Headwater Exploration Inc. · TSX:HWX
Headwater Exploration — Investor Presentation (October 2024)
26 slides from Headwater Exploration's investor presentation, October 2024
Slide 1: Corporate Presentation
Headwater Exploration Inc. CORPORATE PRESENTATION TSX:HWX October 2024
Slide 2: Capitalization, Guidance and Business Strategy
CAPITALIZATION, GUIDANCE AND BUSINESS STRATEGY Outlook Capitalization 2024 Current Average Daily Production Guidance (1) (2) Headwater Exploration Inc. TSX HWX Annual Daily Production (boe/d) 20,000 Share Price (Sep 27th, 2024) $/sh. $6.31 Fourth Quarter Daily Production (boe/d) 21,500 Shares Outsta
Slide 3: Regional Clearwater Area
REGIONAL CLEARWATER AREA Total Land Holdings over 527 net sections with 71.7 net sections added YTD 2024 Cadotte Evi Greater Peavine (Seal, Peavine) 55 sections (Net) Multi-zone potential from Falher Nampa and Bluesky horizons Walrus Slave Seal Greater Nipisi (Heart River, Little Horse, West Nipisi,
Slide 4: Expanding Clearwater Resource Provides Flexibility in Future Capital Allocation
HEADWATER EXPLORATION Expanding Clearwater Resource Provides Flexibility in Future Capital Allocation Significant Clearwater Region Illustrative Example of Cumulative Free 6,000 Resource Expansion 20,000 1,600 4.50 Cash Flow Per Share at 24,000 boe/day Boe/day (est.) 1,400 4.00 5,000 18,038 Boe/day
Slide 5: Leading Maintenance Capital Requirements Provides Capital Optionality
HEADWATER EXPLORATION Leading Maintenance Capital Requirements Provides Capital Optionality Maintenance Capital % of Funds Flow Free Cashflow Per Share 60% US $75/bbl WTI 1.00 US $75 bbl WTI 0.90 Total Capital Maintenance Capital 50% 0.80 Free Cashflow Per Share ($) Maintenance Capital (%) 0.70 40%
Slide 6: Identified Inventory - Stacked Pay with Multiple Proven Zones
HEADWATER EXPLORATION Identified Inventory - Stacked Pay with Multiple Proven Zones Remaining Current Marten OOIP Producing Marten Hills West Stacked Zone Sections Identified Production Hills West (MMbbl) Wells Pay Inventory (boe/day) Potential CLWT G 76 7 3 31 251 CLWT F 101 6 - 34 - CLWT E 540 52
Slide 7: Clearwater Secondary Recovery – Expanding Duration and Resource Capture
HEADWATER EXPLORATION Clearwater Secondary Recovery – Expanding Duration and Resource Capture Current • Approximately 35% of Headwater’s OOIP with Sections 2023 P+P Year Production corporate oil production is supported Sections Secondary Currently End Secondary Directly Marten OOIP Amenable to under
Slide 8: Continued Secondary Recovery Performance
MARTEN HILLS CORE SECONDARY RECOVERY Continued Secondary Recovery Performance Multi-Layer Support Two Bench Pattern Marten Hills Core Yellow: Marten Hills Core Producer 14,000 1,400 Blue: Three Bench Pattern Oil (bbl/d) 10-12m Entire Marten Hills Injection (bbl/d) Green: Two Bench Pattern Core asset
Slide 9: Marten Hills West – Utilizing Marten Hills Core Learnings
MARTEN HILLS WEST SECONDARY RECOVERY Marten Hills West – Utilizing Marten Hills Core Learnings Section 07-076-02W5 Pattern 1,200 2,400 Oil (bbl/d) 2024 Secondary Recovery Expansion Injection (bbl/d) Completed in March 2024 GOR (scf/bbl) 1,000 2,000 800 1,600 GOR (scf/bbl) Rate (bbl/d) 600 1,200 400
Slide 10: Continued Step-out Success; Continuing Secondary Recovery
MARTEN HILLS WEST – CLEARWATER SANDSTONE Continued Step-out Success; Continuing Secondary Recovery Clearwater Sandstone MHW Secondary Recovery Section 07-076-02W5 • First Marten Hills West full section • Full section implementation secondary recovery on injection with injection expansion at the sout
Slide 11: Clearwater E Pool Expansion - A new growth opportunity
MARTEN HILLS WEST EXPLORATION Clearwater E Pool Expansion - A new growth opportunity within Marten Hills West Clearwater E CLWT G OOIP: 540 MMbbl 00/04-35-076-02W5 IP15: 155 bbl/d (24 API) Shut in mid March for break-up Identified Inventory: 287 locations CLWT F • 100/11-20-075-01W5: IP90: 161 bbl/d
