Kolibri Global Energy Inc.

Good day and welcome to the Colibri Global Energy's first 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 that 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 touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I advise participants that this conference is being recorded today, May 14, 2026. This call will be available on the company's website at www.colibrienergy.com. Here is a disclaimer. This call may include 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 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 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 and the applicable risks and uncertainties, and Colibri's policy for updating such statements. We direct you to Colibri's most recent annual information form and management discussion and analysis for the period under discussion, as well as Colibri's most recent corporate presentation, all of which are available on Colibri's website. Listeners should not place undue reliance on forward-looking information. Colibri 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 conference over to Mr. Wolf Reginer, the President and CEO of Colibri Global Energies, Inc. Please go ahead, sir.

Hi. Thank you for the introduction, and thank you, everyone, for joining us today. With me on today's call is Gary Johnson, our Chief Financial Officer. As I'm sure you're all aware, we released our first quarter 2026 results this morning, and we're very pleased with our quarterly results. Our first quarter resulted in the highest quarterly production, net revenue, and EBITDA in the history of the company. And this was achieved even though only March had the impact of the oil price increase. Our production in the first quarter of 4,685 barrels of oil equivalent per day, is up from the fourth quarter 2025 production of 4,493 barrels a day. And keep in mind that using our 2025 annual production, that calculates us to having a 35% compound annual production growth rate over the last three years. So the timing of this oil price increase is fantastic for us. We're looking to further increase our production this year as our drilling program for drilling the Clifton Mack Wells is already underway. And with that, I'll turn it over to Gary to discuss our financial results.

Thanks, Wolf, and thanks, everyone, for joining 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 released today, we had an excellent quarter with the highest recorded quarterly revenue and adjusted EBITDA and a strong increase in production. Net revenue increased by 20% to 19.6 million compared to 16.4 million in the prior quarter due to the higher production. Average production was up 15% to 4,685 DOE per day compared to 4,077 DOE per day in the prior quarter. And the increase was due to the wells that were drilled during 2025. Adjusted EBITDA was 14.8 million compared to 12.8 million in the prior quarter. which was an increase of 60%, mainly due to higher revenues. Our net income was 4 million or 11 cents per basic share, compared to 5.8 million or 16 cents per basic share in the same period of 2025. And that decrease was due to a large non-cash mark-to-market unrealized loss on commodity contracts of 2.9 million. That was due to the significant increase in order prices in March of 2026. Operating expense was $8 per BOE for the quarter compared to $7.07 per BOE in the prior year first quarter, which was an increase of 13%. The increase was due to workover costs on a non-operated well, reassessed natural gas and NGL prior year gathering and processing fees, and higher water hauling costs compared to the prior year first quarter. Our net back from operations increased 2% to $38.41 per BOE, compared to $37.55 per BLE in the prior year quarter. Net fact, including commodity contracts for the first quarter, was $37.72 per BLE compared to $37.55 per BLE in the first quarter of 25. The increases were due to higher average prices. As you may have seen earlier this week, we announced that our credit facility was redetermined and the borrowing capacity was increased from $65 million to $75 million. And even though our borrowing capacity has increased, we have been paying down on our credit facility. Our net debt at the end of the first quarter was $45 million, which was down from $46 million at the end of the year. And then subsequent to the end of the quarter, we made a debt pay down of $4 million. And we plan to make an additional $4 million net pay down later in May. And with that, I'll hand it back to Wolf.

Thank you, Eric. As Gary laid out, we had a very good quarter with us hitting our highest quarterly revenue and adjusted EBIT in the company's history, even though the average oil prices were only $70.31 per barrel. It's nice being able to say only $71 right now, given where our current prices are. The company is in solid financial shape, paying down some of our debt from drilling the wells at the end of last year, and we're looking to continue that success we've had over the last few years. And I must say that the timing of the oil price increase right now is really great. It's benefiting our cash flow. Overall, our plan is to continue to execute and build and grow company value for all shareholders. We're looking to continue buying back shares and drilling more wells. We'll also continue to get the word out about the company to shareholders and potential shareholders. For instance, Gary and I will be attending and having one-on-one meetings at the Louisiana Energy Conference, which is from May 26th to the 28th. and I will be on a panel at that conference on the 27th. In addition, we'll also be presenting at the LIHEIM virtual spring conference on May 28th. With that, that concludes the formal part of our presentation, and we'd be happy to answer any questions that you now may have.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing any keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Steve Frerzani with Sedoti. Please go ahead.

