TIDMGTE
Achieved First Quarter 2021 Average Production of 24,463 BOPD, Up 12%
from Prior Quarter
Increased Current Average Production(1) to 28,930 BOPD, Highest Since
February 2020
Increased Acordionero Field Current Average Production(1) to 16,400 BOPD,
Highest Since September 2019
Reaffirms 2021 Full-Year Production Guidance of 28,000-30,000 BOPD
CALGARY, Alberta, April 12, 2021 (GLOBE NEWSWIRE) -- Gran Tierra Energy
Inc. ("Gran Tierra" or the "Company") (NYSE American:GTE)(TSX:GTE)
(LSE:GTE) today announced an operations and financial update. All dollar
amounts are in United States dollars and all production volumes are on a
working interest before royalties ("WI") basis and are expressed in
barrels ("bbl") of oil per day ("bopd"), unless otherwise stated.
Key Highlights:
-- Production: Gran Tierra's average production for various time periods is
outlined in the table below:
Total
Average Acordionero Costayaco Moqueta Other Company
Production (BOPD) (BOPD) (BOPD) (BOPD) (BOPD)
-------------- ----------- ----------- ----------- ----------- ----------
Second Quarter
2020 10,744 6,021 2,468 932 20,165
-------------- ----------- ----------- ----------- ----------- ----------
Third Quarter
2020 9,696 4,949 2,051 2,248 18,944
-------------- ----------- ----------- ----------- ----------- ----------
Fourth Quarter
2020 9,732 4,363 2,530 5,282 21,907
-------------- ----------- ----------- ----------- ----------- ----------
First Quarter
2021 12,681 4,190 2,304 5,288 24,463
-------------- ----------- ----------- ----------- ----------- ----------
Current
Average
Production(1) 16,400 4,700 2,400 5,430 28,930
-------------- ----------- ----------- ----------- ----------- ----------
(1) Approximate average production over the period from March 28, 2021
to April 10, 2021
-- 2021 Production Guidance: Based on the Company's significant progress in
increasing production during and subsequent to the first quarter of 2021,
Gran Tierra reaffirms its 2021 full-year production guidance of
28,000-30,000 bopd
-- Credit Facility and Cash Balances: As of March 31, 2021, the Company had
paid down its credit facility balance by $10 million to $180 million and
had increased its cash and cash equivalents balance to $20 million,
compared to a credit facility balance of $190 million and cash and cash
equivalents balance of $14 million as of December 31, 2020
-- Acordionero Oil Field (100% WI)
-- Utilizing 2 workover rigs, Gran Tierra continues to workover wells
that went offline in 2020, which the Company decided not to
workover at that time due to low oil prices; during the current
workover campaign, the average workover cost has decreased 28%
from 2019
-- The development drilling rig has also remained active since
starting on November 30, 2020, drilling both producers and
injectors; the average cost per well has decreased 36% since 2019;
the AC-75 well achieved a new record cycle time from spud to
on-production of 10.6 days, at a total cost of $1.9 million
-- The combination of the workover and drilling programs has resulted
in Acordionero's current average production2 of 16,400 bopd, with
approximately 700 bopd of additional production to be added from
existing wells; Gran Tierra also plans to drill and complete an
additional 3 to 5 wells and bring them on production during the
second quarter of 2021
-- Acordionero's current average production2 is the highest level
achieved since September 2019; Gran Tierra believes its prudent
reservoir management of Acordionero's waterflood has allowed the
Company to restore this field's production to a level last
achieved more than 18 months ago, which strongly demonstrates the
effectiveness of the waterflood
-- Costayaco Oil Field (100% WI)
-- In March 2021, Gran Tierra commenced its infill development
drilling campaign to drill 3 oil producers; this drilling program
is the first in Costayaco since November 2019
-- The CYC-42 infill oil well was drilled during the first quarter of
2021 with indications of high quality reservoir in the U, T, and
Caballos Sands based on well logs, with potential prospectivity in
the M2 Carbonate; the CYC-42 well was drilled in 12.1 days at a
cost of $1.9 million, a 30% decrease from the last 4 wells drilled
in Costayaco
-- Currently, the CYC-43 infill well is being drilled and is expected
