Whitecap Resources Inc T.WCP

Alternate Symbol(s): SPGYF

Energy Oil & Gas E&P

Whitecap Resources Inc. is an oil-weighted growth company. The Company is engaged in the business of acquiring, developing and holding interests in petroleum and natural gas properties and assets. Its core areas include the West Division and East Division. Its West Division is comprised of three regions: Smoky, Kaybob and Peace River Arch (PRA). The properties in its Smoky region include Kakwa and Resthaven, all located in Northwest Alberta. The primary reservoir being developed is the Montney resource play, mainly comprised of condensate-rich natural gas. Kaybob is located in the Fox Creek region of Northwest Alberta. The primary reservoir being developed is the Duvernay resource play, mainly comprised of condensate-rich natural gas. The PRA is its original asset area. Its East Division is comprised of four regions: Central AB, West Sask, East Sask and Weyburn. Its Central Alberta region represents the bulk of its Cardium and liquids-rich Mannville assets.

TSX:WCP - Post by User

Whitecap Resources Inc

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Comment by orlandoflon May 02, 2019 8:30am

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Post# 29699413

RE:RE:WCP: Cash flow and leverage in 2019

orlandofl wrote:

stockfy wrote: WCP's net debt is $1.3 billion and the company says that it will use the first $100 million of free cash flow for debt reduction. This sounds good because it will bring its net debt at $1.2 billion by year end.

But with 2019 estimated operating cash flow at almost $700 million, CapEx at about $450 million and cash flow for dividend payments at about $140 million, it seems to me that the first $100 million free cash flow is the best case scenario with perfect execution and no problems with the differentials by year end. WCP will generate almost $700 million operating cash flow if nothing happens with the differentials. But *hit happens in the oil patch. So I think WCP should not raise the dividend. This is my point. I think WCP should focus on its debt and use all the free cash flow for debt reduction. Just my two cents.

I can't remember how much the divident increase was, but it amounts to around $7M or so a year? so I don't know if it matters that much either way - I might be off on my math - I am recalling total dividends and I might be wrong on that, but I think I am reasonably close. I don't think that amount really matters one way or the other.