Hemisphere Energy Corporation (TSXV: HME, OTCQX: HMENF) has just delivered its second quarter 2025 results, and the numbers paint a picture of a company that is bucking the trend of knee-jerk industry reactions to a turbulent year. Despite weathering significant swings in oil prices and broader economic uncertainty, the Vancouver-based producer of heavy oil is sticking to its game plan: keep the company in strong financial shape, generate reliable cash flow, return money to shareholders, and keep just enough powder dry for future opportunities.
For the three months ended June 30, Hemisphere posted daily production of 3,826 barrels of oil equivalent per day, with heavy oil accounting for 99 percent of that total. Revenue for the quarter came in at $24.4 million, working out to $70.06 per barrel on a combined basis. The company’s operating and transportation costs amounted to $14.18 per barrel, which, when subtracted from the realized sales price, produced an operating field netback of $14.9 million, or $42.77 per barrel. The ability to retain that much of every revenue dollar—especially when oil prices have been less than generous—speaks to the efficiency and resilience of Hemisphere’s operations.
Quarterly adjusted funds flow from operations was $10.3 million, or $29.47 per barrel, supporting capital expenditures of $2.2 million in preparation for new drilling programs set for later in 2025. After all spending, free funds flow of $8.1 million, or $0.07 per share, was generated—most of which flowed right back to shareholders through dividends and stock repurchases. Over the quarter, Hemisphere paid out $2.4 million as a base dividend and $2.9 million in a special dividend, a combined $0.055 per share. The company also bought back and cancelled 1.3 million shares under its normal course issuer bid, spending $2.3 million in the process.
What’s striking, given the recent choppiness in commodity prices, is the decision to set aside major capital spending until later in the year. The company has taken the stance that holding steady on its base production is more prudent, preferring to build financial strength and prioritize shareholder returns over chasing every dollar today. This approach is bearing fruit, with Hemisphere reporting positive working capital of nearly $14 million at quarter’s end, leaving it with ample flexibility to launch its 2025 drilling campaign or pursue acquisition opportunities should the right deal emerge.
The company’s new drilling program is due to begin late in the third quarter and will primarily focus on Atlee Buffalo, with several new development wells planned. Additionally, at least one well is earmarked for Marsden, targeting a second oil-bearing zone adjacent to existing facilities and an active polymer pilot project. Management, for its part, has made it clear that it will continue to keep a close watch on market volatility and adapt spending decisions as needed, prioritizing a steady hand over quick pivots.
Hemisphere’s Chief Development Officer, Ashley Ramsden-Wood, is slated to present at the EnerCom Denver Conference this August. For investors following the story, this provides an opportunity to hear more about how management views the company’s prospects and its plans for allocating capital into the back half of the year.
For those new to Hemisphere, the company is a bit of a rarity among Canadian oil producers. It is focused almost exclusively on heavy oil and has carved out a reputation for running a lean operation with ultra-low decline assets. Its enhanced oil recovery work, particularly with polymer flooding, has allowed it to extract long-term value from mature fields while maintaining industry-leading netbacks. By splitting proceeds between new development, debt-free growth, and tangible shareholder returns, Hemisphere is sending a clear message: you do not need to bet the farm to grow shareholder value—not when you have assets that print cash and the discipline to wait for the right opportunity.
Detailed financials and the full suite of management’s discussion are available on both SEDAR+ and the company’s own website for those who want to dig deeper. The company chooses to report all results in Canadian currency, and as such, there is no need for readers to perform any currency conversions.
