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July 2019 Corporate Presentation – Whitecap Resources Inc.

Whitecap Resources Inc. · Jul 22, 2019 · 42 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. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 1
    CORPORATE PRESENTATION / JULY 2019 SUSTAINABLE FREE FUNDS FLOW
  2. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 2
    Whitecap Profile TSX: WCP Shares outstanding (MM) Basic 412.9 Fully diluted (1.8% dilutives) 420.6 Market capitalization (B) 1.9 Enterprise value (B) 3.1 2019 production guidance (boe/d) 70,000 72,000 % oil + NGLs 85% 2019…
  3. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 3
    Whitecap Strategy Strong net debt to funds flow ratio Financial Top tier free funds flow generation Strength Balance sheet as a strategic asset Total Shareholder Return Profitable per share growth Operational 10 15%/annum…
  4. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 4
    Strong Balance Sheet Net debt to funds flow 1.7x decreasing to 1.4x Target < 2x Total debt to capitalization 29% Target 20 35% Liquidity 570MM 1.77B total credit facilities Attractive long-term debt with no near-term…
  5. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 5
    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…
  6. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 6
    Operational Excellence Viking West Pembina Cost per Metre Cost per Metre 600 2,000 500 37% Reduction 76% Reduction 1,500 400 (/metre) (/metre) 300 1,000 200 500 100 0 0 2013 2014 2015 2016 2016 2017 2018 2014 2015…
  7. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 7
    Environmental Sustainability 2018 Direct and Indirect Emissions and CO2 Stored 2,000,000 534,000 CO2 Emissions 1,500,000 Indirect CO2 Stored 1,069,000 CO2 Emissions Net CO2 Emissions 1,000,000 Direct CO2 500,000 CO2…
  8. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 8
    Health & Safety a Priority WCP Total Recordable Injury Frequency 0.9 0.8 Safety is a core element of our culture 0.81 Proactive program to prevent, detect and manage 0.7 leaks and spills 0.6 0.68 Reduced the number of spills and…
  9. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 9
    Per Share Growth Focus 80,000 600,000 72,000 Production 2P Reserves 64,000 500,000 71,000 56,000 489,451 400,000 48,000 Production (boe/d) 40,000 (Mboe) 300,000 32,000 24,000 200,000 16,000 100,000 8,000 - 0…
  10. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 10
    Returning Value to Shareholders 6% 0.0285 54 million 968 million Q2/19 dividend Monthly dividend Share repurchases completed Total dividends paid increase (3.27/share) Total Dividends Total Share Buybacks 1,200 4.00 Total…
  11. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 11
    Sustainable Dividends to Shareholders MM US45 US55 US65 Funds flow 542 720 897 Maintenance capital (400) (400) (400) Surplus 142 320 497 Dividends 141 141 141 % of Surplus 100% 44% 28% Dividend is fully funded by funds…
  12. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 12
    Internally Funded Income and Growth Model NO DRIP 98 Total Payout Ratio 125% 93 100 90 100% 80 65 70 59 Total Payout Ratio 75% 60 WTI (US/bbl) 51 49 43 50 50% 40 30 25% 20 10 0% - 2013 2014 2015 2016…
  13. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 13
    Disciplined and Flexible 2019 Budget Defensive 1H/2019 Flexible 2H/2019 Full Year 2019 Funds flow (MM) 335 362 697 Capital expenditures (MM) (165) (285) (450) Dividends (MM) (68) (71) (139) Free funds flow (MM) 102 6 108 Total…
  14. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 14
    2019 WTI Price Sensitivities Oil (USWTI) 55.00 60.00 65.00 FX (C/US) 0.75 0.75 0.75 Oil (Cdn/WTI) 73.33 80.00 86.67 AECO (C/GJ) 1.30 1.30 1.30 Funds flow netback (/boe) 25.00 26.90 29.00 Funds flow (MM) 648 697 752 Development…
  15. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 15
    Free Funds Flow Allocation Funds Flow Less: Budgeted Capital Expenditures Less: Dividends Free Funds Flow 87% 80-90% Balance Sheet Strength 9% 5-10% Share Buybacks 5-10% Dividend Increase 4% 2019 Target Refer to…
  16. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 16
    Core Areas of Operations Light Oil Drilling Inventory 2,827 8 years of inventory BRITISH COLUMBIA ALBERTA Drilling Wells SASKATCHEWAN Inventory 2018 2019 West Central Sask 813 135 100 Northwest Alberta & BC Southwest Sask 776…
  17. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 17
    Opportunistic Acquisition SW Saskatchewan (2016) 180,000 Free Funds Flow (FFF) 160,000 140,000 120,000 100,000 50 Years FFF Totalling 2.4B 80,000 60,000 40,000 20,000 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18…
  18. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 18
    Opportunistic Acquisition SE Saskatchewan (2017) 200,000 Free Funds Flow (FFF) 150,000 42 Years FFF Totalling 3.9B 100,000 50,000 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32…
  19. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 19
    Capital Allocation 2019 Capital Budget Business Unit Target (MM) % West Central Sask Viking 111 25 Northwest Alberta & BC Cardium 107 24 Southwest Sask Atlas/Shaunavon 91 20 West Central Alberta Cardium 88 19 Southeast Sask CO2…
  20. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 20
    Sustainable Growth Assets: Capital + Dividend < Funds Flow Organic Growth Within Funds Flow 220 199 200 180 167 155 155 160 140 108 Fund Flow (MM) 44 120 67 98 121 100 3 80 53 60 111 91 88 95 40 41 20 46 -…
  21. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 21
