Highpeak Energy, Inc. · NASDAQ:HPK
Highpeak Energy — Investor Presentation (February 2021)
29 slides from Highpeak Energy's investor presentation, February 2021
Slide 1: Investor Presentation
Investor Presentation February 2021 1
Slide 2: Disclaimer
DISCLAIMER • FORWARD-LOOKING STATEMENTS • The information in this presentation and in any oral statements made in connection herewith contains forward-looking statements that involve risks and uncertainties. When used in or in connection with this document, the words • “believes,” “plans,” “expects,
Slide 3: Disclaimer (Cont'd)
DISCLAIMER (CONT’D) • USE OF NON-GAAP FINANCIAL MEASURES • This presentation includes non-GAAP financial measures, including EBITDAX, operating margin and PV-10. HighPeak believes these non-GAAP measures are useful because they allow HighPeak to more effectively • evaluate its operating performance
Slide 4: HighPeak History
HIGHPEAK HISTORY ◼ Starting in 2017, HighPeak acreage was assembled through HighPeak I fund and HighPeak II fund investments over a period of ~3 years – Capital was contributed by management and investors to acquire HighPeak’s current Eastern Howard county position in the Midland Basin ◼ Pure Acquis
Slide 5: HighPeak Energy
HIGHPEAK ENERGY Northern Midland Basin Pure-Play Capitalized for Efficient Oil-Weighted Value Generation • Key Statistics • Acreage Position and Selected Offset Operators • ◼ Market cap ~$1.4 billion (as of Feb. 1, 2021) ◼ Production Current production of approximately 6.0 MBoe/d (1) ◼ Acreage ~33,0
Slide 6: CGA Year-End 2020 Proved Reserves
CGA YEAR-END 2020 PROVED RESERVES Flat $57.00/Bbl and $3.00/MMBtu • CGA Year-End 2020 Proved Reserves (1) • Net Proved Reserves Oil Gas NGL Total % of % PV-10 Reserve Category (MBbl) (MMcf) (MBbl) (MBoe) Total Liquids ($MM) Proved Developed Producing (PDP) 4,426 1,829 462 5,193 22% 94% $120 Proved D
Slide 7: Operational Update
OPERATIONAL UPDATE • Horizontal Wells @ Flat Top Overview • HZ BENCH ◼ Statistics Lower Spraberry – Well lengths ranging from Wolfcamp A ~8,500 to over 15,000’ SWD – Horizontal Ellenburger SWD STATUS with high volume injection Producing capacity Flowback In Progress ◼ Producing wells – 12 wells (9 W
Slide 8: Current Capitalization and Guidance
CURRENT CAPITALIZATION AND GUIDANCE Current Capitalization • Near-Term PDP Reserve Growth (3) • As Reported ($ in millions) 9/30/2020 Ca s h a nd ca s h equi va l ents $55 Revol vi ng credi t fa ci l i ty – HighPeak expects Total debt – strong growth in PDP PV-10 in 1H 2021 as a Ma rket va l ue of e
Slide 9: Evolution of Development in Howard County
EVOLUTION OF DEVELOPMENT IN HOWARD COUNTY Howard County is one of the most active areas of the prolific Permian Basin with 18 rigs currently running and nearly 2,000 horizontal wells drilled to date 2016 Sticks 2020 Sticks 2021 and Beyond HZ Wells to Date: 176 HZ Wells to Date: 1,998 Early Developme
Slide 10: Howard County is the Growth Engine of the Permian
HOWARD COUNTY IS THE GROWTH ENGINE OF THE PERMIAN Howard County production mix has the highest oil percentage and margins across the Midland Basin (ie. best economics) and has seen the most rapid growth in oil volumes of all the major Midland Basin Counties Howard County: Highest Oil Content Drives
Slide 11: Peer-Leading Capital Efficiency and Margins
PEER-LEADING CAPITAL EFFICIENCY AND MARGINS Capital Efficiency • Flat Top Capital Efficiency Through 28 Wells Drilled (D,C,E & F) (1) • ◼ Continuous capital improvement $1,400 Facility ($/ft) Completion ($/ft) – Pad development $1,200 Drilling ($/ft) $1,000 Avg. ($/ft) – Longer laterals Capital Cost
Slide 12: Historical Midland Basin Peer Benchmarking: Enverus Data
HISTORICAL MIDLAND BASIN PEER BENCHMARKING: ENVERUS DATA Oil EUR/ft (MBbls/1000’) • Average % Oil • 93% 68 80% 78% 77% 77% 77% 76% 75% Avg Oil EUR/ft (Mbbls/1,000') 60 60 74% 58 70% 54 53 51 51 51 49 55% Avg % Oil 32 HPK Peer A Peer B Peer C Peer D Peer E Howard Peer F Peer G Peer H Peer I HPK Howar
Slide 13: Eastern Howard County… The Next Big Oil Play
EASTERN HOWARD COUNTY… THE NEXT BIG OIL PLAY Eastern Howard County projected wells compare favorably with Western Howard County wells Western vs. Eastern Howard County (Wolfcamp A – 10,000’) • Howard County Map • Western Eastern HighPeak Howard Howard Energy EUR (MBbls/1,000’) (1) 58 62 68 Avg. Net
Slide 14: Midland Basin Peer Benchmarking
MIDLAND BASIN PEER BENCHMARKING HighPeak well results outperform peers in the Midland Basin HighPeak Well Performance vs. Midland Peers (1) • •HighPeak Well Performance (First 18 Wells at Flat Top) (2) 300 300 Consistent reservoir quality results in strong well performance 250 250 Cumulative Oil Pro
