February 2017 Corporate Summary Capital Structure TSX Venture HME - - PowerPoint PPT Presentation

February 2017

Capital Structure

Common Shares Outstanding 85.7 MM Fully Diluted Shares Outstanding 90.1 MM Insider Ownership (fully diluted) 13%

2

Corporate Summary

TSX Venture HME

Share Price (Feb 10, 2017) $0.30 52 Week High / Low $0.305 / $0.07 Operational Highlights

Average Production (Q4 estimate) 585 boe/d (86% oil) Proved + Probable Reserves (Dec. 31, 2016)** 4.6 MMboe Net Present Value (10% discount, BT)** Proved + Probable Proved Proved Developed Producing $65.9 MM $45.7 MM $30.0 MM Undeveloped Land base (net) ~46,000 acres Liability Management Rating (LMR Feb 2017) 4.53

Financial Highlights

Market Capitalization (Feb 10, 2017) $25.7 MM Enterprise Value (Feb 10, 2017) $37.3 MM Net Debt* (Dec 31, 2016) $11.6 MM Tax Pools ~$47.0 MM Estimated Net Asset Value*** Proved + Probable $0.67/sh

* See Advisory Statements under Non-IFRS Measures and Preliminary Unaudited Results.. ** Reserve volumes and net present values are as attributed by McDaniel & Associates Consultants Ltd. ("McDaniel") in the reserve report of McDaniel dated Feb 10, 2017 and effective as of December 31, 2016 ("McDaniel Reserve Report"). See Advisory Statements – Oil and Gas Information – Net Present Values. *** Based on McDaniel Reserve Report and interval evaluation by management of land and seismic with an average value of $50 per acre for undeveloped net acres, $0.55 MM for seismic, unaudited year end net debt of $11.6MM, and 85.7 MM

• utstanding shares, all as of Dec. 31, 2016.

3

2016 Highlights

 Drilled and placed on production Hemisphere’s first Atlee G Pool well

• Production stable over first 6 months at ~60 bbl/d (100% oil) flat

 Added Facilities to Atlee F Pool for water handling and reinjection  Proved viability of waterflood concepts in both Atlee Buffalo pools  Achieved significant reserve growth despite limited total capital expenditures of $2.4MM, including just one well drilled

• Added 823 Mboe of Proved plus Probable reserves, replacing 427% of estimated

2016 production at an F&D cost of $7.49/boe, including changes in FDC*

• Added 549 Mboe of Proved reserves, replacing 285% of estimated 2016 production

at an F&D cost of $8.96/boe, including changes in FDC*

• Achieved a 2 year average F&D of $2.45/boe on a Proved plus Probable basis and

$3.86/boe on a Proved basis, including changes in FDC*, for recycle ratios** of 6.7 and 4.2 respectively

* Based on estimated 2016 production of 526 boe/d, 2016 changes in Future Development Capital (“FDC”) of $2.5MM (Proved) and $3.8MM (Proved plus Probable), and 2 year (2015-16) changes in FDC of $0.3M (Proved) and -$1MM (Proved plus Probable). ** Recycle ratio is calculated as operating netback divided by Finding and Development (“F&D”) cost for the applicable

• period. Operating netback is based on unaudited 2 year (2015-16) netback of $16.32/boe.

4

Reserves

Net Present Value*

(10% discount, before tax)

Reserves*

MMboe

** **

* Reserve volumes and net present values are as attributed in each of the independent reserve reports prepared for Hemisphere effective as of the end of the financial year noted above.

