Q4 2024 Whitecap Resources Inc Earnings Call

<unk> conference call and no.

Note that all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question at that time simply press Star then number one on your telephone keypad. If you would like to withdraw your question. Please press Star then number two.

Speaker Change: And I would like to turn conference over to Whitecaps, President and CEO, Mr. Graham CAGR Heim. Please go ahead Sir.

Speaker Change: Thank you Sylvia and good morning, everyone and thank you for joining us today.

Speaker Change: Five members of our management team here with me today are senior Vice President and CFO, Don Kim Our senior Vice President of business development information technology developer kit.

Speaker Change: Our senior Vice President production and operations Joel Armstrong, our Vice President of our West Division <unk> and.

Speaker Change: Rich prison, each division Crystal and 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.

Speaker Change: 2024 was an exceptional year in all areas of our business execution of our $1 $1 billion capital program delivered production results that consistently exceeded our expectations providing for guidance increases throughout the year.

Speaker Change: These results not only validate the strength of our asset base, but also the resolve of our personnel and with our ability to execute and deliver on our growth targets.

Speaker Change: We're also very pleased to have returned over $560 million of capital back to our shareholders. During 2024 over $430 million through our base dividend of <unk> 73 per share annually and approximately $130 million and share repurchases.

Speaker Change: This was made possible with our balance sheet flexibility that.

We maintain and was actually enhanced throughout the year, our strong year provided for an impressive 2024.

Mcdaniels: Reserve growth report for Mcdaniels.

Mcdaniels: With that adjusted reserves per share growth between 12% to 13% and low F&D F DNA costs, resulting in attractive recycle ratios of three eight times two.

Mcdaniels: Two seven times and three three times for proved developed producing total proved and proved plus probable reserves respectively.

Mcdaniels: Okay.

Mcdaniels: We believe that we have a very attractive inventory of opportunities on our asset base that will provide long term profitable and sustainable growth for our shareholders.

Mcdaniels: During 2024, we ran a highly competitive process to unlock a portion of the value with the infrastructure portfolio, culminating with a partial sell down of our <unk> 509 battery to Topaz and there are 50% to seven kebab gas processing facility and the right to fund our future for 2014 mature facility to Pgi total port.

Mcdaniels: Proceeds of $520 million.

Mcdaniels: We retained operator ship of all three facilities and will utilize both in house and Pgi is expertise in constructing our new <unk> facility scheduled to be completed by late 2026 early 2027.

Mcdaniels: In addition, we also formed a strategic partnership with Pgi and Pembina to unlock further value from these assets in alignment with our long term strategic goals for both us and our partners receiving preferential fees and access to their vast network of infrastructure and midstream assets has made was made possible by signing long term agreements.

Mcdaniels: That are supported with high quality and long dated inventory of our unconventional montney and duvernay asset.

Mcdaniels: That we possess.

Mcdaniels: Oh, Julien Chris will provide more insight on the asset specific details, but I would like to highlight a few meaningful areas that drove a significant portion of our outperformance in 2024.

Mcdaniels: With our unconventional assets one.

Chris: One of the main 2024 highlights would be our montney asset at <unk>, We completed our private nine battery in March two weeks ahead of schedule and 10% under budget and we were able to quickly add production for our first four well pad in the area.

Mcdaniels: Our first four well pads in the area.

Mcdaniels: Since that time, we've grown production of 17500 Boe per day, where we reached condensate production capacity as the wells consistently provided higher condensate gas ratios than we had forecast overall condensate from the most rou assets provided over 2000 Boe per day of outperformance relative to our initial budget and are remaining.

Mcdaniels: Driver of this year's success K, Bob results outperformed our initial expectations by 500 BOE per day as both initial production rates were higher than forecasted and base production showed stronger performance than what we were expecting we also.

Mcdaniels: Anticipate our 15% to seven gas processing facility to operate at capacity in the second half of 2025, which is earlier than previously forecasted.

Mcdaniels: On the conventional side the two areas that were primary drivers of outperformance with our progress there.

Mcdaniels: Asset in East, Saskatchewan, and the glauconite asset in Central Alberta.

Mcdaniels: New well performance was strong in progress, resulting in 2000 Boe per day of outperformance in our 2024 program paying out in only nine months.

Mcdaniels: Advances in drilling techniques to add second and third laterals legs have improved the already robust economics of this place since we acquired it in 2021 in the Glauconite, we were able to secure additional egress options through 2024, which enabled our base and new production to outperform our initial expectations by approximately 200.

Mcdaniels: Per day.

Bind with the cost savings that we are now realizing through the use of mono bore drilling technique. The asset is really showing its strength within our portfolio.

Mcdaniels: As mentioned at the onset.

Mcdaniels: We have an exceptional 2024 and while we were.

Mcdaniels: Some of the more notable areas of outperformance our teams continue to pursue small wins across our entire portfolio at an aggregate drive continuous improvement and strong results for our shareholders I will now pass it off to Joey for more resorts results on our West Division.

Joey: Thanks, Brett.

Joey: Our unconventional assets closed the year with strength as both new drills and base production exceeded expectations across all focus areas in the Montney and Duvernay.

On average our Duvernay wells ochre formed internal expectations by over 15%, while our montney wells outperformed by over 20%.

Joey: This outperformance is aided by the continued application of our unconventional development workflow to an already strong asset base.

This workflow combines a number of technical best practices with the goal of delivering optimized and predictable results.

Joey: Further informs our development decisions, such as well and completion designs real time monitoring and optimization of completion operations and production and drawdown strategies.

Joey: The consistency and scale of outperformance provide strong operational momentum as we commenced our 2025 program and has reinforced confidence in our long range plan for our unconventional assets.

Joey: That long range plan sets out a projected growth of 10% to 15% per year with a 2025 forecast of 65000 to 70000 Boe's per day and growth to 100200 20000 Boe's per day by the end of 2029.

Joey: With only 16% of our almost 2500 inventory locations booked and proven plus probable reserves. We are confident that we will hit these targets and continue to do so well into the future.

Joey: Building on the asset level discussing the grant just spoke to a key highlight in 2024 was the completion and startup of our modular facility.

Joey: We have now brought on 16 wells that mazo inhibitor exceeded expectations on both the strength of inflow and condensate to gas ratios.

Joey: Further we are observing impressive bottom hole characteristics with wells in our multi bench configuration tracking long term outperformance to expectations of approximately 20%.

Joey: These observations have reaffirmed our design selection of a multi bench development in this area.

Joey: This approach, which vertically offset wells within the Montney enhances reservoir coverage, while mitigating inter wellbore interference.

Joey: If these results can be replicated across our undeveloped acreage, we anticipate increased EUR per well and or expanded inventory through modestly higher well density materially enhancing capital efficiencies extending asset duration and increasing profitability.

Joey: That mature significant process significant progress continues on our <unk> phase one facility scheduled for completion in late 2026 early 2027.

Joey: Engineering and procurement efforts are advancing as planned with permitting and progress in approximately three quarters of critical long lead items now ordered.

Joey: In 2024, we drilled two single wells on the eastern and southern portions of our tour acreage respectively to assess the deliverability and liquids content across the sizeable land block that covers roughly four townships of highly prospective montney rates.

Joey: The first 12 13 or 21 has now been on production for more than a 120 days and has achieved an IP 121265, boe's per day of which 41% were liquids, including 400, and 442 barrels a day of condensate.

Joey: The second well at 30% to 35 with 85 days of production is tracking a projected IP of just over 600 boe's per day of which 24% of liquids, including just over 250 barrels a day of condensate.

Joey: On an asset of this size, we do expect variability in liquids content and keep in mind that our total liquid splits for both wells would be 10% to 15% higher if they were flowing through to our future for 13 facility and it onto a deep cut plant, which is one of the many advantages that our strategic partnership with Pgi and Pembina provides us.

Joey: Also of note condensate to gas ratios on both wells were higher than our initial expectations for each specific area, which is positive for the overall economics of this asset.

Joey: Moving over to cable hub, we recently completed fracturing operations on our second wine rack Duvernay pad at 858, which is a follow up to a pilot at 11 of 14 B.

Joey: Initial indications upon completion flowback and early production days were all favorable on the 11 of 14, B pad, which gave us the confidence to progress. This initiative to ensure repeatability of the observed improvements.

Joey: We're now up to over 120 days of production for the for that 11 of 14, B pad and with an IP 120 is still over 1200 Boe's per day combined with our observations of the bottom hole flowing conditions. We are pleased with the initial results to continue to provide key validation points that support our assessment of what this asset might be capable of.

Joey: The measured approach to development and optimization of this asset demonstrates our commitment to enhancing capital efficiency and improving <unk> expanding our inventory.

Joey: As results are further collected from these early pads, we will assess the potential for further enhancement through potential inter well spacing reductions and associated inventory adds preceding only if additional well density proves economically accretive.

Joey: Beyond wine rack trials, we are also advancing capital efficiency improvements through extended laterals, leveraging our land base and sub surface subsurface characteristics.

Joey: Our next three development pads will feature two and a half mile laterals enhancing resource recovery and operational efficiency.

Speaker Change: With that I will now pass it over to Chris Bullet Vice President of our East Division to talk about our conventional assets.

Chris Bullet: Thanks Joey.

Chris Bullet: Our East Division also had another great year in 2024 exceeding our internal expectations and supporting our corporate growth and free cash flow generation through high net back 80% liquids weighted volumes that are underpinned by both secondary and tertiary recovery assets, thus lowering our corporate decline and reducing maintenance capital requirements.

Chris Bullet: This allows our unconventional assets in our West division to focus on growth and continuing to build more scale to cash flow, which over time becomes very meaningful for whitecap. This complementary asset portfolio is a competitive advantage for us.

Chris Bullet: Outperformance of our conventional assets in 2024, primarily came from from our Central Alberta, Glauconite and eastern Saskatchewan Frobisher assets.

Chris Bullet: Our central Alberta, Glauconite program had a very successful 2024, as we have been able to realize approximately 10% savings on total well costs with the implementation of mono bore drilling which has been operationally validated on the last five wells of the program.

Chris Bullet: We have recently updated our glauconite type curve to reflect us, reducing our total well cost to $6 5 million.

Chris Bullet: This enhancement is now being applied to the majority of our glauconite inventory, which bodes well for upgrading and improving upon an already robust asset.

Chris Bullet: Although one of our drilling is not a new technology as we have used this technique and both the cardium and Viking for years. It has been a staged approach to applying on the glauconite due to technical risks, which our team has done an exceptional job navigating through and ultimately validating and opportunity for enhancement.

Chris Bullet: This outperformance of our 2024 Glauconite program was aided by securing additional infrastructure access and egress, thereby allowing us to realize the full potential of these assets combining asset level performance with improvements in operational execution is leading to superior returns and we're excited to continue this momentum into another act of 2025 program.

Chris Bullet: Our east Saskatchewan Frobisher assets have achieved tremendous success since they were first acquired back in 2021.

Chris Bullet: Our team's evaluation and application of technological advancements have improved the already top tier economics by increasing reservoir contact through longer laterals as well as increasing the number of horizontal legs. As a result, our full program 2024, consisting consists of 37 dual and triple leg wealth is forecast to payout in only nine months.

