On Thursday, Kolibri Global Energy (TSX:KEI) discussed second-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Kolibri Global Energy Inc. reported its highest quarterly revenue, production, and adjusted EBITDA in company history for Q2 2026, with revenues reaching $22.5 million, a 109% increase from the previous year.
The company achieved a 46% increase in average production to 4,690 boe per day, contributing to a significant rise in net income to $8.5 million and basic EPS of $0.24, nearly a 200% increase from the prior year.
Strategically, the company is focusing on the False Caney formation, starting with the Lavina 8-5-1HF well, which has shown promising oil saturation data, potentially opening new reserves.
The company's borrowing base increased by 15% to $75 million, providing greater financial flexibility.
Management expressed optimism about future production growth, particularly from four new wells expected to contribute in the fourth quarter, and remains cautious yet hopeful about the outcomes of the False Caney test.
Full Transcript
OPERATOR (Operator)
Good day and welcome to Kolibri Global Energy's second quarter 2026 financials conference call. All participants will be in a listen-only mode. 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 the participant's permission. If anyone has any trouble and needs assistance, please signal a conference specialist by pressing the star key followed by zero.
After today's presentation there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone, and to withdraw your question, please press star then two. Please note this event is being recorded. I advise participants that this conference call is being recorded today, August 13, 2026. This call will be available on the company's website at www.kolibrienergy.com. Here is a disclaimer. This call may include forward-looking statements and forward-looking information regarding Kolibri's strategic plans, anticipated production, capital expenditures, exit rates, 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 future-oriented financial information and financial outlook information which Kolibri discloses in order to provide readers with a more complete perspective on Kolibri'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, the applicable risks and uncertainties, and Kolibri's policy for updating such statements, we direct you to Kolibri's most recent Annual Information Form and Management Discussion and Analysis for the period under discussion as well as Kolibri's most recent corporate presentation, all of which are available on Kolibri's website. Listeners should not place undue reliance on forward-looking information. Kolibri 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 Mr. Wolf Regener, the President and CEO of Kolibri Global Energy Inc. Please go ahead, sir.
Wolf Regener, President and CEO
Thank you, and thank you everyone for joining us today. With me on today's call is also Gary Johnson, our Chief Financial Officer. As hopefully everyone has seen, we released our second quarter 2026 results this morning, and if you looked at them, I hope you share our excitement about the results. To say we are very pleased is an understatement. Our second quarter resulted in the company having its highest quarterly revenue, production, and adjusted EBITDA in the history of the company, and this is in spite of having three of our wells shut in for one-third of the quarter.
We also finished drilling the three Clifton Mac wells, and I'm looking forward to beginning the completion operations on those shortly. I'm also very excited that we're starting to drill the Lavina 8-5-1HF well, which is our first test of the False Caney formation. I'm looking forward to testing this bench in our field. I'm excited about this because of all the data we have. We have a whole core that shows that the False Caney is highly oil-saturated, and it has excellent characteristics on logs from numerous wells in the field.
I'm looking forward to exciting times ahead for our company. With that, I'll now turn over the call to Gary to discuss our financial results. Go ahead, Gary.
Gary Johnson, Chief Financial Officer
Thanks, Wolf, and thanks everyone for joining the call. I'm just going to go over a few highlights of the second quarter and the year-to-date results, then we’ll take questions at the end of the call. Our amounts are in U.S. dollars unless otherwise stated. I'll start by going over the second quarter. As you may have seen in our press release, our second quarter revenue was $22.5 million, which was our highest quarterly revenue in the company's history.
Revenue increased by 109% from the prior-year second quarter due to a 46% production increase and a 41% increase in average prices. Average production was up 46% to 4,690 boe per day compared to 3,220 boe per day in the prior-year quarter. That increase was due to production from the wells that were drilled and completed during 2H25. Net income was $8.5 million and basic EPS was $0.24 per share compared to $2.9 million and basic EPS of $0.08 per share in the prior-year second quarter, which was an increase of almost 200%.
The increase was due to higher revenue and an unrealized gain on commodity contracts, partially offset by higher operating expense and depletion expense due to the higher production. Adjusted EBITDA was $16.4 million compared to $7.7 million in the prior quarter, which was an increase of 114% due to higher revenues partially offset by higher OPEX and a realized loss on commodity contracts. Our netback from operations increased to $43.92 per boe compared to $29.66 per boe in the prior quarter, which was an increase of 48%.
