EX-99.1 2 ex99-1.htm

 

Exhibit 99.1

 

 

UNAUDITED CONDENSED

CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

 

MARCH 31, 2024 AND 2023

 

 

 

 

KOLIBRI GLOBAL ENERGY INC.

CONDENSED CONSOLIDATED

STATEMENTS OF FINANCIAL POSITION

(expressed in Thousands of United States Dollars)

 

   March 31, 2024   December 31, 2023 
   (unaudited)   (audited) 
Current assets          
Cash and cash equivalents  $1,801   $598 
Accounts receivable and other receivables (Note 3)   7,525    5,492 
Deposits and prepaid expenses   835    838 
    10,161    6,928 
           
Non-current assets          
Property, plant and equipment, net (Note 4)   217,926    216,161 
Right-of-use assets (Note 5)   1,104    1,190 
Fair value of commodity contracts (Note 2)   -    78 
    219,030    217,429 
           
Total Assets  $229,191   $224,357 
           
Current liabilities          
Accounts payable and other payables (Note 3)  $14,881   $17,648 
Lease liabilities (Note 5)   965    1,068 
Fair value of commodity contracts (Note 2)   879    128 
    16,725    18,844 
           
Non-current liabilities          
Loans and borrowings (Note 7)   31,667    29,612 
Asset retirement obligations, net   2,048    1,966 
Lease liabilities (Note 5)   180    162 
Deferred income taxes   4,550    3,359 
Fair value of commodity contracts (Note 2)   111    - 
    38,556    35,099 
           
Equity          
Shareholders’ capital   296,232    296,232 
Contributed surplus   24,330    24,179 
Accumulated deficit   (146,652)   (149,997)
    173,910    170,414 
Total equity and liabilities  $229,191   $224,357 

 

See accompanying notes to unaudited condensed consolidated interim financial statements.

 

1

 

 

KOLIBRI GLOBAL ENERGY INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

THREE MONTHS ENDED MARCH 31

(Unaudited, expressed in Thousands of United States Dollars)

 

   2024   2023 
Revenue          
Oil and natural gas revenue, net of royalties (Note 9)  $14,226   $14,293 
Other income   59    1 
    14,285    14,294 
Expenses          
Production and operating expenses   2,246    1,553 
Depletion, depreciation and amortization (Note 4,5)   3,894    4,338 
General and administrative expenses   1,265    930 
Stock based compensation (Note 8)   128    18 
    7,533    6,839 
           
Finance income          
Unrealized gain on financial commodity contracts (Note 2)   -    1,390 
    -    1,390 
           
Finance expense          
Realized loss on financial commodity contracts (Note 2)   341    414 
Unrealized loss on financial commodity contracts (Note 2)   915    - 
Interest on loans and borrowings (Note 7)   915    485 
Foreign exchange loss   -    5 
Interest on lease liability   23    28 
Accretion expense   22    17 
    2,216    949 
           
Net income before income taxes   4,536    7,896 
Income tax expense   1,191    - 
           
Net income and comprehensive income  $3,345   $7,896 
           
Basic and diluted net income per share (Note 6)  $0.09   $0.22 

 

See accompanying notes to unaudited condensed consolidated interim financial statements.

 

2

 

 

KOLIBRI GLOBAL ENERGY INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited, expressed in Thousands of United States dollars)

 

   Number of common shares   Share capital   Contributed surplus   Accumulated Deficit   Total equity 
 
Balance at January 1, 2023   35,615,921   $296,221   $23,254   $(169,277)  $150,198 
Share based compensation (Note 8)   -    -    20    -    20 
Stock options exercised (Note 8)   5,000    6    (2)   -    4 
Net income for the period   -    -    -    7,896    7,896 
Balance at March 31, 2023   35,620,921   $296,227   $23,272   $(161,381)  $158,118 
                          
Balance at January 1, 2024   35,625,587   $296,232   $24,179   $(149,997)  $170,414 
Share based compensation (Note 8)   -    -    151    -    151 
Net income for the period   -    -    -    3,345    3,345 
Balance at March 31, 2024   35,625,587   $296,232   $24,330   $(146,652)  $173,910 

 

See accompanying notes to unaudited condensed consolidated interim financial statements.

