CALGARY, May 1, 2014 /CNW/ – Whitecap Resources Inc. (“Whitecap” or the
“Company”) (TSX: WCP) is pleased to announce that it has completed its
previously announced acquisition of certain strategic light oil assets
focused primarily in Whitecap’s Pembina Cardium / West Central core
area, as well as at Boundary Lake in northeast B.C. and the concurrent
disposition of certain Nisku natural gas production and related
facilities located in the Pembina area to Keyera Corp. will be closing
later today following satisfaction of the closing conditions (“the
Acquisition”). On closing of the Acquisition, Whitecap will have paid
$678.0 million cash which is net of customary closing adjustments and
the expected proceeds from the disposition.

The acquired assets greatly enhance our sustainable dividend-growth
model as they are synergistic to our current operations, accretive on
all key measures and consistent with our objective of maximizing total
shareholder return. The Acquisition further strengthens Whitecap’s
ability to pay a long-term dividend while growing organically on a per
share basis, all within internally generated cash flow.

Concurrent with closing of the Acquisition, Whitecap’s credit facilities
have been increased to $1 billion from the previous $600 million. In
addition, as part of the $1 billion credit facility, Whitecap has
layered on an incremental $200 million of five year term debt at an
effective interest rate of 4.7%. Whitecap continues to maintain
considerable financial flexibility after closing of the Acquisition
with more than $300 million of current unutilized borrowing capacity.

Whitecap’s Board of Directors approved a 10.3% increase in the monthly
cash dividend to $0.0625 per share from the current level of $0.0567
per share. The increase is effective for the May dividend payable on
June 15, 2014.

Our current production is approximately 35,500 boe/d (73% oil and NGL’s)
which puts us well on track to meet our 2014 annual production guidance
of 31,600 boe/d (73% oil and NGL’s) which generates $493 million of
cash flow based on a cash flow netback of $42.70/boe. After development
capital spending of $307 million and dividend payments of $168 million,
this will leave Whitecap with $18 million of excess free cash flow in
2014. Our total payout ratio for 2014 is estimated to be 96% which will
be reduced to 84% in 2015. Whitecap’s estimated excess free cash flow
in 2015 is $98 million based on a cash flow netback of $47.45/ boe ⁽¹⁾.

The Acquisition was partially funded through a bought deal public
financing (the “Offering”) through a syndicate of underwriters co-led
by National Bank Financial Inc. and TD Securities Inc. and including
GMP Securities L.P., Dundee Securities Inc., RBC Capital Markets,
Scotia Capital Inc., CIBC World Markets, FirstEnergy Capital Corp.,
Macquarie Capital Markets Canada Ltd., Peters & Co. Limited, Raymond
James Ltd., and Cormark Securities Inc. (collectively, the
“Underwriters”) which closed on April 8, 2014. Pursuant to the
Offering, Whitecap issued 44,643,000 subscription receipts at a price
of $11.20 per subscription receipt for gross proceeds of approximately
$500 million. In accordance with their terms, each Subscription Receipt
was exchanged for one Common Share on May 1, 2014 upon the closing of
the Acquisition and the proceeds from the sale of the subscription
receipts were released from escrow. 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. Holders of the
subscription receipts shall receive an amount equal to the dividend
declared on our Common Shares of $0.0567 per subscription receipt, this
amount will be paid on May 15, 2014 to the holders of subscription
receipts of record on April 30, 2014.

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.

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Cash flow netback based on 2014 average WTI US$96.75/bbl, AECO C$4.40/GJ and CAD/USD 0.90 and 2015 average WTI US$95.00/bbl, AECO C$4.00/GJ and CAD/USD 0.90. Current production and 2014 and 2015 estimates are net of the disposition of certain Nisku natural gas production and related facilities located in the Pembina area to Keyera Corp.

