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Whitecap Resources (TSE:WCP)
TSX:WCP
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Whitecap Resources
(TSX:WCP)
74Outperform
Positive Factors
Financial Performance
Reported Q4 cash flow came out higher than consensus expectations.
Operational Excellence
Whitecap Resources Inc. has significantly upgraded and extended its inventory over the last several years, which is a crucial attribute for an exploration and production company.
Negative Factors
Debt Management
Net debt as a percentage of PDP value has decreased and currently stands at a low 13% of PDP value.
Whitecap Resources (WCP) vs. S&P 500 (SPY)
Market Cap
$4.88B
Dividend Yield9.65%
Average Volume (3M)3.62M
Price to Earnings (P/E)5.9
Beta (1Y)1.04
Revenue Growth3.34%
EPS Growth-6.99%
CountryCA
Employees542
SectorEnergy
Sector Strength73
IndustryFossil Fuels
Share Statistics
EPS (TTM)1.37
Shares Outstanding587,500,000
10 Day Avg. Volume6,575,640
30 Day Avg. Volume3,618,997
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.35
Price to Cash Flow (P/CF)2.50
P/FCF Ratio2.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$13.44Price Target Upside61.94% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Whitecap Resources Business Overview & Revenue Model
Company DescriptionWhitecap Resources Inc. is a Canadian energy company engaged in the acquisition, development, optimization, and production of crude oil and natural gas resources. Operating primarily in Western Canada, Whitecap focuses on high-quality, low-decline oil and gas assets, leveraging its technical expertise and operational efficiencies to maximize shareholder value. The company's core operations are situated in the regions of Alberta, Saskatchewan, and British Columbia, where it implements sustainable practices to enhance profitability and environmental stewardship.
How the Company Makes MoneyWhitecap Resources generates revenue primarily through the extraction and sale of crude oil and natural gas. The company operates a portfolio of oil and gas wells, which produce hydrocarbons that are sold to various markets. Key revenue streams include the sale of oil, natural gas, and natural gas liquids. Whitecap's strategic acquisitions and development projects enhance its production capabilities, while its focus on operational efficiency and cost management supports profitability. Additionally, the company may engage in hedging activities to manage price volatility in the commodity markets. Partnerships with service providers and stakeholders, along with adherence to regulatory frameworks, also play a significant role in its financial performance.
Whitecap Resources Financial Statement Overview
Summary
Whitecap Resources shows strong financial recovery with significant revenue growth and improved cash flow, although declining net profit margins and return on equity pose risks. The balance sheet is stable with improved leverage, but the absence of EBIT profitability is a concern.Income Statement
Whitecap Resources has shown a strong recovery in its income statement metrics. The company achieved a significant gross profit margin improvement from 48.5% in 2023 to 60% in 2024. However, the net profit margin decreased slightly to 20.6% in 2024 from 27.5% in 2023, indicating increased costs or other financial pressures. Despite this, the revenue growth rate from 2023 to 2024 was impressive at 21.9%, showcasing strong top-line growth. The lack of EBIT margin is a weak point, but EBITDA margin remained robust at 54.4% in 2024.78
Positive
Balance Sheet
The balance sheet of Whitecap Resources reflects a solid equity base with an equity ratio of 57.8% in 2024, indicating financial stability. The debt-to-equity ratio improved to 0.20, showing a reduction in leverage compared to previous years. However, the return on equity decreased from 16.2% in 2023 to 14.1% in 2024, suggesting a decline in efficiency or profitability relative to equity.75
Positive
Cash Flow
