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

<< Previous

Bullboard Posts

Next >>

Post by retiredcfon Jun 05, 2024 8:50am

246 Views

Post# 36072794

RBC

June 4, 2024

Whitecap Resources Inc.
Highlights from the RBC Global Energy, Power, and Infrastructure Conference

TSX: WCP | CAD 9.85 | Outperform | Price Target CAD 14.00

Sentiment: Neutral

Our view: We hosted Whitecap Resources at the 2024 RBC Global Energy, Power, and Infrastructure Conference with Grant Fagerheim (President and CEO) and Thanh Kang (SVP and CFO) presenting. Discussions mainly revolved around its Montney and Duvernay portfolio, combined with core macro views and M&A perspectives.

Key Conference Takeaways. While M&A will remain a core part of the long-term strategy, near-term we believe management is likely to focus on smaller strategic tuck-ins and infrastructure divestments though larger strategic deals could come into play further into the future. The company indicated that infrastructure selldowns could be of interest, perhaps within facilities such as Musreau and Kaybob.
Q1 update. Whitecap spud 96 (88.4 net) wells and brought 85 (80 net) on production during the first quarter; 11 (10.5 net) were brought online in the West division and 74 (69.5 net) in the East. Management specifically highlighted the Montney and Glauc from an operational perspective, with recent latest pads at Kakwa and Lator exceeding expectations by 15–20%. The company also tied-in its first two 4-well pads at Musreau and results are expected in due course (likely on an IP90 basis). In the Glauc, the company brought 4 (3.9 net) new wells online, all above initial expectations.
Return of Capital - Ongoing. We believe WCP is on track to reach its long-term net debt target ($1.3B) in Q4/24 while returning 75% of FCF through a mix of its base dividend ($0.73/share) and NCIB utilization. After the debt target is achieved, buybacks are likely to become a more significant part of the framework.
2024 & 2025 Outlook. Management reiterated its 2024 production guidance of 167–172 mboe/d; capital spending of $0.9– 1.1bn is unchanged where 55% is earmarked for the West division (approx. $450mm towards Montney & Duvernay) with the balance to the conventional portfolio. Outlook post-2025 was reiterated, which includes reaching corporate production to 200 mboe/d by 2027 (5-year CAGR: 5%).