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August 2019 Corporate Presentation – Whitecap Resources Inc.

Whitecap Resources Inc. · Aug 2, 2019 · 44 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. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 1
    CORPORATE PRESENTATION / AUGUST 2019 SUSTAINABLE FREE FUNDS FLOW
  2. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 2
    Whitecap Profile TSX: WCP Shares outstanding (MM) Basic 412.9 Fully diluted (1.9% 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. August 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. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 4
    Strong Balance Sheet Debt to EBITDA 1.6x decreasing to 1.4x Target < 2x Total debt to capitalization 30% Target 20 35% Liquidity 570MM 1.77B total credit facilities Attractive long-term debt with no near-term maturities…
  5. August 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. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 6
    Operational Philosophy Safety is a core element of our culture and is considered in everything we do Industry leading 2018 TRIF for publicly disclosed peers at 0.26 Competency based assessment and training throughout all operations…
  7. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 7
    Operational Excellence Viking West Pembina Cost per Metre Cost per Metre 600 2000 500 37% Reduction 76% Reduction 1500 400 (/metre) (/metre) 300 1000 200 500 100 0 0 2013 2014 2015 2016 2017 2018 2019 2014 2015…
  8. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 8
    Environmental Sustainability 2018 CO2 Emission & Sequestration (tonnes/year) 2,000,000 1,500,000 Indirect Emissions Weyburn asset is the largest 534,000 1,000,000 CO2 capture and sequesterer Direct for oil and gas sector in…
  9. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 9
    Health & Safety a Priority WCP Total Recordable Injury Frequency 0.9 0.8 Proactive program to prevent, detect and manage 0.7 0.81 leaks and spills 0.6 0.68 Reduced the number of spills and leaks by 30% in 0.64 2018 compared to…
  10. August 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. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 11
    Sustainable Dividends to Shareholders MM US45 US55 US65 Funds flow 562 753 927 Maintenance capital (400) (400) (400) Surplus 162 353 527 Dividends 141 141 141 % of Surplus 87% 40% 27% Dividend is fully funded by funds flow…
  12. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 12
    Disciplined 2019 Budget 1H/2019 2H/2019 Full Year 2019 Funds flow (MM) 337 371 708 Capital expenditures (MM) (151) (299) (450) Dividends (MM) (68) (71) (139) Free funds flow (MM) 118 1 119 Total payout ratio (%) 65% 100% 83%…
  13. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 13
    2019 WTI Price Sensitivities Oil (USWTI) 53.00 58.00 63.00 FX (C/US) 0.76 0.76 0.76 Oil (Cdn/WTI) 69.74 76.32 82.89 AECO (C/GJ) 1.35 1.35 1.35 Funds flow netback (/boe) 25.70 27.20 28.60 Funds flow (MM) 669 708 745 Development…
  14. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 14
    Capital Allocation 2019 Capital Budget Business Unit Target (MM) % West Central Sask Viking 130 29 Northwest Alberta & BC Cardium 106 23 Southwest Sask Atlas/Shaunavon 98 22 West Central Alberta Cardium 70 16 Southeast Sask CO2…
  15. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 15
    Sustainable Growth Assets: Capital + Dividend < Funds Flow Organic Growth Within Funds Flow 220 194 200 180 170 167 160 96 37 140 127 Fund Flow (MM) 120 131 94 100 57 80 130 52 60 98 94 40 70 40 20 39 - 12 SW…
  16. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 16
    Internally Funded Income and Growth Model NO DRIP 98 Total Payout Ratio 125% 93 100 90 100% 80 65 70 58 Total Payout Ratio 75% 60 WTI (US/bbl) 51 49 43 50 50% 40 30 25% 20 10 0% - 2013 2014 2015 2016…
  17. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 17
    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…
  18. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 18
    Free Funds Flow Allocation Funds Flow Less: Budgeted Capital Expenditures Less: Dividends Free Funds Flow 88% 80-90% Balance Sheet Strength 8% 5-10% Share Buybacks 5-10% Dividend Increase 4% 2019 Target Refer to…
  19. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 19
    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 813 135 118 Northwest Alberta & BC Southwest Sask 776…
  20. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 20
    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…
  21. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 21
    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…
  22. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 22
    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.…
  23. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 23
    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…
  24. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 24
    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…
  25. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 25
    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…
  26. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 26
    TSX:WCP www.wcap.ca August 1, 2019 26
  27. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 27
    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…
  28. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 28
    Appendix Asset Overview 28
  29. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 29
    Northwest Alberta (Deep Basin) Core Growth Asset Asset Summary Depth 1,400 2,700 m Large defined oil-in-place Oil Quality / Benchmark 32o - 39o API / MSW High-quality, short cycle projects Multiple expansion and growth DOIIP…
  30. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 30
    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…
  31. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 31
    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…
  32. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 32
    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…
  33. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 33
    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…
  34. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 34
    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…
  35. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 35
    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…
  36. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 36
    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…
  37. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 37
    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…
  38. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 38
    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…
  39. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 39
    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…
  40. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 40
    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…
  41. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 41
    Slide Notes (contd) Slide 22 1. New well economics are based on: WTI US55.00/bbl; C/US0.75 and AECO C1.75/GJ all escalated by 2%/annum; MSW Differential US-8.00/bbl; WCS Differential US- 17.00/bbl. 2. See Oil and Gas Advisory in the…
  42. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 42
    Slide Notes (contd) Slide 33 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.…
  43. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 43
    Advisories (contd) The assumptions used for the 2019 funds flow netbacks (/boe) used on slides 2 and 13 of this presentation are as follows: 1H/2019 2H/2019e 2019e Petroleum and natural gas revenues 56.15 56.76 56.46 Tariffs (0.50)…
  44. August 2019 Corporate Presentation – Whitecap Resources Inc. – slide 44
    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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