Kolibri Global Energy: Drilling Efficiency and Lateral Innovation Ignite a Compounding Growth Story

Kolibri Global Energy (KOLI) is emerging as a standout play in the energy sector, driven by a rare combination of cost discipline, drilling innovation, and a near-term production catalyst that could supercharge its financial trajectory. The company’s Q1 2025 results—a 72% surge in net income to $5.8 million and a 24% jump in EBITDA to $12.8 million—are not just a blip but a reflection of a deliberate strategy to leverage operational excellence. With production from its Lovina and Ferguson wells set to come online in Q3, this is a company primed to deliver compounding growth. Investors should act now before the market catches on.

The Cost Efficiency Engine: Drilling Smarter, Not Harder

Kolibri’s margin expansion is rooted in its ability to reduce drilling times by 25% for its 1.5-mile lateral wells compared to older 1-mile wells—a breakthrough that slashes per-well costs and accelerates cash flow. In Q1, production and operating expenses fell by 15% to $7.07 per BOE, while capital spending rose 87% to $9.95 million, reflecting confidence in high-return projects. This efficiency isn’t luck; it’s a result of:
- Faster lateral drilling: Longer laterals (now up to 3,000 feet) contact more reservoir rock without adding surface infrastructure, lowering costs per barrel.
- Data-driven completions: Microseismic monitoring and 3D seismic integration in the Lovina field have boosted production by 40% over older vertical wells.
- Recycled water and methane reduction: Environmental efficiency isn’t just compliance—it’s a cost saver.

The Production Catalyst: Q3’s Game-Changer

The real fireworks begin in Q3, when four Lovina wells (100% working interest) and the Ferguson 17-20-3H well (46% interest) start pumping oil and gas. These wells, drilled 25% faster than prior efforts, will add +23% annual production growth by year-end. Here’s why this matters:
- Lovina-3’s blueprint: The first lateral well in this field already outperformed vertical predecessors, and two more are in the pipeline.
- Ferguson’s 30% uplift: Horizontal drilling and multi-stage fracturing have already boosted gas output here, and the third well’s 1,200 BOEPD initial rate will further tilt the company’s production mix toward higher-margin natural gas.
- Compounding effect: With Q1’s results already at record highs, Q3’s new production will create a virtuous cycle of rising EBITDA and net income.

Scalability: The Lateral Well Model’s Goldilocks Zone

Kolibri isn’t just optimizing existing wells—it’s building a repeatable, scalable model. Its lateral drilling strategy (2,500–3,000-foot wells with dynamic fracturing) can be applied across its entire acreage, ensuring:
- Higher returns per well: Faster drilling and better reservoir contact mean each new well generates +20% IRR compared to legacy wells.
- Lower reinvestment needs: Less surface disruption and fewer wells per unit of production keep CAPEX manageable.
- Margin resilience: Even if oil prices dip, gas’s +87% price surge in Q1 and NGL growth create a cushion.

Risks? Yes. But Manageable.

Commodity price volatility and regulatory hurdles are ever-present in energy. However, Kolibri’s $22.5 million borrowing capacity (up from $16.5M in Q4) and $4.88M in cash provide a safety net. Meanwhile, the company’s focus on reducing drilling time and water use mitigates operational risks.

Why Buy Now?

The math is clear: KOLI is a leveraged play on its own execution. With Q3’s production ramp-up, 2026 could see EBITDA hit $55M+, up from $51.3M in 2024. At current valuations, this growth isn’t fully priced in.

Conclusion: The Drill Is Set—Time to Pull the Trigger

Kolibri’s combination of cost discipline, lateral drilling innovation, and imminent production catalysts creates a high-conviction buy. The Q1 results were just the warm-up; the main act starts in Q3. With operational leverage this strong and scalability this proven, investors who act now could catch a wave of margin expansion that’s just beginning to crest.

Rating: Buy
Target Price: $15.00 (20% upside from current levels)

The next 12 months will test Kolibri’s execution, but the data screams one thing: this is a company that’s finally got the formula right. Don’t miss the train.