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January 2019 Corporate Presentation – Whitecap Resources Inc.

Whitecap Resources Inc. · Jan 7, 2019 · 29 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. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 1
    CORPORATE PRESENTATION / JANUARY 2019 FOCUSED ON LONG-TERM SUSTAINABILITY
  2. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 2
    Disciplined Strategy Financial flexibility Balance sheet strength and credit capacity Return on capital focused investing Growth within funds flow 6 to 8% production per share growth Dividend growth supported by free funds…
  3. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 3
    Whitecap Profile TSX: WCP Shares outstanding (MM) Basic 413.2 Fully diluted (1.5% dilutives) 419.5 Market capitalization (B) 2.0 Enterprise value (B) 3.3 2019 production guidance (boe/d) 70,000 72,000 % oil + NGLs 85% 2019…
  4. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 4
    Defensive 1H/2019 Budget Defensive 1H/2019 Funds flow (MM) 276 Capital expenditures (MM) (135) Dividends (MM) (67) Free funds flow (MM) 74 Total payout ratio (%) 73% Average production (boe/d) 69,000 Funds flow netback (/boe)…
  5. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 5
    Disciplined and Flexible 2019 Budget Flexible 2H/2019 Full Year 2019 Funds flow (MM) 276 339 615 Capital expenditures (MM) 135 315 450 Dividends (MM) 67 68 135 Free funds flow (MM) 74 (44) 30 Total payout ratio (%) 73% 113%…
  6. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 6
    2019 WTI Price Sensitivities Oil (USWTI) 45.00 55.00 65.00 FX (C/US) 0.71 0.75 0.79 Oil (Cdn/WTI) 63.38 73.33 82.28 AECO (C/GJ) 1.37 1.37 1.37 Funds flow netback (/boe) 19.52 23.75 27.83 Funds flow (MM) 506 615 721 Development…
  7. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 7
    Funds Flow Allocation Target Allocation 10% 5% 2% Organic Growth 43% Decline Mitigation 10% 20% HS&E 5% 43% Facilities 2% Dividends 20% Free Funds Flow 20% 20% Free Funds Flow Priorities 1. Debt reduction and balance…
  8. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 8
    Solid Balance Sheet Conservative debt use and management Maintain 1x to 2x net debt to annual funds flow Total debt capacity: 1.7 BN Unutilized debt capacity: 400 MM Attractive Long-Term Debt with Manageable Profile Amount…
  9. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 9
    Commodity Price Risk Mitigation Objectives: Mitigate price volatility and protect economic returns Target 40 to 60% of net royalty volumes hedged 12 months forward Target 20 to 40% of net royalty volumes hedged 12 24 months forward…
  10. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 10
    Per Share Growth Focus 80,000 600,000 72,000 Production 2P Reserves 64,000 500,000 71,000 56,000 1,141 400,000 48,000 Production (boe/d) 40,000 (Mboe) 300,000 32,000 24,000 200,000 16,000 100,000 8,000 - 0…
  11. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 11
    Internally Funded Income and Growth Model NO DRIP TotalPayout Total Payout Ratio Ratio 98 125% 93 100 90 100% 80 66 70 Total Payout Ratio 75% 55 60 WTI (US/bbl) 51 49 43 50 50% 40 30 25% 20 10 0% -…
  12. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 12
    Returning Cash to Shareholders Cumulative Dividends Paid 4.00 1,200 3.50 1,000 3.00 800 2.50 (MM) 2.00 600 / Share 1.50 400 1.00 200 0.50 - - 2013 2014 2015 2016 2017 2018 2019e Cumulative Dividends (MM)…
  13. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 13
    Capital Allocation 2019 Capital Budget Business Unit Target (MM) % West Central Sask Viking 112 25 Northwest Alberta & BC Cardium/Dunvegan 112 25 Southwest Sask Atlas/Shaunavon 94 21 West Central Alberta Cardium 81 18 Southeast…
  14. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 14
    Core Areas of Operations Drilling Inventory Light Oil Drilling Inventory 2,897 10 years of inventory BRITISH COLUMBIA ALBERTA Drilling Wells SASKATCHEWAN Inventory 2018 2019 West Central Sask 910 135 103 Northwest Alberta &…
  15. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 15
    Whitecaps Balanced Portfolio Growth assets - West Central Alberta - West Central Sask - Deep Basin Alberta Boe/d Low decline assets - Southwest Sask - Southeast Sask - Boundary Lake Stable production underpinned by…
  16. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 16
    IRR 0% 50% 100% 150% 200% 250% 300% Atlas Hz 1.0 (Unconvent'l) Viking ERH 1.5 Wapiti Cardium Standard 1.0 Refer to slide Notes and Advisories. W. Pembina ERH 1.5 Viking Rate of Return Standard…
  17. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 17
    Profit to Investment Ratio 0.0 0.5 1.0 1.5 2.0 2.5 3.0 W. Pembina ERH 1.5 Atlas Hz 1.0 (Unconvent'l) Wapiti Cardium Standard 1.0 Refer to slide Notes and Advisories. W. Pembina Standard 1.0 Viking ERH…
  18. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 18
    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…
  19. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 19
    Crude Oil Price Diversification Midale Par 24% Fosterton Midale receives premium to Edmonton light 25% Par Fosterton receives premium to WCS Edmonton 51% Par Differential Hedges for 1H/2019 Edmonton Par differential…
  20. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 20
    Benchmarking 2019e 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 (December 2018) Peer…
  21. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 21
    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 (December 2018)…
  22. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 22
    Benchmarking North American Oil Plays Half-Cycle Payout Period (Years) 5.0 WCP Oil Plays 4.0 North American Oil Plays 3.0 Median of 2.0 2.0 1.0 0.0 Source: Peters & Co. Limited estimates based on US60.00/B WTI,…
  23. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 23
    The Whitecap Investment Opportunity Financial Flexibility with Balance Sheet Strength Per Share Growth Within Funds Flow Disciplined Free Funds Flow Allocation Safety, Environment and Governance focus 23
  24. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 24
    Research Coverage AltaCorp Capital Laurentian Bank Securities BMO Capital Markets Macquarie Securities Group Canaccord Genuity National Bank Financial CIBC World Markets Peters & Co. Cormark Securities Raymond James Desjardins…
  25. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 25
    TSX:WCP www.wcap.ca January 4, 2019 25
  26. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 26
    Slide Notes Commodity price assumptions used throughout this presentation for 2018 are actuals for January-November and December at WTI US52.00/bbl, C/US0.75, MSW Differential (US-34.65/bbl), WCS differential (US-43.10/bbl) and AECO…
  27. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 27
    Forward-Looking Statements (contd) The assumptions used for the 2019 funds flow netbacks (/boe) used in this presentation are as follows: 1H/2019e 2H/2019e 2019e Petroleum and natural gas revenues 50.10 52.27 51.25 Tariffs (0.70)…
  28. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 28
    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…
  29. January 2019 Corporate Presentation – Whitecap Resources Inc. – slide 29
    Oil and Gas Advisory (contd) This presentation also discloses drilling inventory in three categories: (i) proved locations; (ii) probable locations and (iii) unbooked locations. Proved locations and probable locations are derived from…

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