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The HME Opportunity Creat ing lon ong-t er erm sh shareh eholder er va value ue Organic Production Growth ~ 130% % product ion grow t h since accessing capit al w it h long-t erm d debt d deal in Sept em ber 2017 Substantial Additions booked in 2018 Reserve Report ~ Do Doub ubled P PDP DP va valua uat ion a n and nd grew 1P a and nd 2P r reserve ve va valua uat ions ns by o ove ver 70% Attractive Price Environment for HME Projects ROR * ~ WTI US$55 & WCS Cdn$50 creat es average w w ell econom ics w it h 1 160% R I gnored Sector ~ Can anad adian an energy com pan anies ar are t rad ading at at low m et rics Adds dds up p t o a bu buyi ying g oppo pport unit y. y... * Economics for HME wells have been internally generated based on Proved plus Probable bookings in the McDaniel & Associates Consultants Ltd. ("McDaniel") reserve report dated March 14, 2019 and effective as of December 31, 2018 ("McDaniel Reserve Report” for an average Atlee Buffalo well, run at US$55 Flat WTI Pricing with US$17 WCS Differential and 1.33 Fx, with average $4 quality differential from WCS, $10K/w.mo fixed and $4.40/bbl variable operating and transportation expenses, and ~ $4.15/boe lifetime royalties with ultra heavy par price $7/bbl less than WCS pricing. 2
The Snapshot TSX Venture HME Share Price $0.16 March 26, 2019 52 Week Range $0.09 - $0.32 Basic Shares Outstanding 89.8 MM FD Shares Outstanding 112.0 MM I nsider Ownership (Fully Diluted) ~ 26% Enterprise Value * $49.9 MM Q3 Revenue $5.9 MM Q3 Operating Field Netback $30.62/ boe December 31, 2018 Net Debt $35.5 MM Term Loan Facility * * US$35.0 MM 5 years; Matures September 15, 2022 Estimated Q4 Production * * * ~ 1378 boe/ d (95% oil) Proved + Probable Reserves & NPV10 (before tax) * * * * 10.6 MMboe $197.9 MM Proved Reserves & NPV10 (before tax) * * * * 7.6 MMboe $142.4 MM Proved Developed Producing Reserves & NPV10 (before tax) * * * * 3.2 MMboe $68.4 MM Liability Management Rating (March 2, 2019) 8.85 Ratio of Hemisphere’s deemed assets (production) to deemed liabilities (abandonment & reclamation costs) (Top 10% of Alberta Companies) * Based on an equity value of $0.16 as of Mar 26, 2019 and a net debt of $35.5 million as of Dec 31, 2018. * * The lender under Hemisphere’s Term Loan Facility has committed up to US$30.0 million to date. * * * As disclosed in Hemisphere’s news release dated March 26, 2018. * * * * Reserve volumes and net present values are as attributed in the McDaniel Reserve Report effective as of December 31, 2018. See Advisory Statements – Oil and Gas Information – Net Present Values. 3
The Long-Term Value Growth $2.21 12.0 $200.0 $2.25 NPV10 BT * Reserves * 11.0 $180.0 $2.00 48% Growth 70% Growth per share 2P 10.0 in the last year $55.6 through drilling and $160.0 waterflood in the $1.75 3.0 9.0 last year $140.0 8.0 $1.50 $1.30 $120.0 7.0 Per share (basic) MMboe $1.25 2P 6.0 2.3 $100.0 $MM $36.3 $1.00 5.0 $80.0 $0.77 1P 4.0 $0.64 $142.4 $0.75 1.4 7.6 $60.0 2P 1.1 $20.2 3.0 2P 1P $0.50 $40.0 4.9 $14.1 $80.4 2.0 1P 3.1 2.8 $0.25 1P $20.0 $45.7 1.0 $34.3 $0.0 0.0 $0.00 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 2015 2016 2017 2018 2015 2016 2017 2018 Proved Probable * Reserve volumes and net present values are attributed in each of the independent reserve reports prepared for Hemisphere effective as of the date noted above. 4
The Foundation Assets Southeast Alberta Focus JENNER ATLEE BUFFALO Edmonton Atlee HME Land Buffalo Calgary Jenner 5
Atlee Buffalo: The Growth Opportunity o F Pool G POOL • 31 MMbbl OOIP * • Only ~ 5% current oil recovery factor o G Pool • 40 MMbbl OOIP * • Only ~ 4% current oil recovery factor o Working I nterest – 100% in both pools F POOL o Opex < $10/ boe – Total Q4 18 Operating and Transportation costs o Excellent Geological Control – Oil pools delineated by over 50 vertical wells Hz producer o 3D Seismic – Coverage over both pools Hz water injector Vertical injector o Waterflood – Expanding in both pools o Oil Recovery Factors * – Local analogue oil pools have already achieved up to 40% recovery factors with enhanced recovery methods (waterfloods, polymer) and are still producing! o Hemisphere’s Dec. 31, 2018 Reserve Report reflects total 2P booked reserves of just 17% of McDaniel’s estimated oil in place * * * See Advisory Statements – Oil and Gas Information – Analogous Information. * * Based on McDaniel’s reservoir mapping for the purposes of the McDaniel Reserve Report. See Advisory Statements – Oil and Gas Information – OOIP. 6
