Q2 2024 Highlights
Achieved record quarterly production of 3,628 boe/d (99% heavy oil), a 26% increase over the same quarter last year. < Beat my forecast of 3,300 Boepd.
Attained quarterly revenue of $28.9 million, a 52% increase from the second quarter of 2023. < Beat my forecast of $24.63 million thanks to higher production and higher realized oil prices due to much lower oil price differentials.
Delivered operating netback of $17.7 million or $53.58/boe for the quarter. < Outstanding Profit Margin!
Realized quarterly adjusted funds flow from operations ("AFF") of $13.6 million or $41.13/boe. < Adjusted Net Operating Cash Flow before changes in working capital was $16,339,000 in Q2, an increase of $4,374,000 quarter-over-quarter. Driven by the combination of a $13.02/bbl increase in the Company's realized oil price and a 15.8% increase in production. Hemisphere produces heavy oil. There has been a significant improvement in the differential for Canadian heavy oil since the TMX pipeline came online.
Invested $3.0 million of capital expenditures in the Company's Marsden and Atlee Buffalo properties.
Achieved quarterly free funds flow of $10.6 million or $0.11/share. < Annualized FCF yield at current share price is over 25%
Exited the second quarter with a positive working capital position of $11.6 million. < This company is virtually debt free.
Distributed $2.5 million or $0.025/share in dividends to shareholders during the quarter.
Announced a special dividend of $0.03/share to shareholders that was paid subsequent to the quarter on July 26, 2024.
Purchased and cancelled 1,054,200 shares under the Company's Normal Course Issuer Bid ("NCIB").
Renewed the Company's $35 million two-year extendible credit facility.
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My valuation prior to this report was $4.05Cdn per share. My valuation will be going up.
Hemisphere Energy (HMENF) Q2 Results - August 20
Hemisphere Energy (HMENF) Q2 Results - August 20
Last edited by dan_s on Tue Aug 20, 2024 11:32 am, edited 1 time in total.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Hemisphere Energy (HMENF) Q2 Results - August 20
Operations Update
Hemisphere's current corporate production is approximately 3,700 boe/d (99% heavy oil, based on field estimates between July 1 - August 12, 2024), with 97% of this production coming from the Company's enhanced oil recovery ("EOR") projects in Atlee Buffalo. Despite not having brought any new wells online in Atlee Buffalo since September 2023, Hemisphere's production from the area has grown by almost 10% since the fourth quarter of 2023 due to continued success of the Company's polymer floods. Average corporate production of 3,380 boe/d (99% heavy oil) over the first half of the year includes significant downtime due to weather during the first quarter of 2024 and is on target with the Company's corporate annual guidance of 3,400 boe/d. < Hemisphere's two polymer floods within Atlee Buffalo are "kicking into high gear". Polymer floods are just an enhanced water flood. Mixing in polymer to "thicken" injected water pushes more oil through the formation; increasing production and the ultimate recovery from the zone. This quarter's step change in production is more proof that Atlee Buffalo holds a lot more oil to be recovered.
Atlee Buffalo, Alberta
Hemisphere's 2024 summer drilling program was kicked off in early August, with one of eight planned horizontal wells having been drilled to date. These wells will be brought on production in stages as they are tied-in between the end of August and October. Up to three of the new wells are planned to be converted to injectors within a year.
Marsden, Saskatchewan < This project could more than double Hemisphere's production within five years. It covers a much larger area than Atlee Buffalo.
The majority of capital spent year-to-date included drilling five wells and constructing a multi-well battery with a pilot polymer skid in the Company's new Saskatchewan property. Battery production and polymer injection start-up in Marsden is now anticipated by the end of August. The Company has budgeted minimal production from the area for the year and expects that several months of injection could be required before polymer flood response is seen. At present, only one of the three wells brought on production in May for EOR data gathering purposes is still producing on primary recovery. The other two producers are anticipated to be turned back online in the coming months once polymer injection is underway.
