Whitecap Resources Inc. ($WCP)

Good morning, and welcome to Whitecap Resources Annual Meeting of Shareholders being held this morning 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.

Thanks very much, Sylvie. Good morning, everyone. What a difference a year makes. We'll have more on that later. I'd like to welcome you to the Annual Meeting of Shareholders of Whitecap Resources Inc. The meeting will now come to order. I'm Ken Stickland, and I'm the Chairman of the Board of Directors of White Cap, and I'll act as chair of the meeting. 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. After his remarks, he'll address any questions. For the mean, I'm going to ask Jeff Oak to act as Secretary of the meeting; and Jacquie Fisher and Paul Bedard, representatives of Odyssey Trust Company to act as scrutineers. I have received confirmation from Odyssey as to the mailing of the meeting materials and the financial statements for the year ended December 31, 2025. I direct that this confirmation, together with copies of these documents, be kept by the Secretary with the minutes of this meeting. We'll now move to Quorum in the scrutineers report. Business may be transacted at this meeting 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.

Mr. Chairman, the scrutineers' report shows that there is a quorum of shareholders present at the meeting.

I direct that the scrutineers' report be kept by the Secretary and next to the minutes of this meeting as a schedule. I now declare that the meeting is regularly called and probably constituted for the transaction of business. We'll conduct each vote today 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 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 voting cutoff. We will now open voting for all of the resolutions. Particulars of the votes cast on all matters will be made available on SEDAR plus after the meeting. I would first like to present the financial statements for the year ended December 31, 2025, these are located on the Lumi dashboard page. The next item of business is to fix the number of directors.

My name is Thanh Kang, and I move that the number of directors to be elected at this meeting be fixed at 11.

Thanks, Thanh.

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

Thanks, Janice. Is there any discussion or questions submitted from any registered shareholder or proxy holder on that motion?

Mr. Chairman, there are no questions on that motion.

Thank you, Tim. The next item of business is the election of directors of Whitecap. The advanced notice date for the nomination of directors having passed into Whitecap's advance notice bylaw, the only individuals entitled to be nominated as directors at this meeting are the persons named as nominees in Whitecap's information circular. Therefore, as directed by the Board and in accordance with the information circular, Scott D. Althen; Grant B. Fagerheim; Jodi J. Jenson Labrie; Vineeta Maguire; Glenn A. McNamara; Barbara Munroe; Stephen C. Nikiforuk; Myron Stadnyk; myself, Kenneth S. Stickland; Bradley J. Wall; and Grant A. Zawalsky are nominated as directors of Whitecap to hold office until the next annual election of Directors or until their successors are elected or appointed, subject to the provisions of the Business Corporations Act Alberta and the bylaws of White Cap.

The next item of business is the appointment of auditors.

I move that PricewaterhouseCoopers LLP be appointed auditors of Whitecap until the next annual meeting or until their successor is appointed and that their remuneration, as such, be fixed by the Board of Directors.

I second the motion.

Thank you, Thanh and Janice. The next item of business is to approve a nonbinding advisory resolution concerning Whitecap's approach to executive compensation.

I move that the nonbinding advisory resolution on Page 26 of the information circular of Whitecap dated March 25, 2026, be approved.

I second the motion.

Thank you. Is there any discussion or questions submitted from any registered shareholder or proxy holder on that motion?

Mr. Chairman, there are no questions on that motion.

Thank you. As voting has been enabled for all previous motions, if a shareholder has not voted yet, please do so now. And we'll just pause to allow final voting. [Voting]

Voting is now closed. We'll have another pause to receive voting information from [indiscernible].

Mr. Chairman, the scrutineers have advised that all resolutions have been approved by more than the requisite majority and that those nominated have been duly elected as the directors of Whitecap.

Thank you, Tim. I declare the motions carried and the nominees for the Board of Directors elected. We'll now move to other business. Are there any questions submitted to the formal business of the meeting?

Mr. Chairman, we have received a question from Ruth Saldana of Share, who has been appointed by proxy holder by British Columbia Teachers' Federation holder of 2,876 shares. Her question is, Whitecap's acquisition of Veren in 2025 made it one of the largest energy companies in Canada. In your financial reports, you highlight physical risks of climate change, including a long-term shift in climate patterns and extreme weather conditions posing the risk of causing operational difficulties. In the latest climate engagement Canada benchmark, Whitecap not meet the indicator on board oversight of climate governance where years prior, you did, as the CEO is responsible for overseeing [indiscernible] change. With global commodity price letility and general uncertainty, investors would like strong incentivized oversight and competencies connected to transition risks, can you disclose a named position at Board level with responsibility over these business strategies and risks? And that's the question.

I'll take that. Thank you for your question, Ruth. The Veren transaction was indeed transformative. White caps governance expressly provides for direct board oversight of climate-related issues. The best reference for you is the mandate for our Board's Sustainability and Advocacy Committee of which Mr. Fagerheim, as a Director, is a member and Mr. Wall is the Chair. The first item on that Board committee's mandate is oversight of climate-related and other sustainability-based risks and opportunities. The full mandate is available on our website. I hope that addresses your issue.

