Whitecap Resources reported a sharp drop in third-quarter profit despite stronger production and cash flow following its merger with Veren Inc. The company raised its full-year production guidance and said the integration is ahead of schedule, citing efficiency gains and higher expected output in the months ahead.
BNN Bloomberg spoke with Grant Fagerheim, president and CEO of Whitecap Resources, about post-merger performance, oil price volatility and how the company plans to balance growth, debt reduction and shareholder returns heading into 2026.
Key Takeaways
- Whitecap Resources earned $204.2 million in Q3, down from $274.2 million last year, as merger costs offset higher output.
- Petroleum and natural gas revenue rose to $1.66 billion from $890.9 million a year earlier.
- The company raised 2025 production guidance to 305,000 boepd, expecting about 370,000 in Q4.
- Whitecap realized $300 million in merger synergies, surpassing its $210-million forecast.
- The firm plans to balance share buybacks and debt reduction while maintaining its dividend yield.
Read the full transcript below:
ROGER: Shares of Whitecap Resources are also up today, rising 41 cents. The company now expects average production of more than 300,000 barrels of oil equivalent per day in 2025 — guidance that beat the average analyst estimate. For more on Whitecap, we’re joined by the company’s president and CEO, Grant Fagerheim. Grant, thank you very much for joining us.
GRANT: Thanks very much, Roger.
ROGER: Investors seem to like what they’re seeing. What do you think they’re responding to?
GRANT: I think it’s a combination of two things, Roger. First, we’ve put forward a defensive strategy for 2026. Second, there’s the outperformance we’ve achieved so far in 2025, which we expect to continue through the rest of the year. When we put out our 2026 budget, the expectation was that we’d spend between $2.5 and $2.6 billion. We’re now projecting the same production with capital spending between $2 and $2.1 billion. I think that was a surprise for many shareholders.
ROGER: Oil prices have been volatile — they’ve corrected a bit, then bounced back. Are you concerned that the downward trend might continue, and how could that affect you?
GRANT: We’ve seen a big bounce over the last couple of days — today alone, the near-term contract is up more than $3. For 2026, we’re seeing contracts averaging around US$58 to US$59 a barrel. In the near term, there’s a lot of uncertainty with global events, so we want to stay cautious. We do believe longer term that WTI and Brent prices will rise, but over the next six to nine months, we’re taking a conservative view before we see that upward trend.
ROGER: Was that volatility what drove your net income down — from $274 million last quarter to $204 million in the third — or were there other factors?
GRANT: Our overall cash flow actually remains higher than before. Much of this comes from the synergies realized through our May 12 transaction with Veren. We were originally forecasting $210 million in total synergies, but we’ve already achieved about $300 million. We feel very good about where we’re at and expect to capture more benefits for shareholders as we move forward.
ROGER: Any concerns about your dividend payout ratio? It’s on the high side, around 72 per cent.
GRANT: We feel very good about our dividend at this stage. The yield today is around seven per cent — a bit high — and we expect that to come down to about five per cent over time. That should mean a higher share price as investors gain confidence in the merged company. As Whitecap continues to perform, we expect the yield to decline and the share price to move up accordingly.
ROGER: How is the merger coming along? Any issues or challenges?
GRANT: It’s gone very well. The integration was critical, and we were able to bring in the people we wanted from both companies. Operationally, the efficiencies have been remarkable. We’ve streamlined workflows, optimized production practices, and improved infrastructure in all our core areas. We’re ahead of schedule, which really speaks to the strength of our team and the quality of the assets.
ROGER: What’s next for Whitecap?
GRANT: As we move forward, we take a countercyclical approach. When commodity prices are low, we tend to buy back more shares. When prices are high, we don’t put all incremental cash flow into capital spending — we also focus on strengthening the balance sheet. That allows us to be ready for new opportunities, whether acquisitions or accelerated capital programs. We’ll continue to grow, buy back shares, and reduce debt, even though our balance sheet is strong today. We always want to be prepared for rainy days.
ROGER: Grant, thank you very much for joining us today.
GRANT: Thanks very much, Roger. Appreciate it.
ROGER: Grant Fagerheim is president and CEO of Whitecap Resources, which is trading up 42 cents at $10.64.
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This BNN Bloomberg summary and transcript of the Oct. 23, 2025 interview with Grant Fagerheim are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
