Kolibri Global Energy, Inc. Q3 FY2024 earnings call

• Solid quarter with strong financial results and solid production. Drilled first 3 longer lateral wells (Alicia Renee 2-11-3H, 4H, 5) in 14 days (faster than forecast), with those 3 wells making over 2,800 BOE per day currently.
• Striving for constant improvement with drilling time and cost reductions, completion improvements; longer laterals expected to lead to more economic wells.
• Looking forward to year-end reserve report with potential increase in proved reserves and NPV due to longer laterals' economics (third-party reservoir engineering firm involved).
• Aim to reduce valuation gap between market cap and proved reserve value by improving execution and making story known; continuing share buybacks to return capital to shareholders.

Third Quarter 2024 Results

• Average production: 3,032 BOE per day, up 11% from prior year quarter; due to production from wells drilled over last 12 months.
• Adjusted EBITDA: $10.1 million, up 6% from prior year quarter; higher production partially offset by lower prices (down 9%).
• Revenue: $13.9 million, up 2% due to higher production, partially offset by lower prices.
• Net income: $5.1 million, basic EPS $0.14 per share, up 118% due to higher revenue and noncash mark-to-market adjustments on hedges, partially offset by higher income tax expense.
• Netbacks operations: $40.01 per BOE, down 8% due to price decrease; netbacks including hedges: $39.95 per BOE, down 4%.
• Operating expense: $6.63 per BOE, down 10% due to higher production lowering fixed cost per barrel.

Year-to-Date September Results

• Average production: 3,154 BOE per day, up 13% from prior year.
• Adjusted EBITDA: $30.5 million, up 7% due to higher production, partially offset by lower prices.
• Net revenue: $41.2 million, up 11% due to higher production, partially offset by lower prices up 2%.
• Net income: $12.5 million, basic EPS $0.35 per share; higher income tax, operating, and G&A expenses offset revenue increase.
• Netbacks operations: $39.78 per BOE, down 6% due to lower average prices and higher OpEx; netbacks including hedges: $39.09 per BOE, down 5%.
• Operating expense: $7.84 per BOE, up 21% due to adjusted true-ups and higher water hauling costs in first half of year.
• Credit facility: Redetermined at $50 million borrowing base; net debt at end of quarter $29.1 million with $90 million available borrowing capacity; started share buyback program, repurchased ~104,000 shares.

• Plan to present to Board soon with 2025 plans including additional growth and continuation of returning capital to shareholders.
• Expect significant increase in cash flow in fourth quarter due to well performance.

Q: Congratulations on a solid quarter and strong Rene wells. Is there planned drilling in the fourth quarter?

A: No drilling in fourth quarter; prepping for 2025 but no physical drilling in 2024.

Q: Any notable things learned from the 3 1.5-mile lateral wells?

A: Drilling 1.5-mile laterals was more economic on cost basis; added 50% lateral with only 2 extra days of drilling, pleasantly surprised it was better than anticipated.

Q: Average cost of these wells?

A: Not disclosed yet; still getting hard costs in, but under budget.

Q: Bias in full year guidance with wells in flow back?

A: Haven't proposed to Board yet; intent to present growth and capital return to shareholders.

Q: Capacity for buyback and source of funds?

A: Max 1.75 million shares repurchased; will come out of cash flow.

Q: Cost savings relative to previous reserve reports?

A: Significant cost savings expected due to faster drilling of longer laterals vs mile laterals; fewer wells needed, lower cost per well.

Q: EUR for 1.5 laterals, frac interval, and EUR expectation?

A: Kept same frac interval; expecting better EUR; early results strong, but decline curves to be determined with more data; some wells may flow up casing longer than typical.