All amounts are in U.S. Dollars unless otherwise indicated:
FIRST QUARTER HIGHLIGHTS
- Average production for the first quarter of 2022 was 1,054
BOEPD, an increase of 3% compared to first quarter of 2021 average
production of 1,020 BOEPD. The increase was due to the production
from the Barnes 7-3H well which started producing in the second
half of March partially offset by the natural decline of existing
wells. The Barnes 7-3H well had a 30 day initial production rate
(“IP rate”) of 940 BOEPD, including 740 barrels of oil.
- Adjusted funds flow(1) was $2.8 million in the first quarter of
2022 compared to $1.5 million in the first quarter of 2021. The
increase was mainly due to higher average prices and higher
production partially offset by higher realized losses from
commodity contracts in 2022.
- Average netback from operations(2) for the first quarter of
2022 was $48.91 per BOE, an increase of 73% from the prior year
first quarter. Netback including commodity contracts(2) for the
first quarter of 2022 was $36.88 per BOE which was 49% higher then
the prior year first quarter.
- Revenue, net of royalties was $5.5 million in the first quarter
of 2022 compared to $3.3 million for the first quarter of 2021, an
increase of 70%, as average prices increased 65% and average
production increased 3% between the quarters.
- G&A expense decreased by 10% in the first quarter of 2022
compared to the prior year quarter due to management’s continued
cost cutting measures.
- Interest expense decreased by 5% in the first quarter of 2022
compared to the prior year quarter due to principal payments on the
credit facility in 2021 which reduced the outstanding loan
balance.
- Operating expenses for the first quarter of 2022 increased by
35% compared to the prior year first quarter due primarily to
higher production taxes. Operating expense per barrel averaged
$9.56 per BOE in the first quarter of 2022 compared to $7.30 per
BOE in the first quarter of 2021. The increase was due to higher
production taxes in the first quarter of 2022 which increased by
$1.82 per BOE compared to the prior year first quarter.
- In the first quarter of 2022, the Company incurred a net loss
of $2.5 million compared to a net loss of $0.5 million in the first
quarter of 2021. Excluding the first quarter of 2022 unrealized
loss from commodity contracts of $3.8 million, the Company would
have recognized positive net income.
- In November 2021, the Company’s credit facility was amended to
reduce the Maximum Leverage Ratio covenant discussed below from 4
to 1 down to 3.5 to 1 beginning in the first quarter of 2022. In
addition, BOK Financial agreed to increase the borrowing base by
$2.0 million if the gross proceeds from the Company’s rights
offering exceeded C$8.5 million and the Company has drilled 2 wells
and completed fracture stimulation on one of the wells. The Company
has met both requirements and is awaiting the redetermination from
the bank.
(1)
Adjusted funds flow is considered a
non-GAAP measure. Refer to the section entitled “Non-GAAP Measures”
of this earnings release.
(2)
Netback from operations and netback
including commodity contracts are considered non-GAAP ratios. Refer
to the section entitled “Non-GAAP Measures” of this earnings
release.
Kolibri’s President and Chief Executive Officer, Wolf Regener
commented:
“We are excited as the early results from the first two wells
drilled in 2022 are so good that they are transformative for the
Company. The Barnes 7-3H well (98.07% working interest), which
started production in the second half of March, had a 30 day
initial production rate (“IP rate”) of 940 BOEPD, including 740
barrels of oil, which was the best 30 day IP rate that the Company
has achieved. The early results from the Barnes 8-4H well (98.07%
working interest), which started production in the second half of
April, has, while still flowing up casing, averaged about 580 BOEPD
for the last 12 days, including about 500 barrels of oil. We are
scheduled to install tubing and increase the capacity of our
surface facilities in the coming week. We have been very pleased
with the performance of this well and are looking forward to seeing
what it will produce once these modifications have been
completed.
The new unhedged cash flow will be providing the capital to
drill more wells, assuming these wells follow the projected decline
curves,. We plan to continue the 2022 drilling program in the third
quarter when the drilling rig is expected to be onsite, as we have
already signed a drilling rig contract.
In the first quarter of 2022, we generated $2.8 million of
adjusted funds flow, compared to $1.5 million in the first quarter
of 2021, which was an increase of 87%. The increase was due to
higher average prices of 65% and an increase in production of
3%.
Net revenue increased by 70% in the first quarter of 2022 due to
higher average prices and production.
