Kolibri Global Energy Q4 2024 Earnings Call Transcript

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March 26, 2025

There are 1 speakers on the call.

Operator

Good day, and welcome to the Calibri Global Energy's twenty twenty four Annual Financial Conference Call. All participants will be in a listen only mode.

Operator

Media may monitor this call in a listen only mode. They are free to quote any member of management, but are asked to not quote remarks from any other participant without that participant's permission. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I advise that this conference is being recorded today, 03/26/2025.

Operator

This call will be available on the company's website at www.colibrienergy.com. This call may include forward looking information regarding Colibri strategic plans, anticipated production, capital expenditures, exit rates and cash flows, reserves and other estimates and forecasts. Forward looking information is subject to risks and uncertainties, and actual results will vary from the forward looking statements. This call may include forward future oriented financial information and financial outlook information, which Colibri discloses in order to provide readers with a more complete perspective on Colibri's potential future operations, and such information may not be appropriate for other purposes. For a description of the assumptions on which such forward looking information is based and the applicable risks and uncertainties and Colibri's policy for updating such statements, we direct you to Colibri's most recent annual information form and management's discussion and analysis for the period under discussion, as well as Colibri's most recent corporate presentation, all of which are available on Colibri's website.

Operator

Listeners should not place undue reliance on forward looking information. Colibri undertakes no obligation to update any forward looking future oriented financial or financial outlook information other than as required by applicable law. I would now like to turn the call over to Wolf Regner, the President and CEO of Colibri Global Energy Inc. Please go ahead, sir. Thank you, Nick, and thank you everyone for joining us today.

Operator

With me today on the call is Gary Johnson, our Chief Financial Officer. We released our 2024 annual report yesterday and we'll assume you had a chance to look over the report. We are very pleased with the accomplishments we have achieved. I think that we've had an outstanding year with great results in multiple areas. Production increases 24% over 2023, accomplished with a capital spend that was below the low end of our guidance.

Operator

We had successful and under budget drilling in the first three longer lateral wells, the 1.5 mile lateral Alicia Renee wells, which are performing very well. We have drilled them very quickly, only taking two days longer than our one mile laterals. So we added 50% to the amount of reservoir that we accessed for an extra only 15% in drilling time. That all makes big impact on efficiencies. Our operating expenses remain low.

Operator

Our 2024 average was $7.44 per BOE, which actually included $0.63 of prior year gas and NGL processing from our gatherer XCO, which without which those our 2024 numbers would have been about $6.81 for the year. So our efficient operations led to great unhinged netbacks. We have in 2024, which were $38.54 So that's how much we make per barrel of oil that we pull out of the ground. With an average oil price of $74.06 and gas as low of $1.93 in MCS. On top of that, our 2024 year end proved reserves increased by 24% over the 2023 year end numbers, which is really a big increase.

Operator

In 2024, we also increased our line of credit up to $50,000,000 So things are going very well for the company. And with that, I'll turn the call over to Gary to discuss our financial results. Thanks, Wolf, and thanks, everyone, for joining the call. So I'm going to go over a few highlights of our annual and fourth quarter results as well as our 2025 forecast, and then we'll take questions at the end. All amounts are in U.

Operator

S. Dollars unless otherwise stated. As we mentioned in our earnings release yesterday, we reported our highest annual revenue and adjusted EBITDA ever for the company. Net revenue for 2024 was $58,500,000 which was an increase of 60% compared to the prior year and within our forecasted guidance. The increase was due to an increase of production, partially offset by lower prices of 7%.

Operator

Adjusted EBITDA increased 28% to $44,000,000 which was within our guidance and that compared to $39,100,000 in 2023 due to the higher revenue partially offset by higher operating and G and A expenses. Average production for 2024 was also within our guidance as an increase 24% to 3,478 Boe per day compared to 2,796 in the prior year. The increase was due to the wells we added in 2024, including our three additional A 1.5 mile lateral wells, which came out production in the fourth quarter. Net income was $18,100,000 and basic EPS was $0.51 per share in 2024, compared to $19,300,000 and basic EPS of $0.54 per share in 2023, a 6% decrease. Operating expenses was $7.44 per BOE for the year compared to $6.61 in 2023.

Operator

And like Wolf mentioned, that could include $0.62 of prior year cost true ups in 2024. CapEx for 2024 was $31,300,000 compared to $53,200,000 in 2023, which was a decrease of 41% and about $2,000,000 less than the low end of our forecasted guidance as we continue to achieve cost efficiencies in our field operations. Our netback from operations decreased to $38.54 boe compared to $42.97 in the prior year. This was due to lower average prices of 7% and higher operating expenses. Our net debt at beta '20 '20 '4 was $28,900,000 which was slightly better than our lowest the lowest end of our forecasted guidance.

