Q4 2025 Whitecap Resources Inc Earnings Call

February 24, 2026

Operator: 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 Q4 and 2025 Results and Reserves Conference Call. 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 questions during this time, simply press Star, then the number one on your telephone keypad. If you would like to withdraw your question, please press Star, then number two. I would like to turn over to Whitecap's President and CEO, Mr. Grant Fagerheim. Please go ahead.

Speaker #2: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. And if you would like to ask questions during this time, simply press star, then the number 1 on your telephone keypad.

Speaker #2: If you would like to withdraw your question, please press star, then number 2. And I would like to turn it over to WHITECAP's President and CEO, Mr. Grant Fagerheim.

Speaker #2: Please go ahead. Thanks, Sylvie, and good morning, everyone, and thank you for joining us here today. There are five members of our management team here with me today.

Grant Fagerheim: Thanks, Sylvie. Good morning, everyone, and thank you for joining us here today. There are five members of our management team here with me today. Our Senior Vice President and CFO, Thanh Kang, our Senior Vice President of Production and Operations, Joel Armstrong, our Senior Vice President of Business Development and Information Technology, David Mombourquette, our Vice President of Unconventional Division, Garett Ursu, and our Vice President of the Conventional Division, Chris Bullin. 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. 2025 was another transformational year for Whitecap as we follow up to our 2022 transaction with XTO Energy Canada. The combination with Veren Inc. was deliberate.

Speaker #2: Our senior vice president and CFO, Thanh Kang, our senior vice president, production and operations, Joey Armstrong, our senior vice president, business development and information technology, Dave Monberquet, our vice president of unconventional division, Joey Wong, and our vice president of the conventional division, Chris Bullen.

Speaker #2: Before we get started today, I would like to remind everybody that all statements made by the same forward-looking disclaimer and advisory that we set forth in our news release issued yesterday afternoon.

Speaker #2: 2025 was another transformational year for Whitecap as we follow up on our 2022 transaction with XTO Canada. The combination with Barron was deliberate. We pursued it to increase scale, strengthen our asset base, add to our inventory position, and structurally improve profitability.

Grant Fagerheim: We pursued it to increase scale, strengthen our asset base, add to our inventory position, and to structurally improve profitability. The strategy is already delivering measurable results. We exited the year with strong operational momentum. Q4 production averaged over 379,000 BOE per day, exceeding expectation as a result of accelerated timing and asset level outperformance. Importantly, Q4 production per share was the highest quarterly result in our history, a clear reflection of our quality of the combined asset base and the strength of our technical teams and processes. For the year, we generated funds flow of CAD 2.95 per share, one of the strongest on annual results in our history, despite operating in a lower commodity price environment. That speaks directly to the structural improvements achieved through scale, synergy capture, and disciplined execution.

Speaker #2: The strategy is already delivering measurable results. We exited the year with strong operational momentum. Fourth quarter production averaged over 399,000 boe per day, exceeding expectations as a result of accelerated timing and asset-level outperformance.

Speaker #2: Importantly, Q4 production per share was the highest quarterly result in our history, a clear reflection of our quality of the combined asset base and the strength of our technical teams and processes.

Speaker #2: For the year, we generated funds flow of $2.95 per share, one of the strongest annual results in our history. Despite operating in a lower commodity price environment, that speaks directly to the structural improvements achieved through scale, synergy capture, and disciplined execution.

Speaker #2: With capital expenditures in line with our $2 billion guidance, we generated approximately $900 million of free cash flow and returned $736 million to shareholders through dividend and $193 million through share repurchases.

Grant Fagerheim: With capital expenditures in line with our CAD 2 billion guidance, we generated approximately CAD 900 million of free cash flow and returned CAD 736 million to shareholders through dividend and CAD 193 million through share repurchases. This balanced approach, growing per share production while returning meaningful capital, defines our total shareholder return framework. In 2025, we delivered a 15% total shareholder return at the high end of our 10% to 15% target range. The return was comprised of 6% production per share growth, a 7% dividend yield, and 2% of share repurchases. Our objective is to consistently deliver superior long-term returns through measured capital deployment, operational discipline, and structural margin improvement.

Speaker #2: This balanced approach, growing per share production while returning meaningful capital, defines our total shareholder return framework. In 2025, we delivered a 15% total shareholder return, at the high end of our 10 to 15 percent target range.

Speaker #2: The return was comprised of 6% production per share growth, a 7% dividend yield, and 2% of share repurchases. Our objective is to consistently deliver superior long-term returns through measured capital deployment, operational discipline, and structural margin improvement.

Speaker #2: From a reserves perspective, we now have $2.2 billion BW of 2P reserves under management, equating to a reserve life index of over $16 years.

Grant Fagerheim: From a reserves perspective, we now have 2.2 billion BOE of 2P reserves under management, equating to a reserve life index of over 16 years, with approximately 10,500 high-quality drilling locations in inventory that include optionality and light oil, liquids rich, and lean natural gas opportunities. With this, we have decades of development runway to continue driving increasing returns for our shareholders. I will now pass it on to Tom to further discuss our financial results. Thank you.

Grant Fagerheim: From a reserves perspective, we now have 2.2 billion BOE of 2P reserves under management, equating to a reserve life index of over 16 years, with approximately 10,500 high-quality drilling locations in inventory that include optionality and light oil, liquids rich, and lean natural gas opportunities. With this, we have decades of development runway to continue driving increasing returns for our shareholders. I will now pass it on to Thanh to further discuss our financial results. Thank you.

Speaker #2: With approximately $10,500 high-quality drilling locations in inventory that include optionality and light oil, liquids-rich, and lean natural gas opportunities. With this, we have decades of development runway to continue driving increasing returns for our shareholders.

Speaker #2: I will now pass it on to Thanh to further discuss our financial results. Thank you.

Speaker #3: Thanks, Grant. From a financial standpoint, 2025 clearly demonstrates the resilience and structural strength of our business. On a year-over-year basis, the commodity backdrop was weaker.

