Q3 2025 Whitecap Resources Inc Earnings Call

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And I would like to turn the conference over to White Caps, president and CEO, Mr. Grant fagerheim please go ahead.

Thanks very much, and good morning, everyone. Thank you for joining us. There are five members of our management team here with me today: our Senior Vice President and CFO, Tom Cang.

our senior vice president production and operations, Joel Armstrong, our senior Vice President, Business Development and information technology.

Dave Marquette.

Our vice president of the unconventional division Joey Wong. And our vice president conventional division, Chris Bowen.

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 that was issued yesterday afternoon.

We are very pleased to provide our shareholders with this update this morning as evidenced by our third quarter, operating results and the 2026 released uh budget released yesterday.

The First full quarter following the integration of the baron assets into White Cap. Portfolio has been highly successful.

The company's assets and Personnel, are strategically aligned driving operational, efficiency and value creation. Our top performing assets, serve as key differentiators reinforcing the company's competitive advantage and supporting long-term growth, well, into the future.

Third quarter production of 37,623 bee per day.

Which included 227,419 bee per day of total liquids, and 883 million a day of natural gas.

Strong operating performance has continued throughout the entire year supported by the seamless, integration of the Varon assets and field operating teams, which is enhanced overall, operating efficiency.

As a result, we are increasing our 200025 guidance to 30500 B per day.

for the full year, which implies 370,000 be per day for the fourth quarter, while our full year Capital program at 2 billion dollars remains unchanged

By leveraging, the collective knowledge and Technical understanding of the combined assets and operations. Our 2026 budgets is set to deliver robust.

Free cash flow from a very, uh, efficient Capital drilling program.

our 2026 budget has been set between 2 to 2.1 billion dollars, which is forecast to deliver average production of between 370,000 to 375,000 B per day and an exit production rate in excess of 380,000 B per day to grow production, per share by 3%, the capital program is down from initial Capital projections,

To that 2.1 to 2 uh 2.0 to 2.1 billion from what was 2.6 billion dollars.

Our unconventional division will be allocated, 75% of the capital budget to drill approximately 100 Wells. While the conventional division will receive the remaining 25% to drill approximately 155 Wells.

Particularly excited for our lore asset, where our 4 or 13 battery is on budget and ahead of schedule, Joey, will provide more details on our plans for this asset in 2026. But needless to say, we're looking forward to development of this liquid, Rich asset base in the near future.

A capital efficiency embedded in our budget is approximately 10% better than the previous forecast.

Which can be attributed to recent operational, performance asset allocation, and the realization of synergies.

In aggregate in aggregate, we have included million dollars in forecasted synergies for 2026 or 40% higher than our original estimate of 210 million.

Capital synergies of approximately 130 million were driven by enhanced procurement operational, efficiency and rig line, optimization operating costs. Uh, synergies equate to 135 million, which is 60 million higher than our original estimate.

We are seeing significant wins in areas with adjacent or overlapping operations, along with procurement success and operational best practices.

Lastly we have realised, 35 million of corporate synergies. Through reductions in GNA, share based compensation and interest expense.

These benefits are a direct result of the combination leveraging enhanced scale integration and the technical best practices that we were previously divided between the 2 organizations.

for their technical rigor and dedication and achieving a significantly higher Synergy realization

And doing so much faster than initially anticipated, our culture of continuous improvement positions us to further enhance these synergies through ongoing technical initiatives planned for 2026.

I will now pass the mic on to tan cang.

The further discuss our third quarter Financial results and provide more details to our 2026 budget. Thank you.

Thanks Grant US dollar, WTI remained, relatively stable at $65 per barrel in Q3 compared to 64 dollars per barrel in Q2 in contrast to a weaker Echo price of 63 cents per mcf.

White Cap was however, able to achieve a significantly higher price, realization of a $131 per mcf due to our price diversification efforts,

Although natural gas, accounted for 39% of our production, it only represented 6% of our revenues in the third quarter.

From an upside perspective, a dollar change to Echo would increase our free funds Flow by 200 million.

Operating costs in the quarter decreased by 8% to $12.50 per Boe, compared to the second quarter, due to early synergy realizations.

Current income tax of 25 million in the quarter represents a low pre-tax funds, flow rate of 4%.

