Hemisphere Energy Corp

Published : May 28th, 2015

Announces Q1 2015 Financial and Operating Results

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Hemisphere Energy Corporation
TSX VENTURE: HME
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May 27, 2015
Hemisphere Energy Announces Q1 2015 Financial and Operating Results
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 27, 2015) - Hemisphere Energy Corporation (TSX VENTURE:HME) ("Hemisphere" or the "Company") is pleased to announce its financial and operating results for the three months ended March 31, 2015.

Q1 2015 Highlights

--  Achieved record quarterly production averaging 995 boe/d (84% oil and
    NGL), a 76% increase over the first quarter of 2014 and a 12% increase
    over the fourth quarter of 2014. 
--  Realized a $20.42/boe operating netback during a challenging commodity
    price environment. 
--  Reduced operating costs to $6.80/boe, a 64% decrease from the first
    quarter of 2014 and a 42% decrease from the fourth quarter of 2014
    resulting from the increased production at Atlee Buffalo, the voluntary
    shut-in of higher cost wells, and the implementation of strict cost
    control measures. 
--  Reduced transportation costs to $2.79/boe during the first quarter, a
    decrease from the first and fourth quarters of 2014 by $0.37/boe and
    $0.91/boe, respectively. 
--  Reduced general and administrative costs to $5.18/boe, a decrease of
    $0.19/boe from the first quarter of 2014. 
--  Reduced net debt reported at December 31, 2014 by $1.2 million to $10.4
    million at March 31, 2015.
 
Subsequent Achievement

--  Completed a strategic tuck-in acquisition of the remaining 15% working
    interest in 1.75 sections (1,120 acres) of land in Atlee Buffalo for
    $250,000 to bring the Company's total working interest to 100%.
 
Corporate Update

During the first quarter of 2015, Hemisphere implemented a conservative approach to its capital spending program by deferring all drilling and facility operations to later in the year. With the decline in oil prices and uncertainty in long term price forecasts, Hemisphere focused on operating cost efficiencies, debt reduction, and progression of development plans in its core producing properties. Hemisphere reacted quickly to the changing commodity price environment and, as a result, lowered operating costs significantly, reduced net debt by $1.2 million, and solidified plans for the next phase of development in both the Atlee Buffalo and Jenner properties.

Since April, oil prices have gradually improved, differentials have narrowed, and exchange rates have remained high. With these positive impacts to oil prices, Hemisphere is changing its focus from capital preservation to strategic capital investment in projects that will add production, increase reserves, and achieve long-term growth as oil prices continue to strengthen.

Starting in the second quarter, Hemisphere is planning to construct a pipeline and add an additional water disposal well in Jenner in order to optimize existing production and provide capacity for future growth in the area. In Atlee Buffalo, the Company has proved economic primary production at its Upper Mannville F pool and continues to be encouraged with the initial development results of the property. Planning of two waterflood pilots in the pool is underway with water injection expected to start by year-end. With the implementation of a waterflood, Hemisphere expects to increase the recovery factor of the pool providing significant unbooked reserve upside.

Selected financial and operational highlights should be read in conjunction with Hemisphere's interim condensed financial statements and related Management's Discussion and Analysis for the three months ended March 31, 2015. These reports are available on SEDAR at www.sedar.com and on Hemisphere's website at www.hemisphereenergy.ca. All amounts are expressed in Canadian dollars.

