Highwood Asset Management Ltd. announces transformational acquisitions, approximately $35 million marketed equity financing, and new credit facility – Energy News for the Canadian Oil & Gas Industry | EnergyNow.ca

The cash portion of the Acquisitions is anticipated to be funded primarily through a “best efforts” marketed offering of subscription receipts ‎expected to raise aggregate gross proceeds of approximately $35 million (the “Offering“) and a draw on a new $100 million reserve-based credit facility. Each subscription receipt represents the right of the holder to receive, upon closing of the Acquisitions, without payment of additional consideration, one unit of the Company, comprised of one common share and one-half of one common share purchase warrant.

Commenting on the Acquisitions, Joel MacLeod, Executive Chairman of Highwood said “We are extremely pleased with the opportunity to acquire high quality, low ARO (asset retirement obligation) assets with significant depth of inventory with sub 12-month payouts at a combined 2.2x EV to NTM Field NOI (See “Acquisition Metrics“) purchase multiple. Further, we believe having a clean capital structure with a low cost $100 million credit facility is a significant advantage for Highwood as we look to grow Highwood to 30,000+ boe/d. With an estimated initial leverage of approximately 1.2x on 2024E Adjusted EBITDA (See “Strategic Benefits“) and spending approximately 60% of anticipated cash flow to grow production over 25% while de-leveraging to approximately 0.9x by year-end 2024, we feel Highwood will be in a strong position to grow free cash flow per share over the next three to five years. Alignment with our shareholders is critical and insiders expect to increase our ownership over the next three to five years while offering liquidity to shareholders. These acquisitions are expected to provide a strong production and cash flow base as a platform for further consolidation of conventional oil and gas assets in the WCSB. The assets bring highly economic multi-lateral drilling inventory with anticipated relatively quick Payback Periods, which are expected to drive near-term growth while generating free cash flow.”

Completion of each of the Acquisitions is subject to customary closing conditions, including receipt of requisite regulatory approvals, and is conditional on closing of each of the other Acquisitions. The Company expects to complete the Acquisitions in the third quarter of 2023.

• The Acquisitions bring a combined ~4,500 boe/d (approximately 75% oil and natural gas liquids (“NGLs“)) of expected average production over the 12-month period commencing July 1, 2023 (“Next Twelve Months” or “NTM“) with before tax Proved Developed Producing (“PDP“) net present value discounted at a rate of 10% (“NPV 10“) of $166 million¹, NTM field net operating income (“NTM Field NOI“)² of $64 million, and 97 net drilling locations to sustain the acquired production for over 10 years³
• Highwood will focus on the utilization of multi-lateral well development to drive approximately 25% anticipated production growth to approximately 5,200 boe/d in 2024 on an expected capital program of approximately $11 million in the fourth quarter of 2023 and $40 million in 2024, while expecting to reduce Net Debt / 2024E EBITDA ‎to under 0.9x by year-end 2024⁴
• Upon completion of the Acquisitions, Highwood will be positioned as a growth focused oil-weighted producer with expected insider ownership of more than 50%, where insiders remain committed to supporting the Company’s long-term growth trajectory and prudent use of debt capital
• Highwood plans to grow its oil-weighted production to over 30,000 boe/d both organically and through the acquisition and development of undervalued, low-risk opportunities that support building a strong portfolio of cash flowing assets offering development upside
• The Acquisitions support Highwood’s strategy to become a premier, publicly traded, oil-weighted producer, while leveraging management’s expertise in drilling and deploying multi-lateral well technology with considerable inventory with Payback Periods of less than 12 months⁴

The following table summarizes the expected operating and financial performance ‎of the assets anticipated to be acquired by the Company pursuant to the Acquisitions for the Next Twelve Months.