Tax pools. At the end of the quarter, were 9.8 billion of which 4.4 billion were non- Capital losses, providing us with strong tax coverage for 2026.

Our light oil and condensate weighted portfolio combined with a lower cost structure generated funds flow of nearly 900 million in the third quarter. And after Capital expenditures of approximately 550 million free funds flow with 350 million.

Returns to shareholders in the third quarter, where approximately 400 million.

As 221 million of Base. Dividends were enhanced by approximately 180 million in share repurchases under our ncib. Reducing our share count by almost 2%.

The company's balance sheet, remains strong with net. Debt of 3.3 billion at the end of the quarter, including 1.7 billion in investment grade senior notes.

Supported by this solid Financial foundation and our prudent hedge positions for 2026. We are well positioned to manage commodity price volatility, and maintain long-term Financial stability.

For 2026 based on $60, WTI and $3 acre. We anticipate funds flow of 3.3 billion and after Capital, Investments of 2.1 billion we generate free funds flow of 1.2 billion.

This allows us to return 900 million in dividends to shareholders and the opportunity to repurchase 300 million worth of shares to reduce our share count by a further 2%, enhancing our per share metrics.

Our commodity price sensitivity for 2026.

Are as follows.

For every dollar us change in WTI, our funds flow increases by 50 million.

For every 10% per GJ change in Echo. Our funds flow increases by 20 million and for every penny change in the USD CAD FX rate, our funds flow is impacted by 45 million.

I'll now pass it off to Joey for more remarks on our unconventional third quarter results and 2026 budget.

On.

Our unconventional portfolio continue to deliver impressive results. During third quarter to asset level performance. Exceeding, internal forecasts

Bass Performance benefited from optimization efforts in the quarter, while capital efficiencies and cycle times on new drills continued to exceed expectations.

Following the successful integration of Vin's assets and teams. We shifted our Focus to optimizing our expanded asset base during the third quarter.

The key part of that optimization has been applying our unconventional workflow to tailor development in each area to the underlying geological and reservoir characteristics, and to refine those designs in real time throughout the various phases of execution.

This workflow, which leverages technical best practices to enhance repeatability and economic returns, has already yielded significant capital and operational efficiency improvements across the portfolio.

Initial optimization efforts have driven measurable efficiency gains in our montney, and duven Drilling and completions programs shortening cycle times and improving key performance indicators.

At kbob meters per day. Drilling performance, improved by roughly 20% year-over-year, including a new Pace, Setter pad drilled at approximately 600 m per day.

And optimization of completions practices also contributed to an 8% reduction in average completion times across the dura.

At muzero. We achieved a 20% decrease in drilling costs from an improvement in drilling performance. On our most recent 6 well Monty pad compared to our first 16 wells in the play.

Collectively, these results highlight the strengths of our integrated in-house capabilities, bringing together geoscience, engineering and operations to capture design efficiencies and enhance execution across development programs.

This collaboration, supported by our extensive proprietary data set, allows for continuous improvement and the effect of transfer of best practices throughout the unconventional portfolio.

That gold Creek and car initial enhancement initiatives focused on improving base production through the optimization of artificial lift Gathering systems and other best practices. Along with targeted infrastructure improvements such as mitigating measures for high or low ambient temperatures.

Our operated asset base. We place a high priority on a test on anticipating changes in production requirements through different phases of field. Life. This is particularly important as we introduce new volumes from our Capital programs where protecting base production remains a core Focus,

These optimization efforts have delivered measurable uplift and productivity on base. Wells, driving Monty volumes roughly 4,000 views a day above our internal forecasts in the third quarter.

Our 2026 capital program will continue to build on this operating momentum. As we plan to run a steady 7-rig program to drill approximately 100 wells across our Monty and Duven assets, with 129 wells expected to be brought on production during the year.

This program is expected to drive 8% to 10% growth from our unconventional assets, as measured from exit to exit.

A KB. We plan to Spud, 45 Duren Wells, across a 3, rigs utilizing a wine rack design on approximately half of the plan pads.

Development will be focused within our core areas, to maximize the utilization of expanded infrastructure capacity and enhance overall asset profitability.

