Mr. Don Simmons reports

HEMISPHERE ENERGY ANNOUNCES 2023 SECOND QUARTER RESULTS, DECLARES QUARTERLY DIVIDEND, AND PROVIDES OPERATIONS UPDATE

Hemisphere Energy Corp. has provided its financial and operating results for the three and six months ended June 30, 2023; declared a quarterly dividend payment to shareholders; and provided an operations update.

Q2 2023 Highlights

• Produced an average of 2,883 boe/d for the quarter and 3,026 boe/d for the six months ended June 30, 2023, a 9% increase over the first half of 2022.
• Attained quarterly revenue of $19.0 million.
• Delivered an operating field netback1 of $11.1 million, or $42.41/boe for the quarter.
• Realized quarterly adjusted funds flow from operations ("AFF")1 of $8.1 million, or $30.97/boe.
• Achieved quarterly free funds flow1 of $3.6 million, or $0.04/basic share.
• Exited the second quarter with a positive working capital1 position of $2.6 million, compared to net debt1 of $3.7 million at the end of June 2022.
• Distributed $2.5 million or $0.025/share in dividends to shareholders during the quarter.
• Purchased and cancelled 872,400 shares under the Company's Normal Course Issuer Bid ("NCIB").

Selected financial and operational highlights should be read in conjunction with Hemisphere's Financial Statements and related Management's Discussion and Analysis for the quarter ended June 30, 2023, which are available on SEDAR+ at www.sedarplus.ca and on Hemisphere's website at www.hemisphereenergy.ca. All amounts are expressed in Canadian dollars unless otherwise noted.

Quarterly Dividend

Hemisphere is pleased to announce that its Board of Directors has approved a quarterly cash dividend of $0.025 per common share in accordance with the Company's dividend policy. The dividend will be paid on September 14, 2023 to shareholders of record as of the close of business on August 31, 2023. The dividend is designated as an eligible dividend for income tax purposes.

Operations update

Hemisphere's 2023 summer drilling program is currently underway. To date, four wells have been drilled in the Atlee Buffalo G pool and one in the Atlee Buffalo F pool, with three remaining F pool locations currently being drilled off a single pad. It is anticipated that half of these wells will be on production by the end of August, with the remainder producing by the end of September. Two of the new wells are also planned to be completed as or converted to injectors by the end of the year.

With two of the newly drilled G pool wells recently tied-in, August production has averaged just over 3,000 boe/d (99% heavy oil, based on field estimates between August 1-22, 2023). The Company's polymer (G Pool) and polymer-surfactant (F Pool) floods are continuing to perform effectively, with relatively stable oil rates and lower water cuts being seen across both pools. As the remaining new wells are brought online, Hemisphere will further optimize injection and polymer concentration levels across its pools, as well as use additional treating and pumping capacity added during the year.

To date in 2023, Hemisphere has strategically invested approximately $1 million in the acquisition of over 10 sections of new land that management believes to be prospective enough to become an additional core area for the Company. This resource is characterized by high oil in place and low recovery factor, and reservoir simulation supports its significant potential as an application for Hemisphere's expertise in Enhanced Oil Recovery ("EOR") techniques. Current plans include drilling and testing a pilot flood into this new asset as part of Hemisphere's 2024 development capital budget.

About Hemisphere Energy Corporation

Hemisphere is a dividend-paying Canadian oil company focused on maximizing value per share growth with the sustainable development of its high netback, low decline conventional heavy oil assets using EOR techniques. Hemisphere trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol "HME" and on the OTCQX Venture Marketplace under the symbol "HMENF".

For further information, please visit the Company's website at www.hemisphereenergy.ca to view its corporate presentation or contact:

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