EPAC Investor Showcase June 10, 2015

Transcription

1 EPAC Investor Showcase June 10, 2015

2 Corporate Summary TSX Venture HME Share Price (June 1, 2015) $ Week High / Low $0.79 / $0.23 Capital Structure Common Shares Outstanding 75.8 MM Fully Diluted Shares Outstanding 82.7 MM Insider Ownership (fully diluted) 12% Market Capitalization (June 1, 2015) $23.5 MM Financial Highlights Q Revenue Oil & Gas Netback Operating Netback* Funds Flow from Operations* Credit Facility (ATB) Net Debt* Tax Pools (Dec. 31, 2014) $2.9 MM $1.8 MM $20.42/boe $1.25 MM $0.02/share $15.0 MM $10.4 MM $47.1 MM Operational Highlights Q Production 995 boe/d (84% oil) 2014 Drilling Activity 13 Wells Proved + Probable Reserves (Dec. 31, 2014) Proved Reserve Value (10% discount,bt) Proved + Probable Reserve Value (10% discount,bt) Land base 3.3 MMboe $40.3 MM $62.5 MM ~58,000 net acres * See non-ifrs measures in Advisory Statements. 2

3 Creating Shareholder Value CORPORATE GOALS Increase Production Add Reserves Per Share Growth Integrated Team 200+ Horizontal Wells Successful Track Record Integrated Established Team Operator 200+ Horizontal Waterflood?? Wells Successful Track Record Established Operator Enhanced Oil Recovery Conventional Oil Large OOIP Increase Recovery Factors Low Cost Operator Flexible Balance Sheet ECONOMIC METRICS Quick Payouts High Rates of Return STRATEGY Development Drilling Targeted Exploration Strategic Acquisitions Build Future Inventory 3

4 boe/d Production Growth 1, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q

5 MMboe $MM Per share (basic) Year-Over-Year Reserves Growth Reserves (McDaniel Report as at December 31, 2014) $70.0 $60.0 $50.0 Net Present Value (10% discount, before tax) 2P $62.5 $0.83 $1.00 $ P 3.3 $40.0 $0.49 $0.62 2P $38.2 $ P 1.3 1P 0.8 2P 2.1 1P 1.3 1P $30.0 $20.0 $10.0 $0.0 2P $26.5 1P $18.0 1P $24.6 1P $ $0.25 $0.00 5

6 Hemisphere Value Proved + Probable Reserves McDaniel Report as at December 31, MMBoe Category Reserves Net Present Value 10% Discount Before Tax Per Share Proved 2.2 MMBoe $40.3 MM $0.53 Proved + Probable 3.3 MMBoe $62.5 MM $0.82 PROBABLE 1.1 MMBoe PROVED 2.2 MMBoe Asset Formations Drilling Locations Booked Unbooked Total Atlee Buffalo Glauconitic Jenner Glauconitic, Pekisko Total Low Risk Drilling Locations - 78% Unbooked ~50,000 Undeveloped Net Acres Valued at $7.5 million 6

7 ALBERTA SASKATCHEWAN ALBERTA SASKATCHEWAN Southern Alberta & Saskatchewan HME Land HME Wells Paleo-High NORTHERN BLIZZARD ROCK HEMISPHERE JOURNEY Jenner Atlee Buffalo ARSENAL Brooks CARDINAL Barrier Beach System Paleo-High Calgary 7

8 Focus: Southeast Alberta Focus 2 Foundation Assets ~33,000 net acres ~95% Working Interest Mannville oil zones Conventional Hz wells JENNER ATLEE BUFFALO HME Land Alberta Suffield Military Base HME Land 2014 Growth Drilled 13 wells Shot 2 new 3D seismic surveys Upgraded Jenner facility Acquired Atlee Buffalo land Acquired 6,400 acres from Crown 2015 Activity Tuck-in acquisition of 15% WI in Atlee Add additional water disposal Implement 3 waterflood pilots Drill 1 well 8

9 Jenner: Foundation Highlights 92% average working interest in 25,650 net acres 8 oil pools defined by 3D seismic 30 low risk drilling locations identified B Key Metrics $1.0 MM to drill, complete and tie-in 1,000 m drill depth m horizontal legs No frac required S B Facilities 2 owned and operated oil processing and water disposal facilities Expansion capability B S HME Land Battery Satellite Pipeline Suffield Military Base 9

10 History Acquired in Nov 2013 at ~40 boe/d Drilled 10 successful Hz wells in 2014 Obtained 3D seismic over both pools Highlights Two oil pools delineated by vertical wells MMbbl original-oil-in-place* Current recovery factor <5% 100% working interest 65 low risk drilling locations identified Atlee Buffalo: Growth Key Metrics Low operating cost area at ~$10/boe IP rates ~90 boe/d $1.1 MM to drill, complete and tie-in 1,000 m drill depth m horizontal legs No frac required * Based on internal mapping. HME Land HME Wells Oil Pool Q D Seismic Acquired 3D Seismic 10

