Hello and good afternoon, ladies and gentlemen. Welcome to... Ladies and gentlemen, welcome to today's virtual non-DEAL roadshow. My name is Julia Perron, a virtual event moderator here at Renmark Financial Communications. On behalf of our team, we'd like to thank everyone in Chicago and surrounding areas for joining us today for the presentation of Kolibri Global Energy Inc, trading on the Toronto Stock Exchange under the ticker symbol KEI, and on the NASDAQ under the ticker symbol KGEI. Presenting today is Wolf Regener, President and Chief Executive Officer, and joining us for the Q&A will be Gary Johnson, Chief Financial Officer and Vice President. The presentation will last approximately 20 to 25 minutes and will be followed by a formal Q&A session for which you can participate in using the chat box on the top right-hand corner of your screen.
With that, I will hand it over to Wolf.
All right, thank you. Thank you, everyone, for joining us here. I'll go through our presentation here today. This will be found on our website as well. You can see our forward-looking information there, all the disclaimers, including the non-GAAP measure disclaimers, et cetera. Kolibri Global Energy, we're a shale oil operator where we drill horizontal wells into the Caney Shale primarily. We're located in Oklahoma. Our production is located in Oklahoma. Our reserves are mainly split between about 22% proved developed producing and 78% is proved undeveloped still. We have a lot of room to grow into it. Last year, our reserves grew by 24%. Overall, we're a financially stable company, have high netback production.
We're fully funded for the year for our drilling program, and we have what we consider a very high-quality asset with 2P reserves of about 53 million and proved reserves of 40 million. Let's see. We are listed on the NASDAQ, ticker KGEI, and on the TSX, KEI. We have roughly 35.5 million shares outstanding, gives us a U.S. market cap of about $250 million. It floats up and down right now, especially with these markets as they're going. Our total enterprise value, we only have about $30 million in debt, and our enterprise value is around $280 million roughly. We keep our debt low, so our debt to EBITDA is very low, less than one.
Our reserves valuation at the end of last year in the other one, Sewell gave us our proved reserves of 40 million that I mentioned before, gave us a value of $535 million on those reserves. You can see on our stock chart where, you know, we hadn't drilled or didn't drill any wells during the financial crisis and for a year or two afterwards, so our stock price had come down. Now with the drilling that we're doing and the developing and the new technologies that we're using for the improved economics that we'll go into, our share price has started responding, but again, still quite undervalued compared to our proved reserve value, really undervalued compared to our proved probable reserve value of $700 million. Field history out here for us.
We had originally drilled what we call the Woodford Shale or what is called the Woodford Shale, and it's very gassy. It was about 15% oil. The balance was gas and natural gas liquids from that. You can see that Exxon is in the purple all around us here. We were the last to hold out to sell to Exxon as they were consolidating the acreage out here. We had about 12,500 acres at the time. When we sold the Woodford to Exxon for $147 million, we kept the rights to the slightly shallower Upper Sycamore and Caney formations. They are only about 350 ft shallower than the Woodford. The Caney and Upper Sycamore across our field were down at depths between 8,000 and 11,000 ft roughly, just to put it in perspective.
What that did was we transformed the company from a natural gas producer into a liquids-rich oil producer. Last year, we produced about 74% of our production was oil, with another 16% of it being natural gas liquids. On a liquids production side of things, we were about 90% of our production was that. Our plan for the year: continue developing the field. We're forecasting production growth of 29-47%. We are currently in the process of doing what we said we were going to do in the second quarter, which is drilling four mile and a half lateral Caney wells, where we drill down and then go horizontal by a mile and a half. That's relatively new for us.
We were mainly drilling down and growing horizontal for about a mile until the end of last year, where I'll go into that on a different slide of why we started drilling these longer lateral wells. It really helps economics. We are planning on completing these wells as well in the second quarter, so we will have more production coming on. We are also drilling a well on what we call the east side. It is our Ferguson well. The east side does not have any reserves attributed to it, so no proved, no probable, no possible reserves. That is because we have not drilled any Caney wells out there. Our reservoir engineers, the third party Netherland, Sewell , do not give us any credit out there until we actually go do it. We will be drilling that in the second quarter and completing that in the third quarter as the current plan.
