OTC Markets, we are very pleased you've joined us for the Oil and Gas Conference. The next presentation is from Kolibri Global Energy. Please note you may submit questions for the presenter in the box to the left of the slides. You can also view a company's availability for one-on-one meetings by clicking Book a Meeting. At this point, I am very pleased to welcome Wolf Regener, President, Chief Executive Officer, and Director. Joining us for Q&A later is Gary Johnson, Chief Financial Officer and President of Kolibri Global Energy, which trades on NASDAQ under the symbol KGEI. Welcome back, Wolf and Gary.
Thank you. Thank you for the introduction, and thanks everyone for joining us here today. I will flip through our forward-looking information, our disclaimers, our non-GAAP measure disclaimers, which you all can find on the website in our corporate presentation. Kolibri Global Energy, we are an oil and gas producer, and we produce from the Tishomingo Shale oil field in Oklahoma. We run our business in what we believe is a very financially stable fashion, have a good solid balance sheet, have had great cash flow growth over the last few years, which we look to continue. We have high net back production, so we make a lot of money per barrel of oil that we pull out of the ground. Fully funded for our 2026 drilling program, as we have been in the past few years as well, utilizing both our cash flow and our existing line of credit.
We do have a $65 million line of credit with Bank of Oklahoma. We've got what we believe is a very high-quality asset. Netherland, Sewell does our reservoir engineering work. They've attributed 40 million barrels of proved reserves and about 57 million barrels of proved probable reserves. You'll see on this slide here, our proved reserves are split up into proved developed producing, which is 29%, and then proved undeveloped, which is 71%. You can see we have a lot of running room to drill additional wells in the future here. A bit on the company itself. We trade on the TSX as KGEI and on the NASDAQ as KGEI. Share price running around $5, been up and down with the price of oil here lately. We have about 35.5 million shares outstanding. No warrants or any other convertibles or any dilution along those lines.
do have some RSUs and stock options, but not a huge amount on that. There's a market cap of around $180 million. At the end of December last year, 2023, our last financials that were out, our net debt was about $46 million, which we'll be paying down as this year goes on, and the H1 of the year, we'll be paying that down a bit. It gives us an enterprise value of, call it $225-230 million. Now, that compares to our reserves. The reserve evaluation that Netherland, Sewell put together at the end of last year was for $440 million, roughly, for those 40 million barrels of proved reserves. You look at the bottom here. I forgot my pointer keeps doing this, so I'll just look. Do this here, so as you can see where I'm pointing.
The oil prices that were used in 2026 was about $58 a barrel, $63 a barrel in 2027, $68 in 2028, obviously a lot lower than where oil prices are trading now. Even if long-term, we're looking at mid-70s for oil prices, which I believe is going to be longer- term from now on. You'll see that the valuation of the proved reserve should be much higher. Looking at that $440 million value, even at the low oil prices, compare that to our $225 million enterprise value, you can see a big disconnect on the valuation. As I mentioned, we're in Oklahoma. We're about halfway between Dallas and Oklahoma City. We originally drilled out here for what's called the Woodford Shale. What we do is we drill down between 8,000-11,000 feet, then we drill horizontally.
We used to drill horizontally for about a mile, now we're drilling longer laterals as well. We participated in about 40 wells out here. We had about 12,500 acres for the Woodford, and it was only about 15% oil. The balance was gas and natural gas liquids. Exxon, if you look down in the right-hand side here, you can see that all the purple around us is Exxon. They had acquired about 280,000 acres on this trend, and we were the last holdout. We didn't want to sell. Eventually, they came up to a number that we said, "Okay," but we wanted to hold onto these intervals that are slightly above the Woodford. It's only about 400 feet above. We had just drilled our first horizontal well into this formation called the Caney. It was by no means economic at that moment in time.
Again, they didn't want to pay us what we felt the Caney could be worth, and which I'm glad that worked out that way because we've grown that acreage position to about 17,000 acres. It's now grown into another 40 million barrels of proved reserves with that $440 million valuation on just the proved side of things. That's also converted us to an oil producer. About 70% of our production last quarter was from oil, the balance was gas and natural gas liquids. We only produce about 13% natural gas that comes out of the ground. That's really converted us from an oil producer to a natural gas producer. I mean, to an oil producer from a natural gas producer.
