TSX-V: HME – VANCOUVER, Nov. 23, 2016 /CNW/ – Hemisphere Energy Corporation (TSX-V: HME) (“Hemisphere” or the “Company”) is pleased to announce the results of its summer Atlee Buffalo development well which has now been on production for over 90 days, and an update on overall corporate production which is currently at approximately 640 boe/d (91% oil).
Hemisphere’s first horizontal well into the Atlee Buffalo Upper Mannville G pool, drilled in July 2016, has averaged just over 60 boe/d (100% oil) over its first three months online and has produced over 70 boe/d (100% oil) during the first half of November. The new well continues to show stable production rates, and management expects it to be capable of greater production in the future once a planned multi-well battery is constructed in conjunction with further development of the pool. All oil production is currently being trucked directly to sales, eliminating the need for any third party processing.
The Company is extremely pleased with the results of this well which has performed above expectations at such an early stage in waterflood development of the pool. The success of this well demonstrates that the use of horizontal wells with slotted liners to control sand production, in combination with enhanced oil recovery through waterflood, are working to reinvigorate a pool that was shut-in after only 3% of its estimated original oil in place was produced. Hemisphere has identified an inventory of over 30 drilling locations at this pool alone, and is working towards the design and implementation of a development plan that management believes could lead to recovery of up to 30% of the estimated 38 MMBbl of original oil in place, as mapped by McDaniel & Associates Consultants Ltd. (“McDaniel”), Hemisphere’s independent engineers, for the purposes of its independent reserve report dated effective December 31, 2015 (the “2015 Reserve Report”). Several analogues for heavy oil horizontal waterflood projects at various stages of development already exist in the area with recoveries to date between 10% and 35%. At the lower end with just a 10% total recovery, an additional 2.5 MMBbl could potentially be recovered from this pool under waterflood. Hemisphere’s 2015 Reserve Report, prior to the waterflood and drilling results realized by Hemisphere in 2016, had just 0.1 MMBbl booked for two proved locations in this pool. As a result, Hemisphere’s management believes substantial reserve value remains unbooked at this time.
Hemisphere is continuing to see success in its horizontally developed waterflood at the adjacent Upper Mannville F pool. In October, a water separation and reinjection facility was commissioned for production from the pool, which has enabled water rates at the injectors to be increased and has eliminated all water trucking for third party disposal. Two previously shut-in wells with higher water cuts have been tied-in and recently reactivated, including one from an area of the pool with no attributed reserves that is currently producing at approximately 60 boe/d (100% oil). Total pool production is currently approximately 250 boe/d (96% oil) versus 100 boe/d (70% oil) in May.
During the past three years in the Atlee Buffalo area, Hemisphere has consolidated its land position to 100% ownership, initiated development across two pools by drilling 11 successful horizontal wells with slotted liners, implemented four waterflood pilot projects that have increased reservoir pressure and pool production, as well as built oil treating and water handling facilities that position the Company for future growth in the area. The two Atlee Buffalo pools have been mapped at 66 MMBbl of original oil in place by McDaniel and have to date recovered less than 4% of that resource, versus analogue pools in the area of similar quality that have recoveries of up to 35% of original oil in place. The Company believes it has now proven the concept of waterflood as applied to these pools and will continue to move forward to maximize shareholder value as it further develops its assets in this long-term growth area.
Jenner has remained a stable base for Hemisphere and continues to contribute over 300 boe/d (92% oil) to corporate production. Hemisphere now owns 100% of all its oil wells in the area after taking over 20% and 40% working interests in two of its best wells, which adds approximately 35 boe/d (85% oil) and significant reserve value to the area.
For more detailed information on Hemisphere’s exciting development opportunities please see our 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”.