be cased and cemented on or around April 12, 2021
-- The CYC-44 infill well is expected to spud on or around May 15,
2021
-- All 3 wells are expected to be on production by the end of the
second quarter of 2021
-- Workovers on 6 producing wells were completed during the first
quarter of 2021, with oil production restored and ramping back up
-- Moqueta Oil Field (100% WI)
-- During the second quarter of 2021, Gran Tierra plans a 5-well
workover program, which is expected to consist of 1 workover and 1
stimulation to restore production, and also 3 injector conversions
to further optimize the waterflood and increase production in the
second half of 2021
-- Suroriente Block (52% WI and Operator)
-- At the Cohembi oil field in the Suroriente Block, a facility
expansion program is progressing as planned, which is expected to
allow additional production to be brought online in the second
half of 2021
-- A workover rig is expected to move to the Suroriente Block in
mid-April 2021, where it is expected to accelerate the running of
larger pumps in 2 oil wells and to restore production in 3
additional oil wells which are currently offline
Message to Shareholders
Gary Guidry, President and Chief Executive Officer of Gran Tierra,
commented: "At the beginning of the fourth quarter of 2020, we decided
to hedge 15,000 bopd of first half 2021 production and to resume
development operations across all of our major assets. Throughout the
first quarter of 2021, we have significantly and profitably restored
Gran Tierra's total production. Our ability to ramp up Gran Tierra's
production to the highest level in over a year clearly demonstrates our
team's success at optimizing our core oil fields under waterflood, while
preserving and maximizing the long-term value of all of our assets.
Based on our significant progress in increasing production during the
first quarter of 2021, we reaffirm Gran Tierra's 2021 full-year
production guidance of 28,000-30,000 bopd.
Our 2021 capital budget of $130-150 million remains a balanced,
returns-focused program which prioritizes free cash flow generation and
debt reduction. If Brent oil prices continue to be well above our
original 2021 budget forecast of $49 per bbl, we plan to further
accelerate debt reduction through the remainder of 2021. We also
continue to advance exploration-related activities for our prioritized,
high impact exploration program and we expect to increase activity in
2022.
Our teams in Colombia, Canada and Ecuador have done an excellent job by
safely and effectively executing our development program during the many
challenges faced by Gran Tierra and our industry in 2020 and 2021. The
health and safety of our people and all of our stakeholders where we
operate will continue to be a focus in 2021 through our industry-leading
COVID-19 safety practices and protocols. In addition, our 'Beyond
Compliance Philosophy and Policy' continues. Where Gran Tierra
identifies significant opportunities and benefits to the environment and
communities, we voluntarily strive to go beyond what is legally required
to protect the environment and provide social benefits, because it is
the right thing to do."
(2) Approximate average production over the period from March 28, 2021
to April 10, 2021
Contact Information
For investor and media inquiries please contact:
Gary Guidry
President & Chief Executive Officer
Ryan Ellson
Executive Vice President & Chief Financial Officer
Rodger Trimble
Vice President, Investor Relations
+1-403-265-3221
info@grantierra.com
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. together with its subsidiaries is an independent
international energy company currently focused on oil and natural gas
exploration and production in Colombia and Ecuador. The Company is
currently developing its existing portfolio of assets in Colombia and
Ecuador and will continue to pursue additional new growth opportunities
that would further strengthen the Company's portfolio. The Company's
common stock trades on the NYSE American, the Toronto Stock Exchange and
the London Stock Exchange under the ticker symbol GTE. Additional
information concerning Gran Tierra is available at www.grantierra.com.
Information on the Company's website does not constitute a part of this
press release. Investor inquiries may be directed to info@grantierra.com
or (403) 265-3221.
