Operational Updates

Hammerhead Resources Provides Operational Update

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   |    Tuesday,September 24,2019

Current production is over 28,000 boe/day, with a 42% weighting towards light oil and liquids.  Annual production is expected to average over 27,000 boe/day in 2018, representing a 40% increase over 2017 levels.  Since Riverstone’s initial investment in 2014, the Company has increased production at a compound annual growth rate of over 70%, with a substantial corresponding increase in cash flow and reserves.

Hammerhead continues to see strong well results in both Gold Creek and Karr, with the Company’s 2017 and 2018 wells performing above type curve in aggregate.  These results support an economic uplift from increased completion intensity, and continued refinement of HHR’s completion approach.

Further delineation of the Karr area has proved successful, with three additional Montney wells that are performing above type curve expectations. One of these wells has validated the multi-bench development potential across HHR’s land base.

Through the first half of 2018, HHR invested in infrastructure to support future growth and enhance operational reliability.  Combined with efficiency gains through pad drilling, the Company expects to see significant reductions in capital and operating costs, and improvements in netbacks while delivering material economic growth into 2019.  The Company believes it has secured sufficient oil and gas egress to various downstream markets to support the Company’s ongoing, high-growth development program.

Scott Sobie, CEO of Hammerhead, added: “Hammerhead is a leading Montney light oil producer.  We are encouraged by our operational results, and eager to continue demonstrating the development potential of our unconventional resource play.  This equity injection provides us with the capital to continue on a path of peer-leading growth, while maintaining capital discipline and a strong balance sheet. The continued support from Riverstone and other major shareholders re-affirms the strength of our relationship as well as their confidence in the quality of our assets and management team.”