Hemisphere Energy Declares Special Dividend

Rhea-AI Summary

Hemisphere Energy (HMENF) has announced a special dividend of C$0.03 per common share, to be paid on July 26, 2024, to shareholders of record on July 12, 2024. This special dividend, designated as eligible for Canadian income tax purposes, supplements the company's quarterly base dividend of C$0.025 per share announced earlier. So far in 2024, Hemisphere has committed $10.7 million to shareholder returns, including share repurchases and the special dividend.

This return of capital is funded entirely by the company's free cash flow, driven by high-margin enhanced oil recovery (EOR) assets, low production decline, and a healthy balance sheet. Additionally, Hemisphere has brought online all three producers in its new Marsden, Saskatchewan development play, and is preparing for the start-up of its EOR project in the third quarter of 2024.

Positive

• Special dividend of C$0.03 per common share, payable on July 26, 2024.
• The company has committed $10.7 million to shareholder returns in 2024.
• Dividend payments and share buybacks are funded by free cash flow.
• High-margin enhanced oil recovery (EOR) assets support financial strength.
• Low production decline contributes to a stable financial outlook.
• All three producers in the Marsden, Saskatchewan play are now online.
• EOR project start-up anticipated in the third quarter of 2024.
• Construction of a multi-well battery is currently underway.

Negative

• No specific revenue or profit figures were mentioned, limiting transparency.
• Dependency on EOR project success may pose a future risk.

Vancouver, British Columbia--(Newsfile Corp. - June 4, 2024) - Hemisphere Energy Corporation (TSXV: HME) (OTCQX: HMENF) ("Hemisphere" or the "Company") is pleased to announce that its board of directors has approved the declaration of a special dividend to shareholders.

Given the strong financial position and performance outlook of the Company, Hemisphere is pleased to announce that its board of directors has approved the declaration of a special dividend of C$0.03 per common share. The special dividend is part of Hemisphere's comprehensive shareholder return model, and will be paid on July 26, 2024 to shareholders of record on July 12, 2024. This special dividend is designated as an eligible dividend for Canadian income tax purposes. It is in addition to the Company's quarterly base dividend of C$0.025 per common share announced on May 29, 2024, and is in accordance with the Company's dividend policy.

Hemisphere has committed to shareholder returns of $10.7 million thus far in 2024, including shares repurchased and cancelled under the Company's normal course issuer bid, two quarterly dividend payments in February and June, and the special dividend payment in July. This return of capital is funded entirely by the Company's free cash flow and is made possible by its high-margin enhanced oil recovery ("EOR") assets, ultra-low production decline, and healthy balance sheet.

Subsequent to Hemisphere's last news release, the Company has now brought online all three producers in its new Marsden, Saskatchewan development play. The purpose of primary production at these wells prior to polymer flood start-up is to gather fluid samples, pressure data, and other relevant reservoir data that will assist in EOR project planning. Construction of Hemisphere's multi-well battery is currently underway, with anticipated polymer skid delivery and EOR project start-up in the third quarter.

About Hemisphere Energy Corporation

Hemisphere is a dividend-paying Canadian oil company focused on maximizing value per share growth with the sustainable development of its high netback, low decline conventional heavy oil assets through polymer flood EOR methods. Hemisphere trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol "HME" and on the OTCQX Venture Marketplace under the symbol "HMENF".

For further information, please visit the Company's website at www.hemisphereenergy.ca to view its corporate presentation or contact:

Don Simmons, President & Chief Executive Officer
Telephone: (604) 685-9255
Email: info@hemisphereenergy.ca

Website: www.hemisphereenergy.ca

Forward-looking Statements

Certain statements included in this news release constitute forward-looking statements or forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In particular, but without limiting the generality of the foregoing, this news release includes forward-looking statements including that a quarterly dividend will be paid in June 2024; that a special dividend will be paid to shareholders on July 26, 2024 to shareholders of record on July 12, 2024; and the timing of Hemisphere's anticipated polymer skid delivery and EOR project start-up in the third quarter.

Forward‐looking statements are based on a number of material factors, expectations or assumptions of Hemisphere which have been used to develop such statements and information, but which may prove to be incorrect. Although Hemisphere believes that the expectations reflected in such forward‐looking statements or information are reasonable, undue reliance should not be placed on forward‐looking statements because Hemisphere can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the timing for payment of the special dividend; no delays in the anticipated timing for delivery of the polymer skid and EOR project; the general continuance of current industry conditions; the timely receipt of any required regulatory approvals; the ability of Hemisphere to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Hemisphere has an interest in to operate the field in a safe, efficient and effective manner; the ability of Hemisphere to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Hemisphere to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Hemisphere operates; and the ability of Hemisphere to successfully market its oil and natural gas products.

The forward‐looking statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward‐looking statements including, without limitation: changes in project timelines and workstreams; changes in commodity prices; changes in the demand for or supply of Hemisphere's products, the early stage of development of some of the evaluated areas and zones; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Hemisphere or by third party operators of Hemisphere's properties, increased debt levels or debt service requirements; inaccurate estimation of Hemisphere's oil and gas reserve volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time‐to‐time in Hemisphere's public disclosure documents, (including, without limitation, those risks identified in this news release and in Hemisphere's Annual Information Form).

The forward‐looking statements contained in this news release speak only as of the date of this news release, and Hemisphere does not assume any obligation to publicly update or revise any of the included forward‐looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/211629

FAQ

When will Hemisphere Energy's special dividend be paid?

The special dividend will be paid on July 26, 2024.

What is the amount of Hemisphere Energy's special dividend?

The special dividend amount is C$0.03 per common share.

Who is eligible to receive Hemisphere Energy's special dividend?

Shareholders of record on July 12, 2024, are eligible to receive the special dividend.

What is the significance of the special dividend declared by Hemisphere Energy?

The special dividend reflects Hemisphere's strong financial position and commitment to returning capital to shareholders.

How has Hemisphere Energy committed to shareholder returns in 2024?

Hemisphere Energy has committed $10.7 million to shareholder returns, including share repurchases and dividend payments.

What drives Hemisphere Energy's ability to pay dividends?

Hemisphere Energy's free cash flow, driven by high-margin EOR assets and low production decline, supports its ability to pay dividends.

What developments have been made in Hemisphere Energy's Marsden, Saskatchewan play?

All three producers in the Marsden, Saskatchewan play are online, and the EOR project start-up is anticipated in the third quarter of 2024.