Highpeak Energy, Inc. · NASDAQ:HPK
Highpeak Energy — SPAC Merger (February 2020)
35 slides from Highpeak Energy's SPAC merger presentation, Feb 25, 2020
Slide 1: Investor Presentation — February 2020
Investor Presentation — February 2020
Slide 2: Disclaimer
Disclaimer AN HIGHPEAK {sehange At of 1938, = arene (the Cachange et) Au satemant, over thn statements of proentorhatores fat nuded in tha preenaton, epaing the proposed merge of Pare Sequsiton Margr So ne. ( Mrges. Daloware corporation and wholy owned substy of HigiPeak Eng, te. (HigiPea), Deiwarec
Slide 3: Disclaimer (Cont'd)
Disclaimer (Cont’d) AN HIGHPEAK Reserve engineering a proces of etinating underground axromtons oftdocmbions tit cnnot be measured nan exact way. The ancy fay Feserve imate depends onthe quilt fart at, he itrpettion of sch data ad pce na cont sumptions mae by sree engine naan, the al of dling, ening
Slide 4: Transaction Summary
Transaction Summary \ @nicuHreak —— 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 w
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 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 leading marg
Slide 6: Transaction Summary (Cont'd)
Transaction Summary (Cont’d) AN HIGHPEAK @nHIcHPEAK Minimum Available Liquidity (whichis “73,000 netacres 18 Maoe/d net production"! $445 MM in NTM EBITDA at Closing!) $710 MM in 20218 EBITDA Pro Forma TEV: ~s1.650Mm Proforma Net Deb ~$20sMM“ Pro Forma Market Cap: $1,445 MM Inclusive of expected ava
Slide 7: Northern Midland Basin Pure-Play
Northern Midland Basi HighPeak Energy @nHIcHPEAK Pure-Play Capitalized for Efficient Oil-Weighted Value Generation Led by Jack Hightower, former CEO of 2 public E&P companies Pura eee es | andmultiple partnerships with majors and private equity investors Functional Management has an average of 25 ye
Slide 8: Proven Track Record of Valuation Creation
Proven Track Record of Valuation Creation \ ZN HIGHPEAK ——— 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 Hig
Slide 9: HighPeak Has a Differentiated E&P Business Model
HighPeak Has a Differentiated E&P Business Model ZN HIGHPEAK Business Model Development Profile Infrastructure / Management Team / Incen Public E&P Peers @Qiitenak Focus on growth of production and inventory Highly acquisitive Influenced by Wall Street expectations Potential imbalance of hitting tar
Slide 10: History of Creating Value Across Multiple Platforms, Experienced Management Team
History of Creating Value Across Multiple Platforms, Experienced, Cross-Functional Management Team \ a@ HIGHPEAK Key Points'#) Sponsor has assembled a premier management and operations team to join HighPeak Senior Management: 5 Geoscience: 7 Land 9 Engineering / Operations: 13 Finance/ Accounting: 7
Slide 11: Evolution of Development in Howard County
Evolution of Development in Howard County Development Single welldevelopment; sub-optimal/ Primarily single well development; testing of Design under-stimulated fracs co-development; high-intensity fracs = CALUN SVAMoONDBACK sm = — — mnnenomney fem onan » Fat Deteoemene Full-Field Development > : 2
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 Basin Counties Howard County: 100%
Slide 13: Industry Leading Operating Margins
Industry Leading Operating Margins @nicHreak HighPeak has the best margins among the Permian peers $/Boe Peer1 Peer2-- Peer3«sPeer4 = Peer Peer6 44% Oil: 67% Oil: 61% Oil: 65% Oil: 63% Oil: 70% 16% 47% Gas: 175% Gas: 37% Gas: 19% NGL: 17% NGL: 16% NGL: 21% NGL: 19% NGL: NA NGL: 11% Revenue! $3370 $4
Slide 14: Financial Projections
Financial Projections Assumes $55.00 / Bbl (oil) & $2.50 / MMBtu (gas) \ @HIGHPEAK — Key Points HighPeak Financial Projections Commodity Prices: ee ae Crude Oil: $55.00 / Bbl egon Opacted ae Natural Gas: $2.50 / MMBtu Gross Oper on Woks Oulton ma 2 % Net Operated Walls Drilled 65 86 a1 (gies ESCM Av
Slide 15: Financial Projections
Financial Projections \ @®ue PEAK — Operating margins that mitigate downside risk with significant upside to higher oil prices EBITDA ($MM) sso/abiois | $55 /en101 ll $60/abi01 NTM at Closing 2! Unlevered FCF (SMM) NTM a Closing ®! 2021 2022 ete agree 5250 a ots ar pre Capes entre RW tne, 2) 2222 S0
Slide 16: Geologic Overview
Geologic Overview Keyes cae ogi aa ° ° - ° Wolfcamp Aand Lower Spraberry = have consistently high gross thickness ae = Ss Paid = =o =o eevine ans sud ecresee iron S | Bs the easternmost HighPeak acreage =. wee] Reservoir intervals are comprised of Middle || d A interbedded organic-rich shale, fated)
Slide 17: 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 18: HighPeak Acreage Overlies Thermally Mature Reservoir
HighPeak Acreage Overlies Thermally Mature Reservoir licates Pay Section is Well Within Oil Window Thermal Maturity Data In Key Points Howard County has one of the densest vertical well log data sets inthe entire Permian Basin with over 1,300 wells having digital logs Robust geochemical data set of
