An anonymous director reports

WHITECAP RESOURCES INC. STRENGTHENS BALANCE SHEET -- ADJUSTS 2019 CAPITAL EXPENDITURES

Whitecap Resources Inc. has elected to exercise a more cautious approach for the balance of 2019 by reducing the company's 2019 second half capital expenditures program by 17 per cent to $250-million from $300-million to provide greater optionality and improve near-term free funds flow. The company's fiscal 2019 capital expenditures program is now anticipated to be $400-million, which is $50-million lower than the company's previous guidance of $450-million.

The company's 2019 average production guidance of 70,000 barrels of oil equivalent per day to 72,000 barrels of oil equivalent per day remains unchanged, despite the reduction in capital expenditures. The company now anticipates growing production by 6 per cent to 74,000 barrels of oil equivalent per day to 75,000 barrels of oil equivalent per day in the fourth quarter of 2019 from the second quarter average production of 70,611 barrels of oil equivalent per day. On strip pricing, anticipated 2019 free funds flow is approximately $135-million with a total payout ratio of 80 per cent, compared with $95-million and a total payout ratio of 86 per cent prior to the reduced capital program.

The objectives of the company's 2019 budget were to: protect its balance sheet; reduce net debt; and maintain the current dividend by having a disciplined first half 2019 capital program and a flexible second half 2019 program. In the first half of 2019, the company was able to reduce net debt by $106.6-million and not only maintain the dividend, but provide a modest, but sustainable, 5.6-per-cent increase for its shareholders. The company's continued disciplined approach to capital spending in the second half of 2019 will further strengthen its balance sheet going into a period of significant global economic uncertainty. The company believes the reduction to its capital program is prudent, given the continuing United States/China trade wars and recessionary concerns in 2020.

The company applauds the Alberta government's recent decision to extend crude oil curtailments by one year, along with raising the amount of a producer's output that is exempt from curtailment to 20,000 barrels per day from 10,000 barrels per day. These enhancements will provide more value to all Albertans for their natural resources, while allowing Whitecap to allocate capital investment to the company's highest rate of return projects without the risk of the associated production being restricted.

The company's long-term strategy is prioritized to protect the balance sheet first, maintain a sustainable dividend second and generate a moderate growth rate, while retaining future financial optionality to enhance shareholder returns. The company operates essentially all of its assets and has a comprehensive understanding of its high-quality drilling inventory, and, therefore, has the operational and financial flexibility to accelerate its capital program in 2020 to respond to more stable market conditions, and will ensure capital expenditures and dividend payments are well financed by funds flow and the company's balance sheet strength is maintained.

The company has fixed $200-million of bank debt at a very attractive long-term effective interest rate of 3.25 per cent per year for five years. This is incremental to the $595-million of debt termed out to 2022 to 2026 at an average fixed rate of 3.63 per cent per year. Whitecap continues to have a strong balance sheet, with net debt at $1.2-billion on debt capacity of $1.77-billion.

The company's board of directors and management team would like to thank the Whitecap shareholders for their continuing support.

We seek Safe Harbor.