| From: LoneClone | 12/8/2022 2:55:31 PM | | | | | | Gran Tierra Energy Announces 2023 Guidance
ca.finance.yahoo.com
Gran Tierra Energy Inc.
Wed, December 7, 2022 at 2:05 p.m.·18 min read
2023 Capital Expenditure Budget of $210-250 Million, Expected 2023 Cash Flow1 of $270-320 Million in Base Case
Plan to Drill 18-23 Development Wells and 4-6 Exploration/Appraisal Wells
Forecast 2023 Production of 32,000-34,000 BOPD, an Increase of 8% from 2022 and 24% from 2021
Forecast 2023 Free Cash Flow2 of $135 Million Before Exploration, $65 Million After Exploration in Base Case
CALGARY, Alberta, Dec. 07, 2022 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE)(TSX:GTE)(LSE:GTE) today announced its 2023 capital budget and production guidance. All dollar amounts are in United States dollars and all production volumes are on a working interest before royalties basis and are expressed in barrels (“bbl”) of oil per day (“BOPD”), unless otherwise stated.
Key Highlights:
2023 Guidance:
Gran Tierra is forecasting the following ranges for the Company’s 2023 budget:
2023 Budget
| Low Case
| Base Case Case
| High Case
| Average Brent Oil Price ($/bbl)
| 75.00
| 85.00
| 95.00
| Total Company Production (BOPD)
| 32,000-34,000
| 32,000-34,000
| 32,000-34,000
| Operating Netback4 ($ million)
| 380-430
| 470-520
| 550-600
| EBITDA3 ($ million)
| 350-400
| 440-490
| 510-560
| Cash Flow1 ($ million)
| 230-280
| 270-320
| 310-360
| Total Capital ($ million)
| 210-250
| 210-250
| 210-250
| Free Cash Flow2 ($ million)
| 25
| 65
| 105
| Number of Development Wells (gross)
| 18-23
| 18-23
| 18-23
| Number of Exploration/Appraisal Wells (gross)
| 4-6
| 4-6
| 4-6
|
2023 Capital Program – Profitable Production Growth and High Impact Exploration:
Gran Tierra has a large, diversified development and exploration portfolio in Colombia and Ecuador. The Company’s planned 2023 capital program is a balanced program between development and optimization of existing assets and potentially high-impact exploration.
Development: Gran Tierra expects to allocate approximately 70% of its 2023 capital program towards development activities in its core assets in Colombia. The Company plans to drill 10 to 12 development wells in the Acordionero oil field in the Middle Magdalena Valley Basin. Acordionero’s 2023 plans also include drilling pad extensions, expanded polymer injection pilots (after encouraging 2022 results), and ongoing waterflood optimization. In the Putumayo Basin, Gran Tierra plans to drill 6 to 8 development wells in the Costayaco oil field and 2 to 3 development wells in the Moqueta oil field. The Company expects to execute its Colombian development drilling campaign during the first half of 2023.
Exploration: Approximately 30% of the Company’s 2023 capital program is expected to be allocated to exploration activities and the drilling of 4 to 6 exploration/appraisal wells in Colombia and Ecuador. Gran Tierra’s 2023 exploration drilling is planned to follow up on the encouraging results from the Company’s 2022 exploration program. The Company focuses its exploration program on short-cycle time, near-field prospects in proven basins with access to infrastructure.
Fully Funded Capital Program Generating Free Cash Flow2: Gran Tierra’s mid-point Base Case 2023 capital budget of $230 million is expected to be fully funded from the Base Case 2023 mid-point cash flow1 forecast of $295 million, based on an assumed average $85.00/bbl Brent oil price. The Company’s midpoint Base Case 2023 EBITDA3 guidance of $465 million is well above the midpoint of the Base Case 2023 capital budget of $230 million. Gran Tierra remains focused on generating strong free cash flow2, ongoing net debt5 reduction via bond buybacks and shareholder returns via share buybacks.
Control of Capital Program: Gran Tierra has 100% working interest in and operatorship of the Company's major assets in Colombia and Ecuador. This full control gives the Company the flexibility to quickly optimize its development and exploration programs with changes, either up or down, in oil prices.
