VANCOUVER, Feb. 6, 2019 /CNW/ – Hemisphere Energy Corporation (TSX-V: HME) (“Hemisphere” or the “Company”) is pleased to provide an update on its Southern Alberta operations following the 11 well drilling program that was completed in the fall of 2018.
Based on field estimates, corporate production during the period of January 28 to February 4, 2019 averaged approximately 1600 boe/d (96% oil). Oil production rates are continuing to improve after bringing certain wells back on production that were shut-in through November and December due to extremely low Canadian oil pricing.
In 2018, Hemisphere drilled a total of 14 horizontal wells in the Atlee Buffalo area, of which 11 were drilled as producers and three as injectors. The successful completion of this drilling program has significantly advanced the expansion of both Atlee Buffalo Upper Mannville F and G waterflood pools, and sets up an exciting follow-up program of what management believes to be low risk, low decline, and high quality drilling locations. These pools are still in early maturity with current recovery factors of under 5% of the Alberta Energy Regulator (AER) mapped oil in place. Analogue pools within two townships have reached up to 40% recovery factors when developed using similar enhanced oil recovery techniques.
During the fourth quarter of 2018, Canadian oil prices experienced unprecedentedly high Western Canadian Select (WCS) to West Texas Intermediate (WTI) differentials. In December, the Alberta Government responded by announcing a temporary production curtailment of 325,000 bbl/d (approximately 8.7% of total Provincial production), commencing January 1, 2019 and applying only to companies with production greater than 10,000 bbl/d. This action has resulted in a significant correction to the WCS to WTI pricing differentials. As Hemisphere’s production does not exceed 10,000 bbl/d, no field operations have been impacted.
In response to the price volatility seen through the fourth quarter of 2018, Hemisphere has deferred its capital spending program to the third quarter of 2019. The Company currently has plans to drill up to 16 wells in 2019 if market conditions continue to stabilize near current levels.
Hemisphere is proud to highlight that its Liability Management Rating (LMR) with the AER is at 8.46 as of February 2, 2019, which is within the top 10% of all companies evaluated by the AER. With the recent Supreme Court of Canada ruling on the Redwater case regarding the responsibility for abandonment and reclamation liabilities, Hemisphere believes having a strong LMR will continue to be a critical component in the success of Canadian oil and gas companies.
Please see our website at www.hemisphereenergy.ca for the company’s updated corporate presentation.
About Hemisphere Energy Corporation
Hemisphere Energy Corporation is a Canadian oil and gas company focused on the development of low risk conventional oil assets for minimal capital exposure by drilling known pools of oil and optimizing waterflood projects. Hemisphere plans continued growth in production, reserves, and cash flow by focusing on existing projects and executing strategic acquisitions. Hemisphere trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol “HME”.