May 2016 Corporate Summary Capital Structure TSX Venture HME - - PowerPoint PPT Presentation

May 2016

Capital Structure

Common Shares Outstanding 75.9 MM Fully Diluted Shares Outstanding 80.9 MM Insider Ownership (fully diluted) 12% Market Capitalization (May. 13, 2016) $13.7 MM

2

Corporate Summary

TSX Venture HME

Share Price (May 13, 2016) $0.18 52 Week High / Low $0.33 / $0.05 Operational Highlights

Current Production (Apr. 2016)

(Based on field estimates)

~550 boe/d

(86% oil)

Proved + Probable Reserves (Dec. 31, 2015)** 3.9 MMboe PDP Reserve Value (10% discount, BT)** $24.9 MM Proved Reserve Value (10% discount, BT)** $34.3 MM

P+P Reserve Value (10% discount, BT)**

$48.4 MM Land base (undeveloped) ~50,000 net acres Liability Management Rating (LMR May. 2016) 4.33

Financial Highlights

Year ended Dec. 31, 2015 Revenue $9.7 MM Oil & Gas Netback* $5.3 MM Operating Netback* $18.83/boe Funds Flow from Operations* $3.2 MM

$0.04/share

Net Debt* $11.4 MM Tax Pools ~$47.0 MM

* See non-IFRS measures in Advisory Statements. ** Reserve volumes and net present values are as attributed by McDaniel & Associates Consultants Ltd. ("McDaniel") in the reserve report of McDaniel dated March 1, 2016 and effective as of December 31, 2015 ("McDaniel Reserve Report"). See Advisory Statements – Oil and Gas Information – Net Present Values.

3

2015 Highlights

• Year over year annual production growth of 14% to 776 boed (80% oil)
• $2.4 million development capital program focused on reserve additions
• Added 860 Mboe of Proved (1P) reserves
• Increased by 27% to 2,785 Mboe (95% oil)
• 304% replacement of estimated 2015 production
• $0.24/boe F&D cost (including changes in FDC)*
• Added 820 Mboe of Proved Developed Producing (PDP) reserves
• Increased by 49% to 1,632 Mboe (92% oil)
• Represents 73% of 1P reserve value (NPV10 BT)
• Added 858 Mboe of Proved plus Probable (2P) reserves
• Increased by 19% to 3,934 Mboe (95% oil)
• Estimated Net Asset Value** of $0.37/share (1P) and $0.56/share (2P)

* See Advisory Statements – Oil and Gas Information – F&D ** Based on McDaniel Reserve Report, interval evaluation of undeveloped land and seismic ($5.4M), estimated audited year end net debt ($11.4MM), and 75.8MM outstanding shares as of Dec. 31, 2015.

4

Creating Long-Term Shareholder Value

FOCUS EXPERIENCE FUTURE GROWTH

Integrated Team 200+ Horizontal Wells Successful Track Record Established Operator Enhanced Oil Recovery Conventional Oil Large OOIP Increase Recovery Factors Low Cost Operations Southern Alberta Assets Flexible Balance Sheet ECONOMIC METRICS Quick Payouts High Rates of Return CORPORATE GOALS Increase Production Add Reserves Per Share Growth STRATEGY Development Drilling Targeted Exploration Strategic Acquisitions Build Future Inventory

2011



Raised $2.8M (Net of fees)



Acquired production and land in Jenner for $1.1M



Drilled first 3 oil wells in Jenner



• Avg. Prod 188 boed (78% oil)

5

Hemisphere History

2012



Raised $8.9M (Net of fees)



Acquired production, land and facility in Jenner for $6M



Executed 2 farm-in Agreements



Drilled 8 oil wells in Jenner



• Avg. Prod 408 boed (93% oil)

2013



Raised $4.0M (Net of fees)



Acquired production and land in Atlee for $3.4M



Drilled 2 oil wells in Jenner



• Avg. Prod 463 boed (83% oil)

2014



Raised $9.2M (Net of fees)



Acquired land in Atlee for $0.6M



Drilled 3 oil wells in Jenner and 10 oil wells in Atlee



• Avg. Prod 683 boed (86% oil)

2015



Commenced 3 enhanced

• il recovery pilots in Atlee

Buffalo (waterfloods)



Acquired land in Atlee Buffalo for $0.250M



• Avg. Prod 776 boed (79% oil)

