Q1 2026 Kolibri Global Energy Inc Earnings Call

May 14, 2026

Operator: Good day, welcome to the Kolibri Global Energy's Q1 2026 Financials Conference Call. I advise participants that this conference is being recorded today, 14 May 2026. This call will be available on the company's website at www.kolibrienergy.com. Here is a disclaimer.

Speaker #2: They are free to quote any member of management but are asked to not quote remarks from any other participant without that participant's permission. If anyone has any trouble and needs assistance, please signal a conference specialist by pressing the star key followed by zero.

Speaker #2: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchstone phone.

Speaker #2: To withdraw your question, please press star, then two. Please note this event is being recorded. I advise participants that this conference is being recorded today.

Speaker #2: May 14th, 2026. This call will be available on the company's website at www.kolibrienergy.com. Here is a disclaimer. This call may include forward-looking information regarding Kolibri's strategic plans anticipated production capital expenditures exit rates and cash flows reserves and other estimates and forecasts.

Operator: This call may include forward-looking information regarding Kolibri's strategic plans, anticipated production, capital expenditures, exit rates and cash flows, reserves and other estimates and forecasts. Forward-looking information is subject to risks and uncertainties, and actual results will vary from the forward-looking statements. This call may include future-oriented financial information and financial outlook information, which Kolibri discloses in order to provide readers with a more complete perspective on Kolibri's potential future operations, and such information may not be appropriate for other purposes. For a description of the assumptions on which such forward-looking information is based and the applicable risks and uncertainties and Kolibri's policy for updating such statements, we direct you to Kolibri's most recent annual information form and management's discussion and analysis for the period under discussion, as well as Kolibri's most recent corporate presentation, all of which are available on Kolibri's website.

Speaker #2: Forward-looking information is subject to risks and uncertainties, and actual results will vary from the forward-looking statements. This call may include future-oriented financial information and financial outlook information, which Kolibri discloses in order to provide readers with a more complete perspective on Kolibri's potential future operations, and such information may not be appropriate for other purposes.

Speaker #2: For a description of the forward-looking information is based, and the applicable risks and uncertainties, and Kolibri's policy for updating such statements, we direct you to Kolibri's most recent annual information form and management's discussion and analysis for the period under discussion as well as Kolibri's most recent corporate presentation.

Speaker #2: All of which are available on Kolibri's website. Listeners should not place undue reliance on forward-looking information. Kolibri undertakes no obligation to update any forward-looking future-oriented financial or financial outlook information.

Operator: Listeners should not place undue reliance on forward-looking information. Kolibri undertakes no obligation to update any forward-looking, future-oriented financial or financial outlook information other than as required by applicable law. I would now like to turn the conference over to Mr. Wolf Regener, the President and CEO of Kolibri Global Energy Inc. Please go ahead, sir.

Speaker #2: Other than as required by applicable law. I would now like to turn the conference over to Mr. Wolf Regener the president and CEO of Kolibri Global Energies, Inc. Please go ahead, sir.

Speaker #2: Hi. Thank you for the introduction. And thank you, everyone, for joining us today. With me on today's call is Gary Johnson, our chief financial officer.

Wolf E. Regener: Hi. Thank you for the introduction, and thank you everyone for joining us today. With me on today's call is Gary Johnson, our Chief Financial Officer. As I'm sure you're all aware, we released our Q1 2026 results this morning, and we're very pleased with our quarterly results. Our Q1 resulted in the highest quarterly production, net revenue, and EBITDA in the history of the company. This was achieved even though only March had the impact of the oil price increase. Our production in Q1 of 4,685 barrels of oil equivalent per day is up from the Q4 2025 production of 4,493 barrels a day.

Wolf Regener: Hi. Thank you for the introduction, and thank you everyone for joining us today. With me on today's call is Gary Johnson, our Chief Financial Officer. As I'm sure you're all aware, we released our Q1 2026 results this morning, and we're very pleased with our quarterly results. Our Q1 resulted in the highest quarterly production, net revenue, and EBITDA in the history of the company. This was achieved even though only March had the impact of the oil price increase. Our production in Q1 of 4,685 barrels of oil equivalent per day is up from the Q4 2025 production of 4,493 barrels a day.

Speaker #2: As I'm sure you're all aware, we released our first quarter 2026 results this morning. And we're very pleased with our quarterly results. Our first quarter resulted in the highest quarterly production net revenue and EBITDA in the history of the company.

Speaker #2: And this was achieved even though only March had the impact of the oil price increase. Our production in the first quarter of 4,685 barrels of oil equivalent per day is up from the fourth quarter of 2025 production of 4,493 barrels a day.

Speaker #2: And keep in mind that using our 2025 annual production that calculates us to having a 35% compound annual production growth rate over the last three years.

Wolf E. Regener: Keep in mind that using our 2025 annual production, that calculates us to having a 35% compound annual production growth rate over the last 3 years. The timing of this oil price increase is fantastic for us. We're looking to further increase our production this year as our drilling program for drilling the Clifton Mac wells is already underway. With that, I'll turn it over to Gary to discuss our financial results.

Wolf Regener: Keep in mind that using our 2025 annual production, that calculates us to having a 35% compound annual production growth rate over the last 3 years. The timing of this oil price increase is fantastic for us. We're looking to further increase our production this year as our drilling program for drilling the Clifton Mac wells is already underway. With that, I'll turn it over to Gary to discuss our financial results.