Financial and Operating Summary

                                                Three Months Ended March 31 
Financial                                               2015           2014 
----------------------------------------------------------------------------
Petroleum and natural gas revenue             $    2,928,264 $    3,564,036 
Petroleum and natural gas netback                  1,827,986      1,878,003 
Funds flow from operations(1)                      1,249,142      1,508,107 
  Per share, basic and diluted                          0.02           0.02 
Net (loss) income                                   (646,345)       626,019 
  Per share, basic and diluted                         (0.01)          0.01 
Capital expenditures, including acquisitions         133,289      4,367,316 
Net debt(2)                                       10,420,007      9,161,992 
Bank indebtedness                                  9,973,336      7,650,000 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating                                                                   
----------------------------------------------------------------------------
Average daily production                                                    
  Oil (bbl/d)                                            832            488 
  Natural gas (Mcf/d)                                    960            473 
  NGL (bbl/d)                                              3              - 
  Combined (boe/d)                                       995            567 
  Oil and NGL weighting                                   84%            86%
Average sales prices                                                        
  Oil ($/bbl)                                 $        36.01 $        76.90 
  Natural gas ($/Mcf)                                   2.64           4.42 
  NGL ($/bbl)                                          21.56              - 
                                              ------------------------------
  Combined ($/boe)                            $        32.71 $        69.89 
Operating netback ($/boe)                                                   
  Petroleum and natural gas revenue           $        32.71 $        69.89 
  Royalties                                             2.70          10.82 
  Operating costs                                       6.80          19.08 
  Transportation costs                                  2.79           3.16 
                                              ------------------------------
  Operating netback(3)                        $        20.42 $        36.83 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:                                                                      
(1) Funds flow from operations is a non-IFRS measure that represents cash   
    generated by operating activities, before changes in non-cash working   
    capital and may not be comparable to measures used by other companies.  
(2) Net debt is a non-IFRS measure calculated as current assets minus       
    current liabilities including bank indebtedness and excluding flow-     
    through premium.                                                        
(3) Operating netback is a non-IFRS measure calculated as the Company's oil 
    and gas sales, less royalties, operating expenses, and transportation   
    costs per barrel of oil equivalent.
 
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 5, 2015 at 9:00 a.m. (Pacific Daylight Time).

EPAC Oil & Gas Investor Showcase

Mr. Don Simmons, President and Chief Executive Officer, will be making a presentation on Hemisphere at 11:05 a.m. Mountain Time on June 10, 2015 in the Lecture Theatre at the Metropolitan Conference Centre (333 4th Avenue SW, Calgary, Alberta) as part of the EPAC Oil & Gas Investor Showcase. For details on the conference, please visit www.epacshowcase.ca. Upon availability, the webcast of this presentation will be posted to Hemisphere's website at www.hemisphereenergy.ca.

About Hemisphere Energy Corporation

Hemisphere Energy Corporation is a producing oil and gas company focused on developing conventional oil assets with low risk drilling opportunities. Hemisphere plans continual growth in production, reserves and cash flow by drilling existing projects and executing strategic acquisitions. Hemisphere trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol "HME".

Forward-looking Statements

This news release contains "forward-looking statements" that are based on Hemisphere's current expectations, estimates, forecasts and projections. These forward-looking statements include statements regarding Hemisphere's outlook for our future operations, plans and timing for the commencement or advancement of exploration and development activities on our properties, and other expectations, intention and plans that are not historical fact. The words "estimates", "projects", "expects", "intends", "believes", "plans", or their negatives or other comparable words and phrases are intended to identify forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Many of these factors are beyond the control of Hemisphere. Consequently, all forward-looking statements made in this news release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by Hemisphere will be realized. For the reasons set forth above, investors should not place undue reliance on such forward-looking statements. Hemisphere disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

A barrel of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Definitions and abbreviations

bbl/d  barrels per day                Mcf/d  thousand cubic feet per day    
$/bbl  dollar per barrel              $/Mcf  dollar per thousand cubic feet 
boe    barrel of oil equivalent       NGL    natural gas liquids            
boe/d  barrel of oil equivalent per                                         
       day                                                                  
$/boe  dollar per barrel of oil       IFRS   International Financial        
       equivalent                            Reporting Standards
 
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

CONTACT INFORMATION:
Hemisphere Energy Corporation
Don Simmons
President & Chief Executive Officer
Telephone: (604) 685-9255
Email: info@hemisphereenergy.ca
Website: www.hemisphereenergy.ca

or

Scott Koyich
Investor Relations
Telephone: (403) 619-2200
Email: scott@briscocapital.com
INDUSTRY: Energy and Utilities - Oil and Gas

Suite 900, 25 York Street, Toronto, ON M5J 2V5 | Toll Free:888-299-0338 | Phone: 416-362-0885 | info@marketwired.com


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Hemisphere Energy Corp

CODE : HME.V
ISIN : CA4236301020
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Hemisphere Energy is a silver and gold exploration company based in Canada.

Hemisphere Energy produces silver, gold, in Canada, and holds various exploration projects in Canada.

Its main asset in production is JENNER in Canada and its main exploration properties are ELK 1 (DESTAFFANY MINE), FALCON LAKE TANTALUM and NORTHSTAR-KAZA in Canada.

