Friday, September 29, 2023
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
2023 summer drilling program completed. Hemisphere drilled eight wells (6 for production) during the summer, as planned. Four had been completed by August 24th, as reported during second quarter results, so the completions were expected and in line with our model’s assumptions. Management indicated that capital expenditures for the rest of the year should be minimal and we do not expect additional wells to be drilled.
Production is rising. Management reports that production has reached 3,200 boe/d, up from August production of 3,000 boe/d. Recall that production for the second quarter was slightly below our expectations, but we expected rates to rise as wells came on line. With production finishing the quarter strong, we believe third quarter production should meet our projections for 3,050 boe/d and fourth quarter production of 3,200 boe/d which assumes some improvement from well optimization.
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