KGEI — Kolibri Global Energy Inc.

Summary of Kolibri Global Energy's Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Production: Average production increased to 4,254 barrels of oil equivalent per day (BOE/d), up 40% year-over-year and 33% from Q2 2025.
• Revenue: Q3 revenue rose 15% to $15 million, driven by higher production, despite an 18% decline in oil prices.
• Adjusted EBITDA: Increased 9% to $11.1 million compared to $10.1 million in Q3 2024.
• Net Income: Reported at $3.6 million with basic EPS of $0.10, down from $5.1 million and $0.14 per share in the prior year, primarily due to a $1.8 million negative swing in unrealized hedge adjustments.
• Operating Expenses: Increased to $7.37 per BOE, up 11% year-over-year, but would have been $6.57 per BOE excluding one-time tax adjustments.
• Netbacks: Decreased 23% to $30.84 per BOE from $40.01 in the prior year.

2. Strategic Updates and Business Highlights

• New Wells: The company is currently fracture stimulating four new wells expected to come online in early December, which should further boost production.
• Credit Facility: The line of credit was reaffirmed at $65 million, providing financial stability.
• Share Buyback Program: Since September 2024, approximately 568,000 shares have been repurchased, with plans to continue this initiative to enhance shareholder value.
• Long-term Growth: Average production has increased nearly 300% since the end of 2021, indicating strong operational growth.

3. Forward Guidance and Outlook

• Production Expectations: Anticipated to exit 2025 at an all-time high production rate, with further increases expected in Q1 2026.
• Leverage Guidance: The company aims to maintain a net leverage ratio around 1x by year-end, with plans to pay down $8 million to $10 million in the first quarter of 2026.
• Future Drilling: Future drilling plans will depend on oil prices, with a cautious approach recommended for 2026 drilling programs if prices remain low.

4. Bad News, Challenges, or Points of Concern

• Oil Price Volatility: The company is experiencing challenges due to lower oil prices, which have impacted net income and netbacks.
• Increased Operating Expenses: While operating expenses have risen, the increase was attributed to one-time tax adjustments, which may not recur but indicate potential volatility in costs.
• Hedging Strategy: The company has shifted to using puts for hedging due to unfavorable market conditions, which may limit upside potential if prices recover.

5. Notable Q&A Insights

• Timing of New Wells: Management confirmed that the new wells are on schedule to begin production in early December.
• Future Drilling Decisions: Future drilling plans will be influenced by oil prices, with a focus on maintaining production levels rather than aggressive growth if prices do not improve.
• Tax Adjustments: Clarified that recent increases in operating expenses were due to a one-time true-up of production taxes, which should not be a recurring issue.
• Market Outlook: Management expressed optimism about a potential recovery in oil prices, indicating that current low prices are not sustainable long-term.

Overall, Kolibri Global Energy reported solid operational growth in Q3 2025, despite challenges from declining oil prices. The company remains focused on strategic initiatives to enhance shareholder value while navigating market volatility.