 

3

 

 

KOLIBRI GLOBAL ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31

(Unaudited, expressed in Thousands of United States Dollars)

 

   2024   2023 
         
Cash flows from operating activities          
Net income  $3,345   $7,896 
Adjustments for:          
Depletion, depreciation and amortization   3,894    4,338 
Accretion   45    45 
Unrealized (gain) loss on financial commodity contracts (Note 2)   915    (1,390)
Stock based compensation (Note 8)   128    18 
Deferred income tax   1,191    - 
Amortization of loan acquisition costs   55    25 
Gain on sales of assets   (8)   - 
Change in non-cash working capital (Note 3)   130    2,097 
Net cash from operating activities   9,695    13,029 
           
Cash flows from investing activities          
Additions to property, plant and equipment (Note 4,5)   (5,320)   (4,188)
Proceeds from sale of assets   8    - 
Change in non-cash working capital (Note 3)   (4,902)   (5,918)
Net cash used in investing activities   (10,214)   (10,106)
           
Cash flows from financing activities          
Repayment of loans and borrowings (Note 7)   (5,500)   (3,000)
Proceeds from loans and borrowings (Note 7)   7,500    2,995 
Lease payments   (278)   (190)
Proceeds from stock option exercises   -    6 
Net cash from/used in financing activities   1,722    (189)
           
Change in cash and cash equivalents   1,203    2,734 
Cash and cash equivalents, beginning of period   598    1,037 
Cash and cash equivalents, end of period  $1,801   $3,771 
           
Supplementary information          
Interest paid  $661   $424 
Income taxes paid  $-   $- 

 

See accompanying notes to unaudited condensed consolidated interim financial statements.

 

4

 

 

Notes to the Unaudited

Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Unaudited, expressed in Thousands of United States dollars except per share information)

 

1.NATURE OF OPERATIONS AND BASIS OF PRESENTATION

 

Kolibri Global Energy Inc. (the “Company” or “KEI”), was incorporated under the Business Corporations Act (British Columbia) on May 6, 2008. KEI is a North American energy company focused on finding and exploiting energy projects in oil and gas. 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 in oil, gas and clean and sustainable energy. The Company’s shares are traded on the Toronto Stock Exchange under the stock symbol KEI and on the NASDAQ under the stock symbol KGEI.

 

The unaudited condensed consolidated interim financial statements were approved by the Company’s Board of Directors on May 13, 2024.

 

2.BASIS OF PRESENTATION

 

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, “Interim Financial Reporting” following the same accounting policies, except as described below, and methods of computation as the annual consolidated financial statements of the Company for the year ended December 31, 2023. The disclosures provided below are incremental to those included with the annual consolidated financial statements and certain disclosures, which are normally required to be included in the notes to the annual consolidated financial statements, have been condensed or omitted. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company’s annual filings for the year ended December 31, 2023.

 

New Standards and Interpretations adopted

 

The following future IFRS standards have been adopted by the Company:

 

Amendment to IFRS 16 – Leases on sale and leaseback. This amendment specifies how an entity accounts for a sale and leaseback after the date of the transaction. The Company adopted this standard on January 1, 2024 and it did not have a significant impact on the Company.

 

Amendment to IFRS 1 – Non-current liabilities with covenants. This amendment specifies how an entity must comply within twelve months after the reporting period affecting the classification of a liability. The Company adopted this standard on January 1, 2024 and it did not have a significant impact on the Company.

 

Amendment to IAS 7 and IFRS 7 – Supplier finance. This amendment requires disclosures of supplier finance arrangements and their impact to a company’s liquidity risk. The Company adopted this standard on January 1, 2024 and it did not have a significant impact on the Company.

 

5

 

 

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Unaudited, expressed in Thousands of United States dollars except per share information)

 

3.COMMODITY CONTRACTS

 

At March 31, 2024 the following financial commodity contracts were outstanding and recorded at estimated fair value:

 