Impact of Colombian Tax Reforms: After accounting for Colombia’s recently enacted tax reforms, Gran Tierra’s mid-point Base Case 2023 budget is expected to incur 2023 current taxes of approximately $110 to $130 million (payable in second quarter 2024).
Message to Shareholders
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "Our teams’ excellent work throughout 2022 has strongly positioned the Company for continued development and enhanced oil recovery activities in 2023 to optimize the value from each of our producing assets in Colombia. In addition, we plan to allocate about 30% of our 2023 capital program to prioritized exploration drilling opportunities in Colombia and Ecuador to follow up on our exciting initial exploration results in that 2022.
Our forecast 2023 capital budget is a balanced, returns-focused program which is expected to provide free cash flow2 generation, ongoing strengthening of our balance sheet, shareholder returns via share buybacks, optimization of ultimate oil reserves value and exposure to exploration upside. We see material potential in our exploration portfolio located in highly prospective geological trends in Ecuador and Colombia. We believe Gran Tierra is well-positioned to navigate the current volatile environment with our low base decline, conventional oil asset base and the operational control for capital allocation and timing, while maintaining a low-cost structure and the safety of our people."
1 “Cash flow” refers to line item “net cash provided by operating activities” under generally accepted accounting principles in the United States of America (“GAAP”).
2 “Free cash flow” is a non-GAAP measure and does not have a standardized meaning under GAAP. Free cash flow is defined as “net cash provided by operating activities” less capital expenditures. Refer to "Non-GAAP Measures" in this press release. Forecast 2023 free cash flow of $135 million “before exploration” is equal to the Base Case midpoint cash flow of $295 million less the Base Case midpoint total capital of $230 million, with Base Case midpoint exploration-only capital of approximately $70 million added back. Forecast 2023 free cash flow of $65 million “after exploration” is equal to the Base Case midpoint cash flow of $295 million less the Base Case midpoint total capital of $230 million. Free cash flows in the table above are the midpoints of the ranges of cash flows less the midpoints of the ranges of capital expenditures for each oil price scenario.
3 Earnings before interest, taxes and depletion, depreciation and accretion (“EBITDA”) is a non-GAAP measure and does not have a standardized meaning under GAAP. Refer to "Non-GAAP Measures" in this press release.
4 “Operating netback” is a non-GAAP measures and does not have standardized meaning under GAAP. Refer to “Non-GAAP Measures” in this press release.
5 Net debt is defined as GAAP total debt before deferred financing fees less cash.
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 globenewswire.com. The Company’s Canadian securities regulatory filings are available on SEDAR at globenewswire.com and UK regulatory filings are available on the National Storage Mechanism website at globenewswire.com.
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 capital budget amount and uses; ability of hedges to protect cash flows, 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); expected future net cash provided by operating activities (described in this press release as “cash flow”), free cash flow, operating netback, EBITDA and certain associated metrics; anticipated capital expenditures, including the location and impact of capital expenditures; operating and general and administrative costs; production guidance for 2022 and 2023; the impact of the Company’s COVID-19 protocols; and the Company’s expectations as to debt repayment, share repurchases and its positioning for 2022 and 2023. 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: Gran Tierra’s operations are located in South America and unexpected problems can arise due to guerilla activity or local blockades, strikes 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 (including the ongoing COVID-19 pandemic); 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 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 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 Gran Tierra currently predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; prices and markets for oil and natural gas are unpredictable and volatile; the accuracy of productive capacity of any particular field; 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; 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 effect of hedges; 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 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, 2021 and its other filings with the Securities and Exchange Commission. These filings are available on the Securities and Exchange Commission website at 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, EBITDA, net cash provided by operating activities (described in this press release as “cash flow”), free cash flow, operating netback, total capital, taxes and certain expenses and costs 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. In particular, this press release contains projected operational and financial information for 2023. 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.
Presentation of Oil and Gas Information
This press release contains certain oil and gas metrics, including operating 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. Such metrics are calculated as described in this press release and 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.
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.
Non-GAAP Measures
This press release includes forward-looking 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 an alternative to net income or loss 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, it may not be comparable to similar measures used by other companies. These non-GAAP financial measures are presented along with the corresponding GAAP measure so as to not imply that more emphasis should be placed on the non-GAAP measure.
