Kolibri Global Energy Inc (KGEI) 2025 Q2 法說會逐字稿

Good day, and welcome to the Kolibri Global Energy's second quarter 2025 financials conference call. (Operator Instructions) Please note that this event is being recorded. I advise participants that this conference is being recorded today, August 11, 2025. This call will be available on the company's website at www.kolibrienergy.com.

Here is a disclaimer. This call may include forward-looking information regarding Kolibri's strategic plans, anticipated production, capital expenditures, exit rates and cash flows, reserves and other estimates and forecasts.

Forward-looking information is subject to risks and uncertainties, and actual results will vary from the forward-looking statements. This call may include future-oriented financial information and other financial outlook information, which Kolibri discloses in order to provide readers with a more complete perspective on Kolibri's potential future operations and such information may not be appropriate for other purposes.

For a description of the assumptions on which such forward-looking statements is based and the applicable risks and uncertainties and Kolibri's policy for updating such statements, we direct you to Kolibri's most recent annual information form and management's discussion and analysis for the period under discussion as well as Kolibri's most recent corporate presentation, all of which are available on Kolibri's website.

Listeners should not place undue reliance on forward-looking information. Kolibri undertakes no obligation to update any forward-looking future-oriented financial or financial outlook information other than as required by applicable law.

I would now like to turn the call over to Mr. Wolf Regener, the President and CEO of Kolibri Global Energy, Inc. Please go ahead, sir.

Thank you, Nick, and thank you, everyone, for joining us today. With me on today's call is Gary Johnson, our Chief Financial Officer. As I'm sure you are all aware, we released our second quarter 2025 results this morning, and we're very pleased with what we've achieved this quarter, which continues to build on our last few years' results in multiple ways.

Production from the field has been going very well with our second quarter over 3,200 BOE a day in spite of us temporarily shutting in about 540 BOE per day of wells for the Lovina well completions. Our operating expenses remain low with just over $7, at $7.15 per BOE. We increased our line of credit that we have with our banking syndicate led by Bank of Oklahoma.

Further in the field, we have brought on the four Lovina wells that have shown a very high oil percentage and are still cleaning up fracture stimulation fluid, and we'll be testing the Forguson well over the coming weeks. And we're spudding two new wells, the Barnes 6-31-2H and 3H. So basically, it's full speed ahead with operations. Things are going very well, and we're looking forward to increasing our production further this year.

Now with that, I'll turn the call over to Gary to discuss our financial results.

Thanks, Wolf, and thanks, everyone, for joining the call. I'm going to go over a few highlights of the second quarter and year-to-date results, and then we can take questions at the end of the call. All amounts are in US dollars unless otherwise stated. I'll start by going over the second quarter results.

Average production was up 3% to 3,220 BOE per day compared to 3,128 in the prior year quarter. The increase is due to production from the wells that were drilled and completed in the last six months of 2024. The increase was partially offset by several wells that were shut in during Lovina completion operations, which temporarily reduced production in the quarter by 540 BOE per day. All these wells are now back on production, although some of them are now dewatering.

Net revenue decreased 22% to $10.8 million compared to the prior year quarter due to a 24% decrease in average prices and lower oil production from the shut-in wells. G&A expense decreased by 9% during the quarter to $1.4 million due to lower accounting and auditing fees compared to the prior year quarter.

Adjusted EBITDA was $7.7 million compared to $10 million in the prior year quarter, which was a decrease of 23% due to lower prices. Net income was $2.9 million, and basic EPS was $0.08 per share in the second quarter of '25 compared to $4.1 million or $0.11 per basic share in the prior year second quarter.

The decrease was due to the lower revenue in the quarter. Our netback from operations decreased to $29.66 per BOE compared to $40.40 in the prior year quarter. This was due to lower average prices for the quarter, which were partially offset by lower operating expenses per BOE due to adjustment true-ups in the prior year quarter and lower water hauling costs.

Moving on to the year-to-date June results. Average production for the year-to-date June was up 13% to 3,646 BOE per day compared to 3,216 in the prior year period. The increase was due to production from the wells that were drilled during the last six months of last year. And again, this was partially offset by production loss from the shut-in wells during the quarter.

