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Kolibri Global Energy Announces Second Quarter 2021 Results

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TSX ticker symbol; KEI
OTCQB ticker symbol; KGEIF

NEWBURY PARK, Calif., Aug. 5, 2021 /CNW/ -

All amounts are in U.S. Dollars unless otherwise indicated:

SECOND QUARTER HIGHLIGHTS

  • Adjusted funds flow was $1.5 million in the second quarter of 2021 compared to $1.6 million in the second quarter of 2020. The decrease was mainly due to lower production and realized losses on the commodity contracts in 2021 partially offset by the average price increase

  • Revenue, net of royalties was $3.5 million in the second quarter of 2021 compared to $1.5 million for second quarter of 2020, an increase of 131%, as prices increased by 166% partially offset by a 15% production decrease

  • Average netback from operations for the second quarter of 2021 was $30.30/boe, an increase of 260% from the prior year second quarter due to higher prices in 2021. Netback including commodity contracts for the second quarter of 2021 was $23.49/boe which was 11% higher than the prior year second quarter

  • Average production for the second quarter of 2021 was 994 BOEPD, a decrease of 15% compared to the second quarter of 2020 average production of 1,163 BOEPD due to the normal production decline of existing wells

  • Interest expense decreased by 29% in the second quarter of 2021 compared to the same period in the prior year due to principal payments on the credit facility during the second half of 2020 and 2021 which reduced the outstanding loan balance and lower interest rates

  • The Company received a notice in June 2021 from the Small Business Administration (SBA) that the entire balance of the original Paycheck Protection Program (PPP) loan of $0.3 million had been forgiven and the Company recorded this amount into income

  • General & administrative (G&A) expense increased by 4% in the second quarter of 2021 compared to the prior year quarter due to higher advisor fees partially offset by management's cost cutting efforts

  • Net loss in the second quarter of 2021 was $1.4 million, compared to a net loss of $2.2 million in the second quarter of 2020. The Company recorded an unrealized loss from commodity contracts of $2.1 million in the second quarter of 2021, compared to an unrealized loss of $2.3 million recorded in the second quarter of 2020. Without the unrealized hedging losses for the second quarter of 2021, the Company would have recognized positive net income

  • The Company had an outstanding balance of $18.3 million on its credit facility at June 30, 2021 and, subsequent to the end of the quarter, paid down an additional $0.5 million. As part of the May 2021 redetermination, the Company will make additional principal payments to reduce the outstanding balance to $17.1 million by November 2021

Kolibri's President and Chief Executive Officer, Wolf Regener commented:

"We are pleased that the Company was able to generate positive adjusted funds flow of $1.5 million during the second quarter of 2021 without any new capital expenditures due to the low decline rates of our existing wells. The Company has already made principal repayments of $2.8 million so far in 2021, including payments made after the end of the quarter, which has reduced our interest expense by almost 40%. The $18.3 million outstanding balance on the credit facility is down from a peak debt of $30.0 million in 2019. Going forward this year, the Company expects its low decline rates to allow the Company to continue to generate positive cash flow from its operations. Without the unrealized losses from commodity hedges in 2021, the Company would have recognized positive net income.

The Company's $0.3 million PPP loan was forgiven by the SBA in the second quarter of 2021, so this amount was recognized into income.

Adjusted funds flow was $1.5 million in the second quarter 2021 compared to $1.6 million in the second quarter of 2020. The decrease was mainly due to lower production and realized losses on the commodity contracts in 2021 partially offset by the average price increase.

Net revenue increased by 131% in the second quarter of 2021 as average prices increased by 166% which was partially offset by production decreases of 15% compared to the prior year quarter.

Netback from operations for the second quarter of 2021 increased to $30.30/boe compared to $8.41/boe, an increase of 260% from the prior year second quarter due to higher prices in 2021. Netback including commodity contracts for the second quarter of 2021 was $23.49/boe which was 11% higher than the prior year second quarter amount of $21.15/boe.

Interest expense decreased by 29% in the second quarter of 2021 compared to the comparable prior year period due to principal payments on the credit facility during the second half of 2020 and 2021 which reduced the outstanding loan balance and lower interest rates.