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
the anticipated benefits from the Acquisition, including our beliefs
that the acquired assets are synergistic to Whitecap’s current
operations, highly accretive to our shareholders and consistent with
our objective of maximizing total annual shareholder return and that
the Acquisition will further strengthens Whitecap’s long-term
sustainability to grow organically on a per share basis while paying a
consistent dividend, all within internally generated cash flow; the
impact of the Acquisition on Whitecap’s operations, opportunities,
financial condition, sustainability and overall strategy; expectations
with respect to future cash flow, cash flow netbacks, total payout
ratio, excess free cash flow, net debt, payout ratio and other
financial results, Whitecap’s business and acquisition strategy, the
Company’s financial flexibility and current and expected unutilized
borrowing capacity; the timing of the closing and the expected proceeds
of the disposition; Whitecap’s dividend policy and the increase to the
Whitecap dividend including the timing of the increase and the future
payment thereof; the payment of the dividend equivalent amount to the
holders of subscription receipts, Whitecap’s ability to grow
organically on a per share basis within internally generated cash
flows; 2014 and 2015 production and product mix; and our capital
expenditure program, drilling and development plans and the timing
thereof and sources of funding.

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 our ability to execute and
realize on the anticipated benefits of the Acquisition; 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; ability to market oil and natural gas
successfully; Whitecap’s ability to access capital, and the amount of
future cash dividends that we intend to pay;.

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, including, without limitation, incorrect assessments of
the value of benefits to be obtained from the Acquisition; failure to
realize the anticipated benefits of the Acquisition; unforeseen
difficulties in integrating the assets acquired pursuant to the
Acquisition into Whitecap’s operations; volatility in market prices for
oil and natural gas and foreign exchange rates; operational risks and
liabilities inherent in oil and natural gas operations; uncertainties
associated with estimating oil and natural gas reserves; competition
for, among other things, capital, acquisitions of reserves, undeveloped
lands and skilled personnel; geological, technical, drilling and
processing problems; changes in general economic, market and business
conditions; the accuracy of oil and gas reserves estimates and
estimated production levels as they are affected by exploration and
development drilling and estimated decline rates; the uncertainties in
regard to the timing of Whitecap’s exploration and development program;
fluctuations in the costs of borrowing; political or economic
developments; the ability to obtain regulatory approvals; the
occurrence of unexpected events; the results of litigation or
regulatory proceedings that may be brought against Whitecap; changes in
income tax laws or changes in tax laws and incentive programs relating
to the oil and gas industry; and other factors, many of which are
beyond the control of Whitecap.

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 security holders 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.

This press release contains future-oriented financial information and
financial outlook information (collectively, “FOFI”) about Whitecap’s
prospective results of operations, cash flows, and components thereof,
all of which are subject to the same assumptions, risk factors,
limitations, and qualifications as set forth in the above paragraphs.
FOFI contained in this release was made as of the date of this release
and was provided for the purpose of describing the anticipated effects
of the Acquisition and the dividend increase on Whitecap’s business
operations. Whitecap disclaims any intention or obligation to update or
revise any FOFI contained in this document, whether as a result of new
information, future events or otherwise, unless required pursuant to
applicable law. Readers are cautioned that the FOFI contained in this
document should not be used for purposes other than for which it is
disclosed herein.

Non-GAAP Measures

This press release contains the terms “cash flow”, “free cash flow”,
“operating netbacks”, “cash flow netbacks” and “total payout ratio”
which do not have a standardized meaning prescribed by International
Financial Reporting Standards (“IFRS” or, alternatively, “GAAP”) and
therefore may not be comparable with the calculation of similar
measures by other companies. Whitecap uses cash flow, free cash flow,
operating netbacks, cash flow netbacks and total payout ratio 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, operating netbacks, cash flow
netbacks and total payout ratio 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 adjusted for
changes in non-cash working capital, transaction costs and asset
retirement settlements. Free cash flows are calculated as cash flow
minus development capital expenditures and dividends paid or declared.
Operating netbacks are determined by deducting royalties, production
expenses and transportation and selling expenses from oil and gas
revenue. Cash flow netbacks are determined by deducting interest,
general and administrative expenses and taxes from operating netbacks.
Total payout ratio is calculated as development capital expenditures
and dividends paid or declared divided by cash flow.

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.