Kolibri Global Energy (KEI) Q2 2024 earnings summary

Executive summary

• Achieved 30% year-over-year production growth to 3,128 BOE/day in Q2 2024, driven by new wells completed in late 2023 and early 2024.

• Revenue net of royalties rose 38% to $13.9 million in Q2 2024, reflecting higher production and a 7% increase in average prices.

• Adjusted EBITDA increased 31% to $10 million in Q2 2024, supported by operational growth and improved pricing.

• Net income for Q2 2024 was $4.1 million (EPS $0.11), slightly below Q2 2023 due to higher deferred tax and operating costs.

• Initiated drilling of three Alicia Renee wells with 1.5-mile laterals, expected online in early Q4 2024.

Financial highlights

• Oil and gas gross revenues grew 39% year-over-year to $17.7 million in Q2 2024; oil revenues up 39%, NGL revenues up 58%.

• Q2 2024 netback from operations was $40.40/BOE, up from $39.56/BOE year-over-year.

• For the first six months, revenue net of royalties increased 15% to $28.1 million; adjusted EBITDA up 7% to $20.4 million.

• Net income for the first half was $7.4 million, down from $12.2 million due to higher tax expense and lower unrealized gains on commodity contracts.

• Capital expenditures in Q2 2024 were $6.4 million, down 59% year-over-year.

Outlook and guidance

• Frac operations for three new 1.5-mile laterals expected early in Q4 2024, with anticipated production uplift.

• Budgeting a 1.35x productivity increase for longer laterals, with potential for even higher returns.

• Management expects continued production and EBITDA growth, focusing on drilling longer laterals for improved efficiency.

• Two DUCs likely to be completed in 2025, pending board-approved budget and cash flow considerations.

• Field development plan evolving to incorporate longer laterals, with a formal update expected after third-party reserve report.