Kolibri Global Energy Inc. (the “Company” or
“KEI”) (TSX: KEI, NASDAQ: KGEI) is updating its estimated
2023 guidance and is providing an operations update for its
Tishomingo field in Oklahoma.
Guidance Update
The Company is updating its 2023 forecasted guidance as
follows:
Revised 2023
Forecast
% Increase from
Fiscal Year 2022
Average production
2,800 to 3,000 boepd
71% to 83%
Revenue(1)
US$51 million to US$53
million
36% to 41%
Adjusted EBITDA(2)
US$39 million to US$41
million
55% to 63%
(1)
Assumptions include forecasted pricing for
December 2023 of WTI US $71/bbl, $2.50 Henry Hub and NGL pricing of
$28.40/boe and includes the impact of the Company’s existing
hedges.
(2)
Adjusted EBITDA is considered a non-GAAP
measure. Refer to the section entitled “Non-GAAP Measures” of this
news release
The average production, revenue and Adjusted EBITDA guidance
show significant growth from 2022 even though this guidance has
been revised lower from the Company’s previous guidance due to
several factors. The main factors are timing, as new wells started
producing later than previously forecasted, oil prices that are
lower than previously assumed, and production impacts from the
shut-in of wells surrounding the latest completions, discussed in
more detail below.
The Company expects annual capital expenditures paid during the
year to be in the range of US$47 million to US$49 million. This
guidance is being lowered due to actual well costs coming in
substantially below budget. Net debt is forecasted to be US$29
million to US$31 million, which is higher than previously forecast
due mainly to the timing of the wells. The Company continues to
anticipate that its Debt to Adjusted EBITDA ratio will be less than
1 times at the end of 2023.
Operations Update
The Emery 17-3H, 17-4H, and 17-5H wells were successfully
drilled and fracture stimulated safely and under budget. Flowback
of the fracture stimulation fluid is underway but is taking longer
than expected. More fracture stimulation fluid is being recovered
by these wells than from our previous wells. As a result, we do not
yet have stabilized oil and gas rates. Once the cleanup of the
wells is complete, we will be in a better position to determine
what these wells are capable of producing.
In addition, the fracture stimulation of these three Emery wells
impacted the surrounding wells more than was originally
anticipated. These surrounding wells, which were shut-in during the
Emery operations, have returned to production, but a number of them
have not yet recovered to their pre-shut-in rates. We anticipate
that it may take a few months for their recovery. These factors
will cause the exit rate to fall below the previously announced
rate. What the final rate will be is subject to the production
rates of the Emery wells and the degree of recovery in the
surrounding wells on December 31, 2023.
The Velin 12-9H well was spud last week and is anticipated to be
finished drilling in the coming week. The rig is planned to spud
the next well on the pad in the beginning of January.
NON-GAAP MEASURES
Adjusted EBITDA is not a measure recognized under Canadian
generally accepted accounting principles ("GAAP") and does
not have any standardized meaning prescribed by IFRS. Management of
the Company believes that Adjusted EBITDA is relevant for
evaluating returns on the Company's project as well as the
performance of the enterprise as a whole. Adjusted EBITDA may
differ from similar computations as reported by other similar
organizations and, accordingly, may not be comparable to similar
non-GAAP measures as reported by such organizations. Adjusted
EBITDA should not be construed as an alternative to net income,
cash flows related to operating activities, working capital or
other financial measures determined in accordance with IFRS, as an
indicator of the Company's performance.
An explanation of how Adjusted EBITDA provides useful
information to an investor and the purposes for which the Company’s
management uses Adjusted EBITDA is set out in the management's
discussion and analysis under the heading “Non-GAAP Measures” which
is available under the Company's profile at www.sedar.com and is
incorporated by reference into this news release.
Adjusted EBITDA is calculated as net income before interest,
taxes, depletion and depreciation and other non-cash and
non-operating gains and losses. The Company considers this a key
measure as it demonstrates its ability to generate cash from
operations necessary for future growth excluding non-cash items,
gains and losses that are not part of the normal operations of the
Company and financing costs. The following is the reconciliation of
the non-GAAP measure Adjusted EBITDA:
(US $000)
Three months ended
September 30,
Nine months ended
September 30,
2023
2022
2023
2022
Net income
2,319
9,299
14,483
13,850
Depletion and depreciation
3,790
1,860
11,503
5,086
Accretion
40
8
129
20
Interest expense
651
281
1,511
718
Unrealized (gain) loss on commodity
contracts
2,579
(4,648
)
412
(1,608
)
Share based compensation
157
75
531
232
Interest income
-
-
-
(3
)
Other income
(1
)
(16
)
(2
)
(45
)
Foreign currency loss (gain)
1
15
11
8
Adjusted EBITDA
9,536
6,874
28,578
18,258
About Kolibri Global Energy Inc.
Kolibri Global Energy Inc. is a North American energy company
focused on finding and exploiting energy projects in oil and gas.
Through various subsidiaries, the Company owns and operates energy
properties in the United States. The Company continues to utilize
its technical and operational expertise to identify and acquire
additional projects in oil, gas and clean and sustainable energy.
The Company's shares are traded on the Toronto Stock Exchange under
the stock symbol KEI and on the NASDAQ under the stock symbol
KGEI.
