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4Q 2019 Earnings Presentation – Whitecap Resources Inc.

Whitecap Resources Inc. · Feb 27, 2020 · 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. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 1
    CORPORATE PRESENTATION / FEBRUARY 2020 SUSTAINABLE GROWTH AND FREE FUNDS FLOW
  2. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 2
    Whitecap Profile TSX: WCP Shares outstanding (MM) Basic 408.8 Fully diluted (1.8% dilutives) 416.3 Market capitalization (B) 1.8 Enterprise value (B) 3.0 2020 production guidance (boe/d) 71,000 72,000 % oil + NGLs 85% 2020…
  3. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 3
    Sustainable Business Focused on Shareholder Returns Top Tier Light Oil Asset Base Sustainability High funds flow netbacks Safety is a core to our culture Long life and lower declines Leaders in ESG performance Strong capital…
  4. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 4
    2019 Accomplishments Budget Actual Average Production 70,000 72,000 boe/d 71,050 boe/d Capital Expenditures 425 - 475 million 404 million Financial Reduced net debt 103 million Increased dividend by 5.6% and paid total…
  5. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 5
    2019 Accomplishments (contd) Operational Increased reserves per share across all categories PDP 7%, 1P 9%, 2P 11% Reserve additions replaced production in all categories PDP 100%, 1P 133%, 2P 169% Identified 244 new drilling…
  6. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 6
    Focused on Free Funds Flow 2020 Forecast 2020 Objectives Average production (boe/d) 71,000 72,000 Continue to strengthen balance sheet Funds flow netback (/boe) 23.50 Reduce net debt 100MM MM Efficient execution of the capital…
  7. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 7
    Strong Balance Sheet Total Debt Capacity 1.77B Net Debt 1.10B Average Cost of Debt 3.6% Attractive long-term debt with no near-term maturities Amount Type Rate Maturity date 200 MM Bank - Fixed 3.25% 2024 200 MM Sr. Notes - Fixed…
  8. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 8
    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…
  9. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 9
    2020 WTI Price Sensitivities Oil (USWTI) 50.00 55.00 60.00 FX (C/US) 0.74 0.75 0.76 Oil (Cdn/WTI) 67.57 73.33 78.95 AECO (C/GJ) 1.80 1.80 1.80 Funds flow netback (/boe) 20.50 23.50 26.70 Funds flow (MM) 536 615 699 Development…
  10. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 10
    Core Areas of Operations Light Oil Drilling Inventory 2,970 8 - 10 years of inventory BRITISH COLUMBIA ALBERTA Drilling Wells SASKATCHEWAN Inventory 2019 2020 West Central Sask 854 95 76 Northwest Alberta & BC Southwest Sask…
  11. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 11
    Capital Allocation Business Unit Target (MM) % Southeast Sask CO2 Flood 61 17 Southwest Sask Atlas/Shaunavon 65 18 West Central Sask Viking 79 22 Northwest Alberta & BC Cardium 100 28 West Central Alberta Cardium 48 13…
  12. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 12
    Sustainable Growth Assets: Capital + Dividend < Funds Flow Self Funded Business Units 220 200 180 158 153 160 145 136 140 Millions 120 36 108 97 88 66 100 80 60 60 100 40 79 61 65 20 48 0 Southeast Sask…
  13. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 13
    Internally Funded Income and Growth Model NO DRIP 98 Total Payout Ratio 125% 93 100 90 100% 80 65 70 57 Total Payout Ratio 75% 55 60 WTI (US/bbl) 51 49 43 50 50% 40 30 25% 20 10 0% - 2013 2014 2015 2016…
  14. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 14
    Per Share Growth Focus 80,000 Production 600,000 2P Reserves 72,000 64,000 500,000 71,500 56,000 507,365 400,000 48,000 boe/d Mboe 40,000 300,000 32,000 24,000 200,000 16,000 100,000 8,000 - 0 2010 2011 2012…
  15. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 15
    Returning Value to Shareholders 5.6% 0.0285 81 million 968 million Q2/19 dividend Monthly dividend Share repurchases completed Total dividends paid increase (as at Jan 31, 2019) (3.37/share) 1,400 Cumulative Dividends 4.50…
  16. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 16
    Karr Montney JV Oil Rich Resource Opportunity Montney Inventory Expansion Pay 100% on 2 drills and 1 completion to earn 34 (21.5 net) Montney sections Potential for 144 (84.2 net) drilling locations (30,000 boe/d) upside 65%…
  17. 4Q 2019 Earnings 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 Thousands Totalling 2.4B 80,000 60,000 40,000 20,000 - 1 2 3 4 5 6 7 8 9 10 11 12 13…
  18. 4Q 2019 Earnings 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 Thousands 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…
