Hemisphere Energy Update - Dec 29

[dan_s]

On the Canadian market HME.V is up 31% on heavy volume; 2.5X the normal volume for this small-cap. Canadian price is $0.21Cdn per share at the time of this post.

In the U.S. it trades as HMENF which is up 10.85% to $0.143US per share, also on heavy volume.

Hemisphere is on track for 2020 results of $0.03Cdn EPS and $0.116Cdn operating cash flow per share. It generated almost $0.04/share of FCF in the 3rd quarter. So, it is still trading at less than 2X operating cash flow per share.

My forecast for 2021 (based on $50US/bbl WTI oil price) is $0.17Cdn earnings per share and $0.24Cdn operating cash flow per share. The conversion of one of the Altee Buffalo waterfloods to a polymer flood next summer should cost approximately $5Cdn million, which compares to my operating cash flow forecast of $21Cdn million. The polymer flood is expected to increase Hemisphere's production by at least 50% to an exit rate in 2021 of 2,500 BO per day.

The falling U.S. dollar may have something to do with the share price spike today.

[dan_s]

HMENF up 24% on Dec 30 AM on heavy volume. On companies this small it only takes a few committed buyers to move them.

HMENF at $0.16 this morning, compares to my valuation of $0.55 and First Call's price target of $0.53.