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 2024 Results and 2025 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 it over to Whitecaps president and CEO, Mr. Grant Fagerheim. Please go ahead.

Thanks, Sylvia, and good morning, everyone, and thank you for joining us. There are five members of our management team here with me today, our senior vice president and chief financial officer, Ton Kang, our senior vice president, business development and information technology, Dave Monbriquette, and our senior vice president, production and operations, Joel Armstrong. our Vice President of the West Division, Joy Wong, and our Vice President, East Division, Chris Bullen. 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 earlier this morning. I'm once again very pleased to report that we had another strong quarter, both operationally and financially, achieving average production above our forecast at 173,000 302 BUE per day and generating funds flow of $409 million or 68 cents per share. In particular, our liquids production continues to outperform our expectations as condensate production from our Montney assets at Musgrove and Duvernay assets at KBOB has held in better than we had expected and we continue to see strong production from our southeast Saskatchewan publisher drilling program. We invested $273 million to drill 67 wells, 63.8 net wells, resulting in $136 million of free funds flow generated in the quarter and $350 million of free funds flow generated for the nine months of 2024. We returned over $200 million to shareholders during the third quarter, including $108 million of dividends and $117 million of share repurchases on our normal course issuer bid. Our asset level performance and operational execution has exceeded our expectations through the first nine months of 2024. At present, we are tracking above our previous annual guidance of 167,000 to 172,000 BUE per day and now expect to average 172,500 BUE per day in our third production guidance increase for the year. Turning to 2025. Our budget plan incorporates our current well designs and development strategies that have led to operational success so far in 2024. The budget includes capital investments of $1.1 to $1.2 billion to achieve average production of $176,000 to $180,000 per day, representing 5% per share growth at the midpoint of the range. Our capital allocation process is integrated in the region's compete for capital across both of our divisions, focusing on capital payout and profitability. Our 2025 capital investments, split evenly between our unconventional and conventional assets, reflect the highly economic inventory of both types of assets and is optimized for long-term sustainability. For 2025, our focus on our conventional assets is to maintain production between 110,000 to 115,000 BUE per day, 75% to 80% liquids, while improving capital efficiencies and expanding our inventory duration. Historically, we have had great success finding ways to improve our conventional inventory through updated drilling designs, longer laterals, refined development plans, or simply better operational execution. As such, we expect we will continue to be successful with our inventory enhancement initiatives and extend the duration and contributions from our conventional assets for many years to come. On our unconventional asset base, which includes our Montane and Duvernay assets, in 2025, we are focused on maximizing throughput of our operated facilities at Masrow and Cabot as we build out our next phase of growth at Latour for startup in 2027. We have achieved initial success in our approach to the unconventional development and customization of drilling and completion design, including both horizontal and vertical inter-well spacing across each of our Montane and Duvernay assets, and expect this to continue in 2025. These assets are forecasted to grow at an annual rate between 10% to 15% well into the future. Joey and Chris will provide additional details on our 2025 plans for each division. I will now pass this on to Tom to further discuss our financial results and our 2025 budget. Tom? Thanks, Grant.

Third quarter funds flow was strong at $409 million, or $0.68 per diluted share. WTI prices averaged over $100 per barrel Canadian during the quarter as the low Canadian dollar continues to benefit Whitecaps revenues. AECO natural gas prices averaged $0.65 per GJ in the quarter and contributed to less than 3% of our revenues. We realized hedging gains of $14.9 million in the quarter, of which $12.6 million was attributed to our natural gas hedges. Current tax expense of $53 million was 48% lower than the previous quarter, as we recognized $33 million in capital gains on the partial disposition of our KBOB and Muzzleville facilities in the second quarter. In addition, the lower commodity price outlook for the remainder of the year prompted a true-up to taxes paid in the first half and resulted in an overall decrease to cash taxes paid. As Grant mentioned, we expect to now exceed the top end of our previous guidance to average 172,500 BUEs per day in 2024, which puts our Q4 production at approximately 170,000 BUEs per day. This takes into account the lower CAPEX spending in the fourth quarter of $200 million and timing of production additions. For 2025, our production guidance of 176,000 to 180,000 BUEs per day is forecast to generate $1.6 billion to $1.7 billion in funds flow at U.S. $70 per barrel WTI and $2.50 per GJ ACO. Our main cost assumptions for 2025 include royalties of approximately 16%, operating costs approximately $14 per BOE, transportation costs of $2.10 per BOE, and cash tax equating to 11% to 12% of pre-tax funds flow. Our G&A per BOE at $1 per BOE is one of the lowest in the sector. We'll also direct approximately $40 to $45 million on abandonment and reclamation activities on our assets in 2025. Our balance sheet at the end of the third quarter is in excellent shape with net debt of $1.4 billion, which equates to a debt-to-EBITDA ratio of only 0.6 times. Upon closing of the PGI transaction, which is pending regulatory approval, pro forma net debt is expected to be approximately $1 billion or a debt to EBITDA ratio of only 0.5 times. With our bank credit facility now unsecured and a public investment grade rating of BBB low by DBRS, this positions us well to issue bonds in the near term to diversify our debt structure and reduce our cost of borrowing. I will now pass it off to Joey for more remarks on our West Division results and 2025 plans. Thanks, Don.