Whitecap Resources Inc. announces 182% increase in 2011 year-end reserves

CALGARY, Feb. 13, 2012 /CNW/ - Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to announce its 2011 year-end oil and gas reserves evaluation. The increases reflect our accretive oil acquisitions in 2011 and our ability to efficiently execute our capital program on both our existing and acquired oil assets.

The following highlights and reserves information DO NOT INCLUDE the recent Viking Dodsland acquisition of Compass Petroleum Ltd. ("Compass").

Highlights include:

  • Increased proved plus probable reserves by 182% to 38.6 mmboe (72% oil, 3% NGLs) and proved reserves by 210% to 25.6 mmboe (72% oil, 4% NGLs).
  • On a per share basis (fully diluted) increased proved plus probable reserves by 65% and proved reserves by 81%.
  • The proven reserves component of proved plus probable reserves has increased from 60% to 66% year over year.
  • Proved plus probable reserve additions replaced 1,307% of production in the year and proved reserve additions replaced 942% of production in the year.
  • Achieved finding and development ("F&D") costs of $9.79 per proved plus probable boe and $11.66 per proven boe, excluding changes in future development costs.
  • Achieved finding, development and acquisition ("FD&A") costs of $14.95 per proved plus probable boe and $20.74 per proven boe, excluding changes in future development costs.
  • Generated a FD&A recycle ratio of 3.1 times on proved plus probable reserves based on our estimated 2011 operating netback of $46.00/boe.
  • Maintained a long reserve life index of 12.7 years on a total proved plus probable basis based on our December 2011 exit production rate of 8,300 boe/d.

The recently closed acquisition of Compass on February 10, 2012 added the Dodsland Viking assets to our portfolio of low risk, high netback oil properties. Our oil development inventory is now 679 (426 net) locations which will allow us to continue to provide per share growth in cash flow, production and reserves for our shareholders.

The following tables summarize certain information contained in the independent reserves report prepared by McDaniel & Associates Consultants Ltd. ("McDaniel") as of December 31, 2011 and do not include the recent acquisition of Compass. The report was prepared in accordance with definition, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Additional reserve information as required under NI 51-101 will be included in the Company's Annual Information Form which will be filed on SEDAR by March 30, 2012.

Summary of Company Gross Reserves (Forecast Pricing)(1)

  As at December 31, 2011(2) As at December 31, 2010(3) % Change
Proved producing 10,152 25,469 658 15,055 5,064 197%
Proved non-producing 530 2,920 63 1,080 383 182%
Undeveloped 7,820 8,617 234 9,490 2,810 238%
Total proved 18,503 37,005 955 25,625 8,257 210%
Probable 9,164 19,802 489 12,954 5,419 139%
Total proved plus probable 27,667 56,807 1,444 38,579 13,676 182%

Summary of Before Tax Net Present Values of Future Net Revenue (Forecast Pricing) ($M)(4)(5)

  As at December 31, 2011(2) As at December 31, 2010(3) % Change
  0% 5% 10% 10%
Proved producing 684,580 509,419 408,491 126,647 223%
Proved non-producing 35,840 29,140 24,661 6,409 285%
Undeveloped 359,908 197,703 119,196 27,225 338%
Total proved 1,080,328 736,262 552,348 160,281 245%
Probable 650,202 281,020 153,799 85,163 81%
Total proved plus probable 1,730,530 1,017,281 706,147 245,443 188%

2011 F&D and FD&A Costs(6)(7)(8)

  Total Proved plus Probable Total Proved
2011 Capital Expenditures (000s)    
Development 139,311 139,311
Net acquisitions(9) 264,372 264,372
Change in FDC 157,288 138,654
2011 Reserves Additions (Mboe)    
Development & revisions 14,230 11,950
Net acquisitions 12,764 7,510
2011 F&D Costs ($/boe)    
Excluding FDC 9.79 11.66
Including FDC 12.61 17.59
2011 FD&A Costs ($/boe)    
Excluding FDC 14.95 20.74
Including FDC 20.78 27.87


(1)  Gross Company reserves are the Company's total working interest share before the deduction of any royalties and without including any royalty interests of the Company.
(2)  Based on McDaniel's January 1, 2012 escalated price forecast.
(3)  Based on McDaniel's January 1, 2011 escalated price forecast.
(4)  It should not be assumed that the present worth of estimated future cash flow presented in the tables above represents the fair market value of the reserves.  There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material.  The recovery and reserve estimates of Whitecap's crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.  Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein.
(5)  All future net revenues are stated prior to provision for interest, general and administrative expenses and after deduction of royalties, operating costs and estimated future capital expenditures.  Future net revenues have been presented on a before tax basis.  Estimated values of future net revenue disclosed herein do not represent fair market value.
(6)  Finding and development costs both including and excluding acquisitions and dispositions have been presented above. While NI 51-101 requires that the effects of acquisitions and dispositions be excluded, FD&A costs have been presented because acquisitions and dispositions can have a significant impact on the Company's ongoing reserve replacement costs and excluding these amounts could result in an inaccurate portrayal of the Company's cost structure.
(7)  The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.
(8)  Figures are subject to audit.
(9)  The capital expenditures include the announced purchase price of corporate acquisitions rather than the amounts allocated to property, plant and equipment for accounting purposes.  The capital expenditures also exclude capitalized administration costs and transaction costs.

"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.  In addition, given that 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: 1, utilizing a conversion on a 6: 1 basis may be misleading as an indication of value.

Note Regarding 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 Whitecap's plans and other aspects of Whitecap's anticipated future operations. In addition, and without limiting the generality of the foregoing, this press release contains forward-looking information regarding Whitecap's development inventory, the anticipated benefits to be obtained from the Compass acquisition, the future net revenue from the Company's reserves, pricing, inflation and exchange rates and future development costs. 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.  In addition, statements relating to "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced 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, labour and services; the impact of increasing competition; ability to market oil and natural gas successfully, Whitecap's ability to access capital.

Although Whitecap 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. Whitecap'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 Whitecap 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.

SOURCE Whitecap Resources Inc.

For further information:

Grant Fagerheim, President & CEO
Thanh Kang, VP Finance and CFO

Whitecap Resources Inc.
500, 222 - 3 Avenue SW
Calgary, AB, T2P 0B4

Main Phone (403) 266-0767
Fax (403) 266-6975

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