Gran Tierra Energy Inc. Reports Second Quarter 2024 Net Income of $36 Million and Continued Exploration Success
Gran Tierra Energy reported net income of $36 million for Q2 2024, reversing losses from previous quarters. The company achieved an average WI production of 32,776 BOPD, a 4% YoY increase.
Gran Tierra's operating netback was $113 million, with an adjusted EBITDA of $103 million. The company repurchased 3.9 million shares since January 2023, representing 11% of its outstanding shares. The cash balance was $115 million as of the end of June 2024.
Exploration highlights include successful wells in Bocachico and Charapa fields, with new drilling pads expected by early September. The company saw promising results from Charapa B6 and Bocachico Norte-J1, with tests planned for Q3 2024.
Despite a 38% decline in funds flow from operations, due to a strategic tax revision, Gran Tierra maintained positive financial metrics. Capital expenditures were $61 million, driven by an extensive exploration campaign.
Transportation expenses and G&A expenses increased, though operational costs decreased 3% from the prior year.
Gran Tierra Energy ha registrato un reddito netto di 36 milioni di dollari per il secondo trimestre del 2024, invertendo le perdite dei trimestri precedenti. L'azienda ha raggiunto una produzione media WI di 32.776 BOPD, con un incremento del 4% rispetto all'anno precedente.
Il netback operativo di Gran Tierra è stato di 113 milioni di dollari, con un EBITDA rettificato di 103 milioni di dollari. L' azienda ha riacquistato 3,9 milioni di azioni da gennaio 2023, corrispondenti all'11% delle sue azioni in circolazione. Il saldo di cassa era di 115 milioni di dollari alla fine di giugno 2024.
I risultati dell'esplorazione includono pozzi di successo nei campi di Bocachico e Charapa, con nuovi pad di perforazione previsti per inizio settembre. L'azienda ha visto risultati promettenti da Charapa B6 e Bocachico Norte-J1, con test programmati per il terzo trimestre del 2024.
Nonostante un calo del 38% nel flusso di fondi dalle operazioni, a causa di una revisione fiscale strategica, Gran Tierra ha mantenuto metriche finanziarie positive. Le spese in conto capitale sono state di 61 milioni di dollari, sostenute da una vasta campagna di esplorazione.
Le spese di trasporto e le spese generali e amministrative sono aumentate, anche se i costi operativi sono diminuiti del 3% rispetto all'anno precedente.
Gran Tierra Energy reportó un ingreso neto de 36 millones de dólares para el segundo trimestre de 2024, revertiendo las pérdidas de trimestres anteriores. La compañía logró una producción promedio WI de 32.776 BOPD, un aumento del 4% interanual.
El netback operativo de Gran Tierra fue de 113 millones de dólares, con un EBITDA ajustado de 103 millones de dólares. La empresa recompró 3.9 millones de acciones desde enero de 2023, lo que representa el 11% de sus acciones en circulación. El saldo de efectivo era de 115 millones de dólares al final de junio de 2024.
Los momentos destacados de exploración incluyen pozos exitosos en los campos Bocachico y Charapa, con nuevos pads de perforación esperados para principios de septiembre. La compañía vio resultados prometedores de Charapa B6 y Bocachico Norte-J1, con pruebas programadas para el tercer trimestre de 2024.
A pesar de una disminución del 38% en el flujo de fondos de las operaciones, debido a una revisión tributaria estratégica, Gran Tierra mantuvo métricas financieras positivas. Los gastos de capital fueron de 61 millones de dólares, impulsados por una extensa campaña de exploración.
Los gastos de transporte y los gastos generales y administrativos aumentaron, aunque los costos operativos disminuyeron un 3% en comparación con el año anterior.
Gran Tierra Energy는 2024년 2분기에 3600만 달러의 순이익을 보고하며 이전 분기의 손실을 만회했습니다. 이 회사는 평균 WI 생산량 32,776 BOPD을 달성했으며, 이는 전년 대비 4% 증가한 수치입니다.
Gran Tierra의 운영 네백은 1억 1300만 달러였으며, 조정 EBITDA는 1억 300만 달러였습니다. 이 회사는 2023년 1월 이후 390만 주를 재매입했으며 이는 발행 주식의 11%에 해당합니다. 현금 잔고는 2024년 6월 말 현재 1억 1500만 달러였습니다.
탐사 하이라이트에는 Bocachico와 Charapa 유전에서의 성공적인 우물이 포함되며, 새로운 드릴링 패드는 9월 초에 기대됩니다. 이 회사는 Charapa B6와 Bocachico Norte-J1에서 유망한 결과를 보았으며, 2024년 3분기에 테스트를 계획하고 있습니다.
운영에서의 자금 흐름이 38% 감소했지만, 전략적 세금 개정으로 인해 Gran Tierra는 긍정적인 재무 지표를 유지했습니다. 자본 지출은 6100만 달러였으며, 이는 광범위한 탐사 캠페인에 의해 추진되었습니다.
운송 비용과 일반 관리비가 증가했지만, 운영 비용은 이전 연도 대비 3% 감소했습니다.
