Whitecap Resources (TSE:WCP) executives told investors the company delivered “transformational” results in 2025 following its combination with Veren Inc., highlighting higher production per share, improved margins despite weaker commodity prices, and sizable shareholder returns supported by free cash flow.
Operational and financial highlights
President and CEO Grant Fagerheim said Whitecap exited 2025 with strong momentum, noting fourth-quarter production averaged more than 379,000 barrels of oil equivalent per day (BOE/d), which exceeded expectations due to accelerated timing and asset outperformance. He added that fourth-quarter production per share was the highest quarterly result in the company’s history.
Whitecap also tied its 2025 performance to its stated shareholder return framework. Fagerheim said the company delivered a 15% total shareholder return—at the high end of its 10% to 15% target range—comprised of 6% production per share growth, a 7% dividend yield, and 2% from share repurchases.
Margin improvements and balance sheet position
In prepared remarks re-delivered after a technical interruption, CFO Don (Thanh) Kang said 2025 results demonstrated the “resilience and structural strength” of the business in a weaker commodity backdrop. He cited average WTI pricing of just under US$65 per barrel (down about 15% year over year) and AECO natural gas averaging under CAD 1.70 per GJ.
Despite those prices, Kang said cash flow netbacks increased year over year, which he attributed to structural improvements rather than commodity tailwinds. He outlined three primary drivers:
- Operating efficiencies: Accelerated synergy capture following the Veren combination, field-level optimization, and economies of scale. Whitecap’s fourth-quarter operating costs declined to CAD 12.24 per BOE, an 11% decrease from 2024.
- Corporate and financing efficiencies: Absolute G&A was reduced through elimination of duplicative costs. Kang also noted an upgrade in credit rating to BBB (flat), which lowered the company’s overall cost of debt and improved financial flexibility. He added that acquired non-capital losses reduced cash taxes and enhanced free cash flow.
- Product mix and realized pricing resilience: Management said more than 60% of production is liquids (predominantly light oil and condensate), and that narrow differentials and foreign exchange tailwinds helped offset benchmark weakness.
On leverage and liquidity, Kang said year-end net debt was CAD 3.4 billion, representing less than 1x annualized fourth-quarter funds flow. He added Whitecap had CAD 1.5 billion of available liquidity.
Unconventional operations: Montney, Musreau, Lator, and Kaybob
Vice President of the Unconventional Division Joey Wong highlighted well performance and facility progress across the portfolio. He said new wells averaged roughly 10% above initial expectations in the area discussed, supported by base optimization initiatives such as artificial lift refinements and operating parameter adjustments.
At Musreau, Wong said a six-well pad was brought online, bringing production to approximately 17,000–18,000 BOE/d at about 70% liquids. He said the facility is constrained due to stronger-than-expected condensate performance, with planned gas lift enhancements in the third quarter expected to increase capacity to a 20,000 BOE/d nameplate. Wong also noted condensate performance has translated into approximately 20% higher EURs than originally anticipated. He said Musreau generated over CAD 100 million of operating free cash flow in 2025.
At Lator, Wong said the company drilled a three-well pad in the fourth quarter and recently spud a five-well pad, with a total of 11 wells expected to be spud this year ahead of a Phase I facility startup. Construction of a 35,000–40,000 BOE/d facility was described as on schedule and on budget, with commissioning targeted for the fourth quarter.
At Kaybob in the Duvernay, Wong said a “wine rack” development configuration is demonstrating improved reservoir access and reduced well interference, with seven pads online using that configuration (33 wells). Early pilot pads with roughly 18 months of production history were said to support 10% to 20% improvements in well performance. Based on these changes and base optimization, management now expects to reach debottlenecked productive capacity of 115,000–120,000 BOE/d by year-end—well ahead of the prior expectation of the second half of 2027. At $60–$70 WTI, Wong said the company expects asset-level free cash flow of $650 million–$850 million at capacity, requiring 50% to 55% reinvestment to maintain production.
Conventional division: Saskatchewan, Bakken, Alberta, and EOR
Vice President of the Conventional Division Chris Bullin said the conventional business averaged approximately 140,000 BOE/d in 2025, supported by $500 million of investment and 199 wells drilled. He said stronger well performance and improved efficiencies drove roughly 3,000 BOE/d of production outperformance in the fourth quarter.
