Mr. Don Simmons reports

HEMISPHERE ENERGY PROVIDES FURTHER UPDATE ON ATLEE BUFFALO OPERATIONS

Hemisphere Energy Corp. is providing a further update on the fire incident at the company's largest oil battery at its Atlee Buffalo property, previously announced on Aug. 26, 2026.

Cleanup activities are continuing, and equipment and debris removal is under way. The incident resulted in the loss of all three treaters and other auxiliary equipment at the battery, as well as extensive damage to the battery's electrical system, which must be restored before any temporary production measures can be attempted. As previously disclosed, the affected oil battery accounts for up to 2,650 barrels of oil equivalent per day (99 per cent heavy oil), or approximately 75 per cent, of the company's production. Hemisphere continues to work with applicable authorities, insurers and service providers to assess damage and advance rebuild planning.

Hemisphere has initiated an insurance claim, and maintains both property damage and business interruption insurance, subject to applicable policy terms, conditions, limits, exclusions and deductibles. Any applicable business interruption coverage is subject to a 30-day waiting period.

Hemisphere intends to drill one additional well before releasing its drilling rig earlier than scheduled. In total, Hemisphere expects to drill six wells of its previously planned 11-well summer drilling program.

The company's previously announced guidance remains suspended pending further clarity on repair timelines, production restoration, confirmation of insurance coverage, and related impacts to production, capital expenditures, cash flow, and other operating or financial metrics. The company will provide further updates as more information becomes available.

Hemisphere's current financial position supports its ability to pay its previously declared quarterly dividend of 2.5 cents per share on Sept. 11, 2026, to shareholders of record on Aug. 28, 2026.

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 oil 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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