The cash flow statement indicates healthy cash generation, with a free cash flow of $696.8 million in 2024, a growth of 12.8% from the previous year. The operating cash flow to net income ratio is strong at 2.26, reflecting efficient cash conversion. However, the free cash flow to net income ratio slightly decreased to 0.86, indicating potential challenges in maintaining cash flow relative to net earnings.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.94B | 3.23B | 4.78B | 2.69B | 931.90M | Gross Profit |
| 2.36B | 1.40B | 3.11B | 1.73B | 453.24M | EBIT |
| 0.00 | 1.02B | 1.79B | 840.86M | 18.85M | EBITDA |
| 2.14B | 2.16B | 3.13B | 2.99B | -2.00B | Net Income Common Stockholders |
| 812.30M | 889.00M | 1.68B | 1.78B | -1.84B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 362.30M | 32.90M | -29.00M | -29.67M | -71.59M | Total Assets |
| 9.95B | 9.60B | 9.53B | 6.88B | 3.38B | Total Debt |
| 1.14B | 1.38B | 1.87B | 1.09B | 1.17B | Net Debt |
| 780.80M | 1.38B | 1.90B | 1.11B | 1.24B | Total Liabilities |
| 4.20B | 4.13B | 4.48B | 3.14B | 2.38B | Stockholders Equity |
| 5.75B | 5.48B | 5.05B | 3.74B | 996.95M |
| Cash Flow | Free Cash Flow | |||
| 696.80M | 617.60M | 1.49B | 564.70M | 248.91M | Operating Cash Flow |
| 1.83B | 1.74B | 2.18B | 1.12B | 450.18M | Investing Cash Flow |
| -563.80M | -765.60M | -2.50B | -387.38M | -261.03M | Financing Cash Flow |
| -907.40M | -976.90M | 313.40M | -736.53M | -189.15M |
Whitecap Resources Technical Analysis
Negative
8.30
Price Trends
9.77
Negative
9.87
Negative
9.83
Negative
Market Momentum
-0.31
Positive
30.49
Neutral
20.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WCP, the sentiment is Negative. The current price of 8.3 is below the 20-day moving average (MA) of 9.50, below the 50-day MA of 9.77, and below the 200-day MA of 9.83, indicating a bearish trend. The MACD of -0.31 indicates Positive momentum. The RSI at 30.49 is Neutral, neither overbought nor oversold. The STOCH value of 20.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WCP.
Whitecap Resources Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $4.88B | 5.85 | 14.51% | 9.65% | 3.34% | -6.99% | |
73 Outperform | C$3.04B | 10.45 | 11.55% | 8.65% | -14.63% | -18.40% | |
72 Outperform | C$966.54M | 9.43 | 11.14% | 11.90% | 2.04% | -48.47% | |
70 Outperform | C$24.15B | 17.99 | 8.55% | 2.04% | -8.29% | -30.52% | |
70 Outperform | $15.13B | 13.23 | 14.67% | 2.95% | -9.83% | -27.76% | |
68 Neutral | $2.27B | 9.64 | 5.99% | 3.39% | 22.71% | ― | |
57 Neutral | $8.36B | 5.49 | -6.03% | 7.47% | 0.03% | -68.64% |
* Energy Sector Average
Performance Comparison
TSE:WCP
Whitecap Resources
8.30
-0.52
-5.86%
TSE:BTE
Baytex Energy
2.93
-1.29
-30.50%
TSE:ARX
ARC Resources
25.65
3.49
15.74%
TSE:PEY
Peyto Exploration & Dev
15.64
2.74
21.24%
TSE:CJ
Cardinal Energy
6.09
0.15
2.53%
TSE:TOU
Tourmaline Oil
64.99
7.97
13.98%
Whitecap Resources Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -15.64% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong operational and financial performance in 2024, with significant capital returns to shareholders and reductions in debt. While there are concerns about potential tariffs and weather-related operational challenges, the overall sentiment is positive due to the company's robust growth and strategic achievements.Highlights
Record Capital Return to Shareholders
In 2024, Whitecap Resources returned over $560 million to shareholders, including $430 million in base dividends and $130 million in share repurchases.
Exceptional Operational Performance
Production results consistently exceeded expectations, leading to four guidance increases throughout 2024.
Infrastructure Portfolio Monetization
Successfully sold parts of infrastructure for $520 million while retaining operatorship, enhancing long-term strategic goals.
Strong Reserve Growth
Debt-adjusted reserves per share grew by 12% to 13%, supported by attractive recycle ratios of 3.8x, 2.7x, and 3.3x for various reserves.
High Operational Efficiency
Musreau and Kaybob projects outperformed expectations, with significant increases in production and completion under budget.
Improved Financial Health
Reduced net debt by over $450 million, with a leverage ratio of 0.3x debt to EBITDA and $1.6 billion available credit capacity.
Lowlights
Potential Tariffs on Canadian Oil Exports
Concerns emerged regarding potential tariffs on oil and gas exports to the U.S., which could impact operations.