We plan to spend approximately 55 million to modestly, expand the bottleneck and connect existing infrastructure in 2026, following up on the success of our expansion efforts, at our 15 of 7, gas processing facility in 2025.

These infrastructure, optimization projects will support growth in the play. Over the near term with total capacity in the k-bob region, increasing to 115,000 boas per day to 120,000 bees per day. And by the second half of 2026,

We expect to fully utilize our expanded capacity in the second half of 2027.

Moving over to the Monty, we plan to Spud 53 wells in 2026. Across a 4 rigs, 74 operated Wells on production from our 2025 and 2026 programs.

In Gold Creek and car. We plan to spend 29 Wells and bring 48 Wells on production in 2026 with development focused on well understood areas with existing infrastructure capacity.

Following a detailed technical review of subsurface data, in addition, to recent and Legacy. Well, results in the play, We commence drilling operations on our first of 2 plug and per pilot pads in the car area in the fourth quarter of 2025.

This 4-wheel pad will be followed by a 3-well pad, which has been strategically selected to test the application of this completion design with defined control parameters to evaluate performance.

If designed and executed properly plug, and pair of completions, are expected to lower costs by 1, to 1.5 million per well, relative to a single point entry design.

Early results of this pilot activity in car are expected to be available in the first half of 2026.

With success, we also plan to drill a plug and PF pilot pad in Gold Creek and the second half of 2026, with the same level of control parameters as the car Pilots.

While meaningful in its potential impact, our roll out of this technology will remain measured representing roughly 1 quarter of the total Wells being brought on production in 2026 in Gold Creek and car.

This reflects our deliberate, stepwise approach to improving Capital efficiencies and fully recognizes and limits. The potential risk to asset level performance while pad design and execution are fine-tuned

Results from these pilot pads will inform future well-designed as we seek to de-risk development and maximize long-term value of the assets.

At Muzero, we plan to drill 11 Monty wells on the eastern portion of our acreage in 2026. As we continue to leverage multi-match developments and manage drawdown to optimize per well recoveries.

The strong condensate volume is being realized from this asset which have exceeded expectations due to our development and production practices.

We plan to spot a 2. Well, delineation pad at Rest Haven in 2026, which is a Southeastern extension of our later. Monty land base.

The pad is expected to come on stream and the second half of the year.

Results from this pad will provide us with important technical information. As we evaluate the economic viability of this sizable and prolific natural gas weighted acreage.

Lastly, our lore Monty asset will move toward development mode in 2026.

Following a successful engineering and design and permitting process construction on the 413 facility has been progressing ahead of schedule and within budget dated Capital expectations.

This has allowed us to advance expected commissioning and startup of the project to the fourth quarter of 2026, from our initial target of late 2026 to early 2027.

Continued technical work is strong. The results are reaffirming our expectations in the deliverability and long-term development potential of this area.

We plan to drill 11, wells in the area and spend approximately $180 million of capital in 2026, including 60 million dollars on supporting infrastructure, infrastructure projects, such as water disposal, and Gathering lines to support the ramp up of the 4 of 13 facilities.

Production is expected to ramp towards the design facility capacity of 35,000 to 40,000 bees per day. Throughout 2027 had a measure piece allowing for continued optimization of development plans where warranted

With that, I will now pass it over to Chris Bowen to talk about our conventional assets.

Joey.

Our conventional division delivered. Another strong quarter benefiting from consistent operational execution across our Alberta and Saskatchewan assets along with efficiency improvements following the successful integration of our expanded portfolio.

In 2026, we plan to drill 156 wells across our conventional division, focusing on plays with short cycle times, quick payouts, and high netbacks.

This activity is expected to maintain conventional production in the range of 135,000 to 140,000 Boe per day while generating $900 million of asset-level free cash flow, highlighting the outsized profitability of our conventional assets and the underlying strength of our diversified and complementary portfolio.

Our 2026 Capital program is structured to maximize optionality, providing flexibility to adjust, Capital, allocation, and activity levels in response to changes in commodity prices, our teams will continue to maintain a state of Readiness. Ensuring, we can act quickly, as market conditions evolve,

This disciplined approach ensures, we can protect free cash flow, sustained returns and capture upside. When Market fundamentals, improve

We will continue to look for opportunities to incorporate shared learnings, from our unconventional workflow within our conventional Assets in 20126.

