Highpeak Energy, Inc. · NASDAQ:HPK
Highpeak Energy — SPAC Merger (May 2020)
38 slides from Highpeak Energy's SPAC merger presentation, May 4, 2020
Slide 1: Investor Presentation — May 2020
Investor Presentation — May 2020
Slide 2: Disclaimer
Disclaimer rAN HIGHPEAK {uenange At of 1938, m= arene (the achange et Au satemant, ovr thn atatemants of prose or Hatares fat nuded in tha preenaton, pang the proposed merge of Pare Sequsiton Magar So, ne. Morges Danware corporation and hoy owned subetay of KghPen Energy, ne (WighPaa), 2 Delaware co
Slide 3: Disclaimer (Cont'd)
Disclaimer (Cont’d) AN HIGHPEAK Reserve engineering a proces of etinating underground sxcromiatoes oftncmbions tit cannot be metre nan exact way. The acum of any rene eimte depends onthe quality fart dat, the itrpettin of sch dita prce and cost sumptions mode by tare agian Reserves una ides heren ma
Slide 4: Transaction Summary
Transaction Summary \ @\nHicHpreak —— 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: Superior and Differentiated E&P Business Model
Superior and Differentiated E&P Business Model \ ZN HIGHPEAK —=== wf Best in class drilling and operating execution High oil cut with best in class operating margins Low leverage in a debt-riddled industry Contiguous land position with minimal lease obligations Cycle tested management team Low cost
Slide 6: Experienced, Cross-Functional Management Team
Experienced, Cross-Functional Management Team History of Creating Value Across Multiple Platforms HighPeak has assembled a premier management and operations team Jack Hightower Chairman & CEO PURE bluestem Energy HighPeak will managegrowth in cngsasenie activity with the addition offull- Michael Hol
Slide 7: 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 8: Transaction Overview
Transaction Overview @nicHreak Certain entities controlled by the Sponsor, Pure and HighPeak entered into a definitive agreement to form a pure-play northern Midland Basin E&P Company Post-closing, the Sponsor is expected to be the largest stockholder of HighPeak, with approximately 89% ownership |)
Slide 9: Large Investor Incentive
Large Investor Incentive? q& HIGHPEAK {+ Eligible to SPAC shareholders | Inceni or new HighPeak PIPE investors holding or purchasing 100,000 shares or greater + Sponsor will place into escrow a number of shares sufficient Total Collateral Total to satisfy preferred return ipl down toa share price of
Slide 10: Northern Midland Basin Pure-Play
Northern Midland Basi HighPeak Energy VAN HIGHPEAK Pure-Play Capitalized for Efficient Oil-Weighted Value Generation Led by Jack Hightower, former CEO of 2 public E&P companies. | [Lise mak ia eeueeecRcrees | and multiplepartnershipswith majors and private equity investors | | s**" ry Functional = M
Slide 11: Evolution of Development in Howard County
Evolution of Development in Howard County AN HIGHPEAK Howard é al Development > EarlyDevelopment_ >| _Full-Field Development > i * “ Hz Wells emew) 2 176 1,859 FJ | bevelopmene | WCA/LSBY WCA/ WCB // LSBY Fe] | Detinestion WCA /LSBY wee Jo Mill/ MsBY / Dean / wcc/ WCD SESE) singlewelldevelopment;sub
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: Achieving Excellent Efficiency & Margins
Achieving Excellent Efficiency & Margins \ AN HIGHPEAK ed CAPITALEFFICIENCY FLAT TOP CAPITAL EFFICIENCY (D,C,E&F) © Consistent capital performance $1,400 = demonstrating DCE&F costs of <$520/ft am 5 iomemra S = ” (EEE Comp (S/ft) — Total well cost (10,000’): $5.25mm § sum nai = Continuous capital im
Slide 14: Industry Leading Operating Margins
Industry Leading Operating Margins? @nicHreak HighPeak has the best margins among the Permian peers $/Boe _—«~PEER1-PEER2 PEER3 PEER4 PEERS PEERG PEER7 PEERS PEER9 PEER10 PEERI1 PEER 12 Revenue $27.75 $21.29 $27.97 $25.87 $2435 $30.00 $27.42 $2750 $2641 $27.60 $27.74 $26.79 (AH AOE ($22.22) $1.10) (
