Kolibri Global Energy Inc.

Good day and welcome to the Colibri Global Energy first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists 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. Also, this call may contain... may contain forward-looking information regarding Colibri's strategic plans, anticipated production, capital expenditures, exit rates and cash flows, reserves, and other estimates and forecasts. Forward-looking information is subject to risk 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 Colibri discloses in order to provide readers with a more complete perspective on Colibri'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 on and the applicable risks and uncertainties in Calibri's policy for updating such statements, we direct you to Calibri's most recent annual information form and management discussion and analysis for the period under discussion as well as Calibri's most recent corporate presentation, all of which are available on Calibri's website. I would now like to turn the conference over to Mr. Wolf Regener. Please go ahead, sir.

Thank you. And thank you, everyone, for joining us today. With me on today's call is also Gary Johnson, our Chief Financial Officer. We released our 2023 first quarter report last night, and I'll assume you've all had a chance to look over the report. And hopefully you also saw our announcement this morning regarding a line of credit increase from Bank of Oklahoma. So we're very pleased with accomplishments we've achieved this quarter and last year. We've had strong financial results, continued to make progress on our development program, nice production increases for the field, which you can actually see on slide 11 of our presentation, kind of gives you a nice visual on it. And I want to take the opportunity to thank everyone in the company who's worked hard to grow the company quarter after quarter. And with that, I would like to turn the call over to Gary to discuss our financial results. So, Gary, take it away.

All right. Thanks, Wolf, and thanks, everyone, for turning the call. I'm going to go over a few highlights of the first quarter results, and then we can take questions at the end of the call. All amounts are in U.S. dollars unless otherwise stated. As you can see from the earnings release yesterday, we had another good quarter with strong production and adjusted EBITDA. Average production was up 3% to 3,305 BOE per day compared to 3,194 BOE per day in the prior year quarter. The increase was due to the wells added in 2023, partially offset by lower production from wells that were impacted by the offset fracture simulations last year. Production is tracking above our third-party reservoir engineering firm's year-end forecast, and we look forward to adding new production from the Nickel Hills wells by the end of this month. The production mix for the first quarter was 70% oil due to some troops and adjustments in the quarter, but we expect the oil mix to trend in the mid to high 70s for the rest of the year. Adjusted EBITDA was $10.4 million compared to $11.4 million in the prior year quarter, which was a decrease of 9% due to lower prices and higher OPEX, partially offset by higher production. Net revenue was flat at $14.2 million as the higher production and lower prices offset each other. Operating expense was $8.36 per BLE for the quarter, compared to $6.04 per BLE in the prior year first quarter. The operating expense included prior period cost adjustments of about $600,000, although the net impact of those adjustments was only about $200,000 due to offsetting prior period revenue adjustments. If we subtract out the prior period cost adjustments, our operating expense would have been $6.43 per BLE. Net income was $3.3 million and basic earnings per share was $0.09 a share compared to $7.9 million or $0.22 per basic share in the prior year first quarter. The decrease was due to a $2.3 million swing in the non-cash unrealized mark-to-market adjustments on our hedges between first quarter of this year and last year. We had a $900,000 unrealized loss on hedges in this quarter versus a $1.4 million unrealized gain on hedges in the prior year first quarter. In addition, we had $1.2 million of deferred income-backed expense in the first quarter of 2024, as the difference between the tax basis and book basis of our P&E has increased over the last two years. Since our U.S. subsidiary still has existing NOLs, no cash taxes are expected to be paid this year, but we do expect to continue recognizing deferred income-backed expense for the rest of the year. Our net back from operations decreased to $38.94 per BOE, compared to $43.67 per BOE in the prior year quarter. This was due to lower average prices of 4% and higher OPEX. Netbacks, including the impact of hedges, were $37.81 per BOE, compared to $42.23, which was a 10% decrease. And then I just wanted to point out, as Wolf mentioned as well, our credit facility was just redetermined, which increased our borrowing base from $40 million to $15 million, which was a 25% increase. This will give us more flexibility in managing our working capital and also demonstrates the value of the field. And with that, I'll hand it back to Wolf.