VANCOUVER, June 29, 2016 /CNW/ – Hemisphere Energy Corporation (“Hemisphere” or the “Company”) (TSX-V: HME) is pleased to announce the closing of the first tranche of its non-brokered private placement offering (the “Offering”). Hemisphere issued 2,743,000 flow-through shares (“Flow-Through Shares”) at a price of $0.21 per share, which were issued on a Canadian Development Expense flow-through basis pursuant to the provisions of the Income Tax Act (Canada), and 2,449,500 common shares of Hemisphere (“Common Shares”) at a price of $0.19 per share, for gross proceeds to the Company of $1,041,435.
Hemisphere intends to use the proceeds from the Flow-Through Shares to drill a development well in its Atlee Buffalo Upper Mannville G oil pool as well as other recompletion or development drilling projects. Hemisphere has a 100% working interest in the Upper Mannville G pool, which is currently being re-energized through waterflood but has no producing wells at this time. Hemisphere plans to use the proceeds from the Common Shares to finance the addition of water handling and injection equipment to its existing battery in the Atlee Buffalo Upper Mannville F oil pool where the Company has successfully implemented three waterflood pilot projects, as well as for other general corporate purposes.
The final closing of the Offering is expected to occur on or about July 15, 2016 and is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange. All securities issued under the Offering will be subject to a statutory four-month and one day hold period. While the Offering is being conducted on a non-brokered basis, the Company intends to pay cash finder’s fees, subject to TSX-V acceptance, and in accordance with the rules and policies of the TSX-V, of up to 6% of the proceeds sold by such finders. Such finder’s include, for the initial closing, Canaccord Genuity Corp., Haywood Securities Inc., Raymond James Ltd., and Richardson GMP Ltd.
In light of the recent changes by the Alberta Energy Regulator (AER) requiring a corporate Liability Management Ratio (LMR) of 2.0 in connection with certain transactions involving the transfer of existing AER licences, Hemisphere would like to make shareholders aware that as of June 4, 2016, the Company’s LMR was 4.12. This ratio reflects Hemisphere’s deemed assets to deemed liabilities and puts the Company in a strong position for acquiring additional assets. Hemisphere is above industry average and within the top 15% of companies surveyed by the AER.
Additionally, Hemisphere advises that its shareholders rights plan dated March 9, 2010 has expired. The Company will review implementing a new shareholders rights plan in the future.
About Hemisphere Energy Corporation
Hemisphere Energy Corporation is a producing oil and gas company focused on developing conventional oil assets with low risk drilling opportunities. Hemisphere plans continual growth in production, reserves, and cash flow by drilling existing lands and executing strategic acquisitions. Hemisphere trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol “HME”.