Hemisphere Energy Announces First Quarter 2013 Results

VANCOUVER, BRITISH COLUMBIA–(Marketwired – May 28, 2013) – Hemisphere Energy Corporation (TSX VENTURE:HME) is pleased to announce its financial and operating results for the three months ended March 31, 2013.

Selected financial and operational highlights should be read in conjunction with Hemisphere’s condensed interim Financial Statements and related Management’s Discussion and Analysis for the three months ended March 31, 2013. These reports are available on SEDAR atwww.sedar.com and on Hemisphere’s website at www.hemisphereenergy.ca. As a result of changing the fiscal year-end from February 28 to December 31, the current quarter ended March 31, 2013 is compared to the fourth quarter ended February 29, 2012 and may not provide accurate comparisons due to year-end adjustments. All amounts are expressed in Canadian dollars.

Q1 2013 Achievements and Highlights

• Generated $2.1 million in revenue.
• Achieved funds flow from operating activities of $791,568 or $0.01 per share.
• Reported net income of $134,425.
• Produced 414 boe/d (91% oil and NGL).
• Expanded land base in Jenner, Alberta by acquiring 8 sections (4,963 acres).
• Upgraded the infrastructure at Jenner adding a sweetening tower for associated gas production.
• Drilled the first horizontal well of 2013 in Jenner, subsequently tested an average 145 bbl/d oil and 1.5 mmcf/d natural gas for a total of 400 boe/d.
• Closed the final tranche of a non-brokered private placement announced in December raising the company total gross proceeds of $1.2 million to fund future drilling and other capital expenditures in Jenner.

1. Funds flow from operating activities represents net income or loss before depletion, depreciation and accretion, share-based payments and future income tax.

The Company’s combined average realized price for the three months ended March 31, 2013 decreased by $18.39/boe from the comparable period. The decrease was mainly attributed to the price differentials between the West Texas Intermediate pricing and the Western Canada Select heavy crude oil pricing during the period. Oil differentials had increased due to pipeline constraints and supply and demand factors resulting in a lower realized crude oil price. The oil differentials began narrowing in March 2013 and are progressing favorably in the second quarter.

Subsequent Achievements

• Increased credit facility by 73% to $9.5 million to allow for greater financial flexibility.
• Graduated to Tier 1 of the TSX Venture Exchange – the premier tier reserved for the most advanced issuers with the most significant financial resources on the TSX Venture Exchange.

Annual General Meeting of Shareholders

Hemisphere’s Annual General Meeting of Shareholders is being held at 9:00 am Pacific Daylight Time on June 10, 2013 in the Walker Room at the Terminal City Club, 837 Hastings Street West, Vancouver, British Columbia.

EPAC Oil & Gas Investor Showcase

Mr. Don Simmons, President and Chief Executive Officer, will be making a presentation on Hemisphere at the EPAC Oil & Gas Investor Showcase being held on June 12, 2013 at 1:10 pm Mountain Daylight Time in the Lecture Theatre at the Metropolitan Conference Centre, 333 4th Avenue SW, Calgary, Alberta. Upon availability, the webcast of this presentation will be posted to Hemisphere’s website atwww.hemisphereenergy.ca.

About Hemisphere Energy Corporation

Hemisphere Energy Corporation is an oil and gas exploration and production company focused on developing core areas that provide low to medium risk drilling opportunities to increase production, reserves and cash flow. Hemisphere’s continued growth plan is through drilling existing prospects and executing strategic acquisitions and farm-ins. Hemisphere trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol “HME”.

Forward-looking Statements

This news release contains “forward-looking statements” that are based on Hemisphere’s current expectations, estimates, forecasts and projections. These forward-looking statements include statements regarding Hemisphere’s outlook for our future operations, plans and timing for the commencement or advancement of exploration and development activities on our properties, and other expectations, intention and plans that are not historical fact. The words “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, or their negatives or other comparable words and phrases are intended to identify forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Many of these factors are beyond the control of Hemisphere. Consequently, all forward-looking statements made in this news release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by Hemisphere will be realized. For the reasons set forth above, investors should not place undue reliance on such forward-looking statements. Hemisphere disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

Test rates are not necessarily indicative of long-term performance or of ultimate recovery. Neither a pressure transient analysis nor a well test interpretation has been carried out and the data should be considered to be preliminary until such analysis or interpretation has been done.

A barrel of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.