Including optimizations to our well-designed and targeted, technical enhancements.

These initiatives are expected to drive further efficiencies and improve performance across our conventional portfolio.

Any discussion? We plan to spot 79 wells in 2026, building on the recent success of our Balkan and Frobisher programs.

At Viewfield, we will continue to advance our open Hall multilateral program to maximize capital efficiencies and improve the economics of our drilling inventory.

Our recently completed 3-mile Balkan pilot, well, in the area set multiple records within Saskatchewan, including the longest lateral leg drill to date at over 6,400 M and the longest total lateral length on a single. Well, at over. 34,600 m.

This well was drilled and completed on a dollars per meter basis in line with prior 2-mile. Open Hall, multilateral wells in the area, reinforcing our confidence that lateral lengths exceeding. 2 mi can achieve improved Capital efficiencies, this supports the inclusion of additional extended lateral, length Wells into the 2026 program.

Our 2026 frobisher development will kick off with an active first quarter drilling program with 3 rigs.

Building on strong momentum from 2025 results, which have consistently exceeded expectations. We plan to drill triple League Wells on 15 or 49 planned for overair. Locations, allowing us to increase Reservoir contact and maximize the royalty benefits associated with Saskatchewan's multilateral oil, well program.

Across our Alberta conventional assets. We plan to spot 30 wells in 2026 with activity focused in the Glock at Westwood hoe and the cardium formations at wapity and pamina.

And repeatable cost reductions realized from our 2025 motor program.

In the cardium, we will continue to utilize our optimized completion design at wapity derived from our unconventional workflow. Our 2026 development in the area will push to the South and the Northwest expanding from our successful 2025 program.

In West Saskatchewan, we have 47 Wells planned for next year. Targeting the Viking. Atlas and success formations. Our 2026 program has been level set with a moderation inactivity compared to Prior years, aligning with our strategy to focus on Capital discipline, free cash, flow generation and sustainability.

Our conventional assets are a strong contributor to our ability to sustain production at lower commodity prices and provide significant torque to increase in crude oil prices.

The low 20% decline asset base allows us to shift Capital without materially degrading the short and long-term profitability of these assets and provide the necessary flexibility to enhance the economics of our Capital programs with that. I will turn it back over to grant for his closing remarks.

Thanks very much Tom, Chris joy for your comments as we move through the remainder of 2025, and in 2026. As you all know, we are operating from a position of strength, operationally performance remains exceptional.

Last recycle times across our assets, optimize rig lines and drilling programs, capturing additional efficiencies and the maximization of existing infrastructure to further. Enhance our profitability.

Financially, our 2026 budget is expected to generate substantial, free funds, flow enabling meaningful returns.

Of capital to shareholders where maintaining balance sheet strength and long-term resiliency.

the top tier asset base, we have assembled supported by the long data, drilling inventory of approximately 11,000,000, high-quality locations,

Provides shareholders with Decades of profitable and sustainable growth potential.

This strong Foundation positions us to continue improving Capital efficiency and expanding profit margins over time. Furthermore, our technical initiatives plan for 2026, create additional opportunities, to outperform our base plan and drive continued, value creation,

As we complete our 2025 initiatives. Our Focus remains on delivering strong shareholder returns in 2026. Got it by discipline execution, operational excellence, and prudent financial management.

Our total shareholder return Target is between 10 to 15% per year, and our 2026. Uh, budget will deliver on this target through our 73 cents, per share dividend annually, which equates to 7% yield at this time. 3% production growth to 380,000 B per day and the option to repurchase.

Over 2% of our shares outstanding with excess refunds, flow generated at $60 WTI oil.

This equates to a 12% total returns to shareholders.

which further increases to over 15% at 70, wi with additional 500 million of refunds from

With that I'll now turn the call over to the operator Sylvie for any questions you might have. Thank you.

Thank you, Mr. Fagerheim, ladies and gentlemen, as stated if you do, have any questions, please press star. Followed by 1 on your touchtone phone, you will then hear a prompt that your hand has been raised. And should you wish to withdraw from the question queue simply press star followed by 2? We do ask that if you're using a speaker phone to please, lift your hands up before pressing any keys, please go ahead and press star 1. Now, if you do have any questions,

And your first question will come from Sam Burwell at Jeffrey's please. Go ahead.

