Whitecap announces increase to credit facilities and disposition of non-core assets

Whitecap Resources Inc. ("Whitecap", "we", "us", "our" or the "Company") (WCP.TO) is pleased to announce that as a result of continued operational success in each of our core areas and the related production and reserve increases, our credit facility has increased 13% to $450 million . In addition, Whitecap has entered into agreements in principle to sell non-core assets for total cash proceeds of approximately $56.4 million . The increase to our credit facility and the proceeds from the non-core asset dispositions provides us with significant financial flexibility for ongoing operations moving into 2013.

Non-core Dispositions

The non-core assets being disposed of are located in the Swan Hills area of Alberta, southeast Saskatchewan and our heavy oil assets in Alberta for total cash proceeds of $56.4 million , subject to normal closing adjustments. On a combined basis these assets have current production of approximately 680 boe/d (based on field estimates). The transactions each have an effective date of September 1, 2012 with closing expected in November 2012 . The proceeds will be used initially to reduce indebtedness outstanding under our credit facilities.

Credit Facilities

Based on our mid-year interim reserves review our borrowing base has increased 13% to $450 million from the previous $400 million . Recent operational results in each of our core areas have been very strong and we anticipate a positive independent 2012 year-end reserves evaluation. The 2012 year-end borrowing base review is scheduled for May 31, 2013 .

Outlook

The non-core asset dispositions combined with our borrowing base increase provides us with significant financial and operational flexibility to advance toward a dividend growth model. Pro forma our non-core asset dispositions our guidance for the fourth quarter of 2012 is as follows:

We look forward to releasing our third quarter results on November 6, 2012 and providing our shareholders with our 2013 plans in late November 2012 .

Note Regarding Forward Looking Statements and Other Advisories

This press release contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to the Company's plans and other aspects of our anticipated future operations, management focus, strategies, financial, operating and production results and business opportunities. Forward-looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. In particular, this press release contains forward-looking information relating to our ongoing business plan, strategy and targets, anticipated 2012 year-end reserves increases, the closing of non-core asset dispositions and the use of proceeds therefrom, industry conditions, commodity prices, capital spending, production, product mix, funds from operations drilling plans, net debt to annualized cash flow ratio and potential growth.

The forward-looking information is based on certain key expectations and assumptions made by our management, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future production rates and estimates of operating costs; performance of existing and future wells; reserve and resource volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to efficiently integrate assets and employees acquired through acquisitions, ability to market oil and natural gas successfully; our ability to access capital; and completion of the non-core asset dispositions on the timing contemplated.

Although we believe that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Whitecap can give no assurance that they will prove to be correct.  Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. Our actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that we will derive therefrom.  Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on our future operations and such information may not be appropriate for other purposes.

Readers are cautioned that the foregoing lists of factors are not exhaustive.  Additional information on these and other factors that could affect our operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

These forward-looking statements are made as of the date of this press release and we disclaim any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Non-GAAP Measures

This MD&A contains the terms "funds from operations" which does not have a standardized meaning prescribed by GAAP and therefore may not be comparable with the calculation of similar measures by other companies. Whitecap uses funds from operations to analyze financial and operating performance.  Whitecap believes this benchmark is a key measure of profitability and overall sustainability for the Company. Funds from operations is a term commonly used in the oil and gas industry and is not intended to represent operating profits nor should they be viewed as an alternative to cash flow provided by operating activities, net earnings or other measures of financial performance calculated in accordance with GAAP. Funds from operations are calculated as cash flows from operating activities excluding transaction costs and asset retirement settlements less changes in non-cash working capital. The Company calculates funds from operations per share using the same method and shares outstanding that are used in the determination of earnings per share

"Boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.  In addition, given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

SOURCE: Whitecap Resources Inc.