Hemisphere Energy Corporation (TSX VENTURE:HME) is pleased to announce initial production results from the final three wells of its summer drilling program, record corporate production rates, and the commencement of a fall drilling program in Atlee Buffalo, Alberta.
As a result of the successful summer drilling program, Hemisphere has achieved record corporate production averaging 900 boepd (92% oil), based on field estimates, during the first two weeks of September 2014. The last three wells from the summer drilling program, drilled off of the same pad in Atlee Buffalo, have been on-stream for approximately 30 days. During the first two weeks of September, each well averaged over 100 bopd for a combined rate of 340 bopd.
During the summer of 2014, Hemisphere successfully completed the first five well drilling campaign in its corporate history. Within an 11 week period, Hemisphere drilled, completed, equipped and brought on-stream five horizontal wells in Atlee Buffalo. Results from Hemisphere's first six Atlee Buffalo wells show initial flush production rates 60% higher than originally budgeted with drilling costs from the summer drilling program 10% below budget due to the use of multi-well pads and efficiencies of the larger scale program.
The economics associated with the Atlee Buffalo Glauconitic horizontal wells are robust. Hemisphere estimates ultimate recovery of 100,000 boe per well. Based on an average drill, complete and tie-in cost of $1.15 million, the wells have 9 month payouts, $2.4 million Net Present Value discounted at 10% before tax and 175% rates of return. Hemisphere's first Atlee Buffalo well, which went on production in February 2014, has averaged $60 per boe netbacks through 2014. Since Hemisphere purchased the Atlee Buffalo property in November 2013, production has grown from 60 boepd to current rates of over 520 boepd, and Hemisphere has up to 65 additional locations identified.
Hemisphere has continued to consolidate its land position in Atlee Buffalo. During the summer, the Company closed another acquisition that added 85% working interest in 1,120 net acres of land adjacent to Hemisphere's existing land base.
Hemisphere is extremely encouraged by its initial drilling results in Atlee Buffalo and has commenced its fall drilling program, which includes up to four additional horizontal Atlee wells and one vertical test well in Jenner.