Whitecap Resources Inc.

Good morning. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to Whitecap Resources Q1 2023 Results Conference Call. Note that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. And if you would like to ask a question during this time, simply press star then the number one on your telephone keypad. And if you would like to withdraw your question, please press star then number two. And I would like to turn the conference over to Whitecaps President and CEO, Mr. Grant Fagerheim. You may begin your conference, sir.

Thanks, Sylvia, and good morning, everyone, and thank you for joining us here today. Here with me are three members of our senior management team, our Senior Vice President and CFO, Ton Kang, our Senior Vice President, Production and Operations, Joel Armstrong, as well as Dave Armbroquette, Senior Vice President, Business Development and Information Technology. Before we get started today, I would like to remind everybody that all statements made by the company during this call are subject to the same forward-looking disclaimer and advisory that we set forth in our news release issued yesterday afternoon. There has been a significant commodity price volatility to start the year, and I'm proud of the way our team has made adjustments to our program and the results they've delivered in the first quarter. We generated almost $200 million of free funds flow in the quarter as our total liquids production of approximately 103,000 barrels per day, including oil and condensate, outperformed our expectations, while we spent approximately $50 million less in capital than anticipated compared to our budget released in September of last year. Our first quarter capital spending of $254 million included the drilling of 69 gross 60.8 net wells, resulting in average production of 155,124 BUE per day in the first quarter. We also completed the disposition of of 10,500 BUE per day of high-cost non-strategic assets during the quarter. Consistent with our commitment to returning a significant amount of free funds flow back to our shareholders, we returned $121 million in the first quarter, or over 60% of free funds flow, to our base dividend of 58 cents per share annually and over $30 million in share repurchases. We ended the quarter with net debt of $1.47 billion, which is nearing our second of two debt milestone targets of $1.3 billion. At current strip prices, we are forecasting that we reach this milestone in mid-2023 and at this time intend on increasing our dividend by 26% to 73 cents per share annually and returning a total of 75% of free funds back to the shareholders through increased base dividend as well as share buybacks. Not only were our teams active in drilling 69 gross wells in the quarter, early in the year it became apparent that natural gas prices were not going to be as strong as originally forecasted. And we made the decision to begin reallocating capital towards our higher net pack drilling inventory. The primary enhancement to our capital program included the additions of five gross 4.4 net high liquid yield gloconitic wells and the removal of one lower liquid Glock drill, as well as the addition of four-well Duvernay pad as a substitute for a Montney pad at Latour. These changes are forecast to result in higher net back at current strip prices, and in particular, these specific Duvernay wells are expected to have higher liquids rates than the planned Montney pad at Latour and will increase the utilization of our 100% owned 15-7 gas processing facility at K-BOT. Since the closing of the X2O acquisition, Our teams have advanced their technical understanding of the DuVernay through offset operator activity along with significant seismic data that we own across the asset, which provides us with the confidence to accelerate the development of our DuVernay play from a technical and operational perspective. Our production guidance of 160,000 to 162,000 BUE per day and capital spending guidance of $900 million to $950 million has not changed despite the delays we encountered earlier this year. on our mountaineering drilling and completion program to a third-party supply chain issue. The outperformance of both of our central Alberta and Saskatchewan business units in the first quarter, along with the continued execution of the remaining capital program, expects it to help offset the delay. I'll now pass it on to Joel Armstrong to provide more detailed operational update. Joel?

Thanks, Grant. First, I'd like to walk through a quick update on our health, safety, and environmental progress throughout the quarter. We continue to have a strong track record of outstanding health and safety performance. While we accumulated a record 3.5 million person hours in the first quarter, our TRIF was outstanding at 0.17, which compares to our already low average of 0.4 over the preceding three years. We're always striving for continuous improvement, but I also want to commend our staff and contractors for keeping safety as a top priority at all of our sites. From an operational perspective, in our central Alberta business unit, we brought on production four of the eight Glock night wells spud in the first quarter, with the remaining expected to be on production by the end of June. Since we acquired a larger position in the southern Alberta Glock in early 2022, our well results have consistently outperformed our expectations. Our four most recent wells with over one year production have produced 11% more than our type curve on a BOE basis, but more importantly, the oil and liquids production has outperformed with first-year average rates that are approximately 50% higher than our type curve, which provides Whitecap with stronger funds, funds slower than projected. As part of our capital enhancements, we've chosen to add five or 4.4 net to our 2023 program targeting the higher liquid yields area of our asset while we've removed one well in our western portion of our assets that are expected to have lower liquid yields. Our full year program includes 15 or 13.8 net well. Now moving over to our northern Alberta business unit where supply chain issues contributed in a deferral of $40 million of capital into the third and fourth quarters. resulting in no additional Montney wells being spud in the first quarter. Completion activities on the seven wells spud last year are ongoing and on-stream dates for the two pads are expected by the end of the second quarter. Both pads are in the Calgary area where liquid rates are expected to be strong and are driving the robust economics. As mentioned, we have substituted out a Montney pad at Latour and replaced it with a Duvernay pad to begin drilling later in the second quarter as these wells are expected to have higher liquid rates than the Paddock Latour. In addition, we expect to bring on 12 Maunee wells prior to the end of the year while 10 Maunee wells will commence drilling operations in 2023 with on-stream dates in the first half of 2024. The Maunee wells have been strong with quicker cleanup periods and higher liquid rates than initially expected. Our most recent four-well pad that came on production in late 2022 has achieved an average rate of 1,200 BOE per day per well over the first 150 days of production. The rates of 570 barrels per day are approximately 3% higher than our type curve expectations. As a result, these wells are expected to pay out in approximately eight months after coming on production. We commenced drilling operations a few weeks ago with our first three-well pad. which we are currently planning to have on stream in the third quarter. We are expecting to drill the follow-up four-wheel pad after breakup, and this pad is expected to be on production in the fourth quarter. In Saskatchewan, results across our west-central, southwest, and southeast Saskatchewan regions all exceeded expectations in the first quarter. Our 14 Frobisher wells were a mix of single, dual, and triple leg wells, with results from the five wells on production for more than 60 days outperforming our expectations by over 20%. In southwest Saskatchewan, our lower Shoneman drills were extremely positive, outperforming our type curve by a wide margin, with two wells adding a secondary impact and improving upwards of 30 inventory locations and offsetting sections. Lastly, I want to touch on cost inflation. We experienced 2% to 4% inflation in the first quarter compared to the fourth quarter of 2022 on both capital and operating costs. The two most significant contributors on capital costs are frack spreads and tubulars and power and labor on operating costs. Despite the continued inflationary pressures, we still anticipate being within our capital guidance of $900 million to $950 million for the year and on operating costs we're expecting the trend towards under $13 per BUE in the fourth quarter with higher production volumes. I'll now pass it on to Tom to discuss our financial results.