Highpeak Energy, Inc. · NASDAQ:HPK
Highpeak Energy — SPAC Merger (November 2019)
35 slides from Highpeak Energy's SPAC merger presentation, Nov 27, 2019
Slide 1: Investor Presentation — November 2019
Investor Presentation — November 2019
Slide 2: Disclaimer
Disclaimer rAN HIGHPEAK ‘Steurtin Cachonge Set af 1938, onandad (he Tachange Set} Alstaemants, ater tha statements af present or Natori fact ieude! tha pnantaton, raring the propaned merger ol Pare Reqatian Marge Sub, ne (Magers), a Dslawarecorporaton snd wialy mad ssbssary af WighPeak Cary, ne (Hig
Slide 3: Disclaimer (Cont'd)
Disclaimer (Cont’d) AN HIGHPEAK Reserve engiening 2 proces of etinating underground sccumntions of tatbons tit cnmot be town an eat may The ascoracyo any feserve timate depend on the quay of alate dat the intepretaton of such data od pce and cout naumptons matey sexerveangncen. hatditan, tha rsa of
Slide 4: Transaction Summary
Transaction Summary \ (ZN HIGHPEAK —— In April 2018, Jack Hightower, HighPeak Pure Acquisition, LLC and certain of its affiliates (collectively, the “Sponsor”) raised $414 million in the form of a Special Purpose Acquisition Company (“SPAC”) called Pure Acquisition Corp. (NASDAQ: PACQ) (“Pure”) Pure
Slide 5: Delivering on Investment Criteria
Delivering on Investment Criteria \ (ZN HIGHPEAK Transaction Meets the Pure Investment Criteria Yl Located in a North American oil shale play (i.e. Midland Basin) VY Substantial near-term production and cash flow growth potential vf Identify asset profile and cost structure that offer industry leadi
Slide 6: Transaction Summary (Cont'd)
Transaction Summary (Cont’d) Transaction creates the largest northern Midland Basin pure-play @\nicupeak “73,000 netacres 12 MBo®/4 net production" $630 MM in 20206 EBITDA" Pro Forma EV: ~s1575MM. [+ Pro Forms Cash 272 MM) Pro Forma Market Cap: $1,847 MM Pure Acquisition Corp. Based on the assumptio
Slide 7: HighPeak Energy
HighPeak Energy Northern Experienced, Cross- Functional Management Team| |Contiguous, Scaled| Position in the Core of the Northern Midland Basin Efficient Pad Development Acute Focus on Superior Returns and Operating Margins Differentiated Financial Strategy jand Basin Pure-Play Capitalized for Effi
Slide 8: Proven Track Record of Valuation Creation
@HIGHPEAK ——— Proven Track Record of Valuation Creation Jack Hightower has a proven track record of successfully acquiring, developing and optimizing oil and gas businesses Jack Hightower’s prior businesses have generated average returns of >5.0x ROI and >100% IRR for original investors Jack Hightow
Slide 9: HighPeak Has a Differentiated E&P Business Model
HighPeak Has a Differentiated E&P Business Model Business Model Development Profile Infrastructure / Management Team / Incen \ @uHIGHPEAK ed Public E&P Peers @Qiaeeax Focus on growth of production and inventory Highly acquisitive Influenced by Wall Street expectations Potential imbalance of hitting
Slide 10: Experienced, Cross-Functional Management Team
Experienced, Cross-Functional Management Team History of Creating Value Across Multiple Platforms Key Points'*) Sponsor has assembled a premier management and operations team to join HighPeak SeniorManagement: 4 Geoscience: 7 Land 9 Engineering / Operations: 13 Finance/ Accounting: 7 Corporate Level
Slide 11: Evolution of Development in Howard County
Evolution of Development in Howard County AN HIGHPEAK » EarlyDevelopment_ >| _Full-Field Development > i a ar Hz Wells to Datel!) 2 176 1,077 FJ | bevelopmene | WCA/LSBY WCA/ WCB // LSBY Eq | Detinestion WCA /LSBY wee Jo mill/ MSBY / Dean / WCC/ WCD Development Single welldevelopment; sub-optimal/ P
Slide 12: Howard County is the Growth Engine of the Permian
