Kolibri Global Energy Inc. Annual Report - How They Did This Year

Hey there! Thinking about investing in Kolibri Global Energy? This guide is for you. We're going to break down their performance for the year ending December 31, 2025, in plain English. This will help you understand if it's right for your investments. Think of this as a chat with a friend, not a stuffy financial report.

Here's what we'll cover:

1. What does this company do and how did they perform this year?

Kolibri Global Energy is a Canadian public company. You can find its shares on the Toronto Stock Exchange (TSX) and Nasdaq Capital Market. The ticker symbol is KGEI. For the year ending December 31, 2025, they are an "emerging growth company." This means they are often still growing fast.

Their main focus for exploration and development is in the Caney formation in Oklahoma, specifically the Tishomingo Field, Ardmore Basin. Kolibri uses International Financial Reporting Standards (IFRS) for its financial reports. This accounting system differs from U.S. GAAP, used by many American companies. This means you'll need to be careful if you're comparing their numbers directly to a U.S. company. Also, all their financial figures are reported in United States dollars (USD).

Overall, 2025 was a mixed bag for Kolibri. They boosted oil and gas production by 15%. New wells helped achieve this. But lower average prices for oil and natural gas liquids (NGLs) cut their total sales by 3%. Their profit also dipped by 15% compared to 2024. On the flip side, they generated 7% more cash from daily business. They also doubled investments in new equipment and drilling to $62.6 million.

2. Financial performance - sales, profit, growth metrics

Let's look at their money earned, profit, and growth.

• Total Sales: Kolibri's total sales reached $72.1 million in 2025. This was a 3% decrease from $74.6 million in 2024. Sales fell despite higher production. Average prices for their products were lower.
• Net Sales: After royalties, their net sales also dropped 3%. They reached $56.9 million in 2025, down from $58.5 million in 2024.
• Profit: Their profit fell 15% to $15.5 million in 2025. This compares to $18.1 million in 2024. Lower average prices caused this drop. Higher "depletion expense" also contributed. This is the cost of using up oil and gas reserves. Increased operating costs from higher production also played a part.
• Earnings Per Share (EPS): Lower profit meant lower basic earnings per share. It dropped from $0.51 in 2024 to $0.44 in 2025.
• Cash from Operations: This is a good sign! Kolibri generated $41.5 million cash from its main business in 2025. This was up 7% from $38.9 million in 2024. Their daily operations are bringing in more cash.
• Adjusted EBITDA: This measures operating performance. It excludes interest, taxes, depreciation, and amortization. Kolibri's Adjusted EBITDA was $42.1 million in 2025. This was a 4% decrease from $44.0 million in 2024. This matches their lower sales and higher operating costs.
• Capital Spending (Investing in Growth): Kolibri greatly increased investments in new equipment. This includes drilling new wells. This spending doubled to $62.6 million in 2025. It was $31.3 million in 2024. This shows they want to grow production.

Production & Pricing Breakdown:

• Overall Production: They increased average daily production by 15%. It reached 4,013 barrels of oil equivalent per day (BOEPD) in 2025. This was up from 3,478 BOEPD in 2024.
  • Oil Production: Increased by 8% to 2,726 barrels per day (BOPD).
  • Natural Gas Production: Natural gas production jumped 44%. It reached 3,546 thousand cubic feet per day (MCFPD).
  • Natural Gas Liquids (NGL) Production: Natural Gas Liquids (NGL) production also grew 27%. It reached 696 BOEPD.
• Average Price Received: Unfortunately, average prices for their products fell 16%. They received $49.22 per BOE in 2025. This was down from $58.60 per BOE in 2024.
  • Oil prices were down 15%.
  • NGL prices were down 11%.
  • However, natural gas prices actually rose a healthy 58%!
• Operating Costs Per Barrel: Running their wells and getting oil/gas out cost $7.33 per BOE in 2025. This was a slight drop from $7.44 per BOE in 2024. But, removing one-time adjustments, operating costs per barrel actually increased 5%. They went from $6.81/BOE in 2024 to $7.12/BOE in 2025.
• Netback from Operations: This is the money they keep per barrel. It's after paying royalties and operating costs. It fell 18% to $31.49 per BOE in 2025. This was down from $38.54 per BOE in 2024. Lower average prices caused this drop.
• Impact of Hedging: Kolibri uses financial contracts, called hedging. They protect against big price swings. In 2025, these contracts helped slightly. They added $0.13 per BOE to their netback. This was positive, unlike 2024. Hedging had a negative impact of $0.49 per BOE then. They use 'costless collars' (setting a price range), 'deferred puts' (protecting against price drops), and 'fixed price swaps' (locking in a price). These are different types of hedging contracts. These contracts help manage fluctuating oil and gas prices.

