SLIDE 13 Advisory Statements
13
Drilling Loc
at ion
This presentation discloses drilling locations in two categories: (i) booked locations; and (iii) unbooked locations. Proved locations and probable locations, which are sometimes collectively referred to as "booked locations", are derived from the McDaniel Reserve Report and account for drilling locations that have associated proved or probable reserves, as applicable. Unbooked locations, are internal estimates based on the Company's prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources. Of the 30 locations identified at Jenner in this presentation, 7 are proved locations, 1 is a probable location and 22 are unbooked locations in the Mcdaniel Reserve Report dated December 31, 2018. Of the 40 locations (producers) identified on the map at Atlee Buffalo, 31 are booked as proved undrilled locations and 7 are booked as probable undrilled locations , and 2 are unbooked locations in the Mcdaniel Reserve Report dated December 31, 2018. Unbooked locations have specifically been identified by management as an estimation of Hemisphere's anticipated drilling activities based on evaluation of applicable geologic, seismic, and engineering, production and reserves data on prospective acreage and geologic formations. The drilling locations on which Hemisphere will actually drill wells ultimately depends upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results and other factors. While certain of the unbooked drilling locations have been derisked by drilling existing wells in relative close proximity to such unbooked drilling locations, certain unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production. Anal alog
at ion
The information concerning Upper Mannville N2N and YYY analogue pools may be considered to be "analogous information" within the meaning of applicable securities laws. Such information was obtained by Hemisphere management throughout the year ended December 31, 2018 from various public sources including information available to Hemisphere through AccuMap (a mapping, data management and analysis software for companies
- perating in the Western Canadian Sedimentary Basin).
Management believes such information is analogous to the Upper Mannville F and G pools in which Hemisphere has an interest and is relevant as it may help to demonstrate the reaction of such pools (in which Hemisphere has an interest) to waterflood stimulations. Hemisphere is unable to confirm whether the analogous information was prepared by a qualified reserves evaluator or auditor or in accordance with the COGE Handbook and whether such evaluator or auditor was independent and therefore, the reader is cautioned that the data relied upon by Hemisphere may be in error and/or may not be analogous to the oil pools in which Hemisphere holds an interest. I nit ial al Prod
and Est im at at ed Ult im at at e Recoveri eries Initial production rates disclosed herein are not determinative of the rates at which the wells will continue to produce and decline thereafter and may not necessarily be indicative of long-term performance or estimated ultimate
- recovery. Such rates should be considered preliminary. The term "estimated ultimate recovery" is the estimated quantity of petroleum that is potentially recoverable or has already been recovered from a well. Estimated ultimate
recovery does not have a standardized meaning and may not be comparable to similar measures presented by other companies. As such, it should not be used to make comparisons. Management uses estimated ultimate recovery for its own performance measurements and to provide readers with measures to compare the Company's performance over time; however, such measure is not a reliable indicator of the Company’s future performance and future performance may not compare to the performance in previous periods and therefore should not be unduly relied upon. Non
FRS Measure res The presentation contains terms that are non-IFRS measures and commonly used in the oil and gas industry which are not defined by or calculated in accordance with International Financial Reporting Standards ("IFRS"), such as: (i) funds flow from operations or annualized funds flow; (ii) net debt; and (iii) operating field netback per boe. These terms should not be considered an alternative to, or more meaningful than the comparable IFRS measures (as determined in accordance with IFRS) which in the case of funds flow from operations is cash provided by operating activities and cash flow from operating activities and in the case of operating field netback is net income or net
- loss. There is no IFRS measure that is reasonably comparable to net debt. These measures are commonly used in the oil and gas industry and by Hemisphere to provide shareholders and potential investors with additional
information regarding: (i) in the case of funds flow from operations, the Company's ability to generate the funds necessary to support future growth through capital investment and to repay any debt; (ii) in the case of operating field netback per boe, the indication of the Company's profitability relative to current commodity prices; and (iii) in the case of net debt, the capital structure of the Company. Th Third Part rt y I nfor
at ion
Certain information contained herein is based on, or derived from, information provided by independent third-party sources. Management believes that such information is accurate and that the sources from which it has been
- btained are reliable; however, management is unable to independently verify such information. Readers are also cautioned that the management is, as a result, unable to determine or verify whether such information was
prepared in accordance with NI 51-101 or the COGE Handbook.
