Tag: Hemisphere Energy Corporation

Hemisphere Energy Corporation (HMENF) – Production a bit light, but recent drilling will help

Posted on by cpereira@noblefcm.com


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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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Hemisphere Energy Corporation (HMENF) – Financial results reflect recent investments

Posted on by cpereira@noblefcm.com


Friday, May 26, 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.

Accelerated drilling is beginning to lead to strong production growth. Production rose 20% year over year and 7% quarter over quarter. After paring back drilling in 2020 when oil prices were low, the company has accelerated its drilling efforts. This has led to a doubling of production since 2020. With an active drilling program planned for the fall, look for production to show similar growth at the end of 2023 and the first quarter of 2024. 

But basin differential issues are leading to lower-than-expected pricing. Oil prices fell 19% year over year, but HME’s realized oil price fell 32%. The differential has increased in recent quarters with the last three quarters being significantly larger both in absolute terms and on a percentage basis. We would note that other western Canadian oil producers have reported a similar widening of basin differential. Whatever the reason, it is worth tracking and making adjustments in our models to reflect the widening differential.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Hemisphere Energy Corporation (HMENF) – Hemisphere completed year full of growth

Posted on by cpatches


Friday, April 21, 2023

Michael Heim, Senior Energy & Transportation Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Results demonstrate strong production growth and a sharp increase in cash flow and earnings. Production rates (preannounced) increased 55%. Increased production was partially offset by a drop in energy prices. Lower-than-expected prices were partially offset by a decrease in royalty rates. Production costs (excluding transportation costs) remain somewhat elevated as they were in the September quarter. We look for production costs per barrel to decrease modestly as new production comes on line in 2023.

As netbacks rose, so did the company’s Adjusted Fund Flow (AFF). The margin between prices and costs is high. Operating netbacks (realized prices less royalties and operating costs) is leading to strong cash flow which management is turning their focus toward returning to shareholders now that debt is virtually eliminated and drilling programs have been accelerated.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Hemisphere Energy Corporation (HMENF) – Initiating with an Outperform Rating and $2.25 Price Target

Posted on by cpereira@noblefcm.com


Monday, April 03, 2023

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

We believe the market is undervaluing Hemisphere Energy’s asset base cash flow generation. We believe the stock price will move towards our price target as the company generates operating cash flow that is used to expand operations and return capital to shareholders. We view the investment as fairly low risk because it is expanding operations is an area that is well known and already providing high returns on investment.

Strong production growth. Production increased 55% in 2022 and management expects production to grow another 10-15% in 2023 in response to the addition of new wells. Unless there is a dramatic drop in oil prices, we believe the company will be able to maintain a double-digit production growth rate for the foreseeable future. Longer-term growth may be dependent upon completing a step-out acquisition to increase the company’s drilling locations.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.