted crude oil production (net of royalties) is currently         79% hedged at an average floor price of WTI C$95.83/bbl for 2014,         53% at an average floor price of $95.96/bbl in 2015 and 6% at an         average floor price of $95.05 in 2016.       o Our forecasted natural gas production (net of royalties) is         currently 67% hedged at an average floor price of C$3.94/Mcf for         2014, 35% at an average floor price of C$3.95/Mcf 2015 and 10% at         an average floor price of C$3.70/Mcf 2016.         --  Increased our bank line to $600 million which includes $200             million of 5 year term debt financing at an attractive             long-term fixed interest rate.         --  Declared dividends of $93.0 million ($0.61 per share) in 2013             resulting in a basic payout ratio of 33% and a total payout             ratio of 102% in Whitecap's first year as a dividend-growth             company.  OPERATIONS UPDATE  The first quarter of 2014 has been a very active and successful one for  Whitecap. To date we have drilled 75 (64.0 net) wells with nine drilling rigs  operating. We expect to drill and complete ("D&C") an additional 4 (3.9 net)  wells for an estimated total of 79 (67.9 net) wells for the quarter with all  wells expected to be on production prior to or during the spring break-up  period. We are on track to meet our first quarter and annual production  forecasts.  The following highlights our success to date in each of our core areas:  West Central Saskatchewan (Dodsland/Lucky Hills) - Viking Light Oil  Whitecap had a very active quarter in west central Saskatchewan, drilling 49  (43.5 net) wells with 4 drilling rigs and recently achieved a production  milestone in the area of over 10,000 boe/d. Whitecap continues to optimize  well costs in the area since entering the Viking play in February 2012 with  current D&C costs on standard length wells of $720,000 per well, a 6% decrease  from our 2013 average D&C costs. In addition to our drilling program we have  also focused on improving our operating efficiencies with the installation of  several facility enhancements including the startup of a 2,800 bopd sales oil  pipeline which will reduce our oil transportation and operating costs by an  estimated $0.50/boe in the area.  In addition to these cost reduction initiatives Whitecap has also been focused  on enhancing our type curve economics through the application of extended  reach horizontal ("ERH") wells in the area. In the first quarter we have  drilled 3 (2.8 net) ERH wells and results, although still in the early stages,  look very promising.  West Central Alberta (Greater Pembina/Garrington) - Cardium Light Oil  To date in the first quarter of 2014 Whitecap has drilled 16 (11.8 net)  Cardium horizontal wells of which 3 (2.5 net) were ERH wells. Results from the  first quarter ERH wells are preliminary but initial indications are that they  will continue to provide economics that are better than our standard length  wells and exceed our current ERH type curve economics. The first three ERH  wells drilled in Garrington in 2013 continue to perform above expectations  with an average IP(90) of 481 boe/d or 115% above our standard horizontal  length well type curve.  We currently have 5 (4.5 net) additional ERH wells planned for the remainder  of the year. We will be reviewing our entire corporate program for the  remainder of the year once we have completed the evaluation of our first  quarter drilling program and are actively identifying and pursuing  opportunities to apply this technology across our land base.  Deep Basin Alberta (Karr/Elmworth) - Dunvegan Light Oil  In the first quarter of 2014 Whitecap will have drilled 5 (3.9 net) Dunvegan  horizontal wells of which 1 (1.0 net) was an ERH well. Current production from  our Deep Basin region is over 2,100 boe/d (78% oil and NGLs) with 2 (1.9 net)  wells yet to come on production.  Results from the first quarter program are preliminary but initial indications  are that they will provide economics that are significantly better than our  current Dunvegan type curve economics. For the Dunvegan oil wells that have  significant production history, their IP(90) is on average 16% higher than our  current type curve.  We have an additional 2 - 3 wells planned for this area during the remainder  of the year.  OUTLOOK  For 2014 we are focused on further improving the strength and sustainability  of our dividend-growth model and  providing superior financial returns for our  shareholders. Our strategy remains focused on the cost effective development  and optimization of our assets and realizing the highest cash flow netback on  our production. We remain financially disciplined in our approach while we  strive to deliver meaningful dividends and per share growth in cash flow,  production and reserves for our shareholders.  As we experienced in 2013, we believe the current economic environment is  supportive of strong crude oil prices for the foreseeable future. Light  oil-weighted energy producers in western Canada will continue to benefit from  strong commodity prices and the options for transporting western Canadian  crude oil to markets are being expanded through pipeline alterations and  expansions as well as with the rapidly expanding use of rail for  transportation to refining and export markets. The decline in the value of the  Canadian dollar along with the improving natural gas price environment will  also have a positive impact on cash flow.  On March 17, 2014 we announced an acquisition of certain strategic light oil  assets focused primarily in Whitecap's Pembina Cardium / West Central core  area, as well as at Boundary Lake in northeast BC, which is located just  northwest of its core Valhalla area. Total net consideration was $692.7  million after giving effect to the disposition of certain Nisku natural gas  production and related facilities located in the Pembina area to Keyera Corp.  for $113 million and deducting estimated purchase price adjustments of $49.4  million at closing (the "Acquisition"). The Acquisition will be funded by a  $500 million bought deal equity financing and bank debt. The financing is  expected to close on or before April 8, 2014 and the Acquisition on or before  May 1, 2014.  