Kolibri Global Energy Announces First Quarter 2024 Net Income of US$3.3 Million and Adjusted EBITDA of US$10.4 Million
Kolibri Global Energy reported a net income of $3.3 million for Q1 2024, a 58% decline from Q1 2023. Adjusted EBITDA was $10.4 million, a 9% decrease year-over-year. Revenue net of royalties was $14.2 million, similar to the previous year despite a 3% increase in production to 3,305 BOEPD due to lower average prices. Operating expenses increased significantly to $8.36 per BOE, up from $6.04, attributed to prior year processing costs reassessed in 2024. Netback from operations fell by 11% to $38.94 per BOE. The company also faced a $0.9 million unrealized loss on commodity contracts compared to a $1.4 million gain in Q1 2023. Kolibri reworked several wells to mitigate production impacts from offset fracture stimulations, expecting further production increases from new wells by end of May 2024.
- Net income was $3.3 million in Q1 2024.
- Adjusted EBITDA reached $10.4 million.
- Production increased by 3% to 3,305 BOEPD.
- Oil revenues increased by $0.3 million or 2%.
- Natural gas liquids (NGLs) revenues increased by 28%.
- The company has $8 million available borrowing capacity.
- Net income decreased by 58% compared to Q1 2023.
- Adjusted EBITDA decreased by 9% year-over-year.
- Netback from operations decreased by 11% to $38.94 per BOE.
- Revenue net of royalties was slightly down from $14.3 million to $14.2 million.
- Operating expenses per barrel rose to $8.36 from $6.04.
- Unrealized loss on commodity contracts was $0.9 million.
- General and administrative expenses increased by 36%.
- Finance income dropped by $1.4 million.
- Working capital deficit was $6.6 million as of March 31, 2024.
Insights
The company achieved a 3% increase in average production compared to the same period last year. This production growth is positive, but it's overshadowed by a decline in revenue and increased costs. Specifically, revenue net of royalties decreased slightly to $14.2 million from $14.3 million, indicating that the higher production did not translate into higher revenue due to lower average prices.
The production and operating expense per barrel increased by 38% from $6.04 to $8.36, largely because of prior year reassessed gathering and processing costs. Adjusted EBITDA decreased by 9% to $10.4 million, reflecting the impact of these higher operating expenses and lower average prices. Net income dropped significantly by 58% to $3.3 million from $7.9 million. This is a substantial decline and could indicate issues in cost management or market conditions that are beyond the company’s control.
On a positive note, the company has improved its working capital situation from
While the production increase is promising, the significant drop in net income and increased operational costs are red flags. Investors should watch for further updates on cost management measures and market conditions affecting the company’s profitability.
The company reported achieving its highest quarterly gross revenues in history, yet the net revenue was almost flat year over year, which signals a disconnect between production capacity and market pricing. The decrease in average prices for both oil and natural gas has clearly impacted overall financial performance. Specifically, natural gas revenues plummeted by 45% due to a 51% drop in prices, despite an 11% increase in production. This suggests that market prices are a significant variable affecting the company's profitability.
General and administrative expenses have ballooned by 36%, attributed to higher accounting fees, public company costs and investor relations expenses. These increases suggest the company is investing heavily in administrative and compliance activities, which could be either a strategic long-term investment or indicative of inefficiencies.
Investors should pay close attention to the completion of new wells and reworks. The new production from Nickel Hill 35-1H and 35-2H wells could potentially boost future revenue and offset some of the current financial challenges. However, offset fracture stimulations affecting well productivity is a concerning factor that could lead to unpredictable production levels.
The company's ability to manage commodity price volatility and operational costs will be crucial. This quarter's earnings highlight the need for better cost control and strategic planning to mitigate the risk of fluctuating market prices and operating expenses.
