6-K
Kolibri Global Energy Inc. (KGEI)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM6-K
Reportof Foreign Private Issuer
Pursuantto Rule 13****a-16or 15d-16
UNDERthe Securities Exchange Act of 1934
For the month of August 2024
Commission File No.: 001-41824
KolibriGlobal Energy Inc.
(Translation of registrant’s name into English)
925Broadbeck Drive, Suite 220
ThousandOaks, CA 91320
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☐ Form 40-F ☒
EXHIBITINDEX
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Kolibri Global Energy Inc. | ||
|---|---|---|
| Date:<br> August 13, 2024 | By: | /s/ Gary Johnson |
| Name: | Gary<br> Johnson | |
| Title: | Chief<br> Financial Officer |
Exhibit99.1
UNAUDITEDCONDENSED
CONSOLIDATEDINTERIM
FINANCIALSTATEMENTS
JUNE30, 2024
KOLIBRIGLOBAL ENERGY INC.
CONDENSEDCONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited,Expressed in Thousands of United States Dollars)
| June 30, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2024<br> <br>(unaudited) | 2023<br> <br>(audited) | |||||
| Current assets | ||||||
| Cash and cash<br> equivalents | $ | 549 | $ | 598 | ||
| Accounts receivable<br> and other receivables (Note 4) | 7,766 | 5,492 | ||||
| Deposits and prepaid<br> expenses | 597 | 838 | ||||
| 8,912 | 6,928 | |||||
| Non-current assets | ||||||
| Property, plant and equipment<br> (Note 5) | 221,007 | 216,161 | ||||
| Right of use assets (Note<br> 6) | 1,056 | 1,190 | ||||
| Fair value of commodity<br> contracts (Note 3) | - | 78 | ||||
| 222,063 | 217,429 | |||||
| Total assets | $ | 230,975 | $ | 224,357 | ||
| Current liabilities | ||||||
| Accounts payable and other<br> payables (Note 4) | $ | 9,360 | $ | 17,648 | ||
| Lease liabilities | 919 | 1,068 | ||||
| Fair value of commodity<br> contracts (Note 3) | 518 | 128 | ||||
| 10,797 | 18,844 | |||||
| Non-current liabilities | ||||||
| Loans and borrowings (Note<br> 8) | 33,678 | 29,612 | ||||
| Asset retirement obligations,<br> net | 2,069 | 1,966 | ||||
| Lease liabilities | 177 | 162 | ||||
| Deferred income taxes | 5,762 | 3,359 | ||||
| Fair value of commodity<br> contracts (Note 3) | 4 | - | ||||
| 41,690 | 35,099 | |||||
| Equity | ||||||
| Shareholders’<br> capital | 296,458 | 296,232 | ||||
| Contributed surplus | 24,621 | 24,179 | ||||
| Accumulated deficit | (142,591 | ) | (149,997 | ) | ||
| 178,488 | 170,414 | |||||
| Total equity and liabilities | $ | 230,975 | $ | 224,357 |
Seeaccompanying notes to unaudited condensed consolidated interim financial statements.
| 1 |
| --- |
KOLIBRIGLOBAL ENERGY INC.
CONDENSEDCONSOLIDATED STATEMENTS OF
OPERATIONSAND COMPREHENSIVE INCOME
(Unaudited,expressed in Thousands of United States dollars, except per share amounts)
| Three<br> months ended June 30 | Six<br> months ended June 30 | |||||||
|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||
| Revenue | ||||||||
| Oil and natural gas revenue,<br> net of royalties (Note 10) | $ | 13,915 | $ | 10,114 | $ | 28,141 | $ | 24,407 |
| Other income | 1 | - | 60 | 1 | ||||
| 13,916 | 10,114 | 28,201 | 24,408 | |||||
| Expenses | ||||||||
| Production and operating expenses | 2,109 | 1,147 | 4,355 | 2,700 | ||||
| Depletion, depreciation and amortization<br> (Note 4,5) | 3,700 | 3,375 | 7,594 | 7,713 | ||||
| General and administrative expenses | 1,528 | 1,021 | 2,793 | 1,951 | ||||
| Stock based compensation (Note 9) | 411 | 356 | 539 | 374 | ||||
| 7,748 | 5,899 | 15,281 | 12,738 | |||||
| Finance income | ||||||||
| Unrealized gain on financial commodity contracts<br> (Note 3) | 445 | 777 | - | 2,167 | ||||
| 445 | 777 | - | 2,167 | |||||
| Finance expense | ||||||||
| Realized loss on financial commodity contracts<br> (Note 3) | 242 | 300 | 583 | 714 | ||||
| Unrealized loss on financial commodity contracts<br> (Note 3) | - | - | 470 | - | ||||
| Interest on loans and borrowings | 813 | 375 | 1,728 | 860 | ||||
| Foreign exchange loss | 2 | 5 | 2 | 10 | ||||
| Accretion expense | 44 | 44 | 89 | 89 | ||||
| 1,101 | 724 | 2,872 | 1,673 | |||||
| Net income before income taxes | 5,512 | 4,268 | 10,048 | 12,164 | ||||
| Income tax expense | 1,451 | - | 2,642 | - | ||||
| Net income and comprehensive income | $ | 4,061 | $ | 4,268 | $ | 7,406 | $ | 12,164 |
| Basic net income per share (Note 7) | $ | 0.11 | $ | 0.12 | $ | 0.21 | $ | 0.34 |
| Diluted net income per share (Note 7) | $ | 0.11 | $ | 0.12 | $ | 0.20 | $ | 0.33 |
Seeaccompanying notes to the unaudited condensed consolidated interim financial statements.
| 2 |
| --- |
KOLIBRIGLOBAL ENERGY INC.
CONDENSEDCONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
(Unaudited,Expressed in Thousands of United States Dollars, except number of common shares)
| Number<br> of common shares (Note 6) | Share capital | Contributed Surplus | Deficit | Total Equity | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at January 1, 2023 | 35,615,921 | $ | 296,221 | $ | 23,254 | $ | (169,277 | ) | $ | 150,198 | ||
| Stock based compensation (Note 9) | 441 | 441 | ||||||||||
| Stock options exercised (Note 9) | 5,000 | 6 | (2 | ) | - | 4 | ||||||
| Net income for the period | - | - | - | 12,164 | 12,164 | |||||||
| Balance at June 30,<br> 2023 | 35,620,921 | $ | 296,227 | $ | 23,693 | $ | (157,113 | ) | $ | 162,807 | ||
| Balance at January 1, 2024 | 35,625,587 | $ | 296,232 | $ | 24,179 | $ | (149,997 | ) | $ | 170,414 | ||
| Stock based compensation (Note 9) | 624 | 624 | ||||||||||
| Stock options exercised (Note 9) | 75,000 | 84 | (40 | ) | - | 44 | ||||||
| Restricted stock options issued <br>(Note 9) | 35,378 | 142 | (142 | ) | - | - | ||||||
| Net income for the period | - | - | - | 7,406 | 7,406 | |||||||
| Balance at June 30,<br> 2024 | 35,735,965 | $ | 296,458 | $ | 24,621 | $ | (142,591 | ) | $ | 178,488 |
Seeaccompanying notes to the unaudited condensed consolidated interim financial statements.
| 3 |
| --- |
KOLIBRIGLOBAL ENERGY INC.
CONDENSEDCONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
SIXMONTHS ENDED JUNE 30
(Unaudited,Expressed in Thousands of United States Dollars)
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Cash<br> flows from operating activities | ||||||
| Net income | $ | 7,406 | $ | 12,164 | ||
| Adjustments for: | ||||||
| Depletion, depreciation<br> and amortization | 7,594 | 7,713 | ||||
| Accretion expense | 89 | 89 | ||||
| Amortization of loan acquisition<br> costs | 113 | 50 | ||||
| Unrealized (gain) loss<br> on financial commodity contracts (Note 3) | 470 | (2,167 | ) | |||
| Stock based compensation<br> (Note 9) | 539 | 374 | ||||
| Gain on sale of assets | (8 | ) | - | |||
| Deferred income tax | 2,403 | - | ||||
| Unrealized foreign exchange<br> gain | 3 | - | ||||
| Change in non-cash working<br> capital (Note 4) | (1,596 | ) | 819 | |||
| Net cash from operating<br> activities | 17,013 | 19,042 | ||||
| Cash<br> flows from investing activities | ||||||
| Additions to property,<br> plant and equipment (Note 5) | (11,747 | ) | (19,930 | ) | ||
| Proceeds from sale of<br> assets | 8 | - | ||||
| Change in non-cash working<br> capital (Note 4) | (8,724 | ) | 1,285 | |||
| Net cash used in investing<br> activities | (20,463 | ) | (18,645 | ) | ||
| Cash<br> flows from financing activities | ||||||
| Repayment of loans and<br> borrowings, net | (5,500 | ) | (3,000 | ) | ||
| Proceeds from loans and<br> borrowings | 9,453 | 2,897 | ||||
| Lease payments | (595 | ) | (392 | ) | ||
| Proceeds from stock option<br> exercises | 44 | 6 | ||||
| Net cash used in financing<br> activities | 3,402 | (489 | ) | |||
| Foreign exchange effect on cash and cash equivalents | (1 | ) | - | |||
| Change<br> in cash and cash equivalents | (49 | ) | (92 | ) | ||
| Cash and cash equivalents, beginning of<br> period | 598 | 1,037 | ||||
| Cash<br> and cash equivalents, end of period | $ | 549 | $ | 945 | ||
| Supplementary information | ||||||
| Interest paid | $ | 1,534 | $ | 806 | ||
| Income taxes paid | $ | - | $ | - |
Seeaccompanying notes to the unaudited condensed consolidated interim financial statements.
| 4 |
| --- |
Notesto the unaudited Condensed Consolidated Interim Financial Statements
Forthe Three and Six Months Ended June 30, 2024 and 2023
(Unaudited,expressed in Thousands of United States dollars except per share information)
| 1. | NATURE OF OPERATIONS |
|---|
Kolibri Global Energy Inc. (the “Company” or “KEI”), was incorporated under the Business Corporations Act (British Columbia) on May 6, 2008. KEI 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 the United States. The Company continues to utilize its technical and operational expertise to identify and acquire additional projects in oil, gas and clean and sustainable energy. The Company’s shares are traded on the Toronto Stock Exchange under the stock symbol KEI and on the NASDAQ under the stock symbol KGEI. The unaudited condensed consolidated interim financial statements were approved by the Company’s Board of Directors on August 13, 2024.
| 2. | BASIS OF PRESENTATION |
|---|
These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, “Interim Financial Reporting” following the same accounting policies, except as described below, and methods of computation as the annual consolidated financial statements of the Company for the year ended December 31, 2023. The disclosures provided below are incremental to those included with the annual consolidated financial statements and certain disclosures, which are normally required to be included in the notes to the annual consolidated financial statements, have been condensed or omitted. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company’s annual filings for the year ended December 31, 2023.
NewStandards and Interpretations adopted
The following future IFRS standards have been adopted by the Company:
Amendmentto IFRS 16 – Leases on sale and leaseback. This amendment specifies how an entity accounts for a sale and leaseback after the date of the transaction. The Company adopted this standard on January 1, 2024 and it did not have a significant impact on the Company.
Amendmentto IFRS 1 – Non-current liabilities with covenants. This amendment specifies how an entity must comply within twelve months after the reporting period affecting the classification of a liability. The Company adopted this standard on January 1, 2024 and it did not have a significant impact on the Company.
Amendmentto IAS 7 and IFRS 7 – Supplier finance. This amendment requires disclosures of supplier finance arrangements and their impact to a company’s liquidity risk. The Company adopted this standard on January 1, 2024 and it did not have a significant impact on the Company.