Chris Bullet: Yes.

Chris Bullet: These results are tracking 30% above our expectations, which if you recall back to our Investor Day presentation last June we highlighted that our current expectations of 45% above what our original expectations were only three years ago to continue to post better results is a significant achievement for this team and this asset in such a short period of time.

Chris Bullet: Continuing on with further inventory enhancement initiatives is our open hole multilateral stadia pilot as previously mentioned the state as a tighter flow unit of the upper Frobisher and with advancements in this technology, we believe that the potential of the state aid can now be unlocked.

Chris Bullet: We are currently evaluating fall up locations for 2025 to better assess and validate this potential resource that we have recently identified as having over 100 inventory opportunities.

Chris Bullet: All of our conventional teams are maintaining a close watch on advancements in open hole multilateral development throughout Western Canada and were deemed appropriate we'll look to allocate strategic capital towards unlocking these opportunities with.

Chris Bullet: It was such a strong portfolio of current inventory whitecap can benefit from a staged approach to limit our exposure to any additional risk.

Chris Bullet: Moving over to the Viking we continue to push extended reach laterals across our program with the 81 Viking wells drilled in 2020 for having an average lateral length of over 500 meters, which is our longest to date. This highlights our continued push to maximize efficiencies as extended reach wells reduce operating costs surface footprint and infrastructure.

Chris Bullet: Structure spending while improving economics are.

Chris Bullet: Our 2024 program IP 90 results outperformed the industry average and Saskatchewan by 45%.

Chris Bullet: By leveraging our experience of drilling over 1000 wells to date in the Viking in conjunction with efficient development planning and an enviable land position our conventional team plans to continue to expand ear ache utilization in 2025.

Chris Bullet: Our conventional portfolio has nearly a decade of tier one and tier two opportunities with over 3800 locations in inventory, we are well positioned to continue to harvest. These high quality light oil focused properties that have infrastructure already in place coupled with a strong marketing strategy, providing access to advantageous locations and reliable downstream.

Chris Bullet: <unk>.

Chris Bullet: We are focused on continuing to find ways to enhance and extend the longevity of our place with either technology or operational enhancements or through business development initiatives, focusing on tuck in acquisitions and leveraging our technical expertise in each play.

Chris Bullet: We are looking forward to another successful year in 2025, I will now pass the baton to further discuss our financial results.

Speaker Change: Thanks, Chris 2024 financial performance was also strong as we generated fourth quarter funds flow of $413 million or <unk> 70 per share and full year funds flow of $1 6 billion or $2 73 per share.

Speaker Change: 2024 free funds flow of $501 million or <unk> 84 per share was higher than our original expectations when factoring in actual commodity prices through the year.

Speaker Change: Again, a good result, and a testament to the operational and financial success, we achieved this year.

Speaker Change: From a netback perspective higher than expected light oil and condensate production from both our conventional and unconventional assets drove a strong netback of over $33 per Boe in 2024.

Speaker Change: Our controllable cash costs being operating transportation G&A and share based compensation were also in line with our expectations that we set out at the start of the year.

Speaker Change: White cap contribution through the key to the Canadian economy, where again substantial in 2024 with $1 1 billion in capital spending and almost 800 million paid in crown royalties corporate taxes property taxes and personal taxes paid on behalf of our employees.

Speaker Change: Year end net debt of $933 million was reduced by over $450 million since year end 2023, and we've now reduced net debt by over $1 2 billion since the closing of the <unk> transaction in the third quarter of 2022.

Speaker Change: In that same time period, we have returned approximately $1 2 billion to shareholders through our base dividend and in CIB.

Speaker Change: Counting to almost $4 per share and value accruing to shareholders in just over two years.

Speaker Change: In the fourth quarter. We also closed our inaugural issuance of investment grade senior notes. The five year 400 million notes carry a coupon of 438, 2%, which was lower than our cost of bank debt.

Speaker Change: Our leverage is at three times debt to EBITDA and we have over $1 6 billion of available capacity on our current credit facilities, providing us with ample flexibility to manage through market cycles, including any potential differential impacts that we may be faced in the short to medium term.

Speaker Change: For 2025, our guidance for average production of 176000 to 180000 Boe's per day on a capital budget of $1 one to $1 2 billion is unchanged.

Speaker Change: This is forecast to generate funds flow of approximately $1 7 billion in free funds flow of $550 million at U S dollars $70 per barrel, WTS and $2 per GJ acre price.

Speaker Change: Our 2025 funds flow sensitivities to commodity prices are.

Speaker Change: For every U S dollar change <unk>, our funds flow is impacted by $23 million.

Speaker Change: For every 10 cent change in April our funds flow is impacted by $7 5 million.

Speaker Change: For every dollar change in the MSW differential our funds flow is impacted by $23 million and for every penny change in the U S. Canadian dollar exchange rate our funds flow is impacted by $20 million.

Grant: With that I'll turn it over back to grant for his closing remarks.

Speaker Change: Thanks, Tom Chris Joy for your remarks, as we noted in yesterday's press release, we have made significant strides over the past three years with substantial growth both on an absolute and per share basis, while ensuring our balance sheet strength is maintained and were you able to provide consistent and attractive returns to shareholders. We believe that for all.

Speaker Change: All of the success, we've had changed in 2024. It is just the beginning of hitting our stride with the asset base that we have assembled and we are excited for the years to come.

Speaker Change: With respect to Canadian energy.

Speaker Change: We remain engaged on gaining a full understanding of the potential for tariffs on oil and gas exported to the U S.

Speaker Change: And we will ensure that we do whatever we are able to to minimize the impact to our ongoing operations.

Speaker Change: Canadian energy is a vital part of the Canadian economy, and critical for both Canadian and North American Energy Security currently Canada exports, approximately $4 2 million Boe per day.

Speaker Change: Barrels of oil.

Speaker Change: Per day to the United States.

Speaker Change: 950000 barrels per day is later and we're currently exporting approximately 10 Bcf a day to the U S of the 19 Bcf a day of natural gas we produce across our country.

Speaker Change: We have experienced the positive impact of the <unk> expansion since it came online last year and we also expect to see positive impact on pricing dynamics within Canada.

Speaker Change: But the LNG, Canada ramp up.

Speaker Change: It takes place later this year and what it can provide both projects are increasingly viewed as overwhelmingly benefit beneficial to all Canadians.

Speaker Change: And there are several LNG export projects on the West Coast of Canada that continue to progress that will expand our market access by the end of the decade.

Speaker Change: But still we need more of these types of projects, including having an ability to supply our own citizens in eastern and Central Canada.

Speaker Change: Reliably and ethically produced energy.

Speaker Change: Not subject to protectionist policies and other regimes took.

Speaker Change: To conclude.

Speaker Change: On what wasn't outstanding 2024, our business has never been stronger and more resilient.

Speaker Change: Not only have we manage through extreme volatility over the last several years, but more importantly, our team has been able to execute on organic development opportunities as well as capture inorganic opportunities during periods of market dislocation to make our company stronger.

Speaker Change: That I will turn the call over to the operator, Sylvia you for any questions. Thank you.

Speaker Change: Thank you Sir.

Sylvia: Ladies and gentlemen, if you have a question. Please press star followed by one you touched on this call you.

Speaker Change: You will hear a prompt acknowledging your request and should you wish to withdraw from the question queue.

Sylvia: Followed by two.

Sylvia: We do ask that if you're using a speaker phone. Please lift the handset before pressing any Keith. Please go ahead and press Star one now if you have a question.

Speaker Change: Firstly, we'll hear from Luke Davis Raymond James Please go ahead.

Speaker Change: Hey, good morning, guys. Thanks for taking my question.

Speaker Change: Just regarding guidance I know, it's still early in the year, but wondering if you can just frame out.

Speaker Change: How youre thinking about sort of the lower and upper bounds and what specific assumptions go into that.

Speaker Change: I mean operationally things have gone really well for 2024 I'm.

Speaker Change: Curious if you can kind of delineate how much of that outperformance is actually factored into 2025, and if you could just comment on that by region or even play that'd be that'd be helpful.

Speaker Change: Hey, Thanks for that question there Luca will answer for the first part of that question. So as we think about average production for the year at 176 to 180000 <unk> per day mid case being the 178.

That would represent.

Speaker Change: Basically 3% production per share growth and as we.

Speaker Change: Potentially are able to achieve the higher end of the 4% production per share growth. So it hasnt been incorporated.

Speaker Change: Some of the outperformance that we've seen here in 2000 or that we've seen in 2024. So there is an ability for us to certainly see that continuing on we were off to a really good start here in the first quarter.

Speaker Change: Last year, we had have outperformed by about five 8% relative to original budget, there and so as we think about production per share growth over the last two year period of time.

Speaker Change: In 2024, it was 13% in 2023 it was 11%.

Speaker Change: With outperformance this year the potential to buyback our shares here, we think that per share growth could be in excess of 10% and thats, what our internal target is obviously.

Speaker Change: We're not saying that we are able to achieve that based on the guidance, but that would be our internal targeted at this particular time, but we haven't incorporated any outperformance that we've seen last year into our numbers here. So.

Speaker Change: So there certainly could be outperformance that we can see in 2025.

Speaker Change: One of the things just to add on to Tom's comments in.

Speaker Change: Is that we.

Speaker Change: We're in the middle here, we are middle of February.

Speaker Change: And things are going very well operations are proceeding well and we have not.

Speaker Change: Experienced too many operational challenges with the cold weather certainly are going to have to manage through that as we've had.

Speaker Change: Literally called the February period of time.

Speaker Change: What we've always wanted to do is look at where we're at for the first quarter. Once we finish our capital program through the first quarter and into the second quarter, where it's a little more you have a better understanding of where we're at so we feel we've got a very good start and as Tom mentioned, two coming out of 2024 and its continued on in 2000.

Speaker Change: 25 year first quarter to date, but we're six weeks into the new year. So.

Speaker Change: Before we make any changes to our guidance.

Speaker Change: We want a little bit more time behind us in order to do that but we are tracking ahead.

Speaker Change: Ahead of.

Speaker Change: Our initial guidance was.

Speaker Change: That's what I'd leave you with at this particular time as far as where they are coming from.

Speaker Change: The unconventional and conventional unconventional areas.

Speaker Change: So not only in the Montney and Duvernay, but also in our conventional assets in central Alberta, and Saskatchewan. So.

Speaker Change: It's a combination of all of the above.

And.

Speaker Change: And Chris had alluded to.

Speaker Change: We hope to continue that as we move forward through the balance of this year and into 'twenty six.

Speaker Change: Yes.

Speaker Change: Super helpful. Maybe just a couple of follow ups there.

Speaker Change: You noted some type curve and cost assumption changes on the on the guac specifically.

Speaker Change: If you have the numbers handy how much incremental buffer does that specifically gets you in 2025.

Speaker Change: And then.

Speaker Change: Just following on that when you look out to 2026, plus given the efficiency improvements that you've seen across the portfolio do you see a scenario where the.

Speaker Change: The capital profile starts to decrease in free cash flow increases.

Speaker Change: Yeah.