Hey, good morning guys. Um I wanted to ask about the uh the 7 Rigg program across the money in juvenile is that fewer rigs than you're running now. Fewer rigs than you were originally planning to run in 26. Um is this effectively a a variance Synergy manifesting itself.

Like I say overlap or gaps, but in addition to that, some of the, some of the out performance, we're seeing on the drilling side, uh, we can draw back, um, to the the uh, the consistent use of some of our stronger performing rigs, uh, which the the 7 that we have, uh, retained are going to fall into that category and we'll look to then continue to build on those efficiencies through that uh, that steady program.

Okay. Got it. Um, and you talked a lot about share repurchases, both in the release and and then the opening remarks. So can we expect those to be more rateable over time? Or should those remain something that's deployed in opportunistic situations? Just curious. Like, if you don't see any dislocations, let's say, should we expect most of that free cash flow after the dividend next year to go towards the balance sheet?

Yeah. Hey Sam, it's uh Tom here. Um,

So as it relates to the ncib, there, uh, we are targeting. Um, you know, the 300 million that we've outlined in the press release, their the way that we're viewing it Sam is looking at it from a counter cyclical perspective. So you know, generally in a low commodity price environment, what we want to be doing is focusing on maximizing our free cash flow and repurchasing. Um, our shares as much as we can here, especially when we see quite a bit of a disconnect between where the share price is, uh, and where our intrinsic value is in terms of the execution of it. Uh, you know, we're going to be more opportunistic. Uh, I would say that,

Number 1. Uh, when you know, if there's large blocks that are available to us, we'll try to clear those with our ncib or if we're underperforming. Uh, then we'll, you know, we'll step in and, and support the stock from that perspective there. Um, but ultimately, you know, there are Focus here is, um, to reduce the number of shares that are out which improves the long-term sustainability of our dividend and it's a permanent Improvement, uh, to our capital structure. So that's the way that we would look at it. I think that, you know, given the volatility here, Sam, what we want to make sure is we're able to realize this free cash flow uh before we spend it. So we'll continue to monitor that uh, very closely as we walk through 2026.

Okay, understood. Thanks, guys.

Thank you.

Next question will be from Patrick oror at ATB Capital markets. Please go ahead.

Hey guys. Good morning and thanks for taking my uh my question this morning. Um so the budget came in at certainly what I think 6 months ago or 1 plus 1, budget of white cap and and Varane much lower than that, would have looked here. And just wondering, you know, sort of what the levers, you've pulled to be able to achieve that is. And then in the, in the updated deck, you talk about free cash flow to 70, um, crude price and allocating the incremental free cash flow to share purchases and debt reduction. I wonder what sort of uh crude environment and macro conditions

Um, White Cap would need to see out there to sort of have a, a little bit of a more aggressive Capital program going forward.

Yes, sir capital is lower, uh, but our production, uh, we didn't really lower, so uh, you're right on the, on the Capitol and that was uh, uh, a lot of the work that the, the teams have done are operating, um, individuals that focused on. Um, you know, the synergies that we talked about, we were currently uh, we were previously estimating, 210 million of of synergies. Now we're projecting 300 million uh, dollars and and potentially more into the future. We're not projecting that at this time but and and as we I think we talked quite a bit about it through. Um you know the where these improvements came is when we talk about rig lines and and uh all of our best practices. Um

And really utilizing the infrastructure more appropriately. I think that, you know, combined with our workflows that we do have within the organization. Um,

That's where you're, you know, where we talk about driving this, uh, these capital.

Comes down. Lower, you know, the operating teams have been busy on on um, operating group under under Joel's guidance. I've been busy on procurement and and understanding what we're going to look like with from a capital cost moving forward. But it certainly is dropping Capital um but really more, what we entered into as more of a defensive uh style budget for 201.

26 with a lower commodity price Deck with the expectation that as we know, living in a cyclical commodity price environment, there will be an opportunity to uplift it and we'll be, um, ready to advance uh, capital in the rate of environment. Um,

Uh, as we advance forward, and it's allowed us to get to this point. Um, um, and we'll continue to have that so it'll it isn't formulaic. Um, but it will be, you'll look to see us buy back more shares, um, you know, trigger for more Capital. We'll look at we. We're pretty much set for the first quarter and we can analyze it after the first quarter period of time as to whether or not we increase Capital um um at that time when Kamari prices um, will know further, what they're out of that time.