| 5 |
| --- |
Notesto the unaudited Condensed Consolidated Interim Financial Statements
Forthe Three and Six Months Ended June 30, 2024 and 2023
(Unaudited,expressed in Thousands of United States dollars except per share information)
| 3. | COMMODITY CONTRACTS |
|---|
At June 30, 2024 the following financial commodity contracts were outstanding and recorded at estimated fair value:
| Total Volume<br> Hedged | Price | ||
|---|---|---|---|
| Commodity | Period | (BBLS) | ($/BBL) |
| Oil – WTI Costless Collars | April 1, 2024 to December 31, 2024 | 30,000 | $65.00<br> - $89.50 |
| Oil – WTI Costless Collars | July 1, 2024 to September 30, 2024 | 21,000 | $60.00<br> - $86.65 |
| Oil – WTI Costless Collars | July 1, 2024 to September 30, 2024 | 18,000 | $60.00<br> - $78.00 |
| Oil – WTI Costless Collars | July 1, 2024 to September 30, 2024 | 3,600 | $65.00<br> - $90.65 |
| Oil – WTI Costless Collars | October 1, 2024 to December 31, 2024 | 39,000 | $60.00<br> - $82.50 |
| Oil – WTI Costless Collars | January 1, 2025 to March 31, 2025 | 36,000 | $60.00<br> - $77.00 |
| Oil – WTI Costless Collars | April 1, 2025 to June 30, 2025 | 20,400 | $60.00<br> - $75.40 |
| Oil – WTI Costless Collars | April 1, 2025 to June 30, 2025 | 1,350 | $65.00<br> - $82.54 |
| Oil – WTI Costless Collars | July 1, 2025 to September 30, 2025 | 21,000 | $65.00<br> - $82.00 |
| Oil – WTI Costless Collars | July 1, 2025 to September 30, 2025 | 750 | $65.00<br> - $80.50 |
| Oil – WTI Costless Collars | July 1, 2024 to September 30, 2024 | 15,000 | $63.80<br> - $84.50 |
| Oil – WTI Costless Collars | July 1, 2024 to September 30, 2024 | 13,800 | $67.75<br> - $89.85 |
| Oil – WTI Costless Collars | October 1, 2024 to December 31, 2024 | 15,000 | $62.35<br> - $82.70 |
| Oil – WTI Costless Collars | October 1, 2024 to December 31, 2024 | 13,800 | $65.75<br> - $87.10 |
| Oil – WTI Costless Collars | October 1, 2024 to December 31, 2024 | 1,200 | $61.00<br> - $81.46 |
| Oil – WTI Costless Collars | October 1, 2024 to December 31, 2024 | 2,400 | $60.00<br> - $78.23 |
| Oil – WTI Costless Collars | January 1, 2025 to March 31, 2025 | 15,000 | $64.25<br> - $84.60 |
| Oil – WTI Costless Collars | January 1, 2025 to March 31, 2025 | 14,400 | $66.25<br> - $87.75 |
| Oil – WTI Costless Collars | April 1, 2025 to June 30, 2025 | 3,000 | $59.50<br> - $79.00 |
| Oil – WTI Costless Collars | April 1, 2025 to June 30, 2025 | 5,700 | $60.80<br> - $74.07 |
| Oil – WTI Costless Collars | April 1, 2025 to June 30, 2025 | 13,200 | $64.50<br> - $85.70 |
| Oil – WTI Costless Collars | July 1, 2025 to September 30, 2025 | 21,900 | $63.25<br> - $83.65 |
| Oil – WTI Costless Collars | July 1, 2024 to September 30, 2024 | 13,800 | $67.75<br> - $89.85 |
| Oil – WTI Costless Collars | July 1, 2024 to September 30, 2024 | 24,000 | $69.50<br> - $93.25 |
| Oil – WTI Costless Collars | October 1, 2024 to December 31, 2024 | 13,800 | $65.75<br> - $87.10 |
| Oil – WTI Costless Collars | October 1, 2024 to December 31, 2024 | 24,000 | $67.50<br> - $89.50 |
| Oil – WTI Costless Collars | January 1, 2025 to March 31, 2025 | 15,000 | $64.25<br> - $84.60 |
| Oil – WTI Costless Collars | January 1, 2025 to March 31, 2025 | 16,200 | $65.50<br> - $86.25 |
| Oil – WTI Costless Collars | April 1, 2025 to June 30, 2025 | 10,800 | $64.00<br> - $84.00 |
| Oil – WTI Costless Collars | July 1, 2025 to September 30, 2025 | 10,800 | $62.75<br> - $82.00 |
| Oil – WTI Costless Collars | October 1, 2025 to December 31, 2025 | 10,800 | $62.00<br> - $81.50 |
The estimated fair value results in a $0.5 million liability as of June 30, 2024 (December 31, 2023: $0.1 million liability) for the financial oil and gas contracts which has been determined based on the prospective amounts that the Company would receive or pay to terminate the contracts, consisting of a current liability of $0.5 million (December 31, 2023: current liability of $0.2 million and a long term asset of $0.1 million).
| 6 |
| --- |
Notesto the unaudited Condensed Consolidated Interim Financial Statements
Forthe Three and Six Months Ended June 30, 2024 and 2023
(Unaudited,expressed in Thousands of United States dollars except per share information)
In July 2024, the Company entered into the following additional financial commodity contracts:
| Total<br> <br>Volume Hedged | Price | ||
|---|---|---|---|
| Commodity | Period | (BBLS) | ($/BBL) |
| Oil – WTI Costless Collars | October 1, 2025 to December 31, 2025 | 11,400 | $61.75<br> - $80.70 |
The realized and unrealized gains/losses from the financial commodity contracts are as follows:
| Three<br> months ended June 30, | Six<br> months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Realized loss on financial commodity<br> contracts | $ | (242 | ) | $ | (300 | ) | $ | (583 | ) | $ | (714 | ) |
| Unrealized gain (loss) on financial commodity<br> contracts | $ | 445 | $ | 777 | $ | (470 | ) | $ | 2,167 | |||
| 4. | SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||||
| --- | --- |
Changes in non-cash flow working capital is comprised of the following source (use) of cash:
| Six months<br> ended June 30, | |||||
|---|---|---|---|---|---|
| 2024 | 2023 | ||||
| Trade and other receivables | $ | (2,274 | ) | $ | 1,501 |
| Deposits and prepaid expenses | **** | 241 | **** | 301 | |
| Trade and other payables | **** | (8,288 | ) | **** | 302 |
| Foreign currency | **** | 1 | **** | - | |
| $ | (10,320 | ) | $ | 2,104 | |
| Related to operating<br> activities | $ | (1,596 | ) | $ | 819 |
| Related to investing<br> activities | $ | (8,724 | ) | $ | 1,285 |
| 7 |
| --- |
Notesto the unaudited Condensed Consolidated Interim Financial Statements
Forthe Three and Six Months Ended June 30, 2024 and 2023
(Unaudited,expressed in Thousands of United States dollars except per share information)
| 5. | PROPERTY, PLANT AND EQUIPMENT |
|---|
| Oil<br> and Natural Gas Interests | Processing<br> and Other Equipment | Total | ||||
|---|---|---|---|---|---|---|
| Cost or deemed cost | ||||||
| Balance at January 1, 2023 | $ | 234,126 | $ | 1,378 | $ | 235,504 |
| Additions | 53,713 | 60 | 53,774 | |||
| Balance at December 31, 2023 | $ | 287,839 | $ | 1,438 | $ | 289,277 |
| Additions (a) | 11,888 | 3 | 11,891 | |||
| Balance at June 30, 2024 | $ | 299,727 | $ | 1,441 | $ | 301,168 |
| Accumulated depletion and<br> depreciation | ||||||
| Balance at January 1, 2023 | $ | 57,610 | $ | 1,340 | $ | 58,950 |
| Depletion and depreciation for the period | 14,137 | 29 | 14,166 | |||
| Balance at December 31, 2023 | $ | 71,747 | $ | 1,369 | $ | 73,116 |
| Depletion and depreciation for the period | 7,034 | 11 | 7,045 | |||
| Balance at June 30, 2024 | $ | 78,781 | $ | 1,380 | $ | 80,161 |
| Net carrying amounts | ||||||
| At December 31, 2023 | $ | 216,092 | $ | 69 | $ | 216,161 |
| At June 30, 2024 | $ | 220,946 | $ | 61 | $ | 221,007 |
| (a) | Includes<br> non-cash additions of $85 from capitalized stock-based compensation and $60 from assets related<br> to ARO liabilities. | |||||
| --- | --- |
| 6. | LEASES AND RIGHT OF USE ASSETS |
|---|
| Right<br> of Use Assets | |||
|---|---|---|---|
| Balance at January 1, 2023 | $ | 48 | |
| Additions | 1,984 | ||
| Depreciation | (842 | ) | |
| Balance at December 31, 2023 | 1,190 | ||
| Additions | 415 | ||
| Depreciation | (549 | ) | |
| Balance at June 30, 2024 | $ | 1,056 |
| 7. | EARNINGS PER SHARE | |||||||
|---|---|---|---|---|---|---|---|---|
| Three<br> months ended <br>June 30, | Six<br> months ended <br>June 30, | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2024 | 2023 | 2024 | 2023 | |||||
| Basic earnings per share | ||||||||
| Net<br> income | $ | 4,061 | $ | 4,268 | $ | 7,406 | $ | 12,164 |
| Weighted average<br> number of common shares - basic | 35,644 | 35,621 | 35,635 | 35,620 | ||||
| Net income per share<br> – basic | $ | 0.11 | $ | 0.12 | 0.21 | $ | 0.34 | |
| Diluted earnings per share | ||||||||
| Net income | $ | 4,061 | $ | 4,268 | $ | 7,406 | $ | 12,164 |
| Effect of outstanding<br> options and RSUs | 1,084 | 875 | 1,084 | 866 | ||||
| Weighted average number of common shares<br> - diluted | 36,728 | 36,496 | 36,719 | 36,486 | ||||
| Net income per share<br> – diluted | $ | 0.11 | $ | 0.12 | $ | 0.20 | $ | 0.33 |
| 8 |
| --- |
Notesto the unaudited Condensed Consolidated Interim Financial Statements
Forthe Three and Six Months Ended June 30, 2024 and 2023
(Unaudited,expressed in Thousands of United States dollars except per share information)
| 8. | LOANS AND BORROWINGS |
|---|
In May 2022, the Company’s US subsidiary amended the credit facility from BOK Financial, which is secured by the US subsidiary’s interests in the Tishomingo Field. The credit facility expires in June 2026 and is intended to fund the drilling of the Caney wells in the Tishomingo Field.
In May 2024, the borrowing base of the credit facility was increased from $40.0 million to $50.0 million and the Company has an available borrowing capacity of $16.0 million at June 30, 2024. The credit facility is subject to a semi-annual review and redetermination of the borrowing base. The next redetermination will be in the third quarter of 2024. Future commitment amounts will be subject to new reserve evaluations and there is no guarantee that the size and terms of the credit facility will remain the same after the borrowing base redetermination. Any redetermination of the borrowing base is effective immediately and if the borrowing base is reduced, the Company has six months to repay any shortfall.
The credit facility has two primary debt covenants. One covenant requires the US subsidiary to maintain a positive working capital balance which includes any unused excess borrowing capacity and excludes the fair value of commodity contracts, the current portion of long-term debt (the “Current Ratio”). The second covenant ensures the ratio of outstanding debt and long-term liabilities to a trailing twelve month adjusted EBITDA amount (the “Maximum Leverage Ratio”) be no greater than 3 to 1 at any quarter end. Adjusted EBITDA is defined as net income excluding interest expense, depreciation, depletion and amortization expense, and other non-cash and non-recurring charges including severance, stock based compensation expense and unrealized gains or losses on commodity contracts.
The Company was in compliance with both covenants for the quarter ended June 30, 2024. At June 30, 2024, the Current Ratio of the US Subsidiary was 2.44 to 1.0 and the Maximum Leverage Ratio was 0.89 to 1.0 for the three months ended June 30, 2024.
At June 30, 2024, loans and borrowings of $34.0 million (December 31, 2023: $30.0 million) are presented net of loan acquisition costs of $0.3 million (December 31, 2023: $0.3 million).
| 9 |
| --- |
Notesto the unaudited Condensed Consolidated Interim Financial Statements
Forthe Three and Six Months Ended June 30, 2024 and 2023
(Unaudited,expressed in Thousands of United States dollars except per share information)
| 9. | STOCK BASED COMPENSATION |
|---|
The number and weighted average exercise prices of stock options are as follows:
| Six<br> months ended June 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||||||
| Number<br> of options | Weighted<br> average exercise price | Number<br> of options | Weighted<br> average exercise price | |||||||
| Outstanding at January 1 | 939,634 | $ | 2.36 | 776,000 | $ | 1.67 | ||||
| Granted | 293,190 | 4.23 | 206,800 | 5.23 | ||||||
| Exercised | (75,000 | ) | 0.80 | (5,000 | ) | 0.80 | ||||
| Expired/cancelled | (78,900 | ) | 2.89 | (108,500 | ) | 5.62 | ||||
| Outstanding at June<br> 30 | 1,078,924 | $ | 2.94 | 869,300 | $ | 2.03 | ||||
| Exercisable at June 30 | 746,496 | $ | 2.23 | 494,935 | $ | 1.62 |
The range of exercise prices for the outstanding options is as follows:
| Weighted<br> average exercise price | Weighted<br> average contractual life (years) | ||||
|---|---|---|---|---|---|
| 4.90 to 6.04 | 260,900 | $ | 5.46 | 3.9 | |
| 1.80 to 4.90 | 368,190 | $ | 3.76 | 4.5 | |
| 0.80 to 1.80 | 449,834 | $ | 0.80 | 2.5 | |
| 1,078,924 | $ | 2.94 | 3.5 |
All values are in US Dollars.
The fair value of the stock options was estimated using Black Scholes model with the following weighted average inputs:
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Fair value at grant date (per option) | $ | 3.46 | 5.00 | |||
| Volatility (%) | 77.0 | 110.0 | ||||
| Forfeiture rate (%) | 5 | % | 5 | % | ||
| Option life (years) | 10 | 10 | ||||
| Risk-free interest rate (%) | 3.66 | 2.89 |
| 10 |
| --- |
Notes to the unaudited Condensed Consolidated Interim Financial Statements
Forthe Three and Six Months Ended June 30, 2024 and 2023
(Unaudited,expressed in Thousands of United States dollars except per share information)
The number and weighted average fair value of Restricted Stock Units (RSUs) are as follows:
| Six months<br> ended June 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | ||||||||
| Number<br> of RSUs | Weighted<br> average fair value | Number<br> of RSUs | Weighted<br> average fair value | ||||||
| Outstanding at January 1 | 119,140 | $ | 5.28 | - | $ | - | |||
| Granted | 169,220 | 4.25 | 119,140 | 5.28 | |||||
| Vested | (35,378 | ) | 5.27 | - | - | ||||
| Cancelled | (20,857 | ) | 5.29 | - | - | ||||
| Outstanding at June<br> 30 | 232,125 | $ | 4.53 | 119,140 | $ | 5.28 |
Stock based compensation was recorded as follows:
| Three<br> months ended<br> <br>June<br> 30, | Six<br> months ended<br> <br>June<br> 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||
| Expensed | $ | 411 | $ | 356 | $ | 539 | $ | 374 |
| Capitalized | $ | 62 | $ | 65 | $ | 85 | $ | 67 |
| 10. | REVENUES | |||||||
| --- | --- |
Revenue is recognized when the performance obligations are satisfied and revenue can be reliably measured. Revenue is measured at the consideration specified in the contracts and represents amounts receivable for goods or services provided in the normal course of business, net of discounts, customs duties and sales taxes. All revenue is based on variable prices. Performance obligations associated with the sale of crude oil, natural gas, and natural gas liquids are satisfied at the point in time when the products are delivered to and title passes to the customer. Performance obligations associated with processing services, transportation, and marketing services are satisfied at the point in time when the services are provided.