Highest Quarterly Gross Revenues in Company History
FIRST QUARTER HIGHLIGHTS
-
Average production for the first quarter of 2024 was 3,305 BOEPD, an increase of
3% compared to first quarter of 2023 average production of 3,194 BOEPD. The production increase is due to the additional production from the wells that were drilled and completed in 2023 -
Revenue, net of royalties was
$14.2 million $14.3 million -
Production and operating expense per barrel averaged
$8.36 $6.04 $0.6 million $1.93 $6.43 6% -
Adjusted EBITDA(1) was
$10.4 million $11.4 million 9% The decrease was due to lower average prices and higher production and operating expenses due to the prior period gathering and processing fees, partially offset by an increase in production -
Net income in the first quarter of 2024 was
$3.3 million $7.9 million $0.9 million $1.4 million -
Average netback from operations(2) for the first quarter of 2024 was
$38.94 11% from the prior year first quarter of$43.67 $37.81 $42.23 10% from the prior year period. The decreases were due to lower average prices and increased operating expenses due to the prior period gathering and processing fees. Netback from operations for the first quarter of 2024 without the prior period gathering and processing fees would have been$40.87 -
At March 31, 2024, the Company had
$8.0 million
(1) |
Adjusted EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
|||
(2) |
Netback from operations and netback including commodity contracts are considered non-GAAP ratios. Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
Kolibri’s President and Chief Executive Officer, Wolf Regener commented:
“We are pleased with the first quarter performance of the Company as we continue to generate strong cash flow with
“The Company reworked three wells in the first quarter of 2024 and another well in the second quarter. These are all wells that were impacted by offset fracture stimulations. Wells that were impacted by the offset fracture stimulations reduced production by about 275 BOEPD in the first quarter of 2024. Even with this reduction, production is above the year end forecast from our third-party reservoir engineering firm and the reworks have improved production further.”
First Quarter
|
First Quarter
|
% |
|||||||||
Net income: |
|||||||||||
$ Thousands |
$ |
3,345 |
|
$ |
7,896 |
|
(58 |
)% |
|||
$ per basic common share |
$ |
0.09 |
|
$ |
0.22 |
|
(59 |
)% |
|||
Capital Expenditures |
$ |
5,320 |
|
$ |
4,188 |
|
27 |
% |
|||
Adjusted EBITDA(1) |
$ |
10,374 |
|
$ |
11,396 |
|
(9 |
)% |
|||
Average production per day (Boepd) |
|
3,305 |
|
|
3,194 |
|
3 |
% |
|||
Average price per boe |
$ |
60.66 |
|
$ |
62.87 |
|
(4 |
)% |
|||
Netback from operations(2) |
$ |
38.94 |
|
$ |
43.67 |
|
(11 |
)% |
|||
Netback including commodity contracts(2) |
$ |
37.81 |
|
$ |
42.23 |
|
(10 |
)% |
|||
|
|
|
|
||||||||
March 31, 2024 |
December 31, 2023 |
|
|||||||||
Cash and Cash Equivalents |
$ |
1,801 |
|
$ |
598 |
|
|
||||
Working Capital |
$ |
(6,564 |
) |
$ |
(11,916 |
) |
|
||||
Borrowing Capacity |
$ |
8,042 |
|
$ |
10,042 |
|
|
||||
|
|
|
|
||||||||
(1) |
Adjusted EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
|
(2) |
Netback from operations and netback including commodity contracts are considered non-GAAP ratios. Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
First Quarter 2024 versus First Quarter 2023
Oil and gas gross revenues totaled
Average production for the first quarter of 2024 was 3,305 BOEPD, an increase of
Production and operating expenses for the first quarter of 2024 was
General and administrative expenses for the first quarter of 2024 was
Finance income decreased
Finance expense increased
KOLIBRI GLOBAL ENERGY INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
||||||||
(Expressed in Thousands of United States Dollars) |
||||||||
( |
||||||||
March 31 |
December 31 |
|||||||
2024
|
2023
|
|||||||
Current Assets |
|
|
||||||
Cash |
$ |
1,801 |
|
$ |
598 |
|
||
Accounts receivables and other receivables |
|
7,525 |
|
|
5,492 |
|
||
Deposits and prepaid expenses |
|
835 |
|
|
838 |
|
||
|
|
10,161 |
|
|
6,928 |
|
||
Non-current assets |
|
|
||||||
Property, plant and equipment |
|
217,926 |
|
|
216,161 |
|
||
Right of use assets |
|
1,104 |
|
|
1,190 |
|
||
Fair value of commodity contracts |
|
- |
|
|
78 |
|
||
|
|
