Hemisphere Energy (HME) Q1 2026 earnings summary

Executive summary

• Achieved Q1 2026 production of 3,811 boe/d (99% heavy oil), with stable output from core assets and ongoing polymer flood projects supporting strong base cash flow.

• Revenue totaled $25.4 million, down from $27.3 million in Q1 2025 due to lower realized prices, while production remained flat.

• Net income was $7.9 million ($0.08/share), a decrease from $8.9 million in Q1 2025, mainly due to higher share-based compensation.

• Adjusted funds flow from operations (AFF) was $12.7 million ($0.13/share), nearly flat year-over-year.

• Declared a quarterly cash dividend of $0.025/share, with total dividends of $0.11/share paid in H1 2026, including special and base dividends.

Financial highlights

• Operating netback was $16.7 million ($48.60/boe), down 1% year-over-year.

• Free funds flow reached $9.6 million ($0.10/share), after $3.1 million in capital expenditures.

• Operating and transportation costs were $14.76/boe, stable year-over-year.

• Paid $2.4 million in quarterly dividends and repurchased 457,600 shares for $1.0 million under the NCIB.

• Ended the quarter with no bank debt and positive working capital of $13.9 million.

Outlook and guidance

• 2026 guidance updated for higher oil prices: AFF projected at $40M (US$60 WTI), $57M (US$80 WTI), $78M (US$100 WTI).

• Free funds flow sensitivity: $28M (US$60 WTI), $45M (US$80 WTI), $66M (US$100 WTI).

• Annual production guidance: 3,900 boe/d (99% heavy oil).

• Base dividend guidance: $0.10/share for 2026.

• Fully unhedged oil position and strong balance sheet position the company to benefit from higher oil prices.