pcNewsWire – Whitecap Resources Inc. (TSX: WCP) has closed an issuance of CDN $200 million senior secured notes which have an annual coupon rate of 3.54% and mature in 7 years on May 31, 2024.
Proceeds from the notes will be used to repay a portion of Whitecap’s outstanding bank debt.
May 31, 2017
WHITECAP RESOURCES INC. ANNOUNCES CLOSING OF SENIOR SECURED NOTES AND PROVIDES OPERATIONAL UPDATE
CALGARY, ALBERTA – Whitecap Resources Inc. (“Whitecap” or the “Company”) (TSX: WCP) is pleased to announce that it has closed an issuance of Cdn$200 million senior secured notes which have an annual coupon rate of 3.54% and mature in 7 years on May 31, 2024. The notes were issued by way of a private placement, pursuant to a note purchase agreement and rank equally with Whitecap’s obligations under its bank facilities. Proceeds from the notes will be used to repay a portion of Whitecap’s outstanding bank debt.
Whitecap has now secured $400 million of term debt at very attractive long-term fixed interest rates that mature in five and seven years. These notes, combined with the bank credit facility of $900 million, provide Whitecap with $1.3 billion of total borrowing capacity. Whitecap continues to maintain a strong balance sheet with an estimated 2017 net debt to funds flow ratio of under 1.5 times based on current strip pricing.
The senior secured notes may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption from such registration. Whitecap has not registered and will not register the senior secured notes under the U.S. Securities Act of 1933, as amended. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the senior secured notes in any state in which such offer, solicitation or sale would be unlawful.
On April 28, 2017, the non-operated Coleville gas plant in west central Saskatchewan was unexpectedly shut-in due to operational safety issues, negatively impacting our production volumes, primarily at Lucky Hills and Whiteside, by 1,700 boe/d (8.4 MMcf/d and 300 bbls/d of associated natural gas liquids). The shut-in is ongoing with anticipated production volumes to be fully restored by the end of June 2017. The impact to our funds flow is minimal as there is no impact to our crude oil volumes. We have also been impacted in Q2/17 by unexpected third party facility downtime in the Deep Basin and at Boundary Lake.
As a follow up to our very active Q1/17 capital program after a prolonged period of wet conditions in some of our operated areas, our Q2/17 capital program is now underway with four drilling rigs operational; one in West Pembina, two in west central Saskatchewan and one in southwest Saskatchewan. We anticipate adding one additional drilling rig in the Deep Basin once surface access is available in order to complete the remainder of our Q2/17 program. We have also commenced completion of the 11 drilled but uncompleted wells from Q1/17.
As a result of the uncontrollable downtime and slower than anticipated start to our Q2/17 capital program, we are now forecasting our Q2/17 production to average between 56,000 – 57,000 boe/d, however, our average production guidance for 2017 remains unchanged at 57,000 boe/d.
Whitecap remains well positioned to deliver strong shareholder returns with production per share growth of 14% in 2017, a sustainable dividend paid from funds flow and a total payout ratio of approximately 75%. We will look to effectively redeploy our free funds flow to enhance our dividend and also our per share growth as we move through the balance of 2017.
For further information:
Grant Fagerheim, President & CEO
Thanh Kang, CFO
Whitecap Resources Inc.
3800, 525 – 8th Avenue SW
Calgary, AB T2P 1G1
Main Phone (403) 266-0767
SOURCE: Whitecap Resources Inc.