Gran Tierra Energy a déclaré un revenu net de 36 millions de dollars pour le 2ème trimestre 2024, inversant les pertes des trimestres précédents. La société a atteint une production WI moyenne de 32.776 BOPD, représentant une augmentation de 4% par rapport à l'année précédente.
Le netback opérationnel de Gran Tierra était de 113 millions de dollars, avec un EBITDA ajusté de 103 millions de dollars. La société a racheté 3,9 millions d'actions depuis janvier 2023, ce qui représente 11% de ses actions en circulation. Le solde de trésorerie était de 115 millions de dollars à la fin juin 2024.
Les points saillants de l'exploration incluent des puits réussis dans les champs de Bocachico et Charapa, avec de nouveaux sites de forage prévus d'ici début septembre. La société a constaté des résultats prometteurs de Charapa B6 et Bocachico Norte-J1, avec des tests prévus pour le 3ème trimestre 2024.
Malgré une baisse de 38% dans le flux de fonds d'exploitation, due à une révision fiscale stratégique, Gran Tierra a maintenu des indicateurs financiers positifs. Les dépenses d'investissement étaient de 61 millions de dollars, alimentées par une vaste campagne d'exploration.
Les frais de transport et les frais généraux ont augmenté, bien que les coûts opérationnels aient diminué de 3% par rapport à l'année précédente.
Gran Tierra Energy berichtete im 2. Quartal 2024 von einem Nettogewinn in Höhe von 36 Millionen Dollar, wodurch die Verluste der vorherigen Quartale umgekehrt wurden. Das Unternehmen erreichte eine durschnittliche WI-Produktion von 32.776 BOPD, was einem Anstieg von 4% im Vergleich zum Vorjahr entspricht.
Der operative Netback von Gran Tierra betrug 113 Millionen Dollar, mit einem bereinigten EBITDA von 103 Millionen Dollar. Das Unternehmen hat seit Januar 2023 3,9 Millionen Aktien zurückgekauft, was 11% der ausstehenden Aktien entspricht. Der Geldbestand betrug zum Ende Juni 2024 115 Millionen Dollar.
Erkundungshighlights umfassen erfolgreiche Brunnen in den Feldern Bocachico und Charapa, mit neuen Bohrplätzen, die für Anfang September erwartet werden. Das Unternehmen sah vielversprechende Ergebnisse von Charapa B6 und Bocachico Norte-J1, mit geplanten Tests für das 3. Quartal 2024.
Trotz eines Rückgangs von 38% beim Geldfluss aus dem Betrieb, bedingt durch eine strategische Steuerrevision, hielt Gran Tierra positive Finanzkennzahlen aufrecht. Die Investitionsausgaben beliefen sich auf 61 Millionen Dollar, angetrieben durch eine umfangreiche Erkundungskampagne.
Transportkosten und allgemeine Verwaltungskosten stiegen, während die Betriebskosten im Vergleich zum Vorjahr um 3% sanken.
- Net income of $36 million, compared to net losses in prior quarters.
- 4% year-over-year increase in average WI production to 32,776 BOPD.
- Operating netback of $113 million and adjusted EBITDA of $103 million.
- Repurchased 3.9 million shares since January 2023, representing 11% of outstanding shares.
- Cash balance of $115 million as of June 30, 2024.
- Successful exploration wells in Bocachico and Charapa fields.
- Promising results from Charapa B6 and Bocachico Norte-J1 wells.
- 38% decline in funds flow from operations due to a strategic tax revision.
- Increased transportation expenses by 24% compared to prior quarter.
- Increased G&A expenses due to higher activity and technology costs.
Insights
Gran Tierra Energy's Q2 2024 results demonstrate a solid financial performance amid operational challenges. The company reported
The company's strategic tax planning is noteworthy. While it resulted in a
Gran Tierra's balance sheet remains robust, with
However, investors should monitor the impact of fluctuating oil differentials on the company's realized prices, as these can significantly affect profitability. The current wider Castilla and Oriente differentials could pressure margins in the near term if they persist.
Gran Tierra's Q2 2024 operational performance showcases both challenges and opportunities. The company's total average working interest production of 32,776 BOPD represents a
The company's exploration program in Ecuador is particularly exciting. The Bocachico Norte-J1 well results confirm Gran Tierra's geological understanding of the area, with potential pay in multiple zones. The strong production from Arawana-J1 and Bocachico-J1 wells (1,600-1,800 BOPD combined) underscores the potential of these new discoveries. The completion of the Charapa 3D seismic program and the encouraging early results from the Charapa-B6 well further enhance the company's exploration prospects.
Gran Tierra's focus on optimizing existing assets, as evidenced by the stimulation and ESP installation in Costayaco wells, demonstrates a balanced approach to growth. This strategy of enhancing production from mature fields while pursuing high-impact exploration could provide a sustainable growth trajectory.
However, the company faces challenges in managing transportation expenses, which increased
Gran Tierra's Q2 2024 results reflect a company successfully navigating market challenges while positioning itself for future growth. The
The company's operating netback of
Gran Tierra's exploration success in Ecuador, particularly in the Chanangue and Charapa blocks, could be a game-changer for the company's growth trajectory. The market is likely to closely watch the results of upcoming well tests and further drilling activities, as positive outcomes could significantly boost the company's reserves and production potential.
