Whitecap sets quarterly record for second quarter

BY BRIAN ZINCHUK

Whitecap Resources Inc. delivered record financial and operating results in the second quarter of 2026, supported by continued execution across the asset base, strong commodity price realizations and ongoing cost reductions.

Financial performance was a quarterly record. Funds flow totaled $1.4 billion, or $1.11 per share and, after capital expenditures of $430 million, generated free funds flow of over $900 million. Those numbers were roughly double company’s numbers for the same period the previous year, with production that’s grown substantially, but hasn’t doubled.

On Aug. 9, Whitecap had 10 rigs across Canada, including four in Saskatchewan, according to RiggerTalk.com.

Whitecap’s operating netback increased to $43.84 per boe, reflecting continued operating efficiencies and strong price realizations, the company said in a July 29 release. Operating costs have declined by approximately 13 per cent to $11.88 per boe since the closing of the Veren transaction5, while realized pricing for crude oil and condensate averaged $127.82 per barrel during the quarter.

Second quarter production averaged 388,894 boepd (61 per cent liquids), exceeding the company’s internal forecast by approximately 8,000 boepd. The production outperformance was driven by asset level performance in the Duvernay at Kaybob and base production optimization initiatives in Central Alberta.

The strength of Whitecap’s operating performance and the continued momentum across Whitecap’s asset base have resulted in a second increase to Whitecap’s 2026 production guidance. Whitecap now expects annual production to average between 384,000 and 386,000 boe/d, an increase of 5,000 boepd at the mid-point from Whitecap’s previous guidance range of 378,000 to 382,000 boepd. Given the shorter cycle times and the strong results achieved to date, the company expects 2026 capital expenditures to be at the high end of its previously announced $2.0 billion to $2.1 billion budget range.

Whitecap said its continued focus on disciplined, per-share growth has generated meaningful value for shareholders. Over the past five years, production per share6 has increased by approximately 70 per cent, which equates to a compound annual growth rate of 11 per cent.

During the first six months of 2026, the company reduced net debt by approximately $900 million to $2.5 billion, resulting in a net debt to annualized funds flow ratio of 0.5 times. This rapid deleveraging further strengthens Whitecap’s balance sheet and enhances Whitecap’s ability to sustainably return capital to shareholders while continuing to advance Whitecap’s highest-return development opportunities, it said.

The combination of strong production, record funds flow, record free funds flow and meaningful debt reduction demonstrates the strength of Whitecap’s expanded asset base and the benefits of the Veren transaction being fully realized. The company remains focused on safely and efficiently executing Whitecap’s development program, realizing further operational synergies and delivering sustainable growth in production and funds flow per share.

Second Quarter 2026 Highlights

Record Funds Flow: Generated record quarterly funds flow of $1.4 billion or $1.11 per share. Whitecap’s operating netback of $43.84 per boe was driven by strong realized oil and condensate prices and continued reductions in operating costs.

Significant Free Funds Flow: Strong production performance, combined with disciplined management of controllable operating and capital costs, resulted in free funds flow of $925 million, or $0.76 per share1, during the second quarter of which $221 million of dividends were paid to shareholders.

Production Outperformance: Production averaged 388,894 boe/d, representing an increase of 3 per cent on a per share basis compared to the second quarter of 2025. Production was above internal expectations, driven by successful base production optimization, shorter cycle times and stronger than forecast performance from new wells.

Pristine Balance Sheet: Reduced net debt to $2.5 billion, further enhancing Whitecap’s financial flexibility. At quarter end, Whitecap had approximately $1.7 billion available liquidity and a net debt to annualized funds flow ratio of 0.5 times.

Operations overview

During the quarter, the company spudded 24 (24.0 net) unconventional wells in the Montney and Duvernay and 23 (16.8 net) conventional wells across Alberta and Saskatchewan. Following the end of spring breakup, the company increased its active drilling program from six rigs to ten rigs in June.

