Headwater Exploration Inc. · TSX:HWX
Headwater Exploration — Investor Presentation (April 2021)
24 slides from Headwater Exploration's investor presentation, April 2021
Slide 1: Corporate Presentation
Headwater Exploration Inc. CORPORATE PRESENTATION TSX:HWX April 2021
Slide 2: Capitalization and Guidance
CAPITALIZATION AND GUIDANCE 2021 Revised Guidance Summary Capitalization Average Daily Production Headwater Exploration Inc. TSX HWX Barrels of Oil Equivalent (boe/d) 6,500 - 7,000 Share Price (Apr 6, 2021) $/sh. $ 4.15 Q4 2021 Avg Daily Prod (boe/d) 8,000 - 8,500 Shares Outstanding (Basic) (1) MM 1
Slide 3: Q1 Operations Update
Q1 OPERATIONS UPDATE Core Development Area ▪ Drilled 12, 8-leg multi-lateral producers that are all onstream ▪ Drilled 5 horizontal injection wells including one 4-leg horizontal injector, two 2-leg horizontal injectors and two single leg horizontal injectors ▪ First waterflood injection into 4-leg
Slide 4: HWX Core Area Q1 Drilling
HWX CORE AREA Q1 DRILLING UWI Well Type Rig Release Date: 100/16-26-074-25W4/00 8 Leg Multi Lateral 28-Jan-21 102/09-26-074-25W4/00 Strat 6-Jan-21 100/01-35-074-25W4/00 8 Leg Multi Lateral 13-Mar-21 100/08-35-074-25W4/00 8 Leg Multi Lateral 27-Feb-21 100/09-26-074-25W4/00 8 Leg Multi Lateral 21-Feb-
Slide 5: Waterflood Development Concepts
WATERFLOOD DEVELOPMENT CONCEPTS 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 8 leg producing multi-lateral Injection row 4 leg multi-laterals Injection row (4 leg / dual leg) ▪ F1 dr
Slide 6: Clearwater Bottom Waterflood Projects
CLEARWATER BOTTOM WATERFLOOD PROJECTS Spur Marten Hills Section 32-073-24W4 Spur Marten Hills Section 20-074-25W4 • 6 leg producer (F2) • 6 leg producer • 5 leg injector (F3) • 6 leg injector • Bottom waterflood • Bottom waterflood • Injecting at ~ 375 bbls/day • Injecting at ~ 130 bbls/day • Instan
Slide 7: HWX Core Area Performance
HWX CORE AREA PERFORMANCE Clearwater Primary Type Curves and Waterflood Program Returns Type Log Corporate Well All NPV10 Payout Breakeven EUR Capital Capital ($000) (Months) WTI (mstb) ($000) ($000) US$/bbl Core Waterflood $15,000 19 $1,350 $6,400 $36.00 750 - 1,200 Wells Tier 1 – Primary $9,500 4
Slide 8: Clearwater Lands
CLEARWATER LANDS (1) Well RR Year Well Type Peak Rate CTD (bbl/d) (Mbbl) 102/12-34-074-25W4/00 2019 Development 733 167 100/16-35-074-25W4/00 2019 Development 670 142 102/12-31-074-24W4/06 2019 Development 634 162 100/13-34-074-25W4/00 2019 Development 617 152 100/09-35-074-25W4/07 2019 Development
Slide 9: HWX Clearwater Exploration Prospects
HWX CLEARWATER EXPLORATION PROSPECTS Current (2) Current (2) IP 30 (1) # of Well Rate Cum Oil bbls/d Laterals bbls/d bbls 102/09-11-075-26W4/06 150 58 34,498 8 100/09-23-074-26W4/04 25 11 3,370 4 100/09-32-075-01W5/02 50 0.0 3,601 8 100/08-11-075-02W5/02 20 10 5,519 4 100/04-30-075-02W5/02 75 32 11,
Slide 10: Headwater Execution Strategy
HEADWATER EXECUTION STRATEGY Q3 2021 – Q1 2022 2022 + ▪ Commissioning of gas ▪ Continue core acreage plant and gas gathering development and EOR system in core area Q3 implementation to get 2021 to sustainable production base of ▪ Commissioning of 15,000 13,000-14,000 boe/d bbls/d oil battery in cor
Slide 11: Clearwater Regional Map
CLEARWATER REGIONAL MAP Clearwater Competitor Map (1) Clearwater Net Pay Map (2) Headwater lands are located in the heart of the Marten Hills fairway with net pay >20m See Slide Notes and Advisories 10
Slide 12: 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, debt an attractive alternative that will to the Clearwater, a unique high adjusted funds flo
Slide 13: Appendix
Headwater Exploration Inc. Appendix TSX:HWX
Slide 14: 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 25,000 decline since intermittent New Brunswick 20,000 production implemented is MNP pipeline 4.2% per year Production mcfd
Slide 15: Nipisi EOR Projects
NIPISI EOR PROJECTS Spur Nipisi Section 31-076-06W5 Spur Nipisi Polymer Flood 31-76-06W5 • Dual leg producer • 4 leg producer • Single leg injector • Single leg injector • Lateral flood • Lateral flood • Injecting at ~ 55 bbls/day (<1 VRRi) • Injecting water at ~ 90 bbls/day (<1 VRRi) • Gas-Oil-Rati
Slide 16: EOR Analogy
EOR ANALOGY Pelican LakeSummary versus Marten Hills • Pelican Lake analyzed as Marten Hills Clearwater analog • 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 17: 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 18: CVE Transaction Overview
CVE TRANSACTION OVERVIEW Unique Mutually Beneficial Transaction With Cenovus Asset Attributes ▪ 270 net sections of Clearwater rights at 100% working interest ▪ 2020 average December production of 2,900 bbls/d located in the most prolific part of the Clearwater play at Marten Hills ▪ Proved plus pro
Slide 19: Slide Notes
SLIDE NOTES Slide 1 1. Basic shares outstanding consists of 195.6 million common shares of Headwater (“Headwater Shares”) as at April 6, 2021. Fully diluted shares outstanding assumes 100% exercising of the Cenovus purchase warrants (15 million outstanding at a strike price $2.00/share), 100% vestin
Slide 20: Slide Notes
SLIDE NOTES Slide 13 1. P+P producing RLI is calculated by dividing the P+P producing reserves by the average annual production for 2020. 2. As at December 31, 2020 3. Headwater has made the following assumptions: an average NYMEX Henry Hub price of US$2.77/mmbtu, an average AGT price of US$4.36/mmb
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"). More particularly, this investor presentation contains forward-looki
Slide 22: Forward Looking Statements Advisory
ADVISORIES Forward Looking Statements Advisory Additional information on these and other factors that could affect Headwater's operations and financial are included in its Annual Information Form for the year ended December 31, 2020 and other reports on file with Canadian securities regulatory autho
Slide 23: 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", “adjusted funds flow from operations (“AFFO”)“, “adjusted funds flow netback”, “free cash flow”, “adjusted working capital”, “operating c
Slide 24: Certain Oil and Gas Advisories
ADVISORIES Certain Oil and Gas Advisories ANALOGOUS INFORMATION Certain information in this investor presentation may constitute “analogous information” as defined in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), including, but not limited to, informa
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