      Total Volume Hedged   Price 
Commodity  Period  (BBLS)   ($/BBL) 
Oil – WTI Swap  April 1, 2024 to May 31, 2024   8,000    $62.77 
Oil – WTI Costless Collars  April 1, 2024 to June 30, 2024   3,000    $65.00 - $79.50 
Oil – WTI Costless Collars  April 1, 2024 to June 30, 2024   12,000    $65.00 - $86.00 
Oil – WTI Costless Collars  April 1, 2024 to December 31, 2024   60,000    $65.00 - $89.50 
Oil – WTI Put  April 1, 2024 to June 30, 2024   1,650    $60.00 
Oil – WTI Costless Collars  April 1, 2024 to June 30, 2024   1,950    $65.00 - $94.55 
Oil – WTI Costless Collars  June 1, 2024 to June 30, 2024   8,000    $60.00 - $78.15 
Oil – WTI Costless Collars  July 1, 2024 to September 30, 2024   21,000    $60.00 - $86.65 
Oil – WTI Costless Collars  July 1, 2024 to September 30, 2024   18,000    $60.00 - $78.00 
Oil – WTI Costless Collars  July 1, 2024 to September 30, 2024   3,600    $65.00 - $90.65 
Oil – WTI Costless Collars  October 1, 2024 to December 31, 2024   39,000    $60.00 - $82.50 
Oil – WTI Costless Collars  January 1, 2025 to March 31, 2025   36,000    $60.00 - $77.00 
Oil – WTI Costless Collars  April 1, 2025 to June 30, 2025   20,400    $60.00 - $75.40 
Oil – WTI Costless Collars  April 1, 2025 to June 30, 2025   1,350    $65.00 - $82.54 
Oil – WTI Costless Collars  July 1, 2025 to September 30, 2025   21,000    $65.00 - $82.00 
Oil – WTI Costless Collars  July 1, 2025 to September 30, 2025   750    $65.00 - $80.50 
Oil – WTI Costless Collars  April 1, 2024 to June 30, 2024   15,000    $65.45 - $86.00 
Oil – WTI Swap  May 1, 2024 to June 30, 2024   9,600    $85.67 
Oil – WTI Costless Collars  July 1, 2024 to September 30, 2024   15,000    $63.80 - $84.50 
Oil – WTI Costless Collars  July 1, 2024 to September 30, 2024   13,800    $67.75 - $89.85 
Oil – WTI Costless Collars  October 1, 2024 to December 31, 2024   15,000    $62.35 - $82.70 
Oil – WTI Costless Collars  October 1, 2024 to December 31, 2024   13,800    $65.75 - $87.10 
Oil – WTI Costless Collars  October 1, 2024 to December 31, 2024   1,200    $61.00 - $81.46 
Oil – WTI Costless Collars  October 1, 2024 to December 31, 2024   2,400    $60.00 - $78.23 
Oil – WTI Costless Collars  January 1, 2025 to March 31, 2025   15,000    $64.25 - $84.60 
Oil – WTI Costless Collars  January 1, 2025 to March 31, 2025   14,400    $66.25 - $87.75 
Oil – WTI Costless Collars  April 1, 2025 to June 30, 2025   3,000    $59.50 - $79.00 
Oil – WTI Costless Collars  April 1, 2025 to June 30, 2025   5,700    $60.80 - $74.07 
Oil – WTI Costless Collars  April 1, 2025 to June 30, 2025   13,200    $64.50 - $85.70 
Oil – WTI Costless Collars  July 1, 2025 to September 30, 2025   21,900    $63.25 - $83.65 

 

The estimated fair value results in a $1.0 million liability as of March 31, 2024 (December 31, 2023: $0.1 million liability) for the financial oil and gas contracts which has been determined based on the prospective amounts that the Company would receive or pay to terminate the contracts, consisting of a current liability of $0.9 million and a long term liability of $0.1 million (December 31, 2023: current liability of $0.2 million and a long term asset of $0.1 million).

 

6

 

 

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Unaudited, expressed in Thousands of United States dollars except per share information)

 

In April 2024, the Company entered into the following additional financial commodity contracts:

 

      Total Volume Hedged   Price 
Commodity  Period  (BBLS)   ($/BBL) 
Oil – WTI Swap  May 1, 2024 to June 30, 2024   9,600    $85.67 
Oil – WTI Costless Collars  May 1, 2024 to June 30, 2024   15,600    $71.50 - $96.25 
Oil – WTI Costless Collars  July 1, 2024 to September 30, 2024   13,800    $67.75 - $89.85 
Oil – WTI Costless Collars  July 1, 2024 to September 30, 2024   24,000    $69.50 - $93.25 
Oil – WTI Costless Collars  October 1, 2024 to December 31, 2024   13,800    $65.75 - $87.10 
Oil – WTI Costless Collars  October 1, 2024 to December 31, 2024   24,000    $67.50 - $89.50 
Oil – WTI Costless Collars  January 1, 2025 to March 31, 2025   15,000    $64.25 - $84.60 
Oil – WTI Costless Collars  January 1, 2025 to March 31, 2025   14,400    $66.25 - $87.75 
Oil – WTI Costless Collars  January 1, 2025 to March 31, 2025   16,200    $65.50 - $86.25 
Oil – WTI Costless Collars  April 1, 2025 to June 30, 2025   13,200    $64.50 - $85.70 
Oil – WTI Costless Collars  April 1, 2025 to June 30, 2025   10,800    $64.00 - $84.00 
Oil – WTI Costless Collars  July 1, 2025 to September 30, 2025   21,900    $63.25 - $83.65 
Oil – WTI Costless Collars  July 1, 2025 to September 30, 2025   10,800    $62.75 - $82.00 