The company's continued share buyback program, having repurchased
However, investors should be mindful of the volatile nature of oil prices and regional differentials, which can significantly impact Gran Tierra's financial performance. The company's ability to manage costs and optimize production will be important in maintaining its competitive edge in a dynamic market environment.
- High Impact Exploration Program Continues to Deliver Exciting Catalysts for Growth with the Completion of the Charapa 3D Seismic Program Along with Drilling of the Bocachico Norte-J1 and Charapa B6 Wells
- Arawana-J1 and Bocachico-J1 Wells Continue to Yield Strong Production Results and Continued Positive Exploration Results with Bocachico Norte-J1
- Second Quarter 2024 Total Average WI Production of 32,776 BOPD, a
4% Increase in Production per Share from Second Quarter 2023 - Since January 1, 2023, Gran Tierra has Re-purchased Approximately 3.9 million or
11% of Its Outstanding Shares - Achieved Second Quarter 2024 Net Income of
$36 Million - Operating Netback of
$113 Million and Adjusted EBITDA of$103 Million(1)(3) - Exited the Quarter with
$115 Million in Cash
CALGARY, Alberta, July 31, 2024 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE)(TSX:GTE)(LSE:GTE) announced the Company’s financial and operating results for the quarter ended June 30, 2024 (“the Quarter”). All dollar amounts are in United States dollars, and production amounts are on an average working interest (“WI”) before royalties basis unless otherwise indicated. Per barrel (“bbl”) and bbl per day (“BOPD”) amounts are based on WI sales before royalties. For per bbl amounts based on net after royalty (“NAR”) production, see Gran Tierra’s Quarterly Report on Form 10-Q filed July 31, 2024.
Message to Shareholders
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: “During the second quarter of 2024, Gran Tierra systematically stimulated and added electrical submersible pumps into each of our Costayaco 56, 57, 58, and 59 wells, which were drilled as part of the 2024 development campaign. While the temporary offline status of these wells for the planned completions did impact second-quarter production, the improvements have resulted in enhanced production and all wells are back online. We continue to be excited about these development wells demonstrating further potential to enhance recovery and optimize value from further development drilling and waterflood optimization.
In Ecuador, we have drilled a second successful well in the Bocachico field to the west of the recent Arawana discovery which we have completed, and testing is underway. More recently, we are seeing very encouraging results in the Charapa-B6 well which has been cored with excellent oil shows in the targeted Hollin formation and is now being completed for testing. Importantly, we are constructing two new drilling pads at the exciting Arawana field area with the first expected to be completed by early September.
We are encouraged by the preliminary results of Bocachico Norte-J1 which confirmed our geological interpretation of the Bocachico discovery with potential pay in the T-Sand, B-Limestone and the Basal Tena and we look forward to testing each zone in the third quarter. We are looking forward to the second half of the year where we plan to drill the remainder of our high impact near field exploration wells in Ecuador including drilling two wells to further assess the Arawana discovery. From a development perspective, we are completing the civil works associated with building infrastructure and pads in the Suroriente Block in the southern Putumayo. We expect to begin drilling wells in the fourth quarter of 2024. We are very pleased about our first half results and there are still many more catalysts we are looking forward to in the second half of 2024.”
Ecuador Exploration Update:
- Chanangue Block
- During the Quarter the Bocachico Norte-J1 well was spud and drilled. Log data and core data is positive and testing in multiple zones including the Basal Tena sand, the T-sand and B-limestone is planned during the third quarter of 2024. Based on logs there is reservoir and net pay in the Basal Tena, T-sand and the B-Limestone. The B-Limestone was not a primary target but had positive shows while drilling, which indicates it may be connected to a fracture network. The completion will allow for multi-zone commingling when finished. The preliminary data confirms Gran Tierra’s geological understanding of the Bocachico field and provides further data of the fault mechanism between the Bocachico and Arawana fields.
- The Arawana-J1 and Bocachico-J1 wells continue to yield strong production results with a combined 1,600 to 1,800 BOPD. Gran Tierra plans to convert both wells from jet pump to electrical submersible pumping systems in the second half of 2024.
- Charapa Block
- Upon completion of the Bocachico Norte-J1 well, the rig was moved from the Chanangue Block to the Charapa Block. On July 14th, 2024, the Charapa B6 well was spud with the primary target being the Hollin formation. 60 feet of core was recovered and analyzed from the Hollin structure and the core was saturated with oil from the top to base, further corroborating the expected hydrocarbon column in our geological model of the Charapa field. Drilling is expected to be completed this week followed by casing and testing. Following the drilling of the Charapa B6 well, the rig will begin drilling the Charapa B7 well from the same pad and then move to appraise the Arawana discovery.
- The 3D seismic program of the Charapa Block has been completed, and the data is currently being processed. Preliminary interpretations of the high-quality 3D data confirms potential prospectivity and additional areas of interest identified on seismic including better definition over the Charapa structure. The 3D data will further delineate reserves, underpin future drilling locations scheduled for 2025 and support future development planning.
