Whitecap Resources Inc (SPGYF) Q2 2024 Earnings Call Highlights: Record Production and ...

GuruFocus News
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In This Article:

  • Quarterly Production: Averaged over 177,000 boe per day, exceeding the forecast of 170,500 boe per day.

  • Funds Flow: $426 million or $0.71 per share.

  • Free Funds Flow: $223 million or $0.37 per share.

  • Operating Cost: Decreased to $13.49 per boe.

  • Cash Tax Expense: $100 million, including a $33 million impact from capital gains.

  • Shareholder Returns: Almost $250 million returned year-to-date, including $25 million of share repurchases in July.

  • Net Debt: Below $900 million pro forma the dispositions, with a forecast of below $1 billion at year-end.

  • Crude Oil Prices: Averaged over $110 per barrel on a Canadian dollar basis.

  • Liquids Revenue: Total liquids represented 95% of revenue for the quarter.

  • Montney and Duvernay Wells: First eight wells averaged 1,600 boes a day per well, with almost 1,100 barrels per day of condensate per well.

  • East Division Wells: 26 wells brought on during the second quarter, with strong performance in Southeast Saskatchewan and Viking assets.

Release Date: July 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Whitecap Resources Inc (SPGYF) reported record quarterly production averaging over 177,000 boe per day, surpassing their forecast of 170,500 boe per day.

  • The company generated $426 million in funds flow and $223 million in free funds flow, reflecting strong financial performance.

  • Operating costs decreased to $13.49 per boe, demonstrating effective cost management and higher production efficiency.

  • The company announced a positive FID on their Phase 1 new build Lator facility, fully funded by PGI, enhancing future growth prospects.

  • Whitecap Resources Inc (SPGYF) plans to use $200 million from partial infrastructure dispositions for share repurchases, indicating a commitment to returning value to shareholders.

Negative Points

  • Despite strong performance, the company faces ongoing commodity price volatility, which could impact future financial results.

  • The production additions are described as 'chunky,' indicating potential challenges in maintaining a smooth production profile.

  • There is a significant cash tax expense of $100 million in the quarter, including a $33 million impact from capital gains on partial infrastructure disposition.

  • The company has not increased its dividend, citing the current yield as too high, which may disappoint income-focused investors.

  • Share repurchases were minimal in Q2 despite having excess free cash flow, raising questions about capital allocation priorities.

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