VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 19, 2013) - Hemisphere Energy Corporation (TSX VENTURE:HME) ("Hemisphere") is pleased to announce its financial and operating results for the three and nine months ended September 30, 2013.
Q3 2013 Highlights
-- Achieved highest quarterly production rate of 461 boe/d with an 82% oil
and NGL weighting.
-- Generated record revenue of $3.2 million which represents a 56% increase
over the comparable quarter of 2012 and a 33% increase over the second
quarter of 2013.
-- Achieved record funds flow from operating activities of $1.6 million or
$0.03 per share representing a 91% increase over the comparable quarter
of 2012 and an 85% increase over the second quarter of 2013.
-- Increased net income to $816,130 versus a net loss of $136,556 in the
comparable quarter of 2012 and net income of $241,029 in the second
quarter of 2013.
-- Increased operating netback to $46.42 per boe for an improvement of
$11.99 per boe over the second quarter of 2013.
-- Reduced operating and transportation costs by $5.76 per boe to $13.13
per boe compared to the second quarter of 2013.
-- Successfully drilled and placed on production Hemisphere's 12th
horizontal development well in Jenner targeting the oil-bearing
sandstones of the Glauconitic formation.
Subsequent Achievements
-- Achieved record production rate of approximately 675 boe/d with a 75%
oil and NGL weighting in mid-November 2013.
-- Closed a strategic acquisition of oil and gas assets in the Atlee
Buffalo area of southeast Alberta for $3.35 million. The acquisition
includes stable and operated production of approximately 60 boe/d (75%
oil) and 100% working interest in 8.25 contiguous sections, spanning two
significant Glauconitic oil pools.
-- Increased revolving credit facility to $10.5 million upon closing the
acquisition.
-- Commenced upgrades to Hemisphere's main oil battery to increase water
handling capacity, which is anticipated to be completed by late
November.
Selected financial and operational highlights should be read in conjunction with Hemisphere's unaudited condensed interim Financial Statements and related Management's Discussion and Analysis for the three and nine months ended September 30, 2013. These reports are available on SEDAR at
www.sedar.com and on Hemisphere's website at
www.hemisphereenergy.ca. As a result of changing the fiscal year-end from February 28 to December 31, the three and nine months ended September 30, 2013 are compared to the three and nine months ended August 31, 2012, respectively, and may not provide accurate comparisons due to year-end adjustments. All amounts are expressed in Canadian dollars.
Financial and Operating Summary
Three Months Ended Nine Months Ended
September August September August
Financial 30, 2013 31, 2012(1) 30, 2013 31, 2012(1)
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Petroleum and
natural gas
revenue $ 3,165,562 $ 2,029,140 $ 7,615,092 $ 7,214,367
Petroleum and
natural gas
netback 1,970,836 1,139,827 4,361,137 4,303,488
Funds flow from
operating
activities(2) 1,570,350 823,609 3,209,376 3,247,218
Per share,
basic and
diluted 0.03 0.02 0.06 0.07
Income (loss)
before tax 816,130 (136,566) 1,191,585 (494,689)
Per share,
basic and
diluted 0.02 (0.00) 0.02 (0.01)
Net income
(loss) after
tax 816,130 (136,566) 1,191,585 899,855
Per share,
basic and
diluted 0.02 (0.00) 0.02 0.02
Capital
expenditures 1,970,850 3,094,543 4,376,639 14,386,233
Property
development 1,963,968 2,902,900 4,266,201 8,087,818
Acquisitions 6,882 191,644 110,438 6,298,415
Working capital
deficit,
including bank
indebtedness 5,043,827 1,644,640 5,043,827 1,644,640
Bank
indebtedness 3,800,000 900,000 3,800,000 900,000
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Three Months Ended Nine Months Ended
September August September August
30, 2013 31, 2012(1) 30, 2013 31, 2012(1)
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Average daily
production
Oil (bbl/d) 375 335 360 360
Natural gas
(mcf/d) 501 170 383 205
NGL (bbl/d) 3 4 3 4
Combined
(boe/d) 461 367 428 398
Oil and NGL
weighting 82% 92% 85% 91%
Average sales
prices
Oil ($/bbl) $ 87.76 $ 64.31 $ 73.46 $ 70.94
Natural gas
($/mcf) 2.57 1.93 3.09 2.12
NGL ($/bbl) 69.65 50.27 69.34 61.60
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Combined
($/boe) $ 74.56 $ 60.10 $ 65.24 $ 65.83
Operating
netback ($/boe)
Petroleum and
natural gas
revenue $ 74.56 $ 60.10 $ 65.24 $ 65.83
Royalties 15.02 12.93 11.44 12.03
Operating
costs 10.47 10.25 13.53 10.79
Transportation
costs 2.66 3.15 2.91 3.74
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Operating
netback $ 46.42 $ 33.76 $ 37.36 $ 39.27
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Note:
(1) Fiscal year-end changed from February 28 to December 31.
(2) Funds flow from operating activities represents net income or loss
before depletion, depreciation and accretion, share-based payments and
future income tax.
About Hemisphere Energy Corporation
Hemisphere is an oil and gas, 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 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 barrel mcf thousand cubic feet
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
equivalent
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.