Headwater Exploration Inc. · TSX:HWX
Headwater Exploration — Investor Presentation (January 2024)
24 slides from Headwater Exploration's investor presentation, January 2024
Slide 1: Corporate Presentation
Headwater Exploration Inc. CORPORATE PRESENTATION TSX:HWX January 2024
Slide 2: Capitalization, Guidance and Business Strategy
CAPITALIZATION, GUIDANCE AND BUSINESS STRATEGY Outlook Capitalization Average Daily Production 2023 Guidance (1) 2024 Guidance Headwater Exploration Inc. TSX HWX Annual Daily Production (boe/d) 18,000 20,000 Fourth Quarter Daily Production (boe/d) 21,500 Share Price (Dec 7th, 2023) $/sh. $6.45 Share
Slide 3: Regional Clearwater
REGIONAL CLEARWATER Total Land Holdings >470 net sections with 66 sections added in 2023 Cadotte Evi Falher/Clearwater Fairway 136 sections (100% WI) 6 Locations Drilled in 2023 (4 Zones tested) Nampa Walrus Slave West Nipisi Seal 50.5 sections (100% WI) 7 Producing Wells Godin 2 Exploration Tests P
Slide 4: Headwater Exploration Development Strategy
HEADWATER EXPLORATION DEVELOPMENT STRATEGY 975 Identified Clearwater Locations Total Clearwater OOIP of 3.9 Billion Barrels 25 90 538 1,303 237 400 460 1,793 Marten Hills Core West Nipisi Marten Hills West Greater Peavine Marten Hills Core West Nipisi Marten Hills West Greater Peavine Development St
Slide 5: Marten Hills Core Area
MARTEN HILLS CORE AREA Marten Hills Secondary Recovery 6,000 1,500 Oil (bbl/d) Injection (bbl/d) Blue: Active Secondary Recovery GOR (scf/bbl) Green: 2024 Expansion 5,000 1,250 Current VRRi = 1.5 4,000 1,000 GOR (scf/bbl) Rate (bbl/d) 3,000 750 2,000 500 H1 2023 Program 1,000 250 0 0 Jan-20 Jul-20 J
Slide 6: West Marten Hills
WEST MARTEN HILLS Marten Hills West Secondary Recovery 2024 Secondary Recovery Expansion Marten Hills West Secondary Recovery Pilot Summary • Resulted in GOR decline and oil rate stabilization • Provided confidence to implement a full section secondary recovery in Section 07-076-02W5 in 2024 W/2 07-
Slide 7: Marten Hills West
MARTEN HILLS WEST Continued Exploration Success; Initiated Secondary Recovery 2023 West Marten Hills MHW Secondary Recovery Secondary Recovery Section 07-76-02W5 Pilots • 2024 Full section implementation 03/13-04-076-03W5 IP90: 196 bbl/d Northwestern Pool Extension W0/12-26-075-02W5 IP60: 145 bbl/d
Slide 8: Marten Hills West Exploration
MARTEN HILLS WEST EXPLORATION Tested 4 Prospects and Implemented “Fan-Style” Well Configuration Q4 2023 Exploration • CLWTR E test: 02/13-15-076-02W5: 02/13-15-076-02W5 30 day initial production rate of 65 bbl/d IP30: 65 bbl/d CLWT E • Technical learnings have validated two 00/14-19-076-02W5 Shut in
Slide 9: Greater Peavine
GREATER PEAVINE Greater Peavine 00/07-07-083-15W5 FLHR D “StingWray” IP60: 117 bbl/d • Successful tests in the Fahler B & Fahler D set up a 5-10 well 2024 program including Original 8-leg multi-lateral additional “StingWray” tests 00/13-06-83-15W5 FLHR D IP90: 70 bbl/d • Fahler B 03/13-06-083-15W5:
Slide 10: West Nipisi Expansion
WEST NIPISI EXPANSION Further Development and New Exploration West Nipisi Development • 50.5 sections of land • 6 successful wells with an average IP30 rate of 220 bbl/d • Southern extension successfully tested with a 3 leg multi-lateral Peace River Oil Sands Region #2 West Nipisi Exploration • Two
Slide 11: Why Headwater
WHY HEADWATER Add incremental prospects through strategic land acquisitions and M&A •Added 66 net sections of land in the Clearwater in 2023 •Added a total of155 net sections of land in oil fairways outside the Clearwater Explore and Exploit •Marten Hills West success resulting in current production