219,030 |
|
|
217,429 |
|
||
Total Assets |
$ |
229,191 |
|
$ |
224,357 |
|
||
Current Liabilities |
|
|
||||||
Accounts payable and other payables |
$ |
14,881 |
|
$ |
17,648 |
|
||
Lease liabilities |
|
965 |
|
|
1,068 |
|
||
Fair value of commodity contracts |
|
879 |
|
|
128 |
|
||
|
|
16,725 |
|
|
18,844 |
|
||
Non-current liabilities |
|
|
||||||
Loans and borrowings |
|
31,667 |
|
|
29,612 |
|
||
Asset retirement obligations |
|
2,048 |
|
|
1,966 |
|
||
Deferred taxes |
|
4,550 |
|
|
3,359 |
|
||
Lease liabilities |
|
180 |
|
|
162 |
|
||
Fair value of commodity contracts |
|
111 |
|
|
- |
|
||
|
|
38,556 |
|
|
35,099 |
|
||
|
|
|
||||||
Equity |
||||||||
Shareholders’ capital |
|
296,232 |
|
|
296,232 |
|
||
Contributed surplus |
|
24,330 |
|
|
24,179 |
|
||
Accumulated deficit |
|
(146,652 |
) |
|
(149,997 |
) |
||
|
173,910 |
|
|
170,414 |
|
|||
Total Equity and Liabilities |
$ |
229,191 |
|
$ |
224,357 |
|
||
|
||||||||
KOLIBRI GLOBAL ENERGY INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
||||||||
(Unaudited, expressed in Thousands of |
||||||||
( |
||||||||
Three months ended March 31, |
||||||||
( |
2024 |
2023 |
||||||
Revenue: |
||||||||
Oil and gas revenue, net of royalties |
$ |
14,226 |
|
$ |
14,293 |
|
||
Other income |
|
59 |
|
|
1 |
|
||
|
14,285 |
|
|
14,294 |
|
|||
Expenses: |
||||||||
Production and operating expenses |
|
2,246 |
|
|
1,553 |
|
||
Depletion, depreciation and amortization |
|
3,894 |
|
|
4,338 |
|
||
General and administrative expenses |
|
1,265 |
|
|
930 |
|
||
Share based compensation |
|
128 |
|
|
18 |
|
||
|
7,533 |
|
$ |
6,839 |
|
|||
Finance Income |
|
- |
|
|
1,390 |
|
||
Finance Expense |
|
(2,216 |
) |
|
(949 |
) |
||
Income tax expense |
|
(1,191 |
) |
|
- |
|
||
|
||||||||
Net income |
|
3,345 |
|
|
7,896 |
|
||
Basic and diluted net income per share |
$ |
0.09 |
|
$ |
0.22 |
|
||
| KOLIBRI GLOBAL ENERGY INC. | ||||||||
FIRST QUARTER 2024 |
||||||||
(Unaudited, expressed in Thousands of |
||||||||
|
|
|||||||
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Oil revenue before royalties |
$ |
16,548 |
|
$ |
16,278 |
|
||
Natural gas revenue before royalties |
|
445 |
|
|
815 |
|
||
NGL revenue before royalties |
|
1,251 |
|
|
981 |
|
||
Oil and Gas revenue before royalties |
|
18,244 |
|
|
18,074 |
|
||
Adjusted EBITDA(1) |
|
10,374 |
|
|
11,396 |
|
||
Capital expenditures |
|
5,320 |
|
|
4,188 |
|
||
Statistics: |
||||||||
Average oil production (Bopd) |
|
2,423 |
|
|
2,431 |
|
||
Average natural gas production (mcf/d) |
|
2,371 |
|
|
2,138 |
|
||
Average NGL production (Boepd) |
|
487 |
|
|
407 |
|
||
Average production (Boepd) |
|
3,305 |
|
|
3,194 |
|
||
|
|
|
||||||
Average oil price ($/bbl) |
$ |
75.03 |
|
$ |
74.40 |
|
||
Average natural gas price ($/mcf) |
|
2.06 |
|
|
4.24 |
|
||
Average NGL price ($/bbl) |
|
28.25 |
|
|
26.77 |
|
||
Average price per barrel |
$ |
60.66 |
|
$ |
62.87 |
|
||
Royalties per barrel |
|
13.36 |
|
|
13.16 |
|
||
Operating expenses per barrel(3,4) |
|
8.36 |
|
|
6.04 |
|
||
Netback from operations(2) |
|
38.94 |
|
|
43.67 |
|
||
Price adjustment from commodity contracts (Boe) |
|
(1.13 |
) |
|
(1.44 |
) |
||
Netback including commodity contracts (Boe)(2) |
$ |
37.81 |
|
$ |
42.23 |
|
||
(1) |
Adjusted EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
|
(2) |
Netback from operations and netback including commodity contracts are considered non-GAAP ratios. Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
|
(3) |
Operating expenses include compressor costs of |
|
(4) |
Operating expense in the first quarter of 2024 includes natural gas and NGL processing costs of |
The information outlined above is extracted from and should be read in conjunction with the Company's unaudited financial statements for the three months ended March 31, 2024 and the related management's discussion and analysis thereof, copies of which are available under the Company's profile at www.sedarplus.ca.
NON-GAAP MEASURES
