Kolibri Global Energy Inc. (NASDAQ: KGEI) delivered a record quarterly performance for the second quarter of 2026, reporting a 197% year-on-year increase in net income to $8.5 million. The company’s revenue, net of royalties, more than doubled to $22.5 million, up from $10.8 million in the same period last year, driven by simultaneous gains in production volume and realized pricing.

The results reflect the successful execution of the company’s development strategy, which focused on converting reserves into producing wells. Average production for the quarter reached 4,690 BOEPD, a 46% increase compared to 3,220 BOEPD in the second quarter of 2025. This volume growth was primarily attributed to output from wells drilled and completed in the latter half of 2025. Additionally, average realized prices per barrel of oil equivalent (BOE) rose 41% to $66.50 from $47.06 in the prior year period.

Operational Efficiency and Cost Pressures

Despite the top-line growth, operating costs faced upward pressure. Production and operating expenses per barrel averaged $8.90 per BOE, a 24% increase from $7.15 in the second quarter of 2025. Management attributed this rise to workover costs on a non-operated well, which added $0.59 per BOE, alongside temporary increases in water hauling volumes required to offset wells fracked at the end of 2025.

General and administrative expenses also ticked up 12% to $1.6 million, largely due to higher consulting and legal fees. However, these operational headwinds were outweighed by the revenue surge, allowing adjusted EBITDA to climb 114% to $16.4 million from $7.7 million in the prior year quarter.

What the Numbers Show

A notable divergence exists between the company’s operational netback and its financial results due to commodity hedging activities. While the average netback from operations improved 48% to $43.92/BOE, the netback including commodity contracts was lower at $41.21/BOE. This indicates that realized losses on commodity contracts partially offset the benefits of higher spot prices. Specifically, finance expense included a $1.2 million realized loss on commodity contracts in the quarter, contrasting with finance income of $2.15 million driven by unrealized gains. This mix highlights the volatility introduced by the company’s hedging program against rising oil prices.

Balance Sheet and Liquidity

Kolibri’s liquidity position remains robust, with $30.5 million in available borrowing capacity on its credit agreement as of June 30, 2026. In May 2026, the credit facility was redetermined, increasing the borrowing capacity from $65 million to $75 million. Cash and cash equivalents stood at $1.6 million, down from $2.7 million at the start of the fiscal year, reflecting ongoing capital deployment.

Capital expenditures for the quarter totaled $21.7 million, up 28% from $16.9 million in the second quarter of 2025. This investment supports the company’s revised strategy to target additional benches in its field, including the upcoming Lovina 8-5-1HF well, which will test the False Caney bench and serve as the company’s first 2-mile lateral well.

For the first six months of 2026, net income totaled $12.5 million, a 45% increase from $8.6 million in the same period last year. Revenue for the half-year reached $42.1 million, up 55% year-on-year.

Kolibri Global Energy Inc. has revised its long-term strategy to target additional benches in the Tishomingo field, resulting in a higher 2026 forecast that exceeds analyst estimates. The company now projects revenue of $78 million to $84 million and Adjusted EBITDA of $56 million to $62 million, driven by an expanded drilling program that includes the False Caney bench. This revenue outlook compares to an analyst estimate of $75.258 million. The forecast assumes a future oil price of $70 per barrel for the remainder of the year.

The company's strategy previously focused on the Lower Caney formation but will now incorporate the False Caney, Upper Caney, T-zone, and Sycamore benches. Kolibri plans to continue drilling one and a half and two-mile lateral development wells in the Lower Caney while drilling longer lateral wells into these additional benches to determine economic viability. The Upper Caney is likely to be the next bench targeted, potentially in late 2026 or early 2027.

Operational Update

Kolibri is currently drilling the three previously announced Clifton Mack wells. The Clifton Mack 11-14-1HR well has been drilled and cased following a redesign of the casing program after unexpected geologic conditions were encountered. The company is applying learnings from this well to the batch drilling of the Clifton Mack 11-14-2HR and 11-14-3HR wells. These wells are located in the southwest corner of Kolibri's acreage block and were probable locations in the December 2025 reserve report. Completion of these wells is planned for the third quarter.

Following the Clifton Mack wells, the drilling rig will move to the Lovina 5-8-1H well (98.5% working interest), which will be a two-mile lateral False Caney well.

2026 Financial Outlook

Based on the updated plans, Kolibri provided the following forecast for 2026. All amounts are in U.S. dollars.

(1) Assumptions include forecasted pricing for July - December 2026 of WTI US $70/bbl, $3.50 Henry Hub and NGL pricing of $28.00/boe and includes the impact of the Company’s existing hedges and a 100% working interest in the Clifton Mac wells.

(2) Adjusted EBITDA is considered a non-GAAP measure.

Wolf Regener, President and CEO, stated that the revised forecast demonstrates strong cash flow generation and reflects the beginning of the updated strategy. He noted that the forecast accounts for extra costs incurred in drilling and redrilling the first Clifton Mack well due to unexpected geologic conditions, which required extra casing strings. Regener added that the pressures encountered are supportive of high production rates from the Clifton Mack wells.

David Neuhauser, Chairman, commented that the Board is fully supportive of Kolibri’s continued focus on increasing both production and reserves to unlock intrinsic value for shareholders.