In addition, Whitecap's Board of Directors has approved a 10% increase to our  monthly dividend from $0.0567 to $0.0625 per share, subject to the closing of  the Acquisition and based on the closing date of early May 2014, the dividend  increase is expected to start with our May 2014 dividend payable in June 2014.  I would like to thank our valued employees for their hard work and dedication  over this past year, our Board of Directors for their guidance, and our  shareholders for your support of our company. We are excited about the future  potential of Whitecap and look forward to reporting to you on our progress in  the future. Thank you!  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, objectives,  strategies, financial, operating and production results and business  opportunities, including our 2014 cash flow. 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 addition, and without limiting the  generality of the foregoing, this press release contains forward-looking  information regarding the Acquisition, the financing and the benefits to be  acquired therefrom as well as the expected increase to the dividend. This  press release also contains forward-looking information relating to the  estimated net purchase price of the Acquisition, plans and expectations with  respect to the disposition of certain assets to Keyera Corp., the anticipated  closing dates of the financing and the Acquisition. This press release also  contains forward-looking information relating to our ongoing business plan,  strategy and focus, future dividends and dividend policy, industry conditions,  commodity prices and differentials, access to markets, capital spending, the  source of funding for our capital program and our potential growth.  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; our ability to access  capital; and obtaining the necessary regulatory approvals, including the  approval of the Toronto Stock Exchange and the satisfaction of the other  conditions to closing the Acquisition, the financing and the other  transactions referred to in this press release and on the timeframes  contemplated.  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. The Acquisition, financing and other  transactions referred to in this press release may not be completed on the  anticipated time frames or at all and 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.  Reserves referenced in this press release are based on McDaniel & Associates  Consultants Ltd.'s reserves evaluation for Whitecap effective December 31,  2013. It should not be assumed that the present worth of estimated future cash  flow referenced in this press release represents the fair market value of the  reserves. There is no assurance that the forecast prices and costs assumptions  will be attained and variances could be material. The recovery and reserve  estimates of Whitecap's crude oil, natural gas liquids and natural gas  reserves provided herein are estimates only and there is no guarantee that the  estimated reserves will be recovered. Actual crude oil, natural gas and  natural gas liquids reserves may be greater than or less than the estimates  provided herein.  Finding and development costs including acquisitions and dispositions have  been referenced in this press release. While NI 51-101 requires that the  effects of acquisitions and dispositions be excluded, FD&A costs have been  presented because acquisitions and dispositions can have a significant impact  on the Company's ongoing reserve replacement costs and excluding these amounts  could result in an inaccurate portrayal of the Company's cost structure.  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 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,  settlement of decommissioning liabilities and termination fees received.  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 settlement of decommissioning  liabilities 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. Refer to the "Funds from Operations, Basic payout  ratio and Dividends" section of this report for the reconciliation of cash  flow from operating activities to funds from operations.  The following table reconciles cash flow from operating activities (a GAAP  measure) to funds from operations (a non-GAAP measure):                                  Three months ended     Twelve months ended                                         December 31             December 31     ($000s)                     2013           2012        2013        2012     Cash flow from                                                      operating     activities                79,274         83,688     279,859     173,535     Changes in non-cash                                                 working capital         (13,102)       (21,695)     (1,107)      14,737     Settlement of                                                       decommissioning     liabilities                   25            540         484       1,197     Transaction costs            443          1,055         765       4,416     Termination fee                                                     received                       -              -     (1,200)           -     Funds from                                                          operations                66,640         63,588     278,801     193,885     Cash dividends                                                      declared                  26,847              -      92,978           -     Basic payout ratio           40%              -         33%           -                                                                              "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.  "Basic 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 and the flow-through share liability. 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):                                   December 31     December 31     ($000s)                              2013            2012     Bank debt                         382,899         310,700     Current liabilities               113,773         104,903     Current assets                   (66,795)        (82,272)     Risk management contracts        (28,700)          10,663     Net Debt                          401,177         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.    SOURCE  Whitecap Resources Inc.  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  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/March2014/20/c6211.html  CO: Whitecap Resources Inc. ST: Alberta NI: OIL ERN  
Press spacebar to pause and continue. Press esc to stop.