CALGARY,
AB, Jan. 6, 2025 /CNW/ - Headwater
Exploration Inc. (the "Company" or
"Headwater") (TSX: HWX) is pleased to report fourth
quarter average production volumes of approximately 21,500 BOE/d
and significant land expansion in the Clearwater fairway.
Greater Pelican Area
Headwater is excited to announce a new partnership with the
Bigstone Cree Nation ("BCN"). A new farmout agreement
supported by the Chief and Council of the BCN contemplates
Headwater drilling up to four commitment wells with commensurate
bonus payments paid by the Company, which would result in Headwater
earning leases across 34.5 sections of highly prospective land in
the Greater Pelican area. The agreement is subject to final IOGC
(as defined below) regulatory approval. Headwater has started the
surface land acquisition process and is anticipating drilling our
first multi-lateral earning well, targeting the Wabiskaw formation
late in the first quarter of 2025.
In addition, Headwater has successfully acquired 23 sections of
land in the Greater Pelican area through crown land sales which
offset the lands accessed through the Bigstone Cree Nation
agreement.
The Headwater team has identified multiple prospective horizons
within the newly acquired 57.5 section Greater Pelican area and
plans to test 2-3 of the prospects within the 2025 calendar
year.
Greater Peavine Area
Headwater has successfully closed on a 10 section land
acquisition in the Greater Peavine area. The new lands, which
offset our core Seal lands, offer targets in the multi-zone
Falher and Bluesky formations. With the newly acquired
lands, Headwater now has 65 net sections of land in the Greater
Peavine area.
Land Acquisition and Exploration
The Headwater team continues its pursuit of organic growth
opportunities having accumulated 193 sections of land in the 2024
calendar year. Headwater now has over 600 sections of land within
the Clearwater fairway in addition
to 192 sections of non-Clearwater
acreage in oily fairways across the basin.
Headwater expects to spend approximately $25 million on exploration drilling in 2025
testing 5-7 new play concepts and 8-10 follow up tests on plays
discovered in 2024.
Additional corporate information can be found in the Company's
corporate presentation and on Headwater's website at
www.headwaterexp.com.
FORWARD LOOKING STATEMENTS: This press release contains
forward-looking statements. The use of any of the words "guidance",
"initial, "anticipate", "scheduled", "can", "will", "prior to",
"estimate", "believe", "potential", "should", "unaudited",
"forecast", "future", "continue", "may", "expect", "project", and
similar expressions are intended to identify forward-looking
statements. The forward-looking statements contained herein,
include, without limitation, the terms of the agreement with
Bigstone Cree Nation; the expectation of being able to drill four
commitment wells to earn leases across 34.5 sections of highly
prospective land in the Greater Pelican Lake area; the timing for
receiving regulatory approval for the agreement with the Bigstone
Cree Nation from Indian Oil and Gas Canada ("IOGC"); the
anticipated timing for drilling the first well targeting the
Wabiskaw formation; the anticipated prospective horizons within the
newly acquired 57.5 section Greater Pelican area; the Company's
plans to test 2-3 of the prospects in the Greater Pelican area
within the 2025 calendar year; the anticipated targets in the
multi-zone Falher and Bluesky formations in the Greater Peavine
area; and the Company's plans to spend approximately $25 million on exploration drilling in 2025
testing 5-7 new play concepts and 8-10 follow up tests on plays
discovered in 2024. The forward-looking statements contained herein
are based on certain key expectations and assumptions made by the
Company, including but not limited to expectations and assumptions
concerning obtaining approvals from IOGC, the ability to obtaining
surface rights for drilling in the Greater Pelican area, the
Company and all counterparties will satisfy their obligations under
contracts, the success of optimization and efficiency improvement
projects, the availability of capital, current legislation, receipt
of required regulatory approvals, the success of future drilling,
development and waterflooding activities, the performance of
existing wells, the performance of new wells, Headwater's growth
strategy, general economic conditions, availability of required
equipment and services, prevailing equipment and services costs,
prevailing commodity prices and certain other guidance assumptions.
Although the Company believes that the expectations and assumptions
on which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because the Company can give no assurance that they will
prove to be correct. Since forward-looking statements address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to, risks in
receiving all regulatory approvals, including from the IOGC, for
its operations, risks that counterparties will not satisfy
contractual obligations, risks associated with the oil and gas
industry in general (e.g., operational risks in development,
exploration and production; the risks of political events and
policies impacting the oil and gas industry and the Company; the
Russian-Ukrainian war and the middle eastern conflicts and the
impact on the global economy and commodity prices; the impacts of
inflation and supply chain issues and steps taken by central banks
to curb inflation; pandemics and other major health events, war,
terrorist events, political upheavals and other similar events;
events impacting the supply and demand for oil and gas including
actions taken by the OPEC + group; delays or changes in plans with
respect to exploration or development projects or capital
expenditures; the uncertainty of reserve estimates; the uncertainty
of estimates and projections relating to production, costs and
expenses, and health, safety and environmental risks), commodity
price and exchange rate fluctuations, changes in legislation
affecting the oil and gas industry and uncertainties resulting from
potential delays or changes in plans with respect to exploration or
development projects or capital expenditures. Refer to Headwater's
Annual Information Form dated March 7,
2024, on SEDAR+ at www.sedarplus.ca, and the risk factors
contained therein.
BARRELS OF OIL AND CUBIC FEET OF NATURAL GAS EQUIVALENT: The
term "boe" (or barrels of oil equivalent) and "Mcf" (or thousand
cubic feet of natural gas equivalent) may be misleading,
particularly if used in isolation. A boe and Mcf conversion ratio
of six thousand cubic feet of natural gas to one barrel of oil
equivalent (6 Mcf: 1 bbl) is based on an energy equivalency
conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead. Additionally,
given that the value ratio based on the current price of crude oil,
as compared to natural gas, is significantly different from the
energy equivalency of 6:1; utilizing a conversion ratio of 6:1 may
be misleading as an indication of value.
PRODUCTION VOLUMES: With respect to the 2024 fourth
quarter production volumes presented herein, such volumes
are comprised of: 20,300 bbls/d of heavy oil, 30 bbls/d of
natural gas liquids and 7.0 mmcf/d of natural gas.
SOURCE Headwater Exploration Inc.