  19. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 19
    Environmental Sustainability Weyburn Carbon Capture Internationally Recognized Project: Largest Carbon Capture & Utilization Storage (CCUS) project in the world CO2 injection commenced in October 2000 Have safely captured and stored…
  20. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 20
    Environmental Sustainability 2018 CO2 Emission & Sequestration 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 the 500,000…
  21. 4Q 2019 Earnings 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. 4Q 2019 Earnings 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. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 23
    Crude Oil Marketing Active seller and shipper on 6 oil feeder PL connected to Enbridge mainline 33% of production is protected from Enbridge apportionment rail and Midale - Light Oil direct sales to refineries Price…
  24. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 24
    Research Coverage AltaCorp Capital Laurentian Bank Securities BMO Capital Markets National Bank Financial Canaccord Genuity Peters & Co. CIBC World Markets Raymond James Cormark Securities RBC Capital Markets Desjardins Capital…
  25. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 25
    TSX:WCP www.wcap.ca February 27, 2020 25
  26. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 26
    Appendix Asset Overview 26
  27. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 27
    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…
  28. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 28
    Wapiti Cardium Standard Length 3,500 Net operating income (NOI) 3,000 2,500 2,000 Capital payout < 1 Year Thousands 1,500 1,000 35 Years NOI 500 Totalling 14.4MM 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35…
  29. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 29
    Dunvegan Standard Length Net operating income (NOI) 2,500 2,000 1,500 Capital payout < 1 .5 Years Thousands 1,000 32 Years NOI Totalling 8.3MM 500 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 Year MM US50 US55…
  30. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 30
    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…
  31. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 31
    Viking Standard Length 800 Net operating income (NOI) 700 600 500 Capital payout < 1 Year Thousands 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…
  32. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 32
    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…
  33. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 33
    West Pembina Cardium Standard Length Net operating income (NOI) 2,500 2,000 1,500 Capital payout < 1.5 Years Thousands 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…
  34. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 34
    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…
  35. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 35
    SW Saskatchewan Atlas Net operating income (NOI) 1,600 1,400 1,200 1,000 Capital payout < 1 Year Thousands 800 600 37 Years NOI 400 Totalling 5.9MM 200 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37…
  36. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 36
    SW Saskatchewan Upper Shaunavon Net operating income (NOI) 1,400 1,200 1,000 800 Capital payout < 1.5 Years Thousands 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…
  37. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 37
    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…
  38. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 38
    Southeast Saskatchewan Net operating income (NOI) 900 800 700 Capital payout < 4.5 Years 600 500 Thousands 400 37 Years NOI 300 Totalling 13.1MM 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22…
  39. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 39
    Slide Notes (contd) Slide 18 1. Free funds flow is calculated as net operating income less capital expenditures. 2. Free funds flow to from the date of acquisition to December 31, 2019. 3. Free funds flow discounted 10% is based on: WTI…
  40. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 40
    Slide Notes (contd) Slide 31 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. 4Q 2019 Earnings Presentation – Whitecap Resources Inc. – slide 41
    Advisories (contd) The assumptions used for the 2020 budget funds flow netbacks (/boe) used on slide 2 of this presentation are as follows: 2020 Budget Petroleum and natural gas revenues 51.18 Tariffs (0.55) Processing income 0.35…
  42. 4Q 2019 Earnings 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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