This was due to higher average prices for the quarter, which were partially offset by higher operating expenses. Production and operating expense averaged $8.90 per boe for the quarter compared to $7.15 per boe in the prior quarter, which was an increase of 24%. This increase was due to workover costs for a non-operated well, which added $0.59 per boe, and also temporary higher water hauling costs compared to 2025. So moving on to the year-to-date June results, net revenue increased by 55% to $42.1 million compared to $27.2 million due to a 29% increase in production and a 19% increase in average prices.
Average production for year-to-date June was up 29% to 4,688 boe per day compared to 3,646 in the prior-year period, and this increase was again due to production from the wells that were drilled during 1H25. Net income was $12.5 million and basic EPS was $0.35 per share compared to $8.6 million and basic EPS of $0.24 per share in the prior-year period. The increase was due to higher revenue partially offset by higher operating expense and depletion expense due to the higher production, higher interest expense, and a realized loss on our commodity contracts.
In 2026, adjusted EBITDA was $31.3 million compared to $20.5 million in the prior-year period, an increase of 52% due to higher revenue partially offset by higher operating expenses and a realized loss on commodity contracts. Netback from operations increased by 21% to $41.18 per boe compared to $34.05 per boe in the prior-year period. This was due to higher average prices partially offset by higher operating expenses. I also wanted to add that our credit facility was redetermined in the second quarter and our borrowing base was increased by 15% from $65 million to $75 million.
A continued increase in our borrowing base gives us more flexibility in managing our working capital going forward, and it also demonstrates the growing value of our property. As you can see, last year's drilling program led to significant increases in revenue and cash flow across both the second quarter and the first half of the year. We anticipate the four new wells in our 2026 drilling program will add on to this growth primarily in the fourth quarter, when the wells are expected to be contributing a full quarter of production.
And with that I'll hand it back to Wolf.
Wolf Regener, President and CEO
Thanks, Gary. As Gary laid out, we had a great quarter with us hitting our highest ever quarterly revenue, production, and adjusted EBITDA, and we're looking forward to more growth with the four new wells coming online. In addition, as I said in the beginning of the call, also really looking to this False Caney test. Having a successful False Caney well can open up the door to many more locations, reserves, and thus value creation for all shareholders.
And that is what I believe we are all here to do. This concludes the formal part of our presentation and we'll be happy to answer any questions you may have.
OPERATOR (Operator)
We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. And we'll pause momentarily to assemble our roster. And the first question will come from Steve Ferrazzani with Sidoti.
Please go ahead.
Steve Ferrazzani, Analyst at Sidoti
Morning, Wolf. Morning, Gary. Obviously, great quarter, Wolf. The surprise to us was the strength in the 2Q production and the fact that really, even if we factor in the volume adjustment by the gas purchaser, it's largely offset by the shut-in of the Alicia Renee wells. If we exclude that, there's virtually no sequential decline in production, even though you added new volume in the first half. And I'm just trying to figure out how that happens.
Wolf Regener, President and CEO
Well, they did well. But yeah, no, the wells are performing well and, you know, when we bring these wells on, they flow for a while, then we put them on lift, and so we got a little boost again when we put them on lift. You know, had a little decline and then came back up again on that. And now they'll start their normal decline after that as well. So, you know, we're not going to stay flatlined, unfortunately, until we bring the new wells on, which will go back up again.
So yeah, when I think of what's going on—
Steve Ferrazzani, Analyst at Sidoti
When I think about that, were you—those, the 4Q wells, was it the Barnes and the Valen—were you still optimizing those wells within Q1? Is that part of the factor here?
Wolf Regener, President and CEO
Yeah, well, it's more along the lines of what I mentioned as far as bringing the gas compression in to the gas lift. That helps it out again. Right. So you have some decline happening and then you can reverse some of that when you bring that on.
Steve Ferrazzani, Analyst at Sidoti
Got it. Gary, the gas purchaser volume adjustment—what quarter was that from? I'm just trying to figure out how it factored into your gas and NGL realized price.
Gary Johnson, Chief Financial Officer
It's related to several periods in the past, going back to 2024 actually. But it's just certain wells. But yeah, it goes back quite a few months. Quite a few years actually.
