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Hemisphere Energy Announces Q1 2018 Financial and Operating Results

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Hemisphere Energy Announces Q1 2018 Financial and Operating Results

Canada NewsWire

TSX-V: HME

VANCOUVER, May 23, 2018 /CNW/ - Hemisphere Energy Corporation (TSX-V: HME) ("Hemisphere" or the  "Company") announces its financial and operating results for the three months ended March 31, 2018. 

Q1 2018 Highlights

  • Achieved quarterly production average of 858 boe/d (95% oil), a 47% increase over the first quarter of 2017.
  • Increased revenue by 48% to $3.4 million compared to the first quarter of 2017.
  • Drilled three additional development wells for total capital expenditures of $2.9 million.
  • Corporate Liability Management Ratio (LMR) with the Alberta Energy Regulator was 5.6 at the end of the first quarter 2018.

Corporate Update

During the first quarter of 2018, Hemisphere experienced significant downtime and higher than average operating costs associated with severe winter conditions.  Widened differentials between WTI and WCS oil prices also impacted oil revenues substantially which carved into gains from overall oil market improvements.

The WTI/WCS differential market appears to have stabilized during the second quarter with differentials narrowing dramatically for May and June 2018. Corporate production has continued to grow through the second quarter reaching rates in excess of 1000 boe/d (~97% oil).

In the first quarter, the Company drilled three wells into its Atlee Buffalo G pool. Two of these wells will be converted to injectors to help re-energize new areas of the reservoir in advance of a significant summer drilling program. Hemisphere now produces over 300 bbl/d of oil from this pool, up from 30 bbl/d of oil a year ago. The Company is also planning further development in its Atlee Buffalo F pool, where oil production has grown to almost 500 bbl/d from 300 bbl/d a year ago.

Hemisphere's mangement anticipates significant growth and considerable upside as additional producer and injector wells are drilled through 2018 while pressure continues to build in both Atlee Buffalo pools. Hemisphere's corporate strategy is to substantially increase cash flow through organic production and reserve growth of its existing assets that are still in very early stages of development.

Annual General and Special Meeting of Shareholders

Hemisphere's Annual General and Special Meeting of Shareholders is being held in the Pender Room of Oceanic Plaza, 1035 West Pender Street, Vancouver, British Columbia on Friday, June 22, 2018 at 9:30 a.m. (Pacific Daylight Time)

Financial and Operating Summary


Three Months Ended March 31

Operating

2018

2017

Average daily production






Oil (bbl/d)


809


530


Natural gas (Mcf/d)


281


309


NGL (bbl/d)


2


2


Combined (boe/d)


858


583


Oil and NGL weighting


95%


91%

Average sales prices






Oil ($/bbl)

$

45.76

$

46.29


Natural gas ($/Mcf)


2.09


2.80


NGL ($/bbl)


54.06


46.97


Combined ($/boe)

$

43.96

$

43.68

Operating netback ($/boe)






Petroleum and natural gas revenue

$

43.96

$

43.68


Royalties


6.67


5.70


Operating costs


15.04


17.41


Transportation costs


2.59


3.07


Operating field netback(1)

$

19.66

$

17.51


Realized commodity hedging gain (loss)


7.24


(0.75)


Operating Netback(2)

$

12.42

$

18.26

Financial



Petroleum and natural gas revenue

$

3,393,921

$

2,292,746

Operating netback(2)


959,096


958,276

Funds flow from operations(3)


99,720


505,330


Per share, basic and diluted


0.00


0.01

Net income (loss)


(2,389,393)


(138,678)


Per share, basic and diluted


(0.03)


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