1P 1.3 1P 2.2 1P 2.8 1P 3.1 2P 0.8 2P 1.1 2P 1.1 2P 1.4

0.0 1.0 2.0 3.0 4.0 5.0 Dec 31 2013 Dec 31 2014 Dec 31 2015 Dec 31 2016

2P 2.1 2P 3.3 1P $24.6 1P $40.3 1P $34.3 1P $45.7 2P $13.5 2P $22.2 2P $14.1 2P $20.2 $0.71 $1.02 $0.64 $0.77

$0.00 $0.25 $0.50 $0.75 $1.00 $1.25 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 Dec 31 2013 Dec 31 2014 Dec 31 2015 Dec 31 2016

Per share (basic) MM$

5

Simple Story: Breathing new life into old pools

… FOCUS EXPERIENCE GROWTH

200+ Horizontal Wells Successful Track Record Established Operator Enhanced Oil Recovery Conventional Oil Large OOIP Pools Increase Recovery Factors Low Cost Operations ECONOMIC METRICS Quick Payouts High Rates of Return CORPORATE GOALS Increase Production Add Reserves Per Share Growth STRATEGY Development Drilling Waterflood Strategic Acquisitions

6

Southern Alberta

Paleo-High Paleo-High

Barrier Beach System

SASKATCHEWAN ALBERTA

Calgary

HME Land HME Wells

Jenner

HEMISPHERE

JOURNEY IMAGINEA CARDINAL Brooks ENERPLUS

ALBERTA SASKATCHEWAN Atlee Buffalo

HARVEST CENOVUS CNRL CNRL CENOVUS

7

Focus: Southeast Alberta

• 2 core properties
• ~31,000 net acres
• ~100% Working Interest
• Mannville and Pekisko oil
• Depth of 900-1,000 m
• Conventional Hz wells
• No fracs required

HME Land

Alberta Suffield Military Base

JENNER ATLEE BUFFALO

• 100% average working interest
• 100% operator of production
• >24,000 net acres of land
• 8 oil pools defined by 3D seismic
• 30 drilling locations identified*
• 9 booked locations*