Steve Ferrazzani, Analyst at Sidoti
Got it, got it. You provided the updated guidance late June. Were there any new factors that weren't included in that guide, Wolf? So we know we had the volume adjustment. I'm assuming late June you knew that; you knew the shut-in of the Alicia Renee wells. I'm sure you had a reasonable sense of the timing of the three wells you're completing now. Any factors we should be thinking about that were not in that guide?
Wolf Regener, President and CEO
No, it'll just depend on how these wells do that are coming on—you know, the four wells. That's really the biggest factor on… But that's really what puts you from— Yeah, because it's a lot of production coming on at once. Right. And I mean, our production's been growing nicely. Right. We're close to 5,000.
Steve Ferrazzani, Analyst at Sidoti
Absolutely.
Wolf Regener, President and CEO
And—but still, bringing on four wells at a time that have high IPs really moves the needle a lot one way or another for a forecast. So that's our biggest variable.
Steve Ferrazzani, Analyst at Sidoti
I'll say that's what would put you to the higher end, because right now you'd be—I mean, to hit the low end of guidance, second half would be flat to first half. So it's reasonable to start thinking probably the low end is less low risk.
Wolf Regener, President and CEO
I don't want to overpromise anything. So I'm—
Steve Ferrazzani, Analyst at Sidoti
Yeah, I understand.
Wolf Regener, President and CEO
Our guidance is what we have.
Steve Ferrazzani, Analyst at Sidoti
I'm trying to get you to—anyway,
Wolf Regener, President and CEO
Sorry, I'm not going to fall for that, no offense.
Steve Ferrazzani, Analyst at Sidoti
But bigger picture, 3Q is—based on the guide—3Q is going to be your low production quarter. 4Q is expected to be the high production quarter for the year.
Wolf Regener, President and CEO
Correct. You're absolutely right.
Steve Ferrazzani, Analyst at Sidoti
Okay. And then the Lavina well in general—so it's a two-mile well. You haven't done a two-mile lateral before. How much of that is because it's in the False Caney, or how much of it is the geographical location in the field? What's allowing you to try the two-mile lateral for the first time?
Wolf Regener, President and CEO
You know, even on these mile-and-a-half laterals, some of them are a little bit longer because we're sometimes coming into a section back a bit. So some of these mile and a half were actually a little bit longer. But really, I mean it's a quiet area. We've had no—you know, we've been able to steer still at the end of our laterals, and that was the hardest part for us in the beginning when we just had one-mile laterals, because we do have quite a bit of dip here.
We've made this so that we don't have quite as much dip here. It's in a quiet area of the field where we don't see a whole lot of faulting. We have good control around it, so we feel comfortable that we can push it to the two-mile out here on this well.
Steve Ferrazzani, Analyst at Sidoti
Got it. It's an exciting time. What would make you—what are the factors in deciding whether you'll complete it or not—or we don't know?
Wolf Regener, President and CEO
Oh, I would imagine—unless we have a horrible drilling issue—that we'll be completing. Now, which would then—and that's the plan. I can't imagine any scenario, I can't imagine any scenario where we wouldn't.
Steve Ferrazzani, Analyst at Sidoti
And would you be—timing-wise—would you be using the same spread?
Wolf Regener, President and CEO
It's probably—I don't know if it's going to be the same or not. It would just be a matter of timing, who's available. Yep. For the right price too, right. So it is timing as well. So as soon as we're done drilling we'd like to get the completion crew in as quickly as possible, much like we're doing on the Clifton Mac wells here.
Steve Ferrazzani, Analyst at Sidoti
Got it. Last one for me—just on the update on your production and operating costs, the water hauling—do you expect that to continue through this year? The workover is isolated to this quarter. Fair?
Gary Johnson, Chief Financial Officer
Yeah, the workover is definitely isolated this quarter. Well, it was actually the first half, because it was the first quarter as well. The work from our non-op was both quarters, but yeah, it should stop now.
Steve Ferrazzani, Analyst at Sidoti
But the water hauling—I think it should—it's shocking how much was spent on one well—
Wolf Regener, President and CEO
Yes, we were shocked.
Steve Ferrazzani, Analyst at Sidoti
And then the water hauling—Gary, do you think that—does that temper here, or is it around this level for the year?