Gran Tierra is unable to provide forward-looking net income, net cash provided by operating activities, and oil and gas sales, the GAAP measures most directly comparable to the non-GAAP measures EBITDA, free cash flow and operating netback, respectively, due to the impracticality of quantifying certain components required by GAAP as a result of the inherent volatility in the value of certain financial instruments held by the Company and the inability to quantify the effectiveness of commodity price derivatives used to manage the variability in cash flows associated with the forecasted sale of its oil production and changes in commodity prices.
Operating netback as presented is defined as projected 2023 oil and gas sales less projected 2023 operating and transportation expenses. The most directly comparable GAAP measures are oil and gas sales and oil and gas sales price, respectively. Management believes that operating netback is useful supplemental measures for management and investors to analyze financial performance and provides an indication of the results generated by our principal business activities prior to the consideration of other income and expenses. Gran Tierra is unable to provide a quantitative reconciliation of either forward-looking operating netback to its most directly comparable forward-looking GAAP measure because management cannot reliably predict certain of the necessary components of such forward-looking GAAP measures.
EBITDA as presented is defined as projected 2023 net income adjusted for DD&A expenses, interest expense and income tax expense or recovery. The most directly comparable GAAP measure is net income. 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, and believes that this financial measure is also useful supplemental information for investors to analyze performance and our financial results. Gran Tierra is unable to provide a quantitative reconciliation of forward-looking EBITDA to its most directly comparable forward-looking GAAP measure because management cannot reliably predict certain of the necessary components of such forward-looking GAAP measure.
Free cash flow as presented is defined as GAAP projected “net cash provided by operating activities” less projected 2023 capital spending. The most directly comparable GAAP measure is net cash provided by operating activities. Management believes that free cash flow is a useful supplemental measure for management and investors to in order to evaluate the financial sustainability of the Company’s business. Gran Tierra is unable to provide a quantitative reconciliation of forward-looking free cash flow to its most directly comparable forward-looking GAAP measure because management cannot reliably predict certain of the necessary components of such forward-looking GAAP measure. |
| | Canadian Oil & Gas Companies | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: LoneClone | 1/10/2023 2:27:41 PM | | | | | | Gran Tierra Energy Provides Operational and Financial Update
ca.finance.yahoo.com
Gran Tierra Energy Inc.
Mon, January 9, 2023 at 2:05 p.m. PST·10 min read
.
Gran Tierra Met Production Guidance with 2022 Total Company Average Production of Approximately 30,800 BOPD
Fourth Quarter 2022 Total Company Average Production of Approximately 32,600 BOPD, an Increase of 10% from Fourth Quarter 2021
Strong Exit with Total Company Average Production During December 2022 of Approximately 33,800 BOPD
Moqueta Development Campaign Underway with Second Development Well Spud
First Moqueta Development Well Yielding Encouraging Results
Bought Back 23 Million Gran Tierra Shares of Common Stock During 2022
CALGARY, Alberta, Jan. 09, 2023 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE)(TSX:GTE)(LSE:GTE) today announced an operational and financial update. All dollar amounts are in United States dollars, and production amounts are on an average working interest before royalties (“WI”) basis unless otherwise indicated. Per barrel (“bbl”) and bbl of oil per day (“BOPD”) amounts are based on WI sales before royalties.
Message to Shareholders
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: “We are excited to announce that our 2022 total Company average production was approximately 30,800 BOPD which was within our guidance despite several social disruptions and a delay in our Moqueta drilling program. Our Moqueta development campaign is well underway with two of the five planned wells having been spud thus far. The initial production results of the first well are encouraging with a stable average rate of 1,312 BOPD. We are very excited for what 2023 holds for the Company and expect to build off the momentum from the strong finish to 2022.”
Operations Update:
Production
During fourth quarter 2022, Gran Tierra’s total average production was approximately 32,600 BOPD.
December 2022 total Company average production was approximately 33,800 BOPD.
Gran Tierra’s total average production for the full year 2022 was approximately 30,800 BOPD which is within the Company’s prescribed guidance.
