Kolibri’s Lovina Wells Outperform with Strong Decline Rates and Up to 48% IRR at $70 Oil
Investors looking beyond headline numbers for Kolibri Global Energy (NASDAQ:KGEI) may want to pay close attention to the operational trends emerging out of its Tishomingo field in Oklahoma. The company’s latest press release signals that recent drilling—particularly in the Lovina and Barnes wells—is not just maintaining production, but could drive meaningful value through lower decline rates and robust returns, even at modest oil prices.
Lower Decline Rates in Lovina Wells Boost Long-Term Value
The company’s internal analysis of its Lovina wells, based on four months of actual production data, suggests these assets are living up to their promise. At a constant oil price of $60 per barrel, the Lovina pad is projected to deliver a 33% internal rate of return (IRR). Raise that oil price to $70, and the IRR jumps to 48%. This is particularly notable given recent market volatility and emphasizes management’s focus on well economics over just short-term flow rates. The Lovina wells—located between the Emery and Glenn wells—are outperforming previous wells in terms of decline rate, while also producing less gas and NGLs, and slightly more oil than originally expected.
Barnes Wells Achieve Early Oil Production Strength
The newly completed Barnes 6-31-2H and Barnes 6-4H wells (each 100% working interest) have hit average production rates of approximately 465 barrels of oil equivalent per day (BOEPD), with a strikingly high oil cut of 85%. Although full contribution from the 1.5-mile lateral in one Barnes well is yet to commence, future upgrades—like running production tubing—are anticipated to improve rates even further, matching or exceeding comparable early performance from the Lovina pad.
| Well Name | Lateral Length | Avg BOEPD | Oil % |
|---|---|---|---|
| Barnes 6-31-2H | 1.5 mi | 465 | 85% |
| Barnes 6-4H | 1 mi | 465 | 85% |
| Velin 12-9H & 12-10H | 1 mi each | 200 | 72.5% |
Lovina Well Pad: Internal vs. Independent Reserve Estimates
The following table highlights how Kolibri’s internal reserve estimates for the Lovina pad compare with the independent IQRE report—a key detail for risk-conscious investors looking to cross-check management’s analysis:
| Metric | Kolibri Internal | IQRE Report | Difference |
|---|---|---|---|
| Oil (Mbbl) | 2,086 | 2,039 | 47 |
| Gas (Mbbl) | 2,229 | 2,628 | -399 |
| NGL (Mbbl) | 326 | 643 | -317 |
| BOEs | 2,784 | 3,120 | -336 |
Velin Wells Face Softer Start, But Flow Improvements Expected
The two Velin wells (97% working interest, drilled two years ago) have come online with initial average rates of about 200 BOEPD (145 BOPD)—lower than planned, partly due to longer shut-in durations and unusual pressure readings. Ongoing work to run production tubing and recover more stimulation fluid may help boost these rates, and their unique geological positioning may yet provide upside over the coming months.
Key Takeaways: Operational Upside Remains with Focus on Oil Yield
Current field production surpasses 6,000 BOEPD, driven largely by high-oil percentage wells. With Lovina’s reduced decline rates and healthy returns—even under conservative price scenarios—Kolibri is building a foundation for more predictable cash flow and lower risk of value erosion from commodity volatility. The company’s real test will be how efficiently it can repeat these drilling results—and how the production upgrades in Barnes and Velin wells materialize over time.
For those watching KGEI, the operational data leaves plenty to dig into—especially for investors focused on asset-level returns and sustainability of production. While every shale operation comes with its share of uncertainties, Kolibri appears to be executing on the right levers: high oil cuts, declining well declines, and steady cash flow projections.
Contact Information:
If you have feedback or concerns about the content, please feel free to reach out to us via email at support@marketchameleon.com.
About the Publisher - Marketchameleon.com:
Marketchameleon is a comprehensive financial research and analysis website specializing in stock and options markets. We leverage extensive data, models, and analytics to provide valuable insights into these markets. Our primary goal is to assist traders in identifying potential market developments and assessing potential risks and rewards.
NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
The information is provided for informational purposes only and should not be construed as investment advice. All stock price information is provided and transmitted as received from independent third-party data sources. The Information should only be used as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments and trading strategies. The Company does not guarantee the accuracy, completeness or timeliness of the Information.
Disclosure: This article was generated with the assistance of AI