Don: Thanks, Grant. From a financial standpoint, 2025 clearly demonstrates the resilience and structural strength of our business. On a year-over-year basis, the commodity backdrop was weaker. WTI averaged just under $65 US per barrel, down approximately 15%, and AECO natural gas averaged under CAD 1.70 per GJ. Despite that environment, we generated funds flow of CAD 2.95 per share, the second-highest annual result in our history. More importantly, our cash flow netback increased year-over-year. Expanding margins in a lower price environment reflects structural improvements rather than commodity tailwinds. There were three primary drivers. First, operating efficiencies. We accelerated the capture of synergies following the Veren combination. Field-level optimization and economies of scale drove structural cost improvements, with Q4 operating costs declining to CAD 12.24 per BOE, an 11% decrease from 2024.

Thanh Kang: Thanks, Grant. From a financial standpoint, 2025 clearly demonstrates the resilience and structural strength of our business. On a year-over-year basis, the commodity backdrop was weaker. WTI averaged just under $65 US per barrel, down approximately 15%, and AECO natural gas averaged under CAD 1.70 per GJ. Despite that environment, we generated funds flow of CAD 2.95 per share, the second-highest annual result in our history. More importantly, our cash flow netback increased year-over-year. Expanding margins in a lower price environment reflects structural improvements rather than commodity tailwinds. There were three primary drivers. First, operating efficiencies. We accelerated the capture of synergies following the Veren combination. Field-level optimization and economies of scale drove structural cost improvements, with Q4 operating costs declining to CAD 12.24 per BOE, an 11% decrease from 2024.

Speaker #3: WTI averaged just under $65 US per barrel, down approximately 15%, and ECO natural gas averaged under $1.70 per GJ. Despite that environment, we generated funds flow of $2.95 per share, the second highest annual result in our history.

Speaker #3: More importantly, our cash flow net back increased year over year. Expanding margins in a lower price environment reflects structural improvements rather than commodity tailwinds.

Speaker #3: There were three primary drivers. First, operating efficiencies. We accelerated the capture of synergies following the Varin combination. Field-level optimization and economies of scale drove structural cost improvements with fourth quarter operating costs declining to $12.24 per BW and 11% decrease from 2024.

Speaker #3: Second, corporate and financing efficiencies. While G&A on a per BW basis remained relatively consistent, we reduced absolute G&A through the elimination of ladies and gentlemen, please stand up.

Don: Second, corporate and financing efficiencies. While G&A on a per BOE basis remained relatively consistent, we reduced absolute G&A through the.

Thanh Kang: Second, corporate and financing efficiencies. While G&A on a per BOE basis remained relatively consistent, we reduced absolute G&A through the.

Operator: Ladies and gentlemen, please stand by. Ladies and gentlemen, please stand by while we reconnect. Ladies and gentlemen, thank you for your patience. Please continue to stand by. Ladies and gentlemen, please continue to stand by. Ladies and gentlemen, thank you. Please continue to stand by.

Speaker #3: Ladies and gentlemen, please stand by while we reconnect the speaker. Ladies and gentlemen, thank you for your patience. Please continue to stand by. Ladies and gentlemen, please continue to stand by.

Speaker #1: New wells averaged roughly 10% above initial expectations in the area, supported by base optimization initiatives, including artificial lift refinements and operating parameter adjustments across our Montney assets.

Joey Wong: New wells averaged roughly 10% above initial expectations in the area, supported by base optimization initiatives, including artificial lift refinements and operating parameter adjustments. Across our Montney assets, execution remains consistent, predictable, and scalable. At Musreau, we recently brought a six-well pad online, bringing production to approximately 17,000 to 18,000 BOEs per day at 70% liquids. The facility is currently constrained due to stronger than expected condensate performance. Planned gas lift enhancements in Q3 of this year are expected to increase capacity to the 20,000 BOE per day nameplate. Importantly, condensate performance at Musreau has translated into approximately 20% higher EURs than originally anticipated, and this is the result of our development, design, and production decisions made with this improvement in mind.

Speaker #1: Execution remains consistent , predictable , and scalable At Munro , we recently brought a six well pad online , bringing production to approximately 17,000 to 18,000 votes per day at 70% liquids .

Speaker #1: The facility is currently constrained due to stronger than expected condensate performance , planned gas lift enhancements in Q3 of this year are expected to increase capacity to the 20,000 boe per day nameplate Importantly , condensate performance at Munro has translated into approximately 20% higher year than originally .

Speaker #1: Originally anticipated , and this is the result of our development , design and production decisions made with this improvement in mind , in 2025 , the asset generated over $100 million of operating free cash flow and is a good example of our repeatable development model .

Joey Wong: In 2025, the asset generated over CAD 100 million of operating free cash flow and is a good example of our repeatable development model. Develop the resource, build infrastructure, optimize operations, and transition the asset into a strong free cash flow generator. At Lator, we drilled a 3-well pad in Q4 and have recently spud a 5-well pad. A total of 11 wells will be spud this year ahead of the phase 1 facility startup. Construction of the 35,000 to 40,000 BOE per day facility remains on schedule and on budget, with commissioning targeted for Q4. At Kaybob, in the Duvernay, we continue to drive efficiency gains as the asset progresses towards stabilized at capacity operations. Our wine rack development configuration is demonstrating improved reservoir access and reduced well interference.

Speaker #1: Develop the resource , build infrastructure , optimize operations and transition the asset into a strong free cash flow generator . At Latour , we drilled a three well pad in the fourth quarter and have recently spud a five well pad .

Speaker #1: A total of 11 wells will be spud this year ahead of the phase one facility start up . Construction of the 35,000 to 40,000 boe per day facility remains on schedule and on budget , with commissioning targeted for the fourth quarter at kaybob in the DuVernay .

Speaker #1: We continue to drive efficiency gains as the asset progresses towards stabilized, at-capacity operations. Our Wine Rack development configuration is demonstrating improved reservoir access and reduced well interference.

Speaker #1: We have now brought seven pads online using this configuration, totaling 33 wells. Early pilot pads, some with approximately 18 months of production.

