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Hemisphere Energy Grows Proved Reserve Value by 63% to $276 Million and Proved Net Asset Value to $2.43 per Fully Diluted Share
Vancouver, British Columbia--(Newsfile Corp. - March 16, 2022) - Hemisphere Energy Corporation...
About this update from Hemisphere Energy Corp
[{"type":"text","content":"Hemisphere Energy Grows Proved Reserve Value by 63% to $276 Million and Proved Net Asset Value to $2.43 per Fully Diluted ShareVancouver, British Columbia--(Newsfile Corp. - March 16, 2022) - Hemisphere Energy Corporation (TSXV: HME) (OTCQX: HMENF) (\"Hemisphere\" or the \"Company\") is pleased to announce highlights from its independent reserves evaluation (the \"Reserve Report\"), prepared by McDaniel & Associates Consultants Ltd. (\"McDaniel\") and effective as at December 31, 2021. In 2021, Hemisphere invested $12 million in its Atlee Buffalo core area, including drilling seven wells, implementing a polymer flood in the Upper Mannville G oil pool (\"G pool\"), and upgrading facilities to accommodate additional oil production. With Hemisphere's capital expenditures, corporate production grew by approximately 80% during the year, from 1,340 boe/d in January 2021 to an exit rate of 2,400 boe/d in December 2021. Production has since increased even further to approximately 2,700 boe/d in February 2022 with continued success at Hemisphere's enhanced oil recovery projects. Meanwhile Hemisphere allocated its remaining funds flow to debt repayment, resulting in a 27% reduction in year-end net debt1 to $17.9 million. Hemisphere's successful drilling program and implementation of the G pool polymer flood was recognized by McDaniel in the Reserve Report, resulting in considerable increases to reserves and reserve values in all categories. Hemisphere's most significant increases came in the Proved Developed Producing (\"PDP\") category, where the Company achieved an increase in reserve value of 144% to $197 million NPV10 BT, and a 70% increase in reserves when compared to year-end 2020. These outstanding results provide exceptional industry metrics including a 2-year average F&D cost (including changes in FDC) of $4.26/boe, robust recycle ratio of 6.9, and reserve replacement of 553% of 2021 production in the PDP category.Consistent with the 2020 year-end evaluation, McDaniel's Reserve Report incorporates full corporate abandonment, decommissioning, and reclamation costs (\"ADR\") in the PDP category. Hemisphere has always been cautious of acquiring additional wellbore and facility liabilities. A direct result of this strategy is that Hemisphere's reserves retain more value per barrel than other companies who must deduct higher A...