Headwater Exploration Inc. · TSX:HWX
Headwater Exploration — Investor Presentation (November 2023)
24 slides from Headwater Exploration's investor presentation, November 2023
Slide 1: Headwater Exploration Inc. Corporate Presentation
Headwater Exploration Inc. CORPORATE PRESENTATION TSX:HWX November 2023
Slide 2: Capitalization, Guidance and Business Strategy
CAPITALIZATION, GUIDANCE AND BUSINESS STRATEGY Outlook Capitalization Previous Updated 2023 Guidance 2023 Guidance (1) Headwater Exploration Inc. TSX HWX Average Daily Production (2) Share Price (Nov 9th, 2023) $/sh. $6.97 Annual Daily Production (boe/d) 18,000 18,000 Shares Outstanding (Basic) MM 2
Slide 3: Regional Clearwater
REGIONAL CLEARWATER Total Land Holdings >450 net sections with 65 sections added YTD in 2023 Cadotte Evi Falher/Clearwater Fairway: 121.5 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
Slide 4: Headwater Exploration Development Strategy
HEADWATER EXPLORATION DEVELOPMENT STRATEGY Total Clearwater OOIP of 3.9 Billion Barrels 975 Identified Clearwater Locations 538 25 1303 400 463 237 1793 90 Marten Hills Core Marten Hills West West Nipisi Greater Peavine Marten Hills Core Marten Hills West West Nipisi Greater Peavine • Identified inv
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: Planned 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
Slide 6: Marten Hills West
MARTEN HILLS WEST Continued Exploration Success; Initiating Secondary Recovery Marten Hills West Clearwater 250 Average HWX MHW Clearwater A well to date achieves Payout 1 4x payout in 41 months and 7x payout over its life Payout 2 2023 West Marten Hills secondary recovery 200 Payout 3 MHW Secondary
Slide 7: Marten Hills West Secondary Recovery
MARTEN HILLS WEST Marten Hills West Secondary Recovery 2024 Secondary Recovery Expansion Marten Hills West Secondary Recovery Pilot Summary • GOR suppression and oil rate stabilization evident • Based on positive results, a full section pilot is being evaluated for 2024 W/2 07-076-02W5 Pattern 600 1
Slide 8: Marten Hills West Exploration
MARTEN HILLS WEST EXPLORATION Testing 4 prospects and Implementing “Fan-Style” Well Configuration Q4 2023 Exploration • CLWTR E test: currently drilling with Clearwater E Test expected rig-release mid November, Expected Rig release results by year end mid November Clearwater F Test • CLWTR F test: 1
Slide 9: Greater Peavine
GREATER PEAVINE Greater Peavine 03/13-06-083-15W5 FLHR B IP30: 155 bbl/d • Fahler B 03/13-06-083-15W5: success with an IP30 rate of 155 bbl/d Original 8-leg multi-lateral 00/13-06-83-15W5 FLHR D • Validates approximately 10 sections of IP90: 70 bbl/d prospective lands Walrus • Fahler C 02/13-06-083-
Slide 10: West Nipisi Expansion
WEST NIPISI EXPANSION Further Development and New Exploration West Nipisi Development • 50.5 sections of land • 2 producing zones and 2 additional exploration prospects • 6 successful wells with an average IP30 rate of 220 bbl/d • Southern extension successfully tested with a 3 leg multi-lateral Wes
Slide 11: Why Headwater
WHY HEADWATER Add incremental prospects through strategic land acquisitions and M&A •Added 65 net sections of land YTD in the Clearwater •Added 141 net sections of land in oil fairways outside the Clearwater Explore and Exploit •Marten Hills West success resulting in current production of > 10,000 b
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: Initial Pilots and 2024 Expansion
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: Planned 2024 Expansion GOR (scf/bbl) 2,000 1,000 1,500 750 GOR (scf/bbl) Rate (bbl/d) 1,000 50
Slide 15: Secondary Recovery Implementation: 2023 Expansion with Optimized Injector Design
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: Planned 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
Slide 16: Secondary Recovery Implementation: Marten Hills West Pilots
SECONDARY RECOVERY IMPLEMENTATION Marten Hills West 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 Wild River CEO & Chairman Resources Ltd. Jason Jaskela, P. Eng. ▪ Former COO a
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: Three-Year Development Strategy Advisory
ADVISORIES Three-Year Development Strategy Advisory Advisory Relating to Development Strategy (Slide 3) The Company has presented herein a three-year development strategy. The development strategy is based on a number of assumptions as presented in such slides including, without limitation: the requ
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
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