Lukas: Hey, Lukas Christopher Thanks for the first part of that question I can add some clarity onto the onto the guac.

Speaker Change: I think it's important for us.

Look at the takeaway here that we do have a strong foundation on a conventional side of tier one and tier two.

Speaker Change: Inventory opportunities here so.

Speaker Change: And that's if everything stays static so we continue to find ways to upgrade our portfolio and one of the key things that comes from cost savings opportunities such as the clock has is our ability to upgrade tier three inventory or tier two opportunity to tier one so I think thats pretty important.

Speaker Change: For us to to keep pushing forward on that especially from a.

Speaker Change: Our culture of continuous improvement perspective, we'll say.

Speaker Change: A little more granularity I guess from the Glop perspective, if you take a look.

Speaker Change: This year with the savings.

Speaker Change: You know that we have planned our with our 12 locations it equates to about a $10 million in savings.

Speaker Change: Going forward for the clock for us on a year over year basis. So so for us again.

Speaker Change: It's a pretty impactful.

Speaker Change: Specter from our focused regional perspective.

Speaker Change: And we keep finding ways to push forward on that so.

Speaker Change: Just on <unk>.

Speaker Change: Onto your second part of that question I believe is.

Speaker Change: Talk about capital.

Speaker Change: <unk> as we move through the year.

Speaker Change: Most intense capital timeframe is always the first quarter of the year.

Speaker Change: Obviously through the break up period of time in the second period second quarter.

Speaker Change: And so therefore, you look at your free cash flow running obviously.

Speaker Change: Your.

Speaker Change: Cash flow free cash flow running your capital program.

Speaker Change: And then we will balance for the balance of the year Theres. So much at play right now with tariff conversation in.

Speaker Change: That we'll manage through very carefully but.

Speaker Change: At this particular time, the first quarter capital program first half, we kind of divide it first half second half.

Speaker Change: There is less capital being spent in the second half of the year that that would be in the first half of the year, but pretty well balanced.

Speaker Change: So your cash flow continues to increase as youre growing your production if commodity prices stay flat and tariffs don't come into play.

Speaker Change: A loaded answer.

Speaker Change: Okay.

Speaker Change: That's helpful. Brad I was actually referring now to 2026 forward I'm just curious given how how much efficiencies appear to be improving across the portfolio. If you could see that sort of gross capital profile comes down over time.

Speaker Change: Yeah.

Speaker Change: That's difficult for us to grow with that what percentage of this particular time Luke.

Speaker Change: I mean.

Speaker Change: I would like to think that it continues on but I will leave that more junior operations and technical guys too.

Speaker Change: They know where I stand on that.

Speaker Change: We just we do want to make sure that what we're doing and demonstrating at this particular time is operational excellence.

To advance <unk> into 'twenty, we'll have more details on that as we move into.

Speaker Change: Coming out of the first quarter and first half of this year.

Speaker Change: That's great. Thanks for thanks for taking my questions is it for me.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: A reminder, ladies and gentlemen, this you do have any questions. Please.

Speaker Change: Followed by one you touched on the phone.

Matt Mcnulty: Next will be Matt Mcnulty.

Speaker Change: Please go ahead.

Speaker Change: Hey, everyone. Thanks for taking my question this is Matt.

Speaker Change: The carry on for Chris.

Speaker Change: When you laid out your five year plan at your Investor Day last summer you talked about mid to high single digit production growth.

Thank you are up 11% year over year. My question is do you press forward with that level of production growth or do you lower activity sort of fall back in line with our five year outlook.

Speaker Change: And then a follow up question I know, it's year two of the five year plan, but how comfortable or confident are you that the business will realize a good chunk of the $800 million in incremental free funds flow from efficiencies and Opex improvements.

Speaker Change: Yeah. So it's Tom here. Thanks for that question, Matt I'll answer the first part here, which was.

Speaker Change: The growth rate that we're outlining in our five year plan on average is about 5% organic growth year.

Speaker Change: Year over year, there and so that's a that's right within our mid case of 3% to 8% that we're targeting on a long term basis, obviously over the last.

Speaker Change: A couple of years here, we've had some outperformance as well as we've been able to enhance that per share growth through the NCI and buyback our shares. So that's not incorporated in the five year plan there and so there's certainly an ability for us to number one buyback of our shares increase that per share growth rate, but.

Speaker Change: The organic growth target is still the same it's in that 3% to 8% there mid case being being 5% that hasnt changed there obviously if the outperformance.

Speaker Change: <unk>, whether it's in 2025 or beyond in 'twenty six 'twenty seven there.

Speaker Change: We'll be at the higher end of that growth target.

Speaker Change: But again still within the band of 3% to 8% is what we're targeting long term here.

Speaker Change: Great. Thanks for your question there.

Speaker Change: Maybe I'll pass that on to Julian in terms of the type curve outperformance and what were seeing.

Speaker Change: Yes for sure Joey long here I can definitely take that one so thanks for that like I kind of mentioned in the remarks, there with her.

Speaker Change: Decent track record behind us of meeting or exceeding our expectations with some pretty good read.

Speaker Change: Regularity here, we are feeling confident in the plan that we laid out.

Speaker Change: But like we like Tom just mentioned there we haven't baked that in in terms of an upside.

Speaker Change: On the five year plan so.

Speaker Change: Is it something that is budgeted the answer is no but is it an expectation that we're going to reach for that and start to chew into the savings that you speak to there yeah, we really do hope so.

Speaker Change: Great. Thanks.

Tim Miller: Thank you next question will be from Tim Miller.

Speaker Change: Sir Please go ahead Sir.

Speaker Change: Yeah.

Speaker Change: Thank you first of all I'd like to thank and congratulate the executive team and board of directors for the excellent management of the company.

Speaker Change: My first question relates to the buyback of the WC P shares in the open market I realize the company has received regulatory approval to buy back up to 10% of its outstanding stock, which I guess would be about 58 million shares.

Speaker Change: So far it's bought back about $12 7 million I think I read.

Speaker Change: But at these ridiculously low share values I'm wondering if the board and the executives have considered perhaps front loading those buybacks, while the value of the stock is so low and the uncertainty of investing the money in the ongoing expansion is so questionable with the cheniere.

Speaker Change: <unk> south of the border.

Grant: Tim Thanks, very much excuse me, it's grant I'm taking that.

Speaker Change: Yes.

Speaker Change: I appreciate your comments just on.

Speaker Change: And where our valuation is at this particular time and whether it's on a normal course issuer bid or the potential for substantial course issuer.

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: <unk>.

Speaker Change: We have to work around.

Speaker Change: Certain blackout periods of time to reporting periods.

Speaker Change: To ensure that all of the information is in the market so and during the first quarter. So that's one component. The second component is during the first quarter period of time, and we want to ensure that.

Speaker Change: Because it's our highest capital timeframe in the first quarter.

Speaker Change: We generally don't arent really active on our.

Speaker Change: Normal course issuer bid.

Speaker Change: Generally and that's not to say, we won't do it and we won't step into it but.

Speaker Change: Between the start of the year and up until this point in time, we've been in a blackout period of time. So we're certainly consider that as part of our plan going forward.

Speaker Change: When you talk about front loading.

Speaker Change: Buying back our.

Speaker Change: Equity, we would certainly look to do that as part of our overall plan. We do have the strength of the balance sheet.

Speaker Change: Continuing to maintain that strength.

Speaker Change: As you say.

Speaker Change: The foolishness going on between the on this tariff conversation we have to monitor that closely because there is an impact in.

Speaker Change: If these.

Speaker Change: Tariffs to our applied going forward there would be.

Speaker Change: Minimal impact, but still there would be an impact so we want to monitor that and make sure that where we are.

Speaker Change: Around and maintain our strength going forward into the future but.

Speaker Change: But we will be active through the year and buying back our equity and hopefully that's a.

Speaker Change: Strong enough answer for you.

Speaker Change: It is thank you and I have a second question if I missed it.

Speaker Change: My question stems from the very strong.

Speaker Change: By Canadian sentiment that we are seeing here in eastern Canada and in fact in my 66 years I've never quite seen anything like it I like millions of other Canadians feel strongly that it's time, we leaned ourselves off of the American Pete.

Speaker Change: As the company ever considered investing in our co investing in the development of its own refinery.

Speaker Change: Specific to the.

Speaker Change: Well I appreciate that in eastern Canada, Im hoping that eastern Canada Eastern Canadians also understand that the benefit that the Canadian energy space brings to the oil and gas sector brings to all Canadians as well I think thats.

Eric: And Eric had mentioned.

Eric: As we look to sell our products in and for the benefit of all Canadians are the strongest price as we possibly can.

Eric: As far as refining.

Eric: I think there is.

Eric: A bunch of different opportunities could not specifically looked in the past.

Eric: Refining our own products in Canada.

Eric: But those are these are all things that will have to be.

Eric: Understood when I talked about making sure that we have a clear understanding of what's going to take place between them.

Eric: <unk> relations between Canada, and the U S.

Eric: Yes.

Speaker Change: I don't want to make this comment that Canada is silver resource rich and it's been.

Speaker Change: We've been tentative to ourselves who are some of the policies we have in Canada at the federal level at this particular time.

Speaker Change: We should remove.

Speaker Change: The barriers for investment and bring all of our products not just oil and gas, but whether it's other products those are the things that we.

Speaker Change: Uranium agricultural products aluminum all of these products that we.

Speaker Change: That we can make and have in Canada.

Speaker Change: We should be bringing those forward so refining.

Speaker Change: We have not specifically.

Speaker Change: <unk> looked into refining, but these were all things that once we get a very good understanding as to.

Speaker Change: By Canada.

If that will proceed well into the future. Thanks Kim.

Kim: Thank you.

Speaker Change: Thank you.

Speaker Change: And at this time gentlemen, we have no other questions registered please proceed.

Speaker Change: Okay I just wanted to say thank you Sylvia and thank you for everyone on the line today and.

Speaker Change: I want to wish each of you all the very best in 2025, when we look forward to reporting back to you.

Speaker Change: With strong results as we advance thanks very much.

Speaker Change: 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.

Operator 1: Whitecap Resources Inc. full year 2024 results conference call. Note that 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 a question at that time, simply press star then 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 the conference over to Whitecap's President and CEO, Mr. Grant Fagerheim. Please go ahead, sir.

Operator: Whitecap Resources Inc. full year 2024 results conference call. Note that 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 a question at that time, simply press star then 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 the conference over to Whitecap's President and CEO, Mr. Grant Fagerheim. Please go ahead, sir.

Grant Fagerheim: Thank you, Sylvie. Good morning, everyone, and thank you for joining us 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, Business Development and Information Technology, Dave Mombourquette, our Senior Vice President, Production and Operations, Joel Armstrong, our Vice President of our West Division, Joey Wong, and our Vice President, East 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. 2024 was an exceptional year in all areas of our business. The execution of our CAD 1.1 billion capital program delivered production results that consistently exceeded our expectations, providing 4 guidance increases throughout the year.

