Hemisphere Energy Announces Q2 2014 Financial and Operating Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 27, 2014) - Hemisphere Energy Corporation (TSX VENTURE:HME) ("Hemisphere" or the "Company") is pleased to announce its financial and operating results for the three and six months ended June 30, 2014. 

Q2 2014 Achievements and Financial Highlights

• Achieved quarterly average production of 553 boe/d (82% oil and NGL), a 36% increase over the second quarter in 2013.
• Generated a record $3.8 million in petroleum and natural gas revenue.
• Increased funds flow from operating activities by 83% to $1.6 million or $0.02 per share over the comparable quarter in 2013.
• Achieved net income of $830,322 or $0.01 per share.
• Increased operating netback to $39.98/boe, an improvement of $5.55/boe over the comparable quarter of 2013 and $3.15/boe over the first quarter of 2014.
• Decreased operating and transportation expenses by 10% to $20.08/boe over the first quarter of 2014.
• Closed a bought-deal equity financing for gross proceeds of $10 million at a price of $0.75 with net proceeds being used to accelerate the Company's capital program focused on development in Atlee Buffalo and Jenner.
• Installed a solution gas compressor at the Company's main production facility in Jenner to increase volume through-put.

Subsequent Achievements

• Closed an acquisition in the Atlee Buffalo area which included an 85% working interest in 1.75 sections (1,120 acres) of land adjacent to the Company's existing land base.
• Successfully executed the largest drilling program in the Company's history, with five horizontal wells in the Atlee Buffalo area.
• Based on field estimates, over the first three weeks of August 2014 production was approximately 670 boe/d (83% oil), which includes two of the five new wells drilled in the summer drilling program.

Selected financial and operational highlights should be read in conjunction with Hemisphere's condensed interim Financial Statements and related Management's Discussion and Analysis for the three and six months ended June 30, 2014. These reports are available on SEDAR at www.sedar.com and on Hemisphere's website at www.hemisphereenergy.ca. All amounts are expressed in Canadian dollars.

Financial and Operating Summary

About Hemisphere Energy Corporation

Hemisphere is a producing oil and gas company focused on developing core areas that provide low to medium risk drilling opportunities to increase production, reserves and cash flow. Hemisphere's continued growth plan is through drilling existing prospects and executing strategic acquisitions and farm-ins. Hemisphere trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol "HME".

Forward-looking Statements

This news release contains "forward-looking statements" that are based on Hemisphere's current expectations, estimates, forecasts and projections. These forward-looking statements include statements regarding Hemisphere's outlook for our future operations, plans and timing for the commencement or advancement of exploration and development activities on our properties, and other expectations, intention and plans that are not historical fact. The words "estimates", "projects", "expects", "intends", "believes", "plans", or their negatives or other comparable words and phrases are intended to identify forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Many of these factors are beyond the control of Hemisphere. Consequently, all forward-looking statements made in this news release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by Hemisphere will be realized. For the reasons set forth above, investors should not place undue reliance on such forward-looking statements. Hemisphere disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

A barrel of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Definitions and abbreviations

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.