The Company's G&A expenses increased by 4% due to higher advisor fees in the second quarter of 2021 which offset cost cutting measures.

Operating expenses averaged $8.81 per BOE for the second quarter of 2021 compared to $6.07 per BOE for the same period in 2020. The increase was mainly due to higher production taxes in the second quarter of 2021 which were $2.67 per BOE compared to $0.81 per BOE in the prior year second quarter. Operating expense per boe excluding production taxes for the second quarter of 2021 increased by 16% compared to the prior year quarter due to one-time field maintenance costs incurred in 2021.

Average production was 994 BOEPD in the second quarter of 2021 compared to 1,163 BOEPD in the second quarter of 2020, a decrease of 15%. The decrease was due to the normal production decline of the Company's existing wells.

The Company incurred a net loss in the second quarter of 2021 of $1.4 million, compared to a net loss of $2.2 million in the second quarter of 2020. The Company recorded an unrealized loss from commodity contracts of $2.1 million in the second quarter of 2021, compared to an unrealized loss of $2.3 million recorded in the second quarter of 2020."



Second Quarter


First Six Months




2021

2020

%

2021

2020

%









Net Loss:







$ Thousands

$(1,418)

$(2,224)

36%

$(1,946)

$(68,716)

97%

$ per common share

$(0.01)

$(0.01)

-

$(0.01)

$(0.30)

97%

assuming dilution















Capital Expenditures (adjustments)

$90

$(110)

-

$61

$(111)

-









Average Production (Boepd)

994

1,163

(15%)

1,007

1,194

(16%)

Average Price per Barrel

$49.97

$18.72

166%

$47.70

$27.15

76%

Average Netback from operations per Barrel

$30.30

$8.41

260%

$29.30

$14.75

99%

Average Netback including commodity contracts per Barrel

$23.49

$21.15

11%

$24.14

$22.67

6%











June

2021


March

2021


December
2020










Cash and Cash Equivalents

$697


$735


$920


Working Capital

$(21,377)


$(4,371)


$(3,456)


Second Quarter 2021 versus Second Quarter 2020

Oil and gas gross revenues totaled $4,520,000 in the quarter versus $1,981,000 in the second quarter of 2020. Oil revenues increased $2,205,000 or 129% as average oil prices increased by $40.42 per barrel or 173% partially offset by oil production decreases of 16% to 674 boepd. Natural gas revenues increased $78,000 or 51% to $231,000 as average natural gas prices increased by $1.23/mcf or 75% to $2.86/mcf which were partially offset by a natural gas production decrease of 14% to 889 mcfpd. Natural gas liquids (NGLs) revenues increased $256,000 or 215% as average NGL prices increased 242% to $23.96/boe which was partially offset by a NGL production decrease of 8% to 172 boepd.

Average production for the second quarter of 2021 was 994 BOEPD, a decrease of 15% compared to the second quarter of 2020 average production of 1,163 BOEPD due to the normal production decline of existing wells.

Production and operating expenses increased to $797,000 in the second quarter of 2021, an increase of 22%. Operating expenses averaged $8.81 per BOE for the second quarter of 2021 compared to $6.07 per BOE for the same period in 2020. The increase was mainly due to higher production taxes in the second quarter of 2021 which were $2.67 per BOE compared to $0.81 per BOE in the prior year second quarter. Operating expense per boe excluding production taxes for the second quarter of 2021 increased by 16% compared to the prior year quarter mainly due to one-time field maintenance costs incurred in 2021.

Depletion and depreciation expense decreased $252,000 or 22% due to a decrease in production in the second quarter of 2021.

G&A expense increased $26,000 or 4% due to higher advisor fees which were partially offset by management's continued efforts to reduce G&A costs throughout the Company.

Finance income decreased $1.3 million in the second quarter of 2021 compared to the prior year quarter due to realized gains on commodity contracts in the second quarter of the prior year.

Finance expense increased $0.3 million in the second quarter of 2021 compared to the prior year quarter primarily due to realized losses on commodity contracts in 2021 partially offset by lower interest expense.