Joey Wong: We have now brought 7 pads online using this configuration, totaling 33 wells. Early pilot pads, some with approximately 18 months of production history, continue to affirm 10% to 20% improvements in well performance. We are applying this configuration to approximately half of our 2026 development program and believe it is applicable across roughly half of our undeveloped inventory. Additional upside may come from further expansion of this approach and selective downspacing where conditions are favorable. With these improvements and continued base optimization, we now expect to reach debottlenecked productive capacity of 115,000 to 120,000 BOEs per day in Kaybob by year-end of 2024, well ahead of our prior expectation of the second half of 2027. This acceleration advances Kaybob into a stabilized, free cash flow generating mode sooner than anticipated.

Speaker #1: Historically, we continue to affirm 10 to 20% improvements in well performance. We are applying this configuration to approximately half of our 2026 development program, and believe it is applicable across roughly half of our undeveloped inventory.

Speaker #1: Additional upside may come from further expansion of this approach , and selective down spacing where conditions are favorable . With these improvements and continued base optimization , we now expect to reach Debottlenecking productive capacity of 115,000 to 120,000 boys per day in kabob by year end of this year , well ahead of our prior expectation of the second half of 2027 .

Speaker #1: This acceleration advances kaybob into a stabilized free cash flow . Free cash flow generating mode sooner than anticipated . At 60 to $70 , WTI , we expect asset level free cash flow of $650 million to $850 million at capacity , while requiring only 50 to 55% reinvestment .

Joey Wong: At $60 to $70 WTI, we expect asset level free cash flow of $650 million to $850 million at capacity, while requiring only 50% to 55% reinvestment to maintain these levels of production. Similar to Musreau, this transition from growth to stabilized mode reflects our broader development progression strategy, scale, optimize, and harvest sustainable free cash flow. With that, I'll now turn it over to Chris to discuss our conventional assets.

Speaker #1: To maintain these levels of production . Similar to Muzzo , this transition from growth to stabilized mode reflects our broader development progression strategy , scale , optimize , and harvest sustainable free cash flow .

Speaker #1: With that, I'll now turn it over to Chris to discuss our conventional assets. Thanks, Joey. Our conventional division delivered another strong year, averaging approximately 140,000 boe per day in 2025.

Chris Bullin: Thanks, Joey. Our Conventional Division delivered another strong year, averaging approximately 140,000 BOE per day in 2025. We invested CAD 500 million and drilled 199 wells. The combination of stronger well performance and improved efficiencies drove approximately 3,000 BOE per day of production outperformance in Q4. We continue to view the Conventional Division as a stabilizing and sustainable core cash flow engine. The division is approximately 80% liquids weighted, primarily light oil and underpinned by a sub 20% decline rate. That decline profile is supported by roughly 52,000 barrels per day of dedicated waterflood and EOR production. This platform provides durable free cash flow and meaningful torque to stronger oil prices.

Speaker #1: We invested $500 million and drilled 199 wells. The combination of stronger well performance and improved efficiencies drove approximately 3,000 boe per day of production.

Speaker #1: Outperformance in the fourth quarter , we continue to view the conventional division as a stabilizing and sustainable core cash flow engine . The division is approximately 80% liquids , weighted primarily light oil and underpinned by a 20% decline rate that decline profile is supported by roughly 52,000 barrels per day of dedicated waterflood and air production .

Speaker #1: This platform provides durable , free cash flow and meaningful talk to stronger oil prices . Saskatchewan was the primary driver of year over year growth as we solidified our position as the largest and most active oil producer in the province .

Chris Bullin: Saskatchewan was the primary driver of year-over-year growth as we solidified our position as the largest and most active oil producer in the province, following the integration of the complementary Veren assets. In the Frobisher, 2025 results were exceptional. Average IP180 production exceeded expectations by 41%. These results reflect longer laterals, enhanced reservoir contact, and continued operational efficiencies that improve capital productivity. Since entering the play in 2021, we have organically added nearly 200 premium locations, extending our runway by approximately 4 years. Compared to our initial type curve assumptions at acquisition, capital efficiency has improved by 26% based on IP365 performance. On a per well basis, that translates into materially higher net present value on approximately CAD 1.6 million of capital per well. In the Bakken, we continued to enhance inventory through optimized lateral lengths and increased reservoir contact.

Speaker #1: Following the integration of the complementary Varennes assets in the Frobisher, 2025 results were exceptional. Average IP production exceeded expectations by 41%. These results reflect longer laterals, enhanced reservoir contact, and continued operational efficiencies that improve capital productivity.

Speaker #1: Since entering the play in 2021 , we have organically added nearly 200 premium locations , extending our runway by approximately four years compared to our initial type curve assumptions at acquisition capital efficiency has improved by 26% based on IP 365 performance on a per well basis that translates into materially higher net present value on approximately 1.6 million of capital per well in the Bakken .

Speaker #1: We continued to enhance inventory through optimized lateral links and increased reservoir contact . Our first three mile , eight leg open hole , multi-lateral well achieved an IP 90 rate , 38% above expectations with a record 34,600m drilled .

Chris Bullin: Our first three-mile, eight-leg, open hole multilateral well achieved an IP90 rate, 38% above expectations, with a record 34,600 meters drilled. Based on these results, we are confidently incorporating extended reach open hole multilateral drilling into our development program. With over 1,500 Bakken locations in inventory, we see substantial opportunity to further enhance well economics across this asset. In Alberta, we drilled 39 wells, primarily focused on the Glauconite and Cardium. The Glauconite continues to demonstrate strong, repeatable performance and has evolved into a scaled, liquid-weighted cash flow driver. Since acquiring the asset in 2021, we have doubled production from approximately 13,000 BOE per day to roughly 27,000 BOE per day through improved well designs, longer laterals, infrastructure debottlenecking, and base optimization. With scale achieved, the Glauconite has transitioned into a stabilized development phase, generating consistent and capital-efficient returns.

Speaker #1: Based on these results , we are confidently incorporating extending extended reach open hole multi-lateral drilling into our development program . With over 1500 locations and inventory , we see substantial opportunity to further enhance well economics across this asset in Alberta .

