Hemisphere Energy (HME) Q2 2025 earnings summary

Executive summary

• Achieved Q2 2025 production of 3,826 boe/d (99% heavy oil), up 6% year-over-year, with stable base production and focus on balance sheet strength and shareholder returns.

• Revenue for Q2 2025 was $24.4 million ($70.06/boe), down 16% from Q2 2024, primarily due to a 20% decrease in realized prices, partially offset by higher production.

• Net income for Q2 2025 was $7.1 million ($0.07/share), down from $10.4 million ($0.11/share) in Q2 2024, mainly due to lower commodity prices.

• Distributed $5.3 million in dividends (including $2.4 million base and $2.9 million special) and repurchased $2.3 million in shares under the NCIB during the quarter.

• Renewed $35 million credit facility and exited Q2 with $13.9 million in positive working capital and no bank debt drawn.

Financial highlights

• Adjusted funds flow from operations (AFF) for Q2 2025 was $10.3 million ($0.11/share), down from $13.6 million ($0.14/share) in Q2 2024.

• Free funds flow was $8.1 million ($0.07/share) in Q2 2025.

• Operating field netback was $14.9 million ($42.77/boe), and operating netback was $14.0 million ($40.18/boe), both lower year-over-year due to price declines.

• Operating costs increased to $11.40/boe, up 18% from Q2 2024, mainly due to labor and polymer pilot costs.

• Capital expenditures totaled $2.2 million in Q2 2025, focused on preparatory work for drilling and water injection well treatments.

Outlook and guidance

• Drilling program deferred to late Q3 2025 due to market volatility; focus remains on balance sheet and shareholder returns.

• Management will monitor oil market volatility and adjust capital spending as needed.

• Company is positioned for potential acquisitions and continued shareholder returns.