Colombia Development:
Moqueta Development Campaign:
Testing began on the first Moqueta well which was spud on November 28, 2022. From December 23, 2022, to January 9, 2022, the Moqueta-24 well has been producing on a jet pump at a stable average rate of 1,312 BOPD (28-degree API gravity) and 193 bbl of water ("BWPD") with a gas-oil ratio of 170 standard cubic feet per stock tank bbl.
On January 3, 2023, the Company spud its second development well in the Moqueta field. This well is expected to reach its planned total depth by mid-January 2023.
Acordionero Development:
Waterflood success at Acordionero resulted in December 2022 total Company average production for this field of approximately 17,800 BOPD, the highest level since the second quarter of 2019.
Water injection at Acordionero reached a new record of over 60,000 BWPD in December 2022.
Suroriente Development:
As a result of the successful increase in water injection, expansion of facilities, and minimal disruptions, the Suroriente Block produced an average of 8,700 BOPD gross (4,500 BOPD WI) in the fourth quarter of 2022, the highest level since the second quarter of 2015 despite not drilling a well since the first quarter of 2018.
Shareholder Returns:
Share Buybacks: Pursuant to Gran Tierra’s current normal course issuer bid, Gran Tierra purchased approximately 23 million shares during 2022, representing about 6.2% of shares outstanding as of June 30, 2022.
Debt Repayment:
As part of Gran Tierra’s focus on significant debt reduction, the Company reduced its total debt by $87.6 million in 2022 and by a further $122.5 million in 2021, for a reduction of total debt of $210.1 million over the past two fiscal years.
Corporate Presentation:
Gran Tierra’s Corporate Presentation 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
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 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 (including the Corporate Presentation referenced above) 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 U.S. Securities and Exchange Commission (“SEC”) filings are available on the SEC website at www.sec.gov. The Company’s Canadian securities regulatory filings are available on SEDAR at www.sedar.com and UK regulatory filings are available on the National Storage Mechanism (“the NSM”) website at data.fca.org.uk. Gran Tierra's filings on the SEC, SEDAR and the NSM websites are not incorporated by reference into this press release.
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,” “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 expected future production (including as a result of our testing results), the Company’s drilling program, the Company’s potential debt repayments and share repurchases. 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: Gran Tierra’s 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 (including the ongoing COVID-19 pandemic); 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, the Russian invasion of Ukraine, 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 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 Gran Tierra currently predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; prices and markets for oil and natural gas are unpredictable and volatile; the accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates); 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; the ability of Gran Tierra to execute its business plan and realize expected benefits from current 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 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 Gran Tierra does not receive the anticipated benefits of government programs, including government tax refunds; Gran Tierra’s ability to obtain a new credit agreement and to comply with financial covenants in its credit agreement and indentures and make borrowings under any 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, 2021 and its other filings with the Securities and Exchange Commission. These filings are available on the Securities and Exchange Commission website at sec.gov and 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.
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. |
| | Canadian Oil & Gas Companies | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: LoneClone | 1/23/2023 2:08:48 PM | | | | | | Frontera Energy/CGX Energy Joint Venture Spuds Wei-1 Well Offshore Guyana
newswire.ca
Frontera Energy Corporation Jan 23, 2023, 07:15 ET
Aiming To Build On Light Oil And Condensate Discovery At Kawa-1
TORONTO, Jan. 23, 2023 /CNW/ - CGX Energy Inc. (TSXV: OYL) ("CGX") and Frontera Energy Corporation (TSX: FEC) ("Frontera"), joint venture partners (the "Joint Venture") in the Petroleum Prospecting License for the Corentyne block offshore Guyana (the "License"), announce today that the Joint Venture has spud the Wei-1 well, on the Corentyne block, approximately 200 kilometres offshore from Georgetown, Guyana.
The Joint Venture also announces that the Government of Guyana has approved an Appraisal Plan for the northern section of the Corentyne block which commenced with the Wei-1 well. Following completion of Wei-1 drilling operations and upon detailed analysis of the results, the Joint Venture may consider future wells per its appraisal program to evaluate possible development feasibility in the Kawa-1 discovery area and throughout the northern section of the Corentyne block. Any future drilling is contingent on positive results at Wei-1 and the Joint Venture has no further drilling obligations beyond the Wei-1 well.