Operator

Now I'm going to move on to the fourth quarter results. Our average production for the quarter was 4,440 BOE per day compared to 2,842 in the prior year quarter, which was an increase of 56% due to production from the twenty twenty four wells. Adjusted EBITDA was $13,500,000 which was a 28% increase from the prior year fourth quarter, due to the higher production partially offset by a 17% price decrease. Net revenue was $17,400,000 in the fourth quarter compared to $13,400,000 in the prior year quarter, an increase of 29%. Net income for the quarter was $5,600,000 and basic EPS was $0.16 per share compared to $4,800,000 and basic EPS of $0.14 per share in the prior year fourth quarter.

Operator

Operating expenses was $6.59 per BOE in the fourth quarter compared to $7.02 in the prior year quarter, which was a decrease of 6% due to increased production which reduced the per barrel fixed costs. Net back from operations was $35.94 per BOE compared to $44.4 in the prior year quarter, which was a decrease of 19% due to the lower prices in 2024. Next, I wanted to touch on our 2025 forecast, which we released at the beginning of the year. Our forecast continues to show double digit growth on top of the specific growth we've already achieved over the last three years. Our average production forecast is 4,500 to 5,100 BOE per day, which is a 29% to 47% increase from our 2024 actual production.

Operator

The revenue forecast of $75,000,000 to $89,000,000 is a 28% to 52% increase from our revenue in 2024. Our adjusted EBITDA forecast is $58,000,000 to $71,000,000 which is a 32% to 61% increase from our 2024 adjusted EBITDA. And we forecasted to spend between $48,000,000 to $53,000,000 on our CapEx, as we expect to bring nine wells into production with seven of them being longer laterals. And all this growth is expected to be funded by our cash flow from operations. We will tap into our credit facility to manage our working capital during the year.

Operator

We expect to have net debt of $25,000,000 to $30,000,000 at the end of twenty twenty five. And a leverage ratio is expected to be well below $1,000,000 And the last one I wanted to mention is our share buyback program. During 2024, we purchased 280,656 shares for about $1,100,000 And our plan is continue to buy back shares in 2025 while managing our tax loan needs for the new wells. And with that, I'll hand it back to Wolf. Thanks, Gary.

Operator

As I stated, we had a great 2024 and as Gary pointed out with all the detailed numbers. And when you look over the last few years, the company has had quite the growth. Revenue and cash flow have grown a lot, all while keeping our leverage low. And as you heard from Gary, our production is forecast to continue growing. And our team has been executing really well.

Operator

Our striving for constant improvement has been paying off well. The drilling times and cost improvements have been huge. We've also had numerous completion improvements that have led to more economic wells. And our operating expenses and netbacks are, from what I can see, the best among our peers. And as to the stock price, we had a 58% gain in 2024 and it's been up even more in 2025.

Operator

I'm glad the company is starting to get some recognition and we'll continue to attempt to get the word out and make more people aware of our story. In addition, as Barry mentioned, we're intending to continue our returning capital to shareholders in the form of our share buybacks. Overall, our plan is to continue to execute and to build and grow company value for all shareholders. This includes the formal part of our presentation, and we would be pleased to answer any questions questions you may now have. We'll now begin the question and answer session.

Operator

And your first question today will come from John White with Roth Capital. Please go ahead. Good morning and congratulations on the strong results, especially your LOE for BOE, very impressive operating cost number. Thank you, John. I appreciate it.

Operator

I appreciate you coming on the call as well. And so we're drilling the Lovena Wells right now, 100% working interest. Remind me again, what is your net revenue interest in the Lovena Wells? And the Lavena Wells, we are around 80 oh, I have working interest. Yeah.

Operator

Sorry. I think you said net revenue. Oh. Did you say net revenue, John? Net revenue interest?

Operator

Yeah. Net revenue interest. I think it's around 80 79% roughly. I thought they looked exactly. But it's our average is, like, right in that range.

Operator

Okay. And those are gonna finish up those are gonna be fracked in May. So would we expect production press release in June? Yes. Yeah.