Oil, natural gas liquids and natural gas are mostly sold under contracts of varying price and volume terms. Revenues for oil are typically collected on the 20th day of the month following production, while natural gas and NGL revenues are collected by the 45th day of the month following production.
| 11 |
| --- |
The following table presents the Company’s gross oil and gas revenue disaggregated by revenue source:
| Three months<br> ended <br>June 30, | Six months<br> ended <br>June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Oil revenue | $ | 16,701 | $ | 11,989 | $ | 33,249 | $ | 28,267 | ||||
| Natural gas revenue | 147 | 232 | 592 | 1,047 | ||||||||
| NGL revenue | 830 | 525 | 2,081 | 1,506 | ||||||||
| 17,678 | 12,746 | 35,922 | 30,820 | |||||||||
| Royalties | (3,763 | ) | (2,632 | ) | (7,781 | ) | (6,413 | ) | ||||
| $ | 13,915 | $ | 10,114 | $ | 28,141 | $ | 24,407 | |||||
| 11. | CONTINGENT LIABILITIES | |||||||||||
| --- | --- |
The Company has recorded natural gas and NGL processing costs related to prior years as the purchaser reassessed prior year gathering and processing costs. Under the terms of the Company’s contract with the purchaser, they are able to correct their fee billings if they find adjustments related to the last 24 months, which is a common industry practice. These amounts, which totaled $0.2 million in the second quarter of 2024 and $0.8 million in the six months ended June 30, 2024, are included in production and operating expenses. The Company is not aware of any additional reassessed costs and future adjustments may never occur.
| 12. | SUBSEQUENT EVENTS |
|---|
There were no subsequent events as of the date of issuance.
| 12 |
| --- |
Exhibit99.2
MANAGEMENT’SDISCUSSION AND ANALYSIS
JUNE30, 2024
| ***Kolibri Global Energy Inc.*** | | 1 | | Second Quarter 2024 |
| --- | --- | --- |
MANAGEMENT’SDISCUSSION AND ANALYSIS
The following is management’s discussion and analysis (“MD&A”) of Kolibri Global Energy Inc.’s (“KEI” or the “Company”) operating and financial results for the three and six months ended June 30, 2024, compared to the corresponding periods in the prior year, as well as information and expectations concerning the Company’s outlook based on currently available information. The MD&A should be read in conjunction with the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2024 and the audited consolidated financial statements and MD&A for the year ended December 31, 2023. The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting”. The reporting and measurement currency is the United States dollar. Additional information relating to KEI including its Annual Information Form is filed on SEDAR at www.sedarplus.ca and on the Company’s website at www.kolibrienergy.com.
Netback from operations, netback including commodity contracts, net operating income and adjusted EBITDA (collectively, the “Company’s Non-GAAP Measures”) are not measures or ratios recognized under IFRS 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 from operating activities, working capital or other financial measures and ratios determined in accordance with IFRS, as an indicator of the Company’s performance.
Please read carefully the important cautionary notes regarding technical information, forward-looking statements and other matters set out in this report.
Descriptionof Business
KEI 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 the United States. The Company continues to utilize its technical and operational expertise to identify and acquire additional projects in oil, gas and clean and sustainable energy. The common shares of the Company trade on the Toronto Stock Exchange (“TSX”) under the symbol “KEI” and on the NASDAQ under the symbol “KGEI”.
OperatingSummary
The Company’s results of operations are dependent on production volumes of natural gas, crude oil and natural gas liquids and the prices received for the production. Prices for these commodities have shown significant volatility during recent years and are determined by supply and demand factors, including weather and general economic conditions.
| ***Kolibri Global Energy Inc.*** | | 2 | | Second Quarter 2024 |
| --- | --- | --- |
OVERVIEW
Resultsat a Glance
| Six<br> Months ended June<br> 30, | |||||||
|---|---|---|---|---|---|---|---|
| 2023 | 2024 | 2023 | |||||
| Financial (US 000 except<br> per share) | |||||||
| Oil and gas gross<br> revenues | 17,678 | 12,746 | 35,922 | 30,820 | |||
| Oil and gas net revenues | 13,915 | 10,114 | 28,141 | 24,407 | |||
| Net operating income(1) | 11,806 | 8,967 | 23,786 | 21,707 | |||
| Net income | 4,061 | 4,268 | 7,406 | 12,164 | |||
| Basic net income per share | 0.11 | 0.12 | 0.21 | 0.34 | |||
| Diluted net income per share | 0.11 | 0.12 | 0.20 | 0.33 | |||
| Cash flows from operating<br> activities | 7,318 | 6,013 | 17,013 | 19,042 | |||
| Adjusted EBITDA(2) | 10,036 | 7,646 | 20,410 | 19,042 | |||
| Additions to property, plant<br> and equipment | 6,427 | 15,742 | 11,747 | 19,930 | |||
| Operating | |||||||
| Average production (Boepd) | 3,128 | 2,415 | 3,216 | 2,803 | |||
| Average price (/BOE) | 62.10 | 58.00 | 61.37 | 60.75 | |||
| Netback from operations (/BOE)(3) | 40.40 | 39.97 | 39.66 | 42.07 | |||
| Netback including commodity<br> contracts (/BOE)(3) | 39.56 | 38.60 | 38.67 | 40.66 |
All values are in US Dollars.
| June<br> 30, 2024 | Mar<br> 31,2024 | Dec<br> 31, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Balance<br> Sheet | |||||||||
| Cash and cash<br> equivalents | 549 | 1,801 | 598 | ||||||
| Total assets | 230,975 | 229,191 | 224,357 | ||||||
| Working capital (deficiency) | (1,885 | ) | (6,564 | ) | (11,916 | ) | |||
| Available borrowing capacity | 16,042 | 8,042 | 10,042 | ||||||
| Total non-current liabilities | 41,690 | 38,556 | 35,099 |
(1) Net operating income is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
(2) Adjusted EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
(3) Netback from operations and netback including commodity contracts are considered non-GAAP ratios. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
Highlights
The average production for the second quarter of 2024 was 3,128 BOEPD, an increase of 30% compared to second quarter 2023 production of 2,415 BOEPD. Average production for the six months ended June 30, 2024 was 3,216 BOEPD, an increase of 15% from the average production of 2,803 BOEPD in the same period of 2023. The increases are due to production from the wells that were drilled and completed in the last six months of 2023 and the first six months of 2024.
| ***Kolibri Global Energy Inc.*** | | 3 | | Second Quarter 2024 |
| --- | --- | --- |
Gross revenues for the second quarter of 2024 increased by 39% compared to the second quarter of 2023. The increase was due to a 30% increase in production and an increase in average prices of 7%. Gross revenues for the six months ended June 30, 2024 increased by 17% compared to the same period in 2023. The increase was due to an 15% increase in production and a 1% increase in average prices in the six months ending June 30, 2024 compared to the same period in 2023.
Adjusted EBITDA^(1)^ was $10.0 million for the second quarter of 2024 compared to $7.6 million for the same period in 2023, an increase of 31%. The increase was due to a 30% increase in production and an increase in average prices of 7%. Adjusted EBITDA^(1)^ was $20.4 million for the six months ended June 30, 2024 compared to $19.0 million for the prior year period, an increase of 7%. The increase was due to a 15% increase in production and a 1% increase in average prices in the six months ending June 30, 2024 compared to the same period in 2023.
Net income in the second quarter of 2024 was $4.1 million, compared to net income of $4.3 million in the same period of 2023. The decrease was due to higher income tax expense and higher operating expense partially offset by higher average prices and higher production. Net income in the first six months of 2024 was $7.4 million, compared to net income of $12.2 million in the same period of 2023. The decrease was due to higher income tax expense of $2.6 million and a $2.1 million unrealized gain on commodity contracts in the prior year partially offset by an increase in production and average prices.
Production and operating expense per barrel averaged $8.48 per BOE in the second quarter of 2024 compared to $6.05 per BOE in the second quarter of 2023, an increase of 40%. Production and operating expense per barrel averaged $8.42 per BOE in the first six months of 2024 compared to $6.04 per BOE for the same period of 2023, an increase of 39%. The increase was due to natural gas and NGL processing costs related to prior years as the purchaser reassessed prior year gathering and processing costs, which were $0.2 million, or $0.50 per BOE in the second quarter of 2024 and $0.8 million, or $1.23 per BOE in the six months ended June 30, 2024. Under the terms of the Company’s contract with the purchaser, adjustments to fee billings over the last 24 months are permissible. The adjustments received to date cover 2022 and 2023. In addition, the second quarter of 2024 included rework costs for wells that were impacted by offset fracture stimulations at the end of 2023 which totaled $0.31 per BOE in the second quarter of 2024 and $0.23 per BOE in the six months ended June 30, 2024. Without these fees and costs, operating expense per barrel would be $7.67 per BOE for the second quarter of 2024 and $6.96 per BOE for the six months ended June 30, 2024. The increases are also due to an increase in water hauling costs in 2024 compared to the prior year.
Netback from operations^(2)^ increased to $40.40 per BOE in the second quarter of 2024 compared to $39.97 per BOE in in the same period of 2023, an increase of 1% due to higher average prices. Netback from operations^(2)^ decreased to $39.66 per BOE in the six months ending June 30, 2024 compared to $42.07 per BOE in the six months ending June 30, 2023, a decrease of 6% due to higher operating expenses from the prior year gathering and processing fees and the rework costs. Netback including commodity contracts^(2)^ for the second quarter of 2024 was $39.56 per BOE compared to $38.60 in 2023, an increase of 2% from the prior year period. Netback including commodity contracts^(2)^ for the six months ended June 30, 2024 was $38.67 per BOE, compared to $40.66, a decrease of 5% from the prior year period.
At June 30, 2024, the Company had $16.0 million of available borrowing capacity on the credit facility and was in compliance with both of its debt covenants.
(1) Adjusted EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
(2) Netback from operations and netback including commodity contracts are considered non-GAAP ratios. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
| ***Kolibri Global Energy Inc.*** | | 4 | | Second Quarter 2024 |
| --- | --- | --- |
OPERATIONSUPDATE
TishomingoField, Ardmore Basin, Oklahoma
The average production for the second quarter of 2024 was 3,128 BOEPD, an increase of 30% compared to second quarter 2023 production of 2,415 BOEPD. The average production for the first six months of 2024 was 3,216 BOEPD, an increase of 15% compared to the same period of 2023 production of 2,803 BOEPD. The increases are due to production from the wells that were drilled and completed in the last six months of 2023 and the first six months of 2024.
The Nickel Hill 35-1H and Nickel Hill 35-2H wells (both 62.9% working interest) began production in late May of 2024. The Company has just started drilling the next three wells in the 2024 drilling program, the Alicia Renee 2-11-3H, Alicia Renee 2-11-4H and Alicia Renee 2-11-5H (all 100% working interest). These wells will be 1.5-mile laterals as the Company believes that the most economic and efficient future development of the field is to drill longer laterals going forward.
| Production<br> and Revenue | Six<br> months ended June 30 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | % | 2024 | 2023 | % | |||||||||
| Average oil production<br> (BOPD) | 2,309 | 1,821 | 27 | 2,366 | 2,125 | 11 | |||||||
| Average natural gas production<br> (MCFPD) | 1,916 | 1,397 | 37 | 2,143 | 1,765 | 21 | |||||||
| Average NGL production (BOEPD) | 500 | 361 | 39 | 493 | 384 | 28 | |||||||
| Average production (BOEPD) | 3,128 | 2,415 | 30 | 3,216 | 2,803 | 15 | |||||||
| Average oil price (/bbl) | 79.48 | 72.33 | 10 | 77.20 | 73.51 | 5 | |||||||
| Average natural gas price (/mcf) | 0.84 | 1.83 | (54 | ) | 1.52 | 3.28 | (54 | ) | |||||
| Average NGL price (/bbl) | 18.24 | 15.97 | 14 | 23.18 | 21.67 | 7 | |||||||
| Average price (/BOE) | 62.10 | 58.00 | 7 | 61.37 | 60.75 | 1 | |||||||
| Oil gross revenue (000) | 16,701 | 11,989 | 39 | 33,249 | 28,267 | 18 | |||||||
| Natural gas gross revenue<br> (000) | 147 | 232 | (37 | ) | 592 | 1,047 | (43 | ) | |||||
| NGL gross revenue (000) | 830 | 525 | 58 | 2,081 | 1,506 | 38 |
All values are in US Dollars.
DISCUSSIONOF OPERATING RESULTS
Oil production for the second quarter of 2024 was 2,309 BOPD compared to 1,821 BOPD for the same period of 2023, an increase of 27%. Oil production for the first six months of 2024 was 2,366 BOPD compared to 2,125 BOPD for the same period of 2023, an increase of 11%. The increases are due to production from the wells that were drilled and completed in the last six months of 2023 and the first six months of 2024. Oil revenue increased by 39% in the second quarter of 2024 compared to the same period of 2023 due to an increase in oil prices of 10%, and the production increase. Oil revenue increased by 18% in the first six months of 2024 compared to the same period of 2023 due to an increase in oil prices of 5% and the production increase.