The Wei-1 well is located approximately 14 kilometres northwest of the Joint Venture's previous Kawa-1 light oil and condensate discovery and will be drilled in water depth of approximately 1,912 feet (583 metres) to an anticipated total depth of 20,500 feet (6,248 metres). The Wei-1 well will target Maastrichtian, Campanian and Santonian aged stacked sands within channel and fan complexes in the northern section of the Corentyne block. The well is expected to take approximately 4-5 months to reach total depth.
Professor Suresh Narine, Executive Co-Chairman of CGX's Board of Directors, commented:
"The Joint Venture is pleased to announce that it has spud the Wei-1 well offshore Guyana, and that the Government of Guyana has approved the Joint Venture's appraisal program. Wei-1 will appraise both the Kawa-1 discovery as well as explore additional opportunities within the Corentyne block. The Wei-1 well is on-trend and positioned for success with both Kawa-1 and recent peer discoveries immediately adjacent to the northern section of the Corentyne block. The Joint Venture is grateful for the Government of Guyana's ongoing support as the Joint Venture worked towards spudding Wei-1 in-line with the previously agreed terms."
Orlando Cabrales, Chief Executive Officer of Frontera, commented:
"We are very excited about the potentially transformational opportunity that is now before us on the Corentyne block in one of the most exciting exploration areas in the world and we look forward to safely and successfully drilling the Wei-1 well and potentially extending the Joint Venture's recent light oil and condensate discovery at the Kawa-1 well."
About CGX
CGX is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin and the development of a deep-water port in Berbice, Guyana.
About Frontera
Frontera Energy Corporation is a Canadian public company involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America, including related investments in both upstream and midstream facilities. The Company has a diversified portfolio of assets with interests in 32 exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in Colombia. Frontera is committed to conducting business safely and in a socially, environmentally and ethically responsible manner.
If you would like to receive News Releases via email as soon as they are published, please subscribe here: fronteraenergy.mediaroom.com.
Corporate Presentation
See Frontera Energy's corporate presentation at:
fronteraenergy.ca
Social Media
Follow Frontera Energy social media channels at the following links:
Twitter: twitter.com
Facebook: es-la.facebook.com
LinkedIn: co.linkedin.com.
Advisories
Cautionary Note Concerning Forward-Looking Statements:
This press release contains forward-looking information within the meaning of Canadian securities laws. Forward-looking information relates to activities, events or developments that CGX and Frontera believe, expect or anticipate will or may occur in the future. Forward-looking information in this press release includes, without limitation, statements relating to the parties' expectations as to exploration and development plans and objectives with regards to the Wei-1 well, including drilling plans and time to complete the Wei-1 well, the Joint Venture's consideration of future wells per its appraisal program following completion of the Wei-1 well and dependent upon detailed analysis of the results, and other exploration opportunities. All information other than historical fact is forward-looking information.
Forward-looking information reflects the current expectations, assumptions and beliefs of CGX and Frontera based on information currently available to them and considers the experience of CGX and Frontera and their perception of historical trends. Although CGX and Frontera believe that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be placed on such information. Forward-looking information is subject to a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to CGX and Frontera. The actual results of CGX or Frontera may differ materially from those expressed or implied by the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, either of CGX or Frontera. The annual information form of Frontera for the year ended December 31, 2021, and CGX's and Frontera's management's discussion and analysis for the year ended December 31, 2021, and quarter and nine months ended September 30, 2022, and other documents each of CGX and Frontera filed from time to time with securities regulatory authorities describe the risks, uncertainties, material assumptions and other factors that could influence actual results and such factors are incorporated herein by reference. Copies of these documents are available without charge by referring to each company's profile on SEDAR at www.sedar.com. All forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, each of CGX and Frontera disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.
