Whitecap Resources (WCP.TO and SPGYF) Update - July 14

[dan_s]

Whitecap Resources has been added to our High Yield Income Portfolio. It pays monthly dividends. Annual yield is ~8%.

My initial profile on Whitecap Resources (WCP.TP) has been posted to the EPG website.

Whitecap is a large-cap Canadian upstream company that closed the merger with Veren, Inc. on May 12, 2025. Veren was one of my Top Picks in our Sweet 16 Growth Portfolio at the beginning of this year. The merger creates a solid growth company that should generate over $5.4Cdn billion of net revenues in 2025 with the potential to generate over $7.5Cdn billion of net revenues in 2026. This is a classic "Growth + Income" stock.

Today, Whitecap is the 7th largest producer of oil & gas in Canada and the 5th largest producer of natural gas in the country. It is currently producing approximately 365,000 Boepd of production with a mix of 52.2% crude oil, 10.4% NGLs and 37.4% natural gas.

If you watched the replay of our July 11th webinar, you know that natural gas prices in Western Canada have been much lower than U.S. natural gas prices during 1H 2025, but that the outlook for Canadian natural gas prices has improved significantly with the start-up of LNG Canada. EIA's natural gas price forecast for 2026 is $4.90US/MMBtu. If EIA's forecast become reality, Western Canada natural gas prices should be close to $4.00Cdn/MMBtu next year.

Whitecap's hedging program and gas marketing efforts have somewhat insulated it from the Q2 dip in Western Canada gas prices. About 30% of Whitecap's Q3 natural gas is hedged at a blended price of $3.33Cdn/MMBtu.

I have decided to add Whitecap to our High Yield Income Portfolio. The Company pays monthly dividends that have an annual yield of 8% at the current stock price. It is at the top of my list for promotion to the 2026 Sweet 16.