Netback from operations increased to $48.91 per BOE in the first
quarter of 2022 compared to $28.32 per BOE in the first quarter of
2021, an increase of 73%. Netback including commodity contracts for
the first quarter of 2022 was $36.88 per BOE, an increase of 49%
from the prior year first quarter. The 2022 increase compared to
the same period in the prior year was due to the increase in
average prices partially offset by higher production taxes.
The Company’s G&A expenses decreased by 10% in the first
quarter of 2022 compared to the first quarter of 2021 due to
managements continuing efforts to reduce expenses.
Interest expense decreased by 5% in the first quarter of 2022
compared to the comparable prior year period due to principal
payments on the credit facility during 2021 which reduced the
outstanding loan balance and lower interest rates.
Operating expenses for the first quarter of 2022 increased by
35% compared to the prior year first quarter due primarily to
higher production taxes. Operating expense per barrel averaged
$9.56 per BOE in the first quarter of 2022 compared to $7.30 per
BOE in the first quarter of 2021. The increase was primarily due to
higher production taxes in the first quarter of 2022 which
increased by $1.82 per BOE compared to the prior year first
quarter.
In the first quarter of 2022, the Company incurred a net loss of
$2.5 million compared to a net loss of $0.5 million in the first
quarter of 2021. Excluding the first quarter of 2022 unrealized
loss from commodity contracts of $3.8 million, the Company would
have recognized positive net income.”
1st Qtr 2022
1st Qtr 2021
%
Net loss:
$ Thousands
$
(2,456
)
$
(528
)
-
$ per common share assuming dilution
$
(0.01
)
$
(0.00
)
-
Capital Expenditures
$
7,401
$
29
25,400
%
Adjusted funds flow(1)
$
2,822
$
1,509
87
%
Average production per day (Boepd)
1,054
1,020
3
Average price per boe
$
74.97
$
45.48
65
Netback from operations(2)
$
48.91
$
28.32
73
Netback including commodity
contracts(2)
$
36.88
$
24.77
49
3/31/2022
12/31/2021
Cash and Cash Equivalents
$
3,058
$
7,316
Working Capital
$
(3,011
)
$
3,823
(1)
Adjusted funds flow is considered a
non-GAAP measure. Refer to the section entitled “Non-GAAP Measures”
of this earnings release.
(2)
Netback from operations and netback
including commodity contracts are considered non-GAAP ratios. Refer
to the section entitled “Non-GAAP Measures” of this earnings
release.
First Quarter 2022 versus First Quarter
2021
Oil and gas gross revenues totaled $6,179,000 in the quarter
versus $3,510,000 in the first quarter of 2021. Oil revenues
increased $2,669,000 or 76% as oil prices increased by $40.25 per
barrel or 72% and oil production increased by 2% to 714 bopd.
Natural gas revenues increased $100,000, or 34%, to $391,000 as
average natural gas prices increased by 31% to $4.71/mcf and
natural gas production increased by 3% to 922 mcfpd. Natural gas
liquids (NGLs) revenues increased $166,000, or 44%, as NGL prices
increased 34% to $32.25 per BOE and production increased by 8% to
186 boepd.
Average production for the first quarter of 2021 was 1,054
BOEPD, an increase of 3% compared to the first quarter of 2021
average production of 1,020 BOEPD. The increase was due to the
production from the Barnes 7-3H well which started producing in the
second half of March partially offset by the natural decline of
existing wells.
Production and operating expenses increased to $907,000 from
$670,000 in the prior year first quarter and the per boe production
and operating costs were $9.56/boe in the first quarter of 2022
compared to $7.30/boe in the first quarter of 2021.
Depletion and depreciation expense increased $230,000 or 25% due
to the 2021 impairment reversal of PP&E and higher production
in the first quarter of 2022.
General and administrative expenses decreased $77,000 or 10% due
to cost cutting measures by the Company.
Stock based compensation increased to $125,000 in the first
quarter of 2022 due to stock option grants in January 2022.
Finance income increased $12,000 in the first quarter of 2022
compared to the prior year quarter due to interest income and a
foreign exchange gain in 2022.
Finance expense increased $3,703,000 in the first quarter of
2022 compared to the prior year quarter due to unrealized losses on
commodity contracts of $3,786,000 and realized losses of
$1,142,000.
