Hemisphere Energy (HME) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 production of 3,833 boe/d (99% heavy oil), up 21% year-over-year.

• Revenue rose 30% to $27.3 million compared to Q1 2024, driven by higher production and prices.

• Net income increased to $8.9 million ($0.09/share), up from $6.8 million ($0.07/share) in Q1 2024.

• Adjusted funds flow from operations (AFF) reached $12.7 million ($0.13/share), a 26% increase year-over-year.

• Distributed $2.4 million in dividends and repurchased 709,700 shares for $1.3 million under NCIB.

Financial highlights

• Operating netback was $17.0 million ($49.27/boe), up 29% from Q1 2024.

• Free funds flow totaled $11.5 million ($0.12/share), up from $4.4 million in Q1 2024.

• Operating and transportation costs were $14.63/boe.

• Working capital improved to $14.1 million from $4.2 million at March 2024.

• Heavy oil realized price averaged $79.58/bbl; combined realized price was $79.26/boe, up from $73.53/boe in Q1 2024.

Outlook and guidance

• Most 2025 capital spending is planned for the second half of the year.

• Q2 production is estimated at 3,800 boe/d, consistent with Q1 and up 13% sequentially from Q4 2024.

• Marsden pilot polymer flood project response expected by late 2025, with further development decisions pending.

• Management will prioritize shareholder returns, share buybacks, and potential acquisitions over accelerated capital spending.

• Quarterly dividend of $0.025/share approved for June 2025; $0.08/share paid in dividends in H1 2025 including special dividend.