TSX-V: HME – VANCOUVER, Sept. 12, 2016 /CNW/ – Hemisphere Energy Corporation (TSX-V: HME) (“Hemisphere” or the “Company”) is pleased to announce results from its most recent development well which tested production from its Atlee Buffalo Upper Mannville G pool.
Following the closing of a private placement with gross proceeds of $1.9 million, Hemisphere drilled its first horizontal development well into the Atlee Buffalo Upper Mannville G pool at the end of July. Total costs to drill, complete, equip and tie-in the well are estimated to be $685,000, which is 10% under budget and 45% less than the average cost of the 10 Atlee Buffalo wells drilled by Hemisphere in 2014.
The well has now been on production for a month, with a 30 day average rate of approximately 60 bbl/d of oil. With stable production rates and fluid levels observed, Hemisphere has recently increased the pump speed, which has resulted in a production rate of over 70 bbl/d of oil in the last few days. Oil production from the well is being produced to tanks and trucked directly to sales.
This well is pivitol in proving the economic viability of the remaining reserves in this pool, which has to date produced only 3% of its estimated 38 MMbbl of original oil in place, as mapped by McDaniel & Associates Consultants Ltd., Hemisphere’s independent engineers. Recorded reservoir pressure after nine months of water injection was three times higher than before commencing the waterflood, which has resulted in above expected oil rates at this early stage of secondary recovery. Hemisphere will continue to monitor fluid levels and injection rates to further optimize production at this well.
“This well marks a key milestone in Hemisphere’s corporate history” said Don Simmons, President and Chief Executive Officer of Hemisphere Energy Corporation. “We continue to prove our reservoir and production concepts in Atlee Buffalo by drilling impactful horizontal wells and implementing effective waterflood projects. The team is excited to move forward towards full development and unlock the significant value of both the Atlee Buffalo F and G pools.”
The management of Hemisphere believes that the Upper Mannville G pool is a direct analogue of the Company’s nearby Upper Mannville F pool, which Hemisphere brought to a peak rate of over 600 boe/d on primary production following a 10-well drilling program in 2014 before converting the pool to secondary recovery through conversion of three wells to water injectors in late 2015 and early 2016. Production from the Upper Mannville F pool is continuing to climb as pressures and fluid levels respond positively to waterflood.
A water handling facility is currently being built by Hemisphere in Atlee Buffalo with expected completion by the end of September. These additional facilities will lead to decreased transportation and operating costs in the area due to the reduction of third party processing, trucking, and water disposal fees. Once operational, the Company plans to increase injection rates at all of its water injector wells, which will allow for additional cycling of water in order to re-energize the reservoir more rapidly and ultimately generate higher oil production and increased oil recovery.
Hemisphere’s corporate production in the first week of September was approximately 600 boe/d (90% oil), which represents a greater than 20% growth rate since the second quarter of 2016. This is a result of increased production from the Atlee Buffalo Upper Mannville F pool waterflood and the new well in the Upper Mannville G pool. The Company is monitoring the price of oil closely and plans to bring additional shut-in production back on in the coming weeks.
For more detailed information on Hemisphere’s exciting drilling and development opportunities please see our recently updated corporate presentation on our website at www.hemisphereenergy.ca.
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 projects and executing strategic acquisitions. Hemisphere trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol “HME”.