11 Production (bbl/d) Atlee Buffalo: Economics at Varied Pricing US$65/bbl WTI Payout: 15 months ROR: 100% Primary Recovery All-In Well Cost $1.1 MM Recoverable Reserves 85 Mboe 1 st Month IP 90 boe/d NPV10 BT $1.5 MM Full-Life Netback $39.53/boe F&D Costs $12.79/boe Recycle Ratio US$80/bbl WTI Payout: 10 months ROR: 200% US$70/bbl WTI Payout: 12 months ROR: 130% US$60/bbl WTI Payout: 17 months ROR: 80% Months on production Assumptions: Constant pricing; US$10 Differential; 1.25 Cdn/US exchange rate; Cdn$7 Quality adjustment from WCS; Opex $10/boe 11 11

12 ALBERTA SASKATCHEWAN ALBERTA SASKATCHEWAN Atlee Buffalo: Waterflood Analog Comparisons Mannville Pools Operator OOIP API T28 T27 T26 T25 R10 Laporte* Rock T o 2.5 7% Polymer 2014 Upper Mann G** Hemisphere T o 1.2 4% R9 R8 R7 R6 R5 Recovery Factor to date R4 Enhanced Recovery Name MMbbl Degree MMbbl RF Type Date Upper Mann YYY* Cenovus o % ASP 1998 Upper Mann N2N* Cenovus o % Water 1999 Upper Mann C* Penn West o % Water 1980 Cuthbert* Northern Blizzard o 2.5 8% Water 2001 Marengo South* Conoco o % Water 1992 Mantario East* Conoco o % Water 1996 Upper Mann F** Hemisphere o 1.0 5% R3 R2 SE EIES K II E J I II EMEIIEI IS E MESEJI I M EJI E SSEES ESES SESSI SE S E J ESJEI S I EJ IEE SESEI SE IS II R1W4 Upper Mann C R29 Cuthbert KSI IJSE I EFSE E S ESI I SS ISMEEEI IE SE EI SJI IE S I EE K SESE SE E ESEEE SS S S E R28 R27 Marengo South R26W3 II IEIEISE S ISE ES II I SI EJE SS IEI EIIESI E I IEEIE IJIESIEJE SEE IS IIE SI E IIES SE IS IICE ES I EESS IECSIESS IEISIJSEEISIJSS SIS I IISEMSIM I IIS G GEA JE SJSI EEC E S SIEM IEII EI ASE IEIEEMS EESE JII S ISEEE EIJES JE I IJS SESS IEEIIE E SE IE EI SEE I SISISES II IEIEII IIJ IIISE GSIE IIEJE IE SE SEI IE E SIESE I E S MIEES EEI Mantario East JS IESIEEE E S EE JSES S EEEEES ESE E ES EES E ES Laporte T2 T2 T2 T2 T2 T2 T22 T2 Calgary T21 T20 T19 Upper Mann YYY JED E E SE E ESESEJMEJD EJEDE J EE S JME ESEDSE S DE JE DJSIJ IMD E E KISJMG E S EDJESE IIJEJE S E IE EDEJ E JJJJ KJ JJ J J J IJI EJEJJ G JJ IEIM JJEJ J I J I E J JJ J JJ Upper Mann G I J ME EE E Upper Mann F Upper Mann N2N HME Land T2 T2 T1 R10 R9 R8 R7 * Based on Alberta Energy Regulator. R6 R5 R4 R3 R2 R1W4 R29 R28 R27 ** Based on internal mapping. File: Atlee Analog map.map Datum: NAD83 Projection: Stereographic Center: N W Created in AccuMap, a product o R26W3 12

13 Atlee Buffalo: Upside Potential Formation OOIP* Drilling Locations Reserves (MMBbl) Booked Unbooked Booked Cumulative Produced + Booked (MMBbl) At Various Recovery Factors (2P) (2P) 15% 25% 35% Upper Mann F (6%) 2.6 (11%) Upper Mann G (0%) 1.2 (4%) Atlee Buffalo Total (3%) 3.8 (7%) Potential 3.2 MMBbl Upper Mann F Produced 1.1 MMBbl Booked 1.5 MMBbl 25% Recovery Factor Upper Mann G Potential 7.5 MMBbl Produced 1.2 MMBbl * Based on internal mapping. 13

14 The Team: Built for Growth MANAGEMENT Don Simmons, P.Geol. President & Chief Executive Officer Over 15 years of experience technical, operational and management experience (AEC, Encana, Sebring) Ian Duncan, P.Eng. Chief Operating Officer Over 10 years of experience which includes drilling, completions, facilities, and operations (Talisman and Solaris MCI) Dorlyn Evancic, CPA, CGA Chief Financial Officer Over 30 years of experience in corporate finance and management (Guyana Frontier, Northern Continental and Gemco Minerals) Andrew Arthur, P.Geol. Vice President, Exploration Over 27 years of experience with several hundred wells drilled across the Western Canadian Sedimentary Basin (Enerplus, Mission, Talisman) Ashley Ramsden-Wood, P.Eng. Vice President, Engineering Over 12 years of experience in reservoir engineering, capital planning, and reserves evaluation (NAL, Petro-Canada) BOARD OF DIRECTORS Charlie O Sullivan, B.Sc. - Chairman Don Simmons, P.Geol. Frank Borowicz, QC, CA (Hon) Bruce McIntyre, P.Geol. Gregg Vernon, P.Eng. Richard Wyman, B.Sc., MBA CONSULTANTS James Muraro, P.Geoph. Geophysics Over 26 years domestic and international experience (Sebring, Pan Canadian, Total E&P, Sherritt International, Anderson) Dave Savage, P.Land Business Development Over 35 years experience (Sebring, BXL, Westar, Triquest, Sommer) 14