Hemisphere's current corporate production is approximately 3,700 boe/d (99% heavy oil, based on field estimates between July 1 - August 12, 2024), with 97% of this production coming from the Company's enhanced oil recovery ("EOR") projects in Atlee Buffalo. Despite not having brought any new wells online in Atlee Buffalo since September 2023, Hemisphere's production from the area has grown by almost 10% since the fourth quarter of 2023 due to continued success of the Company's polymer floods. Average corporate production of 3,380 boe/d (99% heavy oil) over the first half of the year includes significant downtime due to weather during the first quarter of 2024 and is on target with the Company's corporate annual guidance of 3,400 boe/d. < Hemisphere's two polymer floods within Atlee Buffalo are "kicking into high gear". Polymer floods are just an enhanced water flood. Mixing in polymer to "thicken" injected water pushes more oil through the formation; increasing production and the ultimate recovery from the zone. This quarter's step change in production is more proof that Atlee Buffalo holds a lot more oil to be recovered.
Atlee Buffalo, Alberta
Hemisphere's 2024 summer drilling program was kicked off in early August, with one of eight planned horizontal wells having been drilled to date. These wells will be brought on production in stages as they are tied-in between the end of August and October. Up to three of the new wells are planned to be converted to injectors within a year.
Marsden, Saskatchewan < This project could more than double Hemisphere's production within five years. It covers a much larger area than Atlee Buffalo.
The majority of capital spent year-to-date included drilling five wells and constructing a multi-well battery with a pilot polymer skid in the Company's new Saskatchewan property. Battery production and polymer injection start-up in Marsden is now anticipated by the end of August. The Company has budgeted minimal production from the area for the year and expects that several months of injection could be required before polymer flood response is seen. At present, only one of the three wells brought on production in May for EOR data gathering purposes is still producing on primary recovery. The other two producers are anticipated to be turned back online in the coming months once polymer injection is underway.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Hemisphere Energy (HMENF) Q2 Results - August 20
EnerCom Denver Conference
Ms. Ashley Ramsden-Wood, Chief Development Officer of Hemisphere, will be presenting at the EnerCom Denver Conference on Tuesday, August 20 at 1:55 pm Mountain Daylight Time (12:55 pm Pacific Daylight Time). Her presentation will be livestreamed on EnerCom's website at www.enercomdenver.com/webcast (Confluence A) and archived on Hemisphere's website at www.hemisphereenergy.ca.
Ms. Ashley Ramsden-Wood, Chief Development Officer of Hemisphere, will be presenting at the EnerCom Denver Conference on Tuesday, August 20 at 1:55 pm Mountain Daylight Time (12:55 pm Pacific Daylight Time). Her presentation will be livestreamed on EnerCom's website at www.enercomdenver.com/webcast (Confluence A) and archived on Hemisphere's website at www.hemisphereenergy.ca.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Hemisphere Energy (HMENF) Q2 Results - August 20
You should all watch Ashley's presentation at Enercom. She did a great job.
Don Simmons and Ashley will be presenting to EPG members in Houston on December 9, 2024. By then they should have some good information to share with us about the Marsden polymer flood.
We are up over 500% on HMENF and I think it should be at least a double for us from where it trades today.
Don Simmons and Ashley will be presenting to EPG members in Houston on December 9, 2024. By then they should have some good information to share with us about the Marsden polymer flood.
We are up over 500% on HMENF and I think it should be at least a double for us from where it trades today.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Hemisphere Energy (HMENF) Q2 Results - August 20
"Shooting fish in a small barrel" and not issuing surprise excuses. Admittedly small, just wish that share price would rise.
Re: Hemisphere Energy (HMENF) Q2 Results - August 20
I thought he said it was up 5x?
Re: Hemisphere Energy (HMENF) Q2 Results - August 20
My basis in HMENF is $0.156US per share. At $1.27US per share today it is actually up 714% since I originally recommended it to EPG.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group