Hemisphere Energy Announces 2025 Second Quarter Results, Declares Quarterly Dividend, and Provides Operations Update

Executive Summary

• Hemisphere Energy Corporation released its financial and operating results for the second quarter ended June 30, 2025, reporting Q2 revenue of $24.4 million and adjusted funds flow from operations (AFF) of $10.3 million.
• The company declared a quarterly base dividend of $0.025 per share, with payments scheduled for September 12, 2025, to shareholders of record as of August 29, 2025.
• Operations update indicates a deferred capital spending strategy due to market volatility, with the drilling program now scheduled to commence in the late third quarter, including development wells in Atlee Buffalo and a new well in Marsden.

Key Details

• Q2 2025 Financial Performance:
  • Revenue: $24.4 million ($70.06/boe).
  • Operating field netback: $14.9 million ($42.77/boe).
  • Adjusted funds flow from operations (AFF): $10.3 million ($29.47/boe).
  • Free funds flow: $8.1 million ($0.07/share).
  • Net income: $7.1 million.
• Dividends:
  • Base dividend: $0.025 per share ($2.4 million total distributed in Q2).
  • Special dividend: $0.03 per share ($2.9 million total distributed in Q2).
  • Upcoming base dividend: $0.025 per share, payable September 12, 2025.
• Capital Allocation & Shareholder Returns:
  • Share repurchases: 1.3 million shares purchased and cancelled for $2.3 million under the Normal Course Issuer Bid (NCIB).
  • Capital expenditures: $2.2 million executed in Q2, including preparatory spending for upcoming drilling.
• Balance Sheet & Liquidity:
  • Working capital: $13.9 million at the end of Q1/Q2.
  • Credit facility: Renewed $35 million two-year extendible credit facility.
• Operational Metrics (Q2 2025):
  • Average daily production: 3,826 boe/d (99% heavy oil).
  • Heavy oil production: 3,810 bbl/d.
  • Natural gas production: 101 Mcf/d.
  • Average sales price (Heavy oil): $70.33/bbl.
  • Average sales price (Natural gas): $1.66/Mcf.
  • Operating costs: $11.40/boe.
  • Transportation costs: $2.78/boe.
• Future Operations:
  • Drilling program scheduled to start late Q3 2025.
  • Planned wells include several development wells in Atlee Buffalo and at least one new well in Marsden to test a second oil-bearing zone.
• Conference Presentation:
  • Chief Development Officer Ashley Ramsden-Wood to present at the EnerCom Denver Conference on August 19, 2025, at 2:45 pm MDT.

Notable Quotes

• "With significant volatility in the economy and oil markets earlier this year, Hemisphere elected to defer the majority of its capital spending into the latter third of the year."
• "Management will continue to closely monitor oil market volatility and adjust capital spending accordingly. With almost $14 million in working capital, an undrawn credit line, and stable cash flow from its production base, Hemisphere is in a unique position to act on potential acquisition opportunities and continued shareholder returns in addition to executing its drilling program."