2014

Whitecap Resources Inc. announces closing of previously announced working interest consolidation of its Valhalla and Garrington light oil core areas

CALGARY, July 31, 2013 /CNW/ - Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to announce the successful completion of its previously announced acquisition of certain strategic light oil assets located predominantly in its core Valhalla and Garrington operated areas of Alberta for total consideration of $173.6 million (the "Acquisition") as previously detailed in our June 27, 2013 press release. The Acquisition adds 2,900 boe/d (56 percent oil and NGLs) of high netback, low base decline production (16 percent current decline rate) in areas where Whitecap already operates 96 percent of the production.

We continue to focus on maximizing total shareholder return and the Acquisition solidifies Whitecap as a premier intermediate oil-weighted, dividend paying company focused on per share growth in cash flow, production and reserves. Whitecap has demonstrated the sustainability of its dividend-growth strategy in the first half of 2013 and will continue to do so for the balance of the year and into 2014 and 2015. We anticipate average production of 20,000 - 21,000 boe/d in the second half of 2013 which will generate cash flow of $145 - $150 million based on a cash flow netback of $39.50/boe. After development capital spending of $75 million and dividend payments of $50.2 million, this will leave Whitecap with $24.8 million of excess free cash flow in the second half of 2013. Our total payout ratio for the second half of 2013 is estimated to be 83 percent and 97 percent for the full year.

The Acquisition was partially funded through a bought deal public financing (the "Offering") which closed on July 18, 2013, through a syndicate of underwriters co-led by GMP Securities L.P. and National Bank Financial Inc. and including Dundee Securities Ltd., FirstEnergy Capital Corp., Macquarie Capital Markets Canada Ltd., TD Securities Inc., CIBC World Markets Inc., Raymond James Ltd., Scotia Capital Inc., Peters & Co. Limited and RBC Capital Markets. Pursuant to the Offering, Whitecap issued 17,172,000 Subscription Receipts of Whitecap at a price of $9.90 per Subscription Receipt to raise gross proceeds of approximately $170 million. In accordance with their terms, each Subscription Receipt was exchanged for one Common Share on July 31, 2013 upon the closing of the Acquisition and the proceeds from the sale of the Subscription Receipts were released from escrow. Holders of Subscription Receipts issued under the Offering are now holders of Common Shares and as a result, will be entitled to the $0.05 per share dividend payable to shareholders of record as of July 31, 2013, which Whitecap previously announced would be payable on August 15, 2013.  Holders of Subscription Receipts are not required to take any action in order to receive the Common Shares and dividends to which they are entitled.

Whitecap Resources Inc. is a dividend paying, oil-weighted company focused on providing sustainable monthly dividends to its shareholders and per share growth through a combination of accretive oil-based acquisitions and organic growth on existing and acquired assets. For further information about Whitecap please visit our website at www.wcap.ca.

Forward-Looking Statements and Other Advisories
This press release contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to the Company's plans and other aspects of Whitecap's anticipated future operations, management focus, objectives, strategies, financial, operating and production results and business opportunities, including expected 2013 and 2014 production, product mix, cash flow, and operating netbacks. In addition, and without limiting the generality of the foregoing, this press release contains forward-looking information regarding the benefits to be acquired from the Acquisition including anticipated rates of return, operating costs, netbacks and other economics, production levels, and the impact of the Acquisition on Whitecap and its results and development plans, including, on its production, cash flow, production weighting, netbacks, development capital spending and free cash flow.

Forward-looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. The forward-looking information is based on certain key expectations and assumptions made by Whitecap's management, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future production rates and estimates of operating costs; performance of existing and future wells; reserve and resource volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labor and services; the impact of increasing competition; and the ability to market oil and natural gas successfully.

Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Whitecap can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on Whitecap's future operations and such information may not be appropriate for other purposes.

Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect our operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

These forward-looking statements are made as of the date of this press release and Whitecap disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Non-GAAP Measures
This document contains the terms "cash flow", "free cash flow" and "operating netbacks" which do not have a standardized meaning prescribed by Canadian GAAP and therefore may not be comparable with the calculation of similar measures by other companies. Whitecap uses cash flow, free cash flow and operating netbacks to analyze financial and operating performance. Whitecap feels these benchmarks are key measures of profitability and overall sustainability for the Company. Each of these terms is commonly used in the oil and gas industry. Cash flow, free cash flow and operating netbacks are not intended to represent operating profits nor should they be viewed as an alternative to cash flow provided by operating activities, net earnings or other measures of financial performance calculated in accordance with GAAP. Cash flows are calculated as cash flows from operating activities less changes in non-cash working capital. Free cash flows are calculated as cash flow minus development capital expenditures. Operating netbacks are determined by deducting royalties, production expenses and transportation and selling expenses from oil and gas revenue.

Note: "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 equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 Bbl, utilizing a conversion ratio at 6 Mcf: 1 Bbl may be misleading as an indication of value.

SOURCE Whitecap Resources Inc.



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