3. Major wins and challenges this year

Every company has good and tough days. Here are Kolibri's 2025 highlights and hurdles:

Major Wins:

• Significant Production Growth: They increased overall production by 15%. Natural gas and NGLs grew especially strong. Their drilling efforts caused this.
• Successful Drilling Program: Kolibri finished four new wells in the Tishomingo Field. These were Barnes 6-31-2H, Barnes 6-4H, Velin 12-9H, and Velin 12-10H. This happened in late 2025. These wells boosted December 2025 average production. It reached an impressive 5,612 BOEPD.
• Increased Cash Flow: Generating more cash from daily operations (up 7%) is healthy for the business.
• Hedging Helped: Their strategy to manage commodity price risks paid off. It boosted per-barrel revenue slightly in 2025.
• Debt Compliance: They met all debt agreement terms by year-end 2025. This keeps lenders confident.

Challenges Faced:

• Lower Commodity Prices: Lower average prices for oil and NGLs hurt them. Total sales and profit both fell, despite higher production.
• Decreased Profit: Their profit dropped 15%. Lower prices outweighed higher production benefits.
• Rising Operating Costs (Adjusted): Overall operating costs per barrel seemed to dip. But, removing one-time adjustments, the cost to produce each barrel rose 5%.
• Worsening Working Capital: They ended the year with a larger "working capital deficiency" of $12.6 million. This was $0.7 million in 2024. It means they had more short-term bills than quick assets to pay them.
• Slightly Less Borrowing Capacity: Their credit facility's borrowing capacity fell slightly. It went from $16.5 million in 2024 to $15.5 million in 2025.
• Customer Concentration: A single customer provides most of their sales. If something happens to that customer, Kolibri's sales could suffer greatly.

4. Financial health - cash, debt, liquidity

This section checks their financial fitness. Do they have enough cash? How much debt do they owe? Can they pay short-term bills easily?

• Cash on Hand: Their cash on hand fell to $2.8 million by year-end 2025. This was down from $4.3 million in 2024.
• Working Capital: This is where things look a bit tighter. Kolibri's working capital position worsened greatly. It went from a $0.7 million deficiency in 2024 to $12.6 million in 2025. They have more short-term bills than quick assets to pay them.
• Available Borrowing Capacity: They can still borrow $15.5 million on their credit facility. This is slightly down from $16.5 million in 2024.
• Total Longer-Term Obligations: Their longer-term debt and other obligations rose to $65.5 million in 2025. This was up from $44.3 million in 2024.
• Debt Covenants: Good news: Kolibri met both debt covenants (loan conditions) by December 31, 2025. Not meeting these could cause lender problems.

One thing to keep an eye on is their debt. They have a $75 million reserve-based credit facility. This loan is tied to their oil and gas reserves' value. They risk not meeting loan conditions, called "covenants," for this facility. If so, they might repay loans early. Or, their borrowing amount could shrink. This would hurt their financial flexibility.

5. Key risks that could hurt the stock price

All investments have risks. Several factors could make Kolibri Global Energy's stock price fall. Here's what to know:

