Kolibri Global Energy (KEI & KGEIF in US) Update - Dec 22

[dan_s]

I have updated my forecast/valuation model for this new information. My current valuation is reduced by $0.50 to 9.25US per share. Q4 production coming in below my forecast due to timing of well completions. I also lowered my production forecasts for 2024 and 2025.
KGEI opened at $3.70US this morning.
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Thousand Oaks, CALIFORNIA, December 22, 2023 – 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
Average production 2,800 to 3,000 boepd an increase of 71% to 83% from 2022
Revenue US$51 million to US$53 million an increase of 36% to 41% from 2022
Adjusted EBITDA US$39 million to US$41 million an increase of 55% to 63%
> 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.
> 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.

[ChuckGeb]

Not worth more than book value per share right now imho. They have failed to prove up their "new and improved" frac formula and this one appears to me to potentially be a bust. Time to call Harold Hamm to salvage.

[Fraser921]

Did they lie to you and Dan a few weeks ago by saying everything was fine?

All I see are downgrades but you tell me not to worry.

Day after day Dan cuts his numbers. We have a case of over exuberance!!

[dan_s]

Timing problems don't concern me. I will be worried if the new well production rates are below the pre-drill type curves.

Lack of scale is a common problem for small-caps that only complete a few wells per year. If Kolibri can fund a continuous drilling program it will help a lot.

They are still going to report better financial results year-over-year despite lower realized commodity prices.

Keep in mind that I am looking for Small-Caps that have "Home Run" potential. It takes time for the "seeds to grow".