For the second quarter of 2024, average natural gas production was 1,916 MCFPD compared to 1,397 MCFPD for the same period of 2023, an increase of 37%. Average natural gas production for the first six months of 2024 was 2,143 MCFPD compared to 1,765 MCFPD for the first six months of 2023. The increases are due to production from the wells that were drilled and completed in the last six months of 2023 and the first six months of 2024. Natural gas revenue decreased by 37% in the second quarter of 2024 compared to the same period in 2023 due to the decrease in natural gas prices of 54% partially offset by the production increase. Natural gas revenue decreased by 43% in the first six months of 2024 versus the same period in 2023 due to a decrease in natural gas prices of 54% partially offset by the production increase.
| ***Kolibri Global Energy Inc.*** | | 5 | | Second Quarter 2024 |
| --- | --- | --- |
Natural gas liquids (NGL) production in the second quarter of 2024 increased to 500 BOEPD from 361 BOEPD in the same period of 2023, an increase of 39%. NGL production in the first six months of 2024 increased to 493 BOEPD from 384 BOEPD in the same period of 2023, an increase of 28%. The increases are due to production from the wells that were drilled and completed in the last six months of 2023 and the first six months of 2024. NGL revenue increased by 58% in the second quarter of 2024 compared to the same period in 2023 due to an increase in NGL prices of 14% and the production increase. NGL revenue increased by 38% in the first six months of 2024 compared to the same period in 2023 due to an increase in NGL prices of 7% and the production increase.
Average production on a per BOE basis was 3,128 BOEPD in the second quarter of 2024 compared to 2,415 BOEPD in the same period of 2023, an increase of 30%. Average production on a per BOE basis was 3,216 BOEPD in the first six months of 2024 compared to 2,803 BOEPD in the same period of 2023, an increase of 15%. The increase is due to the factors discussed above. Gross revenue for the second quarter of 2024 increased by 39% compared to the second quarter of 2023 due to an increase in average prices and an increase in production. Gross revenue for the first six months of 2024 increased by 17% compared to the same period of 2023 due to an increase in average prices and an increase in production.
| Royalties,<br> Operating Expenses and Netback | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Six months ended June 30 | ||||||||||||
| (/BOE) | 2024 | 2023 | % | 2024 | 2023 | % | ||||||
| Average price | 62.10 | 58.00 | 7 | 61.37 | 60.75 | 1 | ||||||
| Less: Royalties | 13.22 | 11.98 | 10 | 13.29 | 12.64 | 5 | ||||||
| Less: operating expenses(3) | 8.48 | 6.05 | 40 | 8.42 | (4) | 6.04 | 39 | |||||
| Netback from operations(1) | 40.40 | 39.97 | 1 | 39.66 | 42.07 | (6 | ) | |||||
| Price adjustment from commodity<br> contracts(2) | (0.84 | ) | (1.37 | ) | 39 | (0.99 | ) | (1.41 | ) | 30 | ||
| Netback including commodity<br> contracts(1) | 39.56 | 38.60 | 2 | 38.67 | 40.66 | (5 | ) |
All values are in US Dollars.
(1) Netback from operations and netback including commodity contracts are considered non-GAAP ratios. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
(2) Price adjustment from commodity contracts includes the positive or negative adjustment to the average price per barrel that the Company realized from its commodity contracts. See the listing of commodity contracts below.
(3) Operating expenses includes compressor costs of $303,975 in the second quarter of 2024 and $573,750 in the first six months of 2024 and compressor costs of $182,625 in the second quarter of 2023 and $365,250 in the first six months of 2023 that are accounted for as a lease under IFRS 16.
(4) Includes natural gas and NGL processing costs related to prior years as the purchaser reassessed prior year gathering and processing costs in 2024 totaling $0.2 million, or $0.50 per BOE in the second quarter of 2024 and $0.8 million, or $1.23 per BOE, in the first six months of 2024.
Average prices increased by 7% in the second quarter of 2024, compared to the same period in the prior year, due to the price increases in oil and NGLs, partially offset by a decrease in gas prices as discussed above. Oil made up 74% of the production mix in the second quarter of 2024 compared to 75% for the same period in 2023. Average prices increased by 1% in the first six months of 2024, compared to the same period in the prior year, due to the price increases in oil and NGLs, partially offset by a decrease in gas prices as discussed above. Oil made up 74% of the production mix in the first six months of 2024 compared to 76% for the same period in 2023.
Royalties on Tishomingo production averaged approximately 21.3% for the second quarter of 2024 versus 20.7% in the second quarter of 2023. Royalties on Tishomingo production averaged approximately 21.7% for the first six months of 2024 versus 20.8% in the first six months of 2023. The differences in percentages in both periods are due to different royalty burdens on the leases drilled by the Company.
| ***Kolibri Global Energy Inc.*** | | 6 | | Second Quarter 2024 |
| --- | --- | --- |
Major production and operating expenses are related to the gathering and processing of natural gas and NGLs as well as periodic well repairs and maintenance. Operating expenses averaged $8.48 per BOE for the second quarter of 2024 compared to $6.05 per BOE for the same period in 2023. The increase was partially due to natural gas and NGL processing costs of $0.2 million, or $0.50 per BOE, related to prior years as the purchaser reassessed prior year gathering and processing costs in 2024. Under the terms of the Company’s contract with the purchaser, adjustments to fee billings over the last 24 months are permissible. The adjustments received to date cover 2022 and 2023. In addition, the second quarter of 2024 included rework costs for wells that were impacted by offset fracture stimulations at the end of 2023 which totaled $0.31 per BOE. Without these fees and costs, operating expense per barrel would be $7.67 per BOE for the second quarter of 2024, an increase of 27%. Operating expenses averaged $8.42 per BOE for the first six months of 2024 compared to $6.04 per BOE for the same period in 2023. The increase was due to natural gas and NGL processing costs of $0.8 million, or $1.23 per BOE, related to prior years as the purchaser reassessed prior year gathering and processing costs in 2024. In addition, the second quarter of 2024 included rework costs for wells that were impacted by offset fracture stimulations at the end of 2023 which totaled $0.23 per BOE. Without these fees and costs, operating expense per barrel would be $6.96 per BOE for the first six months of 2024, an increase of 15%.
Realizedand Unrealized Gains and Losses from Risk Management Contracts
As part of our normal operations, the Company is exposed to movements in commodity prices. In an effort to manage this exposure, the Company utilizes financial commodity contracts. The Company’s strategy focuses on the use of costless collars and fixed price contracts to limit exposure to fluctuations in commodity prices, while allowing for participation in spot commodity prices. Contracts settled in the period result in realized gains or losses based on the market price compared to the contract price and volume. Changes in the fair value of unsettled contracts are reported as unrealized gains or losses in the period as the forward markets fluctuate and as new contracts are executed.
At June 30, 2024 the Company had the financial commodity contracts as discussed in note 3 of the Company’s unaudited condensed consolidated interim financial statements.
The estimated fair value results in a $0.5 million liability as of June 30, 2024 (December 31, 2023: $0.1 million liability) for the financial oil and gas contracts which has been determined based on the prospective amounts that the Company would receive or pay to terminate the contracts, consisting of a current liability of $0.5 million (December 31, 2023: current liability of $0.2 million and a long term asset of $0.1 million).
For the second quarter of 2024, approximately 10% of oil production was hedged at $62.77/bbl and 49% of oil production was hedged with costless collars with a price range of $65/bbl to $94.55/bbl. For the first six months of 2024, approximately 12% of oil production was hedged at $62.77/bbl and 40% of oil production was hedged with costless collars with a price range of $65/bbl to $94.55/bbl.
The realized and unrealized gains/losses from the financial commodity contracts are as follows:
| ($000s) | Three<br> months ended June 30, | Six<br> months ended June<br> 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Realized loss<br> on financial commodity contracts | $ | (242 | ) | $ | (300 | ) | $ | (583 | ) | $ | (714 | ) |
| Unrealized gain (loss) on<br> financial commodity contracts | 445 | 777 | (470 | ) | 2,167 |
Productionand Operating Expenses
Production and operating expenses for the second quarter of 2024 was $2.1 million compared to $1.1 million for the same period of 2023, an increase of 84%. The increase was due to rework costs of $0.1 million for wells that were impacted by offset fracture stimulations at the end of 2023 and natural gas and NGL processing costs of $0.2 million related to prior years as the purchaser reassessed prior year gathering and processing costs in 2024. Under the terms of the Company’s contract with the purchaser, adjustments to fee billings over the last 24 months are permissible. The adjustments received to date cover 2022 and 2023. Production and operating expenses for the first six months of 2024 were $4.4 million compared to $2.7 million for the same period of 2023, an increase of 61%. The increase was due to rework costs of $0.1 million for wells that were impacted by offset fracture stimulations at the end of 2023 and natural gas and NGL processing costs of $0.8 million related to prior years as the purchaser reassessed prior year gathering and processing costs in 2024. The increase is also due to an increase in water hauling costs in 2024 compared to the prior year.
| ***Kolibri Global Energy Inc.*** | | 7 | | Second Quarter 2024 |
| --- | --- | --- |
Generaland Administrative Expenses
G&A expense for the second quarter of 2024 was $1.5 million compared to $1.0 million for the same period of 2023, an increase of 50%. G&A expense for the first six months of 2024 was $2.8 million compared to $2.0 million for the same period of 2023, an increase of 40%. The increases were primarily due to higher accounting fees and public company costs that resulted from listing on the NASDAQ stock market at the end of 2023 which increased by $0.4 million in the second quarter of 2024 and $0.6 million for the first six months of 2024. The increases were also due to higher payroll and director costs mainly related to additional personnel and higher investor relations and marketing costs in 2024.
Depletionand Depreciation
Depletion and depreciation expense for the second quarter of 2024 was $3.7 million compared to $3.4 million in the same period of 2023. Depletion and depreciation expense on a per barrel basis was $12.99 for the second quarter of 2024 compared to $15.35 for the second quarter of 2023. Depletion and depreciation expense for the first six months of 2024 was $7.6 million compared to $7.7 million in the same period of 2023. Depletion and depreciation expense on a per barrel basis was $12.97 for the first six months of 2024 compared to $15.18 for the first six months of 2023.
Intereston loans and borrowings
Interest on loans and borrowings increased from $0.4 million in the second quarter of 2023 to $0.8 million for the same period of 2024. Interest on loans and borrowings increased from $0.9 million in the first six months of 2023 to $1.7 million for the same period of 2024. The increases were due to an increase in interest rates in 2024 and an increase in the outstanding balance in 2024 compared to 2023.
Sharebased compensation
Share based compensation was $0.4 million in the second quarter of 2024 and 2023. Share based compensation increased from $0.4 million in the first six months of 2023 to $0.5 million for the same period of 2024. The increase was due to an increase in the number of stock options and restricted share units granted in 2024 compared to 2023.
Netincome for the period
The Company had net income of $4.1 million ($0.11 per basic share) in the second quarter of 2024 compared to net income of $4.3 million ($0.12 per share) for the same period of 2023. The change in net income in 2024 compared to the same period in 2023 is due to an increase in income tax expense of $1.5 million, an increase in operating expenses of $1.0 million, an increase in G&A expense of $0.5 million, an increase in interest on long term debt of $0.4 million, an increase in depletion, depreciation and accretion of $0.3 million and a gain in unrealized losses in financial commodity contracts in the second quarter of 2024 totaling $0.5 million versus a gain of $0.8 million in the same period of 2023, partially offset by an increase in revenue net of royalties of $3.8 million.
| ***Kolibri Global Energy Inc.*** | | 8 | | Second Quarter 2024 |
| --- | --- | --- |
The Company had net income of $7.4 million ($0.21 per basic share) in the first six months of 2024 compared to net income of $12.2 million ($0.34 per share) for the same period of 2023. The change in net income in 2024 compared to the same period in 2023 is due to an increase in income taxes of $2.6 million, unrealized losses in financial commodity contracts in the first six months of 2024 totaling $0.5 million versus a gain of $2.2 million in the same period of 2023. an increase in operating expenses of $1.7 million, an increase in interest on long term debt of $0.9 million, an increase in G&A expense of $0.8 million, an increase in stock-based compensation of $0.2 million, partially offset by an increase in revenue net of royalties of $3.7 million and a decrease in depletion, depreciation and accretion of $0.1 million.
The explanations for these variances are discussed in the individual sections above.
Cashflows from operating activities
Cash flows from operating activities for the first six months of 2024 was $17.0 million compared to cash flows from operating activities of $19.0 million for the same period in 2023. The decrease in 2024 compared to the same period in 2023 is due to an increase in operating expenses of $1.7 million, an increase in interest on long term debt of $0.9 million, an increase in G&A expense of $0.8 million and a decrease in non-cash working capital of $2.4 million, partially offset by an increase in revenue net of royalties of $3.7 million.
CAPITALEXPENDITURES
Capital expenditures were for the wells drilled and completed in the Tishomingo field located in Oklahoma.
| (000) | |||
|---|---|---|---|
| 2023 | |||
| Additions<br> to oil and gas properties | 11,747 | $ | 19,930 |
| 11,747 | $ | 19,930 |
All values are in US Dollars.
| LIQUIDITY AND<br> CAPITAL RESOURCES | ||||||
|---|---|---|---|---|---|---|
| (000s; other than number of<br> shares and per share amounts) | At June 30, 2024 | At December 31, 2023 | ||||
| Working Capital<br> (Deficiency) (US$) | $ | (1,885 | ) | $ | (11,916 | ) |
| Loans and Borrowings (US$) | $ | 33,958 | $ | 29,958 | ||
| Shares Outstanding, end of period | 35,735,965 | 35,625,587 | ||||
| Market Price per share (in Canadian $) | $ | 4.85 | $ | 5.09 | ||
| Market Value of Shares (in Canadian $) | $ | 173,319 | $ | 181,334 |
In May 2022, the Company’s US subsidiary amended the credit facility from BOK Financial, which is secured by the US subsidiary’s interests in the Tishomingo Field. The credit facility expires in June 2026 and is intended to fund the drilling of the Caney wells in the Tishomingo Field.