Hemisphere Energy is listed in Canada and in United States of America. Its market capitalisation is CA$ 154.4 millions as of today (US$ 113.4 millions, € 101.9 millions).

Its stock quote reached its highest recent level on March 25, 2005 at CA$ 9.30, and its lowest recent point on December 24, 2008 at CA$ 0.04.

Hemisphere Energy has 85 750 000 shares outstanding.

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10/27/2011Announces Flow-Through Private Placement
8/30/2011Receives Proceeds from Warrant Exercise
5/4/2011Closes Private Placements
12/1/2010Announces Flow-Through Private Placement
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12/2/2009Closes First Tranche of Private Placement and Attains Albert...
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10/11/2007 Appoints Vice President Exploration
Financials of Hemisphere Energy Corp
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4/18/2012(Jenner)Announces 206 BOPD Production Rate from Horizontal Well on J...
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6/29/2011(Jenner)Completes Drilling and Commences Completion of First Horizon...
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4/1/2011(Jenner)Closes Jenner Oil Property Acquisition
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Corporate news of Hemisphere Energy Corp
7/12/2016Hemisphere Energy Announces Closing of its Private Placement...
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6/13/2016Hemisphere Energy Announces Results of Annual General and Sp...
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11/3/2015Hemisphere Energy Provides Operational and Corporate Update
9/18/2015Hemisphere Energy Announces Change in Auditor
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7/28/2015Hemisphere Energy Renews $15.0 million Credit Facility
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3/11/2015Hemisphere Energy Announces a 61% Increase in 2014 Reserves
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1/29/2015Hemisphere Energy Grants Incentive Stock Options
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1/28/2015Hemisphere Energy Exceeds 1,000 boe/d and Provides Operation...
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11/18/2014Hemisphere Energy Announces Q3 2014 Financial and Operating ...
10/28/2014Hemisphere Energy Provides Operations and Production Update
10/8/2014Hemisphere Energy Appoints New Director
9/29/2014Hemisphere Energy Grants Incentive Stock Options
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8/27/2014Hemisphere Energy Announces Q2 2014 Financial and Operating ...
8/26/2014Hemisphere Energy Announces Results of First Two Wells From ...
7/23/2014Hemisphere Energy Closes Atlee Buffalo Acquisition and Compl...
6/27/2014Hemisphere Energy Acquires Additional Land in Atlee Buffalo
6/27/2014Hemisphere Energy Acquires Additional Land in Atlee Buffalo
6/13/2014Hemisphere Energy Corporation - Archive Webcast of June 11, ...
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6/5/2014Hemisphere Energy Kicks Off 5 Well Summer Drill Program
5/28/2014Hemisphere Energy Announces Increased 2014 Drilling Plans
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10/16/2013to Acquire Oil Assets in Southeast Alberta
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9/9/2013(Jenner)Tests 357 Boe/d Well in Jenner
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6/5/2013to Present at EPAC Oil & Gas Investor Showcase
5/14/2013Graduates to Tier 1 of the TSX Venture Exchange
4/24/2013Announces Increased Credit Facility
4/11/2013Announces Substantial Growth in 2012
4/9/2013(Jenner)Tests 400 boe/d Well in Jenner
3/21/2013Announces 90% Increase to Proved Reserves in 2012
11/14/2012Drills Two Successful Oil Wells
9/5/2012Drills Two Successful Oil Wells Adding 197 bopd
8/20/2012Announces Results of Annual General and Special Meeting of
7/25/2012Announces FirstQuarter Financial and Operating Results
6/26/2012Announces Year-End Financial and Reserves Results
6/19/2012Enters Into Seismic Option Agreement and Provides Operationa...
3/5/2012(Jenner)Spuds Farm-in Commitment Well at Jenner
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12/8/2011(Jenner)Announces Jenner Oil Property Acquisition and Brokered Priva...
12/6/2011(Jenner)Spuds Horizontal Oil Well at Jenner
9/7/2011Announces Results of Annual General Meeting
3/31/2011Announces $1,540,000 in Private Placements
11/4/2008Announces Trutch Winter Drilling Program
7/7/2008Annual Financial & Reserve Results on SEDAR
12/11/2007FIRST GAS WELL OF THE SEASON
11/15/2007FIRST GAS WELL OF THE SEASON LICENSED
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