CALGARY, Jan. 21, 2014 /CNW/ - Whitecap Resources Inc. ("Whitecap" or
the "Company") (TSX: WCP) is pleased to announce the results of its
2013 year-end oil and gas reserves evaluation, a 51% increase over
year-end 2012 reserves. The increases reflect exceptional organic
growth through the drill-bit and the completion of several accretive
oil acquisitions in 2013. Whitecap is also pleased to provide our
shareholders with an operational update.
The following highlights and reserves information do not include the
recent light oil Viking acquisition of a private company ("PrivateCo")
which closed on January 6, 2014. The financial and operational
information below is based on estimates and are unaudited.
HIGHLIGHTS
Reserves
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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).
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On a per share, fully diluted basis, increased proved plus probable
reserves by 16% and proved reserves by 19%.
-
Achieved finding and development ("F&D") costs of $16.96 per proved plus
probable boe, including changes in future development costs ("FDC"),
which results in a recycle ratio of 2.5 times.
-
Achieved finding, development and acquisition ("FD&A") costs of $18.17
per proved plus probable boe, including FDC, which results in a recycle
ratio of 2.4 times.
-
Increased the net present value discounted at 10% ("NPV10") of proved
plus probable reserves by 29% to $13.33 per fully diluted share and
NPV10 of proved reserves by 34% to $10.54 per fully diluted share.
-
Total proved reserves comprise 71% of total proved plus probable
reserves on a reserve basis and 79% on a NPV10 basis.
-
Organic proved plus probable reserve additions replaced 284% of
production in the year and proved reserve additions replaced 241% of
production, excluding reserves added through acquisitions.
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Including reserves added through acquisitions, proved plus probable
reserve additions replaced 724% of production in the year and proved
reserve additions replaced 568% of production.
-
Increased our reserve life index ("RLI") for proved plus probable
reserves by 17% to 16.4 years and proved reserves by 19% to 11.7 years.
Operations
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Achieved record 2013 annual production of 19,769 boe/d (69% oil and
NGLs), an increase of 7% per fully diluted share compared to 2012.
-
Invested $190 million in 2013 on development capital expenditures which
includes the drilling of 100 (73.3 net) wells with a 100% success rate.
2013 YEAR-END RESERVES
Whitecap's year-end 2013 reserves were evaluated by independent reserves
evaluator McDaniel & Associates Consultants Ltd. ("McDaniels"). The
evaluation of all of Whitecap's oil and gas properties was done in
accordance with the definitions, standards and procedures contained in
the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and
National Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities ("NI 51-101"). Additional reserve information as required
under NI 51-101 will be included in the Company's Annual Information
Form which will be filed on SEDAR on or before March 31, 2014.
Summary of Reserves
(Forecast Pricing)
As at December 31, 2013(1)
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company interest reserves(2)
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Description
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Oil (Mbbl)
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Gas (MMcf)
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NGL (Mbbl)
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Total (Mboe)
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Proved producing
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31,764
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98,276
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4,849
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52,993
|
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Proved non-producing
|
309
|
4,018
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37
|
1,016
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Proved undeveloped
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27,670
|
59,187
|
3,060
|
40,594
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Total proved(3)
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59,743
|
161,481
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7,946
|
94,602
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Probable
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22,486
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72,041
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3,356
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37,850
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Total proved plus probable(3)
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82,229
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233,522
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11,302
|
132,452
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(1)
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Based on McDaniels' January 1, 2014 forecast prices.
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(2)
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Company interest reserves are the Company's total working interest share
before the deduction of any royalties and including any royalty
interests of the Company.
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(3)
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Numbers may not add due to rounding.
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Summary of Before Tax Net Present Values
(Forecast Pricing)
As at December 31, 2013(1)
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Before Tax Net Present Value ($MM)
|
|
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Discount Rate
|
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Description
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0%
|
5%
|
10%
|
15%
|
20%
|
|
Proved producing
|
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2,176
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|
1,590
|
|
1,258
|
|
1,048
|
|
905
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Proved non-producing
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|
23
|
|
14
|
|
10
|
|
8
|
|
7
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Undeveloped
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1,395
|
|
886
|
|
603
|
|
430
|
|
317
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Total proved
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3,594
|
|
2,490
|
|
1,871
|
|
1,487
|
|
1,229
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Probable(2)
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1,828
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|
859
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|
495
|
|
327
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|
236
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Total proved plus probable(2)
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5,423
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|
3,349
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|
2,367
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|
1,814
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1,465
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Per fully diluted share
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$30.55
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$18.87
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$13.33
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$10.22
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$8.25
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(1)
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Based on McDaniels' January 1, 2014 forecast prices.
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(2)
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Numbers may not add due to rounding.
|
Subsequent to the year end, Whitecap closed a light oil Viking
acquisition of a PrivateCo. The PrivateCo reserves at December 31,
2013, internally estimated by a member of Whitecap's management who is
a qualified reserves evaluator in accordance with National Instrument
51-101 as at December 31, 2013 and based on McDaniels' January 1, 2014
forecast prices were 8.8 MMboe of proved reserves, 14.0 MMboe of proved
plus probable reserves and had a net present value discounted at 10%
("NPV10") for proved plus probable reserves of $388.7 million.
