Hemisphere Energy Announces 2023 First Quarter Results, Declares Quarterly Dividend, Renews Credit Facility, and Provides Operations Update

Vancouver, British Columbia, May 25, 2023 – Hemisphere Energy Corporation ("Hemisphere" or the "Company") provides its financial and operating results for the first quarter ended March 31, 2023, declares a quarterly dividend payment to shareholders, renews credit facility, and provides operations update.

Q1 2023 Highlights

  • Produced a record quarterly average of 3,171 boe/d, a 20% increase over the first quarter of 2022.
  • Attained quarterly revenue of $18.7 million.
  • Delivered an operating field netback1 of $11.3 million or $39.75/boe.
  • Realized quarterly adjusted funds flow from operations ("AFF")1 of $8.3 million or $29.01/boe.
  • Achieved free funds flow1 of $6.8 million or $0.07 per share.
  • Exited the first quarter with a positive working capital1 position of $3.0 million, compared to $8.7 million net debt1 at the end of March 2022.
  • Distributed $2.5 million, or $0.025 per share, in dividends to shareholders during the quarter.
  • Purchased and cancelled 202,300 shares under the Company’s Normal Course Issuer Bid ("NCIB").

Q1 2023 Overview

In the first quarter of 2023, Hemisphere’s production increased by 20% over the first quarter of 2022, achieving a record average rate of 3,171 boe/d (99% heavy oil). This was due in part to the production from two new Atlee Buffalo F pool wells that were placed on production early in the quarter.

Average sales price in the first quarter of 2023 was 32% lower than the first quarter of the previous year. This was due to a 19% decrease in the West Texas Intermediate ("WTI") crude oil price, combined with a 70% higher Western Canadian Select ("WCS") differential, which averaged US$76.13 and US$24.77, respectively, for the first quarter of 2023. Fortunately, WCS differentials have narrowed significantly and are trending closer to an average of US$15.50 for the second quarter of 2023 to date.

Despite the lower oil pricing environment, Hemisphere delivered solid financial results for the quarter with $8.3 million in adjusted funds flow from operations and a positive working capital position of $3.0 million at quarter-end. This marks the first time the Company has been in a positive working capital position in many years. Based on current commodity price and production forecasts, management expects the Company’s balance sheet to further improve throughout the year while continuing to develop its core assets, deliver shareholder returns through its dividend and NCIB programs, and look for new growth and acquisition opportunities.

The rest of the news release can be viewed here.