SOURCE Frontera Energy Corporation
 For further information: Todd Durkee, Vice President, Development, CGX Energy Inc., (832) 300-3200, 2400, 333 Bay Street, Toronto, Ontario M5H 2T6, www.cgxenergy.com; Brent Anderson, Director, Investor Relations, (403) 705-8827, 2000, 222 - 3rd Avenue SW, Calgary, Alberta T2P 0B4, ir@fronteraenergy.ca, www.fronteraenergy.ca
|
| | Canadian Oil & Gas Companies | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| From: LoneClone | 1/25/2023 3:18:23 PM | | | | | | Gran Tierra Energy Announces Strong Reserves Replacement and Continued Reserves Growth in 2022
ca.finance.yahoo.com
GTE Alberta Inc.
Tue, January 24, 2023 at 3:00 p.m. PST·41 min read
Added Total Company Reserves of 14 MMBOE 1P, 17 MMBOE 2P and 31 MMBOE 3P
Achieved 126% 1P, 148% 2P and 280% 3P Reserves Replacement
Fourth Consecutive Year of 1P Reserves Growth
Exploration Discoveries Alone Added Company Reserves of 5 MMBOE 1P, 16 MMBOE 2P and 32 MMBOE 3P
Achieved Three-Year Average Per Barrel Finding and Development Costs of $11.69 PDP and $14.51 1P
Reserve Life Indexes of 7 (1P), 11 (2P) and 15 (3P) Years
Net Present Value Before Tax Discounted at 10 Percent Increased to $2.1 Billion (1P), $3.0 Billion (2P) and $4.1 Billion (3P)
1P Net Asset Value per Share of $4.62 Before Tax, Up 77% from 2021
2P Net Asset Value per Share of $7.36 Before Tax, Up 56% from 2021
Net Debt-Adjusted Production per Share Growth of 67% since 2021
Net Debt-Adjusted Reserves per Share Growth of 56% (1P), 57% (2P) and 69% (3P) since 2021
Future Net Revenue After Taxes and Capital Expenditures Forecast to be $1.4 Billion (1P), $1.7 Billion (2P) and $1.9 Billion (3P) Over the Next Five Years
Strong Start to 2023 with Year-to-Date Total Company Average Production of Approximately 33,000 BOPD
CALGARY, Alberta, Jan. 24, 2023 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. ("Gran Tierra" or the "Company") (NYSE American:GTE) (TSX:GTE) (LSE: GTE), a company focused on international oil exploration and production with assets currently in Colombia and Ecuador, today announced the Company's 2022 year-end reserves as evaluated by the Company's independent qualified reserves evaluator McDaniel & Associates Consultants Ltd. ("McDaniel") in a report with an effective date of December 31, 2022 (the "GTE McDaniel Reserves Report").
All dollar amounts are in United States ("U.S.") dollars and all reserves and production volumes are on a working interest before royalties ("WI") basis. Production is expressed in barrels ("bbl") of oil per day ("bopd"), while reserves are expressed in bbl, bbl of oil equivalent ("boe") or million boe ("MMBOE"), unless otherwise indicated. All reserves values, future net revenue and ancillary information contained in this press release have been prepared by McDaniel and calculated in compliance with Canadian National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) and the Canadian Oil and Gas Evaluation Handbook ("COGEH") and derived from the GTE McDaniel Reserves Report, unless otherwise expressly stated. The following reserves categories are discussed in this press release: Proved Developed Producing ("PDP"), Proved ("1P"), 1P plus Probable ("2P") and 2P plus Possible ("3P").
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: “During 2022, Gran Tierra achieved strong 126% (1P), 148% (2P) and 280% (3P) reserves replacement through our successful results from our development and exploration drilling, waterflooding programs and field performance. We completed our 2022 development plan on-budget including waterflooding efforts and development drilling in the Acordionero, Costayaco and Moqueta oil fields. After reduced exploration activity during 2020 and 2021, the Company also made several key exploration discoveries during 2022. We believe our success on multiple fronts during 2022 demonstrates Gran Tierra's ability to be a full-cycle oil and gas exploration, development and production company focused on value creation for all our stakeholders.
The success the Company achieved in 2022 also reflects our ongoing conversion of reserves from the Probable to the Proved category. With 115 booked Proved plus Probable Undeveloped future drilling locations, Gran Tierra is well positioned to continue to grow the Company's production in 2023 and beyond.