In November, our production mix was as high as 75% because we brought on some wells at the end of the year last year that were in the oily window, or the more oily window, I should say. In 2026, because we brought those four wells on at the end of 2025, we're coming into 2026 or came into 2026 with a very strong activity on a production rate basis. I mentioned that we're going to be paying down some of our debt in the H1 of the year. We're also buying back shares with some of the cash flow that we're generating. We continue to develop the field. We kind of put a base case together here for a forecast that I'll go into on the next slide, which just consists of drilling three wells.
Which is enough to hold production flat and actually grow it a little bit with a minimal drilling program. On the guidance here, you'll see we have a 10%-20% increase forecast even with just those three wells being drilled. Production between 4,400 and 4,800 barrels of oil equivalent per day. Revenue, call it $75+ million. Adjusted EBITDA in the $55 million-60 million range, and capital expenditures of $25 million roughly, which includes paying off some of the bills from those wells from the end of last year as well. Our debt is forecast to be down in the $25 million-30 million range by the end of the year. That's all based on a $74 oil price assumption.
We don't know where the price of oil is going to end up in long- term, but we wanted to point out that even in a $74 oil price scenario, our adjusted EBITDA should be up 30%-40% this year. Here's a graphic of our adjusted EBITDA. In 2021 it was $6.5 million, really accelerating our drilling. We've been in the mid-$40s or the low $40s for adjusted EBITDA. These boxes here that you see, you can tell that's the blended oil price we were getting. That's oil, gas, and natural gas liquids combined. What we get paid for, and you can see it was down to about $49 last year, and that's why our adjusted EBITDA was actually down even though our production was up.
This year, with that $74 oil price assumption, we're up at $55-60 million in our forecast. We'll continue to buy back some shares in the market as well. You can see it's good cash flow generation that we have from this. Then if oil prices are higher, for every $5 increase in the price of oil, it would increase our adjusted EBITDA by about $2.8 million. That takes into account our hedges that we have in place and things like that. That's a true number. Production, showing the same thing, showing growth on a quarter-by-quarter basis. Just it's going up, up. Net operating income. The red line that you can see here is the price per barrel of oil equivalent that we're getting, and you can see how that's been going down over the last few years.
Obviously with the prices being up, you'll see that higher up here. Also, net operating income has still been climbing even though the price of oil has been coming down over the last couple of years, which has obviously been reversed now. In the field itself, the infrastructure is all in place. We produce oil and some gas, so the gathering system is in place to take care of the gas and natural gas liquids from all those original Woodford wells. Exxon handles our gas and natural gas liquids. Oil has been priced in West Texas Intermediate, less about $1.85, and that's been very consistent over the last four or five years. It's not a big basis and differential here. As mentioned, Netherland, Sewell does our reserve engineering and the year-end reports for us. They've given us credit for 104 additional Caney locations.
Almost half of those, 48, are in the proved category, 24 in the probable, 17 in the possible. Again, those are mainly 1.5-mile and 2-mile laterals. Acreage position, as I mentioned, is about 17,700. We have 45 wells on production currently. One of the important things is 99% of our acreage is held by production. That means that we don't have to drill wells in certain areas in order to hold those leases. We can drill where we want to when we want to. In addition to the Caney, we do have some upside potential here. There's two other intervals that we have in between our rights, or that we have in our rights that are in between the Caney and the Woodford. One of those is called the Sycamore Formation.
Some operators to the north of us have made successful Sycamore wells, so we are refining where we should test our first Sycamore well sometime. We've got good oil and gas shows in a number of wells that are in the Sycamore or that drilled through the Sycamore. So we have high hopes that we could make some excellent Sycamore wells out here. That's not in the reserve report, so there's no credit given for that, and there is obviously a little bit more risk on that, than there is on the proven Caney locations. T Zone is an interval that's right below the Caney. We've produced some wells from that. We've tested some. In one instance, we had some interference when we completed that well at the same time we completed the Caney. It interfered with our Caney production at that time.
