VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 11, 2013) - Hemisphere Energy Corporation (News - Market indicators) is pleased to announce its financial and operating results for the ten months ended December 31, 2012. 

As a result of changing the fiscal year-end from February 28 to December 31, Hemisphere's current reporting period is for the ten months ended December 31, 2012 with comparatives to the twelve months ended February 29, 2012. All amounts are expressed in Canadian dollars. 

Highlights (10 months ended December 31, 2012 compared to 12 months ended February 29, 2012)

• Increased average production by 117% to 408 boe/d (93% oil and NGL).
   
• Increased petroleum and natural gas revenue by 72% to $7.9 million.
   
• Increased funds flow from operating activities by 66% to $3.3 million or $0.06 per share.
   
• Increased Proved reserves by 90% to 812.3 Mboe (91% oil).
   
• Increased Proved plus Probable reserves by 60% to 1,265.1 Mboe (89% oil).

Financial and Operating Summary

1. Funds flow from operating activities represents net income or loss before depletion, depreciation and accretion, share-based payments and future income tax.

Selected financial and operational highlights should be read in conjunction with Hemisphere's audited annual Financial Statements and related Management's Discussion and Analysis. These reports, in addition to the Company's Annual Report, are available on SEDAR at www.sedar.com and on Hemisphere's website at www.hemisphereenergy.ca/investors/financial-reports. 

Achievements

After closing a strategic acquisition in January 2012 which included two producing wells, production facilities, 8.5 net sections of land and 3D seismic in Jenner, southeast Alberta, Hemisphere continued its growth story throughout the year achieving many milestones, including record production.

• Successfully drilled a total of 8 wells in Jenner:
   
  • Drilled 4 horizontal wells on 100% owned lands, increasing Hemisphere's drilling inventory;
     
  • Drilled 2 earning wells under a 6.5 section rolling farm-in agreement resulting in a 0.5 section of land having been earned; and
     
  • Drilled 2 horizontal wells under another farm-in agreement earning a 0.5 section of land with potential follow-up locations.
     
• Increased seismic database through the purchase and acquisition of two separate 3D seismic surveys.
   
• Increased water handling capacity at Hemisphere's Jenner facilities to dispose of produced water and reduce operating costs.
   
• Acquired 1.25 sections (800 acres) of land in Jenner through a Crown land sale for consideration of future drilling programs.
   
• Closed the first tranche of a non-brokered private placement for gross proceeds of $1.2 million at a price of $0.65 per unit to fund drilling and other capital expenditures in Jenner.
   
• Expanded Hemisphere's technical team and appointed Andrew Arthur, P.Geol. as Vice President of Exploration.

Subsequent Achievements

Hemisphere continued its momentous growth in January 2013 and further expanded its land base in Jenner acquiring 7.75 sections (4,803 acres) through a Crown land sale.

Hemisphere also kicked off its 2013 drilling programs recently announcing production test results of its first horizontal well of the year. The test ran for an 88 hour period. Over the last 24 hours of the test, the well continued to flow up the casing at a stabilized choked pressure of 3,950 kpag yielding an average of 145 bbl/d oil and 1.5 mmcf/d natural gas for a total of 400 boe/d. Water cut remained at 1-2% through the test and a total of 415 barrels of oil were produced after an initial clean up period. The well is currently shut-in awaiting tie-in to nearby facilities in order to conserve the gas production. This well earns Hemisphere an additional 0.25 section of land in the area under the farm-in agreement executed in June 2012. To-date, the company has drilled three wells under this agreement, earning a total 0.75 section of land. The success Hemisphere has achieved under this agreement confirms the potential in the Jenner area and assists in planning future drilling programs.

Annual General Meeting of Shareholders

Hemisphere's Annual General Meeting of Shareholders is being held at 9:00 am Pacific Daylight Time on June 10, 2013 in the Walker Room at the Terminal City Club, 837 Hastings Street West, Vancouver, British Columbia.

About Hemisphere Energy Corporation

Hemisphere Energy Corporation is an exploration and production company focused on developing core areas that provide low to medium risk drilling opportunities to increase production, reserves and cash flow. Hemisphere's continued growth plan is through drilling existing prospects and executing strategic acquisitions and farm-ins. Hemisphere trades on the TSX Venture Exchange 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.

Test rates are not necessarily indicative of long-term performance or of ultimate recovery. Neither a pressure transient analysis nor a well test interpretation has been carried out and the data should be considered to be preliminary until such analysis or interpretation has been done.

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