Kolibri Global Energy Inc. Operations Update and Initial Flow Rates Barnes 7-4H & 7-5H Wells
- The Barnes 7-4H and 7-5H wells are producing at higher rates than previous wells in the Caney formation
- The Company is updating its annual forecasted guidance with increased exit rate production, average production, revenue, and Adjusted EBITDA
- Gathering system optimization is still impacting the Company's production
Initial Flow Rates
The Barnes 7-4H and 7-5H wells, which were drilled and completed in the Lower Caney Formation are still flowing back fracture stimulation fluid. Over the last seven days the Barnes 7-4H well has averaged 686 Barrels of oil equivalent per day (“BOEPD”) (534 barrels of oil per day (“BOPD”)) and the Barnes 7-5H well has averaged 624 BOEPD (472 BOPD). These two wells are producing at higher rates than the Barnes 8-1H and 8-2H
Drilling and Completion Operations
The Company has finished drilling the Emery 17-3H and 17-4H wells and is currently drilling the Emery 17-5H. The Emery 17-3H and 17-5H are Lower Caney formation wells, while the Emery 17-4H is a T-Zone well. Completion operations for all three wells are expected to begin in the first week of November.
Wolf Regener, President and CEO commented, “We are excited that the two new Lower Caney Barnes 7-4H and Barnes 7-5H wells are performing so well, and we are looking forward to bringing on the Emery 17-3H, 17-4H, and 17-5H wells to increase our production further and to demonstrate the repeatability of production from the T-zone. If achieved, another economic T-zone well will hopefully lead to increased reserves in our year end reserve report.
"We anticipate spudding the next set of wells sometime in December for production in early 2024.”
Field Update
The gathering system issues (reported in the Company’s press release dated September 6, 2023) have been mainly resolved. The Company has requested some additional optimization of the gathering system as it is still having a minor impact on the Company’s production.
Guidance Update
The Company is updating its annual forecasted guidance as follows:
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Revised 2023 Forecast |
% Increase from Fiscal Year 2022 |
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|
|
|
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Exit rate production |
5,000 to 6,000 boepd |
|
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Average production |
3,100 to 3,400 boepd |
|
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Revenue(1) |
|
|
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Adjusted EBITDA(2) |
|
|
||
(1) |
Assumptions include on forecasted pricing from September 2023 through December 2023 of WTI US |
|
(2) |
Adjusted EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” of this news release |
The increased exit rate forecast is due to the additional eighth well that wasn’t included in the Company’s original forecast, in addition to some of the wells starting production later than originally planned.
The average production, revenue and Adjusted EBITDA guidance shows significant growth from 2022 even though this guidance has been revised lower from the Company’s initial guidance due to a few factors. The main factor is timing, as new wells started producing later than originally forecasted. Since we added an additional well to our original planned drilling program the timing of the production from the Emery 3 well pad was pushed back. In addition, the field gathering system issues discussed above impacted production, and the upper
The Company expects annual capital expenditures to be in the range of
NASDAQ TRADING
The Company is still expecting to begin trading on the Nasdaq Stock Market on Wednesday, October 11th, 2023 under the symbol “KGEI”. The Company will be dual listed as its shares will also continue to be listed on the TSX under the symbol of “KEI”.
NON-GAAP MEASURES
Adjusted EBITDA is not a measure recognized under Canadian generally accepted accounting principles ("GAAP") and does not have any standardized meaning prescribed by IFRS. Management of the Company believes that Adjusted EBITDA is relevant for evaluating returns on the Company's project as well as the performance of the enterprise as a whole. Adjusted EBITDA may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to similar non-GAAP measures as reported by such organizations. Adjusted EBITDA should not be construed as an alternative to net income, cash flows related to operating activities, working capital or other financial measures determined in accordance with IFRS, as an indicator of the Company's performance.
An explanation of how Adjusted EBITDA provides useful information to an investor and the purposes for which the Company’s management uses Adjusted EBITDA 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.sedar.com and is incorporated by reference into this news release.
Adjusted EBITDA is calculated as net income before interest, taxes, depletion and depreciation and other non-cash and non-operating gains and losses. The Company considers this a key measure as it demonstrates its ability to generate cash from operations necessary for future growth excluding non-cash items, gains and losses that are not part of the normal operations of the Company and financing costs. The following is the reconciliation of the non-GAAP measure Adjusted EBITDA:
(US |
Three months ended June 30, |
Six months ended June 30, |
||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||
Net income |
4,268 |
|
7,007 |
|
12,164 |
|
4,551 |
|
||||
Depletion and depreciation |
3,375 |
|
2,087 |
|
7,713 |
|
3,226 |
|
||||
Accretion |
44 |
|
6 |
|
89 |
|
12 |
|
||||
Interest expense |
375 |
|
212 |
|
860 |
|
437 |
|
||||
Unrealized (gain) loss on commodity contracts |
(777 |
) |
(746 |
) |
(2,167 |
) |
3,040 |
|
||||
Share based compensation |
356 |
|
32 |
|
374 |
|
157 |
|
||||
Interest income |
- |
|
(1 |
) |
- |
|
(3 |
) |
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Other income |
- |
|
(28 |
) |
(1 |
) |
(29 |
) |
||||
Foreign currency loss (gain) |
5 |
|
3 |
|
10 |
|
(7 |
) |
||||
Adjusted EBITDA |
7,646 |
|
8,572 |
|
19,042 |
|
11,384 |
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About Kolibri Global Energy Inc.
Kolibri Global Energy Inc. is a North American energy company focused on finding and exploiting energy projects in oil, gas, and clean and sustainable energy. Through various subsidiaries, the Company owns and operates energy properties in
Cautionary Statements
In this news release and the Company’s other public disclosure: The references to barrels of oil equivalent ("Boes") reflect natural gas, natural gas liquids and oil. 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. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a
Readers should be aware that references to initial production rates and other short-term production rates are preliminary in nature and are not necessarily indicative of long-term performance or of ultimate recovery. Readers are referred to the full description of the results of the Company's December 31, 2022 independent reserves evaluation and other oil and gas information contained in its Form 51-101F1 Statement of Reserves Data and Other Oil and Gas Information for the year ended December 31, 2022, which the Company filed on SEDAR on March 13, 2023.
Caution Regarding Forward-Looking Information
Certain statements contained in this news release constitute "forward-looking information" as such term is used in applicable Canadian securities laws and “forward-looking statements” within the meaning of
Caution Regarding Future-Oriented Financial Information and Financial Outlook
This news release may contain information deemed to be “future-oriented financial information” or a “financial outlook” (collectively, “FOFI”) within the meaning of applicable securities laws. The FOFI has been prepared by management to provide an outlook of the Company’s activities and results and may not be appropriate for other purposes. The FOFI has been prepared based on a number of assumptions including the assumptions discussed above under “Caution Regarding Forward-Looking Information”. The actual results of operations of the Company and the resulting financial results may vary from the amounts set forth herein, and such variations may be material. The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. FOFI contained in this news release was made as of the date of this news release and the Company disclaims any intention or obligations to update or revise any FOFI contained in this news release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231010569863/en/
Wolf E. Regener +1 (805) 484-3613
Email: wregener@kolibrienergy.com
Website: www.kolibrienergy.com
Source: Kolibri Global Energy Inc.
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