Hemisphere Energy Corporation (TSX-V: HME) ("Hemisphere" or the "Company") is pleased to announce it has started operations for its 2019 drilling program.
Image: Onshore wells. Photo: courtesy of Stuart Miles/Freedigitalphotos.net.
After posting record corporate revenue, production, and funds flow from operations for the first quarter, Hemisphere has now commenced its 2019 drilling program in southern Alberta with plans to drill up to 16 wells in the Atlee Buffalo area during the year.
Hemisphere is committed to taking a measured approach to capital spending in 2019 as it balances annual growth in production, reserves and cash flow with commodity price volatility and corporate debt. The Company will continue to monitor oil and WCS differential pricing throughout the program and adjust drilling if required.
At present pricing, Hemisphere’s Atlee Buffalo development oil wells have robust economics. Average production from the first 20 producing horizontal oil wells that Hemisphere has drilled in Atlee Buffalo since 2014 is over 60 bbl/d per well, with between eight months and over five years of production history per well. Operating and transportation costs for the area in the last 12 months averaged less than $11.00/boe, and royalties averaged less than 16% of total revenue at approximately $7.50/boe.
At this time, Hemisphere has completed drilling operations on the first well of the program and started drilling the second horizontal well targeting the Glauconitic sandstones of the Mannville Group. The first horizontal well encountered over 750 meters of oil pay and is awaiting completion and tie-in operations with production estimated to be on by mid-July. Hemisphere has a 100% working interest in its Atlee Buffalo property.
Additional facility upgrades are underway to further expand the Atlee Buffalo G pool battery, where the number of producing oil wells is planned to more than double from eight to nineteen after this drilling program. Hemisphere currently has six water injectors in the G pool, and plans to drill one dedicated water injector as part of this program.
Based on field estimates from June 1st to June 25th, corporate production was approximately 1,445 boe/d (95% oil). The Company’s strategy through 2019 is to further grow production, reserves, and free cash flow with significant focus on strengthening its balance sheet in order to generate greater shareholder value in the coming years.
Source: Company Press Release