2011 to 2015

Summary

Capital Raised = $25MM Wells Drilled = 26 Prod Growth = 313%

6

Reserves

Net Present Value

(10% discount, before tax)

Reserves

1P 0.4 1P 0.8 1P 1.3 1P 2.2 1P 2.8

0.0 1.0 2.0 3.0 4.0 5.0 29-Feb-12 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15

2P 3.9 2P 1.3 2P 0.8 2P 2.1 2P 3.3

1P $10.9 1P $18.0 1P $24.6 1P $40.3 1P $34.3

$0.37 $0.49 $0.62 $0.83 $0.64

$0.00 $0.25 $0.50 $0.75 $1.00 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 29-Feb-12 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15

Per share (basic) $MM

2P $18.7 2P $26.5 2P $48.4 2P $38.2 2P $62.5

MMboe

* * * *

* Hemisphere changed its year-end from February 29 to December 31. ** 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.

7 Paleo-High Paleo-High Barrier Beach System

SASKATCHEWAN ALBERTA

Calgary

HME Land HME Wells

Jenner

HEMISPHERE

JOURNEY ROCK CARDINAL NORTHERN BLIZZARD Brooks ARSENAL

ALBERTA SASKATCHEWAN

Southern Alberta & Saskatchewan

Atlee Buffalo

8

Focus: Southeast Alberta

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

HME Land

Alberta Suffield Military Base

JENNER ATLEE BUFFALO

• 95% avg working interest in 12 producing wells
• 24,300 net acres
• 8 oil pools defined by 3D seismic
• 30 drilling locations identified*
• 9 booked locations*

9

Jenner: Foundation

Highlights

• 2 operated oil processing and water disposal

facilities

• Expansion capability for new locations

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

10

Jenner: Growth

• 6 booked locations across 4 key

Hemisphere pools*

• 10 mmbbl of OOIP** and only 6%

recovery factor to-date

• Booked at 12.5% (1P) and 14% (2P) of

total estimated OOIP**

• Offset older analogue pools in the area

have recovered up to 35% of OOIP***

• 2 Additional Hemisphere pools with SI

wells due to high opex / 3rd party facilities

• Significant development potential

with facilities capital required

• ~$750K to drill, complete and tie-in

Mannville

• 3 booked locations*
• ~$1MM to drill, complete and tie-in

Pekisko

* See Advisory Statements – Oil and Gas Information – Drilling Locations ** Based on internal mapping. See Advisory Statements – Oil and Gas Information - OOIP *** Based on AER data. See Advisory Statements – Oil and Gas Information – Analogous Information

11

Atlee Buffalo: Development

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 UPPER MANN F

* Based on McDaniel’s mapping. See Advisory Statements – Oil and Gas Information - OOIP ** See Advisory Statements – Oil and Gas Information – Drilling Locations

History

• Acquired in Nov 2013 at ~40 boe/d
• Initial development included 10 successful Hz wells

in 2014 drilled in the F pool

• Primary production peaked at over 600 boe/d in

Jan’2015 prior to waterflood start

• Commenced 3 waterflood pilots Q4’15 and

converted a 4th injector Q1’16

Highlights

• Two oil pools delineated by vertical wells with

excellent geological and seismic control

• Exceptional reservoir quality and permeability
• 66 MMbbl OOIP* between two pools
• Current recovery factor <5%, mostly from original

vertical well production

• 100% working interest in both pools
• 65 drilling locations identified**

12

Production Oil Rate Time

HME Current Status Start of the WF. Fill-up/Re-pressure

Primary Production and Development Natural Decline + Shut-in Producers and Convert to Injectors Stable low decline Oil Bank

Atlee Buffalo: Waterflood 101

13

Atlee Buffalo: Waterflood Analogues

Upper Mann YYY Upper Mann N2N

Upper Mann G Upper Mann F

Alberta

Calgary

* Based on McDaniel’s mapping. See Advisory Statements – Oil and Gas Information - OOIP

HME Land

Mannville Pools OOIP* API Recovery Factor to-date Waterflood

Name MMbbl Degree MMbbl RF Type Start Date

Upper Mann YYY 13* 13o 3.5 26% Water-ASP 1998 Upper Mann N2N 34* 12o 3.5 10% Water 1999 Upper Mann F 28* 13o 1.2 4% Water Q3 15 Upper Mann G 38* 13o 1.2 3% Water Q4 15

