TSX-V: HME
VANCOUVER, Feb. 6, 2019 /CNW/ - Hemisphere Energy
Corporation (TSX-V: HME) ("Hemisphere" or the "Company") is pleased
to provide an update on its Southern
Alberta operations following the 11 well drilling program
that was completed in the fall of 2018.
Based on field estimates, corporate production during the period
of January 28 to February 4, 2019
averaged approximately 1600 boe/d (96% oil). Oil production rates
are continuing to improve after bringing certain wells back on
production that were shut-in through November and December due to
extremely low Canadian oil pricing.
In 2018, Hemisphere drilled a total of 14 horizontal wells in
the Atlee Buffalo area, of which 11 were drilled as producers and
three as injectors. The successful completion of this drilling
program has significantly advanced the expansion of both Atlee
Buffalo Upper Mannville F and G waterflood pools, and sets up an
exciting follow-up program of what management believes to be low
risk, low decline, and high quality drilling locations. These
pools are still in early maturity with current recovery factors of
under 5% of the Alberta Energy Regulator (AER) mapped oil in place.
Analogue pools within two townships have reached up to 40% recovery
factors when developed using similar enhanced oil recovery
techniques.
During the fourth quarter of 2018, Canadian oil prices
experienced unprecedentedly high Western Canadian Select (WCS) to
West Texas Intermediate (WTI) differentials. In December, the
Alberta Government responded by announcing a temporary production
curtailment of 325,000 bbl/d (approximately 8.7% of total
Provincial production), commencing January
1, 2019 and applying only to companies with production
greater than 10,000 bbl/d. This action has resulted in a
significant correction to the WCS to WTI pricing differentials. As
Hemisphere's production does not exceed 10,000 bbl/d, no field
operations have been impacted.
In response to the price volatility seen through the fourth
quarter of 2018, Hemisphere has deferred its capital spending
program to the third quarter of 2019. The Company currently has
plans to drill up to 16 wells in 2019 if market conditions continue
to stabilize near current levels.
Hemisphere is proud to highlight that its Liability Management
Rating (LMR) with the AER is at 8.46 as of February 2, 2019, which is within the top 10% of
all companies evaluated by the AER. With the recent Supreme Court
of Canada ruling on the
Redwater case regarding the
responsibility for abandonment and reclamation liabilities,
Hemisphere believes having a strong LMR will continue to be a
critical component in the success of Canadian oil and gas
companies.
Please see our website at www.hemisphereenergy.ca for the
company's updated corporate presentation.
About Hemisphere Energy Corporation
Hemisphere Energy Corporation is a Canadian oil and gas company
focused on the development of low risk conventional oil assets for
minimal capital exposure by drilling known pools of oil and
optimizing waterflood projects. Hemisphere plans continued growth
in production, reserves, and cash flow by focusing on 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
Certain statements included in this news release constitute
forward-looking statements or forward-looking information
(collectively, "forward-looking statements") within the meaning of
applicable securities legislation. Forward-looking statements are
typically identified by words such as "anticipate", "continue",
"estimate", "expect", "forecast", "may", "will", "project",
"could", "plan", "intend", "should", "believe", "outlook",
"potential", "target" and similar words suggesting future events or
future performance. In particular, but without limiting the
generality of the foregoing, this news release includes
forward-looking statements regarding Hemisphere's expectation that
production rates are continuing to improve after the downtime of
certain wells; management's belief that the successful completion
of the drilling program in 2018 sets up an exciting follow-up
program of low risk, low decline, and high quality drilling
locations; management's belief that these pools are still in early
maturity with current recovery factors of under 5%; Hemisphere's
plans to drill up to 16 wells in 2019 if market conditions continue
to stabilize near current levels; Hemisphere's belief that having a
strong LMR will continue to be a critical component in the success
of Canadian oil and gas companies; and the Company's plans for
continual growth in production, reserves, and cash flow by focusing
on existing projects and executing strategic acquisitions.
