Headwater Exploration (HWX) investor relations material

Executive summary

• Achieved record average production of 24,259 boe/d in Q4 2025, up 13% year-over-year, and 22,776 boe/d for the full year, up 12% year-over-year.

• Net income for Q4 2025 was $29.3 million ($0.12 per basic share); full-year net income was $153.2 million ($0.64 per basic share).

• Returned $0.44 per share ($104.7 million) in dividends for 2025 and repurchased 1.05 million shares for $7.7 million.

• No outstanding bank debt at year-end; adjusted working capital stood at $23.6 million.

Financial highlights

• Q4 2025 adjusted funds flow from operations was $79.3 million ($0.33 per basic share); full-year was $326.2 million ($1.37 per basic share).

• Q4 2025 operating netback (including financial derivatives) was $41.14/boe; full-year was $45.22/boe.

• Capital expenditures totaled $46.1 million in Q4 and $228.3 million for the year.

• Q4 2025 sales, net of blending expense, were $145.3 million; full-year sales were $593.8 million.

• Q4 2025 dividends declared were $0.11 per share; full-year dividends were $0.44 per share.

Outlook and guidance

• Plans to drill up to 15 additional Grand Rapids wells and commission 2 more sections of secondary recovery in 2026.

• Expects 14,000 bbls/d (60% of oil production) to be supported by secondary recovery by year-end 2026.

• Anticipates $25 million in exploration spending in 2026, testing multiple new play concepts.

• Maintains a strong balance sheet and flexible budget to adapt to market conditions.