Headwater Exploration Inc. · TSX:HWX
Headwater Exploration — Investor Presentation (August 2021)
20 slides from Headwater Exploration's investor presentation, August 2021
Slide 1: Corporate Presentation
Headwater Exploration Inc. CORPORATE PRESENTATION TSX:HWX August 2021
Slide 2: Capitalization and Guidance
CAPITALIZATION AND GUIDANCE 2021 Outlook Capitalization Headwater Exploration Inc. TSX HWX Previous Revised Guidance Guidance Share Price (August 5, 2021) $/sh. $4.03 Average Daily Production Shares Outstanding (Basic) MM 202.3 Annual 2021 Daily Production (boe/d) 7,000 - 7,250 7,250 Q4 2021 Average
Slide 3: HWX Current Operations Update
HWX CURRENT OPERATIONS UPDATE Top 20 Wells Drilled in Marten Hills Q1 Learnings No. UWI Operator Peak Calendar Rate No. Of Production Per Lateral (bbl/day) Laterals ▪ Optimal number of laterals to control 1 100/12-17-073-24W4/4 CNRL 405 4 (bbl/day) 101 losses and per lateral performance 2 3 102/09-1
Slide 4: Headwater Base Strategy
HEADWATER BASE STRATEGY Production & Net Cash Profile 2022 + 16,000 640,000 ▪ Build to ~14,500 boe/d from core acreage 14,000 560,000 ▪ Estimated primary recovery of 4.5% or 30 mmstb 12,000 480,000 ▪ 6 yr RLI Production (boe/d) 10,000 400,000 ▪ Implement waterflood over core Net Cash ($000) acreage
Slide 5: HWX Exploration Next Steps
HWX EXPLORATION NEXT STEPS Q4 2021 Drills Q3/Q4 exploration wells Q3 2021 Drills Ready to license follow up/exploration wells Type wells @ 20-30 bbls/d per lateral • Multiple additional exploration prospects have been identified throughout our land base • Three to five of these additional exploratio
Slide 6: Headwater Marten Hills 16-35-074-25W4 Waterflood Pilot
CAPITALIZATION AND GUIDANCE HEADWATER MARTEN HILLS 16-35-074-25W4 WATERFLOOD PILOT Decreasing GOR Flat water cut Increasing Oil Rate 16-35-074-25W4 Pattern • First injection: April 15, 2021 • Four leg F3 injector (02/16-35-074-25W4) • Eight leg F2 producer (00/16-35-074-25W4) • Bottom-up waterflood
Slide 7: Clearwater Area Operators
CLEARWATER AREA OPERATORS June 2021 Production: See Slide Notes 6
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 pure play access significant free cash flow and debt an attractive alternative that will to the Clearwater, a unique high adjusted funds
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 McCulley Daily Production mcfd 30,000 Average year over year Production period 25,000 decline since intermittent New Brunswick 20,000 production implemented is MNP pipeline 4.2% per ye
Slide 11: EOR Analogy: Pelican Lake versus Marten Hills
EOR ANALOGY Pelican LakeSummary versus Marten Hills • Pelican Lake analyzed as Marten Hills Clearwater analogy • HWX analysis of various Pelican Lake production areas indicate: • Estimated primary recovery of 3 - 6% • Estimated waterflood recovery of 12 - 15% • Estimated polymer flood recovery of 22
Slide 12: Two Waterflood Strategies Being Evaluated
TWO WATERFLOOD STRATEGIES BEING EVALUATED Bottom Waterflood Center Waterflood Clearwater Core Area EOR Development Clearwater Core Area EOR Development F1 F1 F2 F2 F3 F3 4/6/8 leg producing multi-laterals 6/8 leg producing multi-lateral Injection row 4 leg multi-laterals Injection row (4 leg / dual
Slide 13: Other Clearwater Waterflood Pilots
OTHER CLEARWATER WATERFLOOD PILOTS Spur Marten Hills Section 32-073-24W4 (Grandpa Burger) • 4 leg producer (F1), 6 leg producer (F2), 5 leg injector (F3) • Bottom waterflood • Injecting at ~ 437 bbls/day (2.3x VRRi ) • Gas-Oil-Ratio decreasing • No premature water breakthrough • Cumulative voidage r
Slide 14: Other Clearwater Waterflood Pilots
OTHER CLEARWATER WATERFLOOD PILOTS Spur Marten Hills Section 20-074-25W4 • 6 leg producer • 6 leg injector • Bottom waterflood • Injecting at ~ 180 bbls/day (2x VRRi) • Gas-Oil-Ratio continues to decrease • No premature water breakthrough • Oil rates continue to increase towards initial peak rates •
Slide 15: 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 16: Slide Notes
SLIDE NOTES Slide 1 1. Basic shares outstanding consists of 202.3 million common shares of Headwater (“Headwater Shares”) as at August 5, 2021. Fully diluted shares outstanding assumes 100% exercising of the Cenovus purchase warrants (15 million outstanding at a strike price $2.00/share), 100% exerc
Slide 17: 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 18: Forward Looking Statements and Five-Year Base Strategy Advisory
ADVISORIES Forward Looking Statements and Five-Year Base Strategy Advisory Advisory Relating to Five-Year Base Strategy (Slide 3) The Company has presented herein a five-year base strategy based on certain commodity price and other assumptions. Such five-year base strategy is not based on a budget o
Slide 19: 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 "debt adjusted funds flow growth", “operating cash flow” “adjusted funds flow from operations (“AFFO”)“, “free cash flow”, “adjusted working capital” and “net cash” which d
Slide 20: 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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