The following table summarizes the Company’s forecasted operating and financial guidance for the 12-month period commencing July 1, 2023 and full year 2024 assuming ‎completion of the Acquisitions on July 1, 2023. See “Cautionary Note Regarding Forward-Looking Information“.‎‎

Highwood has entered into a share purchase agreement (the “Boulder Agreement“) to acquire all of the issued and outstanding shares of Boulder, a privately held oil and gas provider focused on light oil in Alberta, for aggregate consideration of $98 million, subject to a working capital adjustment (the “Brazeau Acquisition“). The Brazeau Acquisition is expected to close in the third quarter of 2023, subject to satisfaction of customary closing conditions and receipt of regulatory approvals. The $98 million consideration consists of:

• the issuance of such number of Common Shares by the Company to West Lake at the same price as the Offering ‎that would equal the lesser of: (i) $9 million; and (ii) such number of Common Shares that would equal ‎(but not exceed) 9.99% of the issued and outstanding Common Shares (on a ‎non-diluted basis) as at the closing date of the Acquisitions (the “Brazeau Equity ‎Consideration“);‎
• the issuance of an unsecured subordinated promissory note by the Company to West Lake (the “Boulder Note“) ‎in the principal amount equal to $23 million less (a) the dollar value of the Brazeau Equity Consideration; (b) the ‎dollar value, if any, by which the gross proceeds from the Offering and the Private Placement (as defined below) exceed $37.8 ‎million (up to $3 million) (the “Equity Overage Amount“); and (c) the dollar value, if any, by which the gross ‎proceeds from the Offering and the Private Placement exceed $45 million (up to $11 million) (the “Initial ‎Principal Amount“); provided that, the Initial Principal Amount shall never be less than $0. The Boulder Note is ‎expected to mature on July 1, 2025 ‎and to provide for payments, equal to 25% of the Initial Principal Amount, ‎commencing October 1, 2024 and thereafter ‎on ‎January 1, 2025, April 1, 2025 and July 1, 2025, with the ‎outstanding principal (if any) due in full on maturity‎. The Boulder Note will pay interest at 13% per annum payable ‎‎quarterly on October 1, 2024, January 1, 2025, April 1, 2025 and July 1, 2025; all payments/repayments (of both ‎principal and interest) under the Boulder Note are anticipated to be subject to certain terms and conditions under ‎the New Credit Agreement. If the gross proceeds of the Offering and the Private Placement are less than $40.8 ‎million, all obligations under the Boulder Note will also be fully and unconditionally personally guaranteed by Joel ‎MacLeod, the Executive ‎Chairman of the Company, in an amount limited to $3 million less the Equity Overage ‎Amount, plus costs and expenses of enforcement plus interest; and‎
• an estimated cash payment of $75 million on the closing date of the Acquisitions, such amount representing the ‎aggregate purchase price of $98 million, less the dollar value of each of the Brazeau Equity ‎Consideration (estimated to be $9 million) and the Boulder Note (estimated to be ‎‎$14 million). ‎

Upon completion of the Brazeau Acquisition, Highwood will acquire approximately 2,700 boe/d (~74% oil and NGLs) of low decline, capital efficient production, which is expected to generate Field Cash Flow of $34.91/boe resulting in NTM Field NOI of $35 million, implying a 2.8x Enterprise Value (“EV“)/Field NOI multiple.¹

Based on the Brazeau Reserves Report (as herein defined), the Brazeau Acquisition has a before-tax PDP NPV10 of $116 million, implying a 0.8x EV/PDP NPV10 multiple, and a before-tax Total Proved Plus Probable (“2P“) NPV10 of $320 million, implying a 0.3x EV/2P NPV10 multiple, with over 95,198 net acres of land in the Brazeau area of Alberta (the “Brazeau Assets“).² The focus of the Brazeau Assets is concentrated in the light oil Belly River Formation. The Brazeau Assets are located approximately 350 km northwest of Calgary. Highwood plans to utilize multi-lateral wells to grow production on the asset where the existing 12-09-48-14W5 multi-lateral well has produced over 140,000 bbls of oil over 15 months and had a Payback Period of approximately eight months.

Concurrent with the execution of the share purchase agreement in respect of the Brazeau Acquisition, the Company paid a ‎‎$2.0 million deposit to the vendor. The deposit was financed by a $2.8 million loan from 1080766 Alberta Ltd‎. (a ‎corporation which Joel MacLeod, Executive Chairman of the Company, has beneficial ownership and control, and which ‎currently owns approximately 67% of the issued and outstanding Common Shares) (“1080766“). The loan is non-‎convertible, unsecured and non-interest bearing and is due on demand. The loan is considered a “related party transaction” ‎‎(as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-‎‎101”)) and the Company relied upon the “Fair Market Value Not More Than 25% of Market Capitalization” exemption ‎from the minority shareholder approval requirements under MI 61-101. Subject to acceptance by the Toronto Venture Exchange (“TSX-V“), this loan will be repaid ‎from the proceeds of the Offering and is intended to be later re-invested pursuant to the Private Placement‎.