We'll also be drilling two additional mile and a half lateral Caney wells, and then we'll be completing those two mile and a half lateral Caney wells and two one mile Veland wells. They're also Caney wells. They're just called Veland. It's probably a little confusing in that same time period as well. Guidance, as I mentioned, production up 29-45% is what we're forecasting. Revenue up 28%-52%. Adjusted EBITDA $58 million-$71 million is what our forecast is. That's in the 32%-61% increase over last year, while keeping our debt low in the $25 million-$30 million range is what we're forecasting. What it takes in order to get these growth numbers is roughly, call it midpoint of about $50 million in capital expenditures.
For our forecast of adjusted EBITDA, midpoint being $65 million, midpoint of capital expense of around $50 million leaves us about $15 million extra. We have started a shareholder return policy, which is in the form of share buybacks right now. We have been buying shares back. Last reported, we bought about 280,000 shares, and we're continuing to buy additional shares. You can see over the years since we have been drilling actively and having really good results with our new ways of drilling and completing these wells, that our adjusted EBITDA has been growing nicely, and we're expecting a nice growth at the end of this year again as well. Production on a quarter-by-quarter basis. You can see the nice uptrend that we've had.
You can see in fourth quarter here, this is as a result of the three mile and a half laterals that we brought on in the fourth quarter. Same on the operating income side of things. The red line is oil price. You can see as oil price peaked and then came back down, even though they're coming down a bit, you know, fourth quarter production was up nicely, and net income was up nicely because of those new wells that we brought on. Overall, talking about the Tishomingo Field for us, all the infrastructure is in place. Because of those old Woodford wells that were drilled, the gathering system is we're less than a mile away from all of our proved locations out here. Oil out here, we're getting priced at about $1.85 less WTI, and that's been quite consistent over the years.
We do not have any big differentials that plague some areas. Netherland, Sewell for the reserve report last year, 104 additional booked locations. Fifty-two of those were proved, another 31 in the probable category, and 21 in the possible. Those this year are mainly mile and a half and two mile laterals because we are focusing on drilling longer laterals now than we had before. Seventeen thousand acres, we have grown that to from the 12,500 that we were at when we sold to Exxon the first time for the Woodford rights. Thirty-six wells are on production. Most of the wells, most of the acreage is held by production either by the wells we have or those old Woodford wells. It is nice that we can develop the field as we choose in what areas. We do not have to drill certain areas in order to hold leases or anything.
We have some additional upside for, as I mentioned, the east side, as well as some other intervals called the T zone on the Upper Sycamore. Drilling efficiencies. We were drilling, as I mentioned, one mile laterals earlier. When we first started drilling wells, you can see we were in the 30-day range here back in 2016 and 2017. We got better in 2018 by changing some things around. We had it down to 20-22 days. Using different technology in 2024, we had those one mile laterals down to 12 days. The first three laterals that we drilled last year that were mile and a half laterals, we drilled in an average of 14 days. That was only two days longer.
We're getting 50% more lateral, meaning you get 50% more exposure to the reservoir, and that's really what counts. Now our Levina wells that we're drilling, those four are budgeted for a cost of $6.5 million. Our really efficient one mile laterals are $5.5 million. For a million dollars more, we're getting 50% more access to the reservoir for the Levina wells and our future wells that are mile and a half. Our efficiencies have gone up. Now, oil price-wise, I thought we'd put this chart out here recently. It's what our internal rates of return are at the various oil prices. These are two different assumptions for different locations that Netherland, Sewell has put together from their reserve report that we pulled them out of there.
One is areas that we have, they think we're going to have a little bit higher gas ratios, a little bit more gas that's produced from the wells. Another one's the blue line is where they think we'll have wells that have a little bit less gas produced, so more oil. You can see the difference in the economics even. The nice part is even at $60 oil where we are now, we're looking at a 50% rate of return in the higher gas oil ratio areas and over 110%, 117% to be accurate, in the low GOR areas. Somewhere in this range, even at $60 oil, we're making really good money on the forecasts that Netherland, Sewell has put together for us. All we did was we changed the pricing. We're not at the different prices.
We're not escalating operating expenses because in low operating, low price environments, you're not going to have escalations either in your operating expense side of things. Everything else is the same assumption-wise, but you can see all the details down here. I think we hang in there with some of the best in the country as far as areas to drill on an economic basis. That's what I wanted to show with the slide. For the east side, additional upside, as I mentioned, it's not in our reserve report for this. All the infrastructure is in place out there as well. We have a section where we are operator, and we have a 46% interest. I call it a large integrated oil company because the large guys don't really like us saying their names as far as who's going alongside with us.
