Hemisphere Energy Corporation Announces Year-End 2013 Financial Results

VANCOUVER, BRITISH COLUMBIA–(Marketwired – April 15, 2014) – Hemisphere Energy Corporation (TSX VENTURE:HME) (“Hemisphere”) is pleased to announce its financial and operating results for the twelve months ended December 31, 2013.

As a result of changing the Company’s fiscal year-end from February 28 to December 31, Hemisphere’s current reporting period is for the twelve months ended December 31, 2013 with comparatives to the ten months ended December 31, 2012.

Financial Highlights

• Achieved record average production of 463 boe/d (83% oil and NGL)
• Increased petroleum and natural gas revenue by 34% to $10.6 million.
• Achieved record funds flow from operating activities of $3.8 million or $0.07 per share.
• Increased Proved reserves by 57% to 1,272.8 Mboe (90% oil & liquids).
• Increased Proved plus Probable reserves by 64% to 2,073.7 Mboe (89% oil & liquids).
• Increased revolving credit facility by 91% to $10.5 million.

Corporate Achievements

• Achieved 100% success rate drilling two Glauconitic horizontal oil wells which earned key lands and proved future development locations in Hemisphere’s North Jenner area, which is an extension along trend of the company’s core Jenner property.
• Closed a strategic acquisition of oil and gas assets in the Atlee Buffalo area of southeast Alberta for $3.35 million. The acquisition included 100% working interest in 8.25 contiguous sections, spanning two significant Glauconitic oil pools with a low current recovery factor of only 4%
• Acquired a total of 13.75 sections (8,800 acres) of land through Crown land sales.
• Completed upgrades to Hemisphere’s main oil battery in Jenner to increase fluid handling capacity for new wells and to optimize existing producing wells.
• Built a number of pipelines to reduce operating and transportation costs.
• Closed a bought deal equity financing for gross proceeds of $4.3 million

In the first quarter of 2014 Hemisphere has been focused on a development plan for its newly acquired Atlee Buffalo asset. A number of drilling pads have been surveyed and an inventory of drilling locations are licensed or in the process of being licensed. Hemisphere drilled one well in the Atlee Buffalo property and the results have been better than expected and very encouraging. Over the first 60 days of production, the well had an average pumping rate of approximately 100 boe/d (95% oil). With the consistent low water cut Hemisphere has been able to tank treat the oil production and truck the oil directly to sales.

Selected financial and operational highlights should be read in conjunction with Hemisphere’s audited annual Financial Statements and related Management’s Discussion and Analysis for the three and twelve months ended December 31, 2013. 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

Note:

⁽¹⁾ Funds flow from operating activities represents net income or loss before depletion, depreciation and accretion, share-based payments, impairment and any deferred tax adjustment.

Annual General and Special Meeting of Shareholders

Hemisphere’s Annual General Meeting of Shareholders is being held at 9:00 am Pacific Daylight Time on June 6, 2014 in Terrace B at the Terminal City Club, 837 Hastings Street West, Vancouver, British Columbia.

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”.

[expand title=”Advisories & Contact”]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.

Hemisphere Energy Corporation
Don Simmons
President & Chief Executive Officer
(604) 685-9255
info@hemisphereenergy.ca
www.hemisphereenergy.ca

Scott Koyich
Investor Relations
(403) 619-2200
scott@briscocapital.com