Howard County is the Growth Engine of the Permian (ZN HIGHPEAK — Howard County production mix has the highest oil percentage and margins across the Midland Basin (ie. best economics) Howard County has seen the most rapid growth in oil volumes of all the major Midland Counties Howard County: Highest
Slide 13: Industry Leading Full-Cycle Operating Margins
Industry Leading Full-Cycle Operating Margins @uHIGHPEAK HighPeak has the best margins among the Permian peers Peer7 $/Boe Peert Peer2. = Peer3. = Peer@ = Peer. Peer 6 68% Oil: 44% Oil: 62% Oil: 63% Ol: 62% Ol: 68% Oi:_715 16% 38% Gos: 19% 37% Gas: 17% Gas: 14% Gas: 19% NGL: 16% NGL: 18% NGL: 20% NG
Slide 14: Geology is Highly Analogous to Core Howard County
Geology is Highly Analogous to Core Howard County @HIGHPEAK a ReyRELE: cae ge ‘ ae ° ° as = . \WolfcampA and Lower Spraberry = = have consistentiy high gross thickness PS = = a =a= pen ne renicsd facreae rth bg 4 7 the easternmost HighPeak acreage = 3 i Reservoirintervalsarecomprised of | | Middle |
Slide 15: HighPeak Acreage Lies within the Core Fairways of the Wolfcamp A and Lower Spraberry
HighPeak Acreage Lies within the Core Fairways of the Wolfcamp A and Lower Spraberry Wolfcamp A and Lower Spraberry Geologic Overview \ (ZN HIGHPEAK — Wolfcamp A characterized by >250’ gross, >200’ net, and >35 MMBo/section OOIP across majority of acreage Lower Spraberry characterized by >300’ gross
Slide 16: Thermal Maturity Data Indicates Pay Section is Well Within Oil Window
Thermal Maturity Data Indicates Pay Secti n is Well Within Oil Window HighPeak Acreage Overlies Thermally Mature Reservoir \ (ZN HIGHPEAK — Key Points Howard County has one of the densest vertical well logdata sets inthe entire Permian Basin with over 2,300 wells having digital logs Robust geochemic
Slide 17: Analysis of Evolving Spacing & Sequencing Techniques
Analysis of Evolving Spacing & Sequencing Techniques Offset Operators Implementing Cube Development 2014-2016 pectad concams Pry asen (e363 aurea Le Meee ea 2017 201s ‘rownduest/Surge Operating || FANG / ich /Sobole Increazed Density rr a Surge Operating 50 (Mex er / CQ (Vertex) Tere, tency polis co
Slide 18: HighPeak Co-Development Strategy
HighPeak Co-Development Strategy a HIGHPEAK Batch Development Enhances Well Results and Improves Capital Effi Co-Development Implementation In June 2019, HighPeak drilled a5 well (2 LSBY / 3 WCA) co-development pad pilot which yielded impressive results HighPeak believes that co-development of the L
Slide 19: Significant Intrinsic Value of a Single Drilling Unit
Significant Intrinsic Value of a Single Drilling Unit @uHIGHPEAK HighPeak’s inventory of ~875 gross operated drilling locations offers substantial resource and net asset value HighPeak will focus on co-development of the two primary zones, WCA and LSBY Development of only the LSBY and WCA implies an
Slide 20: Wolfcamp A Type Curve
Wolfcamp A Type Curve AN HIGHPEAK 10,000’ Wolfcamp A ~ Key Points n Normalized to 10,000" (Bo) = Wolfcamp a type curve wells selected from 250,000 geologically similar region ae HighPeak has directly analogous landing zones and oil in place to highly developed parts of the play ene 200,000 || — Type
Slide 21: Lower Spraberry Type Curve
Lower Spraberry Type Curve (ZN HIGHPEAK 10,000’ Lower Spraberry ——— Key Points n Normalized to 10,000" (Bo) Lower Spraberry type curve wells selected from 250,000 geologically similar region ae HighPeak has directly analogous landing zones and oil in place to highly developed parts of the play Type
Slide 22: Substantial Existing In-Basin Infrastructure with Premier Gathering and Takeaway
Substantial Existing In-Basin Infrastructure with Premier G@\nHicureak Midstream & Marketing Solutions Available ne Attractive solutions identified for “manufacturing mode” development Big Spring HighPeak anti third party containing the following terms in the near future Crude Oil All-in tariff to r