Operator

Depending on weather and timing for the crackers when they finish up their previous job. Right now, we're scheduled about mid May and then, we'll be bringing those we intend to bring those wells on production sometime in early June. Okay. And when do you think the Ferguson well would be fracked? The plan right now is to frac that sometime in July, but we'll see if that doesn't move into June as well or into June, I should say, not as well, but bringing it on in July sometime.

Operator

Okay. Well, again, congratulations and good luck with all your operations. I'll turn the call back to the operator. Sounds good. Thank you, John.

Operator

Appreciate it. Your next question today will come from Steve Farizzani with Sidoti. Please go ahead. Good morning, Wolf. I appreciate the detail on the call or asking, I should say.

Operator

Could you talk a little bit about any changes in your hedging strategy? I could see that the release day showed you're hedging into 2026. Any reason to shift it given some concerns over oil prices? No, not really. I mean, we tried to protect the lower end of it.

Operator

We want to keep the upper end open as much as we can, so we've been going with the cost of colors. And, really, we're hedging right now what the bank wants us to hedge. And Jerry, you wanna give a little color on that? Yeah. So we're required to hedge 50% of our next twelve months and 35% of the two quarters after that.

Operator

Is that clear? That's on the forecast. Yeah. And that's yeah. I'm sorry.

Operator

That's old oil. That's what the forecast of the oil on Right. Based on our existing wells that are on production, not on future wells. Yeah. Okay.

Operator

Sorry, I just said that our cross and callers are pretty wide bandwidth. They're currently at $50 to $94. So we have some flexibility there in the price unless it goes really low. Got it. That's great.

Operator

Thank you. Can you talk a little bit about the success of drilling approved reserves last year and what you think the drilling program where the drilling program is focused this year? I know last year a lot of the drilling was on your reserves that were not improved. How does that compare to what your plans are in 'twenty five? This year, so we're drilling mainly in our approved acreage.

Operator

So we're hoping that drilling in this proved acreage will show how well these longer laterals are performing because in our opinion, there are still haircuts by nettle and stool on the longer laterals. And so as we get more production from these longer laterals, I think that will, assuming they perform like we expect them to and it looks like the initial grenade wells we're doing, we shouldn't have those haircuts in comparison to the one mile laterals that we had in the past. So that's really the focus of that. And then obviously, the east side acreage that Forgerton well, that's another 3,000 acres for us that is not in the reserve report at all. So that's our, we call it, step out, to see if we can add some more reserves into the bank without taking a lot of risk.

Operator

Because that looks it looks good out there. It looks similar to what's in the heart of the field. It's just a little shallower. So it's a matter of what are the economics look like? Where does it work?

Operator

Does it work at $40 oil? Does it work at $60 oil? Does it work at $80 oil? So I'm expecting to pay well there. It's just a matter of how economic it is.

Operator

Got it. That's helpful. And I know I don't want to look too far into the future, but for modeling purposes, you have two more wells to drill and the two, you're going to frac in the second half. Any sense of timing at this point just to help us with the modeling? I think we're planning on studying those in around August to early September.

Operator

With the fracking of the other two of the So the same following, yes. With the following for all four of the September, yes, correct. Got it. Great. Thanks, Wolf.

Operator

Thanks, Gary. All right. Thank you, Henry. And your next question today will come from Lee Curry with Curry Partners. Please go ahead.

Operator

Thank you very much. I noticed that the Ferguson well has a 46% working interest instead of the 100%. And am I correct that that's the one, Exxon is participating with you in? Yeah. I don't really say who the company is.

Operator

They don't Oh, okay. I've referred to it as a large integrated oil company that's thought out everyone around us. Alright. Well, what what They don't like their name in print? Whichever large integrated company that's doing that, it's pretty exciting, I think, when you have a unknown large integrated player forming in into a step out, if not a new field wildcat.

Operator

So congratulations. Yes. Thank you. Appreciate it. Yes.

Operator

We're done with that. If you're telling me who it is, could you sort of say how did that come about? It's more along the lines of what the acreage that they had out there as well. We have some joint acreage together with them. So we kind of suspect to the section and they elected to participate in the past.

Operator

They haven't always participated, I would say. So That's it. I think that's a validation. Keep doing what you all are doing guys. Thank you.

Operator

Thank you very much. Thanks for the question. This concludes our question and answer session. I would like to turn the conference back over to Wolf Regner for any closing remarks. I just want to say thank you all for participating and joining And we are looking forward to another great year, and everything looks like it's on track in order to achieve that.

Operator

So let's hope it continues that and look forward to having future calls to share good news as well. So thank you very much. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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Earnings Conference Call
Kolibri Global Energy Q4 2024
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