Kolibri Global Energy Inc. ((TSE:KEI)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Kolibri Global Energy Inc.’s recent earnings call presented a mixed sentiment, highlighting significant production and revenue growth alongside challenges such as declines in net income and netbacks. The company remains optimistic about future production increases, buoyed by strategic initiatives like a stock buyback program.
Significant Production Increase
Kolibri Global Energy Inc. reported a remarkable production increase of over 40% year-over-year, reaching more than 4,250 barrels of oil equivalent per day. This substantial growth underscores the company’s operational efficiency and strategic focus on enhancing production capabilities.
Revenue Growth
Despite facing an 18% decline in oil prices, Kolibri achieved a 15% increase in quarterly revenue, totaling $15 million. This growth was primarily driven by the surge in production levels, showcasing the company’s resilience in navigating challenging market conditions.
Adjusted EBITDA Growth
The company’s adjusted EBITDA rose by 9% to $11.1 million compared to the previous year. This improvement reflects Kolibri’s ability to maintain strong operational performance and cost management, even amidst fluctuating oil prices.
Stock Buyback Program
Kolibri has been actively engaging in a stock buyback program, repurchasing approximately 568,000 shares. This initiative demonstrates the company’s commitment to returning capital to shareholders and enhancing shareholder value.
Record-High Production Expected
Kolibri anticipates exiting the year with record-high production levels, driven by the introduction of new wells coming online. This expectation signals a positive outlook for the company’s future production capacity and market position.
Decline in Net Income
The company experienced a decline in net income, which fell to $3.6 million from $5.1 million. This decrease was attributed to a $1.8 million negative swing in non-cash unrealized mark-to-market adjustments on hedges, impacting overall profitability.
Decrease in Netbacks
Netbacks decreased by 23% to $30.84 per BOE compared to the prior year, primarily due to lower oil prices. This decline highlights the challenges posed by market volatility and its impact on the company’s financial metrics.
Increased Operating Expenses
Operating expenses rose by 11% to $7.37 per BOE, influenced by reassessed production tax adjustments. This increase underscores the importance of cost control in maintaining profitability amidst rising expenses.
Lower Oil Prices Impact
The 18% decline in oil prices significantly affected Kolibri’s overall financial performance, despite the increase in production. This scenario illustrates the sensitivity of the company’s financial outcomes to external market conditions.
Forward-Looking Guidance
Kolibri Global Energy Inc. provided forward-looking guidance, emphasizing a continued focus on production growth and shareholder returns. The company plans to bring four new wells into production by early December, aiming for an all-time high in production levels. Additionally, Kolibri reaffirmed its $65 million line of credit and intends to persist with its share buyback program, reinforcing its commitment to enhancing shareholder value.
In summary, Kolibri Global Energy Inc.’s earnings call conveyed a cautiously optimistic outlook, with significant production and revenue growth tempered by challenges in net income and netbacks. The company’s strategic initiatives, including a stock buyback program and plans for increased production, highlight its resilience and commitment to shareholder value amidst fluctuating market conditions.