Headwater Exploration Inc. · TSX:HWX
Headwater Exploration — Investor Presentation (November 2024)
26 slides from Headwater Exploration's investor presentation, November 2024
Slide 1: Headwater Exploration Inc. Corporate Presentation
Headwater Exploration Inc. CORPORATE PRESENTATION TSX:HWX November 2024
Slide 2: Capitalization, Guidance and Business Strategy
CAPITALIZATION, GUIDANCE AND BUSINESS STRATEGY Outlook Capitalization 2024 Current Average Daily Production Guidance (1) (2) Headwater Exploration Inc. TSX HWX Annual Daily Production (boe/d) 20,250 Share Price (Nov 7th, 2024) $/sh. $7.07 Fourth Quarter Daily Production (boe/d) 21,500 Shares Outstan
Slide 3: Regional Clearwater Area
REGIONAL CLEARWATER AREA Total Land Holdings over 539 net sections with 85.7 net sections added YTD 2024 Cadotte Evi Greater Peavine (Seal, Peavine) 55 sections (Net) Multi-zone potential from Falher Nampa and Bluesky horizons Walrus Slave Seal Greater Nipisi (Heart River, Little Horse, West Nipisi,
Slide 4: Expanding Clearwater Resource Provides Flexibility in Future Capital Allocation
HEADWATER EXPLORATION Expanding Clearwater Resource Provides Flexibility in Future Capital Allocation Significant Clearwater Region Illustrative Example of Cumulative Free 6,000 Resource Expansion 20,250 1,600 4.50 Cash Flow Per Share at 24,000 boe/day Boe/day (est.) 1,400 4.00 5,000 18,038 Boe/day
Slide 5: Leading Maintenance Capital Requirements Provides Capital Optionality
HEADWATER EXPLORATION Leading Maintenance Capital Requirements Provides Capital Optionality Maintenance Capital % of Funds Flow Free Cashflow Per Share 60% US $75/bbl WTI 1.00 US $75 bbl WTI 0.90 Total Capital Maintenance Capital 50% 0.80 Free Cashflow Per Share ($) Maintenance Capital (%) 0.70 40%
Slide 6: Identified Inventory - Stacked Pay with Multiple Proven Zones
HEADWATER EXPLORATION Identified Inventory - Stacked Pay with Multiple Proven Zones Marten Hills West Stacked Pay Potential • Stacked pay potential across 70% of Headwater’s Clearwater OOIP • Stacked pay allows for lower capital costs and increased operational efficiencies • Remaining Clearwater non
Slide 7: Clearwater Secondary Recovery – Expanding Duration and Resource Capture
HEADWATER EXPLORATION Clearwater Secondary Recovery – Expanding Duration and Resource Capture • Approximately 35% of Headwater’s corporate oil production is supported under secondary recovery • It is estimated that secondary recovery has mitigated corporate decline by 5% – 7%, reducing maintenance c
Slide 8: Marten Hills Core Secondary Recovery
MARTEN HILLS CORE SECONDARY RECOVERY Continued Secondary Recovery Performance Multi-Layer Support Yellow: Marten Hills Core Two Bench Pattern Marten Hills Core Producer 14,000 1,400 Blue: Three Bench Pattern Oil (bbl/d) 10-12m Entire Marten Hills Core Green: Two Bench Pattern asset stable at ~7,000
Slide 9: Marten Hills West Secondary Recovery
MARTEN HILLS WEST SECONDARY RECOVERY Marten Hills West – Utilizing Marten Hills Core Learnings Bottom-Up Support Section07-076-02W5 Section 07-076-02W5Pattern Pattern Section 7 1,200 1,200 2,400 2,400 Oil (bbl/d) Oil (bbl/d) 2024 Secondary Recovery Expansion Producer 6-10m Injection (bbl/d) Injectio
Slide 10: Marten Hills West – Clearwater Sandstone
MARTEN HILLS WEST – CLEARWATER SANDSTONE Continued Step-out Success; Continuing Secondary Recovery Clearwater Sandstone • Two full sections under waterflood MHW Secondary Recovery Section 07-076-02W5 support by year-end 2024 Full section implementation • Continued success on step-out tests Future to
Slide 11: Marten Hills West Exploration: Clearwater E Pool Expansion
MARTEN HILLS WEST EXPLORATION Clearwater E Pool Expansion - A new growth opportunity within Marten Hills West CLWT G 00/04-35-076-02W5 IP15: 155 bbl/d (24 API) Shut in mid March for break-up Clearwater E CLWT F • The regional extent of the Clearwater E over HWX land base is estimated to be up to 52
Slide 12: Greater Peavine
GREATER PEAVINE Multiple Productive Falher Sands and Bluesky Development Seal FLHR B 03/08-08-083-15W5 00/08-08-083-15W5 FLHR B StingWray FLHR D StingWray IP60: 142 bbl/d IP90: 52 bbl/d FLHR C 02/07-07-083-15W5 FLHR B StingWray IP120: 114 bbl/d Land Acquisition 50% Net WI on 7 Sections FLHR D 04/13-