Slide 23: Investment Highlights
Investment Highlights \ (ZN HIGHPEAK — Attractive entry point valuation Proposed valuation implies3. 7x 2020E EBITDA and 1.720216 EBITDA 1 Proposed valuation is 2~0.5x and ~2.0xdiscount to the Permian comps on 82020E and 2021E EBITDA multiple basis respectively") ‘Only unlevered pure-play Permian mi
Slide 24: Financial Appendix
Financial Appendix @nicHreak
Slide 25: Transaction Overview
Transaction Overview Certain entities controlled by the Sponsor, Pure and HighPeak entered intoa defi northern Midland Basin E&P Company for cash, equity and warrants Post-closing, the Sponsor is expected to be the largeststockholder of HighPeak, with approximately 61% ownership!) Pro Forma for the
Slide 26: Financial Projections
Financial Projections Assumes $55.00 / Bbl (oil) & $2.50 / MMBtu (gas) \ @HIGHPEAK ——— HighPeak Financial Projections eS ee eT Key Points Commodity Prices: Crude Oil: $55.00 / Bbl ‘Average Rigs, Operated Natural Gas: $2.50 / MMBtu Benchmark Price ($ / Bbl) $ 5500 $ 5500 $ 55.00 NGLs: 36% of WTI Benc
Slide 27: Summary of Year-End 2019 Resource
Summary of Year-End 2019 Resource (1) Key Statistics: Resource PD Reserves ~31 MMBoe Unproved Resource ~641 MMBoe Total Resource ~672 MMBoe Key Statistics: PV-10(2) PD Reserves ~$560 MM Unproved Resource ~$4,910 MM Total Resource ~$5,470 MM. Borden Locator Map ag I wa ¥) - os Howard | (a) ene Sa ols
Slide 28: Illustrative Transaction Timeline
Illustrative Transaction Timeline \ (ZN HIGHPEAK — bast November 2019 December 2019 / January 2020 December 2019 / January 2020 January 2020 February 2020 Business Combination Transaction Approved Business Combination Transaction Announced Business Combination Proxy Filed with the SEC Set Record Dat
Slide 29: Appendix
Appendix
Slide 30: Overview of Regional Activity
Overview of Regional Activity ()(2) @nicHreak a SA od Gasoenescam ree ae A ERS WE UEHEDEEESESWEGEEES RERSUERSESUSER OWE SREE! § ERESERORE REED Ran eEE il vious SAR tt wea 87 GuURGMUSHA aA GUST wea Feng ‘uno eee ou wea sev Fee mona iet3 388 zs 0/3158" owing
Slide 31: Substantial Resource Potential in Upside Targets
Substantial Resource Potential in Upside Targets Key Points While HighPeak will focus development on the WolfcampA and Lower Spraberry, evolution in targeting and completions has drastically unlocked the potential of additionaltargets Many of these targets have transitioned from delineation phase in
Slide 32: Extensive Access to Well Data
Extensive Access to Well Data Key Points = Active drilling programs on HighPeak acreage has provided an extensive well data set — Accessto daily production ~ Accessto drilling & completion designs — Accessto well costs HighPeak Wells by Bench Operated!) | Non-Op Lower Spraberry 2 a3 25 Wolfcamp A a
Slide 33: Financial Projections — Alternative Case
Financial Projections — Alternative Case Assumes $50.00 / Bbl (oil) & $2.50 / MMBtu (gas) \ @HIGHPEAK ——— HighPeak Financial Projections eS ee eT Key Points Commodity Prices: Crude Oil: $50.00 / Bbl ‘Average Rigs, Operated Natural Gas: $2.50 / MMBtu Benchmark Price ($ / Bbl) $ 5000 $ 5000 $ 50.00 NG
Slide 34: Financial Projections — Alternative Case
Financial Projections — Alternative Case Assumes $60.00 / Bbl (oil) & $2.50 / MMBtu (gas) \ @HIGHPEAK ——— HighPeak Financial Projections eS ee eT Key Points Commodity Prices: Crude Oil: $60.00 / BbI ‘Average Rigs, Operated Natural Gas: $2.50 / MMBtu Benchmark Price ($ / Bbl) $ 6000 $ 6000 $ 60.00 NG
Slide 35: CGA Mid-Year 2019 Proved Reserves
CGA Mid-Year 2019 Proved Reserves") CGA Mid-Year 2019 Proved Reserves!!! Net Proved Reserves oil Gas NGL Total % Pv-10 Reserve Category (web! —_(Bcf)_—_—(MMBbI)_(MMBoe) liquids | ($mm) Proved Developed Producing (PDP) 10 8 2 13 19% 90% $ 234 Proved Developed Non-Producing (PDNP) 1 1 0 2 2% 91% 33 To