Grant Fagerheim: Thank you, Sylvie. Good morning, everyone, and thank you for joining us 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, Business Development and Information Technology, Dave Mombourquette, our Senior Vice President, Production and Operations, Joel Armstrong, our Vice President of our West Division, Joey Wong, and our Vice President, East 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. 2024 was an exceptional year in all areas of our business. The execution of our CAD 1.1 billion capital program delivered production results that consistently exceeded our expectations, providing 4 guidance increases throughout the year.

Grant Fagerheim: These results not only validate the strength of our asset base, but also the resolve of our personnel along with our ability to execute and deliver on our growth targets. We're also very pleased to have returned over CAD 560 million of capital back to our shareholders during 2024. Over CAD 430 million through our base dividend of CAD 0.73 per share annually and approximately CAD 130 million in share repurchases. This was made possible with our balance sheet flexibility that we maintained and was actually enhanced throughout the year.

Grant Fagerheim: These results not only validate the strength of our asset base, but also the resolve of our personnel along with our ability to execute and deliver on our growth targets. We're also very pleased to have returned over CAD 560 million of capital back to our shareholders during 2024. Over CAD 430 million through our base dividend of CAD 0.73 per share annually and approximately CAD 130 million in share repurchases. This was made possible with our balance sheet flexibility that we maintained and was actually enhanced throughout the year.

Grant Fagerheim: Our strong year provided for an impressive 2024 reserve growth report for McDaniel, with debt-adjusted reserves per share growth between 12 to 13% and low F&D, FD&A costs, resulting in attractive recycle ratios of 3.8 times, 2.7 times, and 3.3 times for proved developed producing, total proved, and proved plus probable reserves, respectively. We believe that we have a very attractive inventory of opportunities on our asset base that will provide long-term profitable and sustainable growth for our shareholders.

Grant Fagerheim: Our strong year provided for an impressive 2024 reserve growth report for McDaniel, with debt-adjusted reserves per share growth between 12 to 13% and low F&D, FD&A costs, resulting in attractive recycle ratios of 3.8 times, 2.7 times, and 3.3 times for proved developed producing, total proved, and proved plus probable reserves, respectively. We believe that we have a very attractive inventory of opportunities on our asset base that will provide long-term profitable and sustainable growth for our shareholders.

Grant Fagerheim: During 2024, we ran a highly competitive process to unlock a portion of the value with the infrastructure portfolio, culminating with the partial sell down of our Musreau 5-9 battery to Topaz, and our 15-7 K-Bob gas processing facility and the right to fund our future 4-13 Lator facility to PGI, for total gross proceeds of CAD 520 million. We retained operatorship of all three facilities and will utilize both in-house and PGI's expertise in constructing our new Lator facility, scheduled to be completed by late 2026, early 2027. In addition, we also formed a strategic partnership with PGI and Pembina to unlock further value from these assets.

Grant Fagerheim: During 2024, we ran a highly competitive process to unlock a portion of the value with the infrastructure portfolio, culminating with the partial sell down of our Musreau 5-9 battery to Topaz, and our 15-7 K-Bob gas processing facility and the right to fund our future 4-13 Lator facility to PGI, for total gross proceeds of CAD 520 million. We retained operatorship of all three facilities and will utilize both in-house and PGI's expertise in constructing our new Lator facility, scheduled to be completed by late 2026, early 2027. In addition, we also formed a strategic partnership with PGI and Pembina to unlock further value from these assets.

Grant Fagerheim: In alignment with our long-term strategic goals for both us and our partners, receiving preferential fees and access to their vast network of infrastructure and midstream assets was made possible by signing long-term agreements that are supported with high quality and long dated inventory of our unconventional Montney and Duvernay asset that we possess. Both Joey and Chris will provide more insight on the asset-specific details, but I would like to highlight a few meaningful areas that drove a significant portion of our outperformance in 2024. With our unconventional assets, one of the main 2024 highlights would be our Montney asset at Musreau.

Grant Fagerheim: In alignment with our long-term strategic goals for both us and our partners, receiving preferential fees and access to their vast network of infrastructure and midstream assets was made possible by signing long-term agreements that are supported with high quality and long dated inventory of our unconventional Montney and Duvernay asset that we possess. Both Joey and Chris will provide more insight on the asset-specific details, but I would like to highlight a few meaningful areas that drove a significant portion of our outperformance in 2024. With our unconventional assets, one of the main 2024 highlights would be our Montney asset at Musreau.

Grant Fagerheim: We completed our 5 and 9 battery in March, two weeks ahead of schedule and 10% under budget, and we were able to quickly add production for our first 4-well pads in the area. Our first 4-well pads in the area. Since that time, we've grown production to 17,500 BOE per day, where we reached condensate production capacity as the wells consistently provided higher condensate to gas ratios than we had forecast. Overall, condensate from the Musreau assets provided over 2,000 BOE per day of outperformance relative to our initial budget and are a main driver of this year's success. At K-Bob, results outperformed our initial expectations by 1,500 BOE per day, as both initial production rates were higher than forecasted, and base production showed stronger performance than what we were expecting.

Grant Fagerheim: We completed our 5 and 9 battery in March, two weeks ahead of schedule and 10% under budget, and we were able to quickly add production for our first 4-well pads in the area. Our first 4-well pads in the area. Since that time, we've grown production to 17,500 BOE per day, where we reached condensate production capacity as the wells consistently provided higher condensate to gas ratios than we had forecast. Overall, condensate from the Musreau assets provided over 2,000 BOE per day of outperformance relative to our initial budget and are a main driver of this year's success. At K-Bob, results outperformed our initial expectations by 1,500 BOE per day, as both initial production rates were higher than forecasted, and base production showed stronger performance than what we were expecting.

Grant Fagerheim: We also anticipate our 15-7 gas processing facility to operate at capacity in the second half of 2025, which is earlier than previously forecasted. On the conventional side, the two areas that were primary drivers of outperformance was a Frobisher asset in East Saskatchewan and the Glauconite asset in Central Alberta. New well performance was strong in Frobisher, resulting in 2,000 BOE per day of outperformance and our 2024 program paying out in only nine months. Advances in drilling techniques to add second and third lateral legs have improved the already robust economics of this play since we acquired it in 2021. In the Glauconite, we were able to secure additional egress options through 2024, which enabled our base and new production to outperform our initial expectations by approximately 1,200 BOE per day.

Grant Fagerheim: We also anticipate our 15-7 gas processing facility to operate at capacity in the second half of 2025, which is earlier than previously forecasted. On the conventional side, the two areas that were primary drivers of outperformance was a Frobisher asset in East Saskatchewan and the Glauconite asset in Central Alberta. New well performance was strong in Frobisher, resulting in 2,000 BOE per day of outperformance and our 2024 program paying out in only nine months. Advances in drilling techniques to add second and third lateral legs have improved the already robust economics of this play since we acquired it in 2021. In the Glauconite, we were able to secure additional egress options through 2024, which enabled our base and new production to outperform our initial expectations by approximately 1,200 BOE per day.

Grant Fagerheim: Combined with the cost savings that we are now realizing through the use of monobore drilling technique, the asset is really showing its strength within our portfolio. As mentioned at the outset, we have an exceptional 2024, and we've seen some of the more notable areas of outperformance. Our teams continue to pursue small wins across our entire portfolio that in aggregate drive continuous improvement and strong results for our shareholders. I will now pass it off to Joey Wong for more results on our West Division.

Grant Fagerheim: Combined with the cost savings that we are now realizing through the use of monobore drilling technique, the asset is really showing its strength within our portfolio. As mentioned at the outset, we have an exceptional 2024, and we've seen some of the more notable areas of outperformance. Our teams continue to pursue small wins across our entire portfolio that in aggregate drive continuous improvement and strong results for our shareholders. I will now pass it off to Joey Wong for more results on our West Division.

Joey Wong: Thanks, Grant. Our unconventional assets closed the year with strength as both new drills and base production exceeded expectations across all focus areas in the Montney and Duvernay. On average, our Duvernay wells outperformed internal expectations by over 15%, while our Montney wells outperformed by over 20%. This outperformance is aided by the continued application of our unconventional development workflow to an already strong asset base. This workflow combines a number of technical best practices with the goal of delivering optimized and predictable results. It further informs our development decisions such as well and completion designs, real-time monitoring and optimization of completion operations, and production and drawdown strategies. The consistency and scale of outperformance provides strong operational momentum as we commence our 2025 program and has reinforced confidence in our long-range plan for our unconventional assets.

Joey Wong: Thanks, Grant. Our unconventional assets closed the year with strength as both new drills and base production exceeded expectations across all focus areas in the Montney and Duvernay. On average, our Duvernay wells outperformed internal expectations by over 15%, while our Montney wells outperformed by over 20%. This outperformance is aided by the continued application of our unconventional development workflow to an already strong asset base. This workflow combines a number of technical best practices with the goal of delivering optimized and predictable results. It further informs our development decisions such as well and completion designs, real-time monitoring and optimization of completion operations, and production and drawdown strategies. The consistency and scale of outperformance provides strong operational momentum as we commence our 2025 program and has reinforced confidence in our long-range plan for our unconventional assets.

Joey Wong: That long-range plan sets out a projected growth of 10% to 15% per year, with a 2025 forecast of 65,000 to 70,000 BOEs per day, and growth to 100,000 to 120,000 BOEs per day by the end of 2029. With only 16% of our almost 2,500 inventory locations booked in proved plus probable reserves, we are confident that we will hit these targets and continue to do so well into the future. Building on the asset level discussion that Grant just spoke to, a key highlight in 2024 was the completion and startup of our Musreau facility. We have now brought on 16 wells at Musreau and have exceeded expectations on both the strength of inflow and condensate to gas ratios.

Joey Wong: That long-range plan sets out a projected growth of 10% to 15% per year, with a 2025 forecast of 65,000 to 70,000 BOEs per day, and growth to 100,000 to 120,000 BOEs per day by the end of 2029. With only 16% of our almost 2,500 inventory locations booked in proved plus probable reserves, we are confident that we will hit these targets and continue to do so well into the future. Building on the asset level discussion that Grant just spoke to, a key highlight in 2024 was the completion and startup of our Musreau facility. We have now brought on 16 wells at Musreau and have exceeded expectations on both the strength of inflow and condensate to gas ratios.

Joey Wong: Further, we are observing impressive bottom hole characteristics with wells in our multi-bench configuration, tracking long-term outperformance to expectations of approximately 20%. These observations have reaffirmed our design selection of a multi-bench development in this area. This approach, which vertically offsets wells within the Montney, enhances reservoir coverage while mitigating inter-wellbore interference. If these results can be replicated across our undeveloped acreage, we anticipate increased EUR per well and or expanded inventory through modestly higher well density, materially enhancing capital efficiencies, extending asset duration, and increasing profitability. At Lator, significant progress continues on our 413 phase one facility, scheduled for completion in late 2026, early 2027. Engineering and procurement efforts are advancing as planned, with permitting in progress and approximately three-quarters of critical long lead items now ordered.