8

Jenner: Stable Base Production and Cash Flow

Highlights

• 2 operated oil processing and water disposal

facilities

• Expansion capability for growth in production

Facilities

J J J E V E E V J U EU J V I U E U E V E V E V E U I U I V J V J V E V I V E V I V I U J I V E U E VJ E E V E V E V E V E V E V E V E V E V J IV J E V E V E V E V E V I V J I J E U J V J V J J V J E V J J V E V E I V J V J I V J V J V I I V E V J I V I E V I E V E V E V I V EV J V E V E V E E V E V E V E V I V E V E V E V E E V E V I V I V I V E V E V E V E V J V I V J U J V E V J V E V I E V E V I V J V I V E V E V E E V J E V E V I V I V I V I V E V E V E V J V E V E U E V E V J VI V E V E V J V J V E V J E V E V I V I V IV I V E V E V I E V E V E V I V J V E V I V E V E V E V E V J V E V E V E V E V E V E V E V J I U E U E V E VI V E V E V I V J E E VI V IV E I J JV E V J I I V I V E V I V I V J I V E V I V E V E V E V E VJ E E V J J I E E V I V J J J E I V I J V E V J E V J V I V E V J VI U E I I J J J I J E V J E E I V I E E V E I V I V J J E J J U E I E J E E V J E V E E V J U E V E V J U E V E J E V E J J J E V J U J J U J U J E V E V E V E V E V E V I V E V E V I V E V E V E J E V E I V I V I V I V J I V E V E J V E V E V E V E V E V J V E V J E V E V J E V E E V E V E V J V J V E E J I I V E J I J E I I U J J EV E U J V E V IV E V I V J I V I E V I V J J V E J J I J J E J J U E E I V E V E V E E V E E V I I J E J J J E I J E J J I E I J V J J I V I U I IU J U I J J V E E V I E V J J J J J J V I V J V J I J I I J J J E V E VE V E V E V I V E V E V E V E V E V I V I V E V E V E V E VE V E V E V I V E V J E E V J E I E J E E E J J J E E J J U I E E I E I E U J J E J I I E U J J J J E U J I I J I I E E I I E J I I I U E U J U J I E E J E I E U I E J U J U I V I I U J I VI J V J U J V E V J U I U E J E V J V E V J U I U E V EV I V JV J E V J U I I U E V I V E V E U I V J V I V I V J I V I V I VJ VI J U IV J J I V I U J E I E V J J V J U I V I U E V I V E VI V J V E V I U I V E V J I E VE V E V I U I U J V J V I E I V I V J I VIV I I V I U J U I V I V J J V I V J I U E V I V IV I V J I U I U I J V J V J V I I I I V I V I J U I E V J E V E V E V E V E V J E E V I V I V E V E V E V I V I E V E V E V E E V E V E V E V E I V I V E V E V E V E V E V I E V I V E V E V E V E V E V J I V J E V J EV E V E V J J E V E V E J U E U I E V I V E V E V E V EV J E V E V I V I V E V E V I V I V E V J V E V J J J I E V J I V E V E V J EV E EV E V E V E V I V J E V I E V E V E V J V E V I V I V E V J I V I V I V E V IV JV I V E V E V J J I E J U E U J J U E V J U J E E I VE U J V I E VE J V E J J J J E U E J I E I I V J I V J I E V E U I E V E U I U E V E U E J V J J E V E V J E E V E E V E E V E V E E V E V E V E V E J J V E V J V E V E V E V E V E V E V EV J J E V E V E V E V J J J E V E VE V E V I V J E V J E J I V J V J J E V J V J J J J J E E V E V E V J J J V J J J I J J V E V I E V J I V J I E V J J J J J V E V E V J E V J V I I J J J V E V J I J J J J V E V E J J J J V J J V J J J J J I V E V J I V J J V I E V E V J V E J J V J I V I V J V J J E V J V I V I V E V J V J J E I V E V E V E J J E V J V E VJ J V E J J I V J V E E E J V J E V E J V J J J V I V E J V J E J I E V I J J V J J J E V J J E V E V EV J J J J E V J E V J V J V I V J E V J J V E V E V J V E V E E V E E V J V E V J J V I V I V I V J E I V J E V IV E V J V I V E V I V J I V E V E E V I V J V E V I V J V E V E J J V E V E V I J V E V E V E I V I I I J E V I J E J J E E I J E I V I J E V J E V J J E J V J E E V E V J I J J V E V E V J J E I E V E V J E E V J E V J IV E V J J E V E V I V EV J J J E V J E V E V E V J V J V E V E V JV E V J E V E V E V E V J E V E V J E V E V J V I E V JV E V J J V E V E V E V E V E V E V E V E V E V J V J V E V E V I V E V E V E V E V E V E V E V J U E V E V I V I V I V E V E V I V E V I V J I V I V E V I V E V I V J V E V E V J V E V J V E V E V V V

I A V K J V K V

L

V K V A V J V J K E VD V G D V I V A V G V G V E V I U C U E E V G U J D I V E V E V E V E V E V E V E V M D G J D I C G V E E V A V E V D E E V J U E V E V

LU LU

E V E E V J

L

Created in AccuMap™, a product of IHS

Suffield Military Base

S B B

HME Land Battery Satellite Pipeline 3D Seismic

B S

* See Advisory Statements – Oil and Gas Information – Drilling Locations.

9

Atlee Buffalo: Significant Growth Area

J J J J J J J J J E V J J I J I J J J J J J J J J J J J J J J J E V E V E V J J J J J J J E V E V E V E V E V E V J J J J J E V I I J J J J J V I E I J J E V J

J C E V I I J E V E V E V J J M J E V E V E V

L

J

L

F J E V I M G F J J J

L

J V I E I J J K G K E V E V

A A E E E E

Created in AccuMap™, a product of IHS

HME Land HME Hz Wells HME Hz Injectors Oil Pool Q4 2014 3D Seismic Acquired 3D Seismic

UPPER MANN G POOL UPPER MANN F POOL

* Based on McDaniel’s mapping for the purposes of the McDaniel Reserve Report. See Advisory Statements – Oil and Gas Information – OOIP.