Key Highlights of the Quarter:
- Production: Gran Tierra’s total average WI production was 32,776 BOPD, an increase of
2% compared to the first quarter 2024 (“the Prior Quarter”) and up4% on a per share basis since the second quarter 2023. During the Quarter the Company systematically stimulated and installed electrical submersible pumps on four of the high producing Costayaco wells that were drilled as part of the 2024 development campaign. The process required that each well be taken offline for a period of time, which negatively impacted second quarter 2024 production by approximately 700 BOPD. All four wells are now back online with positive production results and Gran Tierra anticipates these positive trends will continue through the remainder of the year. - Net Income: Gran Tierra incurred net income of
$36 million , compared to a net loss of$0.1 million in the Prior Quarter and a net loss of$11 million in the second quarter of 2023. - Adjusted EBITDA(1): Adjusted EBITDA(1) was
$103 million compared to$95 million in the Prior Quarter and$97 million in the second quarter of 2023. Twelve month trailing Net Debt(1) to Adjusted EBITDA(1) was 1.3 times and is expected to be less than 1.0x by year end 2024, which is consistent with the Company’s previous guidance. - Funds Flow from Operations(1): Funds flow from operations(1) was
$46 million ($1.48 per share), down38% from the Prior Quarter and down13% from the second quarter of 2023. The main driver of the decrease in funds flow is the result of tax planning that resulted in the immediate increase of current taxes by$28 million . The company strategically revised its 2022 tax return to use its long-term tax receivables balance to offset current tax liabilities, rather than applying net operating loss carryforwards. This decision was driven by higher current and future tax rates and increased profitability in Colombia. As a result, the current tax expense increased by approximately$28 million , but this was offset by long-term tax receivables, resulting in no cash outflow. However, the increased tax expense did negatively impact our funds flow from operations(1). Nonetheless, this approach preserved our net operating loss carryforwards of approximately$85 million for future periods, providing greater tax benefit in 2024 and in the future. This tax initiative also allowed us to recover$18 million of taxes receivable in 2024 and accelerate the recovery of an estimated$65 million of taxes receivable over the next three years. - Cash and Debt: As of June 30, 2024, the Company had a cash balance of
$115 million , total debt of$637 million and net debt(1) of$521 million . - Share Buybacks: Gran Tierra purchased approximately 0.4 million shares during the Quarter. From January 1, 2023 to July 29, 2024, the Company has repurchased approximately 3.9 million shares, or
11% of shares issued and outstanding at January 1, 2023, from free cash flow(1). - Return on Average Capital Employed(1): Achieved return on average capital employed(1) of
18% during the Quarter and17% over the trailing 12 months.
Additional Key Financial Metrics:
- Capital Expenditures: Capital expenditures of
$61 million were higher than the$55 million in the Prior Quarter due to the launch of a 2024 exploration 3D seismic and drilling campaign, in addition to completions of the Costayaco development wells during the Quarter and down from$66 million compared to the second quarter of 2023. - Oil Sales: Gran Tierra generated oil sales of
$166 million , up5% from the second quarter of 2023 as a result of stronger Brent pricing and lower Vasconia, Castilla and Oriente oil differentials offset by5% lower sales volumes as a result of an increased build in inventory due to timing of sales. Oil sales increased5% from the Prior Quarter primarily due to a4% increase in Brent price and narrower Castilla and Vasconia oil differentials offset by a slightly higher Oriente oil differential and2% lower sales volumes. - Quality and Transportation Discounts: The Company’s quality and transportation discounts per bbl were down during the Quarter at
$12.79 , compared to$15.36 in the Prior Quarter and$14.10 in the second quarter of 2023. The Castilla oil differential per bbl narrowed to$8.21 from$8.82 in the Prior Quarter and from$9.41 in the second quarter of 2023 (Castilla is the benchmark for the Company’s Middle Magdalena Valley Basin oil production). The Vasconia differential per bbl narrowed to$4.00 from$5.05 in the Prior Quarter, and from$5.53 in the second quarter of 2023. Finally, the Ecuadorian benchmark, Oriente, per bbl was$8.38 , up from$8.02 in the Prior Quarter, and down from$11.43 one year ago. The current(2) Castilla differential is approximately$9.40 per bbl, the Vasconia differential is approximately$4.60 per bbl and the Oriente differential is approximately$9.00 per bbl. - Operating Expenses: Gran Tierra’s operating expenses decreased by
3% to$47 million , compared to the Prior Quarter primarily due to lower workover activities. Compared to the second quarter of 2023, operating expenses decreased by3% from$48.5 million , primarily due to lower lifting costs, partially offset by higher workover activities. On a per bbl basis operating expense increased by2% when compared to the second quarter of 2023 and decreased by1% when compared to the Prior Quarter. - Transportation Expenses: The Company’s transportation expenses increased by
24% to$6 million , compared to the Prior Quarter of$5 million and increased by54% from$4 million in the second quarter of 2023. Transportation expenses in the Quarter were higher as a result of Gran Tierra utilizing longer distance delivery points due to low water levels in the Magdalena river. - Operating Netback(1)(3): The Company’s operating netback(1)(3) was
$38.80 per bbl, up10% from the Prior Quarter and up12% from the second quarter of 2023. - General and Administrative (“G&A”) Expenses: Commensurate with increased activity, G&A expenses before stock-based compensation were
$3.69 per bbl, up from$3.22 per bbl in the Prior Quarter due to increased activity, consultant and information technology expenses and up from$3.12 per bbl, when compared to the second quarter of 2023 due to increased activity and information technology expense, general office expense and bank fees. - Cash Netback(1): Cash netback(1) per bbl was
$15.85 , compared to$25.13 in the Prior Quarter primarily as a result of higher current tax expenses of$14.54 per bbl compared to a current tax expense of$1.33 per bbl in the Prior Quarter (see explanation above in funds flow from operations section). Compared to one year ago, cash netback(1) per bbl decreased by$1.52 from$17.37 per bbl as a result of higher current taxes in the Quarter mentioned above and offset by stronger realized pricing.