Joey Wong: Further, we are observing impressive bottom hole characteristics with wells in our multi-bench configuration, tracking long-term outperformance to expectations of approximately 20%. These observations have reaffirmed our design selection of a multi-bench development in this area. This approach, which vertically offsets wells within the Montney, enhances reservoir coverage while mitigating inter-wellbore interference. If these results can be replicated across our undeveloped acreage, we anticipate increased EUR per well and or expanded inventory through modestly higher well density, materially enhancing capital efficiencies, extending asset duration, and increasing profitability. At Lator, significant progress continues on our 413 phase one facility, scheduled for completion in late 2026, early 2027. Engineering and procurement efforts are advancing as planned, with permitting in progress and approximately three-quarters of critical long lead items now ordered.

Joey Wong: In 2024, we drilled two single wells on the eastern and southern portions of our Lator acreage, respectively, to assess the deliverability and liquids content across this sizable land block that covers roughly 4 townships of highly prospective Montney rights. The first well, 13-21, has now been on production for more than 120 days and has achieved an IP120 of 1,265 BOE per day, of which 41% were liquids, including 442 barrels a day of condensate. The second well, at 13-35, with 85 days of production, is tracking a projected IP of just over 1,600 BOE per day, of which 24% are liquids, including just over 250 barrels a day of condensate.

Joey Wong: In 2024, we drilled two single wells on the eastern and southern portions of our Lator acreage, respectively, to assess the deliverability and liquids content across this sizable land block that covers roughly 4 townships of highly prospective Montney rights. The first well, 13-21, has now been on production for more than 120 days and has achieved an IP120 of 1,265 BOE per day, of which 41% were liquids, including 442 barrels a day of condensate. The second well, at 13-35, with 85 days of production, is tracking a projected IP of just over 1,600 BOE per day, of which 24% are liquids, including just over 250 barrels a day of condensate.

Joey Wong: On an asset of this size, we do expect variability in liquids content, and keep in mind that our total liquid splits for both wells would be 10 to 15% higher if they were flowing through to our future 4-13 facility and onto a deep cut plant, which is one of the many advantages that our strategic partnership with PGI and Pembina provides us. Also of note, condensate to gas ratios on both wells were higher than our initial expectations for each specific area, which is positive for the overall economics of this asset. Moving over to K-Bob, we recently completed fracturing operations on our second wine rack Duvernay pad at 8-5-A, which is a follow-up to our pilot at 11-14-B.

Joey Wong: On an asset of this size, we do expect variability in liquids content, and keep in mind that our total liquid splits for both wells would be 10 to 15% higher if they were flowing through to our future 4-13 facility and onto a deep cut plant, which is one of the many advantages that our strategic partnership with PGI and Pembina provides us. Also of note, condensate to gas ratios on both wells were higher than our initial expectations for each specific area, which is positive for the overall economics of this asset. Moving over to K-Bob, we recently completed fracturing operations on our second wine rack Duvernay pad at 8-5-A, which is a follow-up to our pilot at 11-14-B.

Joey Wong: Initial indications upon completion, flow back, and early production days were all favorable on the 11 of 14 B pad, which gave us the confidence to progress this initiative to ensure repeatability of the observed improvements. We're now up to over 120 days of production for that 11 of 14 B pad, and with an IP120 still over 1,200 BOE per day, combined with our observations of the bottom hole flowing conditions, we are pleased with the initial results that continue to provide key validation points that support our assessment of what this asset might be capable of. The measured approach to development and optimization of this asset demonstrates our commitment to enhancing capital efficiency and improving and or expanding our inventory.

Joey Wong: Initial indications upon completion, flow back, and early production days were all favorable on the 11 of 14 B pad, which gave us the confidence to progress this initiative to ensure repeatability of the observed improvements. We're now up to over 120 days of production for that 11 of 14 B pad, and with an IP120 still over 1,200 BOE per day, combined with our observations of the bottom hole flowing conditions, we are pleased with the initial results that continue to provide key validation points that support our assessment of what this asset might be capable of. The measured approach to development and optimization of this asset demonstrates our commitment to enhancing capital efficiency and improving and or expanding our inventory.

Joey Wong: As results are further collected from these early pads, we will assess the potential for further enhancement through potential inter well spacing reductions and associated inventory adds, proceeding only if additional well density proves economically accretive. Beyond wine rack trials, we are also advancing capital efficiency improvements through extended laterals, leveraging our land base and subsurface characteristics. Our next three development pads will feature two and a half mile laterals, enhancing resource recovery and operational efficiency. With that, I will now pass it over to Chris Bullin, Vice President of our East Division, to talk about our conventional assets. Thanks, Joey.

Joey Wong: As results are further collected from these early pads, we will assess the potential for further enhancement through potential inter well spacing reductions and associated inventory adds, proceeding only if additional well density proves economically accretive. Beyond wine rack trials, we are also advancing capital efficiency improvements through extended laterals, leveraging our land base and subsurface characteristics. Our next three development pads will feature two and a half mile laterals, enhancing resource recovery and operational efficiency. With that, I will now pass it over to Chris Bullin, Vice President of our East Division, to talk about our conventional assets. Thanks, Joey.

Chris Bullin: Our East Division also had another great year in 2024, exceeding our internal expectations and supporting our corporate growth and free cash flow generation through high netback, 80% liquids weighted volumes that are underpinned by both secondary and tertiary recovery assets, thus lowering our corporate decline and reducing maintenance capital requirements. This allows our unconventional assets in our West Division to focus on growth and continuing to build more scale to cash flow, which over time becomes very meaningful for Whitecap.

Chris Bullin: Our East Division also had another great year in 2024, exceeding our internal expectations and supporting our corporate growth and free cash flow generation through high netback, 80% liquids weighted volumes that are underpinned by both secondary and tertiary recovery assets, thus lowering our corporate decline and reducing maintenance capital requirements. This allows our unconventional assets in our West Division to focus on growth and continuing to build more scale to cash flow, which over time becomes very meaningful for Whitecap.

Chris Bullin: This complementary asset portfolio is a competitive advantage for us. Outperformance of our conventional assets in 2024 primarily came from our Central Alberta Glauconite and Eastern Saskatchewan Frobisher assets. Our Central Alberta Glauconite program had a very successful 2024, as we have been able to realize approximately 10% savings on total well costs with the implementation of monobore drilling, which has been operationally validated on the last five wells of the program. We have recently updated our Glauconite type curve to reflect this, reducing our total well cost to CAD 6.5 million. This enhancement is now being applied to the majority of our Glauconite inventory, which bodes well for upgrading and improving upon an already robust asset.

Chris Bullin: This complementary asset portfolio is a competitive advantage for us. Outperformance of our conventional assets in 2024 primarily came from our Central Alberta Glauconite and Eastern Saskatchewan Frobisher assets. Our Central Alberta Glauconite program had a very successful 2024, as we have been able to realize approximately 10% savings on total well costs with the implementation of monobore drilling, which has been operationally validated on the last five wells of the program. We have recently updated our Glauconite type curve to reflect this, reducing our total well cost to CAD 6.5 million. This enhancement is now being applied to the majority of our Glauconite inventory, which bodes well for upgrading and improving upon an already robust asset.

Chris Bullin: Although monobore drilling is not a new technology, as we have used this technique in both the Cardium and Viking for years, it has been a staged approach to applying in the Glauconite due to technical risks, which our team has done an exceptional job navigating through and ultimately validating an opportunity for enhancement. This outperformance of our 2024 Glauconite program was aided by securing additional infrastructure access and egress, thereby allowing us to realize the full potential of these assets. Combining asset-level performance with improvements in operational execution is leading to superior returns, and we are excited to continue this momentum into another active 2025 program. Our East Saskatchewan Frobisher assets have achieved tremendous success since they were first acquired back in 2021.

Chris Bullin: Although monobore drilling is not a new technology, as we have used this technique in both the Cardium and Viking for years, it has been a staged approach to applying in the Glauconite due to technical risks, which our team has done an exceptional job navigating through and ultimately validating an opportunity for enhancement. This outperformance of our 2024 Glauconite program was aided by securing additional infrastructure access and egress, thereby allowing us to realize the full potential of these assets. Combining asset-level performance with improvements in operational execution is leading to superior returns, and we are excited to continue this momentum into another active 2025 program. Our East Saskatchewan Frobisher assets have achieved tremendous success since they were first acquired back in 2021.

Chris Bullin: Our team's evaluation and application of technological advancements have improved the already top-tier economics by increasing reservoir contact through longer laterals, as well as increasing the number of horizontal legs. As a result, our full program 2024 consists of 37 dual and triple-leg wells is forecast to pay out in only nine months. These results are tracking 30% above our expectations, which, if you recall back to our Investor Day presentation last June, we highlighted that our current expectations are 45% above what our original expectations were only three years ago. To continue to post better results is a significant achievement for this team and this asset in such a short period of time. Continuing on with further inventory enhancement initiatives is our open-hole multilateral State A pilot.

Chris Bullin: Our team's evaluation and application of technological advancements have improved the already top-tier economics by increasing reservoir contact through longer laterals, as well as increasing the number of horizontal legs. As a result, our full program 2024 consists of 37 dual and triple-leg wells is forecast to pay out in only nine months. These results are tracking 30% above our expectations, which, if you recall back to our Investor Day presentation last June, we highlighted that our current expectations are 45% above what our original expectations were only three years ago. To continue to post better results is a significant achievement for this team and this asset in such a short period of time. Continuing on with further inventory enhancement initiatives is our open-hole multilateral State A pilot.

Chris Bullin: As previously mentioned, the State A is a tighter flow unit of the upper Frobisher, and with advancements in this technology, we believe that the potential of the State A can now be unlocked. We are currently evaluating follow-up locations for 2025 to better assess and validate this potential resource that we have recently identified as having over 100 inventory opportunities. All of our conventional teams are maintaining a close watch on advancements in open-hole multilateral development throughout Western Canada, and where deemed appropriate, we'll look to allocate strategic capital towards unlocking these opportunities. With such a strong portfolio of current inventory, Whitecap can benefit from a staged approach to limit our exposure to any additional risks.

Chris Bullin: As previously mentioned, the State A is a tighter flow unit of the upper Frobisher, and with advancements in this technology, we believe that the potential of the State A can now be unlocked. We are currently evaluating follow-up locations for 2025 to better assess and validate this potential resource that we have recently identified as having over 100 inventory opportunities. All of our conventional teams are maintaining a close watch on advancements in open-hole multilateral development throughout Western Canada, and where deemed appropriate, we'll look to allocate strategic capital towards unlocking these opportunities. With such a strong portfolio of current inventory, Whitecap can benefit from a staged approach to limit our exposure to any additional risks.

Chris Bullin: Moving over to the Viking, we continue to push extended reach laterals across our program with the 81 Viking wells drilled in 2024, having an average lateral length of over 1,500 meters, which is our longest to date. This highlights our continued push to maximize efficiencies as extended reach wells reduce operating costs, surface footprint, and infrastructure spending while improving economics. Our 2024 program IP90 results outperformed the industry average in Saskatchewan by 45%. By leveraging our experience of drilling over 1,000 wells to date in the Viking, in conjunction with efficient development planning and an enviable land position, our conventional team plans to continue to expand ERH utilization in 2025. Our conventional portfolio has nearly a decade of Tier One and Tier Two opportunities with over 3,800 locations in inventory.

