Roth MKM analyst John White, in a research report published on September 16, 2024, provided an update on Kolibri Global Energy Inc. (KEI:TSX; KGEI:NASDAQ) following the company's announcement of a normal course issuer bid. The analyst maintained a Buy rating and a 12-month price target of US$6.75 on the stock.
Kolibri Global Energy announced that the Toronto Stock Exchange has accepted its notice to make a normal course issuer bid to purchase up to 1.8 million common shares, representing approximately 5% of the total 35.7 million shares outstanding as of September 10, 2024. White views this development positively, as indicated by the report title "KGEI: Share Buyback: Positive."
The analyst noted that the share repurchases will be conducted "through the facilities of the TSX and the Nasdaq Capital Market or through alternative Canadian trading platforms." He added, "The actual number of shares which may be purchased pursuant to the bid will be determined by management."
White did not provide specific commentary on the implications of this share buyback program for the company and its shareholders in the excerpt provided. However, share repurchase programs are generally viewed favorably as they can enhance shareholder value by reducing the number of outstanding shares and potentially increasing earnings per share.
Kolibri Global Energy's strategic focus includes exploiting and finding energy projects in oil and gas, with operations in the Ardmore Basin, Oklahoma. The company owns and operates the Tishomingo Field in Oklahoma through its wholly-owned subsidiary, BNK Petroleum (US) Inc., holding approximately 17,200 net contiguous acres with reserves from the Caney Formation.
Roth MKM's valuation methodology for Kolibri Global Energy is based on a net asset value (NAV) analysis. "Our target price is based on a net asset value (NAV) analysis which produced US$6.78 per share, which we adjusted lower to our US$ per share price target," White explained.
With a Buy rating and a price target of US$6.75, representing a potential return of approximately 119% from the price at the time of the report of US$3.08, Roth MKM sees significant upside potential for Kolibri Global Energy.
However, White notes several risk factors, including oil and natural gas price volatility, operational risks, regulatory changes, and uncertainties in petroleum reserve estimates.
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Disclosures for Roth MKM, Kolibri Global Energy Inc., September 16, 2024
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures: Shares of Kolibri Global Energy Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC.