Gary Johnson, Chief Financial Officer
It's definitely going down throughout the quarter—I mean, about the year so far. But I mean, it might be—it's probably going to be higher than last year a little bit, but not too much. But it's definitely going to temper down.
Steve Ferrazzani, Analyst at Sidoti
Got it. And then just generally on cost pressures—are you seeing them around your field?
Wolf Regener, President and CEO
We've had some increases. I mean some of our chemical costs have come up and up, and so we're putting actually some physical things in to try to knock those chemical costs down again. So we're in early stages of that. We think we're making some progress on that. But yeah, I mean, there's been some cost escalation, but nothing—nothing too bad.
Steve Ferrazzani, Analyst at Sidoti
Got it. All right, thanks, Wolf. Thanks, Gary.
Wolf Regener, President and CEO
Absolutely. Thanks.
OPERATOR (Operator)
The next question will come from Nicholas Pope with Roth Capital. Please go ahead.
Nicholas Pope, Analyst at Roth Capital
Hey, Gary. Hey, Wolf. How are you doing?
Wolf Regener, President and CEO
I'm good. How are you?
Nicholas Pope, Analyst at Roth Capital
Good. Got a couple quick questions here on the operations front. Curious with that Lavina well—first test here in the False Caney—you said you had that whole core look oil-saturated. I'm curious what, I guess, what's remaining from a risk standpoint as you kind of look at that well and how y'all are expecting to communicate with the street the kind of results of that well, or maybe what you view as kind of successful relative to what we're seeing in the core Caney wells that you're already drilling—maybe comparing it with that.
Wolf Regener, President and CEO
Yeah, yeah. So on a prospective basis, the zone's a little thinner. You can see that on our presentation, too, with how we've—you know, it's more cartoonish—but it is relative to one another. So it's a little thinner than the Caney itself. But if you look at how much acreage we have in our proved reserves for our Caney itself, it's like 11,500 acres net to us. And the False Caney, we think, has prospective over about 9,900 acres. So it's not as thick, and we have a lot of reserves in the Caney.
We have 40 million barrels proved in the Caney itself. So even if the False Caney is thinner, even if you want to cut it in half, we're looking at something comparable that we're hoping to be able to get a lot of reserves if we can make this work and it's repeatable. So really what we're looking for is having a good well that's steered in this interval. We'll get the cuttings and get the analysis as we're drilling it as well, so we have a feel for what the rock looks like—not anticipating any big surprises on that front—and then it'll come down to just what the flow rates are from it and then what ultimately are the decline rates.
But, you know, we've liked that core for a long time. Because it's a little thinner, we think the two-mile laterals really make the economics work really well. And, you know, our steering has gotten better and better with the newer tools over the last five, six years even, so we have high hopes that we're going to keep it where we want it, that our geology is going to be good—and it should be with the control we have—and that we'll make a good well.
And then, you know, then it'll be what the flow rates are and what the 30-day rate is and how she declines thereafter. So it's hopefully going to be pretty—I'm hoping it's very definitive right off the bat.
Nicholas Pope, Analyst at Roth Capital
And how are you expecting these wells—their initial rates—to compare to the Caney itself, or—
Wolf Regener, President and CEO
Is it too early? I'm hoping—it's really too early. I mean, I'm hoping we're making at least what the Caney wells are. It might have higher IPs, maybe, but the terms look a little better. But we'll see. Let's let the production speak for itself when we do it. So I don't want to lead anyone too much one way or another on this.
Nicholas Pope, Analyst at Roth Capital
Got it. Appreciate that. And then looking at these Alicia Renee wells that are shut in— Curious if there's any concern about performance once those come back online when the Clifton Mac wells are done, or is it pretty straightforward?
Wolf Regener, President and CEO
No, not at all. Yeah, so it's just the way we had to redesign the programs. We had to drill them closer into where those were just to get around some of the faults that we found when we drilled that first one. And so that's the reason that they're shut in—just we're drilling really close to where those other wellbores were. But it's the very toe end of those wellbores that are hitting the heel of the Clifton Mac wells. So even if we crack into it a little bit, it's just at the very heel of it and shouldn't affect the Clifton Mac much or the Alicia Renee much.
And our wells in general—we actually get a bunch of flush production after these wells have been shut in for a while because they don't produce a whole lot of water. It's just the water that we've injected, and then it slowly comes back over time. So I'm anticipating some flush production out of the Alicia Renee when they come back on.
