Kolibri Projects 2025 Production Increase Despite Well Delays and Cost Pressures

Double-Digit Production and EBITDA Growth Remain On Track

Kolibri Global Energy Inc. (NASDAQ: KGEI, TSX: KEI) has released its revised 2025 forecast, aiming for continued expansion despite setbacks in drilling and pricing headwinds. The company now expects average production to reach 4,000–4,400 barrels of oil equivalent per day (boepd) next year, representing a 15%–27% increase from 2024. This output will help drive projected revenue to between $61 million and $65 million, while Adjusted EBITDA is forecasted at $46 million–$50 million. Although these figures are lower than previous projections, they reflect notable growth against the prior year.

Delayed Well Completions Drive Higher Costs and Debt—But Near-Term Impact Is Limited

The latest guidance update follows delays in the completion of four new wells, after a drill pipe failure on the Barnes 6-31-3H forced a redrill. This setback postponed fracture stimulations for multiple wells in the area and prompted Kolibri to raise its annual capital expenditures to $55 million–$58 million. Net debt is also set to increase, landing between $46 million and $48 million by year-end 2025, largely due to the timing of these wells.

Despite the operational hiccup, Kolibri’s management is confident that productivity will not be compromised, with the affected wells now scheduled to come online in December. These new wells are expected to fuel a strong production ramp in early 2026. Management anticipates cash flow from this production will enable debt reductions of $8 million–$10 million in the first quarter of 2026.

Operational Performance: Lovina and Forguson Wells Show Encouraging Trends

While some growth plans have been temporarily delayed, operational results elsewhere remain encouraging. The recently completed Lovina wells are producing at higher oil rates (80%) and declining at a slower pace than earlier projects. According to Kolibri, these characteristics are likely to deliver improved profitability as higher oil percentages often mean stronger margins.

Elsewhere, the Forguson 17-20-3H well is ramping up production, with output up 21% since the last update—even though only 3.8% of the fracture stimulation fluid has been recovered (peak rates typically occur when 7%–10% is recovered). The well is currently producing an average of 195 boepd, of which 106 barrels are oil. Notably, this well and the 3,000 net acres it sits on are not included in Kolibri’s current reserve report, representing additional potential upside.

Financial Perspective: Adjusted EBITDA Reflects Robust Operational Cash Flow

Kolibri’s financial position is anchored by consistent operational cash flow. For the six months ended June 30, 2025, Adjusted EBITDA was $20.5 million, in line with $20.4 million from the same period last year. While the current quarter’s EBITDA of $7.68 million reflects near-term volatility, the company’s cash generation ability supports ongoing capital investment and future growth.

2026 Outlook: Production Exit Rate Expected to Set New Records

Looking forward, Kolibri’s guidance implies a strong 2026 setup, with management expecting to hit a record production exit rate as delayed wells are brought online. The company’s approach to well management—balancing risk, controlling costs, and capitalizing on strong operational trends—appears to underpin its optimism for continued growth, even in the face of commodity price volatility and execution risks.

Bottom Line: Growth Story Intact, but Execution Risks Remain

Kolibri Global Energy is demonstrating resilience, pushing forward with robust production growth targets despite near-term operational hurdles and increased costs. The key factors to watch will be the on-time delivery and performance of new wells, cost discipline in a higher spend environment, and whether positive trends from assets like Lovina and Forguson continue. For investors tracking the energy sector’s mid-cap growth names, KGEI’s latest update underscores the blend of opportunity and uncertainty that defines today’s upstream oil and gas landscape.

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