From Banque Nationale dated March 21stHeadwater Exploration Inc. HWX (TSX): C$6.98 Stock Rating: Outperform Target: C$10.50 HWX Marketing Recap We recently hosted HWX for Management marketing, which in association with recent observations in the Clearwater (LINK), continue to emphasize the magnitude of its potential value; very simply, the Clearwater is already the largest conventional oil play in Canada, and should be the predominant drivers of growth, to the benefit of its primary participants. In our view, and as we describe below, the expanding resource in association with its extreme return profile, have us as a buyer at any price (across its value chain; HWX, TVE, BTE, TPZ, FRU & PSK). At current strip, HWX is poised for a 74% return (vs. peers 54%) while trading at 5.2x 2022e EV/DACF (vs. peers 2.7x) on leverage of -0.8x (vs. peers 0.2x), while its 2023e EV/DACF multiple compresses to 4.5x. Our target price of $10.50/sh is based on a 2023e EV/DACF multiple of 8.0x (unchanged). VALIDATING AND EXPANDING RESOURCE >>> COMPOUNDED BY EXTREME RETURNS >>> IMPLIES MASSIVE POTENTIAL VALUE • Below we highlight two simple value scenarios for HWX, which reflect the fact that cash in any scenario (risked for exploration & waterflood) cannot be spent, meaning the manifestation of massive self-funded value potential is only a matter of WHEN (massive FCF outcome and long-duration of free cash, in either scenario, should be respected through a contracting yield), • Risk & discount the below scenarios for time and inflation, but agree that there are multiples of value remaining.