Financial and Operational Highlights (all amounts in
| Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | |||||
| 2024 | 2023 | 2024 | 2024 | 2023 | |||
| Net Income (Loss) | $36,371 | $36,293 | |||||
| Per Share - Basic and Diluted(4) | $1.16 | $— | $1.15 | ||||
| Oil Sales | $165,609 | $323,186 | |||||
| Operating Expenses | (47,035) | (48,491) | (48,466) | (95,501) | (89,860) | ||
| Transportation Expenses | (5,690) | (3,691) | (4,584) | (10,274) | (6,757) | ||
| Operating Netback(1)(3) | $112,884 | $217,411 | |||||
| G&A Expenses Before Stock-Based Compensation | $10,737 | $20,253 | |||||
| G&A Stock-Based Compensation Expense | 6,160 | 317 | 3,361 | 9,521 | 1,817 | ||
| G&A Expenses, Including Stock Based Compensation | $16,897 | $29,774 | |||||
| Adjusted EBITDA(1) | $103,004 | $197,796 | |||||
| EBITDA(1) | $101,187 | $193,078 | |||||
| Net Cash Provided by Operating Activities | $73,233 | $134,060 | |||||
| Funds Flow from Operations(1) | $46,167 | $120,474 | |||||
| Capital Expenditures | $61,273 | $116,604 | |||||
| Free Cash Flow(1) | $(15,106) | $3,870 | |||||
| Average Daily Volumes (BOPD) | |||||||
| WI Production Before Royalties | 32,776 | 33,719 | 32,242 | 32,509 | 32,671 | ||
| Royalties | (6,774) | (6,515) | (6,397) | (6,586) | (6,301) | ||
| Production NAR | 26,002 | 27,204 | 25,845 | 25,923 | 26,370 | ||
| (Increase) Decrease in Inventory | (811) | 67 | 235 | (288) | (143) | ||
| Sales | 25,191 | 27,271 | 26,080 | 25,635 | 26,227 | ||
| Royalties, % of WI Production Before Royalties | 21% | 20% | |||||
| Per bbl | |||||||
| Brent | $85.03 | $83.42 | |||||
| Quality and Transportation Discount | (12.79) | (14.10) | (15.36) | (14.15) | (16.27) | ||
| Royalties | (15.31) | (11.98) | (13.08) | (14.16) | (12.38) | ||
| Average Realized Price | 56.93 | 51.65 | 53.32 | 55.11 | 51.26 | ||
| Transportation Expenses | (1.96) | (1.21) | (1.55) | (1.75) | (1.15) | ||
| Average Realized Price Net of Transportation Expenses | 54.97 | 50.44 | 51.77 | 53.36 | 50.11 | ||
| Operating Expenses | (16.17) | (15.86) | (16.40) | (16.29) | (15.25) | ||
| Operating Netback(1)(3) | 38.80 | 34.58 | 35.37 | 37.07 | 34.86 | ||
| G&A Expenses Before Stock-Based Compensation | (3.69) | (3.12) | (3.22) | (3.45) | (3.52) | ||
| Severance Expenses | (0.08) | — | (0.43) | (0.26) | — | ||
| Realized Foreign Exchange Gain (Loss) | 0.37 | (4.18) | (0.49) | (0.06) | (2.37) | ||
| Interest Expense, Excluding Amortization of Debt Issuance Costs | (5.38) | (3.81) | (5.12) | (5.24) | (3.85) | ||
| Interest Income | 0.35 | 0.21 | 0.23 | 0.29 | 0.24 | ||
| Net Lease Payments | 0.02 | 0.15 | 0.12 | 0.07 | 0.17 | ||
| Current Income Tax Expense | (14.54) | (6.46) | (1.33) | (7.88) | (6.34) | ||
| Cash Netback(1) | $15.85 | $20.54 | |||||
| Share Information (000s) | |||||||
| Common Stock Outstanding, End of Period(4) | 31,022 | 33,287 | 31,401 | 31,022 | 33,287 | ||
| Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted(4) | 31,282 | 33,300 | 31,813 | 31,547 | 33,872 | ||
(1) Funds flow from operations, operating netback, net debt, cash netback, return on average capital employed, earnings before interest, taxes and depletion, depreciation and accretion (“DD&A”) (“EBITDA”) and EBITDA adjusted for non-cash lease expense, lease payments, foreign exchange gains or losses, stock-based compensation expense, other gains or losses, and financial instruments gains or losses (“Adjusted EBITDA”), cash flow and free cash flow are non-GAAP measures and do not have standardized meanings under generally accepted accounting principles in the United States of America (“GAAP”). Cash flow refers to funds flow from operations. Free cash flow refers to funds flow from operations less capital expenditures. Refer to “Non-GAAP Measures” in this press release for descriptions of these non-GAAP measures and, where applicable, reconciliations to the most directly comparable measures calculated and presented in accordance with GAAP.
