Good morning, and welcome to Whitecap Resources' annual meeting of shareholders being held this morning by audio webcast on the Lumi Meeting platform. I would now like to turn it over to Whitecap's Chairman of the Board, Mr. Ken Stickland.
Thanks very much, Sylvie. Good morning, everyone. What a difference a year makes. We'll have more on that later. I'd like to welcome you to the annual meeting of shareholders of Whitecap Resources Inc. The meeting will now come to order. I'm Ken Stickland, and I'm the Chairman of the Board of Directors of Whitecap, and I'll act as chair of the meeting. Our meeting is being hosted on the Lumi Virtual Shareholder Meeting platform. This allows registered shareholders and duly appointed proxy holders to vote and to submit questions and comments to the moderator to be read and addressed at the meeting. If you have a question or comment, please submit it through the system. Following the formal portion of our meeting today, Grant Fagerheim, our President and Chief Executive Officer, will make some brief remarks. After his remarks, he'll address any questions.
For the meeting, I'm gonna ask Jeff Oke to act as secretary of the meeting and Jackie Fisher and Paul Bedard, representatives of Odyssey Trust Company, to act as scrutineers. I have received confirmation from Odyssey as to the due mailing of the meeting materials and the financial statements for the year ended December 31st, 2025. I direct that this confirmation, together with copies of these documents, be kept by the secretary with the minutes of this meeting. We'll now move to quorum and the scrutineers' report. Business may be transacted at this meeting if two or more persons are present, holding or representing by proxy, not less than 25% of the shares entitled to vote at the meeting.
Mr. Chairman, the scrutineers' report shows that there is a quorum of shareholders present at the meeting.
I direct that the scrutineers' report be kept by the secretary and annexed to the minutes of this meeting as a schedule. I now declare that the meeting is regularly called and properly constituted for the transaction of business. We'll conduct each vote today by way of vote cast on the Lumi platform and those submitted by proxy. I understand that the scrutineers have tabulated all the votes received prior to voting cutoff. If you have previously voted, you do not need to vote again when prompted. By voting again, you'll revoke any previous vote made prior to voting cutoff. We will now open voting for all of the resolutions. Particulars of the votes cast on all matters will be made available on SEDAR+ after the meeting. I would first like to present the financial statements for the year ended December 31st, 2025.
These are located on the Lumi dashboard page. The next item of business is to fix the number of directors.
My name is Thanh Kang. I move that the number of directors to be elected at this meeting be fixed at 11.
Thanks, Thanh.
My name is Janice Wood, and I second the motion.
Thanks, Janice. Is there any discussion or questions submitted from any registered shareholder or proxy holder on that motion?
Mr. Chairman, there are no questions on that motion.
Thank you, Tim. The next item of business is the election of directors of Whitecap. The advance notice date for the nomination of directors having passed under Whitecap's advance notice bylaw, the only individuals entitled to be nominated as directors at this meeting are the persons named as nominees in Whitecap's information circular. Therefore, as directed by the board and in accordance with the information circular, Scott D. Althen, Grant B. Fagerheim, Jodi J. Jenson Labrie, Vineeta Maguire, Glenn A. McNamara, Barbara E. Munroe, Stephen C. Nikiforuk, Myron M. Stadnyk, myself, Kenneth S. Stickland, Bradley J. Wall, and Grant A. Zawalsky, are nominated as directors of Whitecap to hold office until the next annual election of directors or until their successors are elected or appointed, subject to the provisions of the Business Corporations Act (Alberta), and the bylaws of Whitecap. The next item of business is the appointment of auditors.
I move that PricewaterhouseCoopers LLP be appointed auditors of Whitecap until the next annual meeting or until their successor is appointed, and that their remuneration as such be fixed by the board of directors.
I second the motion.
Thank you, Thanh and Janice. The next item of business is to approve a non-binding advisory resolution concerning Whitecap's approach to executive compensation.
I move that the non-binding advisory resolution on page 26 of the information circular of Whitecap dated March twenty-fifth, 2026, be approved.
