Whitecap Resources Inc. is a small Canadian energy company focused on the development and production of crude oil in western Canada. This differs from other major Canadian operators who are focused on oil sands, heavy oil and natural gas. The company was founded in 2009 and has seen rapid growth in the time since. The company produced only 275 barrels per day of oil, liquids, and equivalents in its first year of operation but that grew to over 14,000 bpd by 2012 and well over 90,00 bpd in 2021.
Whitecap Resources is an oil and gas company whose primary product is light-sweet crude oil. The company’s focus is on the development and production of known resources and less on the exploration side which is key to its capital return strategy. To this end, the company acquires and develops properties in Canada that are located in Alberta, British Columbia and Saskatchewan that are cash-producing and have the potential to boost the company’s growth. As of 2022, 80% of the production was light sweet crude with a smaller 15% in medium oil and 5% in condensates. Production was marketed and delivered across Canada’s network of pipelines, railways, and highways.
The company’s goal for investors is to deliver a high rate of return that often exceeds 10% in dividend yield. The strategy is to produce sustainable growth by funneling free cash in excess of dividend payments back into the company for the acquisition of new, cash-producing properties. The company mitigates its risk with a hedging strategy that helps to insulate the business from oil price volatility. Company hedges are listed on its website.
The operating strategy is simple. First, management identifies potential targets. Next, they certify the validity of claims and the potential gains for the company. Then they develop an extraction plan that is followed up by development, production and cash flow without the risk or costs of exploration. The benefits to investors are a steady and predictable cash flow that is also growing.
Whitecap Resources Inc. is headquartered in Calgary, Canada and is positioning itself as a clean energy company as well. The company’s portfolio includes 3 plants and one of the largest carbon-sequestration plants in the world. The Weybrun-Midale Carbon Dioxide Project funnels waste carbon dioxide from a large, coal-burning electrical facility in western Canada and stores it underground in the Weyburn oilfields. In total, the company sequesters and stores close to 2 million tons of carbon per year and is not only aiding the reduction of greenhouse gasses but is also improving the production of normally unrecoverable crude deposits.
As of November 2022, Whitecap Resources had a total proved plus probable reserves in excess of 769,000 Mboe of crude and equivalents. Most of than 60% of the reserves are light-sweet crude.
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