(2) Gran Tierra’s third quarter-to-date 2024 total average differentials are for the period from July 1 to July 31, 2024.
(3) Operating netback as presented is defined as oil sales less operating and transportation expenses. See the table titled Financial and Operational Highlights above for the components of consolidated operating netback and corresponding reconciliation.
(4) Reflects our 1-for-10 reverse stock split that became effective May 5, 2023.
Conference Call Information:
Gran Tierra will host its second quarter 2024 results conference call on Thursday, August 1, 2024, at 9:00 a.m. Mountain Time, 11:00 a.m. Eastern Time. Interested parties may access the conference call by registering at the following link: https://register.vevent.com/register/BIadb0ea054da04f06a3bbd95b354cc66f. The call will also be available via webcast at www.grantierra.com.
Corporate Presentation:
Gran Tierra’s Corporate Presentation has been updated and is available on the Company website at www.grantierra.com.
Contact Information
For investor and media inquiries please contact:
Gary Guidry
President & Chief Executive Officer
Ryan Ellson
Executive Vice President & Chief Financial Officer
+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. Except to the extent expressly stated otherwise, information on the Company’s website or accessible from our website or any other website is not incorporated by reference into and should not be considered 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 (the “SEC”) filings are available on the SEC website at http://www.sec.gov. The Company’s Canadian securities regulatory filings are available on SEDAR+ at http://www.sedarplus.ca 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”). All statements other than statements of historical facts included in this press release regarding our business strategy, plans and objectives of our management for future operations, capital spending plans and benefits of the changes in our capital program or expenditures, our liquidity and financial condition, and those statements preceded by, followed by or that otherwise include the words “expect,” “plan,” “can,” “will,” “should,” “guidance,” “forecast,” “budget,” “estimate,” “signal,” “progress” 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 leverage ratio target, the Company’s plans regarding strategic investments, acquisitions and growth, the Company’s drilling program and the Company’s expectations of commodity prices, exploration and production trends and its positioning for 2024. 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 our actual results to differ materially from the forward-looking statements in this press release include, but are not limited to: our operations are located in South America and unexpected problems can arise due to guerilla activity, strikes, local blockades or protests; technical difficulties and operational difficulties may arise which impact the production, transport or sale of our products; other disruptions to local operations; global health events; global and regional changes in the demand, supply, prices, differentials or other market conditions affecting oil and gas, including inflation and changes resulting from a global health crisis, geopolitical events, including the conflicts in Ukraine and the Gaza region, or from the imposition or lifting of crude oil production quotas or other actions that might be imposed by OPEC and other producing countries and the resulting company or third-party actions in response to such changes; changes in commodity prices, including volatility or a prolonged decline in these prices relative to historical or future expected levels; the risk that current global economic and credit conditions may impact oil prices and oil consumption more than we currently predict. which could cause further modification of our strategy and capital spending program; prices and markets for oil and natural gas are unpredictable and volatile; the effect of hedges; the accuracy of productive capacity of any particular field; geographic, political and weather conditions can impact the production, transport or sale of our products; our ability to execute our business plan, which may include acquisitions, and realize expected benefits from current or future initiatives; 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; volatility or declines in the trading price of our common stock or bonds; the risk that we do not receive the anticipated benefits of government programs, including government tax refunds; our ability to access debt or equity capital markets from time to time to raise additional capital, increase liquidity, fund acquisitions or refinance debt; our ability to comply with financial covenants in our indentures and make borrowings under any future 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, 2023 filed February 20, 2024 and its other filings with the SEC. These filings are available on the SEC website at http://www.sec.gov and on SEDAR+ at www.sedarplus.ca.
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. The risk that the assumptions on which the 2024 outlook are based prove incorrect may increase the later the period to which the outlook relates. 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. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
The estimates of future financial performance and production set forth in this press release may be considered to be future-oriented financial information or a financial outlook for purposes of applicable Canadian securities laws. Financial outlook and future-oriented financial information contained in this press release about the Company’s prospective Net Debt to Adjusted EBITDA ratio, 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. In particular, this press release contains projected operational and financial information for 2024. 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. The actual results of Gran Tierra’s operations for any period could 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 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. See Gran Tierra’s press release dated January 23, 2024 for additional information regarding 2024 financial and production outlook.
