Whitecap closes NAL Resources acquisition, offers Q1 guidance

Canadian oil producer Whitecap Resources Inc. announced that it has completed its acquisition of exploration and production company NAL Resources Ltd.

As previously planned, Whitecap issued roughly 58.3 million of its common shares to Manulife Financial Corp. for all issued and outstanding shares of NAL, the company said in a Jan. 4 press release. The deal to acquire NAL, which produces oil and natural gas in Alberta and Saskatchewan, furthers Whitecap's strategy of consolidating assets in its core Western Canada operating areas.

Whitecap also released updated guidance for fourth-quarter 2020 production and 2021 spending and output.

The Calgary, Alberta-based light oil producer estimated that its average fourth-quarter production totaled 63,000 barrels of oil equivalent per day, above its previous expectation for 59,000 boe/d to 61,000 boe/d.

The company expects to invest $115 million to $120 million in capital expenditures in the first quarter of 2021. It anticipates its production of crude oil, NGLs and other resources to average 89,000 boe/d to 91,000 boe/d during the period.

The capital plan includes operating six drilling rigs and drilling 56 horizontal wells, including 39 extended-reach horizontal wells and two horizontal injection wells. Whitecap intends to spend $14 million on enhanced oil recovery in addition to health, safety and environmental initiatives during the quarter.

Whitecap plans to detail the remainder of its capital spending plans for 2021 following the closing of its strategic combination with TORC Oil & Gas Ltd. The company said its technical review of TORC's assets is ongoing. Whitecap expects the deal to close on Feb. 24, after which its production is set to top 100,000 boe/d, with oil and NGLs accounting for 78% of total output.