Bullin described the conventional division as about 80% liquids-weighted with a sub-20% decline rate, supported by roughly 52,000 barrels per day of dedicated waterflood and EOR production.
In Saskatchewan, Bullin said Whitecap solidified its position as the largest and most active oil producer in the province following the integration of Veren assets. In the Frobisher, he said average IP180 production exceeded expectations by 41%, driven by longer laterals, enhanced reservoir contact, and operational efficiencies. Since entering the play in 2021, he said Whitecap has organically added nearly 200 premium locations, extending runway by about four years, and improved capital efficiency by 26% versus initial type curve assumptions (based on IP365 performance).
In the Bakken, Bullin highlighted a first three-mile, eight-leg, open-hole multilateral well that delivered an IP90 rate 38% above expectations, with a record 34,600 meters drilled. He said the company is incorporating extended-reach open-hole multilateral drilling into its development program and cited over 1,500 Bakken locations in inventory.
In Alberta, Whitecap drilled 39 wells primarily in the Glauconite and Cardium. Bullin said the Glauconite has grown from about 13,000 BOE/d at acquisition in 2021 to roughly 27,000 BOE/d, supported by improved well designs, longer laterals, infrastructure debottlenecking, and base optimization. In the Cardium, he said frac design learnings improved capital efficiency by about 15% in 2025. He also reiterated the importance of the EOR portfolio, including the Weyburn CO2 flood, and said the company continues to evaluate additional EOR opportunities.
2026 outlook, hedging, and gas marketing diversification
Fagerheim said operational momentum carried into the first quarter of 2026, prompting Whitecap to provide first-quarter production guidance of 375,000–380,000 BOE/d, above its internal forecast of 370,000–375,000 BOE/d at the time the budget was released. Full-year guidance remained unchanged at 370,000–375,000 BOE/d on capital spending of CAD 2.0 billion–CAD 2.1 billion.
In response to questions on hedging and capital allocation, management said it does not adjust forecasts until pricing is “in the bank,” and noted the company’s planning assumptions included CAD 65 WTI, a light oil differential of CAD 4, a condensate differential of CAD 2, and a CAD 0.74 Canadian dollar. Fagerheim also said the company lowered its natural gas price assumption to CAD 2 per GJ due to what it viewed as oversupply.
On hedging, management reiterated a strategy to hedge 25% to 35% of production. Kang said approximately 25% of 2026 oil production is hedged at a floor of just under CAD 85 per barrel, and 29% of 2026 natural gas production is hedged at approximately $3.75 per GJ. He also said the company is adding smaller incremental positions in 2027 and noted a preference for using costless collars given backwardation in the curve.
Whitecap also discussed efforts to reduce long-term AECO exposure. Kang said the company announced a 10-year agreement with Centrica for 50,000 MMBtu per day indexed to European TTF pricing, and a second 10-year agreement to deliver 35,000 MMBtu per day into Chicago at Henry Hub pricing. Management said the agreements are intended to enhance price stability and increase exposure to global and U.S. markets, and added it aims to move about 50% of pricing outside AECO over time, with the two contracts increasing exposure outside AECO by about 8% to 9%.
During the Q&A, Kang also addressed cash taxes, saying Whitecap ended the year with CAD 9.3 billion of tax pools, including roughly CAD 500 million of non-capital losses. He said the Veren transaction came with about CAD 1 billion of non-capital losses, about half of which were used in 2025, with the remaining CAD 500 million expected to be used in 2026—contributing to a lower 2026 tax rate guidance of 3% to 5% of funds flow. Beyond 2026, he said management would expect a tax rate in the 5% to 8% range.
About Whitecap Resources (TSE:WCP)
Whitecap Resources Inc is a leading Canadian energy company committed to delivering reliable returns to shareholders through the responsible development of oil and natural gas assets in the Western Canadian Sedimentary Basin. With a strong track record of profitable growth and a sustainable dividend, Whitecap delivers long-term value to investors, supported by investment-grade financial strength.