Net revenue decreased slightly by 3% to $27.2 million compared to $28.1 million due to a 14% decrease in average prices, partially offset by the increase in production. Net income was $8.6 million and basic EPS was $0.24 per share compared to $7.4 million and $0.21 per basic share in the prior year period. The increase was due to lower operating and interest expense and realized and unrealized gains on our commodity contracts in 2025, partially offset by the lower revenues.

Adjusted EBITDA was $20.5 million compared to $20.4 million in the prior year quarter as lower operating expenses and lower realized losses on commodity contracts were offset by the lower revenues. Netback from operations decreased 14% to $34.05 per BOE compared to $39.66 in the prior year period. This was due to lower average prices, partially offset by lower operating expenses per BOE.

And I also wanted to add, as we mentioned, that our credit facility was redetermined in the second quarter, and our borrowing base was increased by 30% from $50 million to $65 million. The continuing increase in our borrowing base gives us more flexibility in managing our working capital going forward and also demonstrates the growing value of the field.

As we discussed in the earnings release, we will have 9 new wells that will start production in the second half of the year. We anticipate significant increases in both production and cash flow in the last two quarters of the year.

And with that, I'll hand it back to Wolf.

Thanks, Gary. As Gary laid out, we had a solid second quarter. And while our oil prices were lower during the quarter, we still performed very well and looking to continue the success we've had over the last few years. The company has had quite the growth and with the activity going on, we're looking to continue that. As Gary said, bringing on nine wells in the second half of the year is expected to make a big impact on our cash flow, especially since the last wells we brought on were in December of 2024.

In addition, we are intending to continue returning capital to shareholders in the form of share buybacks, where just in the month of July, we purchased about 130,000 shares. Overall, our plan is to continue to execute and build and grow company value for all shareholders, and we'll continue to get the word out about the company to shareholders and potential shareholders as we have a number of conferences and presentations that we'll be making later on this year still.

This concludes the formal part of our presentation. We would be pleased to answer any questions you now may have.

(Operator Instructions)

Steve Ferazani, Sidoti.

Wolf, given the timing of the Lovina wells coming online and now the expectations with those two more wells and the completion scheduled, any thoughts on the original production guidance you provided for this year? Should we be rethinking that at all?

Not so far. I mean we'll monitor that. If we see something that changes our guidance, then outside of the range, then we'll definitely put that out. But let's see how these wells clean up and how they come along. And then it's also price dependent, right?

Of course. Speaking to that, given the oil price environment and given where your share price is right now, was there any thoughts in altering near term your capital allocation plans, slow down at least the completions maybe and focus on the buyback?

Right now, we're still going forward where we are. When we look at what our economics are on these wells based on the type curves that Netherland, Sewell put together, that they look like they're going to make us good money even in the $60 oil price range.

I would obviously like the prices to be higher, we make more money on that. But right for now, yes, we'll drill it. But like you said, we always have the option if prices suddenly drop and not -- then we can delay the completions if we need to. But at this point, we're not anticipating that. I think we can make good money at this -- at these prices. And so at this stage, we're looking to go ahead and complete those just on schedule.

Great. In terms of the Lovina wells, I think in the operations release, you noted that the higher liquids content. Any -- were you surprised by that? Does that shift at all where you might drill next or how you completed them? If you could just add a little bit of context around that.

Yes, sure. No, I mean, the offset wells were a little higher as well. These were a little bit higher than even the offset wells. But this part of the field had a little lower of a gas oil ratio in general. It was lower as we've stepped off of these offset wells a little bit than we anticipated, but it wasn't that far off.

And so yes, it's encouraging that it worked out kind of like we were anticipating and a little bit better actually. So we have high hopes for running the tubing in and just having it stabilize here or higher rates and then hopefully having really low declines because we don't have any gas that's just going to blow off.

Right. Right. Okay. Any thoughts? I know it's probably way too early on the Forguson well and how you're thinking about the East side acreage?

Yes. No, just way too early. So still the same range. Everything -- we drilled them in the right spot. Everything went to -- completions got all stages off and everything went fine on the completion side of things.

And so we've got effective stimulation. So now it's in mother nature's hands as far as the flowback goes and what kind of rates we get out of it.

(Operator Instructions) Seeing no further questions, this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Wolf Regener for any closing remarks.

Thank you, Nick. And just thank you, everyone, for joining the call. I appreciate it. I appreciate your continued support as shareholders and maybe even some new shareholders here that understand the company a little bit better. But thank you, and I hope everyone has a great day.

Take care.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.