We decided to hold off on developing that T Zone right now. What we'll do is when we develop an area in the Caney, these wells decline over time, and then when they're down at the lower level, then we can go in and drill these T Zone wells, and even if we have an impact into the Caney, it's not going to be a large impact to the company's production as a whole. We have additional reservoir here that we can go after, another bench.
That's also not in the reserve report, because if you don't have a solid plan and saying, "Look, we're going to drill these wells at this point in time," Netherland, Sewell & Associates is not going to put it in the reserve report. Eastside acreage, we drilled a well last year where we have a 46% working interest, and Exxon had the balance of that well. So we tested that. It was a lot shallower than the rest of the field. Came in for lower rates than we would've hoped for.
It'll still get a payout on it, but it's a long payout, so we would need higher prices and probably a cheaper completion technique in order to make that well economic or those kind of wells economic. So our higher priority is definitely on the Sycamore and the T Zone, going forward for upside. Over the years, we've gotten better at drilling wells.
You can see here on the right-hand side, in 2016 and 2017, it was taking us about 30 days to drill down and then drill horizontally by a mile. By 2024, we had that down to 12 days of drilling. Much quicker, much more efficient. In 2023, we were going in with a $7.2 million well cost, and those 12-day wells ended up costing about $5.5 million each. The wells we drilled last year, the Lovina 1.5-mile laterals were drilled in an average of 10.5 days, so even quicker than those 1-mile laterals. The Clifton Mac wells that we just announced we're going to start drilling right now, have a budgeted cost of about $7.2 million.
We've now gone to drilling longer laterals so we get access to 50% more reservoir, for the same cost as what we were estimating our 2023 wells were going to cost. That includes quite a bit of cost inflation over the last few years as well. I think we're doing really well on the cost efficiency side. Further efficiencies. Operating expenses, per barrel of oil equivalent, what it takes us to get a barrel of oil out of the ground. You can see we're on the lower end of our peers here, and a number of our peers are actually natural gas producers. Some of the other ones around us only produce about 50% oil. When you have a natural gas well, you can just flow it out of the ground.
When you have an oil well, you often need a lift to get it out of the ground after a few months or a year or two. Those efficiencies lead us also to have really good netbacks. Our netback is how much money we make per barrel of oil that comes out of the ground. By the way, these are all numbers taken from 2025 annual reports from other public companies that we consider our peers, and you can find those down at the bottom here. Breaking down our reserve report on a per-share basis. We're trading at on April 10th, we were about $5 a share, but our proved reserves are worth about $12.40 a share on proved basis, $16 a share U.S. on proved probable basis. G&A has been coming down nicely year after year. Our net income has been growing.
As we've mentioned on the previous slides, the red line, again, is the price of oil equivalent that we get. What's coming out of the ground, and the last bar graph here is for 2026, where our forecast is based on that $74 oil price and the blended cost that we expect to get out of the ground. We're trying to be very conservative, but you can see that we have quite a bit of forecasted growth here for this year. A little bit on the management team. I've got 36, now 37 years of oil and gas experience doing lots of operations experience, land acquisitions, M&A, financing, and generally running oil and gas companies. Gary Johnson, who will also join us in the Q&A, who's with us here today, has over 34 years of accounting and finance experience.
He has a CPA, and he also holds an MBA from Auburn. He also, for a number of years, worked for Occidental Petroleum as the Director of Technical Accounting. Dan Simpson, our Director of Engineering, has over 30 years of experience all around the world in oil and gas engineering work. Alan Hemmy, our Senior Geologist, has over 15 years of geology experience. Our current board of directors, Evan Templeton, is our Chairman, lots of oil and gas experience on the credit side of things. For instance, he was Managing Director of the Leveraged Credit Trading Group of Jefferies. Doug Urch, Chair of our Audit Committee, has been CFO of numerous oil and gas companies in his career. David Neuhauser, who owns a big block of stock through Livermore Partners that he runs, has capital markets experience.