Slide 12: Appendix
Headwater Exploration Inc. Appendix TSX:HWX
Slide 13: McCully Producing Asset
MCCULLY PRODUCING ASSET DRY GAS WITH 100% OWNED INFRASTRUCTURE AND LIMITED LIABILITY McCully Asset Daily Production New Brunswick MNP pipeline Nova Scotia HWX Realized Pricing and Winter 2023/2024 Strip (US$/MMBTU) Operational Summary NYMEX HWX Realized pricing NYMEX strip price AGT strip $50.00 P+P
Slide 14: Secondary Recovery Implementation
SECONDARY RECOVERY IMPLEMENTATION Initial Pilots and 2024 Expansion 35-074-25W4 & N/2 26-074-25W4 Pattern 2,500 1,250 Oil (bbl/d) Blue: Active Secondary Recovery Current VRRi = 1.7 Injection (bbl/d) Green: 2024 Expansion GOR (scf/bbl) 2,000 1,000 1,500 750 GOR (scf/bbl) Rate (bbl/d) 1,000 500 500 25
Slide 15: Secondary Recovery Implementation
SECONDARY RECOVERY IMPLEMENTATION 2023 Expansion with Optimized Injector Design Section 36-074-25W4 Pattern 1,600 2,400 Oil (bbl/d) Blue: Active Secondary Recovery Injection (bbl/d) Green: 2024 Expansion GOR (scf/bbl) 1,400 2,100 Current VRRi = 1.6 1,200 1,800 1,000 1,500 GOR (scf/bbl) Rate (bbl/d)
Slide 16: Secondary Recovery Implementation
SECONDARY RECOVERY IMPLEMENTATION West Marten Hills Pilots – Utilizing Marten Hills Core Learnings W/2 07-076-02W5 Pattern 00/16-22-075-02W5/00 Pattern 600 1,800 400 1,600 Oil (bbl/d) Oil (bbl/d) Injection (bbl/d) Injection (bbl/d) GOR (scf/bbl) GOR (scf/bbl) 350 1,400 500 1,500 Current VRRi = 2.2 C
Slide 17: Experienced Team – Management and Directors
EXPERIENCED TEAM – MANAGEMENT AND DIRECTORS Headwater Exploration Inc. Neil Roszell, P. Eng. ▪ Former President, CEO and/or Executive Chairman and founder of Raging River Exploration Inc., Wild Stream Exploration Inc. and Executive Chairman Wild River Resources Ltd. Jason Jaskela, P. Eng. ▪ Former C
Slide 18: Slide Notes
SLIDE NOTES Slide 1 1. The assumptions used in the 2023 guidance include: WTI of US$77.95/bbl, WCS of Cdn$80.15/bbl, AGT US$5.80/mmbtu, foreign exchange rate of US$/Cdn$ of 0.74, blending expense of WCS less $2.25, royalty rate of 18%, operating and transportation costs of $12.65/boe, financial deri
Slide 19: 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"). More particularly, this investor presentation contains forward-looki
Slide 20: Development Strategy Advisory
ADVISORIES Development Strategy Advisory Advisory Relating to Development Strategy (Slide 3) The Company has presented herein a two-year development strategy. The development strategy is based on a number of assumptions as presented in such slides including, without limitation: the required reinvest
Slide 21: Non-GAAP Advisory
ADVISORIES Non-GAAP Advisory NON-GAAP MEASURES AND RATIOS Non-GAAP Measures This investor presentation contains the terms “adjusted funds flow from operations (“AFFO”)”, “adjusted working Capital expenditures or capital program capital”, “capital expenditures or capital program”, “free cash flow”, “
Slide 22: 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. Post dividend free cash flow
Slide 23: Certain Oil and Gas Advisories
ADVISORIES Certain Oil and Gas Advisories TYPE CURVE INFORMATION AND WELL ECONOMICS Headwater has presented certain type curve information and well economics for certain development, exploration and waterflood wells in the Clearwater area. The type curve information and well economics presented are
Slide 24: 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
Headwater Exploration — Investor Presentation (January 2024) on 6ix