Hemisphere Energy (HMENF) Q4 Results - April 29

Hemisphere Energy (HMENF) Q4 Results - April 29

Postby dan_s » Thu Apr 29, 2021 11:49 am

Don Simmons told me that Q1 results will be released by May 14.

Hemisphere Energy Announces 2020 Fourth Quarter and Year-End Financial and Operating Results
HMENF

Newsfile Corp.
Wed, April 28, 2021, 6:41 PM

Vancouver, British Columbia--(Newsfile Corp. - April 28, 2021) - Hemisphere Energy Corporation (TSXV: HME) (OTCQX: HMENF) ("Hemisphere" or the "Company") is pleased to provide its financial and operating results for the fourth quarter and year ended December 31, 2020.

For Hemisphere, 2020 was a year of strengthening the balance sheet by cutting capital, reducing costs, maintaining year over year production rates, and paying down nearly 25% of its previously outstanding year-end debt.

Despite spending only $1.7 million in capital during the year, the Company grew its Proved and Proved plus Probable reserves by 18% and 22%, respectively. While oil prices were down substantially through much of 2020 due to COVID-19, Hemisphere achieved adjusted funds flow from operations of $9.3 million, or $0.11 per basic share. < Inline with my forecast.
This allowed the Company to improve its leverage metrics, strategically execute its Normal Course Issuer Bid (NCIB) program, and prepare for an exciting year of development in 2021.

The first quarter of 2021 has been positive for Hemisphere. Oil prices have rebounded significantly from 2020 and initial production response from water injector conversions done in the fourth quarter has been encouraging. Since completing a facility turnaround in early April, corporate production is currently averaging over 1,900 boe/d (99% heavy crude oil, based on field estimates between April 10th to 26th, 2021). This correlates to an increase of 25% as compared to production from the fourth quarter.

2020 Highlights

Attained annual average production of 1,706 boe/d (99% heavy oil and 1% natural gas), a 2% increase over 2019.

Generated annual revenue of $18.7 million.

Recorded operating netback of $14.5 million.

Achieved $9.3 million of adjusted funds flow from operations, or $0.11/basic share.

Reduced operating and transportation costs to $9.94/boe, a 20% decrease over 2019.

Increased Proved (1P) reserve volumes by 18% to 11.7 MMboe (99% heavy oil and 1% natural gas), with NPV10 BT of future net revenue valued at $170 million.

Increased Proved plus Probable (2P) reserve volumes by 22% to 14.9 MMboe (98% heavy oil and 2% natural gas), with NPV10 BT of future net revenue valued at $211 million.

Purchased 2,120,000 shares at an average price of $0.125 under the Company's NCIB program.

Realized hedging gains of $3.7 million.

Selected financial and operational highlights should be read in conjunction with Hemisphere's audited annual financial statements and related Management's Discussion and Analysis for the year ended December 31, 2020. These reports, including the Company's Annual Information Form for the year ended December 31, 2020, are available on SEDAR at www.sedar.com and on Hemisphere's website at www.hemisphereenergy.ca. All amounts are expressed in Canadian dollars unless otherwise noted.

I will be updating my forecast/valuation model this afternoon, but it won't change much based on this press release. April production is just slightly higher than my Q2 forecast of 1,860 Boepd.
Dan Steffens
Energy Prospectus Group
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Re: Hemisphere Energy (HMENF) Q4 Results - April 29

Postby dan_s » Thu Apr 29, 2021 12:42 pm

Now that 2020 is behind us (Thank God!), I am dropping it from my valuations.

I have updated my forecast/valuation model for Hemisphere. My valuation of HMENF increases by $0.15 to $1.35US/share just by dropping 2020 operating cash flow per share from the formula.
> Hemisphere should generate $23 to $25Cdn million from operations in 2021 if their realized oil price averages $60Cdn/bbl.
> This year's capital expenditures will be approximately $7.5Cdn million, so they s/b be debt free within 12 months.
> Hemisphere's production is a heavy oil that trades at a discount to WCS.
> 99% of the Company's production is oil.
> Production has increased from 1,503 Boe per day in Q4 to 1,900 Boe per day in April.

If this year's polymer flood at Altee Buffalo is successful, Hemisphere's production should ramp up this summer to an exit rate of approximately 2,300 BOPD.

My updated model has been posted to the EPG website.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 25565
Joined: Fri Apr 23, 2010 8:22 am

Re: Hemisphere Energy (HMENF) Q4 Results - April 29

Postby Fraser921 » Thu Apr 29, 2021 1:00 pm

https://www.hemisphereenergy.ca/sites/default/files/2021-04/2021-04-28%20YE%202020%20Results_final.pdf

Name is up to 50 cents Canadian today, nice find!
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Re: Hemisphere Energy (HMENF) Q4 Results - April 29

Postby dan_s » Thu Apr 29, 2021 2:09 pm

When Hemisphere release Q1 results in ~2 weeks, Don will provide more details on the polymer flood.

If WTI moves firmly over $65, Hemisphere's debt will be falling fast, which should push equity valuation a lot higher.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 25565
Joined: Fri Apr 23, 2010 8:22 am


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