Are there any other further questions on the formal business of the meeting? Mr. Chairman, we've received no further questions on the formal business of the meeting.

Thank you. There being no further questions, the chair would entertain a motion and the meeting be terminated.

I move that this meeting be terminated.

I second the motion.

The meeting operator is now activating a poll to vote on the termination of the meeting. We'll wait for that result to be tabulated.

Mr. Chairman, the adjournment motion is carried.

Thank you. I declare the meeting terminated, and I'm going to invite Mr. Fagerheim to deliver his remarks on behalf of Whitecap management. Before I do that though, and I turn it over to Grant, I'd like, on behalf of the Board, to personally thank our entire team at White Cap. 2025 has been a transformative year with the Veren transaction. The dedication and your clear execution have positioned us well going forward. Thank you to everyone. Grant, over to you.

Thanks very much, Ken, and thanks, everyone, for being on the line today. Firstly, I would like to thank our shareholders that have placed the trust in our management team our staff and our Board of Directors to manage this dynamic and growing organization. The future looks very bright, and we are confident that we will continue to deliver strong results as we have over the past year. I would also like to thank our Board of Directors for their guidance over this past year. In addition to our Chair, Ken Stickland, who was speaking today, we have Glenn McNamara, Steve Nikiforuk, Vineeta Maguire, Brad Wall and Grant Zawalsky, we welcome all of our new Board members. We've been working together for almost a year now, and I would like to thank Barbara Munroe, Jodi Jenson Labrie, and Myron Stadnyk for their contributions over this past year. Next, I would like to thank and welcome Scott Althen to the Board as of March 1. Scott brings tremendous experience and financial knowledge to our Board, and we're excited to have him join the team. Welcome, Scott. We're looking forward to continuing to build on these working relationships going forward. Of even greater importance, I would like to thank our entire Whitecap team, both new and long-term Whitecap employees for their efforts over the 2025 year and congratulate each and everyone for the exceptionally strong operational and financial results over this past year. 2025 was truly a transformational year as Kenneth referenced, for Whitecap that included the integration of Verint's assets and personnel beginning 1 year ago today. Over the course of the year, we made remarkable strides in delivering our honor retentions and increasing value from the combined asset base. The Veren transaction closed on May 12, 2025, creating at a time a $15 billion large-cap E&P company, which now is a preeminent $22 billion company, all with keeping leverage under 1x debt to cash flow. We currently introduced -- recurrently produced approximately 380,000 BOE per day and are the largest Alberta Montney [indiscernible] the largest Duvernay operator, the largest light oil producer in Saskatchewan and the fifth largest natural gas producer in Western Canada. We hold 10,500 BOE per day of 10,500 high-quality locations in inventory, providing decades of growth potential with significant light oil, liquids and natural gas commodity optionality within. For perspective, we're only doing 265 of those locations in 2026. The office and importantly, the field personnel to [indiscernible], integrating our teams and teams and assets. We moved through our initial synergy forecast quicker than expected, included in our 2026 budget was $300 million of synergies. And with continued efficiency gains and operating cost reductions, we're quickly approaching $400 million of annual savings, almost double our original projection of $210 million. I will now go through specific operational, financial and shareholder achievements made in 2025. From an operational achievement perspective, average production for the full year was 37,245 BOE per day, comprised of 11,155 barrels per day of crude oil, condensate and NGLs and 697 million cubic feet per day of natural gas. We drilled 113 wells, 13 unconventional wells in the Montney and Duvernay and 199 conventional wells across Alberta and Saskatchewan. We made significant improvements in all [indiscernible] of our operations over the past year from well designed to development planning to execution and ultimately how we produce our wells have all benefited from substantial technical improvements and collaboration across our teams. Along with longer-than-expected productivity from Ls, we have improved our capital efficiency by 12% relative to our initial expectations on the combined asset base 1 year ago today. This has been made possible through improvements in our drilling and completion KPIs, which include a 27% increase in our drilling rates, penetration and 12% increase in our proppant pump per day. Along with our actively got completions, we included 24/7 monitoring from our [indiscernible] Calgary. Our effectiveness has improved, and we're seeing the inner production results. Corporately, our capital efficiency measures have improved by 12% relative to our initial expectations 1 year ago, which is both better and much quicker than we had expected. Construction has progressed on our 4013 Motor facilities throughout 2025, and we have now accelerated our own production start-up time line to Q4 of 2026. And as of today, we are 70% complete with major equipment such as compressors now on site, which keeps us on track with our forecast. Our conventional assets are a differentiating factor for Whitecap. The high liquids weighting and cash flow netback, coupled with a low decline rate and continuous improvement on well results and inventory provide us stable free cash flow. Notable achievements in 2025 and include the full utilization of [indiscernible] resulting in a 10% well cost savings on current future drilling inventory in the area. Next, on the acquired Bakken assets, we are pushing open hole multi-haul technology and operations, driving 2 recent 3-mile open-hole multilateral wells pushing the boundaries on this technology