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  
-0- Mar/20/2014 11:00 GMT
 
 
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