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Morning Report: Hemisphere Energy director accumulates ahead of dividend February 11, 2025
The INK Edge outlooks of Athabasca Oil (ATH) and Hemisphere Energy (HME) have played out as we would generally
expect since we featured the pair here on June 24, 2024. When we discussed heavy oil producer Athabasca early last summer, it had a cloudy outlook, and the stock has subsequently lost 5.0%. One insider reported selling shares in August, but there has been no insider selling over the past 90 days, helping the stock move up into the mixed category. Athabasca has been repurchasing shares, helping to boost overall senior officer and director holdings as a percentage of shares outstanding. On December 5th, Athabasca said it expects 2025 average production of 37,500 to 39,500 boe/d (98% liquids). Of that, annual thermal oil production guidance is between 33,500 to 35,500 bbl/d. Athabasca reaffirmed its objective of returning 100% of thermal oil free cash flow to shareholders via buybacks.
Hemisphere Energy continues to show up brightly on our screens as insiders accumulate ahead of the quarterly dividend. The company will pay a quarterly cash dividend of $0.025 per share to shareholders of record as of February 12th. Hemisphere also reported on January 29th that production between December 1, 2024 and January 27, 2025 averaged about 3,800 boe/d (99% heavy oil). For 2025, after capital expenditures and asset retirement obligations, (non-IFRS) free funds flow is estimated to be $34 million, of which about 30% is budgeted to be paid in quarterly base dividends ($0.10 per share on an annualized basis) with an assumed WTI crude price from US$65/bbl to US$85/bbl (among other assumptions). Any remaining cash balance will be used for discretionary purposes, including potentially special dividends and share repurchases.
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