They're paying the majority of the well, but we're operating it. For us, the Caney has very similar characteristics and thicknesses as in the proven part of our field, except for that it's shallower. We're going to find out what the economics are going to look like of the Caney in an area that it's a little bit shallower. Since there's a little bit of extra risk associated with that, we're happy to have a smaller working interest in order to do so. If we can make that work economically at prices that work. What it is, is I expect fully to make a production or a productive well out here. It's a matter of what our economics are going to be here. Is it going to be economic at $50 oil? At $60 oil? At $80 oil?
What is that number that makes that well on that side of things economic? That is what we are going to be looking to prove up. Hopefully it works economically at a low enough oil price. We can get potentially as much as 3,000 additional acres into our reserve report. That is a big upside for us as well. Enterprise value, these were not updated for 2024, so it does not include our 24% bump in our reserves.
It appears we are experiencing technical difficulties. Please hold as we troubleshoot the issue.
Hello everyone. Thank you for waiting. It appears we have Wolf back on. I will hand over the floor to Wolf.
Wow. I don't know what happened there. Sorry. I don't know if I was the only one that dropped.
I'll put it back to the right slide. You were on slide 16.
Okay. Thank you.
No problem.
I don't know where I cut out, but these are, this is a slide from previous. This does not include our reserve report updates from December 2024 yet. We'll be updating this in the future. This was from December 2023 still. It just shows the comparison to us to other operators that we consider our peers and how we're undervalued compared to the average. I'll make the case that we should actually be trading higher than they are for things like, excuse me, operating netbacks, that we're higher than a lot of our peers. We're calculated out from third quarter of 2024, $40 BOE versus some of the other peers here that are much lower. This is updated for our reserve report. Our year-end reserve report from 2024 values us at approved, unapproved basis for our reserves at about $15 a share US, CAD 21.
On the U.S. side of things for approved probable, as much as $19 a share U.S., CAD 27. And we're trading right now about $7 U.S. and CAD 9.90, just to put it in perspective. Our G&A has been coming down nicely, doing well. Our operating expense per barrel of oil equivalent, so what it costs us to get each barrel of oil out of the ground. This was from third quarter financials as well. It was $6.63. We're really down in the efficient side of things on the operation side of things. It really comes down to two things. One, our field does not produce a lot of water, so we don't have a lot of water disposal costs. Two, we don't buy electricity to make the pump jacks go up and down. Excuse me, we don't have pump jacks on our property.
We actually use our own natural gas in order to create what's called a gas lift in order to produce the oil out of the field. You will see the operators that are close to us are mainly gas producers where it comes out of the ground naturally. On the SEC side of things, they calculate the net backs a little differently because they adjust for royalties and gross production versus net production a little differently. Comparing apples to apples on our US operators, same thing, our operating net backs have been higher than our peers, which are also good operators, by the way. Yearly net revenue has been growing nicely every year. Here is our forecast as well going forward. Let me click here, and I just realized my pointer was not on, so it is now.
Myself, over 36 years of oil and gas experience, lots of operations experience. I've done land acquisitions, land work, a lot of management experience in various different companies as well through multiple different companies. Gary Johnson, our CFO, years of accounting experience, over 20 years in the oil and gas field as well, including with Occidental Petroleum. Director of technical accounting. Dan Simpson, over 30 years of experience in petroleum engineering all around the world. He's been a great addition. He came on last year, but he had been consulting with us for a number of years before that as well. Alan Hemmer, our geologist, he's been with us for over 12 years and is doing a great job. On the board of directors side of things, our chairman, Evan Templeton, ex-Jefferies, high yield and leveraged loan markets, lots of credit experience.
He was senior credit analyst at Jefferies for E&P on the oil and gas side of things, oil field services and midstream as well. Lots of good experience on that side of things. Doug Urch is our chair of our audit committee, numerous companies as a CFO. David Neuhauser, large shareholder, runs Livermore Partners out of Chicago. Lots of good experience on that front as well. Leslie O'Connor rounds out our board on the reservoir engineering side of things. She's retired now, but ran a number of firms, offices out of Colorado for MHA and then for Sproule as well, both engineering firms. In summary, KEI on the TSX, KGEI on NASDAQ, where we've been trading since about a year and a half or so now. We've got a great quality asset, good reserves. We're an efficient operator, low operating expenses.
Drilling costs have been coming down really well. You can see that we can make money even at these lower oil prices here. We keep a low debt, so we're in good shape, not looking for money, just using cash flow. You can always ride out the rough times if you put yourself in that kind of situation. Got a great management team. Cash flow is still increasing. We're still looking for growth this year. We've got lots of catalysts coming up with the new wells coming on. Hopefully those go well. Have good production rates here that we can share in a couple of months. Going to continue with a shareholder return policy. Looking forward to keep growing the company.