FIRST SIX MONTHS 2021 HIGHLIGHTS

  • Adjusted funds flow was $3.0 million in the first six months of 2021 compared to $3.6 million in the first six months of 2020. The decrease was primarily due to realized losses from commodity contracts in 2021 and a 16% decrease in production in the six months ended June 30, 2021 compared to 2020 partially offset by a 76% increase in average prices in the six months ended June 30, 2021

  • Revenue, net of royalties was $6.8 million in the first six months of 2021 compared to $4.6 million for first six months of 2020, an increase of 48%, as prices increased by 76% partially offset by production decreases of 16%

  • Average netback from operations for the first six months of 2021 was $29.30/boe, an increase of 99% from the prior year period due to higher prices in 2021. Netback including commodity contracts for the first six months of 2021 was $24.14/boe which was 6% higher than the prior year period

  • Average production for the first six months of 2021 was 1,007 BOEPD, a decrease of 16% compared to the first six months of 2020 average production of 1,194 BOEPD due to the normal production decline of existing wells

  • Interest expense decreased by 39% in the first six months of 2021 compared to the same period in the prior year due to principal payments on the credit facility during the second half of 2020 and 2021 which reduced the outstanding loan balance and lower interest rates

  • The Company received a notice in June 2021 from the Small Business Administration (SBA) that the entire balance of the original Paycheck Protection Program (PPP) loan of $0.3 million had been forgiven and the Company recorded this amount into income

  • G&A expense increased by 4% in the first six months of 2021 compared to the prior year due to higher advisor fees partially offset by management's cost cutting efforts

  • Net loss for the first six months of 2021 was $1.9 million compared to $68.7 million for the first six months of 2020. The first six months of 2021 included unrealized losses on commodity contracts of $2.9 million and the first six months of 2020 included a PP&E impairment of $71.9 million

First Six Months of 2021 versus First Six Months of 2020

Oil and gas gross revenues totaled $8,696,000 in the first six months of 2021 versus $5,899,000 in the first six months of 2020. Oil revenues increased $2,274,000 or 44% as average oil prices increased by $25.43 per barrel or 74% partially offset by oil production decreases of 17% to 686 boepd. Natural gas revenues increased $180,000 or 53% to $231,000 as average natural gas prices increased by $1.44/mcf or 80% to $3.23/mcf which were partially offset by a natural gas production decrease of 15% to 893 mcfpd. Natural gas liquids (NGLs) revenues increased $343,000 or 84% as average NGL prices increased 111% to $24.06/boe which was partially offset by a NGL production decrease of 12% to 172 boepd.

Average production for the first six months of 2021 was 1,007 boepd, a decrease of 16% from the average production of 1,194 boepd in the same period of 2020. The decrease was due to the normal production decline of the Company's existing wells.

Production and operating expenses increased to $1,467,000 in the second quarter of 2021, an increase of 5%. Operating expenses averaged $8.05 per BOE for the first six months of 2021 compared to $6.44 per BOE for the same period in 2020. The increase was due to higher production taxes in the first six months of 2021 which were $2.46 per BOE compared to $1.23 per BOE in the prior year second quarter. Operating expense per boe excluding production taxes for the first six months of 2021 increased by 7% compared to the prior year period mainly due to one-time field maintenance costs incurred in 2021.

Depletion and depreciation expense decreased $703,000 or 28% due to a decrease in production in the first six months of 2021.

General and administrative expenses increased $52,000 or 4% due to higher advisor fees partially offset by management's continued efforts to reduce G&A costs throughout the Company.

Finance income decreased $4.7 million in the first six months of 2021 compared to the prior year period due to $3.0 million of unrealized gains on commodity contracts and $1.7 million of realized gains in the first six months of the prior year.

Finance expense increased $3.6 million in the first six months of 2021 compared to the prior year period due to a $2.9 million unrealized loss and a $0.9 million realized losses on commodity contracts in the first six months of 2021 partially offset by lower interest expense.

