CALGARY,
AB, May 12, 2022 /CNW/ - Headwater Exploration
Inc. (the "Company" or "Headwater") (TSX:HWX) is
pleased to announce increased guidance and its operating
and financial results for the three months ended March 31, 2022. Selected financial and
operational information is outlined below and should be read in
conjunction with the unaudited interim condensed financial
statements and the related management's discussion and analysis
("MD&A"). These filings will be available at
www.sedar.com and the Company's website at
www.headwaterexp.com.
Financial and Operating
Highlights
|
Three months
ended
March 31,
|
|
Percent
Change
|
|
2022
|
2021
|
|
Financial
(thousands of dollars except share data)
|
|
|
|
|
Total sales, net of
blending (1) (4)
|
110,022
|
23,122
|
|
376
|
Adjusted funds flow
from operations (2)
|
70,023
|
14,479
|
|
384
|
Per share - basic
|
0.32
|
0.07
|
|
357
|
- diluted
|
0.30
|
0.07
|
|
329
|
Cash flows provided by
operating activities
|
60,689
|
12,783
|
|
375
|
Per share - basic
|
0.27
|
0.07
|
|
286
|
- diluted
|
0.26
|
0.07
|
|
271
|
Net income
(loss)
|
42,363
|
(12,793)
|
|
(431)
|
Per share - basic
|
0.19
|
(0.07)
|
|
(371)
|
- diluted
|
0.18
|
(0.07)
|
|
(357)
|
Capital
expenditures (1)
|
81,957
|
37,272
|
|
120
|
Adjusted working
capital (2)
|
80,072
|
58,367
|
|
37
|
Shareholders'
equity
|
441,148
|
257,461
|
|
71
|
Weighted average
shares (thousands)
|
|
|
|
|
Basic
|
221,209
|
195,322
|
|
13
|
Diluted
|
234,265
|
195,322
|
|
20
|
Shares outstanding, end
of period (thousands)
|
|
|
|
|
Basic
|
223,727
|
195,574
|
|
14
|
Diluted
(5)
|
241,688
|
240,456
|
|
1
|
Operating
(6:1 boe conversion)
|
|
|
|
|
|
|
|
|
|
Average daily
production
|
|
|
|
|
Heavy crude
oil (bbls/d)
|
10,602
|
3,385
|
|
213
|
Natural
gas (mmcf/d)
|
10.8
|
8.5
|
|
27
|
Natural gas
liquids (bbls/d)
|
7
|
5
|
|
40
|
Barrels of oil
equivalent (9)
(boe/d)
|
12,414
|
4,805
|
|
158
|
|
|
|
|
|
|
|
|
|
|
Average daily
sales (6) (boe/d)
|
12,398
|
4,768
|
|
160
|
|
|
|
|
|
Netbacks
($/boe) (3) (7)
|
|
|
|
|
Operating
|
|
|
|
|
Sales, net of
blending (4)
|
98.60
|
53.89
|
|
83
|
Royalties
|
(15.09)
|
(5.49)
|
|
175
|
Transportation
|
(4.90)
|
(6.04)
|
|
(19)
|
Production
expenses
|
(5.77)
|
(5.62)
|
|
3
|
|
|
|
|
|
Operating
netback (3)
|
72.84
|
36.74
|
|
98
|
Realized losses on financial
derivatives
|
(3.54)
|
(1.28)
|
|
177
|
Operating
netback, including financial derivatives (3)
|
69.30
|
35.46
|
|
95
|
General and administrative
expense
|
(1.48)
|
(1.97)
|
|
(25)
|
Interest income and other
expense (8)
|
0.14
|
0.26
|
|
(46)
|
Current tax
expense
|
(5.21)
|
-
|
|
100
|
Adjusted funds
flow netback
(3)
|
62.75
|
33.75
|
|
86
|
|
|
(1)
|
Non-GAAP measure.
