Hemisphere Energy (HME) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was $23.1 million, with production averaging 3,571 boe/d (99% heavy oil), a 1% decrease year-over-year due to workovers and downtime, but September production rebounded to 3,800 boe/d.

• Net income for Q3 2025 was $6.9 million ($0.07/share), down from $8.6 million in Q3 2024, mainly due to a 12% drop in realized commodity prices.

• Adjusted funds flow from operations (AFF) for Q3 2025 was $10.1 million ($0.11/share, $30.59/boe), down from $11.7 million in Q3 2024.

• Free funds flow for Q3 2025 was $4.9 million, supporting continued shareholder returns and capital flexibility.

• Paid $5.2 million in dividends and repurchased 1.0 million shares for $1.9 million in Q3 2025 under NCIB.

Financial highlights

• Q3 2025 petroleum and natural gas revenue was $23.1 million, a 13% decrease year-over-year.

• Operating netback for Q3 2025 was $41.39/boe, down 10% from Q3 2024, reflecting lower realized prices.

• Operating and transportation costs were $15.50/boe in Q3 2025.

• Royalties for Q3 2025 were $12.44/boe (18% of revenue), down from $17.53/boe (22%) in Q3 2024.

• Q3 2025 free funds flow was $4.9 million, up from $1.8 million in Q3 2024.

Outlook and guidance

• Management expects WTI oil prices to average US$65/bbl in 2025 and anticipates exceeding AFF guidance of $40 million for this price scenario.

• 2025 capital expenditures are projected to remain on budget despite deferred drilling and downtime.

• Average annual 2025 production is now estimated at 3,600–3,700 boe/d (99% heavy oil), below the original guidance of 3,900 boe/d.

• Fourth quarter 2025 production is expected to range between 3,400–3,500 boe/d due to facility outages.

• 2026 guidance will be released in January 2026.