Private Equity | Reserves | Capital Markets

HighPeak Energy's Proved Reserves Jump 96% in 2020

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   |    Tuesday,February 09,2021

HighPeak Energy, Inc. announced its 2020-year end proved reserves (prepared by Cawley, Gillespie & Associates, Inc.).

As of December 31, 2020:

• Estimated proved reserves increased 96% to 22.5 MMBoe consisting of 84% oil, 6% natural gas and 10% natural gas liquids vs. 2019

• Proved developed reserves increased 107% to 10.3 MMBoe and were 46% of the Company's total proved reserves

The Company's PV-10 was $235 million at year end 2020, an increase of 67%, compared with $141 million at year end 2019. 2020 SEC pricing was $39.57 per barrel of oil and $1.985 per MMBtu of natural gas, before adjustments for price differentials, down 29% and 23% respectively compared with 2019 SEC pricing.

Natural gas liquids realized pricing for the 2020 proved reserve report was $12.27 per barrel, down 42% compared with $21.17 per barrel pricing used in the 2019-year end reserve report.

Using flat pricing of $57.00 per barrel of oil and $3.00 per MMBtu of natural gas, before adjustments for differentials, and an estimated realized price of $17.67 per barrel of natural gas liquids, 2020-year end proved reserves are estimated to be 23.3 MMBoe of which 46% are proved developed. Under this price case, the Company's PV-10 reserve value increases to $426 million including $260 million for proved developed reserves.

HighPeak Energy Chairman and Chief Executive Officer, Jack Hightower, said, "Our proved reserves almost doubled from last year despite suspending our capital program for six months due to COVID-19 issues and related low commodity prices. At the time we paused our capital program, there were 12 wells which had been drilled but not yet completed. By the end of January 2021, all 12 wells plus two (2) additional wells drilled in the fourth quarter were completed and are producing at our expectations providing a steep production ramp that we expect to continue through the end of the first quarter of 2021."

Mr. Hightower continued, "Our year end estimated PV-10 of $260 million for proved developed reserves at $57.00 per barrel and $3.00 per MMBtu, adjusted for differentials, includes 24 horizontal wells. By the end of the 2021 first quarter, we expect to have another four (4) horizontal wells drilled, completed and online plus five (5) horizontal wells in various stages of completion, substantially increasing our reserve value. As we continue to drill and complete wells throughout the year, we anticipate that our production and reserves will continue to increase. Fourth quarter production averaged approximately 3,300 barrels equivalent per day. Production for late January and early February is averaging over 6,000 barrels equivalent per day meeting our well performance expectations and our production continues to increase."

HighPeak Energy President, Michael L. Hollis, added, "We continue to improve our capital efficiency with drill and complete (D&C) costs reduced to approximately $400 per lateral foot and the all-in well costs including drilling, completing, facilitating and equipping our wells was approximately $505 per lateral foot for the last ten wells turned on to production."

Mr. Hollis continued, "We have also completed the buildout of the first phase of our Company-owned and operated water handling and disposal system. The system is currently processing produced water and disposing water into our 100% Company owned horizontal Ellenburger saltwater disposal well. We anticipate completing the buildout of the second phase of the system by the end of the third quarter of 2021. Also, we posted an updated investor presentation to our website at www.highpeakenergy.com that outlines our activities since August 2020 and many key factors that will contribute to HighPeak's ongoing success."