Whitecap Resources Inc. (WCP) Earnings Call Transcript & Summary

Good afternoon, and welcome to Whitecap Resources Special Meeting of Shareholders being held this afternoon by audio webcast on the Lumi meeting platform. I would now like to turn it over to Whitecap's Chairman of the Board, Mr. Ken Stickland. Please go ahead.

Thank you very much, Sylvie. Good afternoon, everyone, and welcome to the Special Meeting of Shareholders of Whitecap Resources, Inc. Meeting will now come to order. I'm Ken Stickland, and I'm the Chair of the Board of Directors of Whitecap, and I will act as Chair of the meeting. Today, our meeting is being hosted on the Lumi virtual shareholder meeting platform. This allows registered shareholders and duly appointed proxy holders to vote and to submit questions and comments to the moderator to be read and addressed at the meeting. If you have a question or comment, please submit it through the system. Following the formal portion of our meeting today, Grant Fagerheim, our President and Chief Executive Officer, will make some brief remarks. And after his remarks, he will address any questions. I shall ask [ Jeff Oak ] to act as Secretary of the meeting; and Jacquie Fisher and Nazim Nathoo, representatives of Odyssey Trust Company, to act as scrutineers. We've just got a couple of formalities to get through, and then we can get to the heart of the meeting. Firstly, I've received confirmation from Odyssey as to the due mailing of the meeting materials. I direct that this confirmation, together with copies of those documents, be kept by the secretary with the minutes of this meeting. At this meeting, business may be transacted if 2 or more persons are present holding or representing by proxy not less than 25% of the shares entitled to vote at the meeting. I received a report from the scrutineer, and it shows that there is a quorum of shareholders present at the meeting. I direct that the scrutineers' report be kept by the Secretary with the minutes of this meeting. I now declare that the meeting is regularly called and properly constituted for the transaction of business. We're going to conduct the vote by way of vote cast on the Lumi platform and those submitted by proxy. I understand that the scrutineers have tabulated all the votes received prior to the voting cutoff. If you have previously voted, you do not need to vote again when prompted. By voting again, you will revoke any previous vote made prior to the voting cutoff date. We will now open voting for the share issuance resolution. Particulars of the votes cast on the share issuance resolution will be available on SEDAR+ after the meeting. I direct the scrutineers' report on all matters be annexed to the minutes of this meeting as a schedule. Today, the only item of business is to consider the share issuance resolution to approve the issuance of such number of common shares of Whitecap necessary to satisfy Whitecap's obligations to and in connection with the business combination with Veren Inc. Full text of the share issuance resolution is found at Appendix B to the joint management information circular of Whitecap and Veren dated March 28, 2025.

My name is Thanh Kang, and I move that the share issuance resolution set out at Appendix B to the joint management information circular of Whitecap and Veren be approved.

My name is [ Janice Wood ], and I second the motion.

Thank you very much, Thanh and Janice. Is there any questions submitted from any registered shareholder or proxy holder on the motion? Just pause for a moment to see if any come in.

Chairman, there are no questions on the motion.

Thank you, Tim. As voting has been enabled for the motion, if a shareholder has not voted yet, please do so. We'll have a brief pause here while we allow people to vote, if necessary. [Voting]

I'm going to declare that voting is now closed, I'll have another brief pause until we wait for the scrutineers to let us know whether that motion has passed.

Mr. Chairman, the scrutineers have advised that the share issuance resolution has been approved by more than the requisite majority of votes cast at the meeting.

Thanks, Tim. That's great news. I declare the motion carried. As that concludes the formal business agenda of the meeting, I now declare that the meeting is terminated. Before I turn it over to Grant, I'd like to again thank our shareholders for your support. This has been a momentous day for us. It's a transformative transaction for us. And I know Grant and the team are keen to get going and let this thing work its way to conclusion here next week, which will be our formal closing, but this was a necessary and important step. And again, shareholders, thank you for your support. With that, Grant, I'd like to turn it over to you for any remarks.

Thanks very much, Ken. And firstly, I do want to thank both the Whitecap and Veren shareholders that have placed trust in our management team, our joint Board of Directors and our combined staff to manage this strong and dynamic organization going forward. I would also like to thank the employees of both companies that are not continuing on with us as the personnel decisions we made certainly -- were certainly not easy with a large number of quality personnel we had to choose from. We are excited to bring the new Whitecap Resources together with 1 mission to drive superior per share returns to shareholders. It's time to get it going. Our assets, just to define a few highlights about our company. Approximately, we have 370,000 BOE per day of production, including 235,000 barrels per day of oil and liquids, and 810 million to 820 million cubic feet a day of natural gas. In those, that 370,000 BOE per day, it's 220,000 BOE per day of unconventional Montney and Duvernay production, 150,000 BOE per day of conventional production in Saskatchewan and Alberta, 40% of the conventional production is under secondary or tertiary recovery, giving way to decline less than 20% in the Conventional division. Reserves on a 1P basis of 1.5 billion barrels, on a 2P basis, 2.3 billion BOE under management. Drilling locations, which is critical for us to move forward to continue to grow our business, we have 11,800 drilling locations producing upwards of 20 to 25 years of enviable drilling locations, 4,800 in the Montney and Duvernay, 7,000 in the conventional portion of our business. We are the largest landholder in the Alberta Montney with 975,000 net acres, largest producer in the Duvernay with 93,000 BOE per day of production, 3.2 million acres of conventional prospective lands and the seventh largest Canadian oil and gas producer, fifth largest Canadian oil and -- sorry, I should say, the seventh largest Canadian oil and gas producer and the fifth largest gas producer in Canada. And ultimately, we're just getting it going with this reinvigorated starter kit to move forward from. From a financial perspective, $10 billion market capitalization, $13.5 billion enterprise value, $3.5 billion of forecast net debt at year-end 2025 with $1.1 billion of additional liquidity on our credit facility. We identified synergies to date of over $200 million, capital synergies of $100 million with program and workflow optimization, operating cost synergies of $75 million with operational overlap and optimization of field operations and corporate cost savings of $35 million. We expect to have additional infrastructure optimization opportunities that will bring financial margin enhancement through both streamlined operations and preferential fees. Veren shareholders will now be receiving an enhanced annual dividend of $0.73 per share annually, while Whitecap shareholders maintain the $0.73 per share annual dividend which is even more resilient and sustainable than previously. From a sustainability perspective, we have stress tested the new Whitecap through the $50 WTI or the low level where natural gas prices are currently trading for 2026. So the question is why investor -- why should investors own Whitecap Resources. The combined team will continue to focus on superior and growing returns to and for our shareholders. High-quality production and drilling inventory, combined resources will drive operational efficiencies, a track record of execution, we have a long history of per share growth, 15 years, and consistent operational improvement and success. Fourthly, attractive shareholder return, $0.73 per share dividend, as I talked about, enhanced by share repurchases, long-term synergies create meaningful savings, increased funds flow and returns to shareholders. Balance sheet strength, low leverage provides flexibility through commodity price cycles. In closing, I again want to thank our combined shareholders for your support and confidence in our team. We will not disappoint you. Our combined team looks forward to delivering strong operational and financial performance and reporting back to you as we advance forward-looking post closing that is set for May 12. It's now time to shine and focus on the economic growth for Whitecap and our Canadian energy sector. Thanks for your attention today.

That concludes today's webcast. Thank you.