Highwood has entered into a share purchase agreement (the “Castlegate Agreement“), to acquire Castlegate, a privately held oil and gas producer focused on light oil in Alberta, for aggregate cash consideration of $36.7 million (the “Castlegate Acquisition“) (plus payment for $4.2 million of working capital), with Highwood expecting to assume an estimated $7.2 million of working capital on closing of the Castlegate Acquisition (assuming closing in the third quarter of 2023). All consideration payable under the Castlegate Acquisition shall be paid in full in cash on closing of the Castlegate Acquisition.

The Castlegate Acquisition is expected to close in the third quarter of 2023, subject to satisfaction of customary closing ‎conditions and receipt of regulatory approvals.‎

Upon completion of the Castlegate Acquisition, Highwood estimates that it will acquire approximately 1,400 boe/d (~85% oil and NGLs) of capital efficient production, which is expected to generate Field Cash Flow of $54.66/boe resulting in NTM Field NOI of $28 million, implying a 1.2x EV/ Field NOI multiple.¹

Based on the Castlegate Reserves Report (as herein defined), the Castlegate Acquisition has a before-tax PDP NPV10 of $40 million, implying a 0.8x EV/PDP NPV10 multiple, and a before-tax 2P NPV10 of $92 million, implying a 0.4x EV/2P NPV10 multiple, with over 10,660 net acres of land in the Wilson Creek area of Alberta (the “Castlegate Assets“).² Highwood looks to develop the asset with both multi-lateral well technology and stage fracked wells where the recent 102/06-04-43-05W5 well continues to produce over 650 boe/d after being on production for over 50 days. The focus of the Castlegate Assets is concentrated in the light oil Belly River Formation. The Castlegate Assets are located approximately 250 km northwest of Calgary.‎ ‎

Highwood has entered into a share purchase agreement (the “Shale Agreement“), to acquire all of the issued and outstanding shares of Shale, a privately held oil and gas provider focused on Cardium liquids-rich natural gas in Alberta, for aggregate consideration of $9 million, subject to a working capital adjustment (the “Shale Acquisition“). The Shale Acquisition is expected to close in the third quarter of 2023, subject to satisfaction of customary closing conditions and receipt of regulatory approvals.

Upon completion of the Shale Acquisition, Highwood will acquire approximately 300 boe/d (~37% oil and NGLs) of moderate decline, capital-efficient production, which is expected to generate NTM Field NOI of $0.4 million, implying a 18.2x EV/Field NOI multiple.^1,2 Based on the Shale Reserves Report, the Shale Acquisition has a before-tax PDP NPV10 of $10 million, implying a 0.7x EV/PDP NPV10 multiple¹, and a before-tax 2P NPV10 of $64 million, implying a 0.1x EV/2P NPV10 multiple¹, with over 27,125 net acres of land located in the Ricinus, Harmattan and Claresholm areas of Alberta (the “Shale Assets“).³ The focus of the Shale Assets is concentrated on the liquids-rich natural gas Fractured Enhanced Cardium Hale at Rincius (FECHAR). The Shale assets are located approximately 150 km northwest of Calgary.

The $9 million consideration for the Shale Acquisition will be paid by the issuance of Common Shares issued at the 20-trading-day trailing volume weighted average price (“VWAP“) on the TSX-V as determined on the last trading date immediately prior to the execution of the Shale Agreement. The VWAP for the period was approximately $7.05/share, resulting in approximately 1,277,030 Common Shares being issued from treasury.

Copies of the Boulder Agreement, Castlegate Agreement and Shale Agreement will be available on SEDAR at www.sedar.com.

