Kolibri Global Energy Inc. Q1 FY2026 earnings call

• Financial and Production Milestones

  • Achieved record highest quarterly production, net revenue, and adjusted EBITDA in company history for Q1 2026, despite only March seeing the impact of the recent oil price increase
  • Delivered 35% compound annual production growth over the past 3 years measured against 2025 annual production
  • Secured an increase in credit facility borrowing capacity from $65 million to $75 million following a redetermination; net debt was $45 million at quarter-end, with an additional $4 million paydown completed post-quarter and a further $4 million paydown planned for May 2026
  • Operating expenses came in at $8 per BOE, up 13% year-over-year, driven by one-time workover costs on a nonoperated well, reassessed prior-year gathering/processing fees, and front-loaded higher water hauling costs from 2025 well stimulations; netbacks increased slightly year-over-year due to higher commodity prices

• Operational Updates

  • The 3-well Clifton Mack drilling program is currently underway; the company has increased its working interest in these wells from an initial ~67% to 88%
  • Drilling is expected to take approximately 2 months, with completions and production startup planned for Q3 2026; new Board members' input is being incorporated into potential completion design tweaks for the wells

• Strategic and Stakeholder Activities

  • Three new Board members joined the company following the recent AGM; the management team is evaluating updated capital allocation options to present to the Board in the coming weeks
  • The company plans to continue share buybacks, debt paydown, and drilling activity to grow shareholder value, and will attend multiple investor conferences in May 2026 to engage with current and potential shareholders

This transcript does not break out financial performance by separate product segments; all results are reported on an aggregate company basis. Q1 2026 aggregate net revenue was $19.6 million (up 20% year-over-year), average production was 4,685 BOE per day (up 15% year-over-year), adjusted EBITDA was $14.8 million (up 16% year-over-year), and net income was $4 million ($0.11 per basic share, down from $5.8 million/$0.16 per share year-over-year due to a noncash unrealized loss on commodity contracts).

• Management reaffirmed that existing 2026 full-year production forecasts remain on track, with 2025 drilled wells performing in line with expectations
  • The company expects to update its full-year forecast after the Board approves a revised capital allocation plan, which will be finalized in the coming weeks
  • No changes to the planned 3-well Clifton Mack drilling program have been announced, though minor to moderate completion design tweaks are under consideration following new Board input

• Uncertainty around future oil price volatility, as forward curve prices have not fully priced in the global oil production damage from the ongoing geopolitical conflict
  • Drilling and completion timelines are subject to unexpected operational fluctuations that can change production startup timing
  • Commodity price changes create noncash mark-to-market volatility for the company's existing commodity hedging contracts
  • Production from shale wells is subject to natural decline, which impacts quarterly production run rates

Q: Given elevated oil prices driven by prolonged global production disruption, has the company changed its planned capital allocation for 2026? What is the updated plan for excess cash flow? / A: Management has met with three newly elected Board members, and is currently developing capital allocation options (including additional drilling, accelerated debt paydown, and expanded share buybacks) to present to the Board in the coming weeks. Clarity on the updated plan and a revised full-year forecast will be shared once the Board makes a decision.

Q: Higher operating expenses this quarter were reportedly driven by one-time items. Is the company seeing ongoing inflationary pressure on operating costs? / A: Management confirmed that no sustained inflationary pressures have emerged, as most operating costs are locked in. The Q1 cost increase was driven by one-time non-operated well workover, prior-year fee reassessments, and front-loaded water hauling costs from 2025 stimulations; water costs already declined in March and are expected to continue falling in future quarters.

Q: Have you added any new hedges after the end of Q1 2026? What is your current hedging strategy given expectations for sustained higher oil prices? / A: No new hedges were added after quarter-end; all additional hedges added in response to the recent price rally were completed before March 31, 2006. The company prefers to hedge a portion of longer-term production if prices reach the $90-$100 per barrel range, but has held off on additional longer-term hedging because forward curve prices have not risen as much as management expects they should. The company uses primarily collars and deferred puts for longer-term hedging, and currently has 50% of baseline projected production hedged, leaving remaining production exposed to spot price upside.

Q: Will the new Board change how the current 3-well drilling program is completed? Are there substantial design changes being considered? / A: Management is incorporating new ideas from the new Board into completion design, so minor tweaks to the original plan are possible. It is too early to say if changes will be substantial, as even small design adjustments can lead to large performance differences; results will only be known after the wells are brought online.