Chris Bullin: Moving over to the Viking, we continue to push extended reach laterals across our program with the 81 Viking wells drilled in 2024, having an average lateral length of over 1,500 meters, which is our longest to date. This highlights our continued push to maximize efficiencies as extended reach wells reduce operating costs, surface footprint, and infrastructure spending while improving economics. Our 2024 program IP90 results outperformed the industry average in Saskatchewan by 45%. By leveraging our experience of drilling over 1,000 wells to date in the Viking, in conjunction with efficient development planning and an enviable land position, our conventional team plans to continue to expand ERH utilization in 2025. Our conventional portfolio has nearly a decade of Tier One and Tier Two opportunities with over 3,800 locations in inventory.

Chris Bullin: We are well-positioned to continue to harvest these high-quality, light oil-focused properties that have infrastructure already in place, coupled with a strong marketing strategy providing access to advantageous locations and reliable downstream pipelines. We are focused on continuing to find ways to enhance and extend the longevity of our plays with either technology or operational enhancements, or through business development initiatives, focusing on tuck-in acquisitions and leveraging our technical expertise in each play. We are looking forward to another successful year in 2025. I will now pass it to Thanh Kang to further discuss our financial results.

Chris Bullin: We are well-positioned to continue to harvest these high-quality, light oil-focused properties that have infrastructure already in place, coupled with a strong marketing strategy providing access to advantageous locations and reliable downstream pipelines. We are focused on continuing to find ways to enhance and extend the longevity of our plays with either technology or operational enhancements, or through business development initiatives, focusing on tuck-in acquisitions and leveraging our technical expertise in each play. We are looking forward to another successful year in 2025. I will now pass it to Thanh Kang to further discuss our financial results.

Thanh Kang: Thanks, Chris. 2024 financial performance was also strong as we generated Q4 funds flow of CAD 413 million or CAD 0.70 per share, and full year funds flow of CAD 1.6 billion or CAD 2.73 per share. 2024 free funds flow of CAD 501 million or CAD 0.84 per share was higher than our original expectations when factoring in actual commodity prices through the year. Again, a good result and a testament to the operational and financial success we achieved this year. From a netback perspective, higher than expected light oil and condensate production from both our conventional and unconventional assets drove a strong netback of over CAD 33 per BOE in 2024.

Thanh Kang: Thanks, Chris. 2024 financial performance was also strong as we generated Q4 funds flow of CAD 413 million or CAD 0.70 per share, and full year funds flow of CAD 1.6 billion or CAD 2.73 per share. 2024 free funds flow of CAD 501 million or CAD 0.84 per share was higher than our original expectations when factoring in actual commodity prices through the year. Again, a good result and a testament to the operational and financial success we achieved this year. From a netback perspective, higher than expected light oil and condensate production from both our conventional and unconventional assets drove a strong netback of over CAD 33 per BOE in 2024.

Thanh Kang: Our controllable cash costs, being operating, transportation, G&A, and share-based compensation, were also in line with our expectations that we set out at the start of the year. Whitecap's contribution to the Canadian economy were again substantial in 2024, with CAD 1.1 billion in capital spending and almost CAD 800 million paid in crown royalties, corporate taxes, property taxes, and personal taxes paid on behalf of our employees. Year-end net debt of CAD 933 million was reduced by over CAD 450 million since year-end 2023, and we've now reduced net debt by over CAD 1.2 billion since the closing of the XTO transaction in Q3 2022.

Thanh Kang: Our controllable cash costs, being operating, transportation, G&A, and share-based compensation, were also in line with our expectations that we set out at the start of the year. Whitecap's contribution to the Canadian economy were again substantial in 2024, with CAD 1.1 billion in capital spending and almost CAD 800 million paid in crown royalties, corporate taxes, property taxes, and personal taxes paid on behalf of our employees. Year-end net debt of CAD 933 million was reduced by over CAD 450 million since year-end 2023, and we've now reduced net debt by over CAD 1.2 billion since the closing of the XTO transaction in Q3 2022.

Thanh Kang: In that same time period, we have returned approximately CAD 1.2 billion to shareholders through our base dividend and NCIB. Amounting to almost CAD 4 per share in value accruing to shareholders in just over two years. In Q4, we also closed our inaugural issuance of investment-grade senior notes. The five-year, CAD 400 million notes carry a coupon of 4.382%, which was lower than our cost of bank debt. Our leverage is at 0.3 times debt to EBITDA, and we have over CAD 1.6 billion of available capacity on our current credit facilities, providing us with ample flexibility to manage through market cycles, including any potential differential impacts that we may be faced in the short to medium term.

Thanh Kang: In that same time period, we have returned approximately CAD 1.2 billion to shareholders through our base dividend and NCIB. Amounting to almost CAD 4 per share in value accruing to shareholders in just over two years. In Q4, we also closed our inaugural issuance of investment-grade senior notes. The five-year, CAD 400 million notes carry a coupon of 4.382%, which was lower than our cost of bank debt. Our leverage is at 0.3 times debt to EBITDA, and we have over CAD 1.6 billion of available capacity on our current credit facilities, providing us with ample flexibility to manage through market cycles, including any potential differential impacts that we may be faced in the short to medium term.

Thanh Kang: For 2025, our guidance for average production of 176,000 to 180,000 BOE per day on a capital budget of CAD 1.1 to 1.2 billion is unchanged. This is forecast to generate funds flow of approximately CAD 1.7 billion and free funds flow of CAD 550 million at $70 per barrel WTI and CAD 2 per GJ AECO price. Our 2025 funds flow sensitivities to commodity prices are. For every $1 change in WTI, our funds flow is impacted by CAD 23 million. For every CAD 0.10 change in AECO, our funds flow is impacted by CAD 7.5 million. For every CAD 1 change in the MSW differential, our funds flow is impacted by CAD 23 million.

Thanh Kang: For 2025, our guidance for average production of 176,000 to 180,000 BOE per day on a capital budget of CAD 1.1 to 1.2 billion is unchanged. This is forecast to generate funds flow of approximately CAD 1.7 billion and free funds flow of CAD 550 million at $70 per barrel WTI and CAD 2 per GJ AECO price. Our 2025 funds flow sensitivities to commodity prices are. For every $1 change in WTI, our funds flow is impacted by CAD 23 million. For every CAD 0.10 change in AECO, our funds flow is impacted by CAD 7.5 million. For every CAD 1 change in the MSW differential, our funds flow is impacted by CAD 23 million.

Thanh Kang: For every penny change in the US Canadian dollar exchange rate, our funds flow is impacted by CAD 20 million. With that, I'll turn it over back to Grant for his closing remarks.

Thanh Kang: For every penny change in the US Canadian dollar exchange rate, our funds flow is impacted by CAD 20 million. With that, I'll turn it over back to Grant for his closing remarks.

Grant Fagerheim: Thanks, Tom, Chris, Joey, for your remarks. As we noted in yesterday's press release, we've made significant strides over the past three years with substantial growth, both on an absolute and per-share basis, while ensuring our balance sheet strength is maintained and we're able to provide consistent and attractive returns to shareholders. We believe that for all the success we've achieved in 2024, it is just the beginning of hitting our stride with the asset base that we have assembled, and we are excited for the years to come. With respect to Canadian energy, we remain engaged on gaining a full understanding of the potential for tariffs on oil and gas exported to the US, and we'll ensure that we do whatever we are able to minimize the impact to our ongoing operations.

Grant Fagerheim: Thanks, Tom, Chris, Joey, for your remarks. As we noted in yesterday's press release, we've made significant strides over the past three years with substantial growth, both on an absolute and per-share basis, while ensuring our balance sheet strength is maintained and we're able to provide consistent and attractive returns to shareholders. We believe that for all the success we've achieved in 2024, it is just the beginning of hitting our stride with the asset base that we have assembled, and we are excited for the years to come. With respect to Canadian energy, we remain engaged on gaining a full understanding of the potential for tariffs on oil and gas exported to the US, and we'll ensure that we do whatever we are able to minimize the impact to our ongoing operations.

Grant Fagerheim: Canadian energy is a vital part of the Canadian economy and critical for both Canadian and North American energy security. Currently, Canada exports approximately 4.2 million BOE per day, million barrels of oil per day to the United States, which 950,000 barrels per day is light oil. We are currently exporting approximately 10 BCF a day to the US of the 19 BCF a day of natural gas we produce across our country. We have experienced the positive impact of the TMX expansions as it came online last year, and we also expect to see positive impact on pricing dynamics within Canada that the LNG Canada ramp up takes place later this year and what it can provide.

Grant Fagerheim: Canadian energy is a vital part of the Canadian economy and critical for both Canadian and North American energy security. Currently, Canada exports approximately 4.2 million BOE per day, million barrels of oil per day to the United States, which 950,000 barrels per day is light oil. We are currently exporting approximately 10 BCF a day to the US of the 19 BCF a day of natural gas we produce across our country. We have experienced the positive impact of the TMX expansions as it came online last year, and we also expect to see positive impact on pricing dynamics within Canada that the LNG Canada ramp up takes place later this year and what it can provide.

Grant Fagerheim: Both projects are increasingly viewed as overwhelmingly beneficial to all Canadians, and there are several LNG projects on the West Coast of Canada that continue to progress that will expand our market access by the end of the decade. Still, we need more of these types of projects, including having an ability to supply our own citizens in Eastern and Central Canada with reliably and ethically produced energy, not subject to protectionist policies of other regimes. To conclude, on what was an outstanding 2024, our business has never been stronger and more resilient. Not only have we managed through extreme volatility over the last several years, but more importantly, our team has been able to execute on organic development opportunities as well as capture inorganic opportunities during periods of market dislocation to make our company stronger.

Grant Fagerheim: Both projects are increasingly viewed as overwhelmingly beneficial to all Canadians, and there are several LNG projects on the West Coast of Canada that continue to progress that will expand our market access by the end of the decade. Still, we need more of these types of projects, including having an ability to supply our own citizens in Eastern and Central Canada with reliably and ethically produced energy, not subject to protectionist policies of other regimes. To conclude, on what was an outstanding 2024, our business has never been stronger and more resilient. Not only have we managed through extreme volatility over the last several years, but more importantly, our team has been able to execute on organic development opportunities as well as capture inorganic opportunities during periods of market dislocation to make our company stronger.

Grant Fagerheim: With that, I'll turn the call over to the operator, Sylvie, for any questions. Thank you.

Grant Fagerheim: With that, I'll turn the call over to the operator, Sylvie, for any questions. Thank you.

Operator 1: Thank you, sir. Ladies and gentlemen, as stated, if you have a question, please press star followed by one on your touch-tone phone. You will hear a prompt acknowledging your request, and should you wish to withdraw from the question queue, simply press star followed by two. We do ask that if you're using a speakerphone to please lift the handset before pressing any keys. Please go ahead and press star one now if you have a question. First, we will hear from Luke Davis at Raymond James. Please go ahead.

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

Luke Davis: Hey, good morning, guys. Thanks for taking my question. Just regarding guidance, I know it's still early in the year, but wondering if you can just frame out how you're thinking about sort of the lower and upper bounds and what specific assumptions go into that. I mean, operationally, things have gone really well through 2024. Curious if you can kind of delineate how much of that outperformance is actually factored into 2025. If you could just comment on that by region or even play, that would be helpful.