Atlee Buffalo: The Development Plan G POOL 2018 Accomplishments Drilled 14 wells Expanded both F and G pool facilities to enhance water separation and increase oil production Grew fourth quarter production by F POOL 80% over that of 2017 I ncreased recognition of waterflood success by McDaniel resulted in 48% increase in Atlee Buffalo 2P Reserve bookings 2019 Plans Hz producer H2 2019: Plan to drill up to 16 wells Hz water injector Continue to expand field-wide reservoir Future producer* * * * Future injector* * * * simulation studies Vertical injector Continue to optimize batteries and existing waterflood operations 7
Atlee Buffalo: The Reserve Upside Potential 2P Booked Potential Additional Cumulative Reserves as at (Unbooked) Reserves OOI P * At Various RF * * * Pool Production to-date December 31, 2017 (MMBbl) (MMBbl) (MMBbl) (MMBbl) 25% 35% 45% Upper Mann F 31 1.5 (5% Recovery Factor) 4.5 (19% Recovery Factor) * * 1.7 4.8 7.9 Upper Mann G 40 1.4 (4% Recovery Factor) 4.7 (15% Recovery Factor) * * 3.9 7.9 11.9 Atlee Buffalo Total 71 2.9 (4% Recovery Factor) 9.2 (17% Recovery Factor) * * 5.6 12.7 19.8 Upper Mann F Upper Mann G 1.4 MMbbl 1.5 MMbbl At t a Produced Produced 4.8 MMbbl 35% 35% 7.9 MMbbl 4.5 MMbbl 4.7 MMbbl Pot ent ial Pot e t ent i t ial Booked Booked Addi ddit ion onal Addi ddit ion onal Recovery Fact or * Based on McDaniel’s reservoir mapping for the purposes of the McDaniel Reserve Report. See Advisory Statements – Oil and Gas Information – OOIP. * * Represents the booked recovery factor attributed by McDaniel in the McDaniel Reserve Report. * * * The recovery factors (and reserve volumes) as noted are potential recovery factors (and reserve volumes) only and are based on management's estimates (as prepared by a qualified reserves evaluator in accordance with National Instrument 51-101) and assumes the successful response to Hemisphere's proposed waterflood operations based on the results of analogous pools under waterflood (See Advisory Statements – Oil and Gas Information – Analogous Information). There is no guarantee that the potential recovery factors will be realized by Hemisphere or that the reserve volumes noted will be attributed by an independent qualified reserves evaluator to Hemisphere. 8
Atlee Buffalo: Comparing Economics CONVENTI ONAL HZ WELL ECONOMI CS – Hemisphere Mannville Development with McDaniel 2P Reserve Bookings @ Flat $55 WTI Pricing * Capital Drill, Estimated Complete, Ultimate I nitial Equip & Tie-in Recovery * * Production * * BT Payout * BT NPV10 * BT ROR * Mannville/ Glauconitic Area $MM Mbbl bbl/d Years $MM % HME Atlee Buffalo 0.8 140 60 1.0 2.1 160 Well UNCONVENTI ONAL HZ WELL ECONOMI CS – Pipestone Montney Development with McDaniel Type Curve @ Flat $55 WTI & $1.40 AECO ($/ GJ) Pricing * * * Capital Drill, Estimated Complete, Ultimate I nitial Recovery * * * Production * * * BT Payout * * * BT NPV10 * * * BT ROR * * * Montney Equip & Tie-in Area $M Bcf Mbbl boed Years $MM % Pipestone Very Rich Gas Condensate 8.6 4.2 392 1650 1.3 5.9 62 Montney B Well * Economics for HME wells have been internally generated based on Proved plus Probable bookings in the McDaniel Reserve Report for an average Atlee Buffalo well., run at US$55 Flat WTI Pricing with US$17 WCS Differential and 1.33 Fx, with average $4 quality differential from WCS, $10K/w.mo fixed and $4.40/bbl variable operating and transportation expenses, and ~ $4.15/boe lifetime royalties with ultra heavy par price $7/bbl less than WCS pricing. * * See Advisory Statements – Oil and Gas Information – Initial Production Rates and Estimated Ultimate Recoveries. * * * Economics for the Montney formation in the Pipestone area have been taken from the March 2019 corporate presentation of a junior exploration and development company. See Advisory Statements – Third Party Information. 9
The Hemisphere I nvestment Assets for Growth Early stage of development High rate of return projects with production and reserve growth through strategic low- risk, low capital expenditure and fast payout projects Multi-year, low-risk drilling inventory in Atlee Buffalo and Jenner oil pools Stable, long-life, inclining production through waterflood Access to Capital Well funded by strategic energy partner to execute growth of HME’s oil assets Term Loan Facility of up to US $ 35 Million allows HME to organically develop its oil assets over the next 2-3 years Team to Deliver Competent and experienced management team that has led Hemisphere through several years of marginal commodity prices during the downturn and has positioned the company for growth Time to Execute Oil market has strengthened and development costs remain low 10
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