Speaker #1: We drilled 39 wells , primarily focused on the Glauconite and Cardium . The Glauconite continues to demonstrate strong , repeatable performance and has evolved into a scaled , liquid weighted cash flow driver .

Speaker #1: Since acquiring the asset in 2021 , we have doubled production from approximately 13,000 boe per day to roughly 27,000 boe per day through improved well designs , longer laterals , infrastructure , debottlenecking and base optimization with scale achieved , the Glauconite has transitioned into a stabilized development phase , generating consistent and capital efficient returns in the Cardium , leveraging learnings from the unconventional workflow , specifically on frack design , enhanced our performance in both West , Pamina and Wapiti .

Chris Bullin: In the Cardium, leveraging learnings from the unconventional workflow, specifically on frack design, enhanced our performance in both West Pembina and Wapiti, realizing improved capital efficiency by approximately 15% in 2025. As we move into 2026, our focus remains on incremental technical enhancements to continue to improve capital efficiency. Finally, our EOR portfolio remains a cornerstone of sustainability within the conventional division, with approximately 52,000 barrels per day of dedicated, secondary, and tertiary production, including our flagship Weyburn CO2 flood, we generate strong, stable cash flow from long-life, low-decline assets. We continue to evaluate additional EOR opportunities across the portfolio, assessing both brownfield and greenfield projects to further enhance long-term recovery and capital efficiency. With that, I'll turn it back over to Grant for his closing remarks.

Speaker #1: Realizing improved capital efficiency by approximately 15% in 2025 . As we moved . As we move into 2026 , our focus remains on incremental technical enhancements to continue to improve capital efficiency Finally , our portfolio remains a cornerstone of sustainability within the conventional division , with approximately 52,000 barrels per day of dedicated secondary and tertiary production , including our flagship Weyburn CO2 flood , we generate strong , stable cash flow from long life low decline assets .

Speaker #1: We continue to Evaluate additional opportunities across the portfolio , assessing both brownfield and greenfield projects to further enhance long term recovery and capital efficiency With that , I'll turn it back over to Grant for his closing remarks .

Speaker #2: Hi , it's Tom here , so I'll just redo the financial section here . Due to the technical difficulties before passing it back to Grant from a financial standpoint , 2025 clearly demonstrates the resilience and structural strength of our business on a year over year basis .

Joey Wong: It's Con here. I'll just redo the financial section here due to the technical difficulties before passing it back to Grant. From a financial standpoint, 2025 clearly demonstrates the resilience and structural strength of our business. On a year-over-year basis, the commodity backdrop was weaker. WTI averaged just under $65 per barrel, US, down approximately 15%, and AECO natural gas averaged under $1.70 per GJ.

Thanh Kang: It's Thanh here. I'll just redo the financial section here due to the technical difficulties before passing it back to Grant. From a financial standpoint, 2025 clearly demonstrates the resilience and structural strength of our business. On a year-over-year basis, the commodity backdrop was weaker. WTI averaged just under $65 per barrel, US, down approximately 15%, and AECO natural gas averaged under $1.70 per GJ.

Speaker #2: The commodity backdrop was weaker. WTI averaged just under $65 per barrel, down approximately 15% in the US, and natural gas averaged under $1.70 per GJ.

Speaker #2: Despite that environment , we generated funds flow of $2.95 per share . The second highest annual result in our history . More importantly , our cash flow netback increased year over year , expanding margins in a lower price environment reflects structural improvements rather than commodity tailwinds .

Don: Despite that environment, we generated funds flow of CAD 2.95 per share, the second highest annual result in our history. More importantly, our cash flow netback increased year-over-year. Expanding margins in a lower price environment reflects structural improvements rather than commodity tailwinds. There were three primary drivers. First, operating efficiencies. We accelerated the capture of synergies following the Veren combination. Field-level optimization and economies of scale drove structural cost improvements, with Q4 operating costs declining to CAD 12.24 per BOE, an 11% decrease from 2024. Second, corporate and financing efficiencies. While G&A on a per BOE basis remained relatively consistent, we reduced absolute G&A through the elimination of duplicative costs following the transaction. Our increased scale contributed to a credit rating upgrade to BBB flat, lowering our overall cost of debt and improving financial flexibility.

Thanh Kang: Despite that environment, we generated funds flow of CAD 2.95 per share, the second highest annual result in our history. More importantly, our cash flow netback increased year-over-year. Expanding margins in a lower price environment reflects structural improvements rather than commodity tailwinds. There were three primary drivers. First, operating efficiencies. We accelerated the capture of synergies following the Veren combination. Field-level optimization and economies of scale drove structural cost improvements, with Q4 operating costs declining to CAD 12.24 per BOE, an 11% decrease from 2024. Second, corporate and financing efficiencies. While G&A on a per BOE basis remained relatively consistent, we reduced absolute G&A through the elimination of duplicative costs following the transaction. Our increased scale contributed to a credit rating upgrade to BBB flat, lowering our overall cost of debt and improving financial flexibility.

Speaker #2: There were three primary drivers . First , operating efficiencies . We accelerated the capture of synergies following the variant combination field level optimization and economies of scale drove structural cost improvements with fourth quarter operating costs declining to $12.24 per boe , an 11% decrease from 2024 .

Speaker #2: Second , corporate and financing efficiencies while G&A on a per Boe basis remained relatively consistent , we reduced absolute G&A through the elimination of duplicate costs following the transaction , our increased scale contributed to a credit rating upgrade to triple B flat , lowering our overall cost of debt and improving financial flexibility .

Speaker #2: In addition , the utilization of acquired non-capital losses materially reduced cash taxes and enhanced free cash flow . Third , product mix and realized pricing resilience .

Don: In addition, the utilization of acquired non-capital losses materially reduced cash taxes and enhanced free cash flow. Third, product mix and realized pricing resilience. Over 60% of our production is liquids, predominantly light oil and condensate. Narrow differentials and foreign exchange tailwinds helped offset benchmark weakness. Turning to financial strength. Year-end net debt was CAD 3.4 billion, representing less than 1x annualized Q4 funds flow. We have CAD 1.5 billion of available liquidity and remain well-positioned to manage volatility. 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 CAD 3.75 per GJ. On natural gas diversification, we are executing a deliberate strategy to reduce long-term ARO exposure.