When there's stress in the environment, sometimes we can see if we can't do something that's creative for the company by picking up some assets where other operators maybe got in over their heads. With that, I'll leave it there.
Thank you all for the presentation and welcome, Gary. We will now begin the Q&A. Your first question for today, viewers asking, what is the timeframe to move the drilling rig from Levina to Ferguson?
That'll only be a few days. It is generally, call it three, four days to move over and rig up and then get going again.
Excellent. Thank you for clarifying that. Your next question is, are there any current or potential bottlenecks in terms of takeaway processing or water handling?
No, not where we are. We're in good shape right now. We'll try to plan for the future as we have a lot of growth, and we'll take that into account. The system that we're in right now on the gas side of things has volume available for us. Our oil is all trucked out of there. No bottlenecks there.
Excellent. Thank you, Wolf. Your next question, viewers asking, how has recent well performance compared to type curve expectations?
I can't talk about the, excuse me, the Alicia Renee yet just because we haven't put anything public, but I'm not disappointed in what's going on. Let's put it that way.
Excellent. Thank you, Wolf. Your next question, viewers asking, what is the depth of the Levina wells?
The Levina wells are at a true vertical depth of about 9,000 ft roughly.
Excellent. Thank you for your answer. Moving on to your next question. What is the status of the Alicia Renee wells? Are they still flowing at maximum output?
Shale wells decline. They are following their forecast to follow a decline curve. It is harder in the first year than in future years. It kind of comes down pretty hard and then starts settling out, much like all shales do. Ours generally have been declining a little less than what an average shale well does. Hopefully we can share with that at some point in time that the Alicia Renee wells are doing the same.
Excellent. Thank you for elaborating on that. Your next question, viewers wondering, why are the Veland wells only being drilled at one mile given that you've had a lot of success with the 1.5 mile laterals?
The Veland wells were actually drilled over a year and a half ago now. We decided not to complete those at the same time until we drilled some more wells in that area. They were not on the schedule. These other wells were not on the schedule to be drilled until later this year. That is why we are going to complete them all at the same time.
Excellent. Thank you for shedding light on that. Your next question is, what is the average well life of your producing wells and do you have any that are nearing depletion?
We don't currently. I mean, that's oil price related as well, obviously, for the long term. Generally, the shale wells here are projected to have close to a 30-year life, so plus or minus.
Excellent. Thank you, Wolf. Your next question is, are there plans to diversify energy sources?
We are looking to keep drilling oil and gas wells and looking to acquire other projects, but mainly in oil and gas. I mean, we'll consider other things, but really we're focused on oil and gas at this point.
Thank you, Wolf. Moving on to your next question. What is the average timeline from spud to first sales on new wells?
If we are just drilling a single well, we have that drilling time down to, call it, less than two weeks. And then generally it would be another couple of weeks. Generally, it would be about 30-40 days. When we're drilling a pad of wells, you have to drill all four of them and then complete those all at the same time. You're looking at a little longer timeframes for a four well pad. We can drill those in two weeks at a time. You're looking at probably closer to 80-90 days if you can set everything up together in a good succinct fashion, which hopefully we can do.
Excellent. Thank you. Your next question is, moving on to some of the financial questions, viewers asking, how has the company adjusted its capital allocation strategy in response to fluctuating commodity prices and inflationary pressures?
Can I take that, Gary?
Yeah, we haven't really modified our plan for the drillings. Like Wolf showed, we can make good money at lower oil prices. We are sticking with our current plan for 2025.
Excellent. Thank you, Gary. Your next question is, what is the average price you are using for 2025 guidance?
Yeah, so we use the $70 oil price, which obviously, so that's why we give a range on our forecast because of price fluctuations in the market. I mean, obviously it would be on the lower end of the range if prices stay in the low 60s like they are now. We use 70 to answer the question.
Of course. Thank you for the clarification.
We put in $70 when oil was in the highs.
Yeah, we put it. We thought we were being conservative. Actually, at the time, we were not.
Excellent. Thank you both. Your next question is, how profitable is your gas and NGL business?
Gas and NGLs, I mean, gas especially just doesn't change things very much for us. Really, our main driver is the oil price and NGLs help as well. Natural gas just up and down, that doesn't do a huge difference for the company right now because it's such a small piece.