 

The realized and unrealized gains/losses from the financial commodity contracts are as follows:

 

 

 

Three months ended March 31,

 
($000s)   2024    2023 
           
Realized loss on financial commodity contracts  $(341)   (414)
           
Unrealized gain (loss) on financial commodity contracts  $(915)   1,390 

 

3. SUPPLEMENTAL CASH FLOW INFORMATION

 

Changes in non-cash flow working capital is comprised of:

 

   Three months ended March 31, 
   2024   2023 
         
Accounts receivables and other receivables  $(2,033)  $237 
Deposits and prepaid expenses   3    (104)
Accounts payable and other payables   (2,742)   (3,954)
   $(4,772)  $(3,821)
           
Related to operating activities  $130   $2,097 
           
Related to investing activities  $(4,902)  $(5,918)

 

7

 

 

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Unaudited, expressed in Thousands of United States dollars except per share information)

 

4.PROPERTY, PLANT AND EQUIPMENT, NET

 

   Oil and Natural Gas Interests   Processing and Other Equipment   Total 
Cost               
Balance at January 1, 2023  $234,126   $1,378   $235,504 
Additions   53,713    60    53,774 
Balance at December 31, 2023  $287,839   $1,438   $289,277 
Additions   5,402    1    5,403 
Balance at March 31, 2024  $293,241   $1,439   $294,680 
Accumulated depletion and depreciation               
Balance at January 1, 2022  $57,610   $1,340   $58,950 
Depletion and depreciation for the period   14,137    29    14,166 
Balance at December 31, 2022  $71,747   $1,369   $73,116 
Depletion and depreciation for the period   3,633    5    3,638 
Balance at March 31, 2023  $75,380   $1,374   $76,754 
                
Net carrying amounts               
At December 31, 2023  $216,092   $69   $216,161 
At March 31, 2024  $217,861   $65   $217,926 

 

5.LEASES AND RIGHT OF USE ASSETS

 

   Right of Use Assets 
Balance at January 1, 2023  $48 
Additions   1,984 
Depreciation   (842)
Balance at December 31, 2023  $1,190 
Additions   170 
Depreciation   (256)
Balance at March 31, 2024  $1,104 

 

8

 

 

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Unaudited, expressed in Thousands of United States dollars except per share information)

 

6. EARNINGS PER SHARE

 

   Three months ended March 31, 
   2024   2023 
Basic earnings per share          
           
Net income  $3,345   $7,896 
           
Weighted average number of common shares (basic)   35,626    35,620 
           
Net income per share – basic  $0.09   $0.22 
           
Diluted earnings per share          
           
Net income  $3,345   $7,896 
           
Effect of outstanding options and future service   806    582 
           
Weighted average number of common shares - diluted   36,432    36,202 
           
Net income per share – diluted  $0.09   $0.22 

 

7.LOANS AND BORROWINGS

 

In May 2022, the Company’s US subsidiary amended the credit facility from BOK Financial, which is secured by the US subsidiary’s interests in the Tishomingo Field. The credit facility expires in June 2026 and is intended to fund the drilling of the Caney wells in the Tishomingo Field.

 

The credit facility has a borrowing base of $40.0 million and the Company has an available borrowing capacity of $8.0 million at March 31, 2024. The credit facility is subject to a semi-annual review and redetermination of the borrowing base. The next redetermination will be later in the second quarter of 2024. Future commitment amounts will be subject to new reserve evaluations and there is no guarantee that the size and terms of the credit facility will remain the same after the borrowing base redetermination. Any redetermination of the borrowing base is effective immediately and if the borrowing base is reduced, the Company has six months to repay any shortfall.