Non-GAAP Measures
This press release includes non-GAAP financial measures as further described herein. These non-GAAP measures do not have a standardized meaning under GAAP. Investors are cautioned that these measures should not be construed as alternatives to net income or loss, cash flow from operating activities or other measures of financial performance as determined in accordance with GAAP. Gran Tierra’s method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to similar measures used by other companies. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as to not imply that more emphasis should be placed on the non-GAAP measure.
Operating netback, as presented, is defined as oil sales less operating and transportation expenses. See the table entitled Financial and Operational Highlights above for the components of consolidated operating netback and corresponding reconciliation.
Return on average capital employed as presented is defined as earnings before interest and taxes ("EBIT"; annualized, if the period is other than one year) divided by average capital employed (total assets minus cash and current liabilities; average of the opening and closing balances for the period).
| Three Months Ended June 30, | Twelve Month Trailing June 30, | As at June 30, | ||||||||||
| Return on Average Capital Employed - (Non-GAAP) Measure ( | 2024 | 2024 | 2024 | |||||||||
| Net Income | $ | 36,371 | $ | 50,531 | ||||||||
| Adjustments to reconcile net income to EBIT: | ||||||||||||
| Interest Expense | 18,398 | 68,114 | ||||||||||
| Income Tax Expense (Recovery) | (9,072 | ) | 54,155 | |||||||||
| EBIT | $ | 45,697 | $ | 172,800 | ||||||||
| Total Assets | $ | 1,379,584 | ||||||||||
| Less Current Liabilities | 245,708 | |||||||||||
| Less Cash and Cash Equivalents | 115,327 | |||||||||||
| Capital Employed | $ | 1,018,549 | ||||||||||
| Annualized EBIT* | $ | 182,788 | ||||||||||
| Divided by Average Capital Employed | 1,018,549 | 1,018,549 | ||||||||||
| Return on Average Capital Employed | 18 | % | 17 | % | ||||||||
*Annualized EBIT was calculated for the three months ended June 30, 2024, by multiplying the quarter-to-date EBIT by 4.
Cash netback as presented is defined as net income or loss adjusted for DD&A expenses, deferred tax expense or recovery, stock-based compensation expense or recovery, amortization of debt issuance costs, non-cash lease expense, lease payments, unrealized foreign exchange gain or loss and other gain or loss. Management believes that operating netback and cash netback are useful supplemental measures for investors to analyze financial performance and provide an indication of the results generated by Gran Tierra’s principal business activities prior to the consideration of other income and expenses. A reconciliation from net income or loss to cash netback is as follows:
| Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||
| Cash Netback - (Non-GAAP) Measure ( | 2024 | 2023 | 2024 | 2024 | 2023 | ||||||||||||
| Net Income (Loss) | $ | 36,371 | $ | (10,825 | ) | $ | (78 | ) | $ | 36,293 | $ | (20,525 | ) | ||||
| Adjustments to reconcile net income (loss) to cash netback | |||||||||||||||||
| DD&A expenses | 55,490 | 56,209 | 56,150 | 111,640 | 108,405 | ||||||||||||
| Deferred tax (recovery) expense | (51,361 | ) | 13,975 | 13,479 | (37,882 | ) | 29,252 | ||||||||||
| Stock-based compensation expense | 6,160 | 317 | 3,361 | 9,521 | 1,817 | ||||||||||||
| Amortization of debt issuance costs | 2,760 | 1,019 | 3,306 | 6,066 | 1,800 | ||||||||||||
| Non-cash lease expense | 1,381 | 1,109 | 1,413 | 2,794 | 2,253 | ||||||||||||
| Lease payments | (1,311 | ) | (636 | ) | (1,058 | ) | (2,369 | ) | (1,242 | ) | |||||||
| Unrealized foreign exchange gain | (3,323 | ) | (8,062 | ) | (2,266 | ) | (5,589 | ) | (7,548 | ) | |||||||
| Other gain | — | — | — | — | (1,090 | ) | |||||||||||
| Cash netback | $ | 46,167 | $ | 53,106 | $ | 74,307 | $ | 120,474 | $ | 113,122 | |||||||
EBITDA, as presented, is defined as net income or loss adjusted for DD&A expenses, interest expense and income tax expense or recovery. Adjusted EBITDA, as presented, is defined as EBITDA adjusted for non-cash lease expense, lease payments, foreign exchange gain or loss, stock-based compensation expense or recovery, other gain or loss and financial instruments loss. Management uses this supplemental measure to analyze performance and income generated by our principal business activities prior to the consideration of how non-cash items affect that income, and believes that this financial measure is useful supplemental information for investors to analyze our performance and our financial results. A reconciliation from net income or loss to EBITDA and adjusted EBITDA is as follows:
| Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | Twelve Month Trailing June 30, | ||||||||||||||||||
| EBITDA - (Non-GAAP) Measure ( | 2024 | 2023 | 2024 | 2024 | 2023 | 2024 | |||||||||||||||
