Kolibri Global Energy (KEI & KGEIF in US) Update - May 16

dan_s · Post by **dan_s** » Tue May 16, 2023 3:53 pm

Kolibri hosted a luncheon for us in Houston today. I have updated my forecast/valuation model for the company based on the notes I took today.

My current valuation is $10.30Cdn or ~$7.70US.

KEI closed at $4.78Cdn today.

If you attended the luncheon today, you now know that there is significantly more upside for this small-cap if their 2023 drilling program is as successful as the wells they completed in 2022.
> Kolibri will be completing three new high potential horizontal wells by mid-June that I expect will increase the Company's total production by 1,000 Boepd from Q2 to Q3.
> Their Q1 production of 3,194 Boepd will decline slightly to 3,000 Boepd in Q2 due to natural decline and only two weeks of production from the new three well package.
> They've already contracted a drilling rig to drill two more Caney wells in July that should be completed in August.
> All five new HZ wells will be 100% paid for by this year's operating cash flow of $50 to $60 million US. Cost per completed well is ~$7.2 million, including surface facilities.
> My forecast now is that Q3 production will be 4,000 Boepd in Q3 and 4,800 Boepd in Q4.
> If all five of the wells are as good as expected, I think they will drill & complete two more high-rate wells in Q4, so their 2023 exit rate could be over 5,000 Boepd if all goes well.
> If the T-Zone well (to be completed in June) is successful, it could add a lot more P1 and P2 reserves this year. This T-Zone well being completed in June could move my valuation to $15Cdn per share.

You can download my forecast model directly from the EPG website home page.

The slides Wolf Regener spoke from can be found at https://www.kolibrienergy.com/shareholders

This company has a lot of running room in Oklahoma and the fact that 99% of their leasehold is held-by-production makes it a Screaming Takeover Target in my opinion.

PS: KEI trades on the TSX, but 100% of its assets are in Oklahoma. My forecast is in U.S. dollars. To buy it in the U.S. use symbol KGEIF.