Speaker #2: So the timing of this oil price increase is fantastic for us. We're looking to further increase our production this year as our drilling program for drilling the Clifton Mackwells is already underway.

Speaker #2: And with that, I'll turn it over to Gary to discuss our financial results.

Speaker #3: Thanks, Wolf. And thanks, everyone, for joining the call. I'm just going to go over a few highlights of the first quarter results and then we can take questions at the end of the call.

Gary W. Johnson: Thanks, Wolf, and thanks to everyone for joining the call. I'm just going to go over a few highlights of the Q1 results, then we can take questions at the end of the call. All amounts are in US dollars unless otherwise stated. As you can see from the earnings release today, we had an excellent quarter with our highest recorded quarterly revenue and adjusted EBITDA, and a strong increase in production. Net revenue increased by 20% to $19.6 million, compared to $16.4 million in the prior quarter due to the higher production. Average production was up 15% to 4,685 BOE per day, compared to 4,077 BOE per day in the prior quarter. The increase was due to the wells that were drilled during 2025.

Gary Johnson: Thanks, Wolf, and thanks to everyone for joining the call. I'm just going to go over a few highlights of the Q1 results, then we can take questions at the end of the call. All amounts are in US dollars unless otherwise stated. As you can see from the earnings release today, we had an excellent quarter with our highest recorded quarterly revenue and adjusted EBITDA, and a strong increase in production. Net revenue increased by 20% to $19.6 million, compared to $16.4 million in the prior quarter due to the higher production. Average production was up 15% to 4,685 BOE per day, compared to 4,077 BOE per day in the prior quarter. The increase was due to the wells that were drilled during 2025.

Speaker #3: All amounts are in US dollars unless otherwise stated. As you can see from the earnings released today, we had an excellent quarter with our highest recorded quarterly revenue and adjusted EBITDA and a strong increase in production.

Speaker #3: Net revenue increased by 20% to $19.6 million compared to $16.4 million in the prior quarter due to the higher production. Average production was up 15% to $4,685 BOE per day.

Speaker #3: Compared to 4,077 BOE per day in the prior quarter. The increase was due to the wells that were drilled during 2025. Adjusted EBITDA was $14.8 million, compared to $12.8 million in the prior quarter.

Gary W. Johnson: Adjusted EBITDA was $14.8 million, compared to $12.8 million in the prior Q, which was an increase of 16%, mainly due to higher revenues. Our net income was $4 million or $0.11 per basic share, compared to $5.8 million or $0.16 per basic share in the same period of 2025. That decrease was due to a large non-cash mark-to-market unrealized loss on commodity contracts of $2.9 million. That was due to the significant increase in oil prices in March of 2026. Operating expense was $8 per BOE for the quarter, compared to $7.07 per BOE in the prior year Q1, which was an increase of 13%.

Gary Johnson: Adjusted EBITDA was $14.8 million, compared to $12.8 million in the prior Q, which was an increase of 16%, mainly due to higher revenues. Our net income was $4 million or $0.11 per basic share, compared to $5.8 million or $0.16 per basic share in the same period of 2025. That decrease was due to a large non-cash mark-to-market unrealized loss on commodity contracts of $2.9 million. That was due to the significant increase in oil prices in March of 2026. Operating expense was $8 per BOE for the quarter, compared to $7.07 per BOE in the prior year Q1, which was an increase of 13%.

Speaker #3: Which was an increase of 16% mainly due to higher revenues. Our net income was $4 million or $0.11 per basic share compared to $5.8 million or $0.16 per basic share in the same period of 2025.

Speaker #3: And that decrease was due to a large non-cash mark-to-market unrealized loss on commodity contracts of $2.9 million. That was due to the significant increase in oil prices in March of 2026.

Speaker #3: Operating expense was $8.00 per BOE for the quarter, compared to $7.07 per BOE in the prior year first quarter, which was an increase of 13%.

Speaker #3: The increase was due to workover costs on a non-operated well reassessed natural gas and NGL prior year gathering and processing fees and higher water hauling costs compared to the prior year first quarter.

Gary W. Johnson: The increase was due to workover costs on a non-operated well, reassessed natural gas and NGL prior year gathering and processing fees, and higher water hauling costs compared to the prior year Q1. Our net back from operations increased 2% to $38.41 per BOE, compared to $37.55 per BOE in the prior quarter. Net back including commodity contracts for Q1 was $37.72 per BOE, compared to $37.55 per BOE in Q1 2025. The increases were due to higher average prices. As you may have seen earlier this week, we announced that our credit facility was redetermined and the borrowing capacity was increased from $65 million to $75 million. Even though our borrowing capacity has increased, we have been paying down on our credit facility.

Gary Johnson: The increase was due to workover costs on a non-operated well, reassessed natural gas and NGL prior year gathering and processing fees, and higher water hauling costs compared to the prior year Q1. Our net back from operations increased 2% to $38.41 per BOE, compared to $37.55 per BOE in the prior quarter. Net back including commodity contracts for Q1 was $37.72 per BOE, compared to $37.55 per BOE in Q1 2025. The increases were due to higher average prices. As you may have seen earlier this week, we announced that our credit facility was redetermined and the borrowing capacity was increased from $65 million to $75 million. Even though our borrowing capacity has increased, we have been paying down on our credit facility.