• Significant free cash flow generation potential at a range of commodity prices
  • Low sustaining capital and capital efficiency drives free cash flow conversion at strip pricing
  • Self-funded growth plan on strip pricing with further upside potential on rising oil prices
• High netback oil-weighted assets with low capital efficiency
  • Ability to hold production flat for over 10 years of high confidence drilling inventory
  • Post-Acquisitions: 72 booked (63 unbooked) net drilling locations provide significant running room for development of assets⁽²⁾
• Prudent use of leverage has a material impact to driving outsized equity returns
  • Acquiring assets near all-time low cash flow multiples supported by traditional Canadian reserve-based credit facility
  • Initial leverage of approximately 1.2x is expected to be reduced to approximately 0.9x by year-end 2024 while growing production to over 5,000 boe/d^{‎(3)(4)(5)‎}
• Downside protected with low WTI Sustaining FCF Breakeven and commodity hedges
  • Expected Corporate FCF Breakeven of approximately US$44/bbl, including interest and growth capital, in 2024^(4)‎(6)‎
  • 65% net after royalty PDP production expected to insulate Highwood from downside commodity environment
• Committed management team with track record of creating value for shareholders
  • Management expected to own approximately 35% of the Common Shares post-Acquisitions
  • Deep technical expertise, including multi-lateral development, with approximately 75 years of combined experience
• Approximately $342 million of tax pools (approximately $113 million immediately deductible)⁽⁷⁾
  • Tax Horizon of >3 years at US$70/bbl WTI
  • Ability to increase pools with follow-on tuck in acquisitions

The cash consideration of the Acquisitions is anticipated to be primarily funded through proceeds from:

• The Offering — a “best efforts” marketed offering of Subscription Receipts with expected aggregate gross proceeds of approximately $35 million
• New Credit Facilities — up to $100 million senior secured reserve-based credit facilities, which will be drawn ‎to a maximum of $75 million, as further described below
• Private Placement — up to $2.8 million private placement of Units (as defined herein) upon, or substantially concurrent with, and conditional upon closing of the Acquisitions as further described below

The Company announced today that it commenced a “best efforts” marketed offering of approximately $35 million of Subscription Receipts led by RBC ‎Dominion Securities Inc. (“RBC“), Echelon Wealth Partners Inc. (“Echelon“), Raymond James Ltd. (“Raymond James” ‎and, collectively with RBC and Echelon, the “Co-Lead Agents“) on behalf of a syndicate of agents to be formed (collectively with the Co-Lead Agents, the “Agents“) for the issuance of approximately 5.8 million Subscription Receipts, at an anticipated issue price of $6.00 per Subscription Receipt.

Each subscription receipt (“Subscription Receipts“) represents the right of the holder to receive, upon closing of the Acquisitions, without payment of additional consideration, one unit of the Company (“Offered Unit“). Each Offered Unit is comprised of one Common Share of the Company (each a “Unit Share“) and one-half of one common share purchase warrant (each full warrant, a “Warrant“) with each Warrant exercisable into one Common Share (a “Warrant Share“). Each Warrant will be exercisable to acquire one Common Share at an anticipated price of $7.50 for a period of 36 months from the issuance date of the Warrants.

The gross proceeds of the Offering, less the portion of the agents’ fee that is payable on the closing of the Offering, will be held in escrow and intended to be used, in combination with the net proceeds of the approximately $2.8 million Private Placement, to partially fund the cash consideration payable in respect of the Acquisitions. If the Acquisitions do not close as described above by September 8, 2023 or if any of the Acquisitions are terminated at an earlier time, the gross proceeds of the Offering and pro rata entitlement to interest earned or deemed to be earned on the gross proceeds of the Offering calculated from the closing of the Offering to but excluding the termination date, net of any applicable withholding taxes, will be paid to holders of the Subscription Receipts and the Subscription Receipts will be cancelled.

1080766 intends to purchase an aggregate amount of up to ‎‎$2.2 million of Subscription Receipts pursuant to the Offering. Such purchase and sale is considered a “related ‎party transaction” (as defined under MI 61-101) and the Company intends to rely ‎upon the “Fair Market Value Not More Than 25% of Market ‎Capitalization” exemption from the formal valuation and minority ‎shareholder approval requirements, respectively, under MI 61-101.

The Offering is being made concurrently in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and New Brunswick pursuant to a prospectus supplement to the Company’s amended and restated short form base shelf prospectus dated May 19, 2023 for the Provinces of British Columbia, Alberta, Saskatchewan and Ontario and the short form base shelf prospectus dated May 19, 2023 for the provinces of Manitoba and New Brunswick (collectively, the “Prospectus“) and in the United States on a private placement basis to “qualified institutional buyers” pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “U.S. Securities Act“).