Gran Tierra's Securities and Exchange Commission filings are available
on the SEC website at http://www.sec.gov and on SEDAR at
http://www.sedar.com and UK regulatory filings are available on the
National Storage Mechanism website at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Forward Looking Statements and Legal Advisories:
This press release contains opinions, forecasts, projections, and other
statements about future events or results that constitute
forward-looking statements within the meaning of the United States
Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and financial outlook and forward
looking information within the meaning of applicable Canadian securities
laws (collectively, "forward-looking statements"). The use of the words
"expect", "plan", "can," "will," "should," "guidance," "forecast,"
"signal," "measures taken to" and "believes", derivations thereof and
similar terms identify forward-looking statements. In particular, but
without limiting the foregoing, this press release contains
forward-looking statements regarding: the Company's strategies related
to drilling and operation activities, expectations regarding reservoir
prospects and production amounts, future well results (including initial
oil production rates and productive capacity based on past performance)
and operating and general and administrative costs, production guidance
for 2021, the impact of the Company's COVID-19 protocols, the Company's
expectations as to debt repayment and its positioning for 2021. The
forward-looking statements contained in this press release reflect
several material factors and expectations and assumptions of Gran Tierra
including, without limitation, that Gran Tierra will continue to conduct
its operations in a manner consistent with its current expectations,
pricing and cost estimates (including with respect to commodity pricing
and exchange rates), and the general continuance of assumed operational,
regulatory and industry conditions in Colombia and Ecuador, and the
ability of Gran Tierra to execute its business and operational plans in
the manner currently planned.
Among the important factors that could cause actual results to differ
materially from those indicated by the forward-looking statements in
this press release are: he unprecedented impact of the COVID-19 pandemic
and the actions of OPEC and non-OPEC countries and the procedures
imposed by governments in response thereto; disruptions to local
operations; the decline and volatility in oil and gas industry
conditions and commodity prices; the severe imbalance in supply and
demand for oil and natural gas; prices and markets for oil and natural
gas are unpredictable and volatile; the accuracy of productive capacity
of any particular field; the timing and impact of any resumption of
operations; Gran Tierra's operations are located in South America and
unexpected problems can arise due to guerilla activity or local
blockades or protests; technical difficulties and operational
difficulties may arise which impact the production, transport or sale of
our products; geographic, political and weather conditions can impact
the production, transport or sale of our products; the ability of Gran
Tierra to execute its business plan and realize expected benefits from
current initiatives (including a reduction of the capital program); the
risk that unexpected delays and difficulties in developing currently
owned properties may occur; the ability to replace reserves and
production and develop and manage reserves on an economically viable
basis; the accuracy of testing and production results and seismic data,
pricing and cost estimates (including with respect to commodity pricing
and exchange rates); the risk profile of planned exploration activities;
the effects of drilling down-dip; the effects of waterflood and
multi-stage fracture stimulation operations; the extent and effect of
delivery disruptions, equipment performance and costs; actions by third
parties; the timely receipt of regulatory or other required approvals
for our operating activities; the failure of exploratory drilling to
result in commercial wells; unexpected delays due to the limited
availability of drilling equipment and personnel; the risk that current
global economic and credit market conditions may impact oil prices and
oil consumption more than Gran Tierra currently predicts, which could
cause Gran Tierra to further modify its strategy and capital spending
program; volatility or declines in the trading price of our common stock
or bonds; the risk that Gran Tierra does not receive the anticipated
benefits of government programs, including government tax refunds; Gran
Tierra's ability to comply with financial covenants in its credit
agreement and indentures and make borrowings under its credit agreement;
and the risk factors detailed from time to time in Gran Tierra's
periodic reports filed with the Securities and Exchange Commission,
including, without limitation, under the caption "Risk Factors" in Gran
Tierra's Annual Report on Form 10-K for the year ended December 31, 2020
and its other filings with the Securities and Exchange Commission. These
filings are available on the Securities and Exchange Commission website
at http://www.sec.gov and on SEDAR at www.sedar.com.
