Hemisphere Energy Corporation Enters Into Seismic Option Agreement and Provides Operational Update

abarrelfullabarrelfull wrote on 20 Jun 2012 06:05
Tags: canada hemisphere n-america upstream

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Hemisphere Energy Corporation ("Hemisphere") (TSX-V: HME) is pleased to announce it has entered into a seismic option and farm-in agreement (the "Agreement") in the Jenner area of southeast Alberta.

Seismic Option and Farm-in Agreement

The Agreement requires Hemisphere to acquire 3D seismic data on or before August 15, 2012. Hemisphere will then have the option to drill a test well on or before November 15, 2012, subject to surface access, rig availability and regulatory approval.

Under the terms of the Agreement, Hemisphere will pay 100% of seismic costs and 100% of any drilling, completion and tie-in costs to earn 100% of the earned lands before payout, subject to a convertible overriding royalty. Once initial obligations are fulfilled, Hemisphere will have the option to acquire additional 3D seismic and drill additional wells to earn into a maximum of 6.5 sections of land in the Jenner area of southeast Alberta.

Operational and Production Update

Hemisphere has recently completed upgrades to its existing facilities by adding a new water disposal pump and a heated free-water-knockout separator. These upgrades provide greater fluid handling capacity for future drilling, optimization of existing wells and reducing overall operating costs.

Based on field estimates, Hemisphere's production for the first week of June was approximately 450 barrels-of-oil-equivalent per day with a 93% oil and natural gas liquids weighting.

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