Speaker #3: Our net back from operations increased 2% to $38.41 per BOE compared to $37.55 per BOE in the prior year quarter. Net back including commodity contracts for the first quarter was $37.72 per BOE compared to $37.55 per BOE in the first quarter of '25.

Speaker #3: The increases were due to higher average prices. As you may have seen earlier this week, we announced that our credit facility was redetermined and the borrowing capacity was increased from $65 million to $75 million.

Speaker #3: And even though our borrowing capacity has increased, we have been paying down on our credit facility. Our net debt at the end of the first quarter was $45 million which was down from $46 million at the end of the year.

Gary W. Johnson: Our net debt at the end of Q1 was $45 million, which was down from $46 million at the end of the year. Then subsequent to the end of the quarter, we made a debt paydown of $4 million, and we plan to make an additional $4 million net paydown later in May. With that, I'll hand it back to Wolf.

Gary Johnson: Our net debt at the end of Q1 was $45 million, which was down from $46 million at the end of the year. Then subsequent to the end of the quarter, we made a debt paydown of $4 million, and we plan to make an additional $4 million net paydown later in May. With that, I'll hand it back to Wolf.

Speaker #3: And in subsequent to the end of the quarter, we made a debt paydown of $4 million. And we plan to make an additional $4 million net paydown later in May.

Speaker #3: And with that, I'll hand it back to Wolf.

Speaker #2: Thanks, Gary. As Gary laid out, we had a very good quarter with us hitting our highest quarterly revenue and adjusted EBIT and the company's history.

Wolf E. Regener: Thanks, Gary. As Gary laid out, we had a very good quarter with us hitting our highest quarterly revenue and adjusted EBITDA in the company's history. Even though the average oil prices were only $70.31 per barrel, it's nice being able to say only $71 right now, given where current prices are. The company is in solid financial shape, paying down some of our debt from drilling the wells at the end of last year, and we're looking to continue that success we've had over the last few years. I must say that the timing of the oil price increase right now is really great, and it's benefiting our cash flow. Overall, our plan is to continue to execute and build and grow company value for all shareholders. We're looking to continue buying back shares and drilling more wells.

Wolf Regener: Thanks, Gary. As Gary laid out, we had a very good quarter with us hitting our highest quarterly revenue and adjusted EBITDA in the company's history. Even though the average oil prices were only $70.31 per barrel, it's nice being able to say only $71 right now, given where current prices are. The company is in solid financial shape, paying down some of our debt from drilling the wells at the end of last year, and we're looking to continue that success we've had over the last few years. I must say that the timing of the oil price increase right now is really great, and it's benefiting our cash flow. Overall, our plan is to continue to execute and build and grow company value for all shareholders. We're looking to continue buying back shares and drilling more wells.

Speaker #2: Even though the average oil prices were only $70.31 per barrel, it's nice being able to say only $71 right now given where our current prices are.

Speaker #2: The company has been in solid financial shape, paying down some of our debt from drilling the wells at the end of last year. And we're looking to continue that success we've had over the last few years.

Speaker #2: And I must say that the timing of the oil price increase right now is really great and it's benefiting our cash flow. Overall, our plan is to continue to execute and build and grow company value for all shareholders.

Speaker #2: We're looking to continue buying back shares and drilling more wells. We'll also continue to get the word out about the company to shareholders and potential shareholders.

Wolf E. Regener: We'll also continue to get the word out about the company to shareholders and potential shareholders. For instance, Gary and I will be attending and having one-on-one meetings at the Louisiana Energy Conference, which is from May 26 to 28. I will be on a panel at that conference on the 27th. In addition, we'll also be presenting at the Lytham Virtual Spring Conference on May 28. With that concludes the formal part of our presentation, we'd be happy to answer any questions that you now may have.

Wolf Regener: We'll also continue to get the word out about the company to shareholders and potential shareholders. For instance, Gary and I will be attending and having one-on-one meetings at the Louisiana Energy Conference, which is from May 26 to 28. I will be on a panel at that conference on the 27th. In addition, we'll also be presenting at the Lytham Virtual Spring Conference on May 28. With that concludes the formal part of our presentation, we'd be happy to answer any questions that you now may have.

Speaker #2: For instance, Gary and I will be attending and having one-on-one meetings at the Louisiana Energy Conference, which is from May 26th to the 28th.

Speaker #2: And I will be on a panel at that conference on the 27th. In addition, we'll also be presenting at the Lithium Virtual Spring Conference on May 28th.

Speaker #2: With that, that includes the formal part of our presentation. And we'd be happy to answer any questions that you now may have.

Speaker #1: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you were using a speakerphone, please pick up your handset before pressing any keys.

Operator: The first question today comes from Steve Ferazani with Sidoti. Please go ahead.

Speaker #1: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster.

Speaker #1: The first question today comes from Steve Farzani, Wisodoty. Please go ahead.

Operator: The first question today comes from Steve Ferazani with Sidoti. Please go ahead.

Speaker #4: Good afternoon, Wolf. Gary, obviously strong production quarter. We're seeing the benefit of those 2025 wells. Wolf, even since you guided the Orient conflict seems to be now prolonged, maybe we get an end shorter term than that longer.

