Whitecap Resources (TSE:WCP) reported third-quarter production and cash flow that exceeded its internal expectations, while raising its 2026 capital budget and production outlook. The company also outlined a 2027 plan centered on production growth, condensate expansion and free cash flow generation.
Chief Executive Officer Grant Fagerheim said third-quarter production averaged 390,720 barrels of oil equivalent per day, including 237,252 barrels per day of condensate, light oil and natural gas liquids, plus about 920 million cubic feet per day of natural gas. Production benefited from base performance and new wells at Gold Creek and Kaybob, as well as stronger-than-expected output from the conventional division.
On a per-share basis, production rose 5% from the third quarter of 2025. Funds flow totaled C$1.2 billion, or C$0.96 per share, up 32% per share from a year earlier. After C$533 million of capital investments, Whitecap generated C$640 million of free funds flow in the quarter and C$1.9 billion through the first nine months of 2026.
Higher 2026 Spending and Production Outlook
Whitecap drilled 84 wells during the third quarter, including 35 unconventional Montney and Duvernay wells and 49 conventional wells in Alberta and Saskatchewan. The company said faster cycle times allowed it to execute its capital program ahead of schedule, leading management to maintain activity levels through year-end rather than slow operations.
As a result, Whitecap increased its 2026 capital budget by about C$100 million to C$2.2 billion. It also raised average production guidance for the third time this year to 392,000 BOE per day, with fourth-quarter production expected to range from 395,000 to 400,000 BOE per day. The revised outlook is approximately 19,500 BOE per day, or 5%, above its original budget guidance.
The additional spending is focused on what the company described as its highest-return programs at Kaybob, Lator and Saskatchewan light-oil assets.
Whitecap’s board also approved a roughly 1.5% increase in its monthly dividend to 6.17 Canadian cents per share, or 74 cents annually. The increase will take effect with the November dividend, payable in December, and represents approximately C$13 million of additional annual spending.
Revenue Growth and Balance Sheet Progress
Senior Vice President and Chief Financial Officer Thanh Kang said petroleum and natural gas revenue rose 45% year over year to C$2.4 billion. Whitecap realized C$113.89 per barrel for crude oil and condensate, a 35% increase from the prior-year period, while its realized natural gas price rose 77% to C$2.32 per Mcf.
Liquids accounted for about 92% of revenue despite representing 61% of production, Kang said. Approximately 30% of third-quarter natural gas revenue came from U.S. markets. Beginning in 2028, Whitecap expects about 5% of its natural gas production to be exposed to European TTF pricing.
Operating costs were C$10.22 per BOE during the quarter, though Kang said the figure included one-time favorable adjustments. Excluding those items, operating expenses would have been C$11.70 per BOE. The company forecasts 2027 operating costs of C$12 to C$12.50 per BOE, reflecting anticipated higher power and fuel costs as well as a planned Kaybob turnaround.
Net debt declined to C$2.1 billion at Sept. 30, down about C$450 million from the end of the second quarter and approximately C$1.3 billion from year-end 2025. Whitecap reported a net-debt-to-annualized-funds-flow ratio of 0.4 times, no draws on its C$2.5 billion credit facility, and C$1.7 billion of investment-grade senior notes. The company expects to finish 2026 with net debt below C$2 billion.
2027 Budget Targets Production Growth and Free Cash Flow
Whitecap’s 2027 capital budget ranges from C$2.4 billion to C$2.6 billion and includes plans to drill 332 wells: 127 unconventional Montney and Duvernay wells and 205 conventional wells. The company forecast average production of 400,000 to 410,000 BOE per day, representing approximately 3% annual per-share growth, or about 5% excluding planned third-quarter turnarounds at Kaybob.
About 75% of the 2027 budget, or approximately C$1.9 billion, is allocated to the unconventional division. Unconventional output is expected to average 265,000 BOE per day, up about 8% from 2026, with condensate production projected to exceed 70,000 barrels per day.
The company plans to invest roughly C$600 million in its conventional division, where it expects average output of 140,000 BOE per day. Vice President Chris Bullin said the lower production level reflects a more normalized outlook following strong 2026 performance and is intended to support higher free cash flow.
Whitecap expects planned maintenance at its 15-07 gas plant and a third-party Kaybob processing facility in the third quarter of 2027 to reduce quarterly production by approximately 32,000 BOE per day and annual average production by about 8,000 BOE per day.
At a planning price deck of C$80 WTI, C$2 per gigajoule AECO natural gas and a C$0.71 exchange rate, Kang said the company forecasts C$4.1 billion of funds flow and approximately C$1.6 billion of free funds flow at the midpoint of its capital budget. The proposed Productivity Mega Deduction, if enacted, would raise that estimate to about C$2 billion. At current strip pricing, management said 2027 free funds flow could approach C$2.5 billion if the measure is enacted.
Capital Allocation and Operating Initiatives
Management said it will remain patient in deploying free cash flow beyond the base dividend, citing potential uses including further debt reduction, share repurchases, dividend growth, incremental development and tuck-in acquisitions. Kang said share buybacks remain compelling because they permanently reduce the share count and can improve per-share growth and long-term dividend sustainability.
At Kaybob, Whitecap identified optimization and compression projects expected to raise productive capacity from 120,000 BOE per day to roughly 130,000 BOE per day in the near term and 135,000 to 140,000 BOE per day by the end of 2027. The company said these projects require nominal capital.
Whitecap also expects Lator’s 04-13 facility to reach capacity of 35,000 to 40,000 BOE per day over 12 to 18 months. President Joey Wong said the pace of the ramp-up will depend on well results, development execution, commodity prices and the broader allocation of capital across the portfolio.
For 2027, Chief Operating Officer Travis Tweit said Whitecap expects approximately 3% operating-cost inflation, primarily from fuel, power and general services, and about 2% capital-cost inflation. The company said long-term contracts for key rigs and recently secured frac suppliers support its supply certainty despite a tightening market.
About Whitecap Resources (TSE:WCP)
Whitecap Resources Inc is a leading Canadian energy company committed to delivering reliable returns to shareholders through the responsible development of oil and natural gas assets in the Western Canadian Sedimentary Basin. With a strong track record of profitable growth and a sustainable dividend, Whitecap delivers long-term value to investors, supported by investment-grade financial strength.
