HighPeak Energy, Inc. Common Stock Water Tower Research Virtual Insights Conference

Our session for the Water Tower Research Virtual Insights Conference. I am pleased to welcome HighPeak Energy. From the company today, we are joined by CEO Mike Hollis and Executive Vice President Ryan Hightower. I am Jeff Robertson, Managing Director of Natural Resources. Before we begin, I would like to note that HighPeak's safe harbor statements regarding forward-looking statements can be found under the Investor tab of the company's homepage. Also that investors can submit questions through the conference portal, and we will seek to address those in the follow-up management series report. Also, indications of interest in meeting with management can be submitted in the portal, and our team will work to coordinate those. HighPeak is an oil and gas exploration and production company focused on developing unconventional resources in the Midland Basin of West Texas.

The company's acreage is primarily concentrated in northeast Howard County and southeastern Borden County, and two contiguous acreage blocks called Flattop and Signal Peak. HighPeak's total production averaged about 45,500 BOE per day in the first half of 2026, and oil accounted for about 66% of the total. As of year-end 2025, management estimates that the asset base held more than 650 gross undeveloped locations in the two primary reservoir targets and upwards of 2,600 locations across all of the stacked potential pay zones on the acreage position. HighPeak is focused on balancing CapEx between the stable production profile and using excess cash flow to strengthen the balance sheet to position the company to recognize the embedded value of the asset base. With the introduction out of the way, Mike, Ryan, thank you for taking the time to join us today.

Thank you. Thanks, Jeff. Mike, you have been in the CEO seat at HighPeak since September 2025.

In fact, last fall, you laid out a strategy to transition HighPeak into a company that is really built for the long-term value creation. Can you give us a one-year progress report on how you see that transition evolving?

You bet, Jeff. No, thank you. Look, from an operational standpoint, we've executed our plan exactly the way we intended. Our focus has been on disciplined maintenance, program production, as well as improving our capital efficiency and driving our operational costs lower. That's across the entire business. As a result, we've not only enhanced our operational efficiency but also built a meaningful and substantial cash position. That financial strength gives us now the optionality and support for our broader objective of transforming HighPeak Energy into a company capable of consistently creating long-term value for our shareholders.

Mike, HighPeak Energy deliberately went to the northeastern portion of the Midland Basin to build the acreage position. Given your experience in the Permian Basin, in the Midland Basin in particular, what drew HighPeak Energy to that part of the basin early on to build the acreage blocks? Does that give you an advantage as you think about the strategy that you have in front of you?

You bet, Jeff. No, that's a great question because we did take a step out whenever we picked up this acreage. I think stepping back, it's important to note that, look, over the last several years, we've consistently allocated capital at a 70/30% breakout or ratio between our northern and southern blocks, which that 70/30% breakout represents almost identically what the breakout in our acreage is, as well as our inventory breakout between the two blocks. The read-through there is what we have been drilling and the results you're seeing today, which again, we've talked about being above guidance, lower LOE cost than we've budgeted over the last couple of years. All of that performance has been a result of what we've completed on that 70/30% breakout of capital across both acreage positions.

It leads credence and gives us confidence that our inventory and our development program over the foreseeable future will continue to have the results that we've seen in the past.

Now most- Oh, real quick, Jeff.

How did we get to this acreage position? That is a pretty unique story. Obviously, my time at Diamondback Energy, we looked at a lot of things over in western Howard, and at the time, that was a pretty far stretch for the industry because, again, the oil and gas industry likes to do closeology, right? When a well is good, we offset it really far away, like a half a mile to drill and make sure that that acreage is good. But what we did know, and the industry knew, is that the resource was there. Jack Hightower, our previous CEO, actually drilled a well in the late 70s right near our acreage position, drilled through our current target zones to a deeper formation. Again, the industry knew it was there.

What was not available back in the 70s was the technology for horizontal drilling and completions to be able to economically extract that oil. Over the decades, what has changed is that technology has caught up. We can now economically, very economically extract that product out of the ground. More importantly, the industry as a whole, as they were stepwise moving to the east, they have now encompassed our entire acreage position, both in north and south. Again, just leading credence and validity to our acreage position's potential and asset value.

Mike, just one question to follow up on the comment about inventory. I think you said closeology, a geologist might refer to it as trendology. But I am curious, in the Lower Spraberry and the Wolfcamp A, which are the main targets, how much geological risking, if any, is left to do? Then you all have spoken about the Middle Spraberry being a potential add to the high margin category. Obviously, since that sits above the Lower Spraberry, every well that is drilled goes through and sees, at least from a well log perspective. Can you help frame for people, from such a large inventory number, put some risk parameters on that?

Absolutely. The 650 wells that are inventory that you had mentioned earlier, that is in the Wolfcamp A and Lower Spraberry formations. Out of our 440 wells that we have drilled and producing today, the vast majority of those, high 90%, are in the Wolfcamp A and Lower Spraberry. We have got a whole lot of data that supports bookended north, south, east, west across our acreage position in those two zones. A very exciting zone for us is the Middle Spraberry. To your point, yes, we drill through it every time we go to the Wolfcamp A, Lower Spraberry, or even on our Wolfcamp D wells. We have the data where the vertical portions of the wells are. Again, HighPeak being a smaller company, I like to explore through other people's dollars.

There have been, if you go back three years ago, several wells drilled along our western flank in the Middle Spraberry. All very good wells. We drilled our first one, now it is probably been a little over two years ago. We currently have at least drilled, I would say, eight Middle Spraberry wells and have five of them online. The Middle Spraberry, think 300-ish wells that will move from our 2,600 total to our top tier. Our 650 will move upwards closer to 900, 950 here in the very near future. We are bookending that Middle Spraberry zone. I am sorry, the Middle Spraberry, such that we can get all of the inventory value credit in between those bookends. Because again, the great thing about being in the Permian Basin is its very consistent sheet-like kind of reservoirs that were laid down over millions of years.