I second the motion.
Again, thank you. Is there any discussion or questions submitted from any registered shareholder or proxy holder on that motion?
Mr. Chairman, there are no questions on that motion.
Thank you. As voting has been enabled for all previous motions, if a shareholder has not voted yet, please do so now. We'll just pause to allow final voting. Voting is now closed. We'll have another pause to receive voting confirmation from Paul that motions have passed.
Mr. Chairman, the scrutineers have advised that all resolutions have been approved by more than the requisite majority and that those nominated have been duly elected as the directors of Whitecap.
Thank you, Jim. I declare the motions carried and the nominees for the board of directors elected. We will now move to other business. Are there any questions submitted to the formal business of the meeting?
Mr. Chairman, we have received a question from Ruth Saldanha of SHARE, who has been appointed by proxy holder by British Columbia Teachers' Federation, holder of 22,876 shares. Her question is: Whitecap's acquisition of Veren in 2025 made it one of the largest energy companies in Canada. In your financial reports, you highlight physical risks of climate change, including long-term shifts in climate patterns and extreme weather conditions, posing the risk of causing operational difficulties. In the latest Climate Engagement Canada Benchmark, Whitecap did not meet the indicator on board oversight of climate governance, where years prior you did, as the CEO is responsible for overseeing climate change. With global commodity price volatility and general uncertainty, investors would like strong incentivized oversight and competencies connected to transition risks.
Can you disclose a named position at board level with responsibility over these business strategies and risks? That's the question.
I'll take that. Thank you for your question, Ruth. The Veren transaction was indeed transformative. Whitecap's governance expressly provides for direct board oversight of climate-related issues. The best reference for you is the mandate for our Board Sustainability and Advocacy Committee, of which Mr. Fagerheim, as a director, is a member, and Mr. Wall is the chair. The first item on that Board Committee's mandate is oversight of climate-related and other sustainability-based risks and opportunities. The full mandate is available on our website. I hope that addresses your issue. Are there any other further questions on the formal business of the meeting?
Mr. Chairman, we've received no further questions on the formal business of the meeting.
Thank you. There being no further questions, the chair would entertain a motion that the meeting be terminated.
I move that this meeting be terminated.
I second the motion.
The meeting operator is now activating a poll to vote on the termination of the meeting. We'll wait for that result to be tabulated.
Mr. Chairman, the adjournment motion is carried.
Thank you. I declare the meeting terminated, and I'm gonna invite Mr. Fagerheim to deliver his remarks on behalf of Whitecap Management. Before I do that, though, and I turn it over to Grant, I'd like, on behalf of the board, to personally thank our entire team at Whitecap. 2025 has been a transformative year with the Veren transaction. The dedication and your clear execution have positioned us well going forward. Thank you to everyone. Grant, over to you.
Thanks very much, Ken, and thanks to everyone for being on the line today. I would like to thank our shareholders that have placed the trust in our management team, our staff, and our board of directors to manage this dynamic and growing organization. The future looks very bright, we are confident that we will continue to deliver strong results as we have over the past year. I would also like to thank our board of directors for their guidance over this past year. In addition to our chair, Ken Stickland, who is speaking today, we have Glenn McNamara, Steve Nikiforuk, Vineeta Maguire, Brad Wall, and Grant Zawalsky. We welcome all of our new board members. We've been working together for almost a year now, I would like to thank Barbara Munroe, Jodi Jenson Labrie, and Myron Stadnyk for their contributions over this past year.
I would like to thank and welcome Scott Elson to the board as of March 1st. Scott brings tremendous experience and financial knowledge to our board, and we're excited to have him join our team. Welcome, Scott. We're looking forward to continuing to build on these working relationships going forward. Of even greater importance, I would like to thank our entire Whitecap team, both new and long-term Whitecap employees, for their efforts over the 2025 year, and congratulate each and every one for the exceptionally strong operational and financial results over this past year. 2025 was truly a transformational year, as Ken had referenced, for Whitecap. That included the integration of Veren's assets and personnel beginning one year ago today. Over the course of the year, we made remarkable strides in delivering on our intentions and increasing value from the combined asset base.