| Net Income (Loss) | $ | 36,371 | $ | (10,825 | ) | $ | (78 | ) | $ | 36,293 | $ | (20,525 | ) | $ | 50,531 | ||||||
| Adjustments to reconcile net income (loss) to EBITDA and Adjusted EBITDA | |||||||||||||||||||||
| DD&A expenses | 55,490 | 56,209 | 56,150 | 111,640 | 108,405 | 218,819 | |||||||||||||||
| Interest expense | 18,398 | 12,678 | 18,424 | 36,822 | 24,514 | 68,114 | |||||||||||||||
| Income tax (recovery) expense | (9,072 | ) | 33,732 | 17,395 | 8,323 | 66,615 | 54,155 | ||||||||||||||
| EBITDA | $ | 101,187 | $ | 91,794 | $ | 91,891 | $ | 193,078 | $ | 179,009 | $ | 391,619 | |||||||||
| Non-cash lease expense | 1,381 | 1,109 | 1,413 | 2,794 | 2,253 | 5,508 | |||||||||||||||
| Lease payments | (1,311 | ) | (636 | ) | (1,058 | ) | (2,369 | ) | (1,242 | ) | (4,145 | ) | |||||||||
| Foreign exchange (gain) loss | (4,413 | ) | 4,707 | (815 | ) | (5,228 | ) | 6,409 | 185 | ||||||||||||
| Stock-based compensation expense | 6,160 | 317 | 3,361 | 9,521 | 1,817 | 13,426 | |||||||||||||||
| Other (gain) loss | — | — | — | — | (1,090 | ) | 3,387 | ||||||||||||||
| Financial instruments loss | — | — | — | — | — | 15 | |||||||||||||||
| Adjusted EBITDA | $ | 103,004 | $ | 97,291 | $ | 94,792 | $ | 197,796 | $ | 187,156 | $ | 409,995 | |||||||||
Funds flow from operations, as presented, is defined as net income or loss adjusted for DD&A expenses, deferred tax expense or recovery, stock-based compensation expense or recovery, amortization of debt issuance costs, non-cash lease expense, lease payments, unrealized foreign exchange gain or loss, other gain or loss and financial instruments loss. Management uses this financial measure to analyze performance and income or loss generated by our principal business activities prior to the consideration of how non-cash items affect that income or loss, and believes that this financial measure is also useful supplemental information for investors to analyze performance and our financial results. Free cash flow, as presented, is defined as funds flow from operations adjusted for capital expenditures. Management uses this financial measure to analyze cash flow generated by our principal business activities after capital requirements and believes that this financial measure is also useful supplemental information for investors to analyze performance and our financial results. A reconciliation from net income or loss to both funds flow from operations and free cash flow is as follows:
| Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | Twelve Month Trailing June 30, | ||||||||||||||||||
| Funds Flow From Operations - (Non-GAAP) Measure ( | 2024 | 2023 | 2024 | 2024 | 2023 | 2024 | |||||||||||||||
| Net Income (Loss) | $ | 36,371 | $ | (10,825 | ) | $ | (78 | ) | $ | 36,293 | $ | (20,525 | ) | $ | 50,531 | ||||||
| Adjustments to reconcile net income (loss) to funds flow from operations | |||||||||||||||||||||
| DD&A expenses | 55,490 | 56,209 | 56,150 | 111,640 | 108,405 | 218,819 | |||||||||||||||
| Deferred tax (recovery) expense | (51,361 | ) | 13,975 | 13,479 | (37,882 | ) | 29,252 | (10,375 | ) | ||||||||||||
| Stock-based compensation expense | 6,160 | 317 | 3,361 | 9,521 | 1,817 | 13,426 | |||||||||||||||
| Amortization of debt issuance costs | 2,760 | 1,019 | 3,306 | 6,066 | 1,800 | 10,097 | |||||||||||||||
| Non-cash lease expense | 1,381 | 1,109 | 1,413 | 2,794 | 2,253 | 5,508 | |||||||||||||||
| Lease payments | (1,311 | ) | (636 | ) | (1,058 | ) | (2,369 | ) | (1,242 | ) | (4,145 | ) | |||||||||
| Unrealized foreign exchange gain | (3,323 | ) | (8,062 | ) | (2,266 | ) | (5,589 | ) | (7,548 | ) | (3,126 | ) | |||||||||
| Other (gain) loss | — | — | — | — | (1,090 | ) | 3,387 | ||||||||||||||
| Financial instruments loss | — | — | — | — | — | 15 | |||||||||||||||
| Funds flow from operations | $ | 46,167 | $ | 53,106 | $ | 74,307 | $ | 120,474 | $ | 113,122 | $ | 284,137 | |||||||||
| Capital expenditures | $ | 61,273 | $ | 65,565 | $ | 55,331 | $ | 116,604 | $ | 136,627 | $ | 198,859 | |||||||||
| Free cash flow | $ | (15,106 | ) | $ | (12,459 | ) | $ | 18,976 | $ | 3,870 | $ | (23,505 | ) | $ | 85,278 | ||||||
Net debt as of June 30, 2024, was
Presentation of Oil and Gas Information
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 not a 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.
This press release contains certain oil and gas metrics, including operating netback and cash netback, which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. These metrics are calculated as described in this press release and management believes that they are useful supplemental measures for the reasons described in this press release.
Such metrics have been included herein to provide readers with additional measures to evaluate the Company’s performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods.
FAQ
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