Whitecap Resources (TSE:WCP) used its Investor Day presentation to outline a strategy focused on durable shareholder returns supported by a large Western Canada asset base, ongoing operational improvements, and a balance sheet management approach that targets leverage at about one times debt-to-funds flow. President and CEO Grant Fagerheim said the company’s capital allocation is built around four pillars: inventory depth and commodity optionality, technical and operational execution, capital discipline, and balance sheet strength.
Scale, 2026 plans, and return targets
Fagerheim described Whitecap as a C$14 billion market-cap company with C$17 billion in enterprise value producing roughly 372,500 BOE/d, including about 900 MMcf/d of natural gas. For 2026, the company plans capital spending of C$2.0-C$2.1 billion. At $60 WTI and C$3 AECO, management said that capital program would generate approximately C$3.3 billion of funds flow.
Capital allocation framework and balance sheet details
Management described a “toolkit” that includes investing in the business, maintaining balance sheet strength, share repurchases, and the base dividend. Fagerheim said the company expects near-term incremental return of capital to be more weighted to buybacks given the current payout ratio, while still aiming to grow the dividend over time.
Senior Vice President and CFO Thanh Kang said Whitecap entered 2026 with a strong balance sheet and noted that approximately 50% of net debt is at fixed interest rates. Kang said the company could consider adding fixed-rate debt if rates trend favorably, and that it plans to use room on its credit facility to address private placement notes maturing in 2026. Beyond that, Whitecap has four investment-grade note issuances with maturities between 2028 and 2034. Kang said the most recent bond issuance was at 3.76%, and variable borrowing costs on the credit facility are around 4%.
Given the commodity environment, Kang said the company’s focus is on enhancing shareholder returns—particularly through share repurchases—rather than aggressively paying down debt today, while continuing to target leverage at one times debt-to-funds flow or less.
Asset base overview and development progression
Whitecap said more than 99% of its production and inventory is in Alberta and Saskatchewan. Management cited 10,500 drilling locations and 2.3 billion BOE of 2P reserves. The company segments assets into unconventional (Montney and Duvernay) and conventional light oil-focused assets, with management emphasizing that different parts of the portfolio serve different roles, ranging from appraisal to growth to stabilized cash-flow generation.
Management said the unconventional portfolio includes about 4,700 drilling locations and is positioned for long-term growth and free funds flow potential, while conventional assets provide long-life, low-decline production and enhanced oil recovery (EOR) projects that generate stable cash flow.
Unconventional: Duvernay and Montney growth options
Vice President of the Unconventional Division Joey Wong said the unconventional division produces roughly 245,000 BOE/d and would deliver approximately C$900 million of free funds flow at $60 WTI and C$3 AECO. Whitecap said it holds about 1.5 million acres in Alberta’s Montney and Duvernay and is the largest landholder in both.
In the Kaybob Duvernay, Wong said Whitecap holds about 500,000 acres and roughly 700 identified locations, with over 500 producing wells. The company said it increased productive capability at its 15-07 complex through debottlenecking and a connection to third-party processing, raising capability to over 50,000 BOE/d from roughly 36,000 BOE/d. Wong said the final stage of those efforts is expected online in early 2026, and that further work is expected to bring total Kaybob Duvernay processing capacity to about 120,000 BOE/d by the third quarter of the year discussed. After reaching capacity, management said it intends to hold production in a 115,000-120,000 BOE/d range longer term and transition the asset to a stabilized mode. At that stage, Wong said Kaybob is expected to generate about C$650 million to C$850 million per year of asset-level free cash flow while requiring 50%-55% reinvestment to maintain flat production.
In the Montney, Whitecap highlighted several projects at different stages. Wong cited Musreau as a recent development example where a facility project was sanctioned with an expected three-year payout but came in under cost and ahead of schedule, alongside 10%-20% well outperformance that management said improved payout to well under two years. Whitecap said Musreau is generating C$90 million-C$115 million per year of asset-level free cash flow while reinvesting about 50%-60% to hold production flat.
The company also provided an update on Lator Phase 1, a 35,000-40,000 BOE/d facility sanctioned in 2024. Wong said construction was about 50% complete on a spend basis and targeted commissioning is in Q4 2026. Management also described additional illustrative growth “wedges,” including Lator Phase 2, Gold Creek and Karr expansions, Resthaven lean gas development, and a Kakwa expansion, while emphasizing that activity will scale only when returns justify it.
Conventional: inventory upgrades and EOR upside
Vice President of the Conventional Division Chris Bollen said conventional assets produce about 140,000 BOE/d with roughly 80% oil and NGLs, and that Whitecap is the second largest light oil producer in Canada and the largest in Saskatchewan. The company cited more than three million acres and a multi-decade conventional inventory of 5,800 locations, supported by 52,000 bbl/d of dedicated low-decline waterflood and EOR production.
Bollen said the conventional team upgraded about 400 premium locations during the year discussed, increasing premium inventory from 2,600 to 2,900 even after accounting for wells drilled. He also said only about 40% of conventional inventory is booked as proved and probable reserves, which he framed as conservative booking and a source of longer runway for future upgrades.
On EOR, Bollen said internal estimates indicate roughly 14 billion barrels of gross original oil in place across EOR-focused assets, with an aggregate forecast recovery factor of 35% over time. He cited a 2P NPV of approximately C$8 billion at year-end 2024 for projects already utilizing secondary and tertiary recovery. Management highlighted Weyburn as a benchmark CO2 EOR project with over 70 years of production, about 600 million barrels produced to date, and more than 41 million tons of CO2 safely stored since CO2 injection began in 2000. Bollen said recent geomodeling and internal reservoir simulation increased estimated gross OOIP at Weyburn by about 20% to around 1.8 billion barrels and expanded total gross OOIP including adjacent lands and the underlying Frobisher zone to about 2.5 billion barrels.
In the Q&A, management said corporate PDP decline is currently 28%-29%, with conventional decline at 19%-20% and unconventional at 32%-33%. The company also said maintenance capital to keep production flat would be roughly C$1.9-C$2.0 billion. On M&A, Fagerheim said acquisitions are not the primary focus “at this particular time” given the company’s organic inventory depth, though it will continue to evaluate opportunities. Management said 2026 production guidance is 370,000-375,000 BOE/d and noted about 90,000 BOE/d of available infrastructure capacity for potential quick additions if needed.
About Whitecap Resources (TSE:WCP)
Whitecap Resources Inc is engaged in the business of acquiring, developing, and holding interests in petroleum and natural gas properties and assets. The company acquires assets with discovered petroleum initially in place and low current recovery factors. Light oil is the primary byproduct of Whitecap’s Canadian assets. To extract petroleum products from its resources, the company uses horizontal drilling, in addition to multistage fracturing technology. Crude oil is the leading revenue generator out of the basket of energy products sold by Whitecap.
