82.2 MM $ % 52 / $0.44 / $0.09 $6.8 MM

Transcription

1 December 2015

2 Corporate Summary TSX enture HM Share Price (Dec. 11, 2015) $ Week High / Low $0.44 / $0.09 Capital Structure Common Shares Outstanding 75.8 MM Fully Diluted Shares Outstanding 82.2 MM nsider Ownership (fully diluted) 13% Market Capitalization (Dec. 11, 2015) $6.8 MM Financial Highlights Q Revenue Oil & Gas Netback Operating Netback* Funds Flow from Operations* Credit Facility (ATB) Net Debt* Tax Pools $2.0 MM $1.1 MM $17.54/boe $0.7 MM $0.01/share $15.0 MM $10.6 MM ~$46.0 MM Operational Highlights Q Production Proved + Probable Reserves (Dec. 31, 2014) Proved Reserve alue (10% discount, BT) P+P Reserve alue (10% discount, BT) Land base (undeveloped) 678 boe/d (75% oil & NGL) 3.3 MMboe $40.3 MM $62.5 MM ~50,000 net acres Liability Management Rating (LMR) 5.60 * See non FRS measures in Advisory Statements. 2

3 2015: Shift in Strategy A rapid development year in 2014: 13 wells and 2 new 3D seismic surveys Continued cost cutting initiatives in Q Reduction in operating costs 12% decrease from Q to $9.95/boe Reduction in transportation costs 9% decrease from Q to $2.76/boe Reduction in royalties 81% decrease from Q to $2.50/boe Reduction in G&A expenses 42% decrease from Q to $4.38/boe Conservative approach to spending Strategic acquisitions at minimal costs Remaining 15% W in 1,120 acres at Atlee Buffalo 4.5 sections of land through Crown landsales Low cost projects mplemented 3 waterflood pilots in Atlee Buffalo Additional fluid handling in enner Now own 100% Working nterest in Atlee Buffalo Add/replace reserves and increase recovery factors 3

4 Creating Long Term Shareholder alue XPRNC ntegrated Team 200+ Horizontal Wells Successful Track Record stablished Operator nhanced Oil Recovery FOCUS Conventional Oil Large OOP ncrease Recovery Factors Low Cost Operations Southern Alberta Assets Flexible Balance Sheet FUTUR GROWTH CORPORAT GOALS ncrease Production Add Reserves Per Share Growth STRATGY Development Drilling Targeted xploration Strategic Acquisitions Build Future nventory CONOMC MTRCS Quick Payouts High Rates of Return 4

5 Year Over Year Reserves Growth 5.0 Reserves (McDaniel Report as at December 31, 2014) $70.0 Net Present alue (10% discount, before tax) $1.00 MMboe P 1.3 1P 0.8 2P 2.1 1P 1.3 2P 3.3 1P $MM $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 2P $26.5 1P $18.0 $0.49 2P $38.2 1P $24.6 $0.62 2P $62.5 1P $ $0.83 $0.75 $0.50 $0.25 $0.00 Per share (basic) 5

6 Hemisphere alue Proved + Probable Reserves McDaniel Report as at December 31, MMBoe Category Reserves Net Present alue 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 PROBABL 1.1 MMBoe PROD 2.2 MMBoe Asset Formations Drilling Locations Booked Unbooked Total Atlee Buffalo Glauconitic enner Glauconitic, Pekisko Total Low Risk Drilling Locations 78% Unbooked ~50,000 Undeveloped Net Acres alued at $7.5 million 6

7 Southern Alberta & Saskatchewan Paleo High NORTHRN BLZZARD ROCK OURNY HMSPHR enner Atlee Buffalo ALBRTA SASKATCHWAN HM Land HM Wells Brooks ARSNAL ALBRTA SASKATCHWAN CARDNAL Barrier Beach System Paleo High Calgary 7

8 Focus: Southeast Alberta Alberta G D A K KDG K LK A C GD L A G D CG D MD L NNR Suffield Military Base 2 core properties ~31,000 net acres 100% Working nterest Mannville oil zones Depth of 900 1,000 m Conventional Hz wells No fracs GK C L K M A M A LLF GF ATL BUFFALO HM Land 8

9 GG enner: Foundation Highlights 92% average working interest 24,338 net acres 8 oil pools defined by 3D seismic 30 low risk drilling locations identified Key Metrics $770K to drill, complete and tie in Facilities 2 operated oil processing and water disposal facilities xpansion capability B S HM Land Battery Satellite Pipeline 3D Seismic D U A U U K GD K K U U AL U A U B UCU U U GUD U U LU U A U B C G MD D G D U L U U U S U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U Suffield Military Base U 9