Steve Ferazani: Afternoon, Wolf, Gary. Obviously strong production quarter, seeing the benefit of those 2025 wells. Now, Wolf, even since you guided, your Mideast conflict seems to be now prolonged. Maybe we get an end shorter term than that longer, but the damage to global production is clear. We see a pretty healthy strip. Obviously, that's gonna be a positive impact to your cash flow as we move through this year. How are you thinking now about capital allocation? You've laid out this 3 well drilling program. How are you thinking about cash usage as we move through this year? Has it changed?

Speaker #4: But the damage to global production is clear. We see a pretty healthy strip. Obviously, that's going to be a positive impact to your cash flow as we move through this year.

Speaker #4: How are you thinking now about capital allocation? You've laid out this three-well drilling program. How are you thinking about cash usage as we move through this year?

Speaker #4: And has it changed?

Wolf E. Regener: Thank you, Steve. Good to hear from you. We did just have our AGM and where we have 3 new board members that came on board. We've had a good meeting with them, and we're gonna come up with some proposals and options that we're gonna present to the board here in the coming weeks in order to determine what we do with all this extra cash flow, drilling some more wells, paying down more debt or buying back shares. We'll have some clarity here in the future, and hopefully we'll put out a different forecast in the future with what's going on now. I agree with you, prices are hopefully staying elevated. The back end of the curve has come up a bit.

Speaker #2: So thank you, Steve. Good to hear from you. We did just have our AGM and where we have three new board members that came on board.

Wolf Regener: Thank you, Steve. Good to hear from you. We did just have our AGM and where we have 3 new board members that came on board. We've had a good meeting with them, and we're gonna come up with some proposals and options that we're gonna present to the board here in the coming weeks in order to determine what we do with all this extra cash flow, drilling some more wells, paying down more debt or buying back shares. We'll have some clarity here in the future, and hopefully we'll put out a different forecast in the future with what's going on now. I agree with you, prices are hopefully staying elevated. The back end of the curve has come up a bit.

Speaker #2: And so we've had a good meeting with them and we're going to come up with some proposals and options that we're going to present to the board here in the coming weeks.

Speaker #2: In order to determine what we do with all this extra cash flow—drilling some more wells, paying down more debt, or buying back shares.

Speaker #2: So, we'll have some clarity here in the future, and hopefully we'll put out a different forecast in the future with what's going on now.

Speaker #2: And I agree with you, prices are hopefully staying elevated. The back end of the curve has come up a bit. It's not as high as really where I think it should be, still.

Wolf E. Regener: It's not as high as really where I think it should be still.

Wolf Regener: It's not as high as really where I think it should be still.

Steve Ferazani: Yeah.

Speaker #2: But it does give some guidance, and I'm on the same page with you as far as I think oil prices are staying up longer.

Wolf E. Regener: It does give some guidance, and I'm on the same page with you as far as I think oil prices are staying up longer, the damage has been done, and that the market hasn't really taken that into account yet, on a forward curve basis yet.

Wolf Regener: It does give some guidance, and I'm on the same page with you as far as I think oil prices are staying up longer, the damage has been done, and that the market hasn't really taken that into account yet, on a forward curve basis yet.

Speaker #2: The damage has been done. And that the market hasn't really taken that into account yet on a forward curve basis yet.

Speaker #4: Got it. Can you give an update on the three well drilling program? Where are you in the drilling process? What's your thoughts on timing or completions?

Steve Ferazani: Got it. Can you give an update on the 3 well drilling program? Where are you in the drilling process? What's your thoughts on timing on completions.

Speaker #2: Just drilling, and then third quarter, like we put in the press release, that we'll be hopefully bringing those wells on at that point in time when we get closer.

Wolf E. Regener: Just drilling then, you know, Q3, like we put in the press release, that we'll be, you know, hopefully bringing those wells on at that point in time when we get closer. I try to stay away from that because there's some fluctuations when you get exact weeks of having completions equipment out there and things like that. I'd rather be a little vague, no offense.

Wolf Regener: Just drilling then, you know, Q3, like we put in the press release, that we'll be, you know, hopefully bringing those wells on at that point in time when we get closer. I try to stay away from that because there's some fluctuations when you get exact weeks of having completions equipment out there and things like that. I'd rather be a little vague, no offense.

Speaker #2: I try to stay away from that because there's some fluctuations when you get exact weeks of having completion equipment out there and things like that.

Speaker #2: So I'd rather be a little vague, no offense, in order to have everything wrong.

Steve Ferazani: No, I understand.

Wolf E. Regener: not have anything wrong.

Wolf Regener: Not have anything wrong.

Speaker #4: I understand. Got it. The higher OPEX this quarter sounds like it was primarily one-timers. Are you starting to see any inflationary pressures?

Steve Ferazani: Got it. The higher OpEx this quarter sounds like it was primarily one-timers. Are you starting to see any inflationary pressures?

Wolf E. Regener: No, not yet. Not yet, not on the operating side of things. That shouldn't really change. Most of our costs are pretty locked in. Like you said, it's that was out of our control, out of our hands, not up, rework, and stuff like that. Then a little bit on the water handling things. It's just from our fracture stimulations that we did last year for the offset wells. That a little higher water handling costs, which will should start coming down again, too, for the future quarters.

