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UPDATE: Whitecap Resources Down 1.5%; Announces Transition To Sustainable Intermediate Light Oil Dividend-and-Growth Co, 2013 Guidance

Whitecap Resources Inc. (WCP.TO) announced its plans to transition to a pre-eminent intermediate size light oil producer focused on paying sustainable dividends and delivering long term per share growth.

STRATEGIC RATIONALE:

On this, it said: "Since inception Whitecap has delivered 33% compounded annual production growth on a fully diluted per share basis. We have strategically acquired and integrated light oil assets that have predictable production profiles, shallow declines, strong netbacks, and large repeatable light oil development drilling inventories. All these factors allow us to seamlessly transition to a dividend-and-growth model that can support sustainable dividend payments to our shareholders and also provide continuing annual per share growth of 3-5%.

"Our assets currently under management provide high operating netbacks and, when combined with our low corporate cost structure, generate strong cash flow netbacks which will allow us to fully fund our planned dividend payments and capital program through internally generated funds from operations. Our basic payout ratio for 2013 is expected to be 32% and we anticipate total capital spending and dividend payments to represent less than 95% of our funds from operations."

OUTLOOK FOR THE FUTURE:

It said: Since we initially contemplated dividend payments in February 2012 we have done a significant amount of stress testing on our modeling assumptions - considering commodity prices, decline rates, capital efficiencies, and debt levels to ensure long-term sustainability. We believe that over the next three years we are capable of providing a reliable and sustainable dividend of $0.60 per share per year with the objective to increase the dividend paid over time while providing 3-5% annual per share growth."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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