10 Atlee Buffalo: Growth GK K L A UPPR MANN F A GF M LLF M UPPR MANN G C HM Land HM Wells Oil Pool Q D Seismic Acquired 3D Seismic 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 OOP* Current recovery factor <5% mplemented three waterflood pilots 100% working interest 65 low risk drilling locations identified Key Metrics Low operating cost area at ~$10/boe P rates ~90 boe/d $875K to drill, complete and tie in m horizontal legs Note: * Based on internal mapping. 10

11 Atlee Buffalo: Waterflood Analog Comparisons Mannville Pools Operator OOP AP Recovery Factor to date Waterflood Name MMbbl Degree MMbbl RF Type Date Upper Mann YYY Cenovus 15.8* 13 o % Water ASP 1998 Upper Mann N2N Cenovus 28.0* 12 o % Water 1999 Upper Mann F Hemisphere 23.4** 13 o 1.1 5% Water Q3 15 Upper Mann G Hemisphere 34.7** 13 o 1.2 4% Water Q4 15 Alberta Upper Mann G Upper Mann F Upper Mann YYY Calgary Upper Mann N2N HM Land * Based on Alberta nergy Regulator. ** Based on internal mapping. 11

12 Atlee Buffalo: Reserve Upside Potential Formation OOP* Production Drilling Locations Booked Reserves Remaining Reserves (MMBbl) (MMBbl) (MMBbl) (MMBbl) Cumulative To Date Booked Unbooked Booked (2P) At arious Recovery Factors 15% 25% 35% Upper Mann F (5%) (6%) Upper Mann G (4%) (0%) Atlee Buffalo Total (4%) (3%) Potential 3.3 MMBbl Upper Mann F Produced 1.1 MMBbl Booked 1.5 MMBbl At 25% Recovery Factor Upper Mann G Potential 7.5 MMBbl Produced 1.2 MMBbl * Based on internal mapping. 12

13 The Team MANAGMNT Don Simmons, P.Geol. President & Chief xecutive Officer Over 15 years of experience technical, operational and management experience (AC, ncana, Sebring) an Duncan, P.ng. Chief Operating Officer Over 10 years of experience which includes drilling, completions, facilities, and operations (Talisman and Solaris MC) Dorlyn vancic, 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. ice President, xploration Over 27 years of experience with several hundred wells drilled across the Western Canadian Sedimentary Basin (nerplus, Mission, Talisman) Ashley Ramsden Wood, P.ng. ice President, ngineering Over 12 years of experience in reservoir engineering, capital planning, and reserves evaluation (NAL, Petro Canada) BOARD OF DRCTORS Charlie O Sullivan, B.Sc. Chairman Don Simmons, P.Geol. Frank Borowicz, QC, CA (Hon) Bruce Mcntyre, P.Geol. Gregg ernon, P.ng. Richard Wyman, B.Sc., MBA CONSULTANTS ames Muraro, P.Geoph. Geophysics Over 26 years domestic and international experience (Sebring, Pan Canadian, Total &P, Sherritt nternational, Anderson) Dave Savage, P.Land Business Development Over 35 years experience (Sebring, BXL, Westar, Triquest, Sommer) 13

14 Hemisphere The nvestment Proven Team with Successful Track Record Disciplined Capital Spending and Flexible Balance Sheet Low Cost Drilling and Operations Focused Strategy to Develop Low Risk Asset Base Solid Production and Cash Flow Growth in Production, Reserves and Cash Flow Top Well Metrics for Payouts and Rates of Return Current Oil Price Creates Attractive ntry Point 14

15 Analyst Coverage ndustrial Alliance Securities nc. Michael Charlton Phone: (403) mail: Mackie Research Capital Corporation David Ricciardi Phone: (403) mail: Maison Placements Canada osef Schachter Phone: (403) mail: sami.com 15

16 Advisory Statements Certain information in this document may constitute "analogous information" as defined in National nstrument Standards of Disclosure for Oil and Gas Activities ("N "), 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. n 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 adviceof 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. n this presentation, certain terms that are not specifically defined in nternational Financial Reporting Standards ("FRS") are used to analyze the Company s future operating results. Management believes that certain measures not recognized under FRS 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 FRS and therefore may not be comparable with the calculations of similar measures for other entities. "Funds flow from operations" is a non FRS 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 FRS 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 FRS 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 n Place ("OOP") is equivalent to Discovered Petroleum nitially n Place (DPP). DPP, as defined in the Canadian Oil and Gas valuations Handbook (COGH), 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 DPP includes production, reserves and contingent resources; the remainder is unrecoverable. OOP/DPP estimates are based on current accepted technology and prepared by Hemisphere s qualified reservoir engineers and geologists. 16

17 Don Simmons President & Chief xecutive Officer T: : simmons@hemisphereenergy.ca Scott Koyich nvestor Relations T: : scott@briscocapital.com Banker Auditor Transfer Agent Legal Counsel valuation ngineers ADSORS Alberta Treasury Branches KPMG LLP Computershare Trust Company of Canada Burnet, Duckworth & Palmer LLP/ Harper Grey LLP McDaniel & Associates Consultants Ltd.