Refer to "Non-GAAP and Other Financial Measures" within this press
release.
|
(2)
|
Capital management
measure. Refer to "Non-GAAP and Other Financial Measures" within
this press release.
|
(3)
|
Non-GAAP ratio.
Refer to "Non-GAAP and Other Financial Measures" within this press
release.
|
(4)
|
Heavy oil sales are
netted with blending expense to compare the realized price to
benchmark pricing while transportation expense is shown separately.
In the interim financial statements blending expense is recorded
within blending and transportation expense.
|
(5)
|
In-the-money
dilutive instruments as at March 31, 2022 includes 9.4 million
stock options with a weighted average exercise price of $2.38 and
8.6 million warrants issued pursuant to the recapitalization
transaction in March 2020 with an exercise price of
$0.92.
|
(6)
|
Includes sales of
unblended heavy crude oil, natural gas and natural gas liquids. The
Company's heavy crude oil sales volumes and production volumes
differ due to changes in inventory.
|
(7)
|
Netbacks are
calculated using average sales volumes. First quarter 2022 sales
volumes comprised of 10,587 bbs/d of heavy oil, 10.8 mmcf/d of
natural gas and 7 bbls/d of natural gas liquids. First quarter 2021
sales volumes comprised of 3,347 bbs/d of heavy oil, 8.5 mmcf/d of
natural gas and 5 bbls/d of natural gas liquids.
|
(8)
|
Excludes unrealized
foreign exchange gains/losses, accretion on decommissioning
liabilities and interest on lease liability.
|
(9)
|
See '"Barrels of Oil
Equivalent."
|
FIRST QUARTER 2022 HIGHLIGHTS
- Production averaged 12,414 boe/d (consisting of 10,602 bbls/d
of heavy oil, 10.8 mmcf/d of natural gas and 7 bbls/d of natural
gas liquids) representing an increase of 158% from the first
quarter of 2021.
- Added 98 net sections of unburdened lands in the Greater
Peavine area of the Clearwater
play establishing the Company's next exploration focus area.
- Realized record adjusted funds flow from operations
(1) of $70.0 million
($0.32 per share basic).
- Achieved our highest net income in the Company's history of
$42.4 million ($0.19 per share basic) representing $37.96 per boe.
- Achieved record operating netback (2) of
$72.84/boe and an adjusted funds flow
netback (2) of $62.75/boe.
- Executed an $82.0 million capital
expenditure (3) program. The Company drilled 26 crude
oil wells inclusive of 7 exploration and step-out wells in Marten
Hills West at a 100% success rate.
- As at March 31, 2022, Headwater
had adjusted working capital (1) of $80.1 million, working capital of $77.1 million, and no outstanding debt.
(1)
|
Capital management
measure. Refer to "Non-GAAP and Other Financial Measures" within
this press release.
|
(2)
|
Non-GAAP ratio that
does not have any standardized meaning under IFRS and therefore may
not be comparable with the calculation of similar measures of other
entities. Refer to "Non-GAAP and Other Financial Measures" within
this press release.
|
(3)
|
Non-GAAP measure. Refer
to "Non-GAAP and Other Financial Measures" within this press
release.
|
2022 Guidance Update
Headwater's Board of Directors (the "Board") has approved
an increase in the 2022 capital budget (1) from
$145 million to $230 million. The increased expenditures
include revised capital allocations as follows:
- Greater Peavine $50 million
- Marten Hills West $70 million
- Marten Hills
$110 million
The accelerated capital includes $30
million of land expenditures, 20 incremental wells and
$30 million of incremental road and
drilling pad construction. The incremental road and drilling
pads constructed in the second half of 2022 will provide Headwater
the ability to drill 150 incremental wells in 2023 and beyond with
minimal construction expense. Incorporated within the budget
increase is an additional 10% increase in drilling, completion and
equipping costs to account for inflationary pressures in service
costs.