The terms of the Offering will be determined in the course of marketing, with the final terms to be determined at the time of pricing. There can be no assurance as to whether or when the Offering may be completed, or as to the actual size or terms of the Offering. The closing of the Offering will be subject to market and other customary conditions and the approval of, and the listing of the Common Shares and Warrants on, the TSX-V.

The Company is seeking the approval of the TSX-V to list the Subscription Receipts, as well as the Common Shares, the Warrants and the Warrants Shares issuable thereunder, once issued, such listing being subject to TSX-V approval.

In addition, the Company will grant to the Agents an option, exercisable in whole or in part in the sole discretion of the Agents at any time up to 30 days from and including the closing date of the Offering, to offer to sell that number of additional Subscription Receipts that is equal to 15% of the number of Subscription Receipts sold under the Offering, on the same terms and conditions as set forth above to cover over-allotments, if any, and for market stabilization purposes.

Copies of the Prospectus, following filing of the prospectus supplement, may be obtained on SEDAR at www.sedar.com and from RBC Capital Markets, RBC Wellington Square, 8th Floor, 180 Wellington St. W., Toronto, Ontario, M5J OC2 Attn: Distribution by telephone at 416-313-8180 or by email at [email protected]. The Prospectus contains important detailed information about the Company and the proposed Offering, including the Subscription Receipts, Offered Units, Unit Shares and Warrants to be issued thereunder. Prospective investors should read the Prospectus and the other documents the Company has filed on SEDAR at www.sedar.com before making an investment decision.

No securities regulatory authority has either approved or disapproved of the contents of this news release. The Subscription Receipts, Offered Units, Common Shares, Warrants and Warrant Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, a U.S. person (as defined in the U.S. Securities Act of 1933, as amended) except in transactions not required to be registered under the U.S. Securities Act of 1933, as amended. This news release does not constitute an offer to sell or a solicitation of an offer to purchase any of the securities within the United States.

In connection with the Acquisitions, the Company received an indicative term sheet from the Royal Bank of Canada which outlined new senior secured extendible revolving credit facilities in the aggregate principal amount of up to $100 million (the “New Credit Facilities“), which are anticipated to replace the Company’s existing credit facilities. The New Credit Facilities are anticipated to be comprised of extendible revolving credit facilities consisting of a $10‎ million ‎operating facility and an up to $‎90‎ million syndicated loan facility. The New Credit Facilities are anticipated to be provided for in a credit agreement to be entered into in connection therewith (the “New Credit Agreement“).

The New Credit Facilities are anticipated to have a revolving ‎period of 364 days, extendible annually at the request of the Company, subject to approval of the lenders thereunder. If not ‎extended, the New Credit Facilities are anticipated to automatically convert to a term loan and all outstanding obligations will be repayable ‎one year after the expiry of the revolving period. The borrowing base for the New Credit Facilities is anticipated to be $‎100‎ ‎million upon completion of all the Acquisitions, and to be subject to semi-annual redeterminations, based upon the Company’s annual independent engineering report or updates thereto. It is anticipated that the Company’s borrowing base will be determined and re-determined by the lenders under the New Credit Agreement in connection with the New Credit Facilities (to the extent provided) based on the Company’s ‎reserves, commodity prices, applicable discount rate and other factors as determined by the Company’s ‎lenders. It is anticipated that a material decline in commodity prices could reduce the Company’s borrowing base, therefore reducing ‎the funds available to the Company under the New Credit Facilities (to the extent provided) which could result in a portion, or all, of the ‎Company’s bank indebtedness being required to be repaid.‎ The New Credit Facilities are anticipated to be secured by a first fixed ‎and floating charge over all the Company’s assets. The New Credit Facilities are anticipated to include ‎operating restrictions on the Company, including (among other things), limitations on acquisitions, distributions, ‎dividends and hedging arrangements.‎

Upon, or substantially concurrently with, and conditional upon closing of the Acquisitions, the full amount under the New ‎Credit Facilities is anticipated to become available under the New Credit Agreement (subject to a maximum utilization rate ‎of 75% at closing, being $75 million). ‎

In connection with the closing of the Shale Acquisition, HR Exploration & Energy GMBH (“HR Exploration“) will receive approximately 943,742 Common Shares of the Company in exchange for the purchase of the common shares of Shale held by HR Exploration at the time of the Shale Acquisition. Additionally, in connection with the Shale Acquisition, HR Exploration agreed to purchase a minimum amount of $10 million of Subscription Receipts under the Offering, pursuant to the terms and subject to the conditions set forth in‎ a strategic investment agreement entered into between the Company and HR Exploration (the “Strategic Investment“). The Strategic Investment is subject to a number of conditions, including the approval of the TSX-V.

