Headwater Exploration (HWX) Corporate Presentation summary

Financial and operational highlights

• 2025 guidance targets average daily production of 22,250 boe/d, with $150M in maintenance and growth capital and $25M for exploration testing 5-7 new play concepts.

• Quarterly dividend increased by 10% to $0.11/share, with approval for a normal course issuer bid for share buybacks.

• 2025 free cash flow yield projected at 25% at US$70 WTI, with resilient free cash flow and downside protection at US$60 WTI.

• Maintenance capital requirements remain below 40% of funds flow at US$70/bbl WTI, supporting sustainability.

• Adjusted working capital at Q1 2025 exit is $63.6M, with a strong balance sheet for strategic opportunities.

Asset base and resource expansion

• Clearwater land holdings exceed 600 net sections, with over 190 net sections of non-Clearwater lands.

• 6,000 MMbbl of identified OOIP, with 68 MMbbl of total proved plus probable reserves booked at year-end 2024.

• 44% compound annual growth in PDP reserves and 222% in secondary recovery supported reserves over three years.

• Marten Hills West and Core areas have significant secondary recovery, with 50% of corporate oil production expected to be supported by year-end 2025.

• Over 20 years of identified drilling inventory, with inventory doubling in the last two years through organic exploration.

Secondary recovery and enhanced oil recovery

• Secondary recovery supports 90% of Marten Hills Core and multiple sections in Marten Hills West and Clearwater E.

• 2024 year-end proved plus probable reserves associated with secondary recovery are 23.3 MMboe.

• Secondary recovery has reduced corporate decline by 5-7%, lowering maintenance capital by ~$25M.

• Analog reservoirs show potential to double recovery factor, returning 4x invested capital at US$70 WTI.

• Waterflood expansion in Marten Hills West and Clearwater Sandstone continues, with additional pilots and sections planned for 2025.