Strong operational execution continued across Whitecap’s asset base, with development learnings and best practices being shared across teams and assets. This collaborative approach is improving execution, supporting stronger well economics and enhancing the future development potential of Whitecap’s portfolio.

Unconventional Highlights

Work on Whitecap’s Lator 04-13 Montney facility continues to progress with construction approximately 90 per cent complete. Both new pad and current area production will be directed to the 04-13 facility upon commissioning and start up in the fourth quarter, supporting meaningful initial utilization of the 35,000 – 40,000 boepd capacity.

Whitecap’s third plug-and-perf (P&P) pilot pad on Whitecap’s Gold Creek and Karr Montney assets will be spud in the coming months at Gold Creek. Collection and interpretation of diagnostic data on the first two P&P pilot pads at Karr is ongoing, and the company is confident that, as one of the many well design inputs, the ability to select pad specific completion technology will further improve overall capital efficiency and risk-adjusted returns of Whitecap’s Gold Creek and Karr assets.

Duvernay production at Kaybob is now in the stated capacity range of 115,000 – 120,000 boe/d and we expect to maintain this production level for the balance of 2026. Capital efficiency improvements at Kaybob have led to lower costs and the deferral of activity into the second half of the year, further improving the operating free cash flow capabilities of the asset.

Conventional Highlights

Whitecap’s conventional assets are 80 per cent liquids weighted and, with a low base decline rate of approximately 20 per cent, the reinvestment rate is highly competitive with other Western Canadian long life oil weighted assets. Second quarter production results were strong and when combined with reduced drilling activity during spring breakup and elevated light oil prices, operating free cash flow was significant.

Whitecap’s well-established and consolidated conventional land positions also provide the ability to maximize productive capability during periods of planned and unplanned facility downtime. During the quarter, base production of Whitecap’s central Alberta conventional assets outperformed Whitecap’s expectations through optimization opportunities and the successful diversion of a portion of impacted production during a third-party turnaround.

The shared workflows and technical learnings across the business are also translating into improved capital efficiency and results on Whitecap’s conventional assets. As an example, Whitecap’s Alberta conventional Cardium, Charlie Lake and Glauconite assets have all experienced improved production results and economics after incorporating well design changes brought on by Whitecap’s development workflow. These changes are also being incorporated into Whitecap’s future inventory, ultimately improving the long-term sustainability of these assets.

Outlook

Whitecap’s strong second quarter production performance, continued growth in free funds flow and the benefit of higher crude oil prices created a meaningful opportunity to accelerate debt repayment and further strengthen the company’s financial flexibility, it said. The company said the strength of its balance sheet provides maximum optionality to enhance total shareholder returns as they execute Whitecap’s counter-cyclical strategy through commodity price cycles. Whitecap’s long-term financial objective is to allocate capital towards the company’s highest return opportunities that increase long-term free funds flow while maintaining a net debt to funds flow ratio of less than 1.0 times through the cycle.

The Canadian energy industry and specifically Whitecap, is well positioned to capture incremental market share as global demand for secure, reliable and responsibly produced energy continues to grow, the company said. “Recent announcements supporting additional crude oil egress from Western Canada to North American and global markets are encouraging. As incremental heavy oil production is required to fill this additional capacity, demand for condensate used as diluent is also expected to increase.”

“Whitecap is strategically positioned to benefit from these developments. The company is the fourth-largest condensate producer in Western Canada, with current production of approximately 60,000 bpd. In addition, approximately 70 per cent of Whitecap’s 4,700 Unconventional drilling locations are liquids-rich, providing a significant inventory of opportunities to support future demand driven growth.”

With a deep, high-quality inventory, a strong balance sheet, broad commodity exposure and a demonstrated track record of operational execution, Whitecap said it is well equipped to capitalize on improving market access, growing demand for Canadian energy and emerging opportunities across crude oil, condensate and natural gas.