Kolibri Global Energy (Kolibri or KEI) is a junior E&P oil and gas company, developing Caney Shale in southern Oklahoma. The company has been ramping up its drilling activity in 2022 and 2023, which led to a strong operational and financial performance. We expect this momentum to continue into FY24, as Kolibri benefits from its large undeveloped proved reserves, the low-cost nature of its operations and its superior operating netbacks. This positions KEI as a fast growing, yet defensive play in the sector, and points to strong near-term potential for returning cash to shareholders. We initiate coverage of KEI with an NPV derived value of US$7.5/share (C$10.1), also noting its undemanding peer-based valuation.