Slide 13: Greater Nipisi – 125 Sections
GREATER NIPISI – 125 SECTIONS Multiple Exploration Prospects Little Horse Bluesky Exploration CLWT G Exploration CLWT F Exploration 00/05-26-077-14W5 02/05-15-077-12W5 00/05-18-077-11W5 Q1 2025 Shut in for break-up IP5: 90 bbl/d (16.5 API) Shut-in for break-up Utikuma West Nipisi Heart River FLHR D
Slide 14: Additional Exploration Opportunities
ADDITIONAL EXPLORATION OPPORTUNITIES W3/W4 Heavy Oil Exploration Clay Clay 00/04-15-059-13W4 Multi-lateral Exploration test • 16 sections in greater Clay area • 00/04-15-059-13W4 Exploration Test (McLaren Formation) • IP30: 205 bbl/d of 16 API Oil • Up to 23 mmbbl OOIP per section • Follow-up locati
Slide 15: Why Headwater
WHY HEADWATER Add Incremental Prospects Through Strategic Land Acquisitions and M&A •Added 85.7 sections of Clearwater lands YTD 2024, total Clearwater lands now totaling over 539 net sections •Added 36.7 sections of non-Clearwater lands YTD 2024, total Non-Clearwater lands now exceeding 192 net sec
Slide 16: Appendix
Headwater Exploration Inc. Appendix TSX:HWX
Slide 17: McCully Producing Asset
MCCULLY PRODUCING ASSET Dry Gas with 100% owned infrastructure and limited liability McCully Asset Daily Production 25.0 20.0 New Brunswick MNP pipeline Production mmscf/d 15.0 10.0 Nova Scotia 5.0 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 HWX Realized
Slide 18: Experienced Team – Management and Directors
EXPERIENCED TEAM – MANAGEMENT AND DIRECTORS Headwater Exploration Inc. Management Team Neil Roszell, P. Eng. Former President, CEO and/or Executive Chairman and founder of Raging River Exploration Inc., Wild Stream Exploration Inc. and Wild River Executive Chairman Resources Ltd. Jason Jaskela, P.
Slide 19: Slide Notes
SLIDE NOTES Slide 1 1. Assumptions used in the updated 2024 guidance as released on November 7, 2024 include: WTI of US$75.33, WCS of Cdn$82.98/bbl, AGT of US$4.60/mmbtu, AECO of Cdn$1.46/GJ, foreign exchange rate of Cdn$/US$ of 0.73, blending expense of WCS less $2.20, royalty rate of 19.0%, operat
Slide 20: Forward Looking Statements Advisory
ADVISORIES Forward Looking Statements Advisory This investor presentation of Headwater Exploration Inc. ("Headwater") contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of Canadian securities laws. All statements other
Slide 21: Development Strategy Advisory
ADVISORIES Development Strategy Advisory Advisory Relating to Development Strategy (Slide 3) The Company has presented herein a two-year development strategy and has also presented an illustrative example of the cumulative free cash flow per share from 2025 through 2029 based on 24,000 boe/d of prod
Slide 22: Non-GAAP Advisory
ADVISORIES Non-GAAP Advisory NON-GAAP MEASURES AND RATIOS Non-GAAP Financial Measures This investor presentation contains the terms “adjusted funds flow from operations (“AFFO”) or Atax funds flow”, Capital expenditures or capital program “adjusted working capital”, “capital expenditures or capital
Slide 23: Non-GAAP Advisory
ADVISORIES Non-GAAP Advisory Non-GAAP Ratios Reinvestment Rate Management believes the reinvestment rate is a useful measure to analyze the ratio of funds generated by the Company and used for reinvestment and is calculated as total capital expenditures divided by AFFO. Free cash flow per share and
Slide 24: Certain Oil and Gas Advisories
ADVISORIES Certain Oil and Gas Advisories TYPE CURVE INFORMATION, WELL ECONOMICS AND WATERFLOOD PERFORMANCE Headwater has presented certain type curve information, well economics and waterflood performance for certain development, exploration and waterflood activities in Headwater's areas of operati
Slide 25: Certain Oil and Gas Advisories
ADVISORIES Certain Oil and Gas Advisories BARRELS OF OIL EQUIVALENT The term "boe" or barrels of oil equivalent may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy
Slide 26: Certain Oil and Gas Advisories
ADVISORIES Certain Oil and Gas Advisories MARKET, INDEPENDENT THIRD PARTY AND INDUSTRY DATA ADVISORY Certain market, independent third party and industry data contained in this presentation is based upon information from government or other independent industry publications and reports or based on e
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