Headwater Exploration (HWX) Corporate presentation summary

Strategic focus and operational highlights

• Achieved over 650% oil production growth since December 2020, with current recovery under 1% of OOIP and significant new discoveries in Grand Rapids and Wabiskaw formations.

• Maintenance capital has decreased by 30% since 2022, now less than 30% of cash flow at $60 WTI, supporting sustainable production growth of 5-10% annually.

• No equity raised or debt incurred since Q1 2020, with cumulative dividends of $1.34/share and a current yield of ~4%.

• Opportunistic NCIB initiated in Q2 2025, with 1 million shares repurchased at $7.30/share.

• Decline rate forecasted below 20% by year-end 2026, targeting further reduction to ~15% by 2028.

Financial performance and capital allocation

• Projected to return ~40% of current EV in cumulative free cash flow by 2030 at $60 WTI, with maintenance capital forecasted at 24% of cash flow in 2028.

• Breakeven price estimated at $46 WTI (2026E), including maintenance capital and dividend.

• Capital allocation for 2026: 30% maintenance, 35% base dividend, 28% growth, and 7% for secondary recovery, exploration, and excess FCF.

• Since 2021, production grew from 3,900 to 24,250 boe/d, with 50% of current production under flood and $318MM returned to shareholders.

• Forward strategy includes 5-10% production growth, $50MM/year spend, and continued inventory replacement above depletion rate.

Asset base, reserves, and exploration

• Year-end 2025 TPP reserves grew 54% YoY, with a 4-year CAGR of 45% in TPP reserves and 18% in PDP RLI.

• Waterflood investment has reduced base decline and maintenance capital, with Marten Hills Core waterflood achieving first full-cycle payout in 2025.

• Exploration since 2021 (excluding Marten Hills Core) invested $173MM, returned $650MM in NOI, and increased OOIP from 1,300 MMbbl to over 7,000 MMbbl.

• Over 1 Bbbl of OOIP discovered in the past 2 years, with significant secondary recovery potential and new pilots in Grand Rapids, Clearwater, and Wabiskaw.

• Land base expanded to over 800 net sections, supporting >10 years of inventory and future secondary recovery expansion.