Slide 15: Financial Projections
Financial Projections Assumes Model Price Key Points Commodity Prices: Model Price NGLs: 36% of WTI Development Pace & Methodology: Assumes an average of 3 operated rigs starting in Aug 2020 Assumes initial program focused on capital- efficient development of the WCA and LSBY Assumes drill, complete
Slide 16: Financial Projections (as of July 31, 2021)
Financial Projections (as of July 31, 2021) @nicHreak Sensitivity: Model Price: OIL ($/bbl):$32 (H2/2020), $35 (2021), $40 (2022) // GAS (MMBtu): $2.50 ~ ed TIM EBITDA ($mm) & PRODUCTION (boepd) CAPITAL ($mm) & WELLS DRILLED $7000 63,000 $600 120 $6000 4,000 $500 100 $5000 45,000 Ss ° e $400.0 ° 36,
Slide 17: Financial Projections (as of July 31, 2022)
Financial Projections (as of July 31, 2022) @nicHreak Sensitivity: Model Price: OIL ($/bbl):$32 (H2/2020), $35 (2021), $40 (2022) // GAS (MMBtu): $2.50 ~ ed TIM EBITDA ($mm) & PRODUCTION (boepd) CAPITAL ($mm) & WELLS DRILLED $7000 63,000 $600 120 ° $600.0 = 4,000 $500 100 $5000 . 45,000 Soo . so $40
Slide 18: Financial Projections
Financial Projections Price Comparison? Key Points Development Pace & Methodology: Assumes an average of 3 operated rigs starting in Aug 2020 ‘Assumes initial program focused on capital- efficient development of the WCA and LSBY Assumes drill, complete, equip and facility of $5.25 MM for a 10,000’ w
Slide 19: Wolfcamp A: CGA Type Curve
Wolfcamp A: CGA Type Curve AN HIGHPEAK 10,000’ Wolfcamp A ~ reetaies n Normalized to 10,000’ (Bo) + Wolfcamp A type curve wells elected from 250,000 geologically similar region Za HighPeakhas directly analogous andingzonesand = oilinplacetohighiydeveloped partsofthe ple | | 55999 Type curve — 42-mo
Slide 20: Lower Spraberry: CGA Type Curve
Lower Spraberry: CGA 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 = oil Type Curve HighPeak has directly analogous landing zones and oil in placetohighly developed parts o
Slide 21: CGA Year-End 2019 Proved Reserves
CGA Year-End 2019 Proved Reserves") CGA Year-End 2019 Proved Reserves!) Net Proved Reserves Gas NGL Total % Pv-10 Reserve Category (mab!) (mcf) _(MBbI) (mBoe) Liquids (sum) Proved Developed Producing (PDP) 990 498 301 4,174 10% 93% § a Proved Developed Non-Producing (PDNP) 3,101 1,454 447 3,791 33%
Slide 22: Internal Proved Reserves at Apr/20
Internal Proved Reserves at Apr/20 () HPK Proved Reserves at Apr/20!") Net Proved Reserves oil Gas NGL % % Pv-10 Reserve Category (mab!) (mcf) (mab!) Liquids (sum) Proved Developed Producing (PDP) 4,481 1,473 435 5,161 12% 95% 74 Proved Developed Non-Producing (PDNP) 7,413 5117 1,220 9,486 21% 91% 1
Slide 23: Summary of Apr/2020 Resource
Summary of Apr/2020 Resource Key Statistics: Resource HighPeak Resource Summary (As of 04/01/20) ‘nme wae! en na $22, Ss 220 So 27) AS Man S20. Fa St Wa Sf ce sna 2 e/a = Proved Reserves ~45 MMBoe Net Resource = Unproved Resource ~317 MMBoe (mmebl) (Bef) (MMBbI) (MMBoe) (SMM) ($MM) = Total Resource)
Slide 24: Significant Unquantified Upside Across Position
Significant Unquantified Upside Across Position from @naicHreeak Productive Economic Horizons? a {operated [ Target OP" Formation Highlights | Fat Top TypeLoy ‘Sina Peak Type Log [7 es cetneated target on agnreasaceage - sae | eee || err years He UpsideZone — enon | 1 soravery | ial | ie rertecncete
Slide 25: Key Results: Primary Targets
Key Results: Primary Targets (1)(2) = [owes |i | $5 [in | im | geal Qace teas nen ae eg Qiseeccaec mec oe aoe ae eee ee re ee Pores pisos ee sent teeta (oan set ae oe ganas aa ae oe : (= Nenenn ae neers rey beers ee tee eT Qusreae =e ee = aa a SEY: er aes oa eee Qavman er eet eee @ovnacr Soest sonia
Slide 26: Key Results: Upside Targets
