Whitecap Resources Inc. announces second quarter 2010 results

CALGARY, Aug. 4 /CNW/ - Whitecap Resources Inc. ("Whitecap" or the "Company") (TSXV:WCP) is pleased to announce it has filed on SEDAR its unaudited financial statements and related Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2010. Selected financial and operational information is outlined below and should be read in conjunction with Whitecap's unaudited financial statements and related MD&A which are available for review at www.sedar.com.

FINANCIAL AND OPERATING HIGHLIGHTS

    
                                      Three months ended    Six months Ended
                                           June 30, 2010       June 30, 2010
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    Financial ($, except per share
     amounts)
    -------------------------------------------------------------------------
    Petroleum and natural gas
     revenues                                  3,998,795           8,466,833
    Funds generated by operations(1)           1,938,187           4,026,575
      Per share basic                               0.01                0.03
      Per share diluted                             0.01                0.02
    Net loss                                    (711,526)           (688,734)
      Per share basic/diluted                       0.00                0.00
    Capital expenditures                       7,251,778          11,069,187
    Corporate and property acquisitions       34,656,397          36,236,384
    Net debt and working capital
     surplus (deficit)(2)                    (21,013,920)        (21,013,920)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Operating
    Production
      Crude oil (bbls/d)                             343                 340
      NGLs (bbls/d)                                   89                  92
      Natural gas (mcf/d)                          3,192               3,162
    -------------------------------------------------------------------------
      Total (boe/d)                                  964                 959
    -------------------------------------------------------------------------
    Average realized price
      Crude oil ($/bbls)                           73.31               76.08
      NGLs ($/bbls)                                55.13               59.97
      Natural gas ($/mcf)                           4.35                4.87
    -------------------------------------------------------------------------
      Total ($/boe)                                45.58               48.80
    -------------------------------------------------------------------------

    (1) Funds used in operations is calculated as cash flow from operating
activities before the change in non-cash working capital and is a non-GAAP
measurement
    (2) Excludes risk management contracts


                                      Three months ended    Six months Ended
                                           June 30, 2010       June 30, 2010
    -------------------------------------------------------------------------
    Netback ($/boe)
      Petroleum and natural gas
       revenue                                     45.58               48.80
      Other income                                  0.52                0.44
      Royalties                                    (7.72)              (9.06)
      Operating expenses                          (10.05)              (9.86)
      Transportation expenses                      (1.37)              (1.71)
    -------------------------------------------------------------------------
    Operating Netback prior to hedging             26.96               28.61
      Realized hedging gain                         2.45                1.84
    -------------------------------------------------------------------------
    Operating Netback                              29.41               30.45
    -------------------------------------------------------------------------

    Wells Drilled                             4 (net 2.5)         8 (net 4.1)
    Undeveloped land holdings (acres)
      Gross                                       50,100              50,100
      Net                                         30,308              30,308
    Shares outstanding                       222,584,796         222,584,796
    Weighted Average shares                  157,988,856         155,660,210


    MESSAGE TO SHAREHOLDERS
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Whitecap Resources Inc. is very pleased to provide you with our report on our second quarter operational and financial results as well as our "going public transaction" through the reverse takeover of Spitfire Energy Ltd.

During the second quarter we drilled three successful vertical wells (one well in our Valhalla North Montney pool and two wells on our recently acquired assets in Southwest Saskatchewan) as well as starting the drilling of our third horizontal well at Valhalla North. In addition, after the extended spring break-up we were able to return to completing and tying in the three wells from our first quarter drilling program which we have brought on-stream in early July.

From a longer term strategic perspective, we were able to complete the reverse takeover of Spitfire Energy Ltd. ("Spitfire") in the second quarter. The "going public transaction" with Spitfire was announced on June 1, 2010 and closed on June 25, 2010. The transaction brings to Whitecap 380 boe/d of primarily shallow decline, high working interest operated assets in Southwest Saskatchewan with a significant amount of development drilling upside. We expect that combining our Valhalla North Montney oil asset with Spitfire's southwest Saskatchewan oil properties will not only provide an additional asset from which to grow but also to diversify our oil growth portfolio of opportunities.