During 2022, a combination of our ongoing reductions in debt and per well drilling, completion and workover costs, focus on maintaining low operating costs, strong rebound in oil prices and share buybacks allowed Gran Tierra to achieve net asset values per share* before tax of $4.62 (1P), up 77% from 2021, and $7.36 (2P), up 56% from 2021. With this significant growth in our net asset values per share* in 2022, we believe Gran Tierra is well positioned to offer exceptional long-term stakeholder value.
We have started 2023 strong with year-to-date average production of approximately 33,000 bopd, which is the midpoint of our 2023 production guidance. We also recently drilled the Moqueta-25 development well, which we expect to bring on production in the new few weeks. We have secured two drilling rigs for our 2023 Acordionero and Costayaco development drilling programs and expect to spud development wells in both fields in early February 2023. We also plan to continue to focus on the development of our existing assets, appraisal of new discoveries and new exploration drilling, while generating free cash flow to strengthen our balance sheet and return capital to shareholders through share buybacks."
Highlights
2022 Year-End Reserves and Values
Before Tax (as of December 31, 2022)
| Units
| 1P
| 2P
| 3P
| Reserves
| MMBOE
| 84
| 130
| 183
| Net Present Value at 10% Discount ("NPV10")
| $ million
| 2,053
| 2,999
| 4,075
| Net Debt1
| $ million
| (453)
| (453)
| (453)
| Net Asset Value (NPV10 less Net Debt) ("NAV")
| $ million
| 1,600
| 2,546
| 3,622
| Outstanding Shares2
| million
| 346
| 346
| 346
| NAV per Share
| $/share
| 4.62
| 7.36
| 10.47
| NAV per Share Change from December 31, 2021
| %
| 77%
| 56%
| 59%
|
After Tax (as of December 31, 2022)
| Units
| 1P
| 2P
| 3P
| Reserves
| MMBOE
| 84
| 130
| 183
| NPV10
| $ million
| 1,328
| 1,833
| 2,409
| Net Debt1
| $ million
| (453)
| (453)
| (453)
| NAV
| $ million
| 875
| 1,380
| 1,956
| Outstanding Shares2
| million
| 346
| 346
| 346
| NAV per Share
| $/share
| 2.53
| 3.99
| 5.65
| NAV per Share Change from December 31, 2021
| %
| 59%
| 37%
| 38%
|
* See the above tables for the definitions of net asset values per share.
During 2022, Gran Tierra achieved:
Material growth in its 2022 year-end 1P NPV10 before tax valuation, which increased by 26% compared to 2021 year-end, and 2022 year-end 2P NPV10 before tax valuation, which increased by 25% compared to 2021 year-end, driven by the Company's successful development and exploration programs and a strong recovery in oil prices.
Growth in the Company's 2022 year-end 1P NPV10 and 2P NPV10 after tax valuations of 6% and 5% respectively, compared to 2021 year-end, which incorporated the new Colombian tax regime. The new Colombian tax regime lowered the Company's NPV10 after tax in all reserves categories by approximately 8% to 12% relative to the previous tax regime.
Strong reserves replacement ratios of:
126% 1P, with 1P reserves additions of 14 MMBOE (38% attributable to exploration discoveries).
148% 2P, with 2P reserves additions of 17 MMBOE (95% attributable to exploration discoveries).
280% 3P, with 3P reserves additions of 31 MMBOE (103% attributable to exploration discoveries).
Material 1P reserves additions largely driven by success with development drilling and waterflooding results at Acordionero and Costayaco, in addition to several exploration discoveries.
Material 2P and 3P reserve additions through the success of the Company's 2022 exploration program, which made several discoveries.
Finding and development costs ("F&D"), including change in future development costs ("FDC"), on a per boe basis of $18.18 (1P), $20.08 (2P) and $12.20 (3P).
Three-year average F&D, including change in FDC, on a per boe basis of $11.69 (PDP) and $14.51 (1P).
F&D recycle ratios*, including change in FDC, of 2.1 times (1P), 1.9 times (2P) and 3.2 times (3P).
Net debt-adjusted production per share3 growth of 67% since 2021.
Net debt-adjusted reserves per share4 growth of 56% (1P), 57% (2P) and 69% (3P) since 2021.
Significant reserves additions at Acordionero: 6 MMBOE (PDP) and 8 MMBOE (1P