TSX-V: HME VANCOUVER, July 12, 2016 /CNW/ – Hemisphere Energy Corporation (“Hemisphere” or the “Company”) (TSX-V: HME) is pleased to announce the closing of the final tranche of its non-brokered private placement offering (the “Offering”). In connection with the closing of the final tranche, Hemisphere issued 527,000 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 4,047,104 common shares of Hemisphere (“Common Shares”) at a price of $0.19 per share, for gross proceeds to the Company of $879,620. The aggregate funds raised by Hemisphere under the first and second closings of the Offering totaled $ 1,921,055.
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, which is expected to be drilled in late July. 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. The Upper Mannville G pool has previously produced approximately 1.2 million barrels of oil, representing 3% of the original oil in place as mapped by McDaniel & Associates Consultants Ltd. (“McDaniel”), Hemisphere’s independent reserve evaluators. The Company’s December 31, 2015 reserve report by McDaniel attributed proved plus probable reserves to Hemisphere of less than 1% of the original oil in place for this reservoir. Management anticipates that successful drilling results at this well could lead to the assignment of several additional drilling locations.
Hemisphere also 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. This facility will allow Hemisphere to increase injection and production rates while reducing operating costs associated with produced water.
The Offering is subject to the final 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 was 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 included Canaccord Genuity Corp., Cornerstone Advisors Pty Ltd., Echelon Wealth Partners Inc., Haywood Securities Inc., Mackie Research Capital Corporation, Raymond James Ltd., and Richardson GMP Ltd.
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”.