With Headwater's substantial pre-planning, we continue to
operate one drilling rig throughout break-up and will have two
additional drilling rigs operational before the end of the second
quarter. The extensive road and pad construction contemplated
in the revised budget will begin in early July, allowing a fourth
drilling rig to be added to our program in October. All four
of the rigs are expected to continue operations for Headwater
throughout 2023.
The increased 2022 capital is expected to have a significant
impact on 2023 production levels. Headwater's
updated 2022 guidance is summarized below along with a comparison
to previous guidance published as of March
10, 2022:
|
Previous
2022
Guidance
|
Revised
2022
Guidance
|
|
|
|
2022 annual production
(boe/d) (1)
|
12,500
|
13,000
|
2022 fourth quarter
(boe/d) (2)
|
15,000
|
16,500
|
|
|
|
Capital expenditures
(3)
|
$145 million
|
$230 million
|
Adjusted funds flow
from operations (4)
|
$259 million
|
$305 million
|
Exit adjusted working
capital (4)
|
$207 million
|
$170 million
|
|
|
(1)
|
March 10, 2022, annual
production guidance comprised of: 11,500 bbls/d of heavy oil and
6.2 mmcf/d of natural gas. May 12, 2022, annual production guidance
comprised of: 11,900 bbls/d of heavy oil and 6.8 mmcf/d of natural
gas.
|
(2)
|
March 10, 2022, fourth
quarter production guidance comprised of: 13,770 bbls/d of heavy
oil and 7.4 mmcf/d of natural gas. May 12, 2022, fourth quarter
production guidance comprised of: 15,200 bbls/d of heavy oil and
7.9 mmcf/d of natural gas.
|
(3)
|
Non-GAAP measure. Refer
to "Non-GAAP and Other Financial Measures" within this press
release.
|
(4)
|
Capital management
measure. Refer to "Non-GAAP and Other Financial Measures" within
this press release.
|
(5)
|
For assumptions
utilized in the above guidance see "Future Oriented Financial
Information" within this press release.
|
Greater Peavine Exploration Area
Headwater has continued to be active with our land expansion
strategy. Since January 1,
2022, we have been successful at adding 98 net sections of
unburdened exploration lands in the Greater Peavine area.
The team is extremely excited about the prospectivity of the new
land base. Headwater has identified more than 10 distinct
prospects on the acreage and are actively preparing to test the
prospects with our fourth quarter drilling campaign.
The Company's revised guidance will see approximately
$50 million dedicated to this area in
2022. The revised guidance includes $30 million of land expenditures and contemplates
the drilling of up to 8 wells, testing 8 of the currently
identified prospects. A significant portion of allocated
capital expenditures to this area are for construction of area
roads and drilling pads resulting in the ability to drill an
additional 50 wells in the area with minimal civil
construction.
With success, this new exploration focus area is expected to
provide an additional material leg of long-term growth for
Headwater.
Marten Hills West Update
We have continued to experience exceptional success in both the
Clearwater A and Clearwater B formations in the Marten Hills
West area. As such, the Board has approved incremental
expenditures to accelerate development. Headwater's revised
guidance contemplates $70 million of
capital expenditures for the area in 2022. Year to date, Headwater
has drilled 9 wells and anticipates drilling 22 further locations
over the balance of the year. A significant amount of road
and pad construction dollars are being spent in 2022 that provide
us the ability to drill the next 100 wells in 2023 and beyond with
minimal civil construction.
Recent wells results are as follows:
Well
UWI
|
Zone
|
Initial Production
("IP")
(Producing Days)
(1)
|
Average
Rate
(bbls/d)
|
00/14-05-076-02W5
|
Clearwater A
|
IP-23
|
395
|
02/14-05-076-02W5
|
Clearwater A
|
IP-14
|
315
|
02/14-07-076-02W5
|
Clearwater A
|
IP-14
|
285
|
00/13-07-076-02W5
|
Clearwater A
|
IP-35
|
245
|
00/09-34-075-03W5
|
Clearwater B
|
IP-60
|
145
|
02/08-34-075-03W5
|
Clearwater A
|
IP-42
|
95
|
|
|
(1)
|
IP rates indicate the
days the well is on production post load recovery.
|
The success of the recent drilling campaign has resulted in area
production growing from 70 bbls/d in September of 2021 to an
average of 1,350 bbls/d in April of 2022.