Thanh Kang: In addition, the utilization of acquired non-capital losses materially reduced cash taxes and enhanced free cash flow. Third, product mix and realized pricing resilience. Over 60% of our production is liquids, predominantly light oil and condensate. Narrow differentials and foreign exchange tailwinds helped offset benchmark weakness. Turning to financial strength. Year-end net debt was CAD 3.4 billion, representing less than 1x annualized Q4 funds flow. We have CAD 1.5 billion of available liquidity and remain well-positioned to manage volatility. 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 CAD 3.75 per GJ. On natural gas diversification, we are executing a deliberate strategy to reduce long-term ARO exposure.

Speaker #2: Over 60% of our production is Liquid's predominantly light oil and condensate . Narrow differentials in foreign exchange tailwinds helped offset benchmark weakness . Turning to financial strength , year end net debt was 3.4 billion , representing less than one times annualized fourth quarter funds flow .

Speaker #2: We have $1.5 billion of available liquidity and remain well positioned to manage volatility . Approximately 25% of 2026 oil production is hedged at a floor of just under $85 per barrel .

Speaker #2: Canadian and 29% of 2020 . Six natural gas production is hedged at approximately $3.75 per GJ . Our natural gas diversification we're executing a deliberate strategy to reduce long term exposure .

Speaker #2: We announced a ten year agreement with Centrica for 50,000 m2 per day , indexed to European TTF pricing and a second ten year agreement to deliver 35,000 m2 per day into Chicago at Henry Hub .

Don: We announced a ten-year agreement with Centrica for 50,000 MMBtu per day, indexed to European TTF pricing, and a second ten-year agreement to deliver 35,000 MMBtu per day into Chicago at Henry Hub pricing. These agreements enhance price stability and increase exposure to global and US markets. I'll now pass it off to Grant for his closing remarks.

Thanh Kang: We announced a ten-year agreement with Centrica for 50,000 MMBtu per day, indexed to European TTF pricing, and a second ten-year agreement to deliver 35,000 MMBtu per day into Chicago at Henry Hub pricing. These agreements enhance price stability and increase exposure to global and US markets. I'll now pass it off to Grant for his closing remarks.

Speaker #2: Pricing . These agreements enhance price stability and increase exposure to global and US markets I'll now pass it off to Grant for his closing remarks .

Speaker #2: Thanks , Don .

Grant Fagerheim: Thanks, Tom, Chris, and Joey, for your comments. In closing, we believe we are still in the early stages of demonstrating the full capability of our asset base and the people we have within the organization. Operational momentum has carried into Q1 2026, and our teams are executing at a high level across our portfolio. As a result, we are providing Q1 production guidance of 375,000 to 380,000 BOE per day, which is up from our internal forecast of 370,000 to 375,000 BOE per day at the time we released our budget.

Grant Fagerheim: Thanks, Thanh, Chris, and Joey, for your comments. In closing, we believe we are still in the early stages of demonstrating the full capability of our asset base and the people we have within the organization. Operational momentum has carried into Q1 2026, and our teams are executing at a high level across our portfolio. As a result, we are providing Q1 production guidance of 375,000 to 380,000 BOE per day, which is up from our internal forecast of 370,000 to 375,000 BOE per day at the time we released our budget.

Speaker #3: Chris and Joey for your comments . In closing , we believe we are still in the early stages of demonstrating the full capability of our asset base and the people have within the organization operational momentum has carried into the first quarter of 2026 , and our teams are executing at a high level across our portfolio .

Speaker #3: As a result, we are providing first quarter production guidance of 375,000 to 380,000 boe per day, which is up from our internal forecast of 370,000 to 375,000 boe per day at the time.

Speaker #3: We released our budget , our full year production guidance of 370 to 375,000 per day on capital spending of 2 to $2.1 billion is unchanged at this time , but stay tuned as we advance through the remainder of the year with scale achieved , structural profitability , improved and a deep inventory of high quality opportunities , we are confident in the path forward to deliver superior returns for current and future shareholders , improving market access for Canadian energy remains an important theme for maximizing economic value and strengthening North American energy security .

Grant Fagerheim: Our full-year production guidance of 370,000 to 375,000 BOE per day on capital of spending of CAD 2 to 2.1 billion is unchanged at this time. Stay tuned as we advance through the remainder of the year. With scale achieved, structural profitability improved, and a deep inventory of high-quality opportunities, we are confident in the path forward to deliver superior returns for current and future shareholders. Improving market access for Canadian energy remains an important theme for maximizing economic value and strengthening North American energy security. Condensate fundamentals remain supportive. Expanding LNG and natural gas demand continue to provide long-term tailwinds. In closing, I want to reemphasize that our team remains focused on disciplined execution, efficiencies in capital spending, and deliberate in creating superior long-term returns for our shareholders.

Speaker #3: Condensate fundamentals remain supportive and expanding LNG and natural gas demand continue to provide long term tailwinds . In closing , I want to reemphasize that our team remains focused on disciplined execution , efficiencies and capital spending and deliberate in creating superior long term returns for our shareholders With that , I will now turn the call back over to our operator , for any questions .

Grant Fagerheim: With that, I will now turn the call back over to our operator, Sylvie, for any questions. Thank you.

Speaker #3: Thank you

Speaker #4: Thank you sir . Ladies and gentlemen , as stated , if you do have any questions , please press star followed by one on your touchtone phone .

Operator: Thank you, sir. Ladies and gentlemen, as stated, if you do have any questions, please press star followed by one on your touch-tone phone. You will then hear a prompt acknowledging your request. If you should wish to withdraw your question, simply press star followed by two. We do ask that if you're using a speakerphone, to please lift your handset before pressing any keys. Please go ahead and press star one now if you have any questions. First will be Sam Burwell at Jefferies. Please go ahead, Sam.