Luke Davis: Hey, good morning, guys. Thanks for taking my question. Just regarding guidance, I know it's still early in the year, but wondering if you can just frame out how you're thinking about sort of the lower and upper bounds and what specific assumptions go into that. I mean, operationally, things have gone really well through 2024. Curious if you can kind of delineate how much of that outperformance is actually factored into 2025. If you could just comment on that by region or even play, that would be helpful.

Thanh Kang: Hey, thanks for that question there, Luke. I'll answer for the first part of that question. You know, as we think about average production for the year at 176,000 to 180,000 BOE/d, mid case being the 178,000, you know, that would represent basically 3% production per share growth. As we potentially are able to achieve the higher end, that'd be 4% production per share growth. It hasn't incorporated some of the outperformance that we've seen here in 2024. There's an ability for us to certainly see that continuing on. We're off to a really good start here in Q1.

Thanh Kang: Hey, thanks for that question there, Luke. I'll answer for the first part of that question. You know, as we think about average production for the year at 176,000 to 180,000 BOE/d, mid case being the 178,000, you know, that would represent basically 3% production per share growth. As we potentially are able to achieve the higher end, that'd be 4% production per share growth. It hasn't incorporated some of the outperformance that we've seen here in 2024. There's an ability for us to certainly see that continuing on. We're off to a really good start here in Q1.

Thanh Kang: You know, last year, we had outperformed by about 5.8% relative to original budget there. As we think about production per share growth-

Thanh Kang: You know, last year, we had outperformed by about 5.8% relative to original budget there. As we think about production per share growth-

Thanh Kang: Over the last two-year period of time, you know, in 2024 it was 13%, 2023 it was 11%. You know, with outperformance this year, the potential to buy back our shares here, we think that per share growth could be in excess of 10%. That's what our internal target is. Obviously, you know, we're not saying that we're able to achieve that, based on the guidance, but that would be our internal target at this particular time. We haven't incorporated any outperformance that we've seen last year into our numbers here. There certainly could be outperformance that we can see in 2025.

Thanh Kang: Over the last two-year period of time, you know, in 2024 it was 13%, 2023 it was 11%. You know, with outperformance this year, the potential to buy back our shares here, we think that per share growth could be in excess of 10%. That's what our internal target is. Obviously, you know, we're not saying that we're able to achieve that, based on the guidance, but that would be our internal target at this particular time. We haven't incorporated any outperformance that we've seen last year into our numbers here. There certainly could be outperformance that we can see in 2025.

Grant Fagerheim: One of the things, just to add on to Thanh's comments and is that we're in the middle of, you know, here we are middle of February, and things are going very well. Operations are proceeding well. We've not experienced too many operational challenges with the cold weather. Certainly, you're gonna have to manage through that, as we've had a bitterly cold February period of time. You know, what we've always wanted to do is look at where we're at for Q1 once we finish our capital program through Q1 and into Q2, where you have a better understanding of where we're at.

Grant Fagerheim: One of the things, just to add on to Thanh's comments and is that we're in the middle of, you know, here we are middle of February, and things are going very well. Operations are proceeding well. We've not experienced too many operational challenges with the cold weather. Certainly, you're gonna have to manage through that, as we've had a bitterly cold February period of time. You know, what we've always wanted to do is look at where we're at for Q1 once we finish our capital program through Q1 and into Q2, where you have a better understanding of where we're at.

Grant Fagerheim: We feel we've got a very good start, as Thanh Kang had mentioned, to coming out of 2024, and it's continued on in 2025 here, Q1 to date. We're six weeks into a new year, so before we make any changes to our guidance, we want a little bit more time behind us, in order to do that. We are tracking ahead of what our initial guidance was. That's what I'll leave you with at this particular time. As far as where they were coming from is both the unconventional and the conventional areas. Not only in the Montney and Duvernay, but also in our conventional assets in central Alberta and southeast Saskatchewan. It's a combination of all the above.

Grant Fagerheim: We feel we've got a very good start, as Thanh Kang had mentioned, to coming out of 2024, and it's continued on in 2025 here, Q1 to date. We're six weeks into a new year, so before we make any changes to our guidance, we want a little bit more time behind us, in order to do that. We are tracking ahead of what our initial guidance was. That's what I'll leave you with at this particular time. As far as where they were coming from is both the unconventional and the conventional areas. Not only in the Montney and Duvernay, but also in our conventional assets in central Alberta and southeast Saskatchewan. It's a combination of all the above.

Grant Fagerheim: As Joey and Chris have alluded to, we look to continue that as we move forward through the balance of this year and into 2026.

Grant Fagerheim: As Joey and Chris have alluded to, we look to continue that as we move forward through the balance of this year and into 2026.

Luke Davis: That's super helpful. Maybe just a couple of follow-ups there. You noted some type curve and cost assumption changes on the Glauconite specifically. If you have the numbers handy, you know, how much incremental buffer does that specifically get you in 2025? Just following on that, when you look out to sort of 2026+, given the efficiency improvements that you've seen across the portfolio, do you see a scenario where the capital profile starts to decrease and free cash flow increases?

Luke Davis: That's super helpful. Maybe just a couple of follow-ups there. You noted some type curve and cost assumption changes on the Glauconite specifically. If you have the numbers handy, you know, how much incremental buffer does that specifically get you in 2025? Just following on that, when you look out to sort of 2026+, given the efficiency improvements that you've seen across the portfolio, do you see a scenario where the capital profile starts to decrease and free cash flow increases?

Chris Bullin: Hey, Luke, it's Chris here. Thanks for the first part of that question. I can add some clarity onto the Glauconite. You know, I think it's important for us just to, you know, look at the takeaway here that, you know, we do have a strong foundation on our conventional side of tier one and tier two, you know, inventory opportunities here. That's if everything stays static, so we continue to find ways to upgrade our portfolio. You know, one of the key things that comes from, you know, cost savings opportunities such as the Glauconite is our ability to upgrade tier three inventory or tier two opportunity to tier one.

Chris Bullin: Hey, Luke, it's Chris here. Thanks for the first part of that question. I can add some clarity onto the Glauconite. You know, I think it's important for us just to, you know, look at the takeaway here that, you know, we do have a strong foundation on our conventional side of tier one and tier two, you know, inventory opportunities here. That's if everything stays static, so we continue to find ways to upgrade our portfolio. You know, one of the key things that comes from, you know, cost savings opportunities such as the Glauconite is our ability to upgrade tier three inventory or tier two opportunity to tier one.

Chris Bullin: You know, I think that's pretty important, you know, for us to keep pushing forward on that, especially from a culture of continuous improvement perspective, we'll say. You know, a little more granularity, I guess, from the Glauconite perspective. You take a look, you know, this year with the savings, you know, that we have planned there with our 12 locations. You know, it equates to about CAD 10 million in savings, you know, going forward for the Glauconite for us on a year-over-year basis. For us, again, I mean, that's a pretty impactful perspective from a focused regional perspective. We keep finding ways to push forward on that.

Chris Bullin: You know, I think that's pretty important, you know, for us to keep pushing forward on that, especially from a culture of continuous improvement perspective, we'll say. You know, a little more granularity, I guess, from the Glauconite perspective. You take a look, you know, this year with the savings, you know, that we have planned there with our 12 locations. You know, it equates to about CAD 10 million in savings, you know, going forward for the Glauconite for us on a year-over-year basis. For us, again, I mean, that's a pretty impactful perspective from a focused regional perspective. We keep finding ways to push forward on that.

Grant Fagerheim: Just on and onto your second part of that question, I believe is talk about capital changes as we move through the year. Our most intense capital timeframe is always Q1 of the year and slows obviously through the break-up period of time in the second period, Q2. Therefore, you look at your free cash flow running obviously your capital program. Then we'll balance it for the balance of the year. There's so much at play right now with tariff conversation and that we'll manage through very carefully. At this particular time, you know, the Q1 capital program, first half, we kind of divide it first half, second half.

Grant Fagerheim: Just on and onto your second part of that question, I believe is talk about capital changes as we move through the year. Our most intense capital timeframe is always Q1 of the year and slows obviously through the break-up period of time in the second period, Q2. Therefore, you look at your free cash flow running obviously your capital program. Then we'll balance it for the balance of the year. There's so much at play right now with tariff conversation and that we'll manage through very carefully. At this particular time, you know, the Q1 capital program, first half, we kind of divide it first half, second half.

Grant Fagerheim: There's less capital being spent in the second half of the year than there would be in the first half of the year. Pretty well balanced. Your cash flow continues to increase as you're growing your production if commodity prices stay flat and tariffs don't come into play. How's that for a loaded answer?

Grant Fagerheim: There's less capital being spent in the second half of the year than there would be in the first half of the year. Pretty well balanced. Your cash flow continues to increase as you're growing your production if commodity prices stay flat and tariffs don't come into play. How's that for a loaded answer?

Luke Davis: Yeah. No, that's helpful, Brad. I was actually referring though to 2026 forward. I'm just curious, given how much efficiencies appear to be improving across the portfolio, if you could see that sort of gross capital profile come down over time.

Luke Davis: Yeah. No, that's helpful, Brad. I was actually referring though to 2026 forward. I'm just curious, given how much efficiencies appear to be improving across the portfolio, if you could see that sort of gross capital profile come down over time.

Grant Fagerheim: Yeah. That's difficult for us to go out with that. You know, what percentage at this particular time, Luke? You know, I mean, I would like to think that it continues on, but I would leave that more to our operations and technical guys. They know where I stand on that. You know, we do wanna make sure that what we're doing, demonstrating at this particular time, is operational excellence and continue to advance that into 2026. We'll have more details of that as we move into, you know, coming out of Q1 and first half of this year.

Grant Fagerheim: Yeah. That's difficult for us to go out with that. You know, what percentage at this particular time, Luke? You know, I mean, I would like to think that it continues on, but I would leave that more to our operations and technical guys. They know where I stand on that. You know, we do wanna make sure that what we're doing, demonstrating at this particular time, is operational excellence and continue to advance that into 2026. We'll have more details of that as we move into, you know, coming out of Q1 and first half of this year.

Luke Davis: That's great. Thanks for taking my questions. That's it for me.

Luke Davis: That's great. Thanks for taking my questions. That's it for me.

Operator 1: Thank you. As a reminder, ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone.

Operator: Thank you. As a reminder, ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone.

Operator 2: Next will be Matt McNary at Haywood Securities. Please go ahead.

Operator: Next will be Matt McNary at Haywood Securities. Please go ahead.

Matt McNary: Hey, everyone. Thanks for taking my question. This is Matt McNary on for Chris. When you laid out your five-year plan at your investor day last summer, you talked about mid to high single digit production growth. I think you're up 11% year-over-year. My question is, do you press forward with that level of production growth, or do you lower activity to sort of fall back in line with the five-year outlook? A follow-up question. I know it's year two of the five-year plan, but how comfortable or confident are you that the business will realize a good chunk of the CAD 800 million in incremental free funds flow from efficiencies and OpEx improvements?