Marten Hills Update
Initial production rates from our latest area wells have been
consistent with an average post load recovery 30-day production
rate of approximately 300-400 bbls/d. Area production continues to
grow, with current rates of approximately 10,500-11,000 boe/d.
Headwater's oil processing facility is now fully commissioned
resulting in reduced oil transportation costs. Cost savings,
partially realized in the first quarter, will be fully realized in
the second quarter of 2022, resulting in annual corporate
transportation expenses of approximately $4.00 per boe.
Headwater's revised guidance will see approximately $110 million dedicated to this area in
2022. This is approximately $20
million greater than our initial guidance, providing
incremental capital to accelerate implementation of secondary
recovery.
Secondary recovery continues to ramp in the field with
approximately 15% of the Marten Hills area now under
waterflood. The accelerated capital allocation in 2022 will
result in 25% of the field under secondary recovery by the third
quarter of 2022 and 55% of the field being under secondary recovery
by the end of the first quarter of 2023. Results from
currently implemented secondary recovery continue to be very
encouraging with decreasing gas oil ratios and stabilized oil
rates.
McCully Update
The Company's McCully asset performed strongly throughout the
first quarter of 2022, contributing $9.5
million in adjusted funds flow from operations
(1). Consistent with prior years and to optimize
adjusted funds flow from operations (1), Headwater
shut-in production May 1, 2022, to
await next winter's premium pricing season which is currently
forecast at >Cdn$30/mcf.
(1)
|
Capital management
measure. Refer to "Non-GAAP and Other Financial Measures" within
this press release.
|
Outlook
Our business continues to evolve with a very strong growth
outlook for the foreseeable future. Our successful land
expansion strategy will be tested with exploration drilling in the
fourth quarter of 2022. When combined with the success we
have already witnessed with our historical exploration and
development strategy we anticipate a very strong and profitable
future. The significant growth, land expansion and exploration
continue to occur, while spending less than our cash flow in
2022.
Headwater's guiding principles of shareholder value creation,
sustainability, asset development with an emphasis on
environmental, social, and governance goals, and maintaining a
pristine balance sheet continue to be unwavering.
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, 2022 revised guidance related to
expected full-year and fourth quarter average daily production,
capital expenditures and the breakdown thereof, adjusted funds flow
from operations and adjusted working capital; the ability to drill
150 incremental wells in 2023 and beyond with minimal construction
expense; the expectation that Headwater will operate one drilling
rig through beak-up and expect to have two drilling rigs
operational by the middle of June; the expectation to have a fourth
drilling added to the program in October and that all four rigs
will continue operations for Headwater through to the end of the
first quarter 2023; the expectation that 2022 capital will have
significant impact on 2023 production levels; expected details of
the 2022 capital expenditure program by area; the expectation that
capital allocated to the Greater Peavine area for construction of
roads and pads will result in the ability to drill the next 50
locations with minimal civil construction; the expectation the new
exploration focus area is anticipated to provide an additional
material leg of long-term growth for Headwater; the expectation to
drill 22 wells over the remainder of 2022 in Marten Hills West; the
expectation that civil expenditures in Marten Hills West
contemplated in 2022 will provide the ability to drill the next 100
wells in 2023 and beyond with minimal civil construction; the
expectation incremental capital will allow for the acceleration of
secondary recovery; the expectation that transportation savings
from the commissioning of the Company's oil processing facility
will be fully realized in the second quarter of 2022 and will
result in annual corporate transportation costs of $4.00/boe; the expectation the accelerated
capital allocation in 2022 will result in 25% of the field under
secondary recovery by the third quarter of 2022 and 55% of the
field under secondary recovery by the end of the first quarter of
2023; the expectation the land expansion strategy will be tested
with exploration drilling in the fourth quarter of 2022; the
expectation of future pricing realized in McCully; the expectation
to have a very strong and profitable future and the expectation to
generate significant free cash flow and the expectation that
Headwater will spend less than cash flow in 2022. 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 the success
of optimization and efficiency improvement projects, the
availability of capital, current legislation, receipt of required
regulatory approval, 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 as detailed
below under the heading "Future Oriented Financial
Information" in the MD&A available on SEDAR at www.sedar.com.