Yeah, and our revenues for oil is in the high $80s. I mean, the majority of our money is coming from oil.
As a percentage.
Right.
As a percentage.
Excellent. Thank you both for your answers. Your next question is, is your OPEX per BOE set to stay flat near term or are there any further declines expected?
So it's.
Yeah, sorry, go ahead, Gary. Go for it.
Yeah, so it was about, I think it was about $750,000 for the year of 2024. We are expecting it to be in that range. I mean, it fluctuates obviously a little bit, but we expect it to be around that, maybe a little lower, but probably in that range, I'd say.
Excellent. Thank you, Gary. Your next question is, can you provide insight into your hedging strategy to manage oil price and gas price volatility?
Yeah, so we just hedge oil. We use costless collars to give us kind of a bandwidth of prices. Our costless collars for 2025, I think our low end is $60 and our high is $85. We've actually, and they're varying prices. I think we've hit some of the low end of some of our hedges now. We'll get some money back, but we're about 55% hedged for the first half of the year. Then it drops lower as we add the production on from the new wells.
Excellent. Thank you for your insight on that, Gary. Your next question, a viewer is asking, has there been any material insider buying this year?
Not that I'm aware of. We've been buying shares back from the company. I mean, the company has been buying shares back.
Yeah, I mean, that's public reported. So there hasn't been any insider buying, but like Wolf said, the share buybacks are occurring.
Excellent. Thank you both for your answers. Your next question, a viewer is wondering, why do you think you can continue to outperform the XOP benchmark?
I think we have got growth that's going really well for us. We're probably have growth that's higher than the average company that's in that index.
Excellent. Thank you, Wolf. We're coming up to your last three questions for today. Your next question is, are your materials for drilling sourced locally? Should tariffs have any material impact on the operations?
Steel prices can. We had actually bought our steel for these wells, made a deal for that back in December because we were concerned that tariffs might do that. I think in the long term, it will not be a big issue. That is about the only thing that can cause a difference. It is not a huge piece of a well. It is a decent piece of it. Yeah, might make a small change, but hopefully our other efficiencies that we might be able to do would make up for that as well. I am hoping everything holds in about the same for us.
Excellent. Thank you for your response. Your next question is, are you hearing any news on possible incentives from the government to increase production?
For us, I don't think it's going to make a big difference. I think streamlining regulations and things like that on federal lands and also getting in pipelines where they need to get into and things like that will help out a number of operators and be good for the industry as a whole. Oklahoma has been really good to work with. We don't have huge regulatory delays on those kind of things. For us, I don't see it making an immediate impact on us.
Excellent. Thank you, Wolf. Your last question for today is, what is Kolibri's long-term growth strategy, particularly in the face of current market volatility in the energy sector?
Given that we're making good money on drilling our future wells, our plan is to keep going with what our plan is. I mean, we can make adjustments. We can obviously stop drilling if we want to. Our acreage is mainly held by production. Long-term value will still be there. I've been in this business long term. I've gone through multiple downturns. We don't have a lot of debt. I'm sleeping well at night here, even in this environment where if we didn't have the revenue that we have, then it would be much more concerning. You just have to ride out the lower times. Oil's not going away. We use 100 million barrels a day in the world. The growth has slowed a little bit, but it's still growing.
Prices will come back up again because not everyone can operate as efficiently as we can. I believe it's going to be around. You just need to manage it through when you have periods of uncertainty and you'll do well on the other side. If people got overleveraged or things like that, then through the downturns presents an opportunity to help us grow even more where we can pick up things that are truly accretive for the shareholders.
Great. Thank you both, Wolf and Gary, for all your answers today. Thank you to our viewers who submitted questions. If you did not get a chance to submit your question, feel free to reach out to the appropriate account manager here at Renmark. This concludes our presentation for today. Before we go, I'll turn it back over to you, Wolf, for final remarks.
Thank you. Thank you, everyone, for participating here today. We are always open for answering questions that we can answer. We appreciate everyone's time. We look forward to future presentations and showing the growth and continued success that we have had so far.
Excellent. Thank you again to Wolf and Gary. Once again, this was Kolibri Global Energy Inc, trading on the Toronto Stock Exchange under the ticker symbol KEI and on the NASDAQ under the ticker symbol KGEI. Thank you again to everyone in Chicago and surrounding areas for joining us today. The playback for this virtual non-deal roadshow will be available on our website 24-48 hours after the presentation under the VNDR Library tab. Stay tuned for other presentations in your area. Thank you and see you next time.