In May 2024, the borrowing base of the credit facility was increased from $40.0 million to $50.0 million and the Company has an available borrowing capacity of $16.0 million at June 30, 2024. The credit facility is subject to a semi-annual review and redetermination of the borrowing base. The next redetermination will be in the third quarter of 2024. Future commitment amounts will be subject to new reserve evaluations and there is no guarantee that the size and terms of the credit facility will remain the same after the borrowing base redetermination. Any redetermination of the borrowing base is effective immediately and if the borrowing base is reduced, the Company has six months to repay any shortfall.
| ***Kolibri Global Energy Inc.*** | | 9 | | Second Quarter 2024 |
| --- | --- | --- |
The credit facility has two primary debt covenants. One covenant requires the US subsidiary to maintain a positive working capital balance which includes any unused excess borrowing capacity and excludes the fair value of commodity contracts, the current portion of long-term debt (the “Current Ratio”). The second covenant ensures the ratio of outstanding debt and long-term liabilities to a trailing twelve month adjusted EBITDA amount (the “Maximum Leverage Ratio”) be no greater than 3 to 1 at any quarter end. Adjusted EBITDA is defined as net income excluding interest expense, depreciation, depletion and amortization expense, and other non-cash and non-recurring charges including severance, stock based compensation expense and unrealized gains or losses on commodity contracts.
The Company was in compliance with both covenants for the quarter ended June 30, 2024. At June 30, 2024, the Current Ratio of the US Subsidiary was 2.44 to 1.0 and the Maximum Leverage Ratio was 0.89 to 1.0 for the three months ended June 30, 2024. Based on the Company’s forecast, it expects to be in compliance with this covenant for the next twelve months.
At June 30, 2024, loans and borrowings of $34.0 million (December 31, 2023: $30.0 million) are presented net of loan acquisition costs of $0.3 million (December 31, 2023: $0.3 million).
At June 30, 2024, the Company had a working capital deficit of $1.9 million compared to a working capital deficit of $11.9 million at December 31, 2023. The Company had available borrowing capacity of $16.0 million at June 30, 2024. The Company closely monitors its working capital and borrowing capacity to ensure adequate funds are available to finance its administrative and operating requirements. Planned drilling activity can be adjusted if adequate funds are not available, and the Company has available borrowing capacity to manage its working capital requirements.
The Company has entered into financial commodity contracts as part of its risk management strategy to manage its cash flows for future activity and to offset commodity price fluctuations. Other potential sources of cash flows include proceeds from additional debt or equity offerings but there is no guarantee that additional financing will be available when needed.
CONTRACTUALOBLIGATIONS
Following are the contractual maturities of financial liabilities, excluding estimated interest payments at June 30, 2024:
| Carrying<br> amount | 2024 | 2025 | 2026 | |||||
|---|---|---|---|---|---|---|---|---|
| Fair value of commodity contracts | $ | 522 | $ | 236 | $ | 286 | $ | - |
| Lease payable | 1,096 | 713 | 311 | 72 | ||||
| Loans and borrowings* | 33,678 | - | - | 33,678 | ||||
| Accounts payable and other<br> payables | 9,360 | 9,360 | - | - | ||||
| $ | 44,656 | $ | 10,309 | $ | 597 | $ | 33,750 |
* The Credit Facility provides for interest only payments until the September 2026 maturity date. The Company is required to repay amounts owing under the Credit Facility in full on the September 2026 maturity date. See “Liquidity and Capital Resources” and “Principal Business Risks” for discussion of events that would require early repayment of the Credit Facility.
| ***Kolibri Global Energy Inc.*** | | 10 | | Second Quarter 2024 |
| --- | --- | --- |
QUARTERLYSUMMARY
Below is a summary of the Company’s performance over the last eight quarters:
| 2024 | 2023 | 2022 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($000,<br> except as noted) | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | ||||||||
| Daily<br> Production | ||||||||||||||||
| Oil<br> (BOPD) | 2,309 | 2,423 | 2,245 | 2,083 | 1,821 | 2,431 | 1,551 | 1,252 | ||||||||
| Natural<br> gas (MCFPD) | 1,916 | 2,371 | 1,428 | 1,565 | 1,397 | 2,138 | 969 | 1,083 | ||||||||
| NGLs<br> (BOEPD) | 500 | 487 | 359 | 393 | 361 | 407 | 155 | 269 | ||||||||
| Average<br> production (BOEPD) | 3,128 | 3,305 | 2,842 | 2,737 | 2,415 | 3,194 | 1,868 | 1,702 | ||||||||
| 2023 | 2022 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| (000,<br> except as noted) | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | |||||||||
| Average<br> Price | ||||||||||||||||
| Oil<br> (/bbl) | 79.48 | 75.03 | 78.51 | 79.70 | 72.33 | 74.40 | 80.42 | 93.52 | ||||||||
| Natural<br> gas (/mcf) | 0.84 | 2.06 | 2.32 | 2.71 | 1.83 | 4.24 | 6.71 | 10.24 | ||||||||
| NGL<br> (/bbl) | 18.24 | 28.25 | 20.41 | 19.84 | 15.97 | 26.77 | 26.66 | 35.33 | ||||||||
| Average<br> price (/bbl) | 62.10 | 60.66 | 65.76 | 65.04 | 58.00 | 62.87 | 72.47 | 80.89 |
All values are in US Dollars.
| 2023 | 2022 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (000,<br> except as noted) | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | ||||||||||||||||
| Netback(1) | |||||||||||||||||||||||
| Average<br> price (/BOE) | 62.10 | 60.66 | 65.76 | 65.04 | 58.00 | 62.87 | 72.47 | 80.89 | |||||||||||||||
| Royalties | 13.22 | 13.36 | 14.34 | 14.42 | 11.98 | 13.16 | 15.83 | 17.96 | |||||||||||||||
| Operating<br> expenses (4,5) | 8.48 | 8.36 | 7.02 | 7.34 | 6.05 | 6.04 | 8.25 | 7.77 | |||||||||||||||
| Netback<br> from operations(1) | 40.40 | 38.94 | 44.4 | 43.28 | 39.97 | 43.67 | 48.39 | 55.16 | |||||||||||||||
| Price<br> adjustment from commodity contracts | (0.84 | ) | (1.13 | ) | (1.63 | ) | (1.37 | ) | (1.44 | ) | (2.34 | ) | (5.47 | ) | (9.40 | ) | |||||||
| Netback<br> including commodity contracts(1) | 39.54 | 37.81 | 41.65 | 38.6 | 42.23 | 46.05 | 49.69 | 53.66 |
All values are in US Dollars.
| ***Kolibri Global Energy Inc.*** | | 11 | | Second Quarter 2024 |
| --- | --- | --- | | | 2024 | | | | 2023 | | | | | | | | 2022 | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | ($000,<br> except as noted) | Q2 | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 | | Q3 | | | Net operating income^(2)^ | | | | | | | | | | | | | | | | | | Oil<br> and gas revenue | | 17,678 | | 18,244 | | 17,192 | | 16,378 | | 12,746 | | 18,074 | | 12,455 | | 12,666 | | Royalties | | 3,762 | | 4,018 | | 3,748 | | 3,632 | | 2,632 | | 3,781 | | 2,721 | | 2,813 | | Operating<br> expenses | | 2,109 | | 2,246 | | 1,567 | | 1,628 | | 1,147 | | 1,553 | | 1,417 | | 1,216 | | | | 11,807 | | 11,980 | | 11,877 | | 11,118 | | 8,967 | | 12,740 | | 8,317 | | 8,637 | | | | | | 2023 | | | | | | | | 2022 | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (000,<br> except as noted) | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 | | Q3 | | | Net<br> income | 4,061 | | 3,345 | | 2,319 | | 4,268 | | 7,896 | | 2,793 | | 9,299 | | 7,007 | | Basic<br> income (loss) (/share) | 0.11 | | 0.09 | | 0.14 | | 0.07 | | 0.12 | | 0.22 | | 0.08 | | 0.26 | | Adjusted<br> EBITDA(3) | 10,036 | | 10,374 | | 10,502 | | 9,536 | | 7,646 | | 11,396 | | 6,854 | | 6,874 | | Cash<br> flows from operating activities | 7,271 | | 9,695 | | 9,974 | | 9,631 | | 6,013 | | 13,030 | | 6,098 | | 6,387 | | Bank<br> debt | 33,678 | | 31,667 | | 29,612 | | 23,809 | | 17,819 | | 17,819 | | 17,799 | | 15,855 | | Total<br> assets | 230,975 | | 229,191 | | 224,439 | | 211,745 | | 196,655 | | 188,023 | | 184,082 | | 172,634 |
All values are in US Dollars.
(1) Netback from operations and netback including commodity contracts are considered non-GAAP ratios. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
(2) Net operating income is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
(3) Adjusted EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
(4) Operating expenses includes compressor costs of $303,975 in the second quarter of 2024 and $573,750 in the first six months of 2024 and compressor costs of $182,625 in the second quarter of 2023 and $365,250 in the first six months of 2023 that are accounted for as a lease under IFRS 16.
(5) Includes natural gas and NGL processing costs related to prior years as the purchaser reassessed prior year gathering and processing costs in 2024 totaling $0.2 million, or $0.50 per BOE in the second quarter of 2024 and $0.8 million, or $1.23 per BOE, in the first six months of 2024.
QuarterlyVariability
The results of the previous eight quarters reflect the Company’s development of the Tishomingo field with production increasing from 1,708 boepd in the third quarter of 2022 to 3,128 boepd in the second quarter of 2024. Changes in production have occurred between quarters due to the timing of drilling and completion operations and the temporary shut-in of wells.
| ***Kolibri Global Energy Inc.*** | | 12 | | Second Quarter 2024 |
| --- | --- | --- |
Commodity prices increased significantly in 2022 due to conflict between Russia and Ukraine as reflected in the third quarter 2022 average price of $80.89/boe. Prices in 2023 and the first six months of 2024 have since stabilized as reflected in our second quarter 2024 average price of $62.10/boe.
Adjusted EBITDA^(1)^ is impacted by the Company’s quarter production and the changes in commodity prices. As our field development has resulted in increased production since the third quarter of 2022, adjusted EBITDA has reflected this increase including our second quarter 2024 adjusted EBITDA of $10.0 million.
Net income is impacted by the Company’s operations and production but it is also impacted by quarterly unrealized gains or losses on the Company’s commodity contracts between quarter which fluctuate from quarter to quarter. In addition, beginning in the fourth quarter of 2023, the Company has recognized deferred tax expense every quarter including $1.5 million recorded in the second quarter of 2024.
The Company’s bank debt has increased from $15.8 million to $33.7 million and has fluctuated depending on the timing of field development activities between quarters. Although debt has increased over the last eight quarters, the Company has consistently maintained a leverage ratio below 1.0.
CRITICALACCOUNTING ESTIMATES
The preparation of the consolidated financial statements requires management to make estimates and use judgment regarding the reported amounts of assets and liabilities, the disclosures of contingencies at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. By their nature, estimates are subject to measurement uncertainty and changes in such estimates in future years could require a material change in the financial statements. Accordingly, actual results may differ from the estimated amounts. Significant estimates and judgments made by management in the preparation of the consolidated financial statements are as follows:
Oil and gas assets
Development and production assets are assessed for recoverability at cash generating unit (“CGU”) level. The determination of CGUs is subject to management judgments. Recoverability is assessed by comparing the carrying value of the asset to its estimated recoverable amount, which is based on the higher of fair value of the assets less the cost to sell (“FVLCS”) or value in use (“VIU”). The significant estimates used in the determination of the estimated recoverable amount include the following:
| ● | Proved<br> and probable oil and gas reserves – Significant assumptions that are valid at the time<br> of oil and gas reserve estimation may change significantly when additional information becomes<br> available. Estimates of economically recoverable proved and probable oil and gas reserves<br> are based upon a number of significant assumptions, such as forecasted production, forecasted<br> oil and gas commodity prices, forecasted operating costs, forecasted royalty costs, and forecasted<br> future development costs. Changes in forecasted oil and gas commodity price assumptions,<br> costs or recovery rates may change the economic status of proved and probable oil and gas<br> reserves and may ultimately result in a restatement of proved and probable oil and gas reserves.<br> Independent third-party reserve evaluators are engaged at least annually to estimate proved<br> and probable oil and gas reserves |
|---|---|
| ● | Discount<br> rate – The discount rate used to calculate the net present value of cash flows is based<br> on estimates of an industry peer group weighted average cost of capital. Changes in the economic<br> environment could result in significant changes to this estimate. |
| --- | --- |
(1) Adjusted EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” at the end of this MD&A.
| ***Kolibri Global Energy Inc.*** | | 13 | | Second Quarter 2024 |
| --- | --- | --- |
Depletion of oil and gas assets
Depletion of development and production assets is determined based on proved and probable oil and gas reserves and includes forecasted future development costs as estimated by the Company’s independent third-party reserve evaluators. By their nature, the estimates of proved and probable oil and gas reserves are subject to measurement uncertainty. Accordingly, the impact to the consolidated financial statements in future periods could be material.
Asset retirement obligations
The provisions for site restoration and abandonment are based on current legal requirements, technology, price levels and expected plans and are based on significant assumptions such as inflation rate and discount rate. Actual costs and cash outflows can differ from estimates because of changes in laws or regulations, market conditions and changes in technology.
Derivative instruments
The estimated fair value of derivative financial instruments resulting in financial assets and liabilities, by their very nature is subject to estimation, due to the use of future oil and natural gas prices and the volatility in these prices.