Matt Macnary: Hey, everyone. Thanks for taking my question. This is Matt McNary on for Chris. When you laid out your five-year plan at your investor day last summer, you talked about mid to high single digit production growth. I think you're up 11% year-over-year. My question is, do you press forward with that level of production growth, or do you lower activity to sort of fall back in line with the five-year outlook? A follow-up question. I know it's year two of the five-year plan, but how comfortable or confident are you that the business will realize a good chunk of the CAD 800 million in incremental free funds flow from efficiencies and OpEx improvements?

Thanh Kang: Yeah. It's Thanh Kang here. Thanks for that question, Matt. I'll answer the first part here, which was the growth rate that we're outlining in our five-year plan. On average, it's about 5% organic growth year-over-year there. You know, that's right within our mid-case of 3% to 8% that we're targeting on a long-term basis. Obviously, over the last couple of years here, we've had some outperformance as well as we've been able to enhance that per share growth through the NCIB and buying back our shares. That's not incorporated in the five-year plan there. There's certainly an ability for us to, number one, buy back our shares, increase that per share growth rate. But the organic growth target is still the same.

Thanh Kang: Yeah. It's Thanh Kang here. Thanks for that question, Matt. I'll answer the first part here, which was the growth rate that we're outlining in our five-year plan. On average, it's about 5% organic growth year-over-year there. You know, that's right within our mid-case of 3% to 8% that we're targeting on a long-term basis. Obviously, over the last couple of years here, we've had some outperformance as well as we've been able to enhance that per share growth through the NCIB and buying back our shares. That's not incorporated in the five-year plan there. There's certainly an ability for us to, number one, buy back our shares, increase that per share growth rate. But the organic growth target is still the same.

Thanh Kang: It's in that 3 to 8% there, mid case being 5%. That hasn't changed there. Obviously, if the outperformance continues on, whether it's in 2025 or beyond in 2026 and 2027 there, we'll be at the higher end of that growth target. Again, still within the band of 3 to 8% is what we're targeting long term here.

Thanh Kang: It's in that 3 to 8% there, mid case being 5%. That hasn't changed there. Obviously, if the outperformance continues on, whether it's in 2025 or beyond in 2026 and 2027 there, we'll be at the higher end of that growth target. Again, still within the band of 3 to 8% is what we're targeting long term here.

Matt McNary: Great. Thanks.

Matt Macnary: Great. Thanks.

Thanh Kang: For your second question there.

Thanh Kang: For your second question there.

Matt McNary: Yeah.

Matt Macnary: Yeah.

Thanh Kang: Maybe I'll pass that on to Joey in terms of the type curve outperformance and what we're seeing.

Thanh Kang: Maybe I'll pass that on to Joey in terms of the type curve outperformance and what we're seeing.

Joey Wong: Yeah, for sure. Joey Wong here. I can definitely take that one. Yeah. Thanks for that. Like I kind of mentioned in the remarks there, with a decent track record behind us of meeting or exceeding our expectations with some pretty good regularity here, we are feeling confident in the plan that we laid out. Like Thanh Kang just mentioned there, we haven't baked that in in terms of an upside on the five-year plan. You know, is it something that is budgeted? The answer is no. Is it an expectation that we're going to reach for that and start to chew into the savings that you speak to there? Yeah, we really do hope so.

Joey Wong: Yeah, for sure. Joey Wong here. I can definitely take that one. Yeah. Thanks for that. Like I kind of mentioned in the remarks there, with a decent track record behind us of meeting or exceeding our expectations with some pretty good regularity here, we are feeling confident in the plan that we laid out. Like Thanh Kang just mentioned there, we haven't baked that in in terms of an upside on the five-year plan. You know, is it something that is budgeted? The answer is no. Is it an expectation that we're going to reach for that and start to chew into the savings that you speak to there? Yeah, we really do hope so.

Matt McNary: Great. Thanks.

Matt Macnary: Great. Thanks.

Operator 2: Thank you. Next question will be from Kim Miller, an investor. Please go ahead, Kim.

Operator: Thank you. Next question will be from Kim Miller, an investor. Please go ahead, Kim.

Kim Miller: Thank you. First of all, I'd like to thank and congratulate the executive team and board of directors for the excellent management of the company. My first question relates to the buyback of the WCP shares in the open market. I realize the company has received regulatory approval to buy back up to 10% of its outstanding stock, which I guess would be about 58 million shares. So far, it's bought back about 12.7 million, I think I read. At these ridiculously low share values, I'm wondering if the board and the executives have considered perhaps front-loading those buybacks while the value of the stock is so low and the uncertainty of investing the money in ongoing expansion is so questionable with the shenanigans south of the border.

Kim Miller: Thank you. First of all, I'd like to thank and congratulate the executive team and board of directors for the excellent management of the company. My first question relates to the buyback of the WCP shares in the open market. I realize the company has received regulatory approval to buy back up to 10% of its outstanding stock, which I guess would be about 58 million shares. So far, it's bought back about 12.7 million, I think I read. At these ridiculously low share values, I'm wondering if the board and the executives have considered perhaps front-loading those buybacks while the value of the stock is so low and the uncertainty of investing the money in ongoing expansion is so questionable with the shenanigans south of the border.

Grant Fagerheim: Kim, thanks very much. Excuse me. It's Grant taking that. Appreciate your comments just on, you know, where our valuation is at this particular time and whether it's on the normal course issuer bid or the potential for a substantial issuer bid. If we have to work around certain blackout periods of time too, reporting periods, you know, to ensure that all the information is in the market. That's one component. The second component is, during the Q1 period of time, we wanna ensure that, because it's our highest capital timeframe in Q1, we generally aren't really active on our normal course issuer bid, generally.

Grant Fagerheim: Kim, thanks very much. Excuse me. It's Grant taking that. Appreciate your comments just on, you know, where our valuation is at this particular time and whether it's on the normal course issuer bid or the potential for a substantial issuer bid. If we have to work around certain blackout periods of time too, reporting periods, you know, to ensure that all the information is in the market. That's one component. The second component is, during the Q1 period of time, we wanna ensure that, because it's our highest capital timeframe in Q1, we generally aren't really active on our normal course issuer bid, generally.

Grant Fagerheim: That's not to say we won't do it, and we won't step into it, but we've between the start of the year and up until this point in time, we've been in a blackout period of time. We'll certainly consider that as part of our plan going forward. When you talk about front-loading buying back our equity, we would certainly look to do that as part of our overall plan. We do have the strength of the balance sheet. We wanna continue to maintain that strength. As you say, the foolishness going on in this tariff conversation, we have to monitor that closely because there is an impact if these tariffs too are applied going forward.

Grant Fagerheim: That's not to say we won't do it, and we won't step into it, but we've between the start of the year and up until this point in time, we've been in a blackout period of time. We'll certainly consider that as part of our plan going forward. When you talk about front-loading buying back our equity, we would certainly look to do that as part of our overall plan. We do have the strength of the balance sheet. We wanna continue to maintain that strength. As you say, the foolishness going on in this tariff conversation, we have to monitor that closely because there is an impact if these tariffs too are applied going forward.

Grant Fagerheim: There would be a minimal impact, but still there would be an impact. We want to monitor that and make sure that we're around and maintain our strength going forward into the future. We will be active through the year in buying back our equity. Hopefully, that's a strong enough answer for you.

Grant Fagerheim: There would be a minimal impact, but still there would be an impact. We want to monitor that and make sure that we're around and maintain our strength going forward into the future. We will be active through the year in buying back our equity. Hopefully, that's a strong enough answer for you.

Kim Miller: It is. Thank you. I have a second question, if I may add it. That question stems from the very strong, you know, buy Canadian sentiment that we are seeing here in Eastern Canada. In fact, in my 66 years, I've never quite seen anything like it. I, like millions of other Canadians, feel strongly that it's time we weaned ourselves off of the American teat. Has the company ever considered investing in or co-investing in the development of its own refinery?

Kim Miller: It is. Thank you. I have a second question, if I may add it. That question stems from the very strong, you know, buy Canadian sentiment that we are seeing here in Eastern Canada. In fact, in my 66 years, I've never quite seen anything like it. I, like millions of other Canadians, feel strongly that it's time we weaned ourselves off of the American teat. Has the company ever considered investing in or co-investing in the development of its own refinery?

Grant Fagerheim: Well, I appreciate that in Eastern Canada. I'm hoping that Eastern Canadians also understand that the benefit that the Canadian energy space brings to the oil and gas sector brings to all Canadians as well. I think that's a narrative that's been missed, you know, as we look to sell our products in and for the benefit of all Canadians at the strongest prices we possibly can. As far as refining, I think there's a bunch of different opportunities. We've not specifically looked in the past at refining our own products in Canada. You know, these are all things that will have to be understood.

Grant Fagerheim: Well, I appreciate that in Eastern Canada. I'm hoping that Eastern Canadians also understand that the benefit that the Canadian energy space brings to the oil and gas sector brings to all Canadians as well. I think that's a narrative that's been missed, you know, as we look to sell our products in and for the benefit of all Canadians at the strongest prices we possibly can. As far as refining, I think there's a bunch of different opportunities. We've not specifically looked in the past at refining our own products in Canada. You know, these are all things that will have to be understood.

Grant Fagerheim: When I talk about making sure that we have a clear understanding of what's going to take place between the government relations between Canada and the US, you know, I wanna make this comment, that Canada is so resource rich, and we've been punitive to ourselves through our or some of the policies we have in Canada at the federal level at this particular time, that we should remove the barriers for investment and bring all of our products, not just oil and gas, but whether it's other products. Those are the things, you know, uranium, agriculture products, aluminum, all these products that we can make and have in Canada, we should be bringing those forward.

Grant Fagerheim: When I talk about making sure that we have a clear understanding of what's going to take place between the government relations between Canada and the US, you know, I wanna make this comment, that Canada is so resource rich, and we've been punitive to ourselves through our or some of the policies we have in Canada at the federal level at this particular time, that we should remove the barriers for investment and bring all of our products, not just oil and gas, but whether it's other products. Those are the things, you know, uranium, agriculture products, aluminum, all these products that we can make and have in Canada, we should be bringing those forward.

Grant Fagerheim: Refining, we have not specifically looked into refining, but these were all things once we get a very good understanding as to, you know, LNG Canada, if it. That will proceed well into the future. Thanks, Kim.

Grant Fagerheim: Refining, we have not specifically looked into refining, but these were all things once we get a very good understanding as to, you know, LNG Canada, if it. That will proceed well into the future. Thanks, Kim.

Kim Miller: Thank you.

Kim Miller: Thank you.

Operator 1: Thank you. 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.

Grant Fagerheim: Okay. I just wanted to say thank you, Sylvie, and thank you, everyone on the line today. I just want to wish each of you all the very best in 2025, and we look forward to reporting back to you with strong results as we advance. Thanks very much.

Grant Fagerheim: Okay. I just wanted to say thank you, Sylvie, and thank you, everyone on the line today. I just want to wish each of you all the very best in 2025, and we look forward to reporting back to you with strong results as we advance. Thanks very much.

Operator 1: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your line.

Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your line.