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 Q3 2023 results and 2024 budget 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. If you would like to ask a question during this time, simply press star then number one on your telephone keypad. And if you would like to withdraw your question, please press start and number two. And I would like to turn the conference over to Whitecaps President and CEO, Mr. Grant Fagerheim. Please go ahead, sir.

Thanks, Sylvie, and good morning, everyone, and thank you for joining us here this morning. Here with me today are five members of our management team, our Senior Vice President and CFO, Ton Kang, our Senior Vice President of Production and Operations, Joel Armstrong, our Senior Vice President of Business Development and IT, Dave Monberquette, We also have Joey Wong, our Vice President of the West Division, and Chris Bullen, our Vice President of the East Division, joining us for the first time here today. Before we get started, 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. I'm happy to report that our third quarter was very successful, both operationally and financially. Our active third quarter drilling program resulted in $281 million of capital spending and the drilling of 76 gross successful wells, which generated production of over 157,000 BUE per day. When we announced our first quarter results, we had reallocated portions of our capital program to higher oil weighted assets. And since then, our liquids production has outperformed our expectations. Total liquids production, including oil, condensate, and NGLs, was over 103,000 BUE per day in the third quarter. And with crude oil prices averaging $110 Canadian dollars per barrel, we were able to generate $466 million of fund flow and $184 million of free fund flow. After our dividend payment of $88 million, we allocated approximately $100 million of free fund flow to our balance sheet. resulting in the achievement of our $1.3 billion debt milestone that we had set earlier. Over the past three years, Whitecap has undertaken a large transformation, increasing from approximately 60,000 BUE per day up to approximately 160,000 BUE per day today through a series of transactions, with the XTO transaction last summer being the largest at $1.88 billion. As an all-cash deal, We were able to significantly increase current and future value for our shareholders while protecting our balance sheet through the commodity price cycles. We will now return 75% of our free funds owed to our shareholders through our 73 cent per share dividend on an annual basis on shared repurchases under our NCIB. Since first implementing a base dividend in 2013, we have focused on strong cash returns to shareholders along with continually growing our business. Our focus will continue to provide moderate annual organic production growth of 3% to 8% per year, while growing our dividend commensurate with our targeted annual growth rate. I will now pass it on to Tom to discuss our financial results. Tom?

Thanks, Chris. An excellent quarter for Whitecap, with production, funds low, and free funds low being the highest so far in 2023, and net debt at its lowest. As mentioned, our third quarter funds flow was $466 million, or $0.76 per fully diluted share, which was 12% higher relative to the second quarter. Impacting our third quarter funds flow was current income tax expense of $44 million, which equates to approximately 9% of pre-tax funds flow for the quarter and 4.5% for the nine months ended. We recalculate current taxes quarterly based on current strip prices. As strip prices are volatile, This will cause fluctuations in our quarterly current tax expense as year-to-date accruals need to be trued up. For 2023, we are forecasting a full-year current tax rate of 4% to 6% of pre-tax funds flow. This will increase to 10% to 15% in 2024 as our 100% deductible pools will be fully exhausted. As Grant mentioned, our balance sheet is in great shape and hitting our $1.3 billion net debt milestone is key to managing through commodity price volatility. Our third quarter debt to EBITDA ratio was 0.6 times, and we now have over $1.8 billion of liquidity on our credit facilities. As a reminder, approximately 90% of our liquids production is linked to light oil or condensate pricing, and although differentials on these products have widened slightly into the fourth quarter, the larger decreases that we have seen in heavy oil prices are less impactful to our funds flow. As discussed in the press release, Yesterday afternoon, we anticipate our full-year 2023 production to come in at the low end of our guidance range, and with inflationary pressures at approximately 10% above our original expectations, we anticipate our full-year capital to be at the high end of our guidance range at approximately $950 million. Early-time outperformance of our Montney-type curves has improved the economics through quicker payouts. However, at this time, we have not made any adjustments to our expected reserves on a per-well basis, and along with temporary suspensions of existing wells to complete fracking operations of new wells and some unplanned downtime, we now expect annual production to be 157,000 DOEs per day. I will now pass it back to Grant for his remarks on the 2024 budget.