Whitecap Resources Inc. (TSX: WCP) is looking to consolidate core assets within its Central Alberta, Eastern Saskatchewan, and Western Saskatchewan business units. This follows the three separate acquisitions with a total acquisition price of $342.5 million, consisting of $240 million in cash and 15.2 million shares at an average of $7.20 per share.
In November 2021, the firm closed a $40 million acquisition deal of additional Viking production and lands in the Forgan, Kerrobert, and Plenty areas in Western Saskatchewan.
The firm continued consolidating its assets in the Weir Hill area in Eastern Saskatchewan, closing the transaction in December 2021. The purchase price includes $21 million in cash and 2.7 million shares.
Finally, the company also entered into an agreement to acquire a private company operating on the Glauconite formation in Central Alberta. The acquisition involves a price tag of $180 million and 12.5 million shares, expected to close in mid-January 2022.
As a result of these acquisitions, the energy firm is now increasing its 2022 production guidance to 130,000 – 132,000 boe/d. It also expects that its 2022 discretionary funds flow will increase by $80 million, which is expected to fund the incremental debt incurred due to the acquisitions.
The company also relayed the repurchase of 19.2 million shares at $6.95 per share as part of its share buyback program expiring in May 2022. It is also expected that the funding for this repurchase will be sourced from the expected discretionary funds flow in 2022.
Whitecap Resources last traded at $7.01 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