Slide 12: Greater Peavine
GREATER PEAVINE Multiple Productive Falher Sands and Bluesky Development Seal FLHR B 03/08-08-083-15W5 00/08-08-083-15W5 FLHR B StingWray FLHR D StingWray IP60: 142 bbl/d IP90: 52 bbl/d FLHR C 02/07-07-083-15W5 FLHR B StingWray IP120: 114 bbl/d Land Acquisition 50% Net WI on 7 Sections FLHR D 04/13-
Slide 13: Greater Nipisi – 125 Sections
GREATER NIPISI – 125 SECTIONS Multiple Exploration Prospects Utikuma West Nipisi Heart River FLHR D follow-up 00/09-25-076-16W5 6 leg multi-lateral well is drilled and currently recovering load fluid Little Horse CLWT C Strat Test 00/09-24-077-11W5 CLWT F Exploration CLWT G Exploration 00/05-18-077-
Slide 14: Additional Exploration Opportunities
ADDITIONAL EXPLORATION OPPORTUNITIES W3/W4 Heavy Oil Exploration Clay Clay 00/04-15-059-13W4 Multi-lateral Exploration test • McLaren Formation • 16 sections in greater Clay area • 7-leg multi-lateral exploration well rig-released Sept 3, 2024 • Recently on production and producing at encouraging ra
Slide 15: Why Headwater
WHY HEADWATER Add Incremental Prospects Through Strategic Land Acquisitions and M&A •Added 71.7 sections of Clearwater lands YTD 2024, total Clearwater lands now totaling over 525 net sections •Added 38.7 sections of non-Clearwater lands YTD 2024, total Non-Clearwater lands now exceeding 194 net sec
Slide 16: Appendix
Headwater Exploration Inc. Appendix TSX:HWX
Slide 17: McCully Producing Asset
MCCULLY PRODUCING ASSET Dry Gas with 100% owned infrastructure and limited liability McCully Asset Daily Production 25.0 20.0 New Brunswick MNP pipeline Production mmscf/d 15.0 10.0 Nova Scotia 5.0 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 HWX Realized
Slide 18: Experienced Team – Management and Directors
EXPERIENCED TEAM – MANAGEMENT AND DIRECTORS 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. and Wild River Executive Chairman Resources Ltd. Jason Jaskela, P.
Slide 19: Slide Notes
SLIDE NOTES Slide 1 1. Assumptions used in the updated 2024 guidance as released on May 9, 2024 and reconfirmed on July 25, 2024 include: WTI of US$76.25, WCS of Cdn$83.88/bbl, AGT of US$5.11/mmbtu, AECO of Cdn$1.88/GJ, foreign exchange rate of Cdn$/US$ of 0.73, blending expense of WCS less $2.20, r
Slide 20: 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") within the meaning of Canadian securities laws. All statements other
Slide 21: Development Strategy Advisory
ADVISORIES Development Strategy Advisory Advisory Relating to Development Strategy (Slide 3) The Company has presented herein a two-year development strategy and has also presented an illustrative example of the cumulative free cash flow per share from 2025 through 2029 based on 24,000 boe/d of prod
Slide 22: Non-GAAP Advisory
ADVISORIES Non-GAAP Advisory NON-GAAP MEASURES AND RATIOS Non-GAAP Financial Measures This investor presentation contains the terms “adjusted funds flow from operations (“AFFO”) or Atax funds flow”, Capital expenditures or capital program “adjusted working capital”, “capital expenditures or capital
Slide 23: 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. Free cash flow per share and
Slide 24: Certain Oil and Gas Advisories
ADVISORIES Certain Oil and Gas Advisories TYPE CURVE INFORMATION, WELL ECONOMICS AND WATERFLOOD PERFORMANCE Headwater has presented certain type curve information, well economics and waterflood performance for certain development, exploration and waterflood activities in Headwater's areas of operati
Slide 25: 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
Slide 26: Certain Oil and Gas Advisories
ADVISORIES Certain Oil and Gas Advisories MARKET, INDEPENDENT THIRD PARTY AND INDUSTRY DATA ADVISORY Certain market, independent third party and industry data contained in this presentation is based upon information from government or other independent industry publications and reports or based on e
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