Capital Program Efficiency
Based on the evaluation of our petroleum and natural gas reserves
prepared in accordance with NI 51-101 by our independent reserve
evaluator, McDaniels, the historical efficiency of our capital programs
is summarized as follows:
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2013
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2012
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Three Year
Weighted
Average
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Excluding Future Development Costs
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Proved ($/boe)
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F&D costs(1)
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$
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10.73
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$
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19.03
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$
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14.33
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FD&A costs(2)
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$
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15.19
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$
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22.15
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$
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19.06
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Proved plus probable ($/boe)
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F&D costs(1)
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$
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9.10
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$
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14.87
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$
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11.42
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FD&A costs(2)
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$
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11.91
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$
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16.57
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$
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14.42
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Recycle ratio(3)
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Proved plus probable
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3.6x
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2.5x
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3.0x
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Including Future Development Costs
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Proved ($/boe)
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F&D costs(1)
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$
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20.31
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$
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22.74
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$
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24.36
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FD&A costs(2)
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$
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23.16
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$
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27.89
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$
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26.66
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Proved plus probable ($/boe)
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F&D costs(1)
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$
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16.96
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$
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18.07
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$
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19.48
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FD&A costs(2)
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$
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18.17
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$
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20.86
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$
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18.61
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Recycle ratio(3)
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Proved plus probable
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2.4x
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2.0x
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2.3x
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Operating netback per boe(3)
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$
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42.62
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$
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41.80
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$
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43.46
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(1)
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The aggregate of the exploration and development costs incurred in the
financial year and change during that year in estimated future
development costs generally will not reflect total finding and
development costs related to reserve additions for that year.
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(2)
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The capital expenditures include the announced purchase price of
corporate acquisitions rather than the amounts allocated to property,
plant and equipment for accounting purposes. The capital expenditures
also exclude capitalized administration costs.
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(3)
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Recycle ratio is calculated as operating netback divided by FD&A costs
(proved plus probable). Operating netback is calculated as revenue
(including realized hedging gains and losses) minus royalties,
production and operating expenses and transportation expenses.
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OPERATIONAL UPDATE
Whitecap achieved 2013 annual production of 19,769 boe/d (69% oil and
NGLs) which exceeded our market guidance of 19,650 boe/d. Total capital
expenditures including capitalized G&A were $190 million compared to
market guidance of $188 million.
In 2013, we drilled a total of 100 (73.3 net) wells all targeting oil
with a 100% success rate, including 50 (37.1 net) horizontal Viking oil
wells in western central Saskatchewan, 25 (14.3 net) horizontal Cardium
oil wells at Garrington, 16 (14.5 net) horizontal Cardium wells in the
greater Pembina area, 5 (4.4 net) horizontal Dunvegan wells in the Deep
Basin area of northwest Alberta and 2 (1.0 net) horizontal Montney oil
wells at Valhalla. We have an extensive inventory currently of 2,103
low-risk development drilling opportunities providing Whitecap and our
shareholders with a solid platform for long-term sustainable dividends
and per share growth.
Our 2014 capital program has fully commenced with nine drilling rigs
currently operating; four in west central Saskatchewan drilling the
Viking formation, three in west central Alberta drilling the Cardium
formation and two in northwest Alberta targeting the Dunvegan and
Montney formations.
Included in the first quarter drilling program are 5 horizontal Dunvegan
oil wells. The Dunvegan is an emerging core play for Whitecap where we
currently have six wells producing over 1,500 boe/d on a combined
basis. To date our average IP (30) rate across the Dunvegan play is 401
boe/d (87% oil and NGLs), including our initial Elmworth wells which
had IP rates curtailed by third party restrictions.
In 2014 we will expand the application of extended reach horizontal
("ERH") wells across our core areas, building on the successful results
achieved in 2013 where we were able to experience a greater than 20%
improvement in capital efficiencies compared to the standard length
horizontal wells. This improvement in capital efficiency provides
strong well economics with accelerated payout of capital employed to
less than one year. We have nine ERH wells planned for the first
quarter, including four in the Viking formation, one in Garrington and
three in Pembina targeting the Cardium and one in Simonette targeting
the Dunvegan. We have 18 to 24 ERH wells in total planned for 2014.
We are off to a great start to the year and look forward to working hard
at making 2014 another exceptional year for our shareholders.
Whitecap is a dividend paying, oil-weighted company focused on providing
sustainable monthly dividends to its shareholders and per share growth
through a combination of accretive oil-based acquisitions and organic
growth on existing and acquired assets. For further information about
Whitecap please visit our website at www.wcap.ca.
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, including statements about our strategy, plans and focus,
timing of filing the Company's annual information form, forecast annual
per share growth, dividend policy, planned capital expenditures,
expected well costs and economics, expected future production and
product mix, and drilling, development and completion plans and the
anticipated results therefrom. Statements relating to "reserves" are
also deemed to be forward-looking statements, as they involve the
implied assessment, based on certain estimates and assumptions, that
the reserves described exist in the quantities predicted or estimated
and that the reserves can be profitably produced in the future.
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.
It should not be assumed that the present worth of estimated future cash
flow presented in the tables above 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.
All future net revenues are stated prior to provision for interest,
general and administrative expenses and after deduction of royalties,
operating costs and estimated future capital expenditures. Future net
revenues have been presented on a before tax basis. Estimated values of
future net revenue disclosed herein do not represent fair market value.
Finding and development costs both including and excluding acquisitions
and dispositions have been presented above. 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 contains the term "operating netbacks" which does not
have a standardized meaning prescribed by GAAP and therefore may not be
comparable with the calculation of similar measures by other companies.
Whitecap uses operating netbacks to analyze financial and operating
performance. Whitecap believes these benchmarks are key measures of
profitability and overall sustainability for the Company. These terms
are commonly used in the oil and gas industry. Operating netbacks are
not intended to represent operating profits nor should they be viewed
as an alternative to funds from operations provided by operating
activities, net earnings or other measures of financial performance
calculated in accordance with GAAP. Operating netbacks are determined
by deducting royalties, production expenses and transportation and
selling expenses from oil and gas revenue.
"Boe" means barrel of oil equivalent on the basis of 6 mcf of natural
gas to 1 bbl of oil. Boe's 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.