Speaker #4: You will then hear a prompt acknowledging your request. And if you should wish to withdraw your question, simply press star followed by two.

Speaker #4: And we do ask that if you're using a speakerphone to please lift your handset before pressing any keys. Please go ahead and press star one.

Speaker #4: Now if you have any questions First , we'll be Sam Burwell at Jefferies . Please go ahead , sir .

Speaker #5: Hey good morning guys . Grant , I caught your . Stay tuned . On the 2026 plan . So I guess with WTI , strip up near 65 bucks for the balance of 26 .

Sam Burwell: Hey, good morning, guys. Grant, I caught your stay tuned on the 2026 plan. I guess with WTI strip up near $65 for the balance of 2026, I mean, any appetite to possibly hedge more and/or deploy more CapEx maybe in conventional oil? Should we think about any benefits of the cash flow really being banked for possible buyback going forward?

Speaker #5: I mean , any appetite to possibly hedge more or deploy more CapEx maybe in conventional oil ? Or should we think about any benefits to cash flow really being banked for possible buybacks going forward

Speaker #3: Yeah . Thanks , Sam . Just a your comments on what we do with the increased pricing at this particular time . You know , what the strategy that we've undertaken is that until we have it , we'll call it in the bank .

Grant Fagerheim: Yeah. Thanks, Sam. Just your comments on what we do with the increased pricing at this particular time. You know what? The strategy that we've undertaken is that until we have it, we'll call it in the bank, we don't make adjustments to our forecast. We are forecasting for the balance of this year, $65 WTI oil, you know, with a light oil differential at $4, $2 differential on condensate, and $0.74 Canadian dollar. What we've done with our natural gas price, we dropped it back to $2 per GJ, just with what we consider to be the oversupply.

Speaker #3: We don't make adjustments to our forecast . We are forecasting for the balance of this year , $65 WTI oil , you a light oil differential at $4 , $2 differential and condensate .

Speaker #3: And 74 Canadian dollar . And what we've done with our natural gas price , we've dropped it back to $2 per GJ just with the what we consider to be the oversupply .

Speaker #3: So at this particular time, you know, what we'll look to do is advance through. Here is the potential to increase our forecast with the same amount of capital.

Grant Fagerheim: At this particular time, you know, what we'll look to do as we advance through time here is the potential to increase our forecast with the same amount of capital if we can continue to deliver operationally as we have.

Speaker #3: If we can continue to deliver operationally as we have, yeah.

Don: Yeah, Sam, just on the hedging front there, our strategy hasn't changed. We look to hedge 25% to 35% of our production here and feel very comfortable around our 2026 positions, as I've talked about there. What we are doing, though, is we're laying on more positions in 2027, smaller incremental positions to get us to that 25% to 35% there. Since the curve is still a little bit backward dated, our preference today is using costless collars. That's been a very consistent theme in terms of how we've executed on our hedging strategy.

Speaker #2: And Sam , just on the hedging front there , I mean , our strategy hasn't changed . We look to hedge 25 to 35% of our production here .

Thanh Kang: Yeah, Sam, just on the hedging front there, our strategy hasn't changed. We look to hedge 25% to 35% of our production here and feel very comfortable around our 2026 positions, as I've talked about there. What we are doing, though, is we're laying on more positions in 2027, smaller incremental positions to get us to that 25% to 35% there. Since the curve is still a little bit backward dated, our preference today is using costless collars. That's been a very consistent theme in terms of how we've executed on our hedging strategy.

Speaker #2: And we feel very comfortable around our 2026 positions . As I've talked about , there , what we are doing though is we're laying on more positions in 2027 , smaller incremental positions to get us to that 25 to 35% .

Speaker #2: There. Since the curve is still a little bit backwardated, our preference today is using costless collars. So that's been a very consistent theme in terms of how we've executed on our hedging strategy.

Speaker #5: Okay . Understood . And then on the gas marketing side , I guess any color you can share on the the discount to ETF , you'd be realizing on the Centrica deal and then also on that how repeatable are the opportunities to achieve LNG linked pricing without necessarily explicitly sending molecules to a facility , whether it's in Canada or whether it's down to the US Gulf Coast

Michael Spyker: Okay, understood. On the gas marketing side, I guess any color you can share on the discount to TTF you'd be realizing on the Centrica deal? Also on that, like, how repeatable are the opportunities to achieve LNG-linked pricing without necessarily, like, explicitly sending molecules to a facility, whether it's in Canada or whether it's down to the US Gulf Coast?

Speaker #2: Yeah , thanks for that question , Sam . So the two contracts that we entered into are , is are part of our price diversification strategy .

Don: Yeah, thanks for that question, Sam. The two contracts that we entered into are part of our price diversification strategy. We're really taking a portfolio approach to mitigate the price volatility that we've seen in the AECO market there. Ultimately, what we're looking to do is move about 50% of our pricing outside of AECO, with these two contracts here, we would be increasing our exposure outside of AECO in that 8% to 9% there. The Centrica transaction, we basically get the TTF pricing, less deductions. We deliver at AECO, with the other third party there, the 35,000 MMBtu per day there, the delivery is at Chicago. We get an IMEX, basically less tolls there. We don't disclose any specific details to our contracts.

Thanh Kang: Yeah, thanks for that question, Sam. The two contracts that we entered into are part of our price diversification strategy. We're really taking a portfolio approach to mitigate the price volatility that we've seen in the AECO market there. Ultimately, what we're looking to do is move about 50% of our pricing outside of AECO, with these two contracts here, we would be increasing our exposure outside of AECO in that 8% to 9% there. The Centrica transaction, we basically get the TTF pricing, less deductions. We deliver at AECO, with the other third party there, the 35,000 MMBtu per day there, the delivery is at Chicago. We get an IMEX, basically less tolls there. We don't disclose any specific details to our contracts.

Speaker #2: We're really taking a portfolio approach to mitigate that price volatility that we've seen in the market there. Ultimately, what we're looking to do is move about 50% of our pricing outside of ACU.

Speaker #2: And with these two contracts here , we would be increasing our exposure outside of ACO in that eight to to 9% . There .