Lastly, subsequent to the end of the second quarter, on July 12, 2010, we announced the acquisition of a private company with Pembina light oil horizontal Cardium potential for $52 million. Concurrent with the transaction the Company announced a bought deal financing of $40 million that was closed on July 30, 2010. We are excited with the oil growth potential that these Pembina Cardium assets add to our asset base and look forward to reporting back to you with the organic growth we expect to generate from these assets.

Our three oil growth areas position our company to provide exceptional oil production and reserve growth from the lands we have under management. With our current 2,200 boe/d of high netback production and the drilling opportunities we have on our lands our visible production growth potential is well in excess of two times our current production. We will continue to focus our energies on capital and operating efficiencies and providing sound economic returns for our shareholders as we move forward for the remainder of 2010.

The Company's Annual General Meeting will be held in the Royal Room at the Metropolitan Conference Centre in Calgary, Alberta on Tuesday September 14, 2010 at 10:00 a.m. local time.

Thank you for your continued interest and support of Whitecap.

"signed"

Grant Fagerheim

August 3, 2010

    
    2010 SECOND QUARTER ACCOMPLISHMENTS/FINANCIAL UPDATE
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    -   On June 25, 2010, the Company completed the reverse take-over of
        Spitfire Energy Ltd which provided for (i) a recapitalization of the
        Corporation through a $7.75 million private placement (ii) the
        appointment of a new management team and a new board of directors,
        and (iii) the acquisition of an oil-weighted asset base in southwest
        Saskatchewan.

    -   Average production volumes increased from 953 boe/d in first quarter
        to 964 boe/d in the second quarter of 2010. Current production is
        approximately 2,200 boe/d.

    -   Generated cash flow from operations of $1.9 million in the second
        quarter which includes $0.2 million of hedging gains on risk
        management contracts.

    -   Operating netback in the second quarter was $29.41 compared to $31.52
        in the first quarter of 2010. Lower commodity prices in the second
        quarter were offset by lower crown royalties paid and a risk
        management program that added $2.45/boe to the corporate netback.

    -   In the second quarter of 2010, the Company drilled and cased 2 (net
        0.6) wells in the Valhalla North property and 2 (net 1.7) vertical
        Roseray Oil wells in SW Saskatchewan.

       Subsequent Event

    -   On July 30, 2010, the Company completed the acquisition of a private
        company for total consideration of approximately $52.0 million. The
        primary assets acquired are located in the Pembina region of west
        central Alberta with production and reserves focused in the Cardium
        formation. The Acquisition was funded through a $40 million bought
        deal subscription receipt financing with the remaining balance funded
        through the Company's credit facility. The Company's Lender has
        increased the credit facility to $55 million concurrent with the
        closing of the acquisition.
    

Note Regarding Forward Looking Statements and Other Advisories

This press release contains forward-looking statements and forward-looking information (collectively "forward looking information") within the meaning of applicable securities laws. Forward-looking information typically use words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. In particular, forward looking information in this press release includes, but is not limited to: statements with respect to the estimated purchase price of the Acquisition and the Acquisition; the use of proceeds of the Offering; and the sources of funding for the Acquisition.

The forward-looking information is based on certain key expectations and assumptions made by Whitecap, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future well production rates and estimates of operating costs; reserve and resource volumes; the state of the economy and the exploration and production business; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to market oil and natural gas successfully and the ability of the Company to access capital; receipt of all necessary approvals for completion of the Acquisition; satisfaction of all necessary conditions to closing of the Acquisition; and completion of the Acquisition on the timing planned.

Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve and resource estimates; the uncertainty of estimates and projections relating to reserves, resources, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions including the Acquisition; ability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to tax laws, royalties and environmental regulations; failure to obtain the necessary regulatory approval, stock exchange and other regulatory approvals and on the timelines planned; risks that conditions to closing of the Acquisition or the Offering are not satisfied.

Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on the Company's future operations and such information may not be appropriate for other purposes.

Although Whitecap believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that the Company will derive there from.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Whitecap are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking information contained in this press release are made as of the date hereof and Whitecap undertakes no obligation to update publicly or revise any forward-looking information or statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

%SEDAR: 00016881E

For further information: Grant Fagerheim, President & CEO or Thanh Kang, VP Finance and CFO, Whitecap Resources Inc., 500, 222 - 3 Avenue SW, Calgary, AB, T2P 0B4, Main Phone [phone], Fax [phone]