Pursuant to the Strategic Investment, the Company and HR Exploration shall enter into a board nomination agreement (“HR Board Nomination Agreement“) whereby HR Exploration shall, for so long as it and its affiliates together shall own or control or exercise discretion over, directly or indirectly, not less than 10% of the issued and outstanding Common Shares, be entitled to nominate for election or appointment to the board of directors of the Company (the “Board“), as applicable, the greater ‎of: (i) one nominee and (ii) such number of nominees that, when compared to the authorized ‎number of directors on the Board at such time, is closest to but not less than proportional to the ‎total number of Common Shares which HR Exploration and its affiliates together own or exercise ‎control or direction over, directly or indirectly, relative to the total number of Common Shares ‎then issued and outstanding. The Company shall use commercially reasonable efforts to ensure that the nominee(s) of HR Exploration shall be elected or appointed to the Board. The HR Board Nomination Agreement further provides HR Exploration with participation rights for future offerings to maintain its percentage ownership interest in the issued and outstanding Common Shares up to a maximum of a percentage ownership interest of 17% of the issued and outstanding Common Shares. HR Exploration’s board nominee has not been determined as at the time of this news release. HR Exploration also has the right to appoint an observer to the Board for so long as it is entitled to designate a Board nominee for election or appointment under the HR Board Nomination Agreement.

In connection with the closing of the Brazeau Acquisition and the issuance of the Brazeau Equity Consideration, the Company and vendor, West Lake Energy Corp. (“West Lake“), shall enter into a board nomination agreement (“WL Board Nomination Agreement“) whereby West Lake shall, for so long as it shall own or control, directly or indirectly, not less than 9% of the issued and outstanding Common Shares, be entitled to designate for election or appointment to the Board, as applicable, one nominee. The Company shall use commercially reasonable efforts to ensure that West Lake’s nominee shall be elected to the Board. West Lake’s board nominee has not been determined as at the time of this news release.

Upon, or substantially concurrent with, and conditional upon closing of ‎the Acquisitions, 1080766 intends to purchase an aggregate amount of up to ‎‎$2.8 million in units of the Company (the “Private Placement Units“) comprised of one Common Share and one-half of one common share purchase warrant (the “Private Placement“). The Private Placement Units are intended to be issued on terms identical to the terms of the Offered Units that are issuable pursuant to the terms of the Subscription Receipts under the Offering.

Each of the Private Placement and the Guarantee are considered a “related ‎party transaction” (as defined under MI 61-101) and the Company intends to rely ‎upon the “Fair Market Value Not More Than 25% of Market ‎Capitalization” exemption from the formal valuation and minority ‎shareholder approval requirements under MI 61-101 in respect of each.

The Private Placement Units purchased pursuant to the Private Placement (including the Common Shares and Warrants comprising such Private Placement Units, and the Common Shares issuable upon the exercise of such Warrants) will be subject to a statutory ‎hold ‎period. ‎‎The Private Placement is subject to a number of conditions, including completion of ‎definitive documentation and the approval of the TSX-V.

1080766 has also committed to participate in the Offering for an additional $2.2 million, bringing the aggregate equity commitment from 1080766 under the proposed transactions to $5 million.

RBC Capital Markets is acting as financial advisor to Highwood on the Acquisitions and Echelon Capital Markets, Raymond James and ATB Capital Markets are acting as strategic advisors to Highwood on the Acquisitions.

Highwood Asset Management Ltd. (TSXV: HAM) is a growth orientated oil and gas exploration and production company committed to shareholder alignment with high insider ownership while creating long-term value for its shareholders. The Company has an extensive inventory of low-risk, oil development drilling locations focused primarily on horizontal multi-lateral development of its assets. Operating as a responsible corporate citizen is a key focus to ensure we deliver on our environmental, social and governance (ESG) commitments and goals. For more information, please visit the Company’s website at www.highwoodmgmt.com.