15 Hemisphere The Investment Proven Team with Successful Track Record Solid Production and Cash Flow Focused Strategy to Develop Low Risk Asset Base Disciplined Capital Spending and Flexible Balance Sheet Growth in Production, Reserves and Cash Flow Low Cost Drilling and Operations Top Well Metrics for Payouts and Rates of Return Current Oil Price Creates Attractive Entry Point 15

16 Analyst Coverage Industrial Alliance Securities Inc. Michael Charlton Phone: (403) Mackie Research Capital Corporation David Ricciardi Phone: (403) Maison Placements Canada Josef Schachter Phone: (403)

17 Advisory Statements Certain information in this document may constitute "analogous information" as defined in National Instrument Standards of Disclosure for Oil and Gas Activities ("NI "), including but not limited to, information relating to the areas in geographical proximity to lands that are or may be held by Hemisphere. Such information has been obtained from government sources, regulatory agencies or other industry participants. Hemisphere believes the information is relevant as it helps to define the reservoir characteristics in which Hemisphere may hold an interest. Hemisphere is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor. Such information is not an estimate of the reserves or resources attributable to lands held or potentially to be held by Hemisphere and there is no certainty that the reservoir data and economics information for the lands held or potentially to be held by Hemisphere will be similar to the information presented herein. The reader is cautioned that the data relied upon by Hemisphere may be in error and/or may not be analogous to such lands to be held by Hemisphere. Any references in this presentation to initial, early and/or test or production performance rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinate of the rates at which such wells will produce or continue production and to decline thereafter. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for Hemisphere. The initial production rate may be estimated based on other third party estimates or limited data available at this time. In all cases in this presentation, initial production or tests are not necessarily indicative of long term performance of the relevant well or fields or of ultimate recovery of hydrocarbons. The information contained in this corporate presentation does not purport to be all inclusive or to contain all information that a prospective investor may require. Prospective investors are encouraged to conduct their own analysis and reviews of Hemisphere and of the information contained in this corporate presentation. Without limitation, prospective investors should consider the advice of their financial, legal, accounting, tax and other advisors and such other factors they consider appropriate in investigating and analyzing Hemisphere. All dollar amounts are expressed in Canadian dollars unless otherwise stated. Any financial outlook or future oriented financial information, as defined by applicable securities legislation, has been approved by management of Hemisphere. Such financial outlook or future oriented financial information is provided for the purpose of providing information about management s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. In this presentation, certain terms that are not specifically defined in International Financial Reporting Standards ("IFRS") are used to analyze the Company s future operating results. Management believes that certain measures not recognized under IFRS assist management and the reader in assessing the Company s expected performance and understanding the Company s outlook. These measures provide the reader with additional insight into the Company s performance. However, these terms do not have any standardized meanings prescribed by IFRS and therefore may not be comparable with the calculations of similar measures for other entities. "Funds flow from operations" is a non-ifrs measure that represents cash generated by operating activities, before changes in non-cash working capital and may not be comparable to measures used by other companies. "Operating netback" is a non-ifrs measure calculated as the Company s oil and gas sales, less royalties, operating expenses, and transportation costs per barrel of oil equivalent. "Net debt" is a non-ifrs measure calculated as current assets minus current liabilities including bank indebtedness and excluding flow through premium. Note: A boe means barrel-of-oil equivalent on the basis of 1 boe to 6,000 cubic feet of natural gas. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Original Oil In Place ("OOIP") is equivalent to Discovered Petroleum Initially-In-Place (DPIIP). DPIIP, as defined in the Canadian Oil and Gas Evaluations Handbook (COGEH), is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of DPIIP includes production, reserves and contingent resources; the remainder is unrecoverable. OOIP/DPIIP estimates are based on current accepted technology and prepared by Hemisphere s qualified reservoir engineers and geologists. 17

18 Don Simmons President & Chief Executive Officer T: E: Scott Koyich Investor Relations T: E: Banker Auditor Transfer Agent Legal Counsel Evaluation Engineers ADVISORS Alberta Treasury Branches Smythe Ratcliffe LLP Computershare Trust Company of Canada Fasken Martineau DeMoulin LLP McDaniel & Associates Consultants Ltd. Suite 2000, 1055 West Hastings Street Vancouver, British Columbia V6E 2E9