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
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production;
disruptions to the Canadian and global economy resulting from major
public health events, including the Russian-Ukrainian war 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; COVID-19 pandemic, war, terrorist events,
political upheavals and other similar events; events impacting the
supply and demand for oil and gas including the COVID-19 pandemic
and 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
most recent Annual Information Form dated March 10, 2022, on SEDAR at www.sedar.com, and
the risk factors contained therein.
FUTURE ORIENTED FINANCIAL INFORMATION: Any financial outlook
or future oriented financial information in this press release, as
defined by applicable securities legislation, has been approved by
management of the Company as of the date hereof. Readers are
cautioned that any such future-oriented financial information
contained herein should not be used for purposes other than those
for which it is disclosed herein. The Company and its management
believe that the prospective financial information as to the
anticipated results of its proposed business activities for 2022
has been prepared on a reasonable basis, reflecting management's
best estimates and judgments, and represent, to the best of
management's knowledge and opinion, the Company's expected course
of action. However, because this information is highly subjective,
it should not be relied on as necessarily indicative of future
results. The assumptions used in the revised 2022 guidance include:
WTI US$97.50/bbl, WCS Cdn$107.30/bbl, AGT US$15.90/mmbtu, foreign exchange rate of US$/Cdn$
of 0.78, blending expense of WCS less $2.50, royalty rate of 20%, operating and
transportation costs of $10.00/boe,
financial derivatives losses of $1.10/boe, cash taxes of $5.85/boe and G&A and interest income and
other expense of $1.40/boe. The AGT
price is the volume weighted average price for the winter producing
months in the McCully field which include January to April and
November to December.
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.
INITIAL PRODUCTION RATES: References in this press
release to IP rates, other short-term production rates or initial
performance measures relating to new wells are useful in confirming
the presence of hydrocarbons; however, such rates are not
determinative of the rates at which such wells will commence
production and decline thereafter and are not indicative of
long-term performance or of ultimate recovery. All IP rates
presented herein represent the results from wells after all "load"
fluids (used in well completion stimulation) have been recovered.
While encouraging, readers are cautioned not to place reliance on
such rates in calculating the aggregate production for the Company.
Accordingly, the Company cautions that the test results should be
considered to be preliminary.
NON-GAAP AND OTHER FINANCIAL MEASURES
In this press release, we refer to certain financial measures
(such as total sales, net of blending, capital expenditures and
free cash flow) which do not have any standardized meaning
prescribed by IFRS. Our determinations of these measures may not be
comparable with calculations of similar measures for other issuers.
In addition, this press release contains the terms adjusted funds
flow from operations and adjusted working capital, which are
considered capital management measures. The term cash flow in
this press release is equivalent to adjusted funds flow from
operations.