Highlights

• Two oil pools delineated by vertical wells from 70’s &

80’s with excellent geological and seismic control

• 100% working interest in both pools
• Upper Mannville F Pool
• 28 MMbbls OOIP*
• 4% Current Recovery Factor
• Waterflood commenced in 2015
• Permeability 1-2 Darcies
• Up to 6m net pay
• Upper Mannville G Pool
• 38 MMbbls OOIP*
• 3% Current Recovery Factor
• Waterflood commenced in 2015
• Permeability 1-4 Darcies
• Up to 13m net pay

10

Atlee Buffalo: Waterflood Analogues

Upper Mann YYY Upper Mann N2N

Upper Mann G Upper Mann F

Alberta

Calgary

* Based on Alberta Energy Mapping as of Feb 10, 2017. ** Based on McDaniel’s mapping for the purposes of the McDaniel Reserve Report. See Advisory Statements – Oil and Gas Information – OOIP.

HME Land

Mannville Pools OOIP* API Oil Recovery to-date Waterflood Current Rate Producing Wells

Name MMbbl Degree MMbbl RF Type Start Date Boe/d #

Upper Mann YYY 15.8* 13o 3.6 23% Water-ASP 1998 270 12 Upper Mann N2N 28.3* 12o 3.8 13% Water 1999 765 28 Upper Mann UU 3.3* 14o 1.3 39% Water-ASP 1998 180 3 Upper Mann F 28** 13o 1.2 4% Water Q3 15 265 8 Upper Mann G 38** 14o 1.2 3% Water Q4 15 60 1

Upper Mann UU

1.2 MMBbl 0.7 MMBbl 7.6 MMBbl

Pool OOIP* Cumulative Production to-date 2P Booked Reserves as of Dec 31, 2016 Potential Unbooked Reserves At Various Recovery Factors***

(MMBbl) (MMBbl) (MMBbl) (MMBbl)

15% 25% 35%

Upper Mann F 28 1.2 (4% Recovery Factor) 2.1 (12% Recovery Factor)** 0.9 3.7 6.5 Upper Mann G 38 1.2 (3% Recovery Factor) 0.7 (5% Recovery Factor)** 3.8 7.6 11.4

Atlee Buffalo Total 66 2.4 (3.6% Recovery Factor) 2.8 (8% Recovery Factor)** 4.7 11.3 17.9

1.2 MMBbl 2.1 MMBbl 3.7 MMBbl

11

Atlee Buffalo: Reserve Upside Potential

Potential Unbooked Produced

* Based on McDaniel’s 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 and assume 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 to Hemisphere.

At 25%

Recovery Factor Upper Mann F Upper Mann G

Potential Unbooked Booked Produced

11

Booked

UPPER MANN G POOL UPPER MANN F POOL

Booked Producers Booked Injectors Unbooked Producers Unbooked Injectors

12

Atlee Buffalo: Development Plan

• Upper Mannville F Pool
• 18 total producer locations

 4 Booked  14 Unbooked

• 7 total injector locations

 4 Booked  3 Unbooked

• Upper Mannville G Pool
• 36 total producer locations

 8 Booked  28 Unbooked

• 14 total injector locations

 4 Booked  10 Unbooked

• Next Step – DEVELOP!
• Expand drilling and

waterflood across pools

• Expand water handling and

re-injection facilities

Drilling Locations*

* See Advisory Statements – Oil and Gas Information – Drilling Locations.

13

Enticing Well Economics – Strip Pricing

* See Advisory Statements – Oil and Gas Information – Initial Production Rates. ** Assumptions: Strip pricing as of Jan 27, 2017; $US14 Differential; 1.31 Cdn/US exchange rate; Cdn$4/bbl Quality adjustment from WCS; ~Cdn$10.50/boe Incremental Opex.

Southern Alberta Mannville Pools Capital Drill, Complete, Equip & Tie-in (DCET) Estimated Ultimate Recovery* IP* Payout** NPV10** ROR** Capital Efficiency**

Area $MM Mbbl Bbl/d Yrs $MM % $/bbl/d

Jenner (Primary) 0.65 110 90 0.9 1.7 155 7,200 Atlee-Buffalo (Waterflood) 0.7 150 60 1.0 2.9 165 11,700

• Hemisphere reduced the DCET costs of its recent 2016 Atlee

Buffalo well by 45% to $685K from the average of the 10 Atlee Buffalo wells drilled in 2014

14

Cash Flow Model – STRIP PRICING

• Full-scale Atlee Buffalo development* has the potential to bring corporate

production to >3000 bbl/d and annualized cashflow to >$40MM within 3 years.

