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  5. HWX: Can you please comment on the call notice to CMHP to exercise warrants at $2. [Headwater Exploration Inc.]
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Q: Can you please comment on the call notice to CMHP to exercise warrants at $2.00 each. What is their current balance sheet like and would they be looking at an acquisition with the proceeds.

Asked by Bruce on December 22, 2021
5i Research Answer:

HWX will receive $30M, and Cenovus (through CMHP) will own 6.9% of HWX. HWX has $84M cash prior to this move (which will occur tomorrow) so cash will rise to $114M. This was largely expected considering how much the warrants are 'in the money'. We can't necessarily predict an acquisition, and the only recent deal was last year (with Cenovus, which is how it got the warrants). But, HWX certainly has the capacity now to do a fairly sizeable deal if it so chooses.