Netback from operations, netback including commodity contracts and adjusted EBITDA (collectively, the "Company’s Non-GAAP Measures") are not measures or ratios recognized under Canadian generally accepted accounting principles ("GAAP") and do not have any standardized meanings prescribed by IFRS. Management of the Company believes that such measures and ratios are relevant for evaluating returns on each of the Company's projects as well as the performance of the enterprise as a whole. The Company's Non-GAAP Measures may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to similar non-GAAP measures and ratios as reported by such organizations. The Company’s Non-GAAP Measures should not be construed as alternatives to net income, cash flows related to operating activities, working capital or other financial measures and ratios determined in accordance with IFRS, as an indicator of the Company's performance.
An explanation of how the Company’s Non-GAAP Measures provide useful information to an investor and the purposes for which the Company’s management uses the Non-GAAP Measures 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.sedarplus.ca and is incorporated by reference into this earnings release.
The following is the reconciliation of the non-GAAP ratio netback from operations to net income (loss) from continuing operations, which the Company considers to be the most directly comparable financial measure that is disclosed in the Company’s financial statements:
(US |
Three months ended March 31, |
|||||||
2024 |
2023 |
|||||||
Net income |
|
3,345 |
|
|
7,896 |
|
||
Adjustments: |
||||||||
Income tax expense |
|
1,191 |
|
|
- |
|
||
Finance income |
|
- |
|
|
(1,390 |
) |
||
Finance expense |
|
2,216 |
|
|
949 |
|
||
Share based compensation |
|
128 |
|
|
18 |
|
||
General and administrative expenses |
|
1,265 |
|
|
930 |
|
||
Depletion, depreciation and amortization |
|
3,894 |
|
|
4,338 |
|
||
Other income |
|
(59 |
) |
|
(1 |
) |
||
Operating netback |
|
11,980 |
|
|
12,740 |
|
||
Netback from operations |
$ |
38.94 |
|
$ |
43.67 |
|
||
The following is the reconciliation of the non-GAAP measure adjusted EBITDA to the comparable financial measures disclosed in the Company’s financial statements:
(US |
Three months ended March 31, |
|||||
2024 |
2023 |
|||||
Net income |
3,345 |
|
7,896 |
|
||
Depletion and depreciation |
3,894 |
|
4,338 |
|
||
Accretion |
45 |
|
45 |
|
||
Interest expense |
915 |
|
485 |
|
||
Unrealized (gain) loss on commodity contracts |
915 |
|
(1,390 |
) |
||
Share based compensation |
128 |
|
18 |
|
||
Other income |
(59 |
) |
(1 |
) |
||
Income tax expense |
1,191 |
|
- |
|
||
Foreign currency loss |
- |
|
5 |
|
||
Adjusted EBITDA |
10,374 |
|
11,396 |
|
||
CAUTIONARY STATEMENTS
In this news release and the Company’s other public disclosure:
(a) |
The Company's natural gas production is reported in thousands of cubic feet ("Mcfs"). The Company also uses references to barrels ("Bbls") and barrels of oil equivalent ("Boes") to reflect natural gas liquids and oil production and sales. 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. |
|||
(b) |
Discounted and undiscounted net present value of future net revenues attributable to reserves do not represent fair market value. |
|||
(c) |
Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a |
|||
(d) |
The Company discloses peak and 30-day initial production rates and other short-term production rates. Readers are cautioned that such production rates are preliminary in nature and are not necessarily indicative of long-term performance or of ultimate recovery. |
Caution Regarding Forward-Looking Information
This release contains forward-looking information including information regarding the proposed timing and expected results of exploratory and development work including production from the Company's
Such forward-looking information is based on management’s expectations and assumptions, including that the Company's geologic and reservoir models and analysis will be validated, that indications of early results are reasonably accurate predictors of the prospectiveness of the shale intervals, that previous exploration results are indicative of future results and success, that expected production from future wells can be achieved as modeled, that declines will match the modeling, that future well production rates will be improved over existing wells, that rates of return as modeled can be achieved, that recoveries are consistent with management’s expectations, that additional wells are actually drilled and completed, that design and performance improvements will reduce development time and expense and improve productivity, that