• Assumptions** include IP rates of 60 bbl/d per well with 10% annual declines and

$38MM in drilling capital for 54 producing locations plus $19MM in facilities/injectors.

500 1000 1500 2000 2500 3000 3500 5000 10000 15000 20000 25000 30000 35000 40000 45000 Q417 Q418 Q419 Corporate Production (bbl/d) Cash Flow, Capital Outlay ($M)

Q4 Annualized Cash Flow Cumulative Annual Capital Outlay Q4 Average Corporate Production

* See Advisory Statements under Forward Looking Information and Statements, and Annualized Cashflow Estimate. ** Assumptions for Atlee Buffalo development locations: Strip pricing as of Jan 27, 2017; $US14 Differential; 1.31 Cdn/US exchange rate; Cdn$4/bbl Quality adjustment from WCS; ~Cdn$10.50/boe Incremental Opex.

• High rate of return projects with production and reserve growth through

strategic low risk and low capital expenditure projects

 Own and acquire known conventional oil pools with large OOIP  Focus on oil pools that have low recovery factors compared to local analogue pools  Maintain 100% working interest and operatorship in wells and facilities  Use 3D seismic and reservoir modelling to map drilling and development plan  Apply proven horizontal drilling and completion practices for optimal oil recovery  Implement low risk enhanced recovery waterflood programs to increase recovery factors

• Significant running room with the full development of existing pools at

Jenner and Atlee Buffalo

Current oil price creates attractive entry point into a company at its ‘tipping point’

15

Hemisphere – The Investment

MANAGEMENT

Don Simmons, P.Geol.

President & Chief Executive Officer

Over 16 years of experience technical, operational and management experience (AEC, Encana, Sebring)

Ian Duncan, P.Eng.

Chief Operating Officer

Over 12 years of experience which includes drilling, completions, facilities, and operations (Talisman and Solaris MCI)

Dorlyn Evancic, CPA, CGA

Chief Financial Officer

Over 30 years of experience in corporate finance and management (Guyana Frontier, Northern Continental and Gemco Minerals)

Andrew Arthur, P.Geol.

Vice President, Exploration

Over 28 years of experience with several hundred wells drilled across the Western Canadian Sedimentary Basin (Enerplus, Mission, Talisman)

Ashley Ramsden-Wood, P.Eng.

Vice President, Engineering

Over 14 years of experience in reservoir engineering, capital planning, and reserves evaluation (NAL, Petro-Canada)

16

The Team

CONSULTANTS

James Muraro, P.Geoph.

Geophysics

Over 26 years domestic and international experience (Sebring, Pan Canadian, Total E&P, Sherritt International, Anderson)

Dave Savage, P.Land

Business Development

Over 35 years experience (Sebring, BXL, Westar, Triquest, Sommer)

Karen Dowling, Land

Land Administration

Over 20 years experience (Conserve, Penn West, Sebring)

BOARD OF DIRECTORS

Charlie O’Sullivan, B.Sc. - Chairman Don Simmons, P.Geol. Frank Borowicz, QC, CA (Hon) Bruce McIntyre, P.Geol. Gregg Vernon, P.Eng. Richard Wyman, B.Sc., MBA

