Whitecap plans more gas drilling amid record profit

Oil and gas producer Whitecap Resources reported record profit and production in the first three months of the year, driven by the company's recent acquisitions and high commodity prices.

The Calgary-based company's production gains helped it to a first-quarter net income of $652 million, compared with $19.6 million in the same period last year.

The company posted record average production of 132,691 barrels of oil equivalent per day ( boe/d) in the first quarter, and production overall was up 38 per cent compared to the first quarter of 2021. CEO Grant Fagerheim said acquisitions over the past 18 months — including rivals Kicking Horse Oil & Gas, NAL Resources and TORC Oil & Gas — helped Whitecap to capture the commodity upside.

Fagerheim told the Financial Post that he expected Whitecap would increase drilling in the second half of the year, despite rising costs and supply chain snarls that have been posing problems for producers.

He said the company was trying to plan carefully to ensure it had enough rigs contracted for the next winter drilling season.

“We just want to ensure that we've got everything lined out,” Fagerheim said Thursday. “Because of the challenges with access to materials, getting your products to market — is there enough infrastructure? Pipelines? Because everything 's been getting tighter.”

Oil and gas prices have skyrocketed amid tight supply and Russia's invasion of Ukraine that sent countries scrambling to find alternative sources to Russian fuel. Whitecap's hopes to drill for more gas come as Alberta gas prices have surged to more than US$6 per million British thermal units, the highest since 2014.

Fagerheim was asked during a conference call with investors Thursday if the company was in the position to help in displacing Russian oil and gas. He said western Canadian producers are limited by infrastructure that only moves product south and west.