The Veren transaction closed on May 12, 2025, creating, at the time, a CAD 15 billion large cap E&P company, which now is a preeminent CAD 22 billion company, all with keeping leverage under 1x debt to cash flow. We currently produce approximately 380,000 BOE per day and are the largest Alberta Montney landholder, the largest Duvernay operator, the largest light oil producer in Saskatchewan, and the 5th-largest natural gas producer in Western Canada. We hold 10,500 high-quality locations in inventory, providing decades of growth potential with significant light oil, liquids, and natural gas commodity optionality within. For perspective, we're only doing 265 of those locations in 2026.
The office, and importantly, the field personnel did not miss a beat, integrating our teams and assets. We blew through our initial synergy forecast quicker than expected. Included in our 2026 budget was CAD 300 million of synergies. With continued efficiency gains and operating cost reductions, we're quickly approaching CAD 400 million of annual savings, almost double our original projection of CAD 210 million. I will now go through the specific operational, financial, and shareholder achievements made in 2025.
From an operational achievements perspective, average production for the full year was 307,245 BOE per day, comprised of 191,155 barrels per day of crude oil, condensate, and NGLs, and 697 million cubic feet per day of natural gas. We drilled 113 unconventional wells in the Montney and Duvernay, and 199 conventional wells across Alberta and Saskatchewan. We made significant improvements in all facets of our operations over the past year. From well design to development planning to execution, ultimately, how we produce our wells have all benefited from substantial technical improvements and collaboration across our teams.
Along with stronger-than-expected productivity from our wells, we have improved our capital efficiency by 12% relative to our initial expectations on the combined asset base one year ago today. This has been made possible through improvements in our drilling and completion KPIs, which include a 27% increase in our drilling rates, penetrations, and 12% increase in our proppant pump per day. Along with our actively guided completions, we included 24/7 monitoring from our frac room in Calgary. Our frac effectiveness has improved, and we're seeing it in our production results. Corporately, our capital efficiency measures have improved by 12% relative to our initial expectations one year ago, which is both better and much quicker than we had expected.
Construction has progressed on our 413 Lator Facility throughout 2025, we have now accelerated our oil production startup timeline to Q4 of 2026. As of today, we are 70% completed with major equipment such as compressors now on site, which keeps us on track with our forecast. Our conventional assets are differentiating factor for Whitecap. The high liquids weighting and cash flow netback, coupled with low decline rate and contiguous, continuous improvement on well results and inventory provide us stable free cash flow. Notable achievements in 2025 include the full utilization of one well drilling in the Glauconite, resulting in a 10% well cost savings on current and future drilling inventory in the area.
On the acquired Bakken assets, we are pushing open-hole multilateral technology and operations, drilling 2 mi recent 3 mi open-hole multilateral wells. Pushing the boundaries on this technology will unlock and improve inventory, we are actively exploring the application of this technology across our entire conventional asset base. Our year-end 2025 2P reserves now stand at 2.2 billion BOEs, resulting in a long-duration reserve life of over 16 years. That said, we have only booked approximately 30% of our total identified inventory, providing us significant running room and flexibility for decades to come. Our financial achievements.
For 2025, we earned our second-highest funds flow per share in Whitecap's history at CAD 2.95 per share, which equates to CAD 2.9 billion, all with WTI averaging less than CAD 65 per barrel and AECO Gas at CAD 1.60 per GJ in 2025. Our focus is on generating higher free funds flow for our shareholders. To do this, we are focused on both margin improvements and capital cost decreases. We discussed the strides we made through deal synergies at the outset, which is a reminder we're at CAD 210 million upon the close of the deal and now stand at CAD 400 million, made up of capital, operating, and corporate costs.