17

Advisory Statements

Forward-looking Information and Statements

This presentation contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends", "forecast" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this presentation contains forward-looking information and statements pertaining to the following: the volumes and estimated value of Hemisphere's oil and gas reserves; resource estimates and volumes in respect of Hemisphere's Jenner and Atlee Buffalo property areas; the volume and product mix of Hemisphere's oil and gas production; production estimates; future oil and natural gas prices; future results from operations and operating metrics; future costs, expenses and royalty rates; the exchange rate between the $US and $Cdn; future development, exploration, acquisition and development activities and related capital expenditures and the timing thereof; an annualized cashflow estimate based on full-scale development plans; the amount and timing of capital projects; operating costs; the total future capital associated with development of reserves and resources, the anticipated response of Hemisphere's oil assets at the Atlee Buffalo property area to waterflood stimulation operations (including the potential for increased recovery factors and reserve volumes resulting there from), estimated ultimate recoveries of producing wells, initial production rates and the estimated payout, NPV10 values, rates of return and capital efficiencies of Hemisphere’s Jenner and Atlee Buffalo wells. The recovery, reserve and resource estimates of Hemisphere's reserves and resources provided herein are estimates only and there is no guarantee that the estimated reserves or resources will be

• recovered. In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Hemisphere which have been used to develop such

statements and information but which may prove to be incorrect. Although Hemisphere believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Hemisphere can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which Hemisphere operates; the timely receipt of any required regulatory approvals; the ability of Hemisphere to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Hemisphere has an interest in to operate the field in a safe, efficient and effective manner; the ability of Hemisphere to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; risks associated with the degree of certainty in resource assessments; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Hemisphere to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Hemisphere operates; and the ability of Hemisphere to successfully market its oil and natural gas products. There are a number of assumptions associated with the potential

• f resource volumes estimated herein, including the quality of the reservoir, future drilling programs and the funding thereof, continued performance from existing wells and performance of new

wells, well density per section and recovery factors and discovery and development of the lands evaluated in Hemisphere's property areas of operation, which necessarily involves known and unknown risks and uncertainties, including those identified in this presentation and including the risks set forth in Hemisphere's most recent annual information form available for review on SEDAR at www.sedar.com. The forward-looking information and statements included in this presentation are not guarantees of future performance and should not be unduly relied upon. The forward-looking information and statements contained in this presentation speak only as of the date of this presentation, and Hemisphere does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Oil and Gas Information

Net Present Values

It should not be assumed that the estimates of future net revenues presented disclosed in this presentation represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions made in estimating such future net revenues will be attained and variances could be material.

BOE

Disclosure provided herein in respect of Boe's may be misleading, particularly if used in isolation. A Boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

18

Advisory Statements

Oil and Gas Metrics

This corporate presentation includes metrics commonly used in the oil and natural gas industry, such as finding and development ("F&D") costs", "development capital", "operating netback", "recycle ratio" and "reserve life index ("RLI")". These terms do not have a standardized meaning and Hemisphere's calculation of such metrics may not be comparable to the calculation method used or presented by other companies for the same or similar metrics, and therefore should not be used to make such comparisons. "Finding and development costs" or "F&D costs" are calculated as the sum of development capital plus the change in future development capital ("FDC") for the period divided by the change in reserves that are characterized as development for the period. Finding and development costs take into account reserves revisions during the year on a per boe basis. The aggregate of the exploration and development costs incurred in the financial year and changes during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year. "Development capital" means the aggregate exploration and development costs incurred in the financial year on reserves that are categorized as development. Development capital excludes capitalized administration costs. "Operating netback" is calculated using production revenues including realized hedging gains and losses on commodity contracts minus royalties, operating and transportation expenses calculated on a per boe basis. "Recycle ratio" is measured by dividing the operating netback by F&D cost per boe for the year. “Reserve life index" is calculated as total company interest reserves divided by annual production, for the year indicated. Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare the Company's operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes.