Slide 19: Significant Intrinsic Value of a Single Drilling Unit
Significant Intrinsic Value of a Single Drilling Unit HighPeak’s inventory of ~670 gross operated dri @HIGHPEAK ing locations in the WCA and LSBY 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
Slide 20: Wolfcamp A: CGA Type Curve
Wolfcamp A: CGA Type Curve q& HIGHPEAK 10,000’ Wolfcamp A ~ n Normalized to 10,000" (Bo) Key Points Wolfcampa type curve wells selected from 250,000 geologically similar region = O11 Type Curve HighPeak has directly analogous landing zones and oil inplace to highly developed parts of the play Type C
Slide 21: Lower Spraberry: CGA Type Curve
Lower Spraberry: CGA Type Curve @nyicw 10,000’ Lower Spraberry ~ n Normalized to 10,000" (Bo) Key Points Lower Spraberry type curve wells selected from 250,000 geologically similar region ——— HighPeakhas directly analogous landingzones and oil inplace to highly developed parts of the play Type Curve
Slide 22: Significant Unquantified Upside Across Position
Significant Unquantified Upside Across Po: @bnbicw Productive Economic Horizons a fees ] lights Fat Top Typetay ‘Sigal Peak TypeLog iin 5 24-2 7 Mena te ogre oe PROTEIN | 7 Watanesacnsiray danens te hat SO | en Spraberry |Mieientsrssterrmotial [7 Wotan tt cet docs Be WolfcampB |W srcst poston ance t
Slide 23: Substantial Existing In-Basin Infrastructure with Premier Marketing
Substantial Existing In-Basin Infrastructure with Premier G@\nicureak Midstream & Marketing Solutions Available ~~ Attractive solutions identified for “manufacturing mode” development Big Spring ‘Alon ates entering into an agreement with a reputable Refinery third party containing the following term
Slide 24: Investment Highlights
Investment Highlights ZN HIGHPEAK Attractive entry Proposed valuation implies~8.7xNTM EBITDA"! and ~2.3x 20216 EBITDA Proposed valuation is a~1.7xdiscountto the Permian comps on a 2021E EBITDA multiple basis (23) Uniquely well-capitalized pure-play Permian mid-cap Company Well capitalized businesswi
Slide 25: Financial Appendix
Financial Appendix @nicHreak
Slide 26: Transaction Overview
Transaction Overview ZN HIGHPEAK Certain entities controlled by the Sponsor, Pure and HighPeak entered into a definitive agreement to acquire Grenadier Energy Partners (“Grenadier”), a pure-play northern Midland Basin E&P Company for cash, equity and warrants Post-closing, the Sponsor is expected to
Slide 27: Summary of Mid-Year 2020 Resource
Summary of Mid-Year 2020 Resource ') ZN HIGHPEAK Key Statistics: Resource HighPeak Resource Summary (As of 05/01/20) PDReseves “A MMoe Pe NetResoure [PD pv-10+ DEVPV.10" Unproved Resource ~463 MMBoe Category oi | Gas | $50 / Bbl $55 /Bbl $60 / Bbl Total Resource ~507 MMBoe (MMBbI) (Bcf) _(MMBbI) (MM
Slide 28: Illustrative Transaction Timeline
Illustrative Transaction Timeline \ ZN HIGHPEAK — Business Combination Transaction Agreed November 2019 Business Combination Transaction Announced Business Combination Proxy Filed with the SEC April 2020 Set Record Date for Stockholder Vote April 2020 Mail Final Proxy Materials to Stockholder April
Slide 29: Appendix
Appendix
Slide 30: Key Results: Primary Targets
Key Results: Primary Targets (1)(2) jt [ewww | in | or |" || a | | [7] @ suas isa 30 us @ caren sem ah = 7 @ cance ie iak ine 79 Hoe — es ‘oom @onmmasiwcin i moet 276 said a — cars aera owen ins isa he cel corn wowent — ae 7 =e © isimevtn——eawene sm nossa © nome verak owen a0 Soames © momen 223i owe
Slide 31: Key Results: Upside Targets
Key Results: Upside Targets ') Key Points Outside of the primary targets HighPeakis developing, the WolfcampA and Lower Spraberry, there is significantunquantified upside across, the position from proven economic horizons, includingthe Middle ‘Spraberry, o Mill, Dean, WolfcampB, WolfcampC and Wolfca
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 oc = : 2 | om ) Sige tpenods ma ncn sarees aE 32
Slide 33: Financial Projections — Alternate Case
Financial Projections — Alternate Case Assumes $60.00 / Bbl (oil) & $2.50 / MMBtu (gas) \ @HIGHPEAK — HighPeak Financial Projections ee ae Key Points Commodity Prices: Crude Oil: $60.00 / Bb ‘Average Operated Rigs Natural Gas: $2.50 / MMBtu Gross Operated Wells billed re Ea ba jae aaa Net Operated W
Slide 34: Financial Projections — Alternate Case
Financial Projections — Alternate Case Assumes $50.00 / Bbl (oil) & $2.50 / MMBtu (gas) \ @HIGHPEAK — Key Points HighPeak Financial Projections Commodity Prices: ee en eer er Crude Oil: $50.00 / Bl ‘Average Operated Rigs Natural Gas: $2.50 / MMBtu Gross Operated Wells billed re Ea ba Net Operated Wa
Slide 35: CGA Year-End 2019 Proved Reserves
CGA Year-End 2019 Proved Reserves") CGA Year-End 2019 Proved Reserves!) Net Proved Reserves oil Gas NGL PV-10 Reserve Category (mmebl) (6cf) (wmebl) (mm) Proved Developed Producing (PDP) R 10 3 16 20% 90% $ 280 Proved Developed Non-Producing (PDNP) 7 4 1 8 11% 92% 131 Total Proved Developed Reserves