Okay, thanks. And then maybe a bit more of a technical question here. Um, in terms of the plug-in per pilots that you're looking at here, I think it's two wells per pad. What are the, uh, how are you going to benchmark the KPIs in terms of what you would measure for success? And then, um, if it is successful there, if you're able to sort of scale that up from two wells to pad scopes that are much larger than that, what would that mean going forward?

Hey, Patrick Joey here. So, um, yeah, the first question there on on, how do we Benchmark it? It's there's quite a few criteria uh, that we look at uh, both through the um, the execution phase of the completion itself. So as we're watching how efficient the Clusters are treating, uh, making sure that the rock is conforming to our, our designed expectations and like I mentioned in in the prepared notes there, we, we do have a, a series of of, of expected criteria through that fees.

And what we also have and and this is important is the ability to react. So we have contingency plans, if if things uh do start to Veer uh from from expected, uh Frac Behavior, which implies a different fract geometry than we designed. Uh, we have the ability to steer that ship and that that's been 1 of the things that has been a different differentiating factor for us. Anyways, um, with respect to the execution of our plug and PF programs to date uh throughout the uh the Legacy White Cap uh, asset base.

Plus on the execution side, the benchmarking on the then subsequent uh, on production side will be uh, as we do with uh, with really. Again, any of our development. We look at, uh, initial on production. We look at how the wells themselves interact, uh, between each other and between, uh, adjacent, uh, Wells, which give us, uh, indications of of what that fraction is, is actually behaving. Like and then, uh, what we then do is we, we look at the long term trends of, again, those, uh, those new wells and the existing ones, and it's important to note there that it's, you know, when we talk about Trends, it's not just production, uh, there's there's downhole, uh, pressure, there's there's temperature. And then, there's interpret interpreted, uh, versions of, of all of those that go into our systems and we allow ourselves to Benchmark through those. So, um, it's a lot of words to describe that uh, there there's quite a bit of eyes on this and quite a bit of criteria that we're we're going to be looking for uh in terms of of calling that a a technical success in terms of scale. Uh Patrick. You know what we've spoken to before is

The uh the car asset or the car portion of the asset piece which be the kind of the south portion of the Legacy Varin assets. Um there is quite a bit of of precedent, plug and perf uh application in those lands. And we've looked quite closely at those gone back and seeing what has worked. And, and what, what hasn't worked, um, up in the Gold Creek portion of of the asset base, it's it's uh, we will see less proven, um, and and we do think that we have a pretty good indication of again, what was what was working and and what went uh, what didn't didn't go quite according to plan their, with again, some some ability to, uh, to try to tailor our designs to that. So, and ultimately, in in a perfect world. You you'd start to see these Capital efficiency savings throughout the asset base, but like we said there, we we probably use the word quite a few times throughout this process, that the approach is going to be measured. We feel like 25% of of the gold Creek and car activity is, is appropriate at this stage given, uh, where we're at, and, and we'll look to, to March it up from there and, you know, avoiding trying to put 2 2 firm a Target on it. You know, you go.

From 25 to 50 to 75 over a certain period of time. We try to try to uh, let the results, dictate that instead of putting that Target out there.

Okay, thank you very much.

Thank you. Next question, will be from Dennis Fong at CIBC World Markets. Please go ahead.

Hi, good morning. And, uh, thanks for taking my questions. Um, the the first 1, uh, I want to focus a little bit on the gas lift side. You've you've optimized, uh, part of gold Creek and car, really frankly, driving some volume male performance and frankly, more to do at muzero. Uh, next year, can you talk towards a little bit of the stage of optimization across the asset base, um, essentially the Legacy 1? And how should we think about the Cadence of working through, kind of the upcoming backlog, to kind of, uh, deploy, gas lift in and optimize basis across? Um, the entire asset base

