WHITECAP RESOURCES INC. CLOSES PREVIOUSLY ANNOUNCED XTO ACQUISITION CONSOLIDATING TOP TIER MONTNEY AND DUVERNAY ASSETS, AND INCREASES PRODUCTION GUIDANCE

CALGARY, AB, Aug. 31, 2022 /CNW/ - Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to announce that it has successfully closed the previously announced acquisition of XTO Energy Canada (the "Acquisition").

The closing of the Acquisition adds production1 of approximately 32,000 boe/d (30% condensate and NGLs) and over 2,000 top tier Montney and Duvernay drilling locations2 that will provide decades of long-term sustainable production and free funds flow growth. The Acquisition also includes 100% ownership of the 15-07 gas processing facility which is a shallow cut facility with 165 mmcf/d of total capacity. The facility currently processes the acquired Duvernay volumes along with third-party volumes from area producers.

Whitecap is also pleased to announce that in conjunction with completion of the Acquisition, Whitecap has closed the issuance of a $705 million 4-year term loan and increased its existing credit facility by $395 million which results in total credit capacity of $3.1 billion. The term loan is repayable at any time with no penalty and uses the same pricing grid as our existing credit facility. On current strip pricing, Whitecap is expected to reach its net debt3 milestone of $1.8 billion by year end, which would represent a debt to EBITDA ratio4 of 0.7 times and leave the company with $1.3 billion of unused credit capacity.

With the Acquisition now closed, along with continued outperformance on our base production, we are increasing our 2022 average production guidance by 4,000 boe/d to 142,000 – 144,000 boe/d and our capital spending guidance by $60 million to $670 - $690 million. The increased capital program will allow us to retain our current field services through the winter drilling season to maintain our strong capital efficiencies for the balance of 2022 and into 2023. There is no change to our 2023 preliminary plans for production to average 168,000 – 174,000 boe/d on capital spending of $900 million to $1.1 billion and we plan to release our formal 2023 budget on September 28, 2022.

Integration of the acquired assets is well underway and expected to be seamless given Whitecap's technical expertise in the area and our ability to effectively acquire, integrate and optimize our historical acquisitions. As our portfolio of opportunities has increased significantly, we are advancing initiatives to achieve our net debt milestones and thereby further advance our return of capital strategy sooner than currently forecasted.

We are excited about the future potential of our consolidated portfolio and look forward to the achievement of our objectives over the next several months.

NOTES

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, including relating to the Acquisition and the Company after completing the Acquisition. Forward-looking information typically uses words such as "anticipate", "believe", "continue", "trend", "sustain", "project", "expect", "forecast", "budget", "goal", "guidance", "plan", "objective", "strategy", "target", "intend", "estimate", "potential", 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, focus, objectives, priorities and position.

In particular, and without limiting the generality of the foregoing, this press release contains forward-looking information with respect to: the acquired assets being top tier Montney and Duvernay assets; the number of acquired top tier drilling locations in the Montney and the Duvernay; that the acquired drilling locations represent decades of long-term sustainable production and free funds flow growth; our expectation to reach our net debt milestone of $1.8 billion by year end based on current strip pricing; our expected debt to EBITDA ratio and unused credit capacity at year end based on reaching our $1.8 billion net debt milestone based on current strip pricing; our average daily production volume and capital expenditure forecasts for 2022 and 2023; that the increased capital program will allow us to retain our current field services through the winter drilling season to maintain our strong capital efficiencies for the balance of 2022 and into 2023; our plans to release our formal budget on September 28, 2022, our expectation that integration of the acquired assets will be seamless; and, that we are advancing initiatives to achieve our net debt milestones and thereby further advance our return of capital strategy sooner than currently forecasted.

The forward-looking information is based on certain key expectations and assumptions made by our management, including: that we will continue to conduct our operations in a manner consistent with past operations, except as specifically noted herein; the general continuance or improvement in current industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes; expectations and assumptions concerning prevailing and forecast commodity prices, exchange rates, interest rates, inflation rates, applicable royalty rates and tax laws, including the assumptions specifically set forth herein; the impact (and the duration thereof) that the COVID-19 pandemic will have on (i) the demand for crude oil, NGLs and natural gas, (ii) our supply chain, including our ability to obtain the equipment and services we require, and (iii) our ability to produce, transport and/or sell our crude oil, NGLs and natural gas; the ability of OPEC+ nations and other major producers of crude oil to adjust crude oil production levels and thereby manage world crude oil prices; the impact (and the duration thereof) of the ongoing military actions between Russia and Ukraine and related sanctions on crude oil, NGLs and natural gas prices; the impact of rising and/or sustained high inflation rates and interest rates on the North American and world economies and the corresponding impact on our costs, our profitability, and on crude oil, NGLs and natural gas prices; future production rates and estimates of operating costs and development capital, including as specifically set forth herein; performance of existing and future wells; reserve volumes and net present values thereof; anticipated timing and results of capital expenditures / development capital, including as specifically set forth herein; 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, including our assumptions regarding the number of drilling locations obtained through the Acquisition; 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; future dividend levels; the impact of increasing competition; ability to efficiently integrate assets and employees acquired through acquisitions, including the Acquisition; ability to market oil and natural gas successfully; our ability to access capital and the cost and terms thereof, including as specifically contemplated herein. In addition, our expectation to reach our net debt milestone of $1.8 billion by year end is based on the following current strip pricing: August 31 – December 31, 2022 WTI of US$90.09/bbl, CAD/USD of 1.31 and AECO of C$6.26/GJ.

