Headwater Exploration Inc. · TSX:HWX
Headwater Exploration — Investor Presentation (December 2024)
27 slides from Headwater Exploration's investor presentation, December 2024
Slide 1: Corporate Presentation
Headwater Exploration Inc. CORPORATE PRESENTATION TSX:HWX December 2024
Slide 2: Capitalization, Guidance and Business Strategy
CAPITALIZATION, GUIDANCE AND BUSINESS STRATEGY Outlook Capitalization Average Daily Production 2024 Guidance 2025 Guidance Headwater Exploration Inc. TSX HWX Annual Daily Production (boe/d) 20,250 22,250 th Share Price (Dec 5 , 2024) $/sh. $6.96 Financial Summary ($millions) Shares Outstanding (Basi
Slide 3: Expanding Clearwater Resource Provides Flexibility in Future Capital Allocation
HEADWATER EXPLORATION Expanding Clearwater Resource Provides Flexibility in Future Capital Allocation Significant Clearwater Region Cumulative Free Cash Flow Per Share at 6,000 Resource Expansion 20,250 1,600 5.00 24,000 boe/day Boe/day (est.) 4.50 1,400 5,000 18,038 4.00 Boe/day Annual avg 1,200 3.
Slide 4: Leading Maintenance Capital Requirements Provides Capital Optionality
HEADWATER EXPLORATION Leading Maintenance Capital Requirements Provides Capital Optionality Maintenance Capital % of FFO Free Cashflow Per Share 50% $70 US/bbl 1.00 $70 US/bbl Total Capital Maintenance Capital 0.90 0.80 Free Cashflow Per Share ($) 40% Maintenance Capital (%) 0.70 30% 0.60 0.50 20% 0
Slide 5: Regional Clearwater Area
REGIONAL CLEARWATER AREA Total Land Holdings over 539 net sections with 85.7 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 6: 2024 Exploration Program Success with further 2025 Exploration & Delineation
REGIONAL CLEARWATER AREA 2024 Exploration Program Success with further 2025 Exploration & Delineation Exploration / New Concepts Seal Bluesky Exploration Evi Cadotte • The 2024 exploration program tested 10 new play concepts with 9 successful outcomes • Success from the 2024 program has captured mor
Slide 7: 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 (1) Identified Production Hills West (MMbbl) Wells (1) Pay Inventory (boe/day) Potential CLWT G 76 7 3 31 242 CLWT F 101 6 - 34 - CLWT E
Slide 8: Clearwater Secondary Recovery – Expanding Duration and Resource Capture
HEADWATER EXPLORATION Clearwater Secondary Recovery – Expanding Duration and Resource Capture • Approximately 35% of Headwater’s Current corporate oil production is stabilized OOIP with Sections 2023 P+P Year Production Sections under secondary recovery Secondary Currently End Secondary Directly Mar
Slide 9: Continued Secondary Recovery Performance
MARTEN HILLS CORE SECONDARY RECOVERY Continued Secondary Recovery Performance Multi-Layer Support Two Bench Pattern Headwater Land Marten Hills Core Producer Two Bench Pattern 10-12m 12,000 1,200 Oil (bbl/d) Three Bench Pattern Injection (bbl/d) Injector GOR (scf/bbl) Three Bench Pattern 10,000 1,00
Slide 10: Marten Hills West – Utilizing Marten Hills Core Learnings
MARTEN HILLS WEST SECONDARY RECOVERY Marten Hills West – Utilizing Marten Hills Core Learnings Bottom-Up Support Section 07-076-02W5 Pattern Section 7 1,200 2,400 2024 Secondary Recovery Expansion Producer Oil (bbl/d) Completed in March 2024 6-10m Injection (bbl/d) 1,100 2,200 GOR (scf/bbl) Injector
Slide 11: Continued Step-out Success; Expanding Secondary Recovery
MARTEN HILLS WEST – CLEARWATER SANDSTONE Continued Step-out Success; Expanding Secondary Recovery Clearwater Sandstone • Two full sections under secondary recovery by year-end 2024 MHW Secondary Recovery Section 07-076-02W5 Full section implementation • Continued success on step-out tests to the Nor
Slide 12: Clearwater E Pool Expansion
MARTEN HILLS WEST EXPLORATION Clearwater E Pool Expansion - A new growth opportunity within Marten Hills West Clearwater E • The regional extent of the Clearwater E over HWX land base is estimated to be up to 52 sections in size • Un-risked inventory offers up to 4 years of drilling potential • Exce
Slide 13: Greater Peavine
GREATER PEAVINE Multiple Productive Falher Sands and Bluesky Development Seal FLHR B 2025 Development Area FLHR C Operated 50% working interest lands Current Development Area FLHR D FLHR B; BLSK Seal FLHR Exploration Area FLHR H New surface pads being constructed for the 2025 drilling program BLSK P
Slide 14: Greater Nipisi – 125 Sections
GREATER NIPISI – 125 SECTIONS Multiple Exploration Prospects Little Horse Bluesky Exploration CLWT G Exploration CLWT F Exploration 00/05-26-077-14W5 02/05-15-077-12W5 00/05-18-077-11W5 Q1 2025 northern block Re-start Jan 2025 IP5: 90 bbl/d (16.5 API) CLWT F Exploration exploration test Re-start Jan
Slide 15: Additional Exploration Opportunities
ADDITIONAL EXPLORATION OPPORTUNITIES W3/W4 Heavy Oil Exploration Clay Clay 00/04-15-059-13W4 Multi-lateral Exploration test • 16 sections in greater Clay area • 00/04-15-059-13W4 Exploration Test (McLaren Formation) • IP60: 201 bbl/d of 16 API Oil • Up to 23 mmbbl OOIP per section • Follow-up locati
Slide 16: Why Headwater
WHY HEADWATER Add Incremental Prospects Through Strategic Land Acquisitions and M&A •Added 85.7 sections of Clearwater lands YTD 2024, total Clearwater lands now totaling over 539 net sections •Added 36.7 sections of non-Clearwater lands YTD 2024, total Non-Clearwater lands now exceeding 192 net sec
Slide 17: Appendix
Headwater Exploration Inc. Appendix TSX:HWX
Slide 18: 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 19: 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 Resources Ltd. Executive Chairman Jason Jaskela, P.
Slide 20: Slide Notes
SLIDE NOTES Slide 1 1. Assumptions used in the updated 2024 guidance as released on November 7, 2024 include: WTI of US$75.33, WCS of Cdn$82.98/bbl, AGT of US$4.60/mmbtu, AECO of Cdn$1.46/GJ, foreign exchange rate of Cdn$/US$ of 0.73, blending expense of WCS less $2.20, royalty rate of 19.0%, operat
Slide 21: 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 22: Development Strategy Advisory
ADVISORIES Development Strategy Advisory Advisory Relating to Development Strategy (Slide 2) 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 23: 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 24: Non-GAAP Advisory
ADVISORIES Non-GAAP Advisory Non-GAAP Ratios Maintenance Capital 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 maintenance capital divided by AFFO. Total Capi
Slide 25: 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 26: 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 27: 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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