Hey Dennis. Um, so in terms of of the, the gas lift that we've done so far,

And I guess maybe, I I can jump to the second part of your question there. Uh, with respect to uh, what you're calling a, a backlog of other stuff, we're largely there Dennis. Um, again, it was a lot of the efforts that went in, um, to the, uh, the infrastructure build out that was done for that supporting gas lift, um, in both Gold Creek and car and then also just the, uh, the adjustment or I'll call tweaking of the parameters done by the the collective field staff to, to get it done. And, and, and that was 1 of the larger driving factors behind the the 4,000 HBU per day. Uh, um, beat expectations there, internally on, on the Monty side was really getting all of that done in in quite short order. And and again maybe I'll I'll draw back to the comment there about the field teams. You know, we we we look at these assets and we say, okay, you know that there probably is um, a easier word there that the backlog there of stuff to do. And they, they did take it upon themselves to, uh, to hustle through quite a bit of that. And like I said,

Say there's there's not a lot of low-hanging fruit left, but we now see though and and we built into our our forward-looking forecasts is um the the anticipation of of getting ahead of this a little bit better. So you know, it's it's been part of our our standard operating practice that we we get out and, and we either adjust gas lift or whether whatever, whatever the artificial left technology is adjust those parameters in advance of the need of those things.

You don't have a uh a sag in production. Uh, followed by a restoration of it. We actually get in front of that, um, to, to shorten that time and and like, I say that's been built in. And um, so we we our intent is to to not have a backlog. I guess is is the short way of answering it. There. Dennis.

Great, thanks for that context there. Um, my second question, um, relates to infrastructure spending. It looks like you have a couple hundred million dollars of that in 2026. Can you talk towards, um, the, the Cadence of, um, we'll call it facility build out and so forth. Obviously, you have the, um, that's kind of the near well more infrastructure build out versus the actual facility build out, which is, uh, done by your infrastructure partner. Um, but can you talk towards the Cadence of infrastructure spending over the next couple of years? Because I think Capital efficiency becomes that much more, um, impressive as if you kind of EX out some of the the mid-cycle spending requirements.

Yep. Yeah, I can speak to that but when they're again, Dennis. So within the year, I guess, answering the first bit there within the year, it's, it's the, the infrastructure spend that we have planned in both later and cable is, um, relatively front end loaded. Um, like we mentioned there with K, Bob being, uh, available for that expanded capacity. And in the second half, we'll, of course, that would imply that we're, we're doing the work in the first half.

And same thing for later, getting ready for, for that Q4. Uh uh, on production date with respect to Future infrastructure, build out. You know, it's it's not something that we've we've put a, a, a fine number out there at this time. When when you look at the infrastructure portfolio that that we now have the benefit of of working with. Um, you know, we we look at a a big chunk coming available to us in in LaTour there. Um, and like I mentioned there, a decent amount coming in K, Bob, and, and some targeted debt and that came through out.

On top of that we then also have some some available capacity in Gold Creek and car because that that area was was being built out for uh a pretty good uh, Capital program. So when we look at the actual amount that needs to be spent in the out years, um, without putting a number to it. Dennis. It's it's, it's going to be lower than, than we would have expected going into this, uh, pre-acquisition just on the basis of again. Being able to utilize the the available stuff and uh, and move around and, and fill that white space, uh, more effectively.

Great, really appreciate that color. Um I'll I'll turn it back. Thanks.

Thank you.

Also a reminder, ladies and gentlemen, if you do have any questions, please press star followed by 1 on your touchtone phone.

And your next question will be from Travis Wood at National Bank Financial. Please go ahead.

Yeah, good morning, guys. Um, I wanted to hear your thoughts on later and, uh, so maybe you could kind of walk us through

The critical path as you're looking out through the tail, end of this year, what type of lead type items you need to work with with the partner? Um additional approvals as as you kind of step into Q4 of of next year and then

On top of that, what do you think the ultimate productive capacity of of that region would be, uh, over and above the initial 35 to, to 40 a day?

