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October 2018 Corporate Presentation – Whitecap Resources Inc.

Whitecap Resources Inc. · Oct 26, 2018 · 26 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 1
    CORPORATE PRESENTATION / OCTOBER 2018 SUSTAINABLE GROWTH WITHIN FUNDS FLOW
  2. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 2
    Whitecaps Strategy Growth within funds flow from operations Production per share growth 6 - 8%/annum Dividend growth supported by free funds flow Premium light oil assets in Western Canada Low decline High netbacks Strong capital…
  3. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 3
    Whitecap Profile TSX: WCP Shares outstanding (MM) Basic 417.1 Fully diluted (1.6% dilutives) 423.5 Market capitalization (B) 3.5 Enterprise value (B) 4.7 2018 production guidance (boe/d) 74,200 % oil + NGLs 85% 2018 funds…
  4. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 4
    Significant Growth Within Funds Flow 2017 2018 Budget % Change Average production (boe/d) 57,450 74,200 29% Per million shares 154 176 14% Funds flow (MM) 509 753 48% Per share 1.36 1.79 32% Development capital (MM) 339 450 33%…
  5. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 5
    Free Funds Flow Priorities 1. Debt reduction and balance sheet strength Annual net debt to funds flow of 1.0 to 2.0x 2. Enhance per share growth Core area tuck-in acquisitions using cash and debt Expanded capital development…
  6. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 6
    Solid Balance Sheet Conservative debt use and management Maintain 1x to 2x net debt to annual funds flow Unutilized debt capacity 500MM liquidity Attractive long term debt with manageable maturity profile 600 3.50% 2022 200…
  7. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 7
    Systematic Approach to Risk Mitigation Commodity Risk Management Mitigate price volatility to provide predictable funds flow and protect economic returns on capital Target 40 60% of net royalty volumes hedged one year forward Target…
  8. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 8
    Focused on Per Share Growth 80,000 600,000 72,000 Production 2P Reserves 74,200 64,000 500,000 56,000 1,141 57,451 400,000 48,000 Production (boe/d) 955 (Mboe) 40,000 300,000 32,000 24,000 200,000 16,000…
  9. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 9
    Internally Funded Income and Growth Model NO DRIP 98 Total Payout Ratio 125% 93 100 90 100% 80 67 70 75% 60 Total Payout Ratio WTI (US/bbl) 51 49 43 50 50% 40 30 25% 20 10 0% - 2013 2014 2015 2016 2017…
  10. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 10
    Returning Cash to Shareholders Cumulative Dividends Paid 3.50 900 800 3.00 700 2.50 600 2.00 500 (MM) / Share 1.50 400 300 1.00 200 0.50 100 - - 2013 2014 2015 2016 2017 2018e Cumulative Dividends (MM)…
  11. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 11
    Capital Discipline 2018 Capital Budget Business Unit Target (MM) % West Central Sask Viking 129 29 Northwest Alberta & BC Cardium/Dunvegan 105 23 Southwest Sask Atlas/Shaunavon 84 19 West Central Alberta Cardium 64 14 Southeast…
  12. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 12
    Self Funded Assets Operating Income by Business Unit 250 211 209 196 200 168 167 150 ( Millions) 100 50 0 West Central Sask West Central Alberta Southeast Sask Northwest Alberta & BC Southwest Sask Capex Free…
  13. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 13
    Core Areas of Operations Drilling Inventory Light Oil Drilling Inventory 2,897 10 years of inventory BRITISH COLUMBIA ALBERTA Drilling Wells SASKATCHEWAN Inventory 2017 2018 West Central Sask 910 125 131 Northwest Alberta &…
  14. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 14
    Whitecaps Balanced Portfolio 90,000 80,000 70,000 60,000 Growth assets - West Central Alberta 50,000 - West Central Sask - Deep Basin Alberta (Boe/d) 40,000 30,000 20,000 Low decline assets - Southwest Sask…
  15. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 15
    Rate of Return 50% 0% 100% 150% 200% 250% 300% 350% 400% Viking ERH 1.5 Wapiti Cardium Standard 1.0 Atlas Hz 1.0 (Unconvent'l) Viking Standard 1.0 W. Pembina Rate of Return ERH 1.5 W. Pembina…
  16. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 16
    Profit to Investment Ratio 0.0 1.0 1.5 2.0 2.5 0.5 W. Pembina ERH 1.5 Wapiti Cardium Standard 1.0 Atlas Hz 1.0 (Unconvent'l) W. Pembina Standard 1.0 Viking ERH 1.5 Profit to Investment Ratio…
  17. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 17
    Diversified Crude Oil Sales Crude Oil and NGL Sales by Pipeline 0.1% 2% 24% 23% Taylor 6% 17% Prince George Edmonton 9% Hardisty Kerrobert 20% Regina Cromer Plains South Sask. Pembina Peace TEML Weyburn/Westspur…
  18. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 18
    Large and Intermediate Producers (Liquids Weighted) 15.0% WCP 12.5% 10.0% 2019E Free Cash Flow Yield Median of 8.8% 7.5% 5.0% Median of 12.7% 2.5% 0.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2019E 2-Year…
  19. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 19
    Benchmarking 2018e Decline Rate 45% 41% 40% 40% 40% 38% 35% 35% 33% 32% 33% 33% 31% 31% 30% 29% 29% 25% 25% 23% 20% 19% 19% 15% 15% 14% 10% 5% 0% WCP Source: National Bank Financial (June 2018) Peer Group…
  20. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 20
    Benchmarking Best in Class Sustaining Ratio 140% Dividend Payout Sustaining Capital Payout 120% Peer Average 100% 80% Sustaining Ratio 60% 40% 20% 0% WCP Source: National Bank Financial (June 2018) Peer…
  21. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 21
    Benchmarking North American Oil Plays Half-Cycle Payout Period (Years) 4.0 WCP Oil Plays 3.5 North America Oil Plays 3.0 2.5 2.0 Median of 1.6 1.5 1.0 0.5 0.0 Source: Peters & Co. Limited estimates based on current…
  22. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 22
    The Whitecap Investment Opportunity Per Share Growth Within Funds Flow Annual Funds Flow exceeds Capital + Dividends Return on capital discipline Disciplined Free Funds Flow Allocation Opportunistic acquisitions and development…
  23. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 23
    Research Coverage AltaCorp Capital Industrial Alliance Securities BMO Capital Markets Laurentian Bank Securities Canaccord Genuity Macquarie Securities Group CIBC World Markets National Bank Financial Cormark Securities Peters &…
  24. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 24
    TSX:WCP www.wcap.ca October 1, 2018 24
  25. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 25
    Slide Notes Slide 3 Commodity price assumptions are actuals for January-August and balance 2018 at WTI US70.00/bbl, C/US0.77, MSW Differential (US-15.00/bbl), WCS differential (US-27.00/bbl) and AECO C1.75/GJ. Funds flow netback…
  26. October 2018 Corporate Presentation – Whitecap Resources Inc. – slide 26
    Oil and Gas Advisory 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…

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