Speaker #2: So the Centrica transaction , we basically get the pricing less deductions . We deliver at ACO . And with the other third party there , the 35,000 m2 per day , there , the delivery is at Chicago .

Speaker #2: So we get Nymox basically less tolls there. But we don't disclose any specific details to our contracts.

Speaker #5: Okay . Got it . Thank you guys

Michael Spyker: Okay, got it. Thank you, guys.

Speaker #4: Two next question will be from Philip Johnson at Capital One Securities . Please go ahead .

Operator: Thank you. Next question will be from Philip Johnston at Capital One Securities. Please go ahead.

Speaker #6: Hey guys . Thanks for the time . I wanted to ask you about the current tax rate guidance for 26 . Nice to see that you've reduced it to 3 to 5% of funds .

[Analyst] (Capital One Securities): Hey, guys. Thanks for the time. Wanted to ask you about the current tax rate guidance for 2026. Nice to see that you reduced it to 3% to 5% of funds flows from, I guess, 5% to 8% previously. I realize Veren some tax loss pools that might be playing a factor, but can you talk about what's driving that? You know, as we look out over the next four years or so, I assume that percentage will drift higher, but can you maybe talk about sort of the glide path there? Thank you.

Phillips Johnston: Hey, guys. Thanks for the time. Wanted to ask you about the current tax rate guidance for 2026. Nice to see that you reduced it to 3% to 5% of funds flows from, I guess, 5% to 8% previously. I realize Veren some tax loss pools that might be playing a factor, but can you talk about what's driving that? You know, as we look out over the next four years or so, I assume that percentage will drift higher, but can you maybe talk about sort of the glide path there? Thank you.

Speaker #6: Flows from , I guess 5 to 8% . Previously I realized I had some tax loss pools that might be playing a factor .

Speaker #6: But can you talk about what's driving that, and as we look out over the next four years or so, I assume that percentage will drift higher.

Speaker #6: But can you maybe talk about, sort of, the glide path there? Thank you.

Speaker #2: Yeah . It's fun here . So in terms of the tax pools at the end of the year , we had 9.3 billion of tax pools , of which approximately 500 million of that was non-capital losses .

Don: Yeah, it's Don here. In terms of the tax pools, at the end of the year, we had CAD 9.3 billion of tax pools, of which approximately CAD 500 million of that was non-capital losses. We were able to use it. When we did the Veren transaction, it came with about CAD 1 billion of non-capital losses, we used about half of that in 2025. The remaining CAD 500 million, we expect to use that in 2026. That's really what drove the lower tax rate there, in that 3% to 5%. Pretty consistent, I would say, in 2026 compared to 2025.

Thanh Kang: Yeah, it's Don here. In terms of the tax pools, at the end of the year, we had CAD 9.3 billion of tax pools, of which approximately CAD 500 million of that was non-capital losses. We were able to use it. When we did the Veren transaction, it came with about CAD 1 billion of non-capital losses, we used about half of that in 2025. The remaining CAD 500 million, we expect to use that in 2026. That's really what drove the lower tax rate there, in that 3% to 5%. Pretty consistent, I would say, in 2026 compared to 2025.

Speaker #2: And so we were able to use—when we did the variance transaction, it came with about $1 billion of non-capital losses. So we used about half of that in 2025.

Speaker #2: And then the remaining $500 million, we expect to use that in 2026. So that's really what drove the lower tax rate there, in that 3 to 5% range.

Speaker #2: So pretty consistent I would say in 2026 compared to 2025 , as we think about it going forward here , you know , we'd expect it to be still pretty reasonable in that five to to 8% on a go forward basis .

Don: As we think about it going forward here, you know, we'd expect it to be still pretty reasonable in that 5% to 8% on a go-forward basis past 2026.

Thanh Kang: As we think about it going forward here, you know, we'd expect it to be still pretty reasonable in that 5% to 8% on a go-forward basis past 2026.

Speaker #2: Past 2026 .

Speaker #6: Okay , great . That sounds good . And then you're you're proved developed producing costs ticked up a little bit from around $15 a barrel back in 23 to around 17 a barrel and 25 .

[Analyst] (Capital One Securities): Okay, great. That sounds good. Your approved developed producing F&D costs ticked up a little bit from around $15 a barrel back in 2023 to around $17 a barrel in 2025. That's obviously a low figure still, but can you maybe talk about the driver of the increase there? Is it perhaps related to sort of a mix shift within the portfolio rather than any sort of increase in D&C costs or decrease in underlying EORs? Or are there other factors at play? Just maybe as a follow-up, how would you expect those costs to trend going forward?

Phillips Johnston: Okay, great. That sounds good. Your approved developed producing F&D costs ticked up a little bit from around $15 a barrel back in 2023 to around $17 a barrel in 2025. That's obviously a low figure still, but can you maybe talk about the driver of the increase there? Is it perhaps related to sort of a mix shift within the portfolio rather than any sort of increase in D&C costs or decrease in underlying EORs? Or are there other factors at play? Just maybe as a follow-up, how would you expect those costs to trend going forward?

Speaker #6: That's obviously a low figure still. But can you maybe talk about the driver of the increase? Is it perhaps related to sort of a mix shift within the portfolio, rather than any sort of increase in D&A costs or decrease in underlying users, or are there other factors at play?

Speaker #6: And then, just maybe as a follow-up, how would you expect those costs to trend going forward?

Speaker #1: Yeah . Hey , Philip Joey Wong here . So yeah , you're right that the 17 and change there is is a reflection of the asset mix .

Joey Wong: Yeah. Hey, Philip, Joey Wong here. Yeah, you're right. The 17 and change there is a reflection of the asset mix when you combine Veren and Whitecap. It actually does reflect on PDP as well as across the other two categories on the 1P and the 2P. A portion of the efficiency gains we've started to see in the operations, whether that's on the reduction of cost, taking a portion of those on the book, or on a portion of the increased performance on a per well basis, where we did see some good technical revisions. To your question of what would the trajectory of that be?