Key Results: Upside Targets (*) AN HIGHPEAK Key Points © Outside ofthe primary targets HighPeak is developing, the WolfcampA and Lower Spraberry, there is significant unquantified upside across the position from proven economic horizons, including the Middle Spraberry, Jo Mill, Bean, Wolfcamp 8, Wol
Slide 27: Geologic Overview
Geologic Overview @nticHPeak ——— Cea Rats pe wi pening expen mien WolfcampA and Lower Spraberry aa” ° me . ae alt have consistently high gross thickness —| —— ae - —— eee moving from SM's acreage through a bg + 7 the easternmost HighPeak acreage : Reservoirintervalsarecomprisedot || midaie |<] inter
Slide 28: Wolfcamp A and Lower Spraberry Geologic Overview
Wolfcamp A and Lower Spraberry Geologic Overview \ ZN HIGHPEAK a HighPeak Acreage Lies within the Core Fairways of the Wolfcamp A and Lower Spraberry Wolfeamp A characterized by >250’ gross, >200’ net, and >35 MMBo/section OOIP across majority of acreage Lower Spraberry characterized by >300’ gross,
Slide 29: Thermal Maturity Data Indicates Pay Section is Well Within Oil Window
Thermal Maturity Data Indicates Pay Section is Well Within Oil Window HighPeak Acreage Overlies Thermally Mature Reservoir \ ZN HIGHPEAK — Key Points Wolfcamp A Structure (SSTVD') and Wolfcamp A Geochemistry Tmax Data Howard County has one of the densest vertical well log data sets inthe 5 entire Pe
Slide 30: HighPeak Recent Activity
HIGHPEAK RECENT ACTIVITY ZN HIGHPEAK ——— Key Points FLATTOP ACTIVITY HighPeak has drilled 22 wells in the Flat ] 7 Top area with 6 wells producing, 8 wells } —— RobuCING completed (4 flowing back) and 8 DUCs | - comer Jasmine wells were drilled first and have produced steadily since being put online
Slide 31: Financial Appendix
Financial Appendix @nicHreak
Slide 32: Financial Projections — Alternate Case
Financial Projections — Alternate Case Assumes $40.00 / Bbl (oil) & $2.50 / MMBtu (gas) Key Points Commodity Prices: Crude Oil: $40.00 / Bbl $2.50 / MMBtu 36% of WTI Natural Gas: NGLs: Development Pace & Methodology: ‘Assumes an average of 3 operated rigs starting in Aug 2020 Assumes initial program
Slide 33: Financial Projections — Alternate Case
Financial Projections — Alternate Case Assumes $50.00 / Bbl (oil) & $2.50 / MMBtu (gas) Key Points Commodity Prices: Crude Oil: $50.00 / Bbl $2.50 / MMBtu 36% of WTI Development Pace & Methodology: Natural Gas: NGLs: Assumes an average of 3 operated rigs starting in Aug 2020 Assumes initial program
Slide 34: Illustrative Transaction Timeline
Illustrative Transaction Timeline \ rzAN HIGHPEAK — May 2019 July 2020 July 2020 July 2020 August 2020 Business Combination Transaction Agreed Business Combination Transaction Announced Business Combination Proxy Filed with the SEC Set Record Date for Stockholder Vote Mail Final Proxy Materials to S
Slide 35: Investment Highlights
Investment Highlights \ ZN HIGHPEAK — Attractive entry int valuation with differentiated growth and return profi Proposed valuation implies~5.1xNTM EBITDA and ~3.0x 2021E EBITDA! (a ~81% discounttothe Permian comps on a 2021E EBITDA multiple basis) 22 Projected two-year production CAGR in excess of
Slide 36: Appendix
Appendix
Slide 37: Extensive Access to Well Data
Extensive Access to Well Data Key Points Active drilling programs on and around HighPeak acreage has provided set ‘Accessto daily production 2iealbemtinesesthinnets ccessto driling completondesiens | | | ‘Accessto well costs ‘Wells by Bench \ ) Sgrmecsnperenssamn
Slide 38: Substantial Existing In-Basin Infrastructure
Substantial Existing In-Basin Infrastructure with Premier G@\nicureak Midstream & Marketing Solutions Available ne . Attractive solutions identified for “manufacturing mode” development Big Spring ates entering into an agreement with a reputable = third party containing the following terms in the ne