Excerpt from a recent analyst report in USD •.
• We raise our price target to $10 (from $6) as we lift our 2025-2026 cash flow from operations
(CFFO) estimates, reflecting Kolibri’s initial 2025 outlook.
• Last week, management offered 2025 revenue and capex guidance of $75-$89 million (representing
32%-44% growth to its current 2024 projection), and $48-$53 million, respectively.
• The company, which typically funds drilling activity within CFFO, plans to bring nine wells into
production in 2025, including the completion of two previously drilled wells and its first well in
its eastern acreage (in the Caney Shale), of which it will have a 46% working interest.
• We had previously modeled seven wells (including the two completions). We expect KGEI benefits
from lower drilling and completion costs with four of the wells planned on one pad in 2Q:25.
• The big takeaways for us are the company’s ability to expand its 3P (proved, probable and
possible) reserves with its first drilling on the eastern acreage …
• … And ongoing conversion of reserves to proved and proved developed (only 24% at year-end 2023),
all of which we view as positive to the stock.
• We model growing cash flow funding increased drilling activity. We forecast 10 1.5-mile lateral
wells (previously nine) in 2026, which could prove conservative. (Longer two-mile laterals are also
possible in 2026.)
• We forecast all drilling funded within CFFO with net leverage remaining well under 1x through
2026, supporting our moderate risk rating.
• Our revised $10 price target is derived by applying $12 per barrel to 32.4 million boe (barrels
of oil equivalent) of proved reserves on an EV/proved reserve basis, in line with the small-cap
liquids-rich E&P peer group trading range over the last three years. (Previously, we applied 3x to
our former 2026 CFFO estimate of $66 million.)
what is missed is that 2024 proven reserves in my opinion will be closer to 42 million barrels based on the new wells (my opinion only) this implies USD 13 or cad$ 18 as always only my opinion please do your own analysis and DD or seek a qualified broker to advise