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. These include, but are not limited to: the risk that we do not realize some or all of the anticipated benefits of the Acquisition; the risk that we are not able to advance our return of capital strategy sooner than currently forecasted or that it is otherwise delayed or amended; the risk that any of our material assumptions prove to be materially inaccurate, including our 2022 and 2023 forecasts; the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production; pandemics and epidemics; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; risks associated with increasing costs, whether due to high inflation rates, high interest rates, supply chain disruptions or other factors; health, safety and environmental risks; commodity price and exchange rate fluctuations; interest rate fluctuations; inflation rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions, including the Acquisition; failure to complete or realize the anticipated benefits of acquisitions or dispositions, including the Acquisition; ability to access sufficient capital from internal and external sources on acceptable terms or at all; failure to obtain required regulatory and other approvals; reliance on third parties and pipeline systems; and changes in legislation, including but not limited to tax laws, production curtailment, royalties and environmental regulations. 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 security holders with a more complete perspective on our future operations and such information may not be appropriate for other purposes.

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.

This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about forecast production volumes for the acquired assets, our net debt and debt to EBITDA ratio at 2022 year-end, Whitecap's 2022 and 2023 average daily production volumes and capital expenditures all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. The actual results of operations of Whitecap and the resulting financial results will likely vary from the amounts set forth herein and such variation may be material. Whitecap and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, Whitecap undertakes no obligation to update such FOFI. FOFI contained in this press release was made as of the date of this press release and was provided for the purpose of providing further information about Whitecap's anticipated future business operations. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein.

Barrel of Oil Equivalency

"Boe" means barrel of oil equivalent. All boe conversions in this press release are derived by converting gas to oil at the ratio of six thousand cubic feet ("Mcf") of natural gas to one barrel ("Bbl") of oil. Boe may be misleading, particularly if used in isolation. A Boe conversion rate of 1 Bbl : 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 Bbl : 6 Mcf, utilizing a conversion ratio of 1 Bbl : 6 Mcf may be misleading as an indication of value.

Drilling Locations

This press release discloses drilling inventory in three categories: (i) proved locations; (ii) probable locations; and (iii) unbooked locations. Proved locations and probable locations are derived from the reserves evaluation prepared by McDaniel & Associates Consultants Ltd. in respect of the reserves attributed to the Acquisition effective May 1, 2022 and account for drilling locations that have associated proved and/or probable reserves, as applicable. The reserves evaluation used the three consultant average price deck as at April 1, 2022 with WTI averaging US$80.78/bbl and AECO averaging C$3.70/GJ (2022 – 2026). Unbooked locations are internal estimates based on our prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources.

Unbooked locations consist of drilling locations that have been identified by management as an estimation of our multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that we will drill all of these drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which we drill wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been de-risked by drilling existing wells in relative close proximity to such unbooked drilling locations, other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.

Production and Product Type Information

References to petroleum, crude oil, natural gas liquids ("NGLs"), natural gas and average daily production in this press release refer to the light and medium crude oil, tight crude oil, conventional natural gas, shale gas and NGLs product types, as applicable, as defined in National Instrument 51-101 ("NI 51-101").

NI 51-101 includes condensate within the NGLs product type. The Company has disclosed condensate as combined with crude oil and separately from other NGLs since the price of condensate as compared to other NGLs is currently significantly higher, and the Company believes that this crude oil and condensate presentation provides a more accurate description of its operations and results therefrom. Crude oil therefore refers to light oil, medium oil, tight oil and condensate. NGLs refers to ethane, propane, butane and pentane combined. Natural gas refers to conventional natural gas and shale gas combined.

The Company's forecast current average daily production for the Acquisition and for the Company for the full years 2022 and 2023 disclosed in this press release consists of the following product types, as defined in NI 51-101 and using a conversion ratio of 1 Bbl : 6 Mcf where applicable:

This press release includes various specified financial measures, including capital management measures as further described herein. These financial measures are not standardized financial measures under International Financial Reporting Standards ("IFRS" or, alternatively, "GAAP") and, therefore, may not be comparable with the calculation of similar financial measures disclosed by other companies.

"Net Debt" is a capital management measure that management considers to be key to assessing the Company's liquidity. See Note 5(e)(i) "Capital Management – Net Debt and Total Capitalization" in the Company's unaudited interim consolidated financial statements for the three and six months ended June 30, 2022 and in the Company's audited annual consolidated financial statements for the year ended December 31, 2021 for additional disclosures.

SOURCE Whitecap Resources Inc.

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