Kolibri Global Energy (KEI & KGEIF in US) Update - Jan 9

[dan_s]

This is the reason that I decided to add KEI to our Small-Cap Growth Portfolio. This company holds over 150 low-risk / high-return horizontal drilling locations (55 listed as "Proved") in Central Oklahoma's SCOOP play. It also has enough operating cash flow to fully fund steady production growth. Read the profile we published last week.
KGEIF opened today at $3.00US. My valuation before this press release was $4.65US. See my note at the bottom.
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KOLIBRI GLOBAL ENERGY INC. ACHIEVES EXIT RATE OF OVER 4,000 BOEPD

Kolibri Global Energy Inc. KEI:T/KGEIF:OTCQB

Capital Structure:
Shares outstanding 35.62MM
Market cap $136.41
Net Debt ~$24.41 (CAD)
EV~ $160.8MM

Key Highlights from Press Release

Exit Rate

The Company exited the year with a production rate over 4,000 BOEPD (barrels of oil equivalent per day). This is 1,300 BOEPD, or 48% higher than the Company’s forecasted exit rate released in May of 2022.

Emery 17-2H Well, Brock 9-3H Well & Glenn 16-3H Well were placed on-line in Q4.

The Emery 17-2H well (98.725% working interest) had a 30-day Initial Production Rate (“IP30”) of 715 BOEPD (560 BOPD) (barrels of oil per day).

The Brock 9-3H well (100% working interest) had an IP30 of 970 BOEPD (820 BOPD).

The Glenn 16-3H well (100% working interest) has averaged about 935 BOEPD (765 BOPD) for twenty-two production days while the well has been flowing back the completion stimulation fluid. The production from this well had been halted for a portion of December due to a packer malfunction, but production had resumed on the well by the end of the month.

Wolf Regener, President and CEO, commented, “These latest three wells have far exceeded our expectations and contributed to the Company significantly surpassing its year-end forecasted exit rate. The 4,000 BOEPD exit rate was achieved without the production contribution of one legacy well, which had been reworked in late December. We look forward to drilling our next wells later this quarter, as we have signed a drilling rig contract, where the rig is expected to arrive around March 1st, 2023.

To put these excellent well results in perspective, the forecasted 30-day proved curve case (IP30) utilized by our third-party engineering firm for our December 31, 2021 reserve report was 388 BOEPD (“Reserve Report IP30”), while the initial 30-day type curve used by the Company’s management for wells in the corridor assumes a 472 BOEPD IP30 rate (“Management IP30”). The Emery 17-2H well IP-30 and the Brock 9-3H well IP-30 are about 1.8 and 2.5 times higher, respectively, than the Reserve Report IP30.

While three of the wells are early in the production cycle, the five wells we drilled this year with our latest generation completion technique demonstrate some of the best results we have had in this field.

Operations & Catalysts

Current production over 4000 BOEPD VS 2700 BOEPD forecast with one legacy well shut in versus 1700boepd in Q3 2022
Budget to be released in next few weeks
Early March to commence 2023 drilling program
Updated Reserve Report (Currently 55 Proven Locations to Drill) < With over 100 additional "probable" drilling locations.

Trading Metrics:

1.7x C/F (DEC 2022 annualized)
1P NPV 10% is $13.42/share CAD
Operating Netback $42.00 (USD) @ $80 WTI
CF for December 2022 ~ $5M
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You can download my forecast/valuation model from the EPG website. Just log on and click on the Small-Cap tab.
Note that my valuation of $6.20Cdn is based on 2023 production averaging 3,500 Boepd.
The Company's 2023 drilling program, which kicks off in March, should push production to more than 5,000 Boepd by 2H 2023.
Finding companies like this before the Wall Street Gang discovers them is why you pay Big Bucks for your EPG membership.