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Kolibri Global Energy Inc. (TSX:KEI) (OTCQB:KGEIF):
All amounts are in U.S. Dollars unless otherwise indicated:
2021 HIGHLIGHTS
- In December 2021, the Company completed an equity rights offering for gross proceeds of C$8.6 million and is using the proceeds to drill two wells. As of March 10, 2022, the Company has completed drilling the Barnes 7-3H well (98.07% working interest) and the Barnes 8-4H well (99.8% working interest) and is currently performing a fracture stimulation on the Barnes 7-3H well with production expected in late March.
- BOK Financial agreed to increase the borrowing base of the credit facility by $2.0 million if certain items are met. When the Company finishes fracture stimulating the Barnes 7-3H well, those items will have been met. The Company anticipates receiving the increase in the borrowing base in the second quarter of 2022.
- The Company's debt was reduced to $16.9 million at December 31, 2021 from $20.7 million at the beginning of the year. This was down from a peak debt level of $30.0 million.
- The Company's Total Proved Reserves were 34.1 million barrels of oil equivalent (BOE) for 2021 which was a 3% increase from 2020 according to the Company's December 31, 2021, independent reserves evaluation. The NPV10 value of the Total Proved Reserves increased to $358.8 million, an 86% increase from 2020, due primarily to higher estimated future pricing.
- The Company performed an impairment reversal test at December 31, 2021 and reversed the entire impairment expense of $71.9 million that was recorded in March 2020 due to low prices. The $71.9 impairment reversal was lower than the original impairment charge by $1.1 million to reflect the depletion that would have been recorded if the PP&E was never impaired for a net impairment reversal amount of $70.8 million.
- Gross revenue in 2021 was $19.2 million, compared to $12.3 million in 2020.
- Net income in 2021 was $71.0 million, compared to a net loss of $70.4 million in 2020, due to the impairment reversal of $70.8 million for the year ended December 31, 2021 compared to the impairment charge of $71.9 million for the year ended December 31, 2020.
- Revenue, net of royalties was $15.0 million for 2021 compared to $9.6 million for 2020, due to an average price increase of 85% partially offset by 15% lower production.
- Adjusted funds flow was $6.6 million for 2021 compared to $7.2 million for 2020. This decrease was due to a decrease in production of 15% and realized losses from commodity contracts in 2021 compared to realized gains in 2020, partially offset by the increase in average prices.(1)
- Netback from operations increased to $33.75 per BOE in 2021 compared to $16.20 per BOE in 2020, an increase of 108%.(2) Netback including the impact of commodity contracts for 2021 was $26.05 per BOE, an increase of 9% from the prior year.(2) The 2021 increase compared to the prior year was due to the increase in average prices partially offset by higher production taxes.
- Interest expense has decreased by 32% in 2021 compared to the prior year due to principal payments on the credit facility which reduced the outstanding loan balance combined with lower interest rates.
- Average production for 2021 was 976 BOEPD compared to 1,151 BOEPD in 2020, a decrease of 15% due to the normal production decline of existing wells.
- General & administrative (G&A) expenses for 2021 were $2.7 million compared to $2.9 million in 2020, a decrease of 7%. The decrease is due to management's continued efforts to reduce G&A costs throughout the Company partially offset by higher advisor fees at the beginning of the year.
- Production and operating expense per barrel averaged $8.32 per BOE in 2021 compared to $6.54 per BOE in 2020, an increase of 27%. The increase was primarily due to an increase in production taxes of $1.47 per BOE in 2021 due to higher average prices.
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(1) |
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Adjusted Funds Flow is considered a non-GAAP measure. Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
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(2) |
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Netback from operations and netback including commodity contracts are considered non-GAAP ratios. Refer to the section entitled “Non-GAAP Measures” of this earnings release. |
Kolibri's President and Chief Executive Officer, Wolf Regener commented:
“With our successful rights offering raising over C$8.6 million in December, the Company was able to fast track our 2022 drilling program at the beginning of the year. We have already drilled both the Barnes 7-3H well and the Barnes 8-4H well safely and on budget. The Company is currently performing fracture stimulation operations on the Barnes 7-3H well and expects production flow back by the end of March. In addition, we anticipate receiving the additional $2.0 million increase in our credit facility borrowing base which we will use, along with cash flow from operations, to fracture stimulate the Barnes 8-4H well in the second quarter of 2022. With oil current prices of over $100/barrel, we expect to generate significant incremental value to shareholders from both of these wells as production from these wells is unhedged.