discoveries will prove to be economic, that anticipated results and estimated costs will be consistent with management’s expectations, that all required permits and approvals and the necessary labor and equipment will be obtained, provided or available, as applicable, on terms that are acceptable to the Company, when required, that no unforeseen delays, unexpected geological or other effects, equipment failures, permitting delays or labor or contract disputes are encountered, that the development plans of the Company and its co-venturers will not change, that the demand for oil and gas will be sustained or increase, that the Company will continue to be able to access sufficient capital through financings, credit facilities, farm-ins or other participation arrangements to maintain its projects, that the Company will continue in compliance with the covenants under its reserves-based loan facility and that the borrowing base will not be reduced, that funds will be available from the Company’s reserves based loan facility when required to fund planned operations, that the Company will not be adversely affected by changing government policies and regulations, social instability or other political, economic or diplomatic developments in the countries in which it operates and that global economic conditions will not deteriorate in a manner that has an adverse impact on the Company's business and its ability to advance its business strategy.
Forward looking information involves significant known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks 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’s geologic and reservoir models or analysis are not validated, that anticipated results and estimated costs will not be consistent with management’s expectations, 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), the risk of commodity price and foreign exchange rate fluctuations, risks and uncertainties associated with securing the necessary regulatory approvals and financing to proceed with continued development of the Tishomingo Field, the risk 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 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 Company will cease to be in compliance with the covenants under its reserves-based loan facility and be required to repay outstanding amounts or that the borrowing base will be reduced pursuant to a borrowing base re-determination and the Company will be required to repay the resulting shortfall, that the Company is unable to access required capital, that funding is not available from the Company’s reserves based loan facility at the times or in the amounts required for planned operations, 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 identified in the Company’s most recent Annual Information Form under the “Risk Factors” section, the Company’s most recent management's discussion and analysis and the Company’s other public disclosure, available under the Company’s profile on SEDAR at www.sedarplus.ca.
Although the Company has attempted to take into account important factors that could cause actual costs or results to differ materially, there may be other factors that cause actual results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The forward-looking information included in this release is expressly qualified in its entirety by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligation to update these forward-looking statements, other than as required by applicable law.
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
View source version on businesswire.com: https://www.businesswire.com/news/home/20240513315690/en/
For further information, contact:
Wolf E. Regener, President and Chief Executive Officer +1 (805) 484-3613
Email: investorrelations@kolibrienergy.com
Website: www.kolibrienergy.com
Source: Kolibri Global Energy Inc.
FAQ
What was Kolibri Global Energy's net income in Q1 2024?
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What was Kolibri Global Energy's revenue net of royalties in Q1 2024?
What were the operating expenses per barrel for Kolibri Global Energy in Q1 2024?
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What increase in production costs did Kolibri Global Energy experience in Q1 2024?
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