KOLIBRI GLOBAL ENERGY
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
(Unaudited, Expressed in
Thousands of United States Dollars)
($000 except as noted)
March 31
December 31
2022
2021
Current Assets
Cash
$
3,058
$
7,316
Trade and other receivables
3,868
1,999
Deposits and prepaid expenses
499
587
7,425
9,902
Non-current assets
Property, plant and equipment
153,435
147,076
Fair value of commodity contracts
22
38
153,457
147,114
Total Assets
$
160,882
$
157,016
Current Liabilities
Trade and other payables
$
6,049
$
3,145
Current portion of loans and
borrowings
250
1,000
Lease payable
25
43
Fair value of commodity contracts
4,112
1,891
10,436
6,079
Non-current liabilities
Loans and borrowings
15,893
15,866
Asset retirement obligations
1,469
1,398
Fair value of commodity contracts
2,150
585
19,512
17,849
Equity
Share capital
296,221
296,060
Contributed surplus
23,089
22,948
Deficit
(188,376
)
(185,920
)
Total Equity
130,934
133,088
Total Equity and Liabilities
$
160,882
157,016
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)
Three months ended March
31,
($000’s)
2022
2021
Oil and gas revenue net of royalties
$
5,547
$
3,269
Other income
1
1
5,548
3,270
Production and operating expenses
907
670
Depletion and depreciation
1,139
909
General and administrative expenses
686
763
Share based compensation
125
-
$
2,342
$
2,342
Finance Income
12
-
Finance Expense
(5,159
)
(1,456
)
Net loss
(2,456
)
(528
)
Net loss per share
$
(0.01
)
$
(0.00
)
KOLIBRI GLOBAL ENERGY
INC.
FIRST QUARTER 2022
(Unaudited, expressed in
Thousands of United States dollars, except as noted)
Quarter Ending March
31,
2022
2021
Oil revenue before royalties
$
6,179
$
3,510
Natural gas revenue before royalties
391
291
NGL revenue before royalties
541
375
Oil and Gas revenue before royalties
7,111
4,176
Adjusted funds flow(1)
2,822
1,509
Capital expenditures
7,401
29
Statistics:
Average oil production (Bopd)
714
697
Average natural gas production (mcf/d)
922
898
Average NGL production (Boepd)
186
173
Average production (Boepd)
1,054
1,020
Average oil price ($/bbl)
$
96.17
$
55.92
Average natural gas price ($/mcf)
4.71
3.60
Average NGL price ($/bbl)
32.25
24.15
Average price per barrel
$
74.97
$
45.48
Royalties per barrel
16.50
9.86
Operating expenses per barrel
9.56
7.30
Netback from operations(2)
48.91
28.32
Price adjustment from commodity contracts
(Boe)
(12.03
)
(3.55
)
Netback including commodity contracts
(Boe)(2)
$
36.88
$
24.77
(1)
Adjusted funds flow is considered a
non-GAAP measure. Refer to the section entitled “Non-GAAP Measures”
of this earnings release.
(2)
Netback from operations and netback
including commodity contracts are considered non-GAAP ratios. Refer
to the section entitled “Non-GAAP Measures” of this earnings
release.
The information outlined above is extracted from and should be
read in conjunction with the Company's unaudited financial
statements for the three months ended March 31, 2022 and the
related management's discussion and analysis thereof, copies of
which are available under the Company's profile at
www.sedar.com.
NON-GAAP MEASURES
Netback from operations, netback including commodity contracts
and adjusted funds flow (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.sedar.com and is incorporated by reference into this earnings
release.
The following is the reconciliation of the non-GAAP ratio
netback from operations to net income (loss) from continuing
operations, which the Company considers to be the most directly
comparable financial measure that is disclosed in the Company’s
financial statements:
(US $000)
For the three months ended
March 31,
2022
2021
Net loss
(2,456
)
(528
)
Adjustments:
Finance income
(12
)
-
Finance expense
5,159
1456
Share based compensation
125
-
Impairment of property, plant and
equipment
-
-
General and administrative expenses
686
763
Depletion, depreciation and
amortization
1,139
909
Other income
(1
)
(1
)
Operating netback
4,640
2,599
Netback from operations
$
48.91
$
28.32
The following is the reconciliation of the non-GAAP measure
adjusted funds flow to the comparable financial measures disclosed
in the Company’s financial statements:
(US $000)
Three months ended March
31,
2022
2022
Cash flow from continuing operations
1,243
1,364
Change in non-cash working capital
1,381
(64)
Interest expense(a)
198
209
Adjusted funds flow
2,822
1,509
(a)
Interest expense on long-term debt
excluding the amortization of debt issuance costs
CAUTIONARY STATEMENTS
In this news release and the Company’s other public
disclosure:
(a)
The Company's natural gas production is
reported in thousands of cubic feet ("Mcfs"). The Company
also uses references to barrels ("Bbls") and barrels of oil
equivalent ("Boes") to reflect natural gas liquids and oil
production and sales. Boes may be misleading, particularly if used
in isolation. A Boe conversion ratio of 6 Mcf:1 Bbl is based on an
energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Given that the value ratio based on the current price of
crude oil as compared to natural gas is significantly different
from the energy equivalency of 6:1, utilizing a conversion on a 6:1
basis may be misleading as an indication of value.