Slide 15: CGA Type Curve Economics
CGA TYPE CURVE ECONOMICS • WCA and LSBY type curves Overview • ◼ Wolfcamp A and Lower Spraberry type curve wells selected from geologically similar region ◼ HighPeak has directly analogous landing zones and oil in place to highly developed parts of the play ◼ Higher oil cut and shallower decline rel
Slide 16: Key Results: Primary Targets
KEY RESULTS: PRIMARY TARGETS LL First EUR Oil EUR Well Name Operator (ft) Prod (MBoe) (Mbo/ft) 1 ALLAR 19A-30 1LS HANNATHON 7,580 Aug 2017 532 65 2 CHEVRON 3-56 UNIT 7LS GRENADIER 9,633 Feb 2020 819 63 3 DUSTY 4824LS SM ENERGY 7,859 Jul 2019 639 67 LSBY 4 MORGAN-NEAL 39-26 2LS GRENADIER 10,482 Apr 2
Slide 17: Reservoir Quality Similar Across Howard County
RESERVOIR QUALITY SIMILAR ACROSS HOWARD COUNTY SW NE Key Reservoirs Comparison • Across Howard County • Lower Spraberry Wolfcamp A West East West East Howard Howard Howard Howard Porosity 4.3% 4.7% 4.3% 4.3% Net to gross 89% 91% 82% 89% Wells/section 8 6 10 6 Spraberry Lower NE Wolfcamp A SW 17
Slide 18: Oil-Rich Mixed Lithology Rock Column
OIL-RICH MIXED LITHOLOGY ROCK COLUMN ◼ Spraberry and Wolfcamp sections comprised of mixed-lithology, kerogen-rich reservoirs Organic- ◼ Interbedded limestones are consistently kerogen- rich, high-porosity reservoir intervals rich shale facies DEAN ◼ All rock types are hydrocarbon-bearing and contrib
Slide 19: Over a Decade of Inventory
OVER A DECADE OF INVENTORY Level of Delineation Middle Target Wolfcamp A Lower Spraberry Wolfcamp B Wolfcamp D Jo Mill Wolfcamp C Spraberry Flat Top Operated 156 165 173 173 172 172 0 Locations Signal Peak Operated 114 114 114 114 0 0 228 (1) Locations Flat Top Development Design • Signal Peak Devel
Slide 20: Substantial Existing In-Basin Infrastructure with Premier Midstream & Marketing Solutions
SUBSTANTIAL EXISTING IN-BASIN INFRASTRUCTURE WITH PREMIER MIDSTREAM & MARKETING SOLUTIONS AVAILABLE Infrastructure Map • ◼ At present, HighPeak incurs trucking costs of ~$1.50/Bbl but anticipates entering into a transportation agreement that will substantially reduce transport costs going forward Cr
Slide 21: HighPeak's Commitment to ESG
HIGHPEAK’S COMMITMENT TO ESG HighPeak Energy continues to keep ESG considerations at the forefront of operations • Flaring / Emissions Water Disposal and Recycle • ◼ HighPeak is actively focused on eliminating air emissions ◼ Drilled first large volume capacity horizontal Ellenburger through reducin
Slide 22: Investment Highlights
INVESTMENT HIGHLIGHTS HighPeak’s strong operational performance with leading well results creates a new leading Permian company Contiguous Acreage Sponsor and Management Superior and Differentiated Skilled, Cycle-Tested Position with Premier Asset Coverage Team Highly Aligned with E&P Business Model
Slide 23: Appendix
PEAK APPENDIX
Slide 24: Key HighPeak Reservoirs Comparable to W. Howard County
KEY HIGHPEAK RESERVOIRS COMPARABLE TO W. HOWARD COUNTY Primary reservoirs have comparable rock quality on HighPeak acreage compared to Western Howard Lower Spraberry OOIP Wolfcamp A OOIP LSBY OOIP WC-A OOIP (Mmbo/mi2) (Mmbo/mi2) 0 85 0 60 24
Slide 25: HighPeak Acreage Has Most Attractive Lower Wolfcamp
HIGHPEAK ACREAGE HAS MOST ATTRACTIVE LOWER WOLFCAMP De-risked Wolfcamp B and D shales have the highest OOIP in Howard County Wolfcamp B OOIP Wolfcamp D OOIP WC-B OOIP WC-D OOIP (Mmbo/mi2) (Mmbo/mi2) 0 40 0 44 25
Slide 26: Signal Peak Offsets Prolific Wolfcamp C Hutto Field
SIGNAL PEAK OFFSETS PROLIFIC WOLFCAMP C HUTTO FIELD ◼ The Wolfcamp C Hutto reservoir is a mixed WC-C Hutto OOIP lithology interval that has produced >4.5 million (Mmbo/mi2) barrels of oil equivalent from 32 vertical wells 20 90 ◼ The lower target interval exhibits consistently high porosity througho
Slide 27: SEC Pricing: CGA Year-End 2020 Proved Reserves
SEC PRICING: CGA YEAR-END 2020 PROVED RESERVES (1) • CGA Year-End 2020 Proved Reserves (1) • Net Proved Reserves Oil Gas NGL Total % of % PV-10 Reserve Category (MBbl) (MMcf) (MBbl) (MBoe) Total Liquids ($MM) Proved Developed Producing (PDP) 4,213 1,660 440 4,929 22% 94% $73 Proved Developed Non-Pro
Slide 28: Proven Track Record of Valuation Creation
PROVEN TRACK RECORD OF VALUATION CREATION • Jack Hightower has experience Jack Hightower Selected Investment Returns • developing assets for multiple ROI IRR classes of oil & gas investors 9.2x >100% Former CEO of two public businesses, Titan Public Exploration & Pure 6.1x Investors Resources, that
Slide 29: The End
The End 29
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