Set us up for for the uh, the beat on timing there. And it's it's important to know that they're in hand early as a result of getting in front of at, at the very start getting in front of our, our design basis, very early. And that started with a, a strong understanding of both, uh, the the, the technical like the subsurface of of the asset base itself. Um, and then some familiarity with with building some some similar, uh, facilities. You know, whether we look at the the musreau facility or some other uh, very similar um, projects that have been done. Um, we we've got the same facility team working on it so they could draw on a lot of that experience and really compress that initial planning and Engineering time so that when we went out for permits, which uh, we again to to repeat myself, we have all of them now. But we got those early and that allowed us to, to, to start construction. Early had a very productive, uh, past few months and, and find ourselves where we're at right now. Um, so so in terms of, you know, what we're looking for, for critical path. It's it's just execution now.

Uh, procurement is is uh all along leads are are uh are placed and and deliveries are are on track. So really not looking for uh for any other check marks, except for a, just following through your other question on, on the ultimate, uh, productive capability of the asset base. So, the tour Phase 1 is, is what we're speaking about here. Right now, 35000 to 40,000 boies per day, uh, in that 40 to 50% liquids range,

When we look at the entirety of the asset base, uh, the way that we envision, it is a likely Phase 2 at some point, um, to bring us up to somewhere in that 85,000 views per day range. Um, and and recognizing again, that, you know, when we first envisioned that, um, it was outside of the context of having these. The combined assets that we have, uh, again the the, the benefit of working with. So, what we intend to do going into the back part of this year and and and, you know, continually refresh that of course is evaluate where that next leg of growth comes from. Is it, is it a later Phase 2? It's very compelling. We, we like lore Phase 1 and and, and we will definitely like a phase 2. But again, having a, a bit of a, a wealth of opportunities to look at there. We'll, we'll put them all against each other and and see what makes sense to grow into at the right time. Is it more up in the northern part of our acreage? Is it, is it looking into depending on what commodity prices look like in the long term? Is it something down in, in West Haven? We'll, we'll look to make that determination. Uh,

Into the future.

Okay, perfect. I'll I'll turn it back to the color.

Thank you.

Next is a follow-up from Dennis Fong at CIBC World Markets. Please go ahead.

Hey, sorry, I just had 1 more question. Maybe is a follow-up to Travis's on LaTour, there just wanted to High. Um ask if you had, if you could kind of highlight any of the um either engineering work or the geology, or the facility design that really kind of provides incremental confidence in, showcasing it on plan, uh, ramp up, um, for that region and that facility

Yeah. Would I draw back to Dennis is is the uh, the results that we've had to date. Um, we we've called those delineations and that's, that's intentional. Um, because we were testing different portions of the acreage base there as it pertained to both geological characteristics, like how the rock behaves, how it behaves when drilling, how it behaves when when fract and of course, of course, subsequent production. And then what what we what we've also looked to do is is craft some of our development program around. Um, both the, the draw down, uh, assessing what the optimal draw down rate is and got a team of of reservoir Engineers that assess, uh, what the the push and pull between, uh, strong initial production, uh, compared to, uh, ultimately looking at higher ultimate. Recoveries are and, and, and kind of looking to find a balance there and then also crafting the, the uh, this year's program around, um, being near, uh, existing horizontals to make sure that we've accounted for, uh, parent child interaction appropriately in in our plan. So,

With without pointing at anything specific there. Dennis, I would definitely say that when you look at the amount of work that's been done, um, be that through um, actual drilling through modeling um, through. I should also mention as well, by the way, we we cored a well drilled drilled and cord a well there. Uh, in the past few quarters there as well. When you look at the amount of work that's gone in it, it is uh, quite a high level of rigor and the, the good news for us anyways, and and should give has given us. Anyways, quite a bit of of confidence is with every uh, either technical evaluation that's been done or observation of of physical Behavior, Uh, of the assets, everything is either met or slightly exceeded expectations. So, uh, that that's really what's giving us the the confidence to to stand behind the the forecast there.

Great, thanks. I'll turn it back.

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

Thank you, Sylvia, and thanks to each of you on the line today.

And who continue to support us on our journey.

I do want to. Once again, thank our entire White Cap team for your dedication and efforts over the past 5 month period of time. As well as for the full year, we are excited about the opportunity that facing us um, with our company and look forward to updating you on the progress, through the balance of 25 and into into the future. All the best of each of you signing off for now. Cheers.

Thank you, sir.

Ladies and gentlemen, this is indeed conclude your conference call for today. Once again, thank you for attending. And at this time we ask that you please disconnect your lines, enjoy the rest of your day.