Compensation costs
Compensation costs recognized for share based compensation plans are subject to the estimation of what the ultimate payout will be using pricing models such as Black-Scholes model which is based on assumptions such as volatility, forfeiture rate, interest rate and expected term.
Income taxes
Tax interpretations, regulations and legislation in the various jurisdictions in which the Company operates are subject to change. As such income taxes are subject to measurement uncertainty. Deferred income tax assets are assessed by management at the end of the reporting period to determine the likelihood that they will be realized from future taxable earnings.
Liquidity
The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
Typically, the Company ensures that it has sufficient cash on demand and cash flows from operating activities to meet expected operational expenses for a one-year period, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. To achieve this objective, the Company prepares annual capital expenditure budgets, which are regularly monitored and updated as considered necessary. Further, the Company utilizes authorizations for expenditures on both operated and non-operated projects to further manage capital expenditure. The Company also attempts to match its payment cycle with collection of oil revenue on the 20th of each month.
The Company monitors its expected cash inflows from trade and other receivables and its expected cash outflows on trade and other payables and principal debt payments. The current volatile economic climate may lead to adverse changes in cash flows and working capital levels which may also have a direct impact on the Company’s results and financial position and which may adversely affect the Company’s liquidity.
| ***Kolibri Global Energy Inc.*** | | 14 | | Second Quarter 2024 |
| --- | --- | --- |
OUTSTANDINGSHARE DATA
There were 35,735,965, 35,735,965 and 35,625,587 common shares outstanding as of August 13, 2024, June 30, 2024 and December 31, 2023, respectively. The Company had 1,078,924 1,078,924 and 939,634 stock options outstanding as of August 13, 2024, June 30, 2024 and December 31, 2023, respectively. The Company had 232,125, 232,125, and 119,140 restricted share units (RSUs) granted as of August 13, 2024, June 30, 2024 and December 31, 2023 respectively.
PRINCIPALBUSINESS RISKS
KEI’s business and results of operations are subject to a number of risks and uncertainties, including but not limited to the following:
| ● | the<br> uncertainty of finding oil and gas in commercial quantities |
|---|---|
| ● | securing<br> markets for existing and future production |
| ● | commodity<br> price fluctuations due to market forces |
| ● | volatile<br> market conditions related to the current conflict between Russia and Ukraine |
| ● | financial<br> risk due to foreign exchange rates and interest rate exposure |
| ● | changes<br> to government regulations in the United States, including regulations relating to prices,<br> taxes, royalties and environmental protection |
| ● | changing<br> government policies and regulations, social instability and other political, economic or<br> diplomatic developments in the countries in which the Company operates |
| ● | the<br> ability to fund wells drilled in non-operated sections of the Tishomingo field |
| ● | the<br> uncertainty of pipeline repairs leading to temporary shutting-in of wells |
| ● | availability<br> of equity or debt financing is affected by many factors many of which are beyond the control<br> of the Company |
| ● | uncertainties<br> inherent in estimating quantities of oil and natural gas reserves and cash flows to be derived<br> therefrom |
| ● | the<br> oil and gas industry is intensely competitive and the Company competes with a large number<br> of companies with greater resources |
| ● | risks<br> related to evolving emissions, carbon and other regulations impacting climate change and<br> the advancement of alternative sources of renewable energy |
| ● | risks<br> related to the Credit Facility, including the risk that the Company could be required under<br> the terms of the Credit Facility to prepay the outstanding principal amount and other amounts<br> owing under the Credit Facility in certain circumstances, some of which are out of the Company’s<br> control, including failure to comply with financial ratio tests, borrowing base redeterminations,<br> Mr. Wolf Regener ceasing to be the President of Kolibri Global Energy Inc., certain changes<br> to the board of directors of the Company and the acquisition by any person or persons acting<br> jointly or in concert of 25% or more of the Company’s shares. There can be no assurance<br> that the Company will be able to obtain sufficient capital to repay the Credit Facility.<br> A failure by the Company to perform its obligations under the Credit Facility could result<br> in, among other adverse effects, the loss of the Company’s Tishomingo Field assets.<br> A copy of the Amended and Restated Credit Agreement was filed on SEDAR on May 26, 2023. See<br> “Liquidity and Capital Resources” and “Contractual Obligations” above<br> and the “Risk Factors” section in the Company’s most recent Annual Information<br> Form. |
| ● | the<br> other risks identified in the Company’s most recent Annual Information Form under the<br> “Risk Factors” section and the Company’s other public disclosure, available<br> under the Company’s profile on SEDAR at www.sedarplus.ca. |
The Company seeks to mitigate these risks by:
| ● | maintaining<br> product mix to manage exposure to commodity price risk |
|---|---|
| ● | monitoring<br> production trends to maximize the potential of its capital spending program |
| ● | from<br> time to time, entering into financial commodity contracts to hedge against commodity price<br> risk |
| ● | ensuring<br> strong third-party operators for non-operated properties |
| ● | transacting<br> with creditworthy counterparties |
| ● | monitoring<br> commodity prices and capital programs to manage cash flows |
| ● | reviewing<br> proposed changes in applicable government regulations and laws to assess the impact on the<br> Company’s operations |
| ***Kolibri Global Energy Inc.*** | | 15 | | Second Quarter 2024 |
| --- | --- | --- |
DISCLOSURECONTROLS AND PROCEDURES
The Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) have designed, or caused to be designed under their supervision, disclosure controls and procedures (“DC&P”) and internal controls over financial reporting (“ICOFR”) as defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements in accordance with IFRS.
The DC&P have been designed to provide reasonable assurance that material information relating to KEI is made known to the CEO and CFO by others and that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by KEI under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation. The Company’s CEO and CFO have concluded, based on their evaluation that the Company’s DC&P and ICOFR are effective at March 31, 2024 to provide reasonable assurance that material information related to the Company is made known to them by others within the Company.
The CEO and CFO are required to cause the Company to disclose any change in the Company’s ICOFR and DC&P that occurred during the most recent interim period that has materially affected, or is reasonably likely to materially affect, the Company’s ICOFR. No changes in ICOFR and DC&P were identified during such period that have materially affected, or are reasonably likely to materially affect, the Company’s ICOFR during the quarter ended June 30, 2024.
It should be noted that a control system, including the Company’s DC&P and ICOFR, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objective of the control system will be met and it should not be expected that DC&P and ICOFR will prevent all errors or fraud.
OUTLOOK
In the United States, the Company intends to drill and complete additional wells in the Caney/Sycamore formations on its Oklahoma lands as financing becomes available and the economic environment changes. In addition, the Company continues to utilize its technical and operational expertise to identify and acquire additional oil, gas and clean energy projects. The Company expects to continue drilling additional wells utilizing cash flows from operating activities and potentially its available borrowing capacity under its credit facility.
NON-GAAPMEASURES
The Company’s Non-GAAP Measures are not measures or ratios recognized under IFRS 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 from operating activities, working capital or other financial measures and ratios determined in accordance with IFRS, as an indicator of the Company’s performance.
| ***Kolibri Global Energy Inc.*** | | 16 | | Second Quarter 2024 |
| --- | --- | --- |
Netback from operations per barrel and its components are calculated by dividing revenue, less royalties and operating expenses by the Company’s sales volume during the period. Netback including commodity contracts is calculated by adjusting netback from operations by the realized gains or losses received from commodity contracts during the period. Netback is a non-GAAP ratio but it is commonly used by oil and gas companies to illustrate the unit contribution of each barrel produced. The Company believes that the netback is a useful supplemental measure of the cash flows generated on each barrel of oil equivalent that is produced in its operations. However, non-GAAP measures and non-GAAP ratios do not have any standardized meaning prescribed by IFRS and therefore, may not be comparable to similar measures or ratios used by other companies and should not be used to make comparisons.
The following is the reconciliation of the non-GAAP ratio netback from operations to net income:
| (US $000) | Three<br> months ended June 30, | Six<br> months ended June 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net income | 4,061 | 4,268 | 7,406 | 12,164 | ||||||||
| Adjustments: | ||||||||||||
| Income tax expense | 1,451 | - | 2,642 | - | ||||||||
| Finance income | (445 | ) | (777 | ) | - | (2,167 | ) | |||||
| Finance expense | 1,101 | 724 | 2,872 | 1,673 | ||||||||
| Share based compensation | 411 | 356 | 539 | 374 | ||||||||
| General and administrative<br> expenses | 1,528 | 1,021 | 2,793 | 1,951 | ||||||||
| Depletion, depreciation and<br> amortization | 3,700 | 3,375 | 7,594 | 7,713 | ||||||||
| Other income | (1 | ) | - | (60 | ) | (1 | ) | |||||
| Operating netback | 11,806 | 8,967 | 23,786 | 21,707 | ||||||||
| Netback from operations per<br> BOE | 40.40 | 39.97 | 39.66 | 42.07 |
Net operating income is similarly a non-GAAP measure that represents revenue net of royalties and operating expenses. The Company believes that net operating income is a useful supplemental measure to analyze operating performance and provides an indication of the results generated by the Company’s principal business activities prior to the consideration of other income and expenses.
The following is the reconciliation of the non-GAAP measure net operating income:
| (US $000) | Three<br> months ended June 30, | Six<br> months ended June 30, | ||||||
|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||
| Oil and gas revenue,<br> net of royalties | 13,915 | 10,114 | 28,141 | 24,407 | ||||
| Operating expenses | 2,109 | 1,147 | 4,355 | 2,700 | ||||
| Net operating income | 11,806 | 8,967 | 23,786 | 21,707 |
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:
| ***Kolibri Global Energy Inc.*** | | 17 | | Second Quarter 2024 |
| --- | --- | --- |
| (US $000) | Three<br> months ended June 30, | Six<br> months ended June 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net income | 4,061 | 4,268 | 7,406 | 12,164 | ||||||||
| Income tax expense | 1,451 | - | 2,642 | - | ||||||||
| Depletion and depreciation | 3,700 | 3,375 | 7,594 | 7,713 | ||||||||
| Accretion | 44 | 44 | 89 | 89 | ||||||||
| Interest expense | 813 | 375 | 1,728 | 860 | ||||||||
| Unrealized (gain) loss on<br> commodity contracts | (445 | ) | (777 | ) | 470 | (2,167 | ) | |||||
| Share based compensation | 411 | 356 | 539 | 374 | ||||||||
| Interest income | - | - | - | - | ||||||||
| Other income | (1 | ) | - | (60 | ) | (1 | ) | |||||
| Foreign currency loss (gain) | 2 | 5 | 2 | 10 | ||||||||
| Adjusted EBITDA | 10,036 | 7,646 | 20,410 | 19,042 |
ProductType Disclosure
This MD&A includes references to sales volumes of “oil”, “natural gas”, and “barrels of oil equivalent” or “BOEs”. “Oil” refers to light crude oil and medium crude oil combined, and “natural gas” refers to shale gas, in each case as defined by NI 51-101. Production from our wells, primarily disclosed in this MD&A in BOEs, consists of mainly oil and associated wet gas. The wet gas is delivered via gathering system and then pipelines to processing plants where it is treated and sold as natural gas and NGLs.
CautionaryStatements
| (a) | The Company’s natural<br> gas production is reported in thousands of cubic feet (“Mcfs”). The Company also uses references to barrels (“Bbls”)<br> and barrels of oil equivalent (“BOEs”) to reflect natural gas liquids and oil production and sales. BOEs may be misleading,<br> particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily<br> applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current<br> price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion<br> on a 6:1 basis may be misleading as an indication of value. |
|---|---|
| (b) | Discounted and undiscounted<br> net present value of future net revenues attributable to reserves do not represent fair market value. |
| --- | --- |
| (c) | Possible reserves are those<br> additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually<br> recovered will equal or exceed the sum of proved plus probable plus possible reserves. |
| --- | --- |
| (d) | This MD&A and the Company’s<br> other public disclosure contains peak and 30-day initial production rates and other short-term production rates. Readers are cautioned<br> that initial production rates are preliminary in nature and are not necessarily indicative of long-term performance or of ultimate<br> recovery. |
| --- | --- |
| ***Kolibri Global Energy Inc.*** | | 18 | | Second Quarter 2024 |
| --- | --- | --- |
CAUTIONREGARDING FORWARD-LOOKING INFORMATION
This MD&A contains forward-looking information including expectations regarding proposed timing and expected results of development work in the Company’s Tishomingo Field, expected productivity from current and future wells, planned capital expenditure programs and cost estimates, the effect of design and performance improvements on future productivity, planned use and sufficiency of proceeds from the Company’s debt and equity financings, compliance with debt covenants under the Company’s credit facility, cash on hand and cash flows from operating activities and the Company’s strategy and objectives. The use of any of the words “target”, “plans”, “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe”, “intend” and similar expressions are intended to identify forward-looking statements.