Forward‐looking statements are based on a number of material
factors, expectations, or assumptions of Hemisphere which have been
used to develop such statements but which may prove to be
incorrect. Although Hemisphere believes that the expectations
reflected in such forward‐looking statements are reasonable, undue
reliance should not be placed on forward‐looking statements because
Hemisphere can give no assurance that such expectations will prove
to be correct. In addition to other factors and assumptions which
may be identified herein, assumptions have been made regarding,
among other things: that Hemisphere will continue to conduct its
operations in a manner consistent with past operations; results
from drilling and development activities are consistent with past
operations; the quality of the reservoirs in which Hemisphere
operates and continued performance from existing wells; the
continued and timely development of infrastructure in areas of new
production; the accuracy of the estimates of Hemisphere's reserve
volumes; certain commodity price and other cost assumptions;
continued availability of debt and equity financing and cash flow
to fund Hemisphere's current and future plans and expenditures; the
impact of increasing competition; the general stability of the
economic and political environment in which Hemisphere operates;
the general continuance of current industry conditions; the timely
receipt of any required regulatory approvals; the ability of
Hemisphere to obtain qualified staff, equipment and services in a
timely and cost efficient manner; drilling results; the ability of
the operator of the projects in which Hemisphere has an interest in
to operate the field in a safe, efficient and effective manner; the
ability of Hemisphere to obtain financing on acceptable terms;
field production rates and decline rates; the ability to replace
and expand oil and natural gas reserves through acquisition,
development and exploration; the timing and cost of pipeline,
storage and facility construction and expansion and the ability of
Hemisphere to secure adequate product transportation; future
commodity prices; currency, exchange and interest rates; regulatory
framework regarding royalties, taxes and environmental matters in
the jurisdictions in which Hemisphere operates; and the ability of
Hemisphere to successfully market its oil and natural gas
products.
The forward‐looking statements included in this news release
are not guarantees of future performance and should not be unduly
relied upon. Such statements, including the assumptions made in
respect thereof, involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to defer
materially from those anticipated in such forward‐looking
statements including, without limitation: changes in commodity
prices; changes in the demand for or supply of Hemisphere's
products, the early stage of development of some of the evaluated
areas and zones; unanticipated operating results or production
declines; changes in tax or environmental laws, royalty rates or
other regulatory matters; changes in development plans of
Hemisphere or by third party operators of Hemisphere's properties,
increased debt levels or debt service requirements; inaccurate
estimation of Hemisphere's oil and gas reserve volumes; limited,
unfavourable or a lack of access to capital markets; increased
costs; a lack of adequate insurance coverage; the impact of
competitors; and certain other risks detailed from time‐to‐time in
Hemisphere's public disclosure documents, (including, without
limitation, those risks identified in this news release and in
Hemisphere's Annual Information Form).
The forward‐looking statements contained in this news release
speak only as of the date of this news release, and Hemisphere does
not assume any obligation to publicly update or revise any of the
included forward‐looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities laws.
Oil and Gas Advisories
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. In addition, given that
the value ratio based on the current price of crude oil as compared
to natural gas is significantly different from the energy
equivalency of 6:1, utilizing a conversion on a 6:1 basis may be
misleading as an indication of value.
Production rates disclosed herein are not determinative of
the rates at which the wells will continue to produce and decline
thereafter and may not necessarily be indicative of the long term
performance or estimated ultimate recovery.
The information concerning the oil pools (the "Analogous
Pools") located within two townships of Hemisphere's lands and
disclosed in this press release may be considered to be "analogous
information" within the meaning of applicable securities
laws. The information concerning the Analogous Pools was
obtained by Hemisphere management on Feb 5,
2019 from various public sources including information
available to Hemisphere through AccuMap. Management believes
such information is analogous to the Upper Mannville F and G pools
in which Hemisphere has an interest at the Atlee Buffalo property
area and is relevant as it may help to demonstrate the reaction of
such pools (in which Hemisphere has an interest) to waterflood
stimulations. Hemisphere is unable to confirm whether
the analogous information was prepared by a qualified reserves
evaluator or auditor or in accordance with the COGE Handbook and
whether such evaluator or auditor was independent and therefore,
the reader is cautioned that the data relied upon by Hemisphere may
be in error and/or may not be analogous to the oil pools in which
Hemisphere holds an interest.
Definitions and Abbreviations
|
boe/d
bbl/d
|
barrel of oil
equivalent per day
barrel of oil per
day
|
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.
SOURCE Hemisphere Energy Corporation