(b)
Discounted and undiscounted net present
value of future net revenues attributable to reserves do not
represent fair market value.
(c)
Possible reserves are those additional
reserves that are less certain to be recovered than probable
reserves. There is a 10% probability that the quantities actually
recovered will equal or exceed the sum of proved plus probable plus
possible reserves.
(d)
The Company discloses peak and 30-day
initial production rates and other short-term production rates.
Readers are cautioned that such production rates are preliminary in
nature and are not necessarily indicative of long-term performance
or of ultimate recovery.
Caution Regarding Forward-Looking Information
This release contains forward-looking information including
information regarding the proposed timing and expected results of
exploratory and development work including production from the
Company's Tishomingo field, Oklahoma acreage, projected adjusted
funds flow, the Company’s reserves based loan facility, including
scheduled repayments and the expected increase to the Company’s
borrowing base of $2.0 million in the second quarter of 2022,
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 and will be increased in the second quarter of 2022,
that funds will be available from the Company’s reserves based loan
facility when required to fund planned operations, that the Company
will not be adversely affected by changing government policies and
regulations, social instability or other political, economic or
diplomatic developments in the countries in which it operates and
that global economic conditions will not deteriorate in a manner
that has an adverse impact on the Company's business and its
ability to advance its business strategy.
Forward looking information involves significant known and
unknown risks and uncertainties, which could cause actual results
to differ materially from those anticipated. These risks include,
but are not limited to: the risk that any of the assumptions on
which such forward looking information is based vary or prove to be
invalid, including that the Company’s geologic and reservoir models
or analysis are not validated, that anticipated results and
estimated costs will not be consistent with management’s
expectations, the risks associated with the oil and gas industry
(e.g. operational risks in development, exploration and production;
delays or changes in plans with respect to exploration and
development projects or capital expenditures; the uncertainty of
reserve and resource estimates and projections relating to
production, costs and expenses, and health, safety and
environmental risks including flooding and extended interruptions
due to inclement or hazardous weather), the risk of commodity price
and foreign exchange rate fluctuations, risks and uncertainties
associated with securing the necessary regulatory approvals and
financing to proceed with continued development of the Tishomingo
Field, the risk that the Company or its subsidiaries is not able
for any reason to obtain and provide the information necessary to
secure required approvals or that required regulatory approvals are
otherwise not available when required, that unexpected geological
results are encountered, that completion techniques require further
optimization, that production rates do not match the Company’s
assumptions, that very low or no production rates are achieved,
that the Company will cease to be in compliance with the covenants
under its reserves-based loan facility and be required to repay
outstanding amounts or that the borrowing base will be reduced
pursuant to a borrowing base re-determination and the Company will
be required to repay the resulting shortfall, that the Company is
unable to access required capital, that funding is not available
from the Company’s reserves based loan facility at the times or in
the amounts required for planned operations, that occurrences such
as those that are assumed will not occur, do in fact occur, and
those conditions that are assumed will continue or improve, do not
continue or improve and the other risks identified in the Company’s
most recent Annual Information Form under the “Risk Factors”
section, the Company’s most recent management's discussion and
analysis and the Company’s other public disclosure, available under
the Company’s profile on SEDAR at www.sedar.com.
Although the Company has attempted to take into account
important factors that could cause actual costs or results to
differ materially, there may be other factors that cause actual
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those
anticipated in such statements. The forward-looking information
included in this release is expressly qualified in its entirety by
this cautionary statement. Accordingly, readers should not place
undue reliance on forward-looking information. The Company
undertakes no obligation to update these forward-looking
statements, other than as required by applicable law.
About Kolibri Global Energy Inc.
KEI is an international energy company focused on finding and
exploiting energy projects in oil, gas and clean and sustainable
energy. Through various subsidiaries, the Company owns and operates
energy properties in the United States. The Company continues to
utilize its technical and operational expertise to identify and
acquire additional projects. The common shares of the Company trade
on the Toronto Stock Exchange (“TSX”) under the symbol “KEI” and on
the Over the Counter QB (“OTCQB”) under the symbol “KGEIF”.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220505006242/en/
Wolf E. Regener, President and Chief Executive Officer +1 (805)
484-3613 Email: investorrelations@kolibrienergy.com Website:
www.kolibrienergy.com
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