Non-GAAP Financial Measures
Total sales, net of blending
Management utilizes total sales, net of blending expense to
compare realized pricing to benchmark pricing. It is calculated by
deducting the Company's blending expense from total sales. In the
interim financial statements blending expense is recorded within
blending and transportation expense.
|
|
Three months ended
March 31,
|
|
|
|
2022
|
2021
|
|
|
(thousands of
dollars)
|
Total sales
|
|
|
119,262
|
25,492
|
Blending expense
|
|
|
(9,240)
|
(2,370)
|
Total sales, net of
blending expense
|
|
|
110,022
|
23,122
|
Capital expenditures
Management utilizes capital expenditures and capital
expenditures including acquisition to measure total cash capital
expenditures incurred in the period. Capital expenditures
represents capital expenditures – exploration and evaluation and
capital expenditures – property, plant and equipment in the
statement of cash flows in the Company's interim financial
statements.
|
|
Three months ended
March 31,
|
|
|
|
2022
|
2021
|
|
|
(thousands of
dollars)
|
Cash flows used in
investing activities
|
|
|
80,374
|
8,260
|
Restricted
cash
|
|
|
(5,000)
|
1,237
|
Change in non-cash
working capital
|
|
|
6,583
|
27,775
|
Capital
expenditures
|
|
|
81,957
|
37,272
|
Capital Management Measures
Adjusted Funds Flow from Operations
Management considers adjusted funds flow from operations to be a
key measure to assess the Company's management of capital. In
addition to being a capital management measure, adjusted funds flow
from operations is used by management to assess the performance of
the Company's oil and gas properties. Adjusted funds flow from
operations is an indicator of operating performance as it varies in
response to production levels and management of production and
transportation costs. Management believes that by eliminating
changes in non-cash working capital and deducting current income
taxes, adjusted funds flow from operations is a useful measure of
operating performance. While current income taxes will not be paid
until 2023, management believes adjusting for current income taxes
in the period incurred is a better indication of the funds
generated by the Company.
|
|
Three months ended
March 31,
|
|
|
|
2022
|
2021
|
|
|
(thousands of
dollars)
|
Cash flows provided by
operating activities
|
|
|
60,689
|
12,783
|
Changes in non–cash
working capital
|
|
|
15,150
|
1,696
|
Current income
taxes
|
|
|
(5,816)
|
-
|
Adjusted funds flow
from operations
|
|
|
70,023
|
14,479
|
Adjusted Working Capital
Adjusted working capital is a capital management measure which
management uses to assess the Company's liquidity.
|
|
|
March 31,
2022
|
December 31,
2021
|
|
|
|
|
|
(thousands of
dollars)
|
Working
capital
|
|
|
77,122
|
89,775
|
Financial derivative
receivable
|
|
|
(565)
|
(770)
|
Financial derivative
liability
|
|
|
3,515
|
3,924
|
Adjusted working
capital
|
|
|
80,072
|
92,929
|
Non-GAAP Ratios
Adjusted funds flow netback, operating netback and operating
netback, including financial derivatives
Adjusted funds flow netback, operating netback and operating
netback, including financial derivatives are non-GAAP ratios and
are used by management to better analyze the Company's performance
against prior periods on a more comparable basis. Adjusted funds
flow netback is defined as adjusted funds flow from operations
divided by sales volumes in the period.
Operating netback is defined as sales less royalties,
transportation and blending costs and production expense divided by
sales volumes in the period. The sales price, transportation and
blending costs, and sales volumes exclude the impact of purchased
condensate. Operating netback, including financial derivatives is
defined as operating netback plus realized gains on financial
derivatives.
Adjusted funds flow per share and net income per
share
Adjusted funds flow per share and adjusted net income per share
are non-GAAP ratios and are used by management to better analyze
the Company's performance against prior periods on a more
comparable basis. Adjusted funds flow per share and net income per
share are calculated as adjusted funds flow from operations or net
income divided by weighted average shares outstanding on a basic or
diluted basis.
Per boe numbers
This press release represents various results on a per boe basis
including Headwater average realized sales price, net of blending,
financial derivatives gains (losses) per boe, royalty expense per
boe, transportation expense per boe, production expense per boe,
general and administrative expenses per boe, interest income and
other expense per boe and current taxes per boe. These figures are
calculated using sales volumes.
SOURCE Headwater Exploration Inc.