We think our research is special not because of the data, but what we let our analysts do with it.

HTM was founded with a simple thesis — there is too much data to reduce E&P investing to just a valuation multiple. We set out to build a research framework that centers around the assets, the potential to add value outside of commodity prices, and the quality of each producer's inventory. In our first letter to clients, this was the mission we detailed, and it's the mission we continue to progress today. While commodity prices mean cashflow forecasts can change daily — the geology doesn't, and focusing on top-down cashflow projections that only consider the short-term is not a strategy that leads to durable and outsized returns.

Amazingly so, the upstream sector is the only one in the world where the key variables that impact the outcomes of capital deployed are entirely knowable and observable. Outcomes are not based on extrapolating trends where human behaviour is a key input. Every factor that contributes to the performance of a single well, and thus the assets within a portfolio, is 'knowable' with an extremely high degree of confidence. The answer may not be published outright, but using the billions of public data points to create ground-up models, we fill in the blanks and solve for the answers ourselves. This all results in an acute understanding of what's good and what's bad — at any scale. From a single well, to a broader play trend, to basin balances; we're able to effortlessly weave millions of raw and interpreted data points together to paint a more correct picture.

Our advantage isn't data, effectively all of our analysis uses public data; but we use all of the public data, and use it better. Our Geology Engine and Subsurface Learning Models accurately predict initial subsurface conditions, and how the rock will react to a producer's 'input variables' (like fracture stimulations). Our integrated workflow gives HTM the edge of knowing what will happen, even when there isn't observable production data. We control our entire data and software library, giving us a completely fresh perspective compared to those that integrate 3^rd party systems. Every log track, tour report, production month, core analysis, DFIT record, and hundreds of other puzzle pieces are assembled to tell the story of each well, and thus each play. From dissolvable frac plugs impacting EURs, to pumping consistency improving EURs — we aim to track, assess, and anticipate everything that's going on below, and above the surface; and how those key inputs impact what's relevant to the capital and asset markets. Over the long-term, these 'knowable' variables are what build-up to NAV and cashflow figures. Importantly, we always bring this granular understanding up to a local, then regional level to determine how we can help clients generate better risk-adjusted returns using our work; and generate returns they wouldn't have otherwise.

Our process is impossible to recreate without an undying industry passion, and a license to think in creative ways. To appreciate how pore throats can change single-well outcomes; how those single-well outcomes can change corporate trajectories; and how corporate trajectories can change regional commodity market dynamics. So, we don't think our research is great because of the data, it's the fact that we use our own tools every day to turn over more stones, faster, and finish with an almost unequivocal conviction in our assessment of the "so what". Our advantage isn't better numbers — it's complete control of our constantly improving and flexible process that's gives analysts the license to be curious; all driven by a raw passion for the industry, joy in improvement, and pride in our work.

We believe this is a superior way to view the industry when seeking to appreciate what actually drives value, and align with quality issuers over the long-term at valuations that may be arguably incorrect. HTM expertly weaves data science together with geologic and operating nuance to deliver insights that nobody else can. From bringing step-changes in completion designs through to long-term NAV, or delivering high-confidence type curves for emerging plays; our proprietary models and software are tailored specifically for Western Canada, if not the localized play we're working in, allowing us to filter noise, identify signals, and appraise opportunities earlier, faster, and more accurately that our peers; all with the goal of helping our clients position proactively — in both the capital, and physical asset markets.

Our research isn't for everyone. It's neither macro-focused, nor conciliatory. Our work is incongruous with those seeking ways to strictly gain exposure to underlying commodity fundamentals. We're unwavering in our view that a thorough geologic focus is the only way to invest in the industry; and we let only data guide our analysis — even if it's negative or contradictory to our previous views. For those that believe the upstream industry was built by enterprising individuals that can deliver value across commodity cycles — our research encapsulates that ethos. We cover Western Canada's key upstream plays and companies, both public and private; doing so with a level of detail and care that cannot be found anywhere else. Our research empowers the allocators more-than-casually involved in the industry, to make truly better decisions.

For those seeking continuous and broad coverage; our offerings are likely not compatible with your investment process. For those that demand uncompromising excellence in Canadian upstream research, there's HTM.

Michael Spyker
Principal Analyst