Speaker #2: No, not yet. Not yet. Not on the operating side of things. And that shouldn't really change. Most of our costs are pretty locked in.

Wolf Regener: No, not yet. Not yet, not on the operating side of things. That shouldn't really change. Most of our costs are pretty locked in. Like you said, it's that was out of our control, out of our hands, not up, rework, and stuff like that. Then a little bit on the water handling things. It's just from our fracture stimulations that we did last year for the offset wells. That a little higher water handling costs, which will should start coming down again, too, for the future quarters.

Speaker #2: And like you said, it's that was an out of our control, out of our hands not up. Rework and stuff like that. And then a little bit on the water handling things, it's just from our fracture stimulations that we did last year for the offset wells.

Speaker #2: So that a little higher water handling costs, which will should start coming down again too for the future quarters.

Speaker #4: Yeah. And then the color on that, the March cost was on the water hauling cost. The March cost was half of January. So really it was loaded to the beginning of the quarter.

Steve Ferazani: And then-

Gary W. Johnson: Just to give more color on that.

Gary Johnson: Just to give more color on that.

Steve Ferazani: Yeah.

Gary W. Johnson: The March cost was on the water hauling cost, the March cost was half of January, so it really was front-loaded to the beginning of the quarter. It should keep coming down. Just giving more color.

Gary Johnson: The March cost was on the water hauling cost, the March cost was half of January, so it really was front-loaded to the beginning of the quarter. It should keep coming down. Just giving more color.

Speaker #4: So it should keep coming down. Just give me more color.

Speaker #5: Got it, that's helpful. And realized prices came in a little bit better than we were modeling, Wolf. Looks like the differentials were narrower. Any color you can provide around that?

Steve Ferazani: Got it. That's helpful. Realized prices came in a little bit better than we were modeling. Wolf, looks like the differentials were narrower. Any color you can provide around that?

Wolf E. Regener: No, not really. I mean, our differential still should be around $1.85. It doesn't really fluctuate.

Speaker #2: No, not really. I mean, our differential still should be around $1.85. It doesn't really fluctuate much per contract itself. It's just a matter of where pricing was and what they must be—the fluctuations in mid-month type of thing.

Wolf Regener: No, not really. I mean, our differential still should be around $1.85. It doesn't really fluctuate much per contract itself. It's just a matter of where pricing was and what they must be the fluctuations in mid-month type of thing of what took care of that.

Steve Ferazani: Okay

Wolf E. Regener: much per contract itself. It's just a matter of where pricing was and what they must be the fluctuations in mid-month type of thing of what took care of that.

Speaker #2: Okay, that took care of that. So, got it.

Steve Ferazani: Got it. Got it. That's what I got. Thanks, Wolf. Thanks, Gary.

Speaker #5: That's what I got. Thanks, Wolf. Thanks, Gary.

Speaker #2: All right. Thank you, Steve.

Wolf E. Regener: All right. Thank you, Steve.

Wolf Regener: All right. Thank you, Steve.

Speaker #1: The next question comes from Pofrat with Alliance Global Partners. Please go ahead.

Operator: The next question comes from Poe Fratt with Alliance Global Partners. Please go ahead.

Poe Fratt: Hi, good morning, Wolf. Can you just give me an idea of sort of how the March production looked versus the January production or maybe a run rate for April? You know, looking at sort of how the wells that came on at the end of last year are doing so far.

Speaker #6: Hi, good morning, Wolf. Can you just give me an idea of how the March production looked versus the January production? Or maybe a run rate for April?

Speaker #6: Looking at, sort of, how those wells that came on at the end of last year are doing so far.

Wolf E. Regener: You know, we haven't put that out publicly, I can't really say that on this call either. I mean, they're just going through the natural declines like our normal shale wells do and like they do as well, our wells do as well. The wells overall are performing as expected, I can say. Everything's matching what we have forecasted for the year as well. We're comfortable with our forecast that we've put together for the year based on just drilling those 3 wells at a lower percentage rate.

Speaker #2: You know, we haven't put that out publicly, so I can't really say that on this call either. But I mean, they're just going through the natural declines like our normal shale wells do and like what they do as well.

Wolf Regener: You know, we haven't put that out publicly, I can't really say that on this call either. I mean, they're just going through the natural declines like our normal shale wells do and like they do as well, our wells do as well. The wells overall are performing as expected, I can say. Everything's matching what we have forecasted for the year as well. We're comfortable with our forecast that we've put together for the year based on just drilling those 3 wells at a lower percentage rate.

Speaker #2: Our wells do as well. The wells overall are performing as expected, I can say. So everything's matching what we have forecasted for the year as well.

Speaker #2: So we're comfortable with our forecast that we've put together. For the year, based on just drilling those three wells at a lower percentage rate, by the way, if you noticed that our percentage rate on those wells was, I think we said 67% or something like that.

Wolf E. Regener: By the way, if you noticed that our percentage rate on those wells, I think we said 67% or something like that when we first announced them, and we're up to in the 80s now on working interest in those wells.

Wolf Regener: By the way, if you noticed that our percentage rate on those wells, I think we said 67% or something like that when we first announced them, and we're up to in the 80s now on working interest in those wells.

Speaker #2: And when we first announced them and we're up to in the 80s now on working interest on those wells.