Afternoon, Wolf, Gary. Obviously, strong production quarter, seeing the benefit of those 2025 wells. Now, Wolf, even since you guided, your ad conflict seems to be now prolonged. Maybe we get an end shorter term than that longer, but the damage to global production is clear. We see a pretty healthy strip. obviously that's going to be a positive impact to your cash flow as we move through this year. How are you thinking now about capital allocation? You've laid out this three-well drilling program. How are you thinking about cash usage as we move through this year, and has it changed?

So, thank you, Steve. Good to hear from you. We did just have our AGM, and where we have three new board members that came on board. And so we've had a good meeting with them, and we're going to come up with some proposals and options that we're going to present to the board here in the coming weeks in order to determine what we do with all this extra cash flow, drilling some more wells, paying down more debt, or buying back shares. So we'll have some clarity here in the future, and hopefully we'll put out a different forecast in the future with what's going on now. And I agree with you, prices – are hopefully staying elevated. The back end of the curve has come up a bit. It's not as high as really where I think it should be still, but it does give some guidance, and I'm on the same page with you as far as I think oil prices are staying up longer, the damage has been done, and that the market hasn't really taken that into account yet on a forward curve basis yet.

All right. Can you give an update on the three-well drilling program? Where are you in the drilling process? What's your thoughts on timing of completions?

Just drilling and then, you know, third quarter, like we put in the press release, that we'll be, you know, hopefully bringing those wells on at that point in time. When we get closer, I try to stay away from that because there's some fluctuations when you get exact weeks of having completions of equipment out there and things like that. So I'd rather be a little vague, no offense, in order to not have anything wrong.

But the higher OPEX this quarter sounds like it was primarily one-timers. Are you starting to see any inflationary pressures?

No, not yet. Not yet. Not on the operating side of things. And that shouldn't really change. Most of our costs are pretty locked in. And like you said, that was out of our control, out of our hands, not OPEX. and stuff like that, and then a little bit on the water handling things. It's just from our pressure stimulations that we did last year for the offset wells, so that a little higher water handling costs, which should start coming down again, too, for the future quarters.

Yeah, there's no more color on that. The March cost was on the water hauling cost. The March cost was half of January, so really it was quite low at the beginning of the quarter, so it should keep coming down, just giving it color.

Got it. That's helpful. And I realize prices came in a little bit better than we were modeling. Wolf, it looks like the differentials were narrower. Any color you can provide on that?

No, not really. I mean, our differential still should be around $1.85. It doesn't really fluctuate much per contract itself. It's just a matter of where pricing was and what they must be, the fluctuations in mid-month type of thing of what took care of that.

Got it. Got it. That's what I got. Thanks, Wolf. Thanks, Harry. All right. Thank you.

The next question comes from Poe Frat with Alliance Global Partners. Please go ahead.

Hi. Good morning, Wolf. Can you just give me an idea of sort of how the March production looked versus the January production or maybe a run rate for April? you know, looking at sort of how the wells that came on at the end of last year are doing so far?

You know, we haven't put that out publicly, so I can't really say that on this call either. But, I mean, they're just going through the natural declines like normal shale wells do and like they do as well, our wells do as well. The wells overall are performing as expected, I can say. So, they're everything's matching what we have forecasted for the year as well. So we're comfortable with our forecast that we've put together for the year based on just drilling those three wells at a lower percentage rate. By the way, if you noticed that our percentage rate on those wells was, I think we've said 67% or something like that. And when we first announced them and we're up to in the 80s now on the working interest on those wells.

Great. What will the working interest be on the next wells that you drill?

You mean these three that we're drilling? Right now, they're about 88% now.

Okay, great. And then if you could – I scanned your 10Q, and I didn't see any subsequent event discussing hedging. So have you done any hedging since the end of the first quarter? And then would you discuss sort of given your posture and your comments earlier on prices – Are you going to, you know, wait to hedge a little bit more or sort of what's your strategy on the hedging front?