Nicholas Pope, Analyst at Roth Capital
Got it. All right, well, that's all I had. I appreciate the time.
Wolf Regener, President and CEO
No, absolutely. Good to hear from you, Nick.
OPERATOR (Operator)
Again, if you have a question, please press star then one. Our next question will come from Richard Darnley with Longport Partners. Please go ahead.
Richard Darnley, Analyst at Longport Partners
Good morning. The Clifton Mac wells—with the casing problem—was it because one of the things was too much pressure? How much more pressure did they have than what you were expecting, or versus the standard average Caney well?
Wolf Regener, President and CEO
Yeah, and let me say it's not so much a casing issue, it's just that we had to use extra casing strings in these wells. So we had a lower-pressure interval that was up shallower that we've not had in other areas of the field—just in this area—so we had to put an extra casing string across that to isolate that. And then there were some higher pressures down at the bottom, so before we drilled the lateral, we set another string right there before we drilled the lateral in order to hold everything back and keep everything isolated.
That's kind of—it's always been a tougher interval for us right at that transition from the Springer into the Caney formation. So really that's the extra security that was there for these wells that we felt that we had to do in order to go forward. Yeah, it showed us higher pressures. I don't have a quantifiable number on that. And so we'll just see what she does when we come back. Really the only pressure readings we can really get is once we actually fracture stimulate and start getting fluid back out of the rock.
So for that, we used higher mud weights here to drill it to keep everything in place. So that's the reason for the higher pressures that we mentioned.
Richard Darnley, Analyst at Longport Partners
And what did they end up costing?
Wolf Regener, President and CEO
Well, we haven't specified it specifically, but they were more expensive than our normal well.
Richard Darnley, Analyst at Longport Partners
Is that classified info?
Wolf Regener, President and CEO
No, it's just we haven't discussed it, so I can't—whatever we didn't specifically put in a press release, I can't say on the call either, because otherwise we have to do another press release to disseminate that information. That's difficult. We have to be careful about what we disseminate to everyone per the rules.
Richard Darnley, Analyst at Longport Partners
Well, it would be useful to know that when you release the, you know, the IP or EUR estimates—just for background—and,
Wolf Regener, President and CEO
But the good part is that—no matter what these wells cost—you know, we're still guiding toward our normal Caney well still being that same cost, because in the rest of the field we don't have to do these extra casing strings.
Richard Darnley, Analyst at Longport Partners
And is the gas-oil ratio heading north this quarter? Is that a one-off, or are the base—your average—your base wells getting gassier?
Gary Johnson, Chief Financial Officer
No. So part of it is this adjustment that came in that dropped it down a bit lower as well. And you'll see we have a note in our—I can't remember—the press release or the MD&A. Yeah, it was 70% in May and June. So it kind of got skewed by that adjustment for the quarter. That's why it was really low. But yeah, so we're tracking 70 in the last two months. Yeah, and basically the 74 that was in the first quarter was the new wells that came on had a higher percentage oil.
And while the oil is tracking what the decline has been, we did start getting additional gas coming in. So they actually, on a boe basis, came up a little bit more than expected. Oil stayed kind of what we expected, but more gas came in, so that dropped that down a bit.
Richard Darnley, Analyst at Longport Partners
Correct. Okay. And you said that you expect the False Caney well to be oil-saturated. Well, you know your base is very oil-saturated already. Are you expecting higher oil saturation from the False Caney?
Wolf Regener, President and CEO
No, we won't know what the percentage is until we drill it. But all we're saying is that when you have whole core, our Caney was oil-saturated as well. So it's just an indication that there is oil in the False Caney. And then what the rates are and what the percentage oil to gas is, we'll see when we fracture stimulate and when we produce them back.
Richard Darnley, Analyst at Longport Partners
Yeah, understand.
Wolf Regener, President and CEO
All right, good to talk to you.
OPERATOR (Operator)
And this will conclude our question and answer session. I would like to turn the conference back over to Mr. Wolf Regener for any closing remarks. Please go ahead, sir.
Wolf Regener, President and CEO
I just want to thank everyone for being supportive of the company and shareholders, and also taking the time to listen to us today and ask questions, etc. Thank you, everyone. Have a great day.
OPERATOR (Operator)
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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