Speaker #6: Great. And then what will the working interest be on the next wells that you drill?

Poe Fratt: Great.

Wolf E. Regener: Thanks.

Wolf Regener: Thanks.

Poe Fratt: What will the working interest be on the next wells that you drill?

Speaker #2: You mean these three that we're drilling, you mean? They're right now, they're about 88% now.

Wolf E. Regener: You mean these 3 that we're drilling, you mean?

Wolf Regener: You mean these 3 that we're drilling, you mean?

Poe Fratt: Yeah.

Wolf E. Regener: Right now they're about 88% now.

Wolf Regener: Right now they're about 88% now.

Speaker #6: Okay. Great. And then if you could, I scanned your 10-Q and I didn't see any subsequent event discussing hedging. So have you done any hedging since the end of the first quarter?

Poe Fratt: Okay, great. If you could I scanned your 10-Q, and I didn't see any subsequent event discussing hedging. Have you done any hedging since the end of the Q1? Would you discuss, sort of given your posture, your comments earlier on prices, are you going to, you know, wait to hedge a little bit more? Sort of what's your strategy on the hedging front?

Speaker #6: And then, would you discuss, sort of given your posture and your comments earlier on prices, are you going to wait to hedge a little bit more?

Speaker #6: Or sort of what's your strategy on the hedging front?

Speaker #2: Yeah, so the hedging—I mean, I'll give you kind of my overall thoughts on hedging in general. Where it's always been is, like, if you can hedge in the 90 to 100 range longer term, you should probably do that.

Wolf E. Regener: Yeah. The hedging, I mean, I'll give you kind of my overall thoughts on hedging in general. What it's always been is like, you know, if you can hedge in, you know, 90 to 100 longer term, you should probably do that for a portion of your production. Like I said, the back end of the curve really hasn't come up. It's come up, but not as much as I would like to see it come up. I think we're gonna be in for a bit stronger till then. Gary, I think we put all of our hedges in by 31 March, right?

Wolf Regener: Yeah. The hedging, I mean, I'll give you kind of my overall thoughts on hedging in general. What it's always been is like, you know, if you can hedge in, you know, 90 to 100 longer term, you should probably do that for a portion of your production. Like I said, the back end of the curve really hasn't come up. It's come up, but not as much as I would like to see it come up. I think we're gonna be in for a bit stronger till then. Gary, I think we put all of our hedges in by 31 March, right?

Speaker #2: For a portion of your production, and like I said, the back end of the curve really hasn't come up. It's come up, but not as much as I would like to see it come up.

Speaker #2: And I think we're going to be in for a bit stronger, too, then. Gary, I think we put all of our hedges in by March 31st, right?

Speaker #6: Yeah. We didn't have anything subsequent to March 31st because we met the bank requirements by the end of March.

Gary W. Johnson: Yeah. We didn't have anything subsequent to 31 March 'cause we met.

Gary Johnson: Yeah. We didn't have anything subsequent to 31 March 'cause we met.

Wolf E. Regener: Yeah.

Wolf Regener: Yeah.

Gary W. Johnson: We met the bank requirements by the end of March.

Gary Johnson: We met the bank requirements by the end of March.

Speaker #2: Yeah. So as soon as the prices spiked up, we added some hedges right away. And then we were a little patient on some of them by adding some more longer-term but it was all done before the end of the first quarter then.

Wolf E. Regener: Yeah. As soon as the prices spiked up, we added some hedges right away. We were a little patient on some of them by adding some more longer term. It was all done before the end of the Q1 then.

Wolf Regener: Yeah. As soon as the prices spiked up, we added some hedges right away. We were a little patient on some of them by adding some more longer term. It was all done before the end of the Q1 then.

Speaker #6: Yeah. And it seems like you're using more colors than you are swaps, at least beyond this second quarter. Okay.

Poe Fratt: Yeah. It seems like you're using more collars than you are swaps, at least, you know, beyond this Q2. Okay.

Speaker #3: That's correct. And we add some we also add some deferred puts in there as well. As we go out further. Just to protect the bottom.

Gary W. Johnson: That's correct. We also have some deferred puts in there as well, you know, as we go out farther just to protect not having any ceiling.

Gary Johnson: That's correct. We also have some deferred puts in there as well, you know, as we go out farther just to protect not having any ceiling.

Speaker #6: Yeah, no, I'm just looking at—yeah, I'm looking at page six on the Q. Great, thanks for your time.

Poe Fratt: Yeah, I'm looking at page 6 on the Q. Great.

Wolf E. Regener: Got it.

Wolf Regener: Got it.

Poe Fratt: Thanks for your time.

Speaker #2: Absolutely. Thanks for the questions.

Wolf E. Regener: Absolutely. Thanks for the questions.

Wolf Regener: Absolutely. Thanks for the questions.

Speaker #3: Thank you.

Gary W. Johnson: Thank you.

Gary Johnson: Thank you.

Speaker #1: The next question comes from Lee Curry with Curry Partners. Please go ahead.

Operator: The next question comes from Leigh Stephen Curry with Curry Partners. Please go ahead.

Speaker #4: Thank you. Congratulations, Wolf, on your continued progress here with the company. Very eager to see how things go with your new board members when that gradually shakes out.

