Headwater Exploration Inc. · TSX:HWX
Headwater Exploration — Merger or Acquisition (November 2020)
17 slides from Headwater Exploration's merger presentation, November 2020
Slide 1: Corporate Presentation: Transformational Transaction
Headwater Exploration Inc. CORPORATE PRESENTATION TRANSFORMATIONAL TRANSACTION TSX:HWX November 2020
Slide 2: Transaction Highlights
TRANSACTION HIGHLIGHTS Unique Mutually Beneficial Transaction With Cenovus Proforma Capitalization Asset Attributes Headwater Exploration Inc. TSX HWX ▪ 270 net sections of Clearwater rights at 100% working interest Share Price (Nov 6, 2020) $/sh. $1.27 ▪ 2020 exit production of 2,800 bbls/d of 22˚
Slide 3: Investable Business
INVESTABLE BUSINESS “THIS TRANSACTION CHECKS ALL OF THE BOXES” 1. Asset Quality ▪ One of the most economic oil plays in Western Canada ▪ Acquired acreage has top decile inventory and large OOIP (1) with significant EOR potential ▪ Headwater team possess the top tier execution ability to maximize ass
Slide 4: Clearwater Regional Map
CLEARWATER REGIONAL MAP Clearwater Competitor Map (1) Clearwater Net Pay Map (2) Gross Gross Company Operating Areas Company Operating Areas Sections Sections Marten Hills / Nipisi / Marten Hills / Spur >1,000 Deltastream 190 Jarvie / Desmarais / Evi Nipisi / Canal Headwater Acquisition Rolling Hill
Slide 5: Acquired Clearwater Lands
ACQUIRED CLEARWATER LANDS (1) Well RR Year Well Type Peak Rate CTD (bbl/d) (Mbbl) 102/12-34-074-25W4/00 2019 Development 733 107 100/16-35-074-25W4/00 2019 Development 670 86 102/12-31-074-24W4/06 2019 Development 634 112 100/13-34-074-25W4/00 2019 Development 617 90 100/09-35-074-25W4/07 2019 Devel
Slide 6: Core Area Performance
CORE AREA PERFORMANCE Clearwater Primary Type Curves and Waterflood Program Returns Type Log (4) IRR(2) Corporate Breakeven(3) EUR (%) WTI (US$/bbl) mstb Core Water Flood Wells 40% $36.00 750-1,200 Tier 1 – Primary (1) 500% $25.00 400-450 Tier 2 – Primary (1) 55% $36.00 150-200 Tier 3 – Exploration
Slide 7: Headwater Execution Strategy
HEADWATER EXECUTION STRATEGY BASE BUSINESS Q1 2021 Q3 2021 Q4 2021 2022 + Value Proposition ▪ Drill 10-12 - 8 lateral ▪ Begin injection into ▪ Drill additional source ▪ Complete and ▪ Sufficient capital on producing wells our first pilot project and injection wells commission all HWX balance sheet t
Slide 8: Why Headwater
WHY HEADWATER Relevance Returns Resiliency ▪ Headwater is the only way for ▪ Headwater’s business plan shows ▪ Headwater provides investors with investors to gain access to the significant free cash flow, 20-30% an attractive alternative that will Clearwater, a unique high return annualized average
Slide 9: Appendix
Headwater Exploration Inc. Appendix TSX:HWX
Slide 10: McCully Producing Asset
MCCULLY PRODUCING ASSET DRY GAS WITH 100% OWNED INFRASTRUCTURE AND LIMITED LIABILITY McCully Asset Daily Production Average year over year New Brunswick decline since intermittent production implemented is MNP pipeline 4.2% per year Nova Scotia HWX Realized Pricing and Winter 2021 Strip (US$/MMBTU)
Slide 11: Experienced Team
EXPERIENCED TEAM 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. CEO & Chairman and Wild River Resources Ltd. Jason Jaskela, P. Eng. ▪ Former COO and founder
Slide 12: Slide Notes
SLIDE NOTES Slide 1 1. Basic shares outstanding consists of 145 million common shares of Headwater (“Headwater Shares”) as at November 9, 2020 plus 50 million common shares that will be issued to Cenovus upon closing of the Transaction. Fully diluted shares outstanding assumes 100% exercising of the
Slide 13: Slide Notes
SLIDE NOTES Slide 6 1. The internal projections, expectations or beliefs underlying the 2021 preliminary outlook are subject to change in light of ongoing results, prevailing economic circumstances, commodity prices and industry conditions and regulations. Headwater's financial outlook for 2021 prov
Slide 14: 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 15: Forward Looking Statements Advisory
ADVISORIES Forward Looking Statements Advisory Additional information on these and other factors that could affect Headwater's operations and financial are included in its Annual Information Form for the year ended December 31, 2019 and other reports on file with Canadian securities regulatory autho
Slide 16: Non-IFRS Measures and Certain Oil and Gas Advisories
ADVISORIES Non-IFRS Measures and Certain Oil and Gas Advisories NON-IFRS MEASURES This investor presentation contains the terms "annualized average debt adjusted funds flow growth", "funds flow from operations (“FFO”)", “free cash flow”, "field-based cash flow“, “operating cash flow” “operating netb
Slide 17: Certain Oil and Gas Advisories
ADVISORIES Certain Oil and Gas Advisories ESTIMATED ULTIMATE RECOVERY (EUR) This investor presentation contains a metric commonly used in the oil and natural gas industry, "estimated ultimate recovery" or "EUR". The term EUR is the estimated quantity petroleum that is potentially recoverable or has
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