The forward-looking statements contained in this press release are based
on certain assumptions made by Gran Tierra based on management's
experience and other factors believed to be appropriate. Gran Tierra
believes these assumptions to be reasonable at this time, but the
forward-looking statements are subject to risk and uncertainties, many
of which are beyond Gran Tierra's control, which may cause actual
results to differ materially from those implied or expressed by the
forward looking statements. In particular, the unprecedented nature of
the current economic downturn, pandemic and industry decline may make it
particularly difficult to identify risks or predict the degree to which
identified risks will impact Gran Tierra's business and financial
condition. All forward-looking statements are made as of the date of
this press release and the fact that this press release remains
available does not constitute a representation by Gran Tierra that Gran
Tierra believes these forward-looking statements continue to be true as
of any subsequent date. Actual results may vary materially from the
expected results expressed in forward-looking statements. Gran Tierra
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as expressly required by applicable
law.
The estimates of future production set forth in this press release may
be considered to be future-oriented financial information or a financial
outlook for the purposes of applicable Canadian securities laws.
Financial outlook and future-oriented financial information contained in
this press release about prospective financial performance, financial
position or cash flows are provided to give the reader a better
understanding of the potential future performance of the Company in
certain areas and are based on assumptions about future events,
including economic conditions and proposed courses of action, based on
management's assessment of the relevant information currently available,
and to become available in the future. These projections may not be
appropriate for other purposes. These projections contain
forward-looking statements and are based on a number of material
assumptions and factors set out above. Actual results may differ
significantly from the projections presented herein. These projections
may also be considered to contain future-oriented financial information
or a financial outlook. The actual results of Gran Tierra's operations
for any period will likely vary from the amounts set forth in these
projections, and such variations may be material. See above for a
discussion of the risks that could cause actual results to vary. The
future-oriented financial information and financial outlooks contained
in this press release have been approved by management as of the date of
this press release. Readers are cautioned that any such financial
outlook and future-oriented financial information contained herein
should not be used for purposes other than those for which it is
disclosed herein. The Company and its management believe that the
prospective operational and financial information has been prepared on a
reasonable basis, reflecting management's best estimates and judgments,
and represent, to the best of management's knowledge and opinion, the
Company's expected course of action. However, because this information
is highly subjective, it should not be relied on as necessarily
indicative of future results.
Presentation of Oil and Gas Information
BOEs have been converted on the basis of 6 thousand cubic feet ("Mcf")
of natural gas to 1 bbl of oil. BOEs may be misleading, particularly if
used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an
energy equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead. In
addition, given that the value ratio based on the current price of oil
as compared with natural gas is significantly different from the energy
equivalent of six to one, utilizing a BOE conversion ratio of 6 Mcf: 1
bbl would be misleading as an indication of value.
References to a formation where evidence of hydrocarbons has been
encountered is not necessarily an indicator that hydrocarbons will be
recoverable in commercial quantities or in any estimated volume. Gran
Tierra's reported production is a mix of light crude oil and medium and
heavy crude oil for which there is no precise breakdown since the
Company's oil sales volumes typically represent blends of more than one
type of crude oil. Well test results should be considered as preliminary
and not necessarily indicative of long-term performance or of ultimate
recovery. Well log interpretations indicating oil and gas accumulations
are not necessarily indicative of future production or ultimate
recovery. If it is indicated that a pressure transient analysis or
well-test interpretation has not been carried out, any data disclosed in
that respect should be considered preliminary until such analysis has
been completed. References to thickness of "oil pay" or of a formation
where evidence of hydrocarbons has been encountered is not necessarily
an indicator that hydrocarbons will be recoverable in commercial
quantities or in any estimated volume.
(END) Dow Jones Newswires
April 12, 2021 06:00 ET (10:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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