Hemisphere Energy Announces Third Quarter Results and Declares Dividend

Vancouver, British Columbia - Hemisphere Energy Corporation ('Hemisphere' or the 'Company') reported its financial and operating results for the third quarter ended September 30, 2022, during which the Company recorded almost $24 million in revenue and its third highest ever adjusted funds flow from operations (AFF)1 of $10.6 million. Hemisphere also spent $4.6 million on drilling operations and facility improvements, paid off its bank debt, and distributed $2.6 million of dividends to its shareholders.

Quarterly Dividend

With the Company realizing free funds flow1 of $6 million in the quarter, Hemisphere's board of directors has approved a quarterly dividend of $0.025 per share, to be paid November 30, 2022 to shareholders of record as of the close of business on November 23, 2022. The dividend is designated as an eligible dividend for income tax purposes.

Q3 2022 Highlights

Paid off all bank debt.

Produced an average of 2,870 boe/d (99% heavy oil), a 72% increase over the third quarter of 2021.

Attained quarterly revenue of $23.7 million, a 127% increase over the third quarter of 2021.

Delivered an operating field netback1 of $49.95/boe, 27% higher than in the third quarter of 2021.

Realized adjusted funds flow from operations (AFF)1 of $10.6 million ($0.10 per diluted share), a 162% increase over the comparable period in 2021.

Achieved free funds flow1 of $6 million ($0.06 per diluted share), representing a 725% increase over the comparable period in 2021.

Lowered net debt1 at the end of the quarter to $0.7 million from $18.2 million at the end of September 2021, representing a 96% reduction year-over-year.

Paid Hemisphere's quarterly variable dividend of $0.025 per share on September 7, 2022 for an annualized yield based on market price at the time of 6.5%.

Acquired and cancelled 393,800 Hemisphere shares as part of the corporate NCIB at an average price of $1.55.

Operations Update

In September, Hemisphere commenced a drilling program to test potential new pools, pool extensions, and new production technologies. Successful wells are being brought online through the fourth quarter.Additionally, two wells have been converted to injectors in the Atlee G pool to help repressurize the northwestern portion of the reservoir. The Company is also finalizing the construction of its field battery expansion at the Atlee F pool following the start-up of its polymer flood in August.

Contact:

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BC V6C 1L6

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