Then Leslie O'Connor is a reservoir engineer as well, is retired now, but ran MHA and Sproule's Denver offices for those oil and gas engineering firms. That really brings us to the summary. We're operating our company in what we feel is a very prudent manner. We're conservative in what we do. We're small, so we're quick. We can change gears like we had originally announced that we were going to drill wells starting in June for a very basic program of at least three wells, even when oil prices were down in the high $50s, low $60s, because that's what we felt we could still make money at, but we weren't going to drill a ton of wells. When oil prices jumped up, we said, "Okay, you know what?
Let's get a rig quicker." We quickly signed a contract for a drilling rig, and that's why we're starting to drill in April now instead of June. That's the advantage that we have, being the size that we are. We believe we're an efficient operator, which you can see from our low operating expenses and high netback. We try to keep our debt down low, less than 1x debt to adjusted EBITDA. We're at 1.09 right now, but when the pay-down, we'll be down below one. We've got a good team that's been doing a good job. We've been constantly improving year- after- year, getting more efficient in what we do. Looking for production gains this year. If prices stay up and the board of directors agrees that we should drill some more wells, we'll probably drill some more wells.
We're getting some other areas permitted and locations ready so we could quickly move the drilling rig in to drill additional wells. Continuing to do some shareholder returns, buying stock back. This cash flow that we have forecasted gives us a lot of opportunities in order to either return more capital to shareholders, drill more wells, or whatever else we want to do. With that, I will leave it so that we can open it up for any Q&A. I'll hand it over to us.
All right. I'm going to go through the questions, Will.
First one, Kolibri is guiding to less than 1x debt to EBITDA while still growing double digits. How long can you keep that combination of growth and low leverage going?
We feel we can for a long time. It's really our choice. As you can see from this year, just with three wells, and we have a capital program of $25 million, which still gives us 10%-20% growth for the year in production, and generates a lot of free cash flow. We've got a lot of locations, so that's only three wells out of 104 possible per the Netherland Sewell oil report. That gives us a lot of time. Now, in a good oil price environment, for sure we'll be drilling more than three wells a year. It does go to show you that we can do this for a long time.
All right. Next question. Now that you've publicly laid out the 2026 forecast, what early indicators are you seeing in the field that give you confidence you could at least hit the midpoint of that guidance range?
Every time we drill a well, it's an average. Some wells are better and some wells are average, and some wells are a little bit less than average. Drilling our average wells should allow us to hit that midpoint number. We're drilling basically close locations that are very close in to our existing production. We like the geology, we like what we see there. Hopefully it all will work out well. It is a forecast, though, and there are things that happen in the oil and gas business, but we're quite comfortable that we'll hit at least our midpoint number.
All right. Next one. Your operating cost per BOE are already low versus your peers. As volumes rise in 2026, how much more can you realistically drive down cost per barrel?
We do have some opportunities to drive some cost per barrel, but we're just forecasting that we keep them in about the same range. We do have service costs coming up on wells that are getting a little older on us, some of the early wells we drilled that add to that OPEX expense, so that offsets some of the costs that we'd have. I would suggest that if you're looking at modeling us, using roughly the prices where we are, or our cost, I should say, that we have right now.
All right. Next one. With analysts' estimate revisions moving up, what are the one or two operational milestones in 2026 that you think could trigger another leg higher in earnings expectations?
I think just having good execution on these next three wells, and then hopefully the oil prices cooperate and we're able to drill some additional wells this year. That would increase all of the above numbers from production to our income, our adjusted EBITDA, net income, et cetera.
All right. Next one. Kolibri already repurchased about 650,000 shares. At current valuation, do you see continued buybacks as one of the best uses of incremental free cash flow?
We do consider that one of the things that we should be doing, and that'll depend on where the stock price is as well. We do believe we're undervalued. As we're undervalued, we would lean toward definitely buying back additional shares. That's always a discussion that we'll have at the board level, whether we should spend more money on buying back shares or spend more money on drilling wells and increasing that production.
All right. Next question. The company just released their inaugural sustainability report. Are there any ESG improvements that you think could broaden your potential shareholder base or reduce your cost of capital?
