Whitecap Resources Inc. Exceeds 2011 Exit Production Rate Guidance of 8,300 Boe/d and Provides Operational Update

CALGARY, ALBERTA -- (Marketwire - Jan. 23, 2012) - Whitecap Resources Inc. (“Whitecap“, “we“, “us“, “our“ or the “Company“) (TSX: WCP) is pleased to provide shareholders with an update to its production volumes and continuing operational success.


PRODUCTION HIGHLIGHTS

- Current production is approximately 8,500 boe/d with approximately 700 boe/d to come onstream in the near term excluding production volumes from the recently announced Compass Petroleum Ltd. (“Compass“) transaction dated December 15, 2011 which is expected to close in mid-February 2012.

- As a result of our successful 2011 drilling program we have exceeded our 2011 exit rate production guidance of 8,200 - 8,300 boe/d. This represents an increase of greater than 159% on an absolute basis and a 51% increase per share, fully diluted over our 2010 exit rate production of 3,200 boe/d.

- Our fourth quarter 2011 average production is estimated to be approximately 7,800 boe/d, a 287% increase on an absolute basis and a 78% increase per share, fully diluted over fourth quarter 2010 average production of 2,014 boe/d.

- Our 2011 average annual production is estimated to be approximately 5,600 boe/d, a 291% increase on an absolute basis and a 41% increase per share, fully diluted over our 2010 average annual production of 1,433 boe/d.


OPERATIONAL UPDATE

In 2011, Whitecap drilled a total of 60 (47.7 net) wells all targeting oil with a 100% success rate. Of these 44 (35.8 net) were horizontal multi-fractured oil wells. Whitecap has a current inventory of 373 (251 net) low risk development drilling opportunities (91% oil), prior to the inclusion of the Compass inventory, which will allow us to continue our trend of exceptional, low risk organic growth in 2012 and beyond.


West Central Alberta - Pembina (Cardium light oil)

Whitecap continues to demonstrate significant progress in developing the Cardium from both a cost and well productivity perspective. We are generating consistent and repeatable results that provide superior economics. In East Pembina, where we drilled 70% of our 2011 Cardium horizontal wells, our average drill and complete costs are $2.2 million with average IP(30) rates of 226 boe/d (84% oil).

In the fourth quarter of 2011 we drilled 13 (11.3 net) horizontal Cardium oil wells of which 8 (6.9 net) were placed on production in 2011 with the remaining five wells coming on production in early 2012.

Evaluations of reduced spacing and waterflood pilot schemes for our Cardium lands continue to progress and we plan to implement these pilot schemes in 2012. Positive results from these pilots have the potential to more than double Whitecap's current inventory of Cardium horizontal locations.

In the first quarter of 2012 we will have two rigs drilling continuously until spring break-up and anticipate drilling 16 gross Cardium horizontal wells, primarily in our East Pembina core area.


Peace River Arch - Valhalla (Primarily Montney light oil)

In the fourth quarter of 2011 we drilled 8 (5.0 net) wells including 2 (1.0 net) horizontal multi-fractured Montney Sexsmith wells, 3 (2.5 net) Doe Creek horizontal wells, 2 (1.0 net) water source wells for the waterflood expansion, and one additional well. One of the three Doe Creek horizontal oil wells was brought onstream in the fourth quarter while the other two Doe Creek wells and the two horizontal Montney Sexsmith wells are being brought on production in the first quarter of 2012.

We continue to optimize our horizontal well development program in the Valhalla Montney Sexsmith oil pool from both a cost and productivity perspective. In 2011, our average drill and complete costs were down 10% to $4.6 million gross per well with average IP(30) productivity rates increasing over 150% to 532 boe/d. Our working interest in the Montney formation is a consistent 50% across the entire pool.

The first phase of the waterflood expansion is in progress and by the end of the first quarter we will have 17 wells on injection as compared to five wells injecting at the start of 2011. It is expected these conversions will increase our injection into the Valhalla Montney oil pool three-fold to 7,500 barrels of water per day. Our full field simulation model has been updated with recent results and continues to indicate improvement in the ultimate oil recovery in the Montney Sexsmith.

We will have one rig drilling continuously and expect to drill 3 (2.0 net) Montney horizontal wells in the first quarter including the first horizontal targeting the Middle Montney oil interval.


SW Saskatchewan - Fosterton (Roseray, Cantuar & Success light oil)

In the fourth quarter of 2011 we drilled 4 (3.5 net) wells in Fosterton which included a successful Cantuar horizontal well. This is the first Cantuar horizontal in the pool and had an IP(30) rate of 67 bopd. Both the initial water cut and decline profile of this well are better than expected. The other three wells drilled were vertical wells targeting Roseray, Cantuar and Success sands. Two of these wells were brought on production in the fourth quarter while the other well will be brought on production in 2012.

We have plans to drill three development wells in the first quarter of 2012 including a follow-up to the initial Cantuar horizontal. In addition to the first quarter Cantuar horizontal well there are three other development locations in the immediate area. This continued success opens up a number of Cantuar growth opportunities in the area.


West Central Saskatchewan (Viking light oil)

It is anticipated that our previously announced acquisition of Compass will close in mid-February 2012. In the meantime, Compass has initiated their 2012 drilling program and has drilled four Viking horizontal light oil wells to date of which two have been completed. Post-closing, we plan to have one drilling rig working continually through to spring break-up and subject to weather expect to have 14 to 16 Viking oil wells drilled and completed in the first quarter of 2012.

We have had strong operational success to date throughout our core areas and look forward to carrying this positive momentum into 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, business development plans, performance and opportunities, plans to bring wells on-stream and the timing thereof, financial, operating and production guidance and business opportunities, our capital expenditure program, drilling and development plans and the timing thereof, drilling inventories, our waterflood pilot plans and the results therefrom, ultimate oil recoveries, and the completion of the Compass acquisition and the timing thereof. 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.

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 market oil and natural gas successfully and our ability to access capital.

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. The Company's 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 the Company 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.

Note: “Boe“ means barrel of oil equivalent on the basis of 6 thousand cubic feet (“mcf“) of natural gas to 1 bbl. Boes 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.



Contact Information

Whitecap Resources Inc.
Grant Fagerheim
President & CEO

Whitecap Resources Inc.
Thanh Kang
VP Finance & CFO

Whitecap Resources Inc.
500, 222 - 3 Avenue SW
Calgary, AB T2P 0B4
Main Phone (403) 266-0767
(403) 266-6975 (FAX)
www.wcap.ca