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, declines will match the modeling, 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 well shut-ins will not materially reduce production or adversely affect future productivity, that anticipated results and estimated costs will be consistent with managements’ 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, that the combination of cash on hand and cash flows from operating activities will be sufficient to finance the Company’s cash requirements through 2024, 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 reserve-based loan facility and that the borrowing base will not be reduced, 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: 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, anticipated results and estimated costs will not be consistent with managements’ expectations, that the Company will not achieve a comparable level of hedging going forward in respect of its existing production, that the Company will not achieve the results anticipated by management from the Company’s cost reduction measures, 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 conditions), well shut-ins and the potential for damage to the affected wells, 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 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 reserve-based loan facility and be required to repay outstanding amounts or that the borrowing base will be reduced pursuant to a borrowing base redetermination and the Company will be required to repay the resulting shortfall, that the Company is unable to access required capital, 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 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 MD&A 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.
| ***Kolibri Global Energy Inc.*** | | 19 | | Second Quarter 2024 |
| --- | --- | --- |
CORPORATEINFORMATION
| DIRECTORS AND OFFICERS | |
|---|---|
| Evan Templeton^1.2,3,5^ | |
| Director,<br> Chairman of the Board | |
| Leslie O’Connor ^2,3,4,5^ | |
| Director | AUDITORS |
| Marcum<br> LLP | |
| David Neuhauser ^1,3,4^ | Houston,<br> TX, USA |
| Director | |
| Douglas Urch ^1,2,5^ | BANKERS |
| Director | BOK<br> Financial |
| Denver,<br> CO, USA | |
| Wolf Regener ^4^ | |
| Director,<br> President and Chief Executive Officer | RBC<br> Bank Canada |
| Calgary,<br> AB | |
| Gary Johnson | |
| Chief<br> Financial Officer and Vice President | CONSULTING ENGINEERS |
| Netherland,<br> Sewell & Associates, Inc. | |
| 1 Member of the Audit Committee | Houston,<br> TX, USA |
| 2 Member of the Corporate Governance Committee | |
| 3 Member of the Compensation Committee | TRANSFER AGENT AND REGISTRAR |
| 4 Member of the HS&E Committee | Computershare<br> Trust Company |
| 5 Member of the Reserves Committee | Calgary,<br> AB |
| STOCK EXCHANGE LISTING | HEAD OFFICE |
| The<br> Toronto Stock Exchange | Suite<br> 220, 925 Broadbeck Drive |
| Trading<br> Symbol: KEI | Thousand<br> Oaks, CA, USA 91320 |
| NASDAQ | Telephone:<br> (805) 484-3613 |
| Trading<br> Symbol: KGEI | Fax:<br> (805) 484-9649 |
| LEGAL COUNSEL | CANADIAN OFFICE |
| DuMoulin<br> Black LLP | 15th<br> Floor, 1111 West Hastings St. |
| Vancouver,<br> BC | Vancouver,<br> BC, Canada V6E 2J3 |
| Telephone<br> (604) 687-1224 | |
| Haynes<br> Boone, LLP | Fax:<br> (604) 687-3635 |
| New<br> York, NY, USA |
| ***Kolibri Global Energy Inc.*** | | 20 | | Second Quarter 2024 |
| --- | --- | --- |
Exhibit99.3
FORM52-109F2
CERTIFICATIONOF INTERIM FILINGS
FULLCERTIFICATE
I, Wolf Regener the Chief Executive Officer of Kolibri Global Energy Inc., certify the following:
1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Kolibri Global Energy Inc. (the “issuer”) for the interim period ended June 30, 2024.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
| A. | designed<br> DC&P, or caused it to be designed under our supervision, to provide reasonable assurance<br> that |
|---|---|
| I. | material information relating<br> to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and |
| --- | --- |
| II. | information<br> required to be disclosed by the issuer in its annual filings, interim filings or other reports<br> filed or submitted by it under securities legislation is recorded, processed, summarized<br> and reported within the time periods specified in securities legislation; and |
| --- | --- |
| B. | designed<br> ICFR, or caused it to be designed under our supervision, to provide reasonable assurance<br> regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with the issuer’s GAAP. |
| --- | --- |
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2N/A
5.3N/A
6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2024 and ended on June 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
| Date: August 13, 2024 |
|---|
| “Wolf Regener” |
| Wolf Regener |
| Chief Executive Officer |
Exhibit99.4
FORM52-109F2
CERTIFICATIONOF INTERIM FILINGS
FULLCERTIFICATE
I, Gary Johnson the Chief Financial Officer of Kolibri Global Energy Inc., certify the following:
1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Kolibri Global Energy Inc. (the “issuer”) for the interim period ended June 30, 2024.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
| A. | designed DC&P, or caused it to be designed under our supervision,<br>to provide reasonable assurance that |
|---|---|
| I. | material<br> information relating to the issuer is made known to us by others, particularly during the<br> period in which the interim filings are being prepared; and |
| --- | --- |
| II. | information<br> required to be disclosed by the issuer in its annual filings, interim filings or other reports<br> filed or submitted by it under securities legislation is recorded, processed, summarized<br> and reported within the time periods specified in securities legislation; and |
| B. | designed<br> ICFR, or caused it to be designed under our supervision, to provide reasonable assurance<br> regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with the issuer’s GAAP. |
| --- | --- |
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2N/A
5.3N/A
6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2024 and ended on June 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
| Date: August 13, 2024 |
|---|
| “Gary Johnson” |
| Gary Johnson |
| Chief Financial Officer |
Exhibit99.5
| 925<br> Broadbeck Dr., Suite 220<br><br> <br>Thousand<br> Oaks, California 91320<br><br> <br>Phone:<br>(805) 484-3613<br><br> <br><br><br> <br>TSX<br> ticker symbol; KEI<br><br> <br>NASDAQ<br> ticker symbol; KGEI |
|---|
ForImmediate Release
KOLIBRIGLOBAL ENERGY ANNOUNCES PRODUCTION INCREASE OF 30% AND REVENUE INCREASE OF 38% FOR SECOND QUARTER OF 2024
THOUSANDOAKS, CALIFORNIA, August 13, 2024
All amounts are in U.S. Dollars unless otherwise indicated:
SECONDQUARTER HIGHLIGHTS
| ● | Average<br> production for the second quarter of 2024 was 3,128 BOEPD, an increase of 30% compared to<br> the second quarter of 2023 average production of 2,415 BOEPD. The increase is due to production<br> from the wells that were drilled and completed in the last six months of 2023 and the first<br> six months of 2024. |
|---|---|
| ● | Adjusted<br> EBITDA^(1)^ was $10.0 million in the second quarter of 2024 compared to $7.6 million<br> in the second quarter of 2023, an increase of 31%. The increase was due to the production<br> increase and an increase in average prices of 7% |
| ● | Revenue,<br> net of royalties was $13.9 million in the second quarter of 2024 compared to $10.1 million<br> for second quarter of 2023, an increase of 38%, due to higher average production and prices |
| ● | Net<br> income in the second quarter of 2024 was $4.1 million and EPS was $0.11/share compared to<br> $4.3 million and EPS of $0.12/share in the second quarter of 2023. The decrease was due to<br> higher income tax expense and higher operating expense partially offset by higher average<br> prices and higher production |
| ● | Average<br> netback from operations^(2)^ for the second quarter of 2024 was $40.40/boe, an increase<br> of 1% from the prior year second quarter. Netback including commodity contracts^(2)^<br> for the second quarter of 2024 was $39.56/boe which was 2% higher than the prior year second<br> quarter |
| ● | At<br> June 30, 2024, the Company had $16.0 million of available borrowing capacity on its credit<br> agreement |
| (1) | Adjusted<br> EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures”<br> of this earnings release. |
| --- | --- |
| (2) | Netback<br> from operations and netback including commodity contracts are considered non-GAAP ratios.<br> 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 that the Company continues to increase production and Adjusted EBITDA as we demonstrate the growth potential of the Tishomingo field. Average production increased by 30% and Adjusted EBITDA increased 31% in the second quarter of 2024 compared to the second quarter of 2023 demonstrating our continued growth. We are excited to enter into a new phase of the Company’s development where we believe the most economic and efficient strategy is to drill longer laterals. We just started drilling the three Alicia Renee wells (all 100% working interest) that will each have a 1.5 mile lateral and we expect to bring those wells on production early in the fourth quarter of 2024.”
| 2 |
| --- | | | Second Quarter | | | | | | | First Six Months | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 2024 | | 2023 | | % | | | 2024 | | 2023 | | % | | | | Net Income: | | | | | | | | | | | | | | | | $ Thousands | $ | 4,061 | $ | 4,268 | | (5 | )% | $ | 7,406 | $ | 12,164 | | (39 | )% | | $ per basic common share | $ | 0.11 | $ | 0.12 | | (8 | )% | $ | 0.21 | $ | 0.34 | | (38 | )% | | $ per diluted common share | $ | 0.11 | $ | 0.12 | | (8 | )% | $ | 0.20 | $ | 0.33 | | (39 | )% | | Capital Expenditures | $ | 6,427 | $ | 15,742 | | (59 | )% | $ | 11,747 | $ | 19,930 | | (41 | )% | | Average Production (Boepd) | | 3,128 | | 2,415 | | 30 | % | | 3,216 | | 2,803 | | 15 | % | | Average Price per Barrel | $ | 62.10 | $ | 58.00 | | 7 | % | $ | 61.37 | $ | 60.75 | | 1 | % | | Average Netback from operations^(2)^per Barrel | $ | 40.40 | $ | 39.97 | | 1 | % | $ | 39.66 | $ | 42.07 | | (6 | )% | | Average Netback including commodity contracts^(2)^ per Barrel | $ | 39.56 | $ | 38.60 | | 2 | % | $ | 38.67 | $ | 40.66 | | (5 | )% | | | June 2024 | | | March 2024 | | | December 2023 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Cash and Cash Equivalents | $ | 549 | | $ | 1,801 | | $ | 598 | | | Working Capital | $ | (1,885 | ) | $ | (6,564 | ) | $ | (11,916 | ) | | Borrowing capacity | $ | 16,042 | | $ | 8,042 | | $ | 10,042 | | | (1) | Adjusted<br> EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures”<br> of this earnings release. | | --- | --- | | (2) | Netback<br> from operations and netback including commodity contracts are considered non-GAAP ratios.<br> Refer to the section entitled “Non-GAAP Measures” of this earnings release. | | --- | --- |
Second Quarter 2024 versus Second Quarter 2023
Oil and gas gross revenues totaled $17.7 million in the quarter versus $12.7 million in the second quarter of 2023, an increase of 39%. Oil revenues increased $4.7 million or 39% as average oil prices increased by $7.15 per barrel or 10% and oil production increased by 27% to 2,309 bopd. Natural gas revenues decreased $0.1 million or 37% to $0.1 million as average natural gas prices decreased by $0.99/mcf or 54% to $0.84/mcf partially offset by a natural gas production increase of 37% to 1,916 mcfpd. Natural gas liquids (NGLs) revenues increased $0.3 million or 58% as average NGL prices increased 14% to $18.24/boe and NGL production increased 39% to 500 boepd.
Average production for the second quarter of 2024 was 3,128 BOEPD, an increase of 30% compared to the second quarter of 2023 average production of 2,415 BOEPD due to production from the wells that were drilled and completed in the last six months of 2023 and the first six months of 2024.
| 3 |
| --- |
Production and operating expenses for the second quarter of 2024 were $2.1 million compared to $1.1 million in the prior year comparable period. The increase was partially due to natural gas and NGL processing costs of $0.2 million, or $0.50 per BOE, related to prior years as the purchaser reassessed prior year gathering and processing costs in 2024. Under the terms of the Company’s contract with the purchaser, adjustments to fee billings over the last 24 months are permissible. The adjustments received to date cover 2022 and 2023. In addition, the second quarter of 2024 included rework costs for wells that were impacted by offset fracture stimulations at the end of 2023 which totaled $0.31 per BOE. Without these fees and costs, operating expense per barrel would be $7.67 per BOE for the second quarter of 2024, an increase of 27% due to higher water hauling costs.
General and administrative expenses for the second quarter of 2024 was $1.5 million compared to $1.0 million for the second quarter of 2023, an increase of 50%. The increase was due to higher accounting fees and public company costs that resulted from listing on the NASDAQ stock market at the end of 2023 which increased by $0.4 million in the second quarter of 2024 as well as higher payroll and director fees mainly related to additional personnel and higher investor relations and marketing costs.
Finance expense increased $0.4 million in the second quarter of 2024 compared to the prior year quarter due to higher interest expense as a result of higher interest rates and an increase in the outstanding bank loan balance in 2024.
FIRSTSIX MONTHS 2024 HIGHLIGHTS
| ● | Average<br> production for the first six months of 2024 was 3,216 BOEPD, an increase of 15% compared<br> to the first six months 2023 average production of 2,803 BOEPD. The increases are<br> due to production from the wells that were drilled and completed in the last six months of<br> 2023 and the first six months of 2024 |
|---|---|
| ● | Adjusted<br> EBITDA^(1)^ was $20.4 million in the first six months of 2024 compared to $19.0<br> million in the first six months of 2023, an increase of 7%. The increase was due to the 15%<br> increase in production and a 1% increase in average prices |
| ● | Revenue,<br> net of royalties was $28.1 million in the first six months of 2024 compared to $24.4 million<br> for first six months of 2023, an increase of 15%, as production increased by 15% and average<br> prices increased by 1% |
| ● | Net<br> income in the first six months of 2024 was $7.4 million compared to $12.2 million in the<br> first six months of 2023. The decrease was due to higher income tax expense of $2.6 million<br> and a $2.1 million unrealized gain on commodity contracts in the comparable prior<br> year period partially offset by the increase in production and average prices. |
| ● | Average<br> netback from operations^(2)^ for the first six months of 2024 was $39.66/boe, a<br> decrease of 6% from the prior year period. Netback including commodity contracts^(2)^for the first six months of 2024 was $38.67/boe which was a decrease of 5% compared<br> to the comparable prior year period |
| (1) | Adjusted<br> EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures”<br> of this earnings release. |
| --- | --- |
| (2) | Netback<br> from operations and netback including commodity contracts are considered non-GAAP ratios.<br> Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
| --- | --- |
First Six Months of 2024 versus First Six Months of 2023
Oil and gas gross revenues totaled $35.9 million in the first six months of 2024 versus $30.8 million in the first six months of 2023, an increase of 17%. Oil revenues increased $5.0 million or 18% as oil production increased by 11% to 2,366 boepd and average oil prices increased by $3.69 per barrel or 5%. Natural gas revenues decreased $0.5 million or 43% to $0.6 million as average natural gas prices decreased by $1.76/mcf or 54% to $1.52/mcf partially offset by a natural gas production increase of 21% to 2,143 mcfpd. Natural gas liquids (NGLs) revenues increased $0.6 million or 38% as average NGL prices increased 7% to $23.18/boe and NGL production increased by 28% to 493 boepd.
| 4 |
| --- |
Average production for the first six months of 2024 was 3,216 BOEPD, an increase of 15% compared to the first six months 2023 average production of 2,803 BOEPD. The increases are due to production from the wells that were drilled and completed in the last six months of 2023 and the first six months of 2024.