 

The credit facility has two primary debt covenants. One covenant requires the US subsidiary to maintain a positive working capital balance which includes any unused excess borrowing capacity and excludes the fair value of commodity contracts, the current portion of long-term debt (the “Current Ratio”). The second covenant ensures the ratio of outstanding debt and long-term liabilities to a trailing twelve month adjusted EBITDA amount (the “Maximum Leverage Ratio”) be no greater than 3 to 1 at any quarter end. Adjusted EBITDA is defined as net income excluding interest expense, depreciation, depletion and amortization expense, and other non-cash and non-recurring charges including severance, share based compensation expense and unrealized gains or losses on commodity contracts.

 

The Company was in compliance with both covenants for the quarter ended March 31, 2024. At March 31, 2024, the Current Ratio of the US Subsidiary was 1.16 to 1.0 and the Maximum Leverage Ratio was 0.90 to 1.0 for the three months ended March 31, 2024.

 

At March 31, 2024, loans and borrowings of $32.0 million (December 31, 2023: $30.0 million) are presented net of loan acquisition costs of $0.3 million (December 31, 2023: $0.3 million).

 

9

 

 

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Unaudited, expressed in Thousands of United States dollars except per share information)

 

8.SHARE BASED PAYMENTS

 

The number and weighted average exercise prices of share options are as follows:

 

   Three months ended
March 31, 2024		   Three months ended
March 31, 2023		 
   Number of options   Weighted average exercise price   Number of options   Weighted average exercise price 
                 
Outstanding at January 1   939,634   $2.36    776,000   $1.67 
Granted   15,050    4.88    -    - 
Expired/cancelled   (78,900)   2.89    (11,500)   4.90 
Exercised   -    -    (5,000)   0.80 
Outstanding at March 31   875,784   $2.35    759,500   $1.63 
                     
Exercisable at March 31   666,818   $1.52    523,001   $1.90 

 

The range of exercise prices for the outstanding options is as follows:

 

   Number of outstanding stock options   Weighted average exercise price   Weighted average contractual life (years) 
             
$4.90 to $6.00   260,900   $5.46    4.1 
$1.80 to $4.90   90,050   $2.39    3.5 
$0.80 to $1.80   524,834   $0.80    2.8 
    875,784   $2.35    3.2 

 

The fair value of the stock options granted was estimated using the Black Scholes model with the following weighted average inputs:

 

  

Three Months Ended

March 31, 2024

 
     
Fair value at grant date (per option)  $4.03 
      
Volatility (%)   80.08 
Forfeiture rate (%)   5%
Option life (years)   10 
Risk-free interest rate (%)   3.33 

 

The number and weighted average fair value of RSUs are as follows:

 

   Three months ended
March 31, 2024		   Three months ended
March 31, 2023		 
   Number of RSUs   Weighted average fair value   Number of RSUs   Weighted average fair value 
                 
Outstanding at January 1   119,140   $5.28    -   $- 
Granted   12,430    4.88    -    - 
Cancelled   (13,000)   5.38    -    - 
Outstanding at March 31   118,570   $5.23    -   $- 

 

10

 

 

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Unaudited, expressed in Thousands of United States dollars except per share information)

 

The fair value at grant date for the RSUs was $4.88 per RSU which was the closing share price on the date of grant.

 

Share based compensation was recorded as follows:

 

  

Three months ended

March 31,

 
   2024   2023 
         
Expensed  $128   $18 
           
Capitalized  $23   $2 

 

9.REVENUES

 

Revenue is recognized when the performance obligations are satisfied and revenue can be reliably measured. Revenue is measured at the consideration specified in the contracts and represents amounts receivable for goods or services provided in the normal course of business, net of discounts, customs duties and sales taxes. All revenue is based on variable prices. Performance obligations associated with the sale of crude oil, natural gas, and natural gas liquids are satisfied at the point in time when the products are delivered to and title passes to the customer. Performance obligations associated with processing services, transportation, and marketing services are satisfied at the point in time when the services are provided.

 

Oil, natural gas liquids and natural gas are mostly sold under contracts of varying price and volume terms. Revenues for oil are typically collected on the 20th day of the month following production, while natural gas and NGL revenues are collected by the 45th day of the month following production.

 

The following table presents the Company’s gross oil and gas revenue disaggregated by revenue source:

 

  

Three months ended

March 31,

 
   2024   2023 
         
Oil revenue  $16,548   $16,278 
Natural gas revenue   445    815 
NGL revenue   1,251    981 
   $18,244   $18,074 
Royalties   (4,018)   (3,781)
    14,226    14,293 

 

10.SUBSEQUENT EVENTS

 

There were no subsequent events as of the date of issuance.

 

11