Leigh Stephen Curry: Thank you. Congratulations, Wolf, on your continued progress here with the company. Very eager to see how things go with your new board members when that gradually shakes out. The question I have today is how and when or if does this dramatic decline in oil inventories here in the United States affect you? Is all of your oil sold on the spot market? Is any of it on contracted on a longer-term basis? Are there any takeaway concerns? I know Exxon is in charge of that, are there any kind of concerns or problems that the lower inventories and maybe even some rationing, you know, of distillate that may not be too far away here in the United States, any impact on you?

Leigh Curry: Thank you. Congratulations, Wolf, on your continued progress here with the company. Very eager to see how things go with your new board members when that gradually shakes out. The question I have today is how and when or if does this dramatic decline in oil inventories here in the United States affect you? Is all of your oil sold on the spot market? Is any of it on contracted on a longer-term basis? Are there any takeaway concerns? I know Exxon is in charge of that, are there any kind of concerns or problems that the lower inventories and maybe even some rationing, you know, of distillate that may not be too far away here in the United States, any impact on you?

Speaker #4: The question I have today is how and when or if does this dramatic decline in oil inventories here in the United States affect you?

Speaker #4: Is all of your sold is all of your oil sold on the spot market? Is any of it on contracted on a longer-term basis?

Speaker #4: Are there any takeaway concerns? I know Exxon is in charge of that, but are there any kind of concerns or problems with the lower inventories, and maybe even some rationing of distillate that may not be too far away here in the United States?

Speaker #4: Any impact on you?

Wolf E. Regener: It'll just be extremely along the lines of just what the price is of WTI for us for on the oil side of things.

Speaker #2: So it'll just be extremely along the lines of just what the price is of WTI for us on the oil side of things. So, the oil price—WTI—is up.

Wolf Regener: It'll just be extremely along the lines of just what the price is of WTI for us for on the oil side of things.

Leigh Stephen Curry: All right.

Leigh Curry: All right.

Leigh Stephen Curry: WTI is up, then we're making more money. We do have some hedges in place that we just talked about. It was about 50%.

Leigh Curry: WTI is up, then we're making more money. We do have some hedges in place that we just talked about. It was about 50%.

Speaker #2: Then we're making more money. We do have some hedges in place that we just talked about. It was about 50% of what our projected production is not including the new wells.

Wolf E. Regener: Of what our projected production is, not including the new wells. Whatever our projected production was here, a few months ago. We have about 50% of that hedged. Some of that, you know, as we were talking about before with costless collars, we can capture some of that upside that was above the, where the prices were at the time. The rest of it is all free floating still. We will definitely take advantage or, have the advantage of, I should say, 'cause not anything we're doing, of having the higher prices affect our bottom line. We had said for every $5 increase on our forecast, I think it was adding about $2.8 million, if I'm correct, Gary, to our

Wolf Regener: Of what our projected production is, not including the new wells. Whatever our projected production was here, a few months ago. We have about 50% of that hedged. Some of that, you know, as we were talking about before with costless collars, we can capture some of that upside that was above the, where the prices were at the time. The rest of it is all free floating still. We will definitely take advantage or, have the advantage of, I should say, 'cause not anything we're doing, of having the higher prices affect our bottom line. We had said for every $5 increase on our forecast, I think it was adding about $2.8 million, if I'm correct, Gary, to our.

Speaker #2: So whatever our projected production was here a few months ago, and so we have about 50% of that hedged. And some of that, as we were talking about before with costless colors so we can capture some of that upside that was above where the prices were at the time.

Speaker #2: And the rest of it is all free-floating still. So we will definitely take advantage or have the advantage of, I should say, because not anything we're doing of having the higher prices affect our bottom line.

Speaker #2: And we had said for every $5 increase on our forecast, I think it was adding about 2.8 million, if I'm correct, Gary.

Speaker #4: Yeah, that's correct. That's none of the hedges we have in place.

Gary W. Johnson: Yeah, that's correct. That's the set of the hedges we have in place.

Gary Johnson: Yeah, that's correct. That's the set of the hedges we have in place.

Speaker #2: Yeah. To our EBITDA for the year. And as far as takeaway, no, there's no issues. We actually handle our own oil takeaways, but gas and NGLs are handled through Exxon.

Wolf E. Regener: Yeah. To our EBITDA for the year. As far as takeaway, no, there's no issues. We actually handle our own oil takeaways, but gas and NGLs are handled through Exxon.

Wolf Regener: Yeah. To our EBITDA for the year. As far as takeaway, no, there's no issues. We actually handle our own oil takeaways, but gas and NGLs are handled through Exxon.

Speaker #4: Oh, all right. Thank you very much. And I look forward to hearing the details of y'all's presentation that you work with the new board.

Leigh Stephen Curry: All right. Thank you very much, and I look forward to hearing the details of y'all's presentation that you work with the new board. Again, congratulations, Wolf.

Leigh Curry: All right. Thank you very much, and I look forward to hearing the details of y'all's presentation that you work with the new board. Again, congratulations, Wolf.

Speaker #4: Again, congratulations, Wolf.

Speaker #2: Thank you very much. Appreciate your calling in. Good to hear from you.

Wolf E. Regener: Thank you very much. Appreciate your calling in. It's good to hear from you.

Wolf Regener: Thank you very much. Appreciate your calling in. It's good to hear from you.