    IRR 50% 0% 100% 150% 200% 250% Atlas Hz 1.0 (Unconvent'l) Viking ERH 1.5 Refer to slide Notes and Advisories. Wapiti Cardium Standard 1.0 W. Pembina ERH 1.5 Rate of Return Viking Standard 1.0 W.…
  22. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 22
    Depth and Quality of Inventory for Organic Growth Profit to Investment Ratio 2.5 2.0 Historically, inventory expanded through high quality acquisitions Profit to Investment Ratio Average Average == 1.4 1.4 1.5 Focus…
  23. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 23
    Crude Oil Price Diversification Midale Par 25% Midale receives premium to Edmonton light 25% Fosterton Par Fosterton receives premium to WCS 50% Edmonton Par Differential Hedges for 2H/2019 Q3/2019 Edmonton Par…
  24. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 24
    Research Coverage AltaCorp Capital Industrial Alliance Securities BMO Capital Markets Laurentian Bank Securities Canaccord Genuity National Bank Financial CIBC World Markets Peters & Co. Cormark Securities Raymond James Desjardins…
  25. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 25
    TSX:WCP www.wcap.ca July 8, 2019 25
  26. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 26
    Appendix - Generating Discretionary Free Funds Flow 1,200 Discretionary free funds flow Dividends 1,000 Maintenance Capital US45 WTI funds flow break-even 800 Maintenance Capital + Dividends Significant funds flow upside…
  27. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 27
    Appendix Asset Overview 27
  28. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 28
    Northwest Alberta (Deep Basin) Core Growth Asset Asset Summary Depth 1,400 2,700 m Large defined oil-in-place Oil Quality / Benchmark 39o - 32o API / MSW High-quality, short cycle projects Multiple expansion and growth DOIIP…
  29. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 29
    Wapiti Cardium Standard Length 3,500 Net operating income (NOI) 3,000 2,500 2,000 Capital payout < 1 Year 1,500 1,000 35 Years NOI 500 Totalling 14.4MM - 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 Year MM…
  30. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 30
    Dunvegan Standard Length Net operating income (NOI) 2,500 2,000 1,500 Capital payout < 1 .5 Years 1,000 32 Years NOI Totalling 8.3MM 500 - 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 Year MM US50 US55 US60 Capital…
  31. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 31
    West Central Saskatchewan Core Growth Asset Asset Summary Depth 700 m High ROR and short capital payout projects Oil Quality / Benchmark 36o API / MSW Industry leading capital efficiencies DOIIP (Bbbls) 1.3 (1.1 net) Reduced…
  32. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 32
    Viking Standard Length 800 Net operating income (NOI) 700 600 500 Capital payout < 1 Year 400 300 16 Years NOI 200 Totalling 1.6MM 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Year MM US50 US55 US60 Capital 0.8 0.8…
  33. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 33
    West Central Alberta Stable and Predictable Asset Summary Depth 1,300 2,300 m Large oil-in-place and low risk development Oil Quality / Benchmark 39o API / MSW Underdeveloped enhanced oil recovery projects DOIIP (Bbbls) 1.6…
  34. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 34
    West Pembina Cardium Standard Length Net operating income (NOI) 2,500 2,000 1,500 Capital payout < 1.5 Years 1,000 39 Years NOI 500 Totalling 12.4MM 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 Year…
  35. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 35
    Southwest Saskatchewan Sustainable Free Funds Flow Asset Summary Depth 900 1,200 m Large defined oil-in-place in multiple horizons Oil Quality / Benchmark 22o API / FOS Enhanced oil recovery opportunities DOIIP (Bbbls) 3.3 (1.9…
  36. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 36
    SW Saskatchewan Atlas 1,600 Net operating income (NOI) 1,400 1,200 1,000 Capital payout < 1 Year 800 600 37 Years NOI 400 Totalling 5.9MM 200 - 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 Year MM US50 US55…
  37. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 37
    SW Saskatchewan Upper Shaunavon Net operating income (NOI) 1,400 1,200 1,000 800 Capital payout < 1.5 Years 600 400 37 Years NOI 200 Totalling 5.1MM 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 Year MM…
  38. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 38
    Southeast Saskatchewan Free Funds Flow Engine Asset Summary Depth 1,400 m Opportunities to optimize and expand CO2 flood Oil Quality / Benchmark 36o API / Midale Reserve life 40 years Generates 100MM excess cash flow DOIIP…
  39. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 39
    Southeast Saskatchewan Net operating income (NOI) 900 800 700 Capital payout < 4.5 Years 600 500 400 37 Years NOI 300 Totalling 13.1MM 200 100 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27…
  40. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 40
    Slide Notes (contd) Slide 32 1. Net operating income is based on: WTI US50.00/bbl, US55.00/bbl or US60.00/bbl; C/US0.75 and AECO C1.75/GJ all escalated by 2%/annum; MSW Differential US- 8.00/bbl; and WCS Differential US-17.00/bbl. 2.…
  41. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 41
    Advisories (contd) The assumptions used for the 2019 funds flow netbacks used on slides 2 and 13 of this presentation are as follows: The assumptions used for the funds flow netback sensitivities on slide 14 of this presentation are…
  42. July 2019 Corporate Presentation – Whitecap Resources Inc. – slide 42
    Advisories (contd) Drilling Locations 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…

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