will unlock and improve inventory, and we are actively exploring the application of this technology across our conventional -- our entire conventional asset base. Our year-end 2025 2P reserves now stand at 2.2 billion BOEs, resulting in a long duration reserve rate for over 16 years. That said, we have only booked approximately 30% of our total identified inventory, providing us significant running room and flexibility for decades to come. For financial achievements. For 2025, we earned our second highest fund copper share in Whitecap's history at $2.95 per share, which equates to $2.9 billion all with WTI averaging less than $65 per barrel and AECO gas at $1.60 per GJ in 2025. Our focus is on generating higher free funds flow for our shareholders. To do this, we are focused on both margin improvements and capital cost decreases. We discussed the strides we made through deal synergies at the outset, which as a reminder, were $210 million upon the close of the deal and now stand at $400 million, made up of capital, operating and corporate costs. Our free funds flow in 2025 was $900 million, and at current strip prices, this increases to over $2 billion in 2026. We ended 2025 with a strong balance sheet with $3.4 billion of net debt, equating to a net debt to annualized fourth quarter funds flow ratio of 1x. Our credit rating was also upgraded during 2025 to BBB's lab by DBRS, and we issued $300 million of 3 investment-grade notes at a low coupon of 3.71%. To talk about return of capital to shareholders, return our capital to our shareholders is a focus of our capital allocation strategy. We currently pay a dividend -- an annual dividend of $0.73 per share which equates to $735 million for 2025. We also had an auto normal course issue bid, where we spent $93 million on share repurchases in 2025. In total, we returned $900 million to shareholders in 2025, another significant achievement. Our outlook -- our performance is underpinned by a few key attributes that define our strategy and differentiate Whitecap. We went into a bit more detail in each of our first quarter conference call. But in the interest of time, I would just list them off at this time. Operational execution, number one. Number two, asset quality, duration and optionality; number three, high net dock; number four, low decline rate; number five, a strong balance sheet; and number six, Whitecap personnel. And to talk a little bit more about that, we believe that wake-up that our people are our most important asset and without their intelligence, hard work, dedication and T-post attitude, we wouldn't be where we are today. I'm speaking about our white cap personnel and our plans to continue to advance and evolve our organization with a proctor succession plan, we are pleased to introduce several changes to our executive team from within Whitecap. Firstly, I'm proud to say that Joey Wong will be taking on the role of President of White Cap with responsibilities include driving continued technical and operational collaboration along with capital budget in coordination with the unconventional and conventional divisions. Joey will continue to report through to myself with my role changing to Chief Executive Officer moving to more oversight and strategic direction. Joey has over 20 years of experience -- industry experience and has been with Whitecap for the past 12 years, progressing through various technical and leadership roles and has been responsible for development planning capital execution and overall performance of our unconventional Montney and Duvernay assets since 2023. Joey is also involved in investor engagement alongside Thanh Kang, our CFO, and myself for the past 1.5 years. Secondly, Travis Twelt will be promoted to the role of Chief Operating Officer. Travis has over 25 years of the industry experience has been with Whitecap since 2010 under the stewardship of our Senior Vice President, Production and Operations, Joel Armstrong. Thomas has been our Vice President of Operations since 2020 and previously was Vice President Production. [indiscernible] is now responsible for directing our operating teams consisting of our drilling and completion operations, where they experienced significant progress and efficiency gains over the past couple of years as a result of his and the team's efforts over the past several years. Number three, [indiscernible], Jeff Missouri is being promoted to VP Operations. Jeff has over 20 years of industry experience in various drilling, completion and operating roles and has been with Whitecap since 2021. In Jeff's current role, he has been responsible for our unconventional operations, consisting of drilling and completions operations. He and Travis have been working closely together since Jeff joined Whitecap and we're looking forward to bring forward to Jeff bringing his experience and expertise to our entire set of assets. We are very confident of these 3 individuals, along with various other evolutionary advancement in our organization are able to step into new roles to allow wage count to continue on our path to bringing strong operational and financial success to Whitecap. Lastly, on the personnel side, we advised that one of our key long-term officers of Whitecap is retiring at the end of June at the end of June after 16 years at Whitecap with a total of 40 years in the energy sector. Joel Armstrong has been a significant and positive impact on our company with his direct oversight of operations production and health and safety. A huge thank you to Joel. I know that the leaders mentioned above, along with the others will continue to carry the torch, as you have in the past. In closing, I again want to thank and congratulate our entire team for a remarkable 2025 year including the very successful integration of bringing 2 sizable asset bases together just 1 year ago today. Operational momentum has continued into 2026, which is an outstanding and we continue to look forward to keeping shareholders in focus as we execute on our business plan this year and well into the future. Thank you for your time today and interest in Whitecap. All the best to you from all of us at Whitecap. Cheers.

That concludes today's webcast. Thank you.