Speaker #1: As a reminder, if you would like to ask a question, please press star, then one to join the question queue. The next question comes from Richard Dernley with Longport Partners.

Operator: As a reminder, if you would like to ask a question, please press star then one to join the question queue. The next question comes from Richard Dernely with Longport Partners. Please go ahead.

Speaker #1: Please go ahead.

Speaker #5: Good morning. Sorry, I’ve got a cold, so I’m a little croaky.

Richard Dernely: Good morning. Sorry, I got a cold, so I'm a little croaky.

Richard Dearnley: Good morning. Sorry, I got a cold, so I'm a little croaky.

Speaker #2: Not a problem at all, Richard.

Wolf E. Regener: Not a problem at all, Richard.

Wolf Regener: Not a problem at all, Richard.

Speaker #5: Then I realized the board is new. Very new. Are there initial indications that you will complete these three wells differently than you would have planned them before the board arrived?

Richard Dernely: I realize the board is new, very new.

Richard Dearnley: I realize the board is new, very new.

Wolf E. Regener: Yep.

Wolf Regener: Yep.

Richard Dernely: Are the initial indications that you will complete the, these three wells, differently than you would have planned them before the board arrived?

Richard Dearnley: Are the initial indications that you will complete the, these three wells, differently than you would have planned them before the board arrived?

Wolf E. Regener: We are doing our completion designs right now. New ideas are definitely being taken into account, and those are being attributed to that. We will potentially do some tweaks to our completion designs on those wells.

Speaker #2: We are doing our completion designs right now. New ideas are definitely being taken into account, and those are being attributed to that. So we will potentially do some tweaks to our completion designs on those wells.

Wolf Regener: We are doing our completion designs right now. New ideas are definitely being taken into account, and those are being attributed to that. We will potentially do some tweaks to our completion designs on those wells.

Richard Dernely: Would you characterize the design changes as substantial or minimal or in the middle?

Speaker #5: Would you characterize the design changes as substantial, or minimal, or in the middle?

Richard Dearnley: Would you characterize the design changes as substantial or minimal or in the middle?

Wolf E. Regener: You know, that'll be the end result as far as how they perform.

Speaker #2: You know, that'll be the end result as far as how they perform.

Wolf Regener: You know, that'll be the end result as far as how they perform.

Speaker #5: Oh. Well.

Richard Dernely: Oh. Well.

Richard Dearnley: Oh. Well.

Wolf E. Regener: So sometimes-

Wolf Regener: So sometimes a small tweak could make a big difference. Sometimes a larger tweak doesn't make that much of a difference. The truth will be in the pudding, so to speak. We're hoping that some of these tweaks do make a substantial difference.

Speaker #2: So sometimes a small tweak could make a big difference. Sometimes a larger tweak doesn't make that much of a difference. So the truth will be in the pudding, so to speak.

Richard Dernely: That is true.

Richard Dernely: Sometimes a small tweak could make a big difference. Sometimes a larger tweak doesn't make that much of a difference. The truth will be in the pudding, so to speak. We're hoping that some of these tweaks do make a substantial difference.

Speaker #2: And we're hoping that some of these tweaks do make a substantial difference. But we'll see.

Richard Dernely: Right.

Richard Dearnley: Right.

Richard Dernely: We'll see.

Wolf Regener: We'll see.

Richard Dernely: When should you finish drilling?

Speaker #5: When should you finish drilling?

Richard Dearnley: When should you finish drilling?

Wolf E. Regener: Generally, I mean, we budgeted about 20 days per each well, you know, between moves and everything else that happens. It's about 2 months worth of drilling and then, waiting for the, you know, getting the rig out of the way, getting everything cleaned up, and getting ready for the frac crews. In general.

Speaker #2: Generally, I mean, we budgeted about 20 days per E12. So between moves and everything else, that happens. So it's about two months' worth of drilling.

Wolf Regener: Generally, I mean, we budgeted about 20 days per each well, you know, between moves and everything else that happens. It's about 2 months worth of drilling and then, waiting for the, you know, getting the rig out of the way, getting everything cleaned up, and getting ready for the frac crews. In general, it's about three months from start to finish.

Speaker #2: And then waiting for the getting the rig out of the way, getting everything cleaned up, and getting ready for the frackers. So in general, it's about three months from start to finish.

Richard Dernely: Right.

Richard Dernely: It's about three months from start to finish.

Speaker #5: Okie-doke. Thank you.

Richard Dernely: Okie doke. Thank you.

Richard Dearnley: Okie doke. Thank you.

Speaker #2: Thank you.

Wolf E. Regener: Thank you.

Wolf Regener: Thank you.

Operator: This concludes our question and answer session. I would like to turn the conference back over for any closing remarks.

Speaker #1: This concludes our question and answer session. I would like to turn the conference back over for any closing remarks.

Speaker #2: Thank you very much. And thank you, everyone, for joining and listening, and for all the questions. I hope everyone has a great rest of your day, and we thank everyone for your support in the company.

Wolf E. Regener: Thank you very much, and thank you everyone for joining, listening, and all the questions. Hope everyone has a great rest of your day, and we thank everyone for your support in the company.

Wolf Regener: Thank you very much, and thank you everyone for joining, listening, and all the questions. Hope everyone has a great rest of your day, and we thank everyone for your support in the company.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.