Yeah, so the hedging, I mean, I'll give you kind of my overall thoughts on hedging in general. What it's always been is like, you know, if you can hedge in, you know, 90 to 100 longer term, you should probably do that for a portion of your production. And like I said, the back end of the curve really hasn't come up. It's come up, but it's not as much as I would like to see it come up. And I think we're going to be in for a bit stronger until then. Gary, I think we put all of our hedges in by March 31st, right?

Yeah, we didn't have anything subsequent to March 31st because we met the bank requirements by the end of March.

Yeah, so as soon as the prices spiked up, we added some hedges right away. And then we were a little patient on some of them by adding some more longer term. But it was all done before the end of the first quarter then.

Yeah, and it seems like you're using more callers than you are swaps, at least, you know, beyond this second quarter. Okay.

That's correct. And we also have some different puts in there as well, you know, as we go out further.

Yeah, I'm looking at page six on the queue. Great. Got it. Thanks for your time.

Absolutely. Thanks for the questions. Thank you.

The next question comes from Lee Curry with Curry Partners. Please go ahead.

Thank you. Congratulations, Wolf, on your continued progress here with the company. Very eager to see how things go with your new board members when that gradually shakes out. The question I have today is how and when or if does this dramatic decline in oil inventories here in the united states affect you um is all of your soul is all of your oil sold on the spot market is any of it on contracted on a longer term basis are there any takeaway concerns i know exxon is in charge of that but are there any kind of concerns or problems that the lower inventories and maybe even some rationing you know of distillate that may not be too far away here in the United States. Any impact on you?

So it'll just be extremely along the lines of just what the price is of WTI for us on the oil side of things. So the oil price, WTI is up, then we're making more money. We do have some hedges in place that we just talked about. It was about 50% of what our projected production is, not including the new wells. So whatever our projected production was here – a few months ago. And so we have about 50% of that hedged and some of that, you know, as we were talking about before with costless callers, so we can capture some of that upside that was above where the prices were at the time. And the rest of it is all free floating still. So we will definitely take advantage or have the advantage of, I should say, because not anything we're doing, of having the higher prices affect our bottom line. And we had said for every $5 increase on our forecast, I think it was adding about $2.8 million, if I'm correct, Gary? That's correct.

That's none of the hedges we have in place.

Yeah, to our EBITDA for the year. And as far as takeaway, no, there's no issues. We actually handle our own oil takeaways, but gas and NGLs are handled through Exxon.

Oh, all right. Thank you very much, and I look forward to hearing the details of y'all's presentation that you work with the new board. Again, congratulations, Wolf.

Thank you very much. Appreciate your calling in. It's good to hear from you.

As a reminder, if you would like to ask a question, please press star then 1 to join the question queue. The next question comes from Richard Durnley with Longport Partners. Please go ahead.

Good morning. Sorry, I got a cold, so I'm a little broken. Not a problem at all. I realize the board is new, very new. Are the initial indications that you will complete these three wells differently than you would have planned them before the board arrived?

um we are doing our completion designs right now new ideas are definitely being taken into account and those are being attributed to that so we will potentially do some tweaks to our completion designs on those wells uh would you characterize the uh the the

The design changes is substantial or minimal or in the middle?

You know, that'll be the end result as far as how they perform. Oh. Well. So sometimes a small tweak could make a big difference. Sometimes a larger tweak doesn't make that much of a difference. So the truth will be in the pudding, so to speak. And we're hoping that some of these tweaks do make a substantial difference. But we'll see.

When should you finish drilling?

Generally, I mean, we budgeted about 20 days per E12, so, you know, between moves and everything else that happens. So it's about two months' worth of drilling and then waiting for the, you know, getting the rig out of the way, getting everything cleaned up, and getting ready for the frackers. So in general, it's about three months from start to finish.

Okay. Thank you. Thank you.

This concludes our question and answer session. I would like to turn the conference back over for any closing remarks.

Thank you very much, and thank you, everyone, for joining, listening, and all the questions. So I hope everyone has a great rest of your day, and we thank everyone for your support in the company.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.