Hemisphere Energy (HMENF) Update - April 28

[dan_s]

I have confirmed that Hemisphere will announce Q4 2020 results this week. Since the company already announced Q4 production volumes and detailed guidance for 2021 I don't expect Don to say anything that will have an impact on my forecast. Also, oil prices in Q1 are averaging more than what I'm using in my model and the 2H 2021 outlook for oil prices seems to be looking better each day.
Hemisphere is generating a lot of free cash flow from operations. YTD they've paid down another $5Cdn of debt and this year's capex program of approximately $7.5Cdn million will be totally funded by operating cash flow. If WTI stays over $60/bbl, Hemisphere should generate more than $12Cdn million of operating cash flow in Q2+Q3. Their goal is to be debt free by mid-2022.

WTI has rallied to more than $64/bbl as of the time of this post.

Traders like that
1. OPEC+ is sticking with their plan to gradually raise production as they have again raised their demand forecast.
2. U.S. (#1 consumer of oil) economy is rebounding, which offsets India's Covid outbreak. Covid vaccines are working, so traders see India as a short-term problem.
3. Goldman Sachs tripled down on their forecast that Brent will trade up to $80/bbl in Q3. < The rest of the Wall Street Gang is coming around to this.

If WTI goes over $70/bbl, my valuation of HMENF will go over $1.70US/share.