Cautionary Statements
In this news release and the Company’s other public disclosure:
The references to barrels of oil equivalent ("Boes") reflect
natural gas, natural gas liquids and oil. Boes may be misleading,
particularly if used in isolation. A Boe conversion ratio of 6
Mcf:1 Bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead. Given that the value ratio based
on the current price of crude oil as compared to natural gas is
significantly different from the energy equivalency of 6:1,
utilizing a conversion on a 6:1 basis may be misleading as an
indication of value. Possible reserves are those additional
reserves that are less certain to be recovered than probable
reserves. There is a 10% probability that the quantities actually
recovered will equal or exceed the sum of proved plus probable plus
possible reserves.
Readers should be aware that references to initial production
rates and other short-term production rates are preliminary in
nature and are not necessarily indicative of long-term performance
or of ultimate recovery. Readers are referred to the full
description of the results of the Company's December 31, 2022
independent reserves evaluation and other oil and gas information
contained in its Form 51-101F1 Statement of Reserves Data and Other
Oil and Gas Information for the year ended December 31, 2022, which
the Company filed on SEDAR on March 13, 2023.
Caution Regarding Forward-Looking Information
Certain statements contained in this news release constitute
"forward-looking information" as such term is used in applicable
Canadian securities laws and “forward-looking statements” within
the meaning of United States securities laws (collectively,
“forward looking information”), including statements regarding the
timing of and expected results from planned wells development,
projected exit rate and average production, revenue and Adjusted
EBITDA for 2023 and projected total capital expenditures, net debt
and debt to Adjusted EBITDA ratio for 2023. Forward-looking
information is based on plans and estimates of management and
interpretations of data by the Company's technical team at the date
the data is provided and is subject to several factors and
assumptions of management, including forecasted pricing in December
2023 of WTI US $71/bbl, $2.5 Henry Hub and NGL pricing of
$28.40/boe that indications of early results are reasonably
accurate predictors of the prospectiveness of the shale intervals,
that required regulatory approvals will be available when required,
that no unforeseen delays, unexpected geological or other effects,
including flooding and extended interruptions due to inclement or
hazardous weather conditions, equipment failures, permitting delays
or labor or contract disputes are encountered, that the necessary
labor and equipment will be obtained, that the development plans of
the Company and its co-venturers will not change, that the offset
operator’s operations will proceed as expected by management, that
the demand for oil and gas will be sustained, that the price of oil
will be sustained or increase, that the Company will continue to be
able to access sufficient capital through cash flow, debt,
financings, farm-ins or other participation arrangements to
maintain its projects, and that global economic conditions will not
deteriorate in a manner that has an adverse impact on the Company's
business, its ability to advance its business strategy and the
industry as a whole. Forward-looking information is subject to a
variety of risks and uncertainties and other factors that could
cause plans, estimates and actual results to vary materially from
those projected in such forward-looking information. Factors that
could cause the forward-looking information in this news release to
change or to be inaccurate include, but are not limited to, the
risk that any of the assumptions on which such forward looking
information is based vary or prove to be invalid, including that
the Company or its subsidiaries is not able for any reason to
obtain and provide the information necessary to secure required
approvals or that required regulatory approvals are otherwise not
available when required, that unexpected geological results are
encountered, that equipment failures, permitting delays, labor or
contract disputes or shortages of equipment, labor or materials are
encountered, the risks associated with the oil and gas industry
(e.g. operational risks in development, exploration and production;
delays or changes in plans with respect to exploration and
development projects or capital expenditures; the uncertainty of
reserve and resource estimates and projections relating to
production, costs and expenses, and health, safety and
environmental risks, including flooding and extended interruptions
due to inclement or hazardous weather conditions), the risk of
commodity price and foreign exchange rate fluctuations, that the
offset operator’s operations have unexpected adverse effects on the
Company’s operations, that completion techniques require further
optimization, that production rates do not match the Company’s
assumptions, that very low or no production rates are achieved,
that the price of oil will decline, that the Company is unable to
access required capital, that occurrences such as those that are
assumed will not occur, do in fact occur, and those conditions that
are assumed will continue or improve, do not continue or improve,
and the other risks and uncertainties applicable to exploration and
development activities and the Company's business as set forth in
the Company's management discussion and analysis and its annual
information form, both of which are available for viewing under the
Company's profile at www.sedar.com, any of which could result in
delays, cessation in planned work or loss of one or more leases and
have an adverse effect on the Company and its financial condition.
The Company undertakes no obligation to update these
forward-looking statements, other than as required by applicable
law.
Caution Regarding Future-Oriented Financial Information and
Financial Outlook
This news release may contain information deemed to be
“future-oriented financial information” or a “financial outlook”
(collectively, “FOFI”) within the meaning of applicable securities
laws. The FOFI has been prepared by management to provide an
outlook of the Company’s activities and results and may not be
appropriate for other purposes. The FOFI has been prepared based on
a number of assumptions including the assumptions discussed above
under “Caution Regarding Forward-Looking Information”. The actual
results of operations of the Company and the resulting financial
results may vary from the amounts set forth herein, and such
variations may be material. The Company and management believe that
the FOFI has been prepared on a reasonable basis, reflecting
management’s best estimates and judgments. FOFI contained in this
news release was made as of the date of this news release and the
Company disclaims any intention or obligations to update or revise
any FOFI contained in this news release, whether as a result of new
information, future events or otherwise, unless required pursuant
to applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231222456845/en/
Wolf E. Regener +1 (805) 484-3613 Email:
wregener@kolibrienergy.com Website: www.kolibrienergy.com
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