Our 2021 independent reserves evaluation report showed a 3% increase in total proved reserves from the prior year with a NPV10 total proved value of $358.8 million, which was an 86% increase from 2020, primarily due to higher prices.
Also, due to higher prices in the oil market, the Company completely reversed the $71.9 million impairment charge that it has recorded in March 2020. The $71.9 impairment reversal was reduced by $1.1 million to reflect the depletion that would have been recorded if the PP&E was never impaired for a net impairment reversal amount of $70.8 million.
The Company was able to generate $6.6 million of adjusted funds flow without any capital expenditures during the year.
Netback from operations increased to $33.75 per BOE in 2021 compared to $16.20 per BOE in 2020, an increase of 108%, with an average price of $66.08 per BOE. Netback including the impact of commodity contracts for 2021 was $26.05 per BOE, an increase of 9% from the prior year. The 2021 increase compared to the prior year was due to the increase in average prices partially offset by higher production taxes.
Revenue, net of royalties was $15.0 million for 2021 compared to $9.6 million for 2020, an increase of 56% due to an 86% increase in average prices partially offset by a 15% decrease in production.
The average production for 2021 was 975 BOEPD, a decrease of 15% compared to 2020 production of 1,151 BOEPD. The decrease is due to the normal production decline of existing wells as no new wells were brought online in 2021.
G&A expenses for 2021 was $2.7 million compared to $2.9 million in 2020, a decrease of 7%. The decrease is due to management's continued efforts to reduce G&A costs throughout the Company partially offset by higher advisor fees at the beginning of the year.
Interest expense has decreased by 32% in 2021 compared to the prior year due to principal payments on the credit facility which reduced the outstanding loan balance combined with lower interest rates.
Production and operating expense per barrel averaged $8.32 per BOE in 2021 compared to $6.54 per BOE in 2020, an increase of 27%. The increase was primarily due to an increase in production taxes of $1.47 per BOE in 2021 due to higher average prices.”
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Fourth Quarter |
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Year Ended |
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2021 |
2020 |
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% |
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2021 |
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2020 |
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% |
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Net Income (Loss): |
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$ Thousands |
$72,340 |
$(1,078) |
-% |
$71,002 |
$(70,410) |
-% |
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$ per common share |
$0.31 |
$(0.01) |
-% |
$0.30 |
$(0.30) |
-% |
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assuming dilution |
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Adjusted Funds Flow |
$1,859 |
$1,750 |
6% |
$6,569 |
$7,196 |
(9%) |
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Capital Expenditures |
$559 |
$43 |
1200% |
$696 |
$(16) |
-% |
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Average Production (Boepd) |
931 |
1,082 |
(14%) |
975 |
1,151 |
(15%) |
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Gross Revenue |
5,444 |
3,205 |
70% |
19,128 |
12,251 |
56% |
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Average Price per Barrel |
$51.67 |
$32.19 |
61% |
$53.75 |
$29.08 |
85% |
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Netback from operations per Barrel |
$40.88 |
$18.38 |
122% |
$33.75 |
$16.20 |
108% |
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Netback including commodity contracts per Barrel |
$28.99 |
$25.40 |
14% |
$26.05 |
$23.86 |
9% |
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December 2021 |
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December 2020 |
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Cash and Cash Equivalents |
$7,316 |
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$920 |
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Working Capital |
$3,823 |
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($3,456) |
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Year Ended 2021 to Year Ended 2020
For 2021, oil and gas gross revenues increased $6,877,000 or 56% to $19,128,000. Oil revenues before royalties increased by 51% to $15,978,000 due to a 79% increase in prices between years partially offset by a 16% decrease in production. Natural gas revenues before royalties increased $534,000 or 74% due to a 104% increase in average gas prices partially offset by a 15% decrease in natural gas production. NGL revenue before royalties increased $958,000 or 103% due to a 136% increase in average prices partially offset by a 14% decrease in production.
Average production per day for 2021 decreased 15% from the prior year due to the normal production decline of existing wells.
Production and operating expenses increased by $207,000 due to an increase in production taxes. Production and operating expense per barrel averaged $8.32 per BOE in 2021 compared to $6.54 per BOE in 2020, an increase of 27%. The increase was primarily due to an increase in production taxes of $1.47 per BOE in 2021 due to higher average prices.
Depletion and depreciation expense decreased $1,020,000 due to decreased production and a lower PP&E balance due to the impairment.