I don't see how our cost of capital would come down any further. We comply with all rules and laws, et cetera, on that. We try to be ahead of the curve a bit. We continue to do some improvements, as it says in that report. I don't know that there's anything else that'll influence anything along the cost of capital line.
All right. Recent articles have highlighted Kolibri's 40% production growth in 2025, and another 10%-20% plan for 2026. What do you see as a key driver to keep that growth going into 2027?
Just drilling wells. That's really what it comes down to. We're an oil and gas company, so by drilling wells, we can increase production by drilling additional wells, or just drilling a handful of wells, we can hold production flat and just generate the cash flow that we're forecasting to generate this year, for instance. We have a lot of options, which is nice. It doesn't take a lot of wells in order to hold things flat because shale wells do decline. That's the good situation that we're in that we feel very comfortable with, and it's really nice to have options where we can adjust as we see fit.
All right, next question. With three shareholders already above 10%, how do you think about attracting additional long-only institutions to help improve trading liquidity and valuation?
Executing. Just running our business in the right fashion. That's what we have to do. We have to focus on doing the best we can in the field, maximizing what we get out of the property. I believe that if you do that, and you try to get the word out as much as possible, then everything will head in that direction. You're creating value. No matter who owns your stock, as long as you're doing the right thing, creating cash flow, creating value for the shareholders, which is what we've always tried to do. That's what we have to do.
All right. One person's asking, why did the East Side well not work?
The East Side well worked in that we found oil and gas. We're producing from that well. It's just the rates of production were less than we had hoped for. It's a matter of most likely the less pressure that's in that rock because of being shallower. We have to either cut our costs or oil and gas prices have to be high in order to make that East Side work, or we can target potentially a little different interval out there to see if that's a little bit more productive, that it's different there than it is in the heart of the field for some reason.
All right. Next. The Tishomingo field has a long history and large inventory of locations. Roughly how many years of drilling do you see ahead at the pace implied in the new plan?
Well, just on the proved side of things, it was 48 locations. If we're only drilling three a year, that's a lot of years of drilling wells. Like I mentioned, that we would probably drill in a normal oil price environment more than three wells a year. If we're drilling even six-nine wells a year, we've got a lot of inventory in order to keep drilling wells. That doesn't include the other intervals that we're hopeful will also be productive, meaning like the Sycamore, and we already actually have wells into the T zone. The T zone should work in large parts of the field as well, even though those are not in the reserve report yet.
All right. Next question. Your shareholder letter notes a much higher borrowing base alongside ongoing debt paydown. At what point do you think the markets start to recognize Kolibri as a low risk, high margin PDP story?
Hopefully soon. We don't have a lot of research coverage. We do, Sidoti covers us, but we don't have any other investment banks, and we haven't needed money for a number of years, so investment banks are more reluctant to provide coverage for us. We're doing our best to get the word out about the company and results speak for themselves as we're building this track record of constantly improving production going up, generating this free cash flow. I feel like this last year, we just hit that plateau that gives us a lot of options, or that milestone, I should say, not plateau. For production, that gives us a lot of options in order to generate a lot of cash flow where we have options to either pay it back to shareholders, drill more wells. We also look for creative acquisitions in general.
It's hard when you believe your stock is undervalued in order to find something creative.
All right. Kind of running out of time here. This is kind of similar. Kolibri combined faster drilling with lower costs and higher liquids weighting. What does that do to your full cycle returns compared to where the company was three years ago?
It just improves them, really. We make more money on a barrel of oil, so on the higher oil wells, our net backs are higher. Any financial questions, Gary? Everything's been non-financial today for you.
No, there aren't any. Only a couple, only a few left, but one's about ESG focused, attracting more ESG focused funds over time with our sustainability report. A couple more about, I think similar to ones you already talked about is 2026 the foundation year and what does it look like going forward? Which I think you kind of answered that. Most of these are similar. Actually, we're almost out of time here, so.
Okay. Well, thank you everyone for joining here today. We appreciate it. We're always happy to answer questions if we didn't get anything answered, feel free to reach out.