Friday, August 25, 2023
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Production was a bit light, but new wells are coming. Production was flat in the June quarter versus last year and down 9% versus the previous quarter. Results were modestly below our expectations. Management indicated that it pushed drilling (and thus well completion) into the third quarter. Hemisphere remains on track to drill ten wells this year. The company reports that production is back up over 3,000 boe/d in August and appears heading towards a good jump in production in the December quarter when wells are completed.
Lower-than-expected production had an adverse affect on bottom-line financial results. With lower-than-expected production’ revenues, operating income, adjusted fund flow, and net income were all a few C$ million lower than projected in our models. Realized prices were in line with expectations as were operating costs and netbacks.
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