Speaker #1: When you combine Baron and Whitecap and the it actually does reflect on PDP as well as across the other two categories on the one P and the £0.02 , a portion of the efficiency gains .

Speaker #1: We've started to see in the operations , whether that's on on the reduction of of costs , taking a portion of those on the book or on a portion of the the increased performance on a per well basis , where we did see some some good technical revisions to your question of what would the trajectory of that be , I guess it's embedded in the in the last response .

Joey Wong: I guess it's embedded in the last response there, is that we've taken a portion of it, and we would expect that with continued performance and outperformance, that we can build upon that.

Speaker #1: There is that we've taken a portion of it , and we would expect that with continued performance and outperformance that we can we can build upon that .

Speaker #6: Yeah , that's very clear . Thank you so much

[Analyst] (Capital One Securities): That's very clear. Thank you so much.

Phillips Johnston: That's very clear. Thank you so much.

Speaker #7: Q

Operator: Thank you. Once again, ladies and gentlemen, a reminder to please press star one should you have any questions at this time. Thank you. Next, we will hear from Michael Spyker at HTM Research. Please go ahead, Michael.

Speaker #4: Once again , ladies and gentlemen , a reminder to please press star one , should you have any questions at this time . Thank you .

Speaker #4: Next, we will hear from Michael 'Skype' Speicher at HCM Research. Please go ahead, Michael.

Speaker #8: Good morning guys . I'm not sure if the cut there was intentional . Give everybody a few minutes to reflect on the pure unbridled execution that we're witnessing .

Michael Spyker: Good morning, guys. Not sure if the cutout there was intentional. Give everybody a few minutes to reflect on the pure, unbridled execution that we're witnessing. In my few minutes flipping through the deck, I see you guys have 30 or 90,000 BOEs a day of asset potential in the near term, productive capacity bucket. You know, you don't consume that until the early 2030s. You've got all these efficiencies that you're realizing, and you can kind of move some of that infrastructure CapEx over to PGI potentially. Is there a possibility to, you know, when you have that money in the bank, you said to maybe keep growth capital flat and add more volume kind of thing, if you keep delivering sequential capital efficiency improvements?

Speaker #8: But in my few minutes flipping through the deck I see you guys have 30 or 90,000 views a day of asset potential in the near term .

Speaker #8: Productive capacity bucket . And you know , you don't consume that until the early 2030s . So you've got all these efficiencies that you're realizing and you can kind of kind of move some of that infrastructure CapEx over to PGE potentially .

Speaker #8: Is there a is there a possibility to , you know , when you have that money in the bank , you said to to maybe keep growth capital flat and add more volume kind of thing .

Speaker #8: If you keep delivering sequential capital efficiency improvements ? I'm just kind of wondering , you know , could we see a filling of this 90,000 boe a day of , of near-term capacity from the Bottlenecking efforts , etc.

Michael Spyker: Just kind of wondering, you know, could we see a filling of this 90,000 BOE a day of near-term capacity from the debottlenecking efforts, et cetera, pulled forward a little bit on a same capital budget kind of thing? Is that kind of a potential upside we can think about?

Speaker #8: pulled forward a little bit on a on a same capital budget kind of thing . Is that kind of a potential upside ? We can think about

Speaker #3: Yeah . Thanks , Michael . I mean , so the way we're thinking about this is , you know , obviously , yes , we do have capacity runway through to an incremental 90,000 viewers per day .

Grant Fagerheim: Yeah, thanks, Michael. I mean, the way we're thinking about this is, you know, obviously, yes, we do have the capacity runway through to an incremental 90,000 BOE per day. You know, a lot of this reflects back on what the commodity price environment is of the day. From our perspective, we think that we can continue to focus on our efficiencies of our capital program. Growing into this, the opportunity base that we do have, is truly going to be, you know, what's the reflection of commodity prices and, you know, the cash generation that's being delivered off of the assets we do have.

Speaker #3: You know , a lot of this reflects back on what the commodity price environment is of the day . So from our perspective , we think that we can continue to focus on our our efficiencies of our capital program .

Speaker #3: But growing into this , the opportunity base that we do have is truly going to be , you know , what's the reflection of commodity prices and and , you know , the cash generation that's being delivered off of the assets we do have .

Speaker #3: So a appreciate you realizing that we do have a lot of runway in front of us at this particular time , but it is going to be dependent upon us , you know , commodity prices as we advance forward , we think we can put a very sound base plan in place .

Grant Fagerheim: Appreciate you realizing that we do have a lot of runway in front of us at this particular time, but it is going to be dependent upon, you know, commodity prices as we advance forward. We think we can put a very sound base plan in place, and then being able to continue to grow into the excess capacity that we do have available to us.

Speaker #3: And then being able to continue to grow into the excess capacity that we do have available to us .

Speaker #8: All right . Gotcha . Thanks ,

Michael Spyker: All right. Gotcha. Thanks, guys.

Speaker #9: Guys

Speaker #7: Thank you . And at this time , gentlemen , we have no other questions registered , please proceed .

Operator: Thank you. At this time, gentlemen, we have no other questions registered. Please proceed.

Speaker #3: Okay . Thank you . Sylvia . And thanks to each of you on the line today for your patience and with the technology glitch , we experienced earlier .

Grant Fagerheim: Okay. Thank you, Sylvie, and thanks to each of you on the line today for your patience and with the technology glitch we experienced earlier. I do want to once again thank our entire Whitecap office and field staff for your dedication and efforts in 2025 and continuing into 2026. We look forward to updating you, our shareholders, on our progress through 2026 and into the future. All the best to each of you. Signing off for now. Cheers.

Speaker #3: I do want to once again thank our entire Whitecap office and field staff for your dedication and efforts in 2025 and continuing into 2026.

Speaker #3: We look forward to updating you as shareholders on our progress through 2026 and into the future . All the best to each of you signing off for now .

Speaker #3: Cheers .

Speaker #4: Thank you sir Ladies and gentlemen , this does conclude your conference call for today . Once again , thank you for attending . And at this time we do ask that you please disconnect your lines .

Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.

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