Kolibri Global Energy Inc. Q2 FY2026 earnings call

• Q2 2026 Achievements: Management confirmed that Q2 2026 delivered the highest quarterly revenue, production, and adjusted EBITDA in the company's history, even with 3 wells shut in for one-third of the quarter. The 2025 drilling program delivered strong, sustained production and revenue growth as projected. The company's credit facility borrowing base was redetermined and increased 15% from $65 million to $75 million, demonstrating growing asset value and improving working capital flexibility.

• Drilling Progress: Three Clifton Mack wells have been fully drilled, with completion operations expected to begin shortly. The company has started drilling the Lobina 8-5-1HF well, its first test of the Falls Caney Formation. Core and well log data confirm high oil saturation and favorable geological characteristics for the new formation. The company has improved drilling steering capabilities over time, allowing it to successfully complete its first 2-mile lateral on the new exploration well, in a geologically stable area with low fault risk.

• Production Performance: Wells from the 2025 program performed better than expected after optimization, including the addition of gas lift infrastructure, which temporarily reversed production decline and kept production nearly flat sequentially despite no new wells added in H1 2026. Three Alicia Renee wells were shut in temporarily to allow safe drilling of the adjacent Clifton Mack wells; management expects no permanent impact to production, and anticipates flush production when the wells are brought back online. Extra casing strings were added to the Clifton Mack wells to isolate unexpectedly high shallow pressure intervals, a site-specific adjustment that will not apply to most future wells in the field.

Colibri Global Energy operates as a single upstream oil and gas exploration and production segment. For Q2 2026, the segment generated total revenue of $22.5 million, a 109% increase year-over-year. Average production reached 4,690 BOE per day, a 46% year-over-year increase driven by wells drilled and completed in H2 2025. Net income was $8.5 million, up from $2.9 million year-over-year, with basic EPS of $0.24 per share, up from $0.08 per share year-over-year. Adjusted EBITDA hit $16.4 million, a 114% increase year-over-year. Net back from operations rose 48% to $43.92 per BOE. Production and operating expense averaged $8.90 per BOE, up 24% year-over-year, driven by one-off workover costs for a non-operated well and temporarily elevated water hauling costs. For year-to-date June 2026, total revenue was $42.1 million, a 55% year-over-year increase, with average production of 4,688 BOE per day (29% year-over-year increase), net income of $12.5 million, basic EPS of $0.35 per share, and adjusted EBITDA of $31.3 million (52% year-over-year increase).

Management reaffirmed the full-year 2026 guidance that was updated in late June 2026, with no material revisions. Full-year production growth is expected to be driven by the four new 2026 drilling program wells, which are projected to contribute a full quarter of production in Q4 2026, making Q4 2026 the highest production quarter of the year and leaving Q3 2026 as the lowest production quarter of the second half. The only major variable to full-year results is the initial production performance of the four new wells, with higher well performance pushing full-year output to the upper end of the guided range, and performance meeting base expectations keeping output in line with the mid-to-low end of the range. Management expects the one-off cost increases from non-operated well workover and temporary water hauling costs to end after Q2 2026. Normal Caney formation well cost guidance remains unchanged, as the extra costs for the Clifton Mack wells are site-specific.

• Forward-looking statements regarding production, performance of new exploration and development wells, and future financial results are subject to inherent uncertainties, and actual results may differ materially from projections.
• The first test of the Falls Caney Formation carries geological and performance risk: ultimate flow rates, decline rates, and oil-to-gas ratio are unknown until the well is drilled, completed, and tested.
• Outperformance of 2025 wells in Q2 2026 is not expected to persist, and normal production decline will resume until new wells come online.
• Cost of the Clifton Mack wells is higher than standard company wells due to the need for extra casing strings to manage unexpected high pressure intervals.

Q: Why did production stay nearly flat sequentially in Q2 2026 despite no new volumes added and the Alicia Renee wells being shut in? / A: Management explained that the 2025 wells had ongoing optimization after initial production, specifically the addition of gas lift infrastructure after initial flow testing. This optimization temporarily reversed some production decline, keeping overall output flat. Normal decline will resume before new 2026 wells come online.

Q: What is the risk profile and expected outcome of the first Falls Caney Formation test well, and how does it compare to the company's existing Caney production? / A: Core data confirms high oil saturation in the Falls Caney interval. The company expects the 2-mile lateral, enabled by improved steering technology, will deliver strong economics even though the formation is thinner than the main Caney. Management will not project flow rates ahead of testing, but hopes the well will deliver results comparable to existing Caney wells, and a successful result would open up significant new reserve potential.

Q: Why were extra casing strings added to the Clifton Mack wells, and how does that impact cost guidance for future wells? / A: The Clifton Mack location had an unexpected high-pressure shallow interval not seen in other parts of the field, requiring extra casing strings for wellbore isolation. This made the Clifton Mack wells more expensive than standard company wells, but the higher cost is site-specific. Management reaffirmed that cost guidance for standard Caney wells remains unchanged, as most future wells will not require this extra work.

Q: Why did the oil-gas ratio shift lower in Q2 2026, and is this a long-term trend? / A: The Q2 ratio was skewed by a multi-period gas volume adjustment dating back to 2024. Excluding the adjustment, the oil-gas ratio has declined modestly because 2025 new wells have produced more gas than initially projected, while oil output has met expectations. This is a gradual trend from base well decline, not a one-off issue or a material surprise.