Mr. Don Simmons reports

HEMISPHERE ENERGY DECLARES SPECIAL DIVIDEND AND ANNOUNCES 2025 FOURTH QUARTER AND YEAR-END FINANCIAL AND OPERATING RESULTS

Hemisphere Energy Corp.'s board of directors has approved the declaration of a special dividend to shareholders, as well as provide its financial and operating results for the fourth quarter and year ended Dec. 31, 2025.

Special dividend

Supported by the current strength in oil pricing and consistent 2026 first quarter production performance of approximately 3,800 barrels of oil equivalent per day (boe/d) (99 per cent heavy oil), Hemisphere's board of directors has approved a special dividend of three cents per common share under its dividend policy. The special dividend will be paid on May 28, 2026, to shareholders of record on May 14, 2026, and is designated as an eligible dividend for Canadian income tax purposes. This is in addition to the company's special dividend of three cent s per common share to be paid on April 28, 2026, to shareholders of record on April 15, 2026, which was previously announced on March 11, 2026.

2025 highlights:

• Increased annual production by 6 per cent to a record 3,645 boe/d (99 per cent heavy oil);
• Generated annual revenue of $93.9-million;
• Achieved $42.9-million in annual adjusted funds flow from operations (AFF) (1);
• Invested $16.3-million in capital expenditures (1) focused on Hemisphere's long-life, low-decline assets;
• Generated $26.6-million of annual free funds flow (FFF) (1), an 11-per-cent increase over annual 2024 FFF;
• Achieved total operating and transportation costs of $15.14 per barrel of oil equivalent (boe);
• Distributed $9.6-million in quarterly base dividends to shareholders during the year;
• Distributed $5.8-million in special dividends to shareholders during the year;
• Returned $6.5-million to shareholders during the year with the purchase and cancellation of 3.5 million shares under the company's normal course issuer bid (NCIB), at an average price of $1.88 per share;
• Exited 2025 with a positive working capital (1) position of $8.6-million, compared with $6.4-million at year-end 2024.

(1) Non-IFRS (international financial reporting standards) financial measure that is not a standardized financial measure under international financial reporting standards and may not be comparable with similar financial measures disclosed by other issuers.

Financial and operating summary

Selected financial and operational highlights should be read in conjunction with Hemisphere's audited consolidated financial statements and related management's discussion and analysis for the year ended Dec. 31, 2025. These reports, including the company's annual information form for the year ended Dec. 31, 2025, are available on SEDAR+ and on Hemisphere's website.

About Hemisphere Energy Corp.

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 through polymer flood enhanced recovery methods. 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.

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