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Hemisphere Energy Provides Corporate Update and Announces 2019 Fourth Quarter and Year-end Financial and Operating Results
Vancouver, British Columbia--(Newsfile Corp. - April 23, 2020) -  Hemisphere Energy Corpo...
About this update from Hemisphere Energy Corp
[{"type":"text","content":"Hemisphere Energy Provides Corporate Update and Announces 2019 Fourth Quarter and Year-end Financial and Operating ResultsVancouver, British Columbia--(Newsfile Corp. - April 23, 2020) -  Hemisphere Energy Corporation (TSXV: HME) (\"Hemisphere\" or the \"Company\") is pleased to provide a corporate update and announce its financial and operating results for the fourth quarter and year ended December 31, 2019. Corporate Update and OutlookIn recent months, COVID-19 has had an unprecedented impact on the global economy as countries have locked down their citizens in an attempt to stop the spread of the virus. This instantaneous loss in demand for oil and its byproducts, coupled with an oil price war between Saudi Arabia and Russia, has resulted in historic lows in the price of oil. Although there is uncertainty around the duration and severity of the impact of these events, Hemisphere has taken numerous steps to protect its balance sheet, assets, staff, contractors, and community. Hemisphere has completed a detailed review of its operating costs in all producing areas and has shut-in approximately 180 boe/d (93% heavy crude oil and 7% conventional natural gas) of uneconomic production, representing just under 10% of corporate first quarter production of approximately 1970 boe/d (99% heavy crude oil and 1% conventional natural gas). The Company continues to monitor oil prices and will act to shut-in further volumes if required. In the first quarter of 2020, the Company incurred approximately $400,000 in capital expenditures, but has since deferred all other non-essential capital spending until the oil price environment improves. Hemisphere has the ability to quickly restart production from its shut-in wells when oil prices and demand outlook improve.Hemisphere also has an extensive risk management program with hedges in place until June 30, 2021, and the current mark-to-market value of these hedges is approximately $8.9 million (as of market close April 22, 2020). In early April, Hemisphere opted to protect its assets by adding significant hedge volumes through the second quarter of 2020. This has allowed the Company greater flexibility in decisions to avoid shutting in certain production and risking damage to its reservoirs and wellbores, while mitigating the downside scenario of a possible negative oil price environment, whic...