• Operational Risks:
  • Drilling for oil and gas is tricky. They face unexpected geological findings. The ground might not be as expected. Production rates might miss targets. Wells could produce very little or nothing.
  • Completion techniques, like "fracking," might need fine-tuning. Fracking itself has uncertainties.
  • External factors could shut down or damage wells. These include extreme weather, equipment failures, or nearby drilling.
  • They might not find or develop enough new oil and gas. This would stop growth.
  • Important note on production numbers: Be careful with "peak production" or "30-day initial production" rates. These are short-term numbers. They don't show a well's lifetime production. Long-term performance could be much lower.
• Market & Economic Risks:
  • Oil and natural gas prices can swing wildly. This directly impacts their earnings. In 2025, lower oil and NGL prices hurt sales and profit. This happened despite higher production.
  • Global economic conditions could worsen. This would hurt their business, especially in Canada and the U.S.
  • Borrowing money could get harder. Finding project partners could also be tough.
  • Labor and equipment costs constantly change. They could rise.
  • Currency exchange or interest rate changes could also affect their profit.
  • Kolibri uses hedging contracts to protect against price swings. These include costless collars, deferred puts, and fixed price swaps. But these strategies might not fully cover them. Contract terms might also be unfavorable. They might not hedge enough to cover all production.
• Regulatory & Political Risks:
  • Governments can change energy, tax, and royalty policies. This especially applies to environmental protection, drilling, and royalties. Environmental rules could make operations costlier or harder.
  • Tariffs, nationalization (government taking private assets), or other political issues are risks. These could happen in their operating regions.
  • Getting permits and approvals from regulators can be slow. They could even be denied.
• Company-Specific Risks:
  • They face competition for money. They also compete for land with potential reserves and skilled workers.
  • They need to keep or extend existing leases and concessions. These are rights to explore or produce. This isn't always guaranteed.
  • They have a limit on common shares they can issue. (35,471,833 shares were outstanding at year-end 2025; a limit of 37,367,894 shares was approved on November 25, 2025). They need shareholder approval to issue more. This could affect their ability to raise money by selling stock.
  • They might not get enough funding when needed. Or, terms might not be good.
  • Estimates for reserves (how much oil/gas they think they have) are uncertain. Future cash flows are also uncertain. Actual results could differ greatly.
    • A note on reserve reporting: Kolibri reports oil and gas reserves using Canadian standards (National Instrument 51-101). U.S. companies report them differently, under SEC rules. Canadian standards often report "gross volumes" (before royalties). U.S. rules require "net volumes" (after royalties). Definitions for "proved" and "probable" reserves also differ. "Possible reserves" are less certain than probable reserves. There's only a 10% chance actual recovered amounts will meet or exceed proved, probable, and possible reserves combined. So, comparing their reserve numbers to a U.S. company can mislead you.
  • Acquisitions they make might not be as valuable as first thought.
  • Legal disputes can be unpredictable and costly.
  • Customer Concentration: A single customer provides much of Kolibri's sales. Losing this customer, or reduced purchases, could severely impact their finances.

6. Competitive positioning

Kolibri operates in a very competitive oil and gas industry. They constantly compete for critical resources. This competition includes securing money for projects. It also covers acquiring good land with potential reserves, like in the Caney formation. Attracting and keeping experienced staff for exploration, drilling, and production is also competitive. They compete against many energy companies. These range from large, established players with more money to smaller, independent producers. All want more market share and new resources.

7. Leadership or strategy changes

No major changes to leadership or company strategy happened in the year ending December 31, 2025. The company continued its strategy. They developed their Tishomingo Field assets.

8. Future outlook

Looking ahead, Kolibri plans more exploration and development. This includes drilling and "fracking" in Oklahoma's Caney formation. They are finalizing their 2026 drilling program. This will continue developing the Tishomingo field. They expect better production from new wells. They also estimate future crude oil, natural gas, and natural gas liquids production. They plan capital spending programs. They hope to raise more money to develop or acquire more reserves. Their future success depends on accurate geological models. It also relies on early exploration results being good indicators of future potential. Their hedging strategy extends into 2026. Various oil contracts are in place. They help stabilize future sales against price swings.

Remember, these future plans rely on many assumptions. For example, they assume correct geological models. They assume early drilling predicts future success. They also assume they can hit production rates. And they assume they'll get all licenses, permits, and equipment. If these assumptions are wrong, actual results could differ greatly.

9. Market trends or regulatory changes affecting them

Beyond their operations, Kolibri is very sensitive to market trends. Regulatory changes also affect them. They watch crude oil and natural gas supply and demand. Global economic growth, geopolitical events, and energy transition influence these. Significant changes can directly impact commodity prices. This affects their sales and profit. Also, government regulations and tax laws in energy can change. This especially applies to environmental protection, drilling, and royalties. New environmental policies could raise costs. They could also restrict drilling. They also face impacts from international trade rules, like tariffs. They need stable political and financial systems where they operate. This ensures consistent operations and access to money.