1.00 10.00 100.00 1000.00 10000.00 Rate bbl/d

14

Atlee Buffalo: Waterflood Analogues N2N Pool

Water Injection started Feb’07

1.00 10.00 100.00 1000.00 10000.00 Rate bbl/d

Oil Response started May’07 Water Injection started Sep’04 Oil Response started May’05

* See Advisory Statements – Oil and Gas Information – Analogous Information

1.00 10.00 100.00 1000.00 10000.00

15

Atlee Buffalo: Waterflood Analogues YYY Pool

Water Injection started May’03 Oil Response by Dec’03

* See Advisory Statements – Oil and Gas Information – Analogous Information

16

Atlee Buffalo: Waterflood Expansion

* Based McDaniel’s mapping. See Advisory Statements – Oil and Gas Information – Reserve Disclosure, OOIP, and Analogous Information

• ~$750K to drill, complete and tie-in both

producers and injectors

• Analogue pools in the area have to date

recovered 10% and 26% of OOIP* with significant production still to come

• 1P booked recovery factor for F pool is

~10% of McDaniel’s 28 MMbbl OOIP* (7 producers and 4 PUDs)

• With continued success of flood

performance, management expects booked recovery factors to increase

• ver time in-line with analogues
• 1P booked recovery factor for G pool is

<4% of McDaniel’s 38 MMbbl OOIP* (2 PUDs)

• Few reserves have been recognized

for this pool since no producers have been drilled by HME to date

• A test wells is planned for Q3’16 in
• rder to prove the economic

viability of the waterflood

Key Metrics

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 Producers HME Hz Injectors HME Booked Locations HME Booked Injectors Oil Pool

UPPER MANN G UPPER MANN F

MANAGEMENT

Don Simmons, P.Geol.

President & Chief Executive Officer

Over 15 years of experience technical, operational and management experience (AEC, Encana, Sebring)

Ian Duncan, P.Eng.

Chief Operating Officer

Over 10 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 27 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 12 years of experience in reservoir engineering, capital planning, and reserves evaluation (NAL, Petro-Canada)

17

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)

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

 Proven Team with Successful Track Record  Disciplined Capital Spending and Flexible Balance Sheet  Low Cost Drilling and Operations  Focused Strategy to Develop Low Risk Asset Base  Solid Production and Cash Flow  Growth in Production, Reserves and Cash Flow  Top Well Metrics for Payouts and Rates of Return

Current Oil Price Creates Attractive Entry Point

18

Hemisphere – The Investment

19

Analyst Coverage

Michael Charlton Industrial Alliance Securities Inc. (403) 705-4978 mcharlton@iagto.ca Josef Schachter Maison Placements Canada (403) 264-4413 josef@e-sami.com

20

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; the amount and timing of capital projects; operating costs; the total future capital associated with development of reserves and resources and the anticipated response of Hemisphere's oil assets at the Atlee Buffalo property area to waterflood stimulation operations. 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 of 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.

20

Advisory Statements

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. F&D Finding and development costs ("F&D") are calculated as the sum of development capital (plus the change in future development capital, where indicated) for the period divided by the change in reserves for the period. The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year. F&D is utilized by Hemisphere as Hemisphere believes it is a metric that demonstrates its capital efficiency in adding reserves. Readers are cautioned that there is no standardized meaning or calculation for F&D and as a result, Hemisphere's reported F&D may not be comparable to F&D as reported by other industry participants. Additionally, F&D may not be a reliable indicator of the future performance of Hemisphere and future performance may not compare to the performance in previous periods. 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, 2015. 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 65 drilling locations identified at Atlee Buffalo, 6 are proved locations, none are booked as probable locations and 59 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.

20

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, 2015 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. 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) funds flow from operations, which is an additional IFRS measure; (ii) net debt, which is a non‐IFRS measure; and (iii) operating netback, which is a non‐IFRS measure. 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 and operating netback, are cash provided by operating activities and cash flow from operating activities or 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 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 netback, 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. Hemisphere's determination of these measures may not be comparable to that reported by other companies. Funds flow from operations is calculated as cash generated by

• perating activities, before changes in non‐cash working capital; operating netback is calculated as the Company's oil and gas sales, less royalties, operating expenses, and

transportation costs per barrel of oil equivalent; 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.

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.