Hemisphere Energy Corporation Announces Year-End 2013 Financial Results
16 April 2014 - 7:00AM
Marketwired Canada
Hemisphere Energy Corporation (TSX VENTURE:HME) ("Hemisphere") is pleased to
announce its financial and operating results for the twelve months ended
December 31, 2013.
As a result of changing the Company's fiscal year-end from February 28 to
December 31, Hemisphere's current reporting period is for the twelve months
ended December 31, 2013 with comparatives to the ten months ended December 31,
2012.
Financial Highlights
-- Achieved record average production of 463 boe/d (83% oil and NGL)
-- Increased petroleum and natural gas revenue by 34% to $10.6 million.
-- Achieved record funds flow from operating activities of $3.8 million or
$0.07 per share.
-- Increased Proved reserves by 57% to 1,272.8 Mboe (90% oil & liquids).
-- Increased Proved plus Probable reserves by 64% to 2,073.7 Mboe (89% oil
& liquids).
-- Increased revolving credit facility by 91% to $10.5 million.
Corporate Achievements
-- Achieved 100% success rate drilling two Glauconitic horizontal oil wells
which earned key lands and proved future development locations in
Hemisphere's North Jenner area, which is an extension along trend of the
company's core Jenner property.
-- Closed a strategic acquisition of oil and gas assets in the Atlee
Buffalo area of southeast Alberta for $3.35 million. The acquisition
included 100% working interest in 8.25 contiguous sections, spanning two
significant Glauconitic oil pools with a low current recovery factor of
only 4%
-- Acquired a total of 13.75 sections (8,800 acres) of land through Crown
land sales.
-- Completed upgrades to Hemisphere's main oil battery in Jenner to
increase fluid handling capacity for new wells and to optimize existing
producing wells.
-- Built a number of pipelines to reduce operating and transportation
costs.
-- Closed a bought deal equity financing for gross proceeds of $4.3 million
In the first quarter of 2014 Hemisphere has been focused on a development plan
for its newly acquired Atlee Buffalo asset. A number of drilling pads have been
surveyed and an inventory of drilling locations are licensed or in the process
of being licensed. Hemisphere drilled one well in the Atlee Buffalo property and
the results have been better than expected and very encouraging. Over the first
60 days of production, the well had an average pumping rate of approximately 100
boe/d (95% oil). With the consistent low water cut Hemisphere has been able to
tank treat the oil production and truck the oil directly to sales.
Selected financial and operational highlights should be read in conjunction with
Hemisphere's audited annual Financial Statements and related Management's
Discussion and Analysis for the three and twelve months ended December 31, 2013.
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
Twelve Months Ten Months
Ended Ended
December 31, December 31,
Financial 2013 2012
----------------------------------------------------------------------------
Petroleum and natural gas revenue $ 10,573,199 $ 7,875,723
Petroleum and natural gas netback 5,607,492 4,657,308
Funds flow from operating activities(1) 3,789,201 3,265,657
Per share, basic and diluted 0.07 0.06
Income (loss) before tax (5,307,312) 543,818
Per share, basic and diluted (0.10) 0.01
Net income (loss) after tax (3,832,078) 61,361
Per share, basic and diluted (0.07) 0.00
Capital expenditures, including acquisitions 9,969,174 11,888,398
Working capital deficit, including bank
indebtedness (6,700,147) (3,927,595)
Bank indebtedness 4,500,000 1,035,000
----------------------------------------------------------------------------
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Twelve Months Ten Months
Ended Ended
December 31, December 31,
2013 2012
----------------------------------------------------------------------------
Average daily production
Oil (bbl/d) 381 378
Natural gas (mcf/d) 474 161
NGL (bbl/d) 3 3
Combined (boe/d) 463 408
Oil and NGL weighting 83% 93%
Average sales prices
Oil ($/bbl) $ 71.19 $ 66.76
Natural gas ($/mcf) 3.45 2.07
NGL ($/bbl) 68.60 60.87
------------------------------
Combined ($/boe) $ 62.55 $ 63.15
Operating netback ($/boe)
Petroleum and natural gas revenue $ 62.55 $ 63.15
Royalties 11.23 11.00
Operating costs 15.14 11.79
Transportation costs 3.01 3.02
------------------------------
Operating netback $ 33.17 $ 37.34
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Note:
(1) Funds flow from operating activities represents net income or loss before
depletion, depreciation and accretion, share-based payments, impairment and any
deferred tax adjustment.
Annual General and Special Meeting of Shareholders
Hemisphere's Annual General Meeting of Shareholders is being held at 9:00 am
Pacific Daylight Time on June 6, 2014 in Terrace B at the Terminal City Club,
837 Hastings Street West, Vancouver, British Columbia.
About Hemisphere Energy Corporation
Hemisphere is a producing oil and gas 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
boe/d barrel of oil equivalent per
day
Mboe thousands of barrels of oil
equivalent
$/boe dollar per barrel of oil NGL natural gas liquids
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Hemisphere Energy Corporation
Don Simmons
President & Chief Executive Officer
(604) 685-9255
info@hemisphereenergy.ca
www.hemisphereenergy.ca
Scott Koyich
Investor Relations
(403) 619-2200
scott@briscocapital.com
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