Production and operating expenses per barrel averaged $8.42 per BOE in the fix six months of 2024 compared to $6.04 per BOE in the prior year period. The increase was due to natural gas and NGL processing costs of $0.8 million, or $1.23 per BOE, related to prior years as the purchaser reassessed prior year gathering and processing costs in 2024. Under the terms of the Company’s contract with the purchaser, adjustments to fee billings over the last 24 months are permissible. The adjustments received to date cover 2022 and 2023. In addition, the first six months of 2024 included rework costs for wells that were impacted by offset fracture stimulations at the end of 2023 which totaled $0.23 per BOE. Without these fees and costs, operating expense per barrel would be $6.96 per BOE for the first six months of 2024, an increase of 15% due to higher water hauling costs in 2024.
General and administrative expenses for the first six months of 2024 was $2.8 million compared to $2.0 million for the same period of 2023, an increase of 43%. The increase was due to higher accounting fees and public company costs that resulted from listing on the NASDAQ stock market at the end of 2023 which increased by $0.6 million in 2024 as well as higher payroll and director fees mainly related to additional personnel and higher investor relations and marketing costs.
Finance income decreased by $2.2 million for the first six months of 2024 due to an unrealized gain on commodity contracts in the comparable prior year period.
Finance expense increased $1.2 million in the first six months of 2024 compared to the prior year comparable period due to an unrealized loss on commodity contracts in 2024 and higher interest expense as a result of higher interest rates and an increase in the outstanding bank loan balance in 2024.
| 5 |
| --- |
KOLIBRI GLOBAL ENERGY INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited, Expressed in Thousands of United States Dollars)
($000 except as noted)
| June 30 | December 31 | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| Current Assets | ||||||
| Cash | $ | 549 | $ | 598 | ||
| Accounts receivables and other receivables | 7,766 | 5,492 | ||||
| Deposits and prepaid expenses | 597 | 838 | ||||
| 8,912 | 6,928 | |||||
| Non-current assets | ||||||
| Property, plant and equipment | 221,007 | 216,161 | ||||
| Right of use assets | 1,056 | 1,190 | ||||
| Fair value of commodity contracts | - | 78 | ||||
| 222,063 | 217,429 | |||||
| Total Assets | $ | 230,975 | $ | 224,357 | ||
| Current Liabilities | ||||||
| Accounts payable and other payables | $ | 9,360 | $ | 17,648 | ||
| Lease liabilities | 919 | 1,068 | ||||
| Fair value of commodity contracts | 518 | 128 | ||||
| 10,797 | 18,844 | |||||
| Non-current liabilities | ||||||
| Loans and borrowings | 33,678 | 29,612 | ||||
| Asset retirement obligations | 2,069 | 1,966 | ||||
| Deferred taxes | 5,762 | 3,359 | ||||
| Lease liabilities | 177 | 162 | ||||
| Fair value of commodity contracts | 4 | - | ||||
| 41,690 | 35,099 | |||||
| Equity | ||||||
| Shareholders’ capital | 296,458 | 296,232 | ||||
| Contributed surplus | 24,621 | 24,179 | ||||
| Accumulated deficit | (142,591 | ) | (149,997 | ) | ||
| Total Equity | 178,488 | 170,414 | ||||
| Total Equity and Liabilities | $ | 230,975 | $ | 224,357 |
| 6 |
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KOLIBRI GLOBAL ENERGY INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited, expressed in Thousands of United States dollars, except per share amounts)
($000 except as noted)
| Second Quarter | First Six Months | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Oil and natural gas revenue, net | $ | 13,915 | $ | 10,114 | $ | 28,141 | $ | 24,407 | ||||
| Other income | 1 | - | 60 | 1 | ||||||||
| 13,916 | 10,114 | 28,201 | 24,408 | |||||||||
| Production and operating expenses | 2,109 | 1,147 | 4,355 | 2,700 | ||||||||
| Depletion and depreciation expense | 3,700 | 3,375 | 7,594 | 7,713 | ||||||||
| General and administrative expenses | 1,528 | 1,021 | 2,793 | 1,951 | ||||||||
| Stock based compensation | 411 | 356 | 539 | 374 | ||||||||
| 7,748 | 5,899 | 15,281 | 12,738 | |||||||||
| Finance income | 445 | 777 | - | 2,167 | ||||||||
| Finance expense | (1,101 | ) | (724 | ) | (2,872 | ) | (1,673 | ) | ||||
| Income tax expense | (1,451 | ) | - | (2,642 | ) | - | ||||||
| Net income | 4,061 | 4,268 | 7,406 | 12,164 | ||||||||
| Basic net income per share | $ | 0.11 | $ | 0.12 | $ | 0.21 | $ | 0.34 | ||||
| Diluted net income per share | $ | 0.11 | $ | 0.12 | $ | 0.20 | $ | 0.33 |
| 7 |
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KOLIBRI GLOBAL ENERGY
SECOND QUARTER 2024
(Unaudited, expressed in Thousands of United States dollars, except as noted)
| Second Quarter | First Six Months | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Oil revenue before royalties | $ | 16,701 | $ | 11,989 | $ | 33,249 | $ | 28,267 | |||
| Gas revenue before royalties | 147 | 232 | 592 | 1,047 | |||||||
| NGL revenue before royalties | 830 | 525 | 2,081 | 1,506 | |||||||
| Oil and Gas gross revenue | 17,678 | 12,746 | 35,922 | 30,820 | |||||||
| Adjusted EBITDA^(1)^ | 10,036 | 7,646 | 20,410 | 19,042 | |||||||
| Additions to property, plant & equipment | 6,427 | 15,742 | 11,747 | 19,930 | |||||||
| Statistics: | First Six Months | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2023 | 2024 | 2023 | |||||||||
| Average oil production (Bopd) | 2,309 | 1,821 | 2,366 | 2,125 | |||||||
| Average natural gas production (mcf/d) | 1,916 | 1,397 | 2,143 | 1,765 | |||||||
| Average NGL production (Boepd) | 500 | 361 | 493 | 384 | |||||||
| Average production (Boepd) | 3,128 | 2,415 | 3,216 | 2,803 | |||||||
| Average oil price (/bbl) | 79.48 | $ | 72.33 | $ | 77.20 | $ | 73.51 | ||||
| Average natural gas price (/mcf) | 0.84 | $ | 1.83 | $ | 1.52 | $ | 3.28 | ||||
| Average NGL price (/bbl) | 18.24 | $ | 15.97 | $ | 23.18 | $ | 21.67 | ||||
| Average price (/boe) | 62.10 | $ | 58.00 | $ | 61.37 | $ | 60.75 | ||||
| Less: Royalties (/boe) | 13.22 | 11.98 | 13.29 | 12.64 | |||||||
| Less: Operating expenses (/boe) | 8.48 | 6.05 | 8.42 | 6.04 | |||||||
| Netback from operations(2)<br> (/boe) | 40.40 | $ | 39.97 | $ | 39.66 | $ | 42.07 | ||||
| Price adjustment from commodity contracts (/boe) | (0.84 | ) | (1.37 | ) | (0.99 | ) | (1.41 | ) | |||
| Netback<br> including commodity contracts(2) (/boe) | 39.56 | $ | 38.60 | $ | 38.67 | $ | 40.66 |
All values are in US Dollars.
| (1) | Adjusted<br> EBITDA is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures”<br> of this earnings release. |
|---|---|
| (2) | Netback<br> from operations and netback including commodity contracts are considered non-GAAP ratios.<br> Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
The information outlined above is extracted from and should be read in conjunction with the Company’s unaudited financial statements for the three and six months ended June 30, 2024 and the related management’s discussion and analysis thereof, copies of which are available under the Company’s profile at www.sedarplus.ca.
| 8 |
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NON-GAAPMEASURES
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.
Netback from operations per barrel and its components are calculated by dividing revenue, less royalties and operating expenses by the Company’s sales volume during the period. Netback including commodity contracts is calculated by adjusting netback from operations by the realized gains or losses received from commodity contracts during the period. Netback is a non-GAAP ratio but it is commonly used by oil and gas companies to illustrate the unit contribution of each barrel produced. The Company believes that the netback is a useful supplemental measure of the cash flow generated on each barrel of oil equivalent that is produced in its operations. However, non-GAAP measures and non-GAAP ratios do not have any standardized meaning prescribed by IFRS and therefore, may not be comparable to similar measures or ratios used by other companies and should not be used to make comparisons.
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 000) | Six months ended June 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2024 | 2023 | |||||||||
| Net income | 4,061 | $ | 4,268 | $ | 7,406 | $ | 12,164 | ||||
| Adjustments: | |||||||||||
| Income tax expense | 1,451 | - | 2,642 | - | |||||||
| Finance income | (445 | ) | (777 | ) | - | (2,167 | ) | ||||
| Finance expense | 1,101 | 724 | 2,872 | 1,673 | |||||||
| Share based compensation | 411 | 356 | 539 | 374 | |||||||
| General and administrative expenses | 1,528 | 1,021 | 2,793 | 1,951 | |||||||
| Depletion, depreciation and amortization | 3,700 | 3,375 | 7,594 | 7,713 | |||||||
| Other income | (1 | ) | - | (60 | ) | (1 | ) | ||||
| Operating netback | 11,806 | 8,967 | 23,786 | 21,707 | |||||||
| Netback from operations per /BOE | 40.40 | 39.97 | 39.66 | 42.07 |
All values are in US Dollars.
| 9 |
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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 $000) | Three months ended June 30, | Six months ended June 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net income | $ | 4,061 | $ | 4,268 | $ | 7,406 | $ | 12,164 | ||||
| Income tax expense | 1,451 | 2,642 | ||||||||||
| Depletion and depreciation | 3,700 | 3,375 | 7,594 | 7,713 | ||||||||
| Accretion | 44 | 44 | 89 | 89 | ||||||||
| Interest expense | 813 | 375 | 1,728 | 860 | ||||||||
| Unrealized (gain) loss on commodity contracts | (445 | ) | (777 | ) | 470 | (2,167 | ) | |||||
| Share based compensation | 411 | 356 | 539 | 374 | ||||||||
| Interest income | - | - | - | - | ||||||||
| Other income | (1 | ) | - | (60 | ) | (1 | ) | |||||
| Foreign currency loss (gain) | 2 | 5 | 2 | 10 | ||||||||
| Adjusted EBITDA | $ | 10,036 | $ | 7,646 | $ | 20,410 | $ | 19,042 |
ProductType Disclosure
This news release includes references to sales volumes of “oil”, “natural gas”, and “barrels of oil equivalent” or “BOEs”. “Oil” refers to light crude oil and medium crude oil combined, and “natural gas” refers to shale gas, in each case as defined by NI 51-101. Production from our wells, primarily disclosed in this news release in BOEs, consists of mainly oil and associated wet gas. The wet gas is delivered via gathering system and then pipelines to processing plants where it is treated and sold as natural gas and NGLs.
CautionaryStatements
In this news release and the Company’s other public disclosure:
| (a) | The<br> Company’s natural gas production is reported in thousands of cubic feet (“Mcfs”).<br> The Company also uses references to barrels (“Bbls”) and barrels of oil<br> equivalent (“Boes”) to reflect natural gas liquids and oil production<br> and sales. Boes may be misleading, particularly if used in isolation. A Boe conversion ratio<br> of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at<br> the burner tip and does not represent a value equivalency at the wellhead. Given that the<br> value ratio based on the current price of crude oil as compared to natural gas is significantly<br> different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be<br> misleading as an indication of value. |
|---|---|
| (b) | Discounted<br> and undiscounted net present value of future net revenues attributable to reserves do not<br> represent fair market value. |
| --- | --- |
| 10 |
| --- | | (c) | Possible<br> reserves are those additional reserves that are less certain to be recovered than probable<br> reserves. There is a 10% probability that the quantities actually recovered will equal or<br> exceed the sum of proved plus probable plus possible reserves. | | --- | --- | | (d) | The<br> Company discloses peak and 30-day initial production rates and other short-term production<br> rates. Readers are cautioned that such production rates are preliminary in nature and are<br> not necessarily indicative of long-term performance or of ultimate recovery. | | --- | --- |
CautionRegarding 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 Tishomingo field, Oklahoma acreage, projected increases in production and cash flow, adjusted EBITDA and net debt, the Company’s reserves based loan facility, including scheduled repayments, expected hedging levels and the Company’s strategy and objectives. The use of any of the words “target”, “plans”, “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe” and similar expressions are intended to identify forward-looking statements.
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.
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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.
AboutKolibri Global Energy Inc.
KolibriGlobal Energy Inc. is a North American energy company focused on finding and exploiting energy projects in oil and gas. Through varioussubsidiaries, the Company owns and operates energy properties in the United States. The Company continues to utilize its technical andoperational expertise to identify and acquire additional projects in oil, gas and clean and sustainable energy. The Company’s sharesare traded on the Toronto Stock Exchange under the stock symbol KEI and on the NASDAQ under the stock symbol KGEI.
Forfurther information, contact:
Wolf E. Regener, President and Chief Executive Officer +1 (805) 484-3613
Email: [email protected]
Website: www.kolibrienergy.com