OOIP

Original Oil-In-Place ("OOIP") is used by Hemisphere in this presentation as an equivalent to Discovered Petroleum Initially‐In‐Place ("DPIIP"). DPIIP, as defined in the Canadian Oil and Gas Evaluation Handbook, is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of DPIIP includes production, reserves and contingent resources; the remaining portion of DPIIP is unrecoverable. It should not be assumed that any portion of the OOIP/DPIIP set forth in this presentation is recoverable other than the portion which has been attributed reserves by McDaniel. There is uncertainty that it will be commercially viable to produce any portion of the OOIP/DPIIP other than the portion that is attributed reserves. The OOIP/DPIIP set forth in this presentation has been provided for the sole purpose of highlighting the recovery factors for the reservoirs that have been attributed reserves. The OOIP/DPIIP volumes for Hemisphere's Jenner property disclosed in this presentation were prepared by a member of Hemisphere's management team who is a qualified reserves evaluator. The OOIP/DPIIP volumes for Hemisphere's Atlee Buffalo property disclosed in this presentation are from the mapping of the reservoirs by McDaniel (who is independent of Hemisphere) in connection with preparing the McDaniel Reserve Report. All OOIP/DPIIP estimates set forth herein are provided as of December 31, 2016.

Drilling Locations

This presentation discloses drilling locations in three categories: (i) proved locations; (ii) probable 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, 8 are proved locations, 1 is a probable location and 21 are unbooked locations. Of the 54 drilling locations (producers) identified at Atlee Buffalo, 10 are proved locations, 2 are probable locations, and 42 are unbooked locations. 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.

19

Advisory Statements

Analogous Information

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, 2016 from various public sources including information available to Hemisphere through AccuMap. 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.

Initial Production Rates

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.

Non-IFRS Measures

This presentation contains terms 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) net debt, which is a non‐IFRS measure; and (ii) operating netback, which is a non‐IFRS measure. Operating netback 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 operating netback is net income or net loss, respectively. 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 operating netback, the indication of the Company's profitability relative to current commodity prices; and (ii) in the case of net debt, the capital structure of the Company. Hemisphere's determination of these measures may not be comparable to that reported by other companies. Operating netback is calculated as the Company's oil and gas sales, less royalties,

• perating expenses, and transportation costs; and net debt is calculated as current assets minus current liabilities including bank indebtedness and excluding flow‐ through premium. Hemisphere

has provided information on how these measures are calculated in its most recent Management's Discussion and Analysis, which is available under Hemisphere's SEDAR profile at www.sedar.com.

Preliminary Unaudited Results

All financial information in respect of Hemisphere's results for 2016 included in this corporate presentation is per Hemisphere's preliminary unaudited financial statements for the year ended December 31, 2016, which financial statements have not yet been approved by the Company's audit committee or board of directors and therefore represents management's preliminary

• estimates. Readers are advised that these figures may be subject to change as a result of the completion of the independent audit on Hemisphere's financial statements for the year ended

December 31, 2016 and the review and approval of same with the Company's audit committee and board of directors.

Annualized Cashflow Estimate

This corporate presentation includes an estimate in Slide 14 regarding Hemisphere's potential annualized cashflow. Such projection is based on Hemisphere's anticipated cashflow assuming a full- scale development at Atlee Buffalo consisting of $38 million in drilling capital expenditures, an additional $19 million of capital expenditures on facilities and injectors, strip pricing as of Jan 27, 2017, initial production rates for each well drilled of 60 bbl/d and an annual 10% production decline. To the extent such estimate constitutes future-oriented financial information or a financial

• utlook, it was approved by management of Hemisphere on February 10, 2017 and such future-oriented financial information or financial outlook is included herein to provide readers with an

understanding of Hemisphere's potential anticipated results assuming a full-scale development and may not be appropriate for other purposes. There is no assurance that Hemisphere will be able to obtain capital on terms satisfactory to Hemisphere, or at all, in order to develop its assets on the basis of the presented expenditure plan.

Don Simmons

President & Chief Executive Officer T: 604.685.9255 E: simmons@hemisphereenergy.ca

Scott Koyich

Investor Relations T: 403.619.2200 E: scott@briscocapital.com

ADVISORS

Banker Auditor Transfer Agent Legal Counsel Evaluation Engineers Alberta Treasury Branches KPMG LLP Computershare Trust Company of Canada Burnet, Duckworth & Palmer LLP / Harper Grey LLP McDaniel & Associates Consultants Ltd.