KOLIBRI GLOBAL ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited, Expressed in Thousands of United States Dollars)

($000 except as noted)


June 30


December 31


2021


2020





Current Assets




Cash

$697


$920

Trade and other receivables

1,588


1,607

Other current assets

333


575


2,618


$3,102





Non-current assets




Property, plant and equipment

77,366


79,082





Total Assets

$79,984


$82,184





Current Liabilities




Trade and other payables

$3,496


$4,371

Current portion of loans and borrowings

18,171


2,084

Lease payable

70


66

Fair value of commodity contracts

2,258


37


23,995


6,558





Non-current liabilities




Loans and borrowings

280


18,665

Asset retirement obligations

1,278


1,269

Fair value of commodity contracts

721


-

Lease payable

8


44


2,287


19,978





Equity




Share capital

289,622


289,622

Contributed surplus

22,948


22,948

Deficit

(258,868)


(256,922)

Total Equity

53,702


55,648





Total Equity and Liabilities

$79,984


$82,184

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)




Second Quarter


First Six Months



2021


2020


2021


2020










Oil and natural gas revenue, net

$

3,539


1,532


6,808


4,603

Other income


-


-


1


1



3,539


1,532


6,809


4,604










Production and operating expenses


797


642


1,467


1,400

Depletion and depreciation expense


896


1,148


1,805


2,508

General and administrative expenses


662


636


1,425


1,373

Stock based compensation


-


5


-


21

Impairment of PP&E


-


-


-


71,923

Other income


(303)




(303)





2,052


2,431


4,394


77,225










Finance income


1


1,349


-


4,686

Finance expense


(2,906)


(2,674)


(4,361)


(781)










Net loss


(1,418)


(2,224)


(1,946)


(68,716)

Net loss per share

$

(0.01)


(0.01)


(0.01)


(0.30)


KOLIBRI GLOBAL ENERGY

SECOND QUARTER 2021

(Unaudited, expressed in Thousands of United States dollars, except as noted)












Second Quarter


First Six Months




2021

2020


2021

2020

Oil revenue before royalties


$

3,914

1,709


7,424

5,150

Gas revenue before royalties



231

153


522

342

NGL revenue before royalties



375

119


750

407

Oil and Gas revenue



4,520

1,981


8,696

5,899









Adjusted funds flow



1,465

1,601


2,974

3,553

Additions to property, plant & equipment



61

(110)


90

(111)









Statistics:











2nd Quarter


First Six Months




2021

2020


2021

2020

Average oil production (Bopd)



674

804


686

823

Average natural gas production (mcf/d)



889

1,033


893

1,050

Average NGL production (Boepd)



172

187


172

196

Average production (Boepd)



994

1,163


1,007

1,194

Average oil price ($/bbl)



$63.77

$23.35


$59.80

$34.37

Average natural gas price ($/mcf)



$2.86

$1.63


$3.23

$1.79

Average NGL price ($/bbl)



$23.96

$7.00


$24.06

$11.41









Average price (Boe)



$49.97

$18.72


$47.70

$27.15

Less: Royalties (Boe)



10.86

4.24


10.35

5.96

Less: Operating expenses (Boe)



8.81

6.07


8.05

6.44









Netback from operations (Boe)



$30.30

$8.41


$29.30

$14.75

Price adjustment from commodity contracts (Boe)



(6.81)

12.74


(5.16)

7.92

Netback including commodity contracts (Boe)



$23.49

$21.15


$24.14

$22.67

The information outlined above is extracted from and should be read in conjunction with the Company's unaudited financial statements for the three and six months ended June 30, 2021 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, net operating income and adjusted funds flow (collectively, the "Company's Non-GAAP Measures") are not measures recognized under Canadian generally accepted accounting principles ("GAAP") and do not have any standardized meanings prescribed by GAAP.

The Company's Non-GAAP Measures are described and reconciled to the GAAP measures in the management's discussion and analysis which are available under the Company's profile at www.sedar.com.

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 cash flow and adjusted funds flow, the Company's reserves based loan facility, including scheduled repayments, 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, 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, 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".

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