Our free funds flow in 2025 was CAD 900 million. At current strip prices, this increases to over CAD 2 billion in 2026. We ended 2025 with a strong balance sheet with CAD 3.4 billion of net debt, equating to a net debt to annualized fourth quarter funds flow ratio of 1 x. Our credit rating was also upgraded during 2025 to BBB flat by DBRS. We issued CAD 300 million of three investment-grade notes at a low coupon of 3.761%. To talk about return of capital to shareholders. Return of capital to our shareholders is a focus of our capital allocation strategy.
We currently pay a dividend, an annual dividend of CAD 0.73 per share, which equates to CAD 735 million for 2025. We also had an our normal course issuer bid, where we spent CAD 193 million on share repurchases in 2025. In total, we returned CAD 900 million to shareholders in 2025, another significant achievement. Our outlook. Our performance is underpinned by a few key attributes that define our strategy and differentiate Whitecap. We went into a bit more detail in each of our first quarter conference call, but in the interest of time, I will just list them off at this time. Operational execution, number one. Number two, asset quality, duration, and optionality. Number three, high netback. Number four, low decline rate. Number five, strong balance sheet.
Number six, Whitecap personnel. To talk a little bit more about that, we believe at Whitecap that our people are our most important asset. Without their intelligence, hard work, dedication, and team-first attitude, we wouldn't be where we are today. Speaking about our Whitecap personnel and our plans to continue to advance and evolve our organization with a proactive succession plan, we are pleased to introduce several changes to our executive team from within Whitecap. Firstly, I'm proud to say that Joey Wong will be taking on the role of President of Whitecap, with responsibilities including driving continued technical and operational collaboration, along with capital budgeting coordination with the unconventional and conventional divisions. Joey will continue to report through to myself with my role changing to just Chief Executive Officer, moving to more oversight and strategic direction. Excuse me.
Joey Wong has over 20 years of experience, industry experience and has been with Whitecap Resources for the past 12 years, progressing through various technical and leadership roles and has been responsible for development planning, capital execution, and overall performance of our unconventional Montney and Duvernay assets since 2023. Joey Wong is also involved in investor engagement alongside Thanh Kang, our CFO, and myself for the past year and a half. Travis White will be promoted to the role of Chief Operating Officer. Travis White has over 25 years of industry experience, has been with Whitecap Resources since 2010 under the stewardship of our Senior Vice President, Production and Operations, Joel Armstrong. Travis White has been our Vice President Operations since 2020, and previously was Vice President Production.
Travis is now responsible for directing our operating teams, consisting of our drilling and completion operations, where he's experienced significant progress and efficiency gains over the past couple of years as a result of his and the team's efforts over the past several years. Number three, to backfill Travis's role, Jeff Mazurak is being promoted to VP Operations. Jeff has over 20 years of industry experience in various drilling, completion, and operating roles and has been with Whitecap since 2021. In Jeff's current role, he has been responsible for our unconventional operations consisting of drilling and completions operations. He and Travis have been working closely together since Jeff joined Whitecap, and we're looking forward to Jeff bringing his experience and expertise to our entire set of assets.
We are very confident that these three individuals, along with various other evolutionary advancements in our organization, are able to step into new roles to allow Whitecap to continue on our path of bringing strong operational and financial success to Whitecap. Lastly, on the personnel side, we advise that one of our key long-term officers of Whitecap is retiring at the end of June. Excuse me, sorry. At the end of June, after 16 years at Whitecap, with a total of 40 years in the energy sector. Joel Armstrong has been a significant and positive impact on our company with his direct oversight of operations, productions, and health and safety. A huge thank you to Joel and know that the leaders mentioned above, along with the others, will continue to carry the torch as you have in the past.
In closing, I again want to thank and congratulate our entire team for a remarkable 2025 year, including the very successful integration of bringing two sizable asset bases together just one year ago today. Operational momentum has continued into 2026, which is outstanding, and we continue to look forward to keeping shareholders in focus as we execute on our business plan this year and well into the future. Thank you for your time today and interest in Whitecap. All the best to you from all of us at Whitecap. Cheers.
That concludes today's webcast. Thank you.