Hemisphere Energy (HMENF) Valuation Update - June 13

[dan_s]

Hemisphere is the most heavily weighted to the price of oil, out of all the upstream companies that I follow. It is a pure play on Canadian Heavy Oil and none of the Company's oil is subject to U.S. tariffs.

At the time of this post HMENF was trading at $1.44US.

If WTI oil averages $70US/bbl in Q2 and Q3 my valuation of HMENF goes to $2.75 US.

If the polymer flood at Marsden is successful, my valuation will go to at least $3.25 US.

[Petroleum economist]

Dan, I think that the impact of a successful Marden polymer flood can be much more than a $ 0.50 share price increase. I think Marsen potentially can double the Hemisphere reserves and production. See below.

Hemisphere production chart - June 2025.jpg (41.55 KiB) Viewed 72 times

Due to the large well spacing, we will not know the success/failure of Marsden until late 2025/early 2026. Patience is required
Without Marsden, Hemisphere will provide an 8-10% shareholder return. Hemisphere is a solid investment with a major upside.

[dan_s]

I agree that Marsden can be much bigger than Atlee Buffalo. At this point there is still a chance that it won't be successful, but based on my conversation with Don Simmons, he believes that it will be successful. I know that his team did a lot of geological work before they acquired the acreage. There is still a lot of oil in place at Marsden. If the polymer flood works, Hemisphere will hold a lot of recoverable oil reserves.

Also, Don has told me that his team keeps looking at other acquisition possibilities. Another big plus for Hemisphere is their stock buyback program. With higher oil prices, they will be able to accelerate the buybacks.
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What I just heard is that Israel is doing damage assessment of the targets that they hit last night. There will be more attacks on Iran, and it is clear that Israel is going to finish the job of making sure they have no ability to enrich uranium and probably wipe out all of Iran's ballistic missiles.

If the Supreme Leader was smart, he would surrender because Iran obviously has no air defense, but I doubt that he will.

WTI is up about 6% today, but as the bombing continues, I expect the geopolitical premium to grow. It will go way up if Iran is stupid enough to attack U.S. forces in the region or try to block tankers in the Persian Gulf.