Operational Challenges Due to Weather
Cold weather conditions in February posed operational challenges, although these were managed effectively.
Company Guidance
During the Whitecap Resources Q4 and Full Year 2024 Results Conference Call, significant guidance and metrics for 2025 were provided. Whitecap achieved exceptional results in 2024 with a $1.1 billion capital program, leading to four guidance increases throughout the year. The company returned over $560 million to shareholders, which included $430 million from a base dividend of $0.73 per share and $130 million in share repurchases. They reported impressive reserve growth with debt-adjusted reserves per share increasing by 12% to 13% and attractive recycle ratios of 3.8, 2.7, and 3.3 times for different reserve categories. Whitecap's production exceeded expectations, with Montney assets achieving 17,500 BOE per day, surpassing projections by over 2,000 BOE per day. For 2025, the company forecasts average production of 176,000 to 180,000 BOEs per day with a capital budget of $1.1 billion to $1.2 billion. They expect to generate approximately $1.7 billion in fund flow and $550 million in free funds flow at $70 per barrel WTI and $2 per GJ AECO. Sensitivities were also outlined, with funds flow impacted by changes in WTI, AECO, MSW differential, and the U.S.-Canadian dollar exchange rate.Whitecap Resources Corporate Events
M&A TransactionsBusiness Operations and Strategy
Whitecap Resources and Veren Announce $15 Billion Merger to Form Leading Canadian Oil Producer
Positive
Mar 10, 2025
Whitecap Resources Inc. and Veren Inc. have announced a strategic merger valued at $15 billion, creating a leading Canadian light oil and condensate producer. This merger positions the combined entity as the largest landholder in the Alberta Montney and Duvernay regions, with significant production capabilities and a strong focus on sustainable growth. The transaction is expected to enhance profitability and shareholder returns, while also reinforcing the company’s financial strength and competitive advantage in the evolving energy market.
Business Operations and StrategyFinancial Disclosures
Whitecap Resources Achieves Record Production and Strong 2024 Financial Results
Positive
Feb 19, 2025
Whitecap Resources Inc. has announced record annual production and strong financial results for 2024, with significant increases in petroleum and natural gas revenues. Despite a slight decrease in net income compared to 2023, the company achieved a substantial reduction in net debt and maintained robust daily production levels. These achievements underscore Whitecap’s solid operational performance and strategic financial management.
DividendsFinancial Disclosures
Whitecap Resources Declares February Dividend and Schedules Financial Results Announcement
Positive
Feb 13, 2025
Whitecap Resources Inc. has announced a monthly cash dividend of Cdn. $0.0608 per share for February, payable on March 17, 2025, reinforcing their commitment to shareholder returns. Additionally, the company will release its fourth quarter and year-end 2024 financial results on February 19, 2025, followed by a conference call and webcast to discuss the results the next day.
Business Operations and StrategyFinancial Disclosures
Whitecap Resources Reports Strong 2024 Reserves and Positive 2025 Outlook
Positive
Feb 3, 2025
Whitecap Resources Inc. announced strong 2024 reserves metrics, showcasing significant operational and financial success driven by its organic drilling program. The company replaced over 110% of production across all reserve categories and achieved a notable debt-adjusted reserves per share growth of 12% to 13%. With a long-term drilling inventory representing nearly 30 years of development, Whitecap is well-positioned for sustainable growth. The 2025 drilling program has started robustly, with promising production results from the Kaybob pad, supporting the potential for improved long-term development plans.
Whitecap Resources Announces January 2025 Dividend
Jan 15, 2025
Whitecap Resources Inc. announced a monthly dividend of C$0.0608 per share for January 2025, payable on February 18, 2025, to shareholders of record as of January 31, 2025. This decision reflects Whitecap’s commitment to maintaining regular dividend payments, signaling stable financial operations and ongoing profitability, which may reassure and attract investors.
Whitecap Resources Strengthens Position with Key Deals
Jan 2, 2025
Whitecap Resources has announced the closure of a $420 million infrastructure sale to Pembina Gas Infrastructure, which significantly reduces its net debt and increases liquidity. Additionally, a strategic partnership with PGI will fund the first phase of the Lator Infrastructure project, enhancing Whitecap’s production capabilities in the Montney region. These developments position the company for strong shareholder returns in 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.