Overview

* Headwater Q2 totalsales, net of blending expense falls 12% yr/yr, net income down 29%

* Company achieves record production of 22,235 boe/d, up 12% yr/yr

* Headwater declares quarterly cashdividend of C$0.11 per share

Outlook

* Company expects having 2,500 bbls/d oil production in Clearwatersandstone supported by year-end

* Headwater to implement polymer flood pilot in Greater Pelican in early 2026

* Company anticipates 25% of Marten Hills West oil volumes will be supported bysecondary recovery by year-end

Result Drivers

* NEW POOL DISCOVERIES - Exceptional results from exploration program with new pool discoveries in Grand Rapids formation in West Marten Hills and the Wabiskaw formation in Greater Pelican

* PRODUCTION INCREASE - Record production achieved with 22,235 boe/d, driven by increased drilling and exploration activities

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Net C$38.02

Income mln

Q2 Capex C$50.70

mln

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the oil & gas exploration and production peer group is "buy"

* Wall Street's median 12-month price target for Headwater Exploration Inc ( CDDRF ) is C$8.50, about 14% above its July 23 closing price of C$7.31

* The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)