The Company completely reversed the $71.9 million PP&E impairment charge that it has recorded in March 2020 due to higher oil prices. The $71.9 impairment reversal was reduced by $1.1 million to reflect the depletion that would have been recorded if the PP&E was never impaired for a net impairment reversal amount of $70.8 million.
G&A expenses decreased $162,000, or 6%, in 2021 compared to 2020. The decrease is due to management's continued efforts to reduce G&A costs throughout the Company partially offset by higher advisor fees at the beginning of the year.
Finance income decreased $3,542,000 in 2021 compared to the prior year due to realized and unrealized gains on commodity contracts that were recorded in 2020.
Finance expense increased $4,760,000 due to realized and unrealized losses on commodity contracts in 2021 partially offset by lower interest expense.
FOURTH QUARTER HIGHLIGHTS:
- Net income in the fourth quarter of 2021 was $72.3 million, compared to net loss of $1.8 million in the fourth quarter of 2020, due to the impairment reversal of $70.8 million for the year ended December 31, 2021.
- Revenue, net of royalties, was $4.3 million for the fourth quarter of 2021, an increase of 70% compared to the fourth quarter 2020 due to higher average prices partially offset by lower production.
- Adjusted funds flow was $1.9 million in the fourth quarter of 2021 compared to $1.8 million in the prior year fourth quarter.
- Netback from operations increased to $40.88 per BOE in the fourth quarter of 2021 compared to $18.38 per BOE in the fourth quarter of 2020, an increase of 123%. Netback including the impact of commodity contracts for the fourth quarter of 2021 was $28.99 per BOE, an increase of 14% from the prior year. The 2021 increase compared to the prior year quarter was due to the increase in average prices partially offset by higher production taxes.
- Interest expense decreased by 22% in the fourth quarter of 2021 due to principal payments on the credit facility which reduced the outstanding loan balance and lower interest rates.
- Average production for the fourth quarter of 2021 was 931 BOEPD, a decrease of 14% compared to the prior year fourth quarter due to the normal decline of existing wells.
- G&A expense decreased by over 20% in the fourth quarter of 2021 due to due to management's continued efforts to reduce G&A costs throughout the Company.
- Operating expense per barrel averaged $8.79 per BOE in the fourth quarter of 2021 compared to $6.84 per BOE in the prior year quarter, an increase of 28%. The increase was primarily due to an increase in production taxes in 2021 due to higher average prices.
- The Company performed an impairment reversal test at December 31, 2021 and reversed the entire impairment expense of $71.9 million that was recorded in March 2020. The $71.9 impairment reversal was lower than the original impairment by $1.1 million to reflect the depletion that would have been recorded if the PP&E was never impaired for a net impairment reversal amount of $70.8 million.
Fourth Quarter 2021 to Fourth Quarter 2020
Gross oil and gas revenues totaled $5,444,000 in the fourth quarter of 2021 versus $3,205,000 in the fourth quarter of 2020, an increase of 70%. Oil revenues were $4,450,000 in the fourth quarter of 2021 versus $2,735,000 in the fourth quarter of 2020, an increase of 63%, due to increase in average prices partially offset by decreased production. Natural gas revenues increased 95% due to an increase in average prices partially offset by a decrease in production. NGL revenue increased 125% to $577,000 due to higher average NGL prices partially offset by lower production.
Operating expenses increased by $72,000 in the fourth quarter of 2021 compared to 2020 due to higher production taxes.
G&A expenses decreased by $155,000, or 20%, between quarters due to management's continued efforts to reduce G&A costs throughout the Company.
Finance income decreased by $185,000 in the fourth quarter of 2021 compared to the prior year fourth quarter due to realized gains on commodity contracts in 2020.
Finance expense decreased $602,000 due to unrealized losses on commodity contracts in 2020 and lower fourth quarter 2021 interest expense compared to the prior year fourth quarter.
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KOLIBRI GLOBAL ENERGY INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
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(Unaudited, Expressed in Thousands of United States Dollars) |
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December 31, |
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December 31, |
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2021 |
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2020 |
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Current assets |
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Cash and cash equivalents |
$ |
7,316 |
$ |
920 |
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Trade and other receivables |
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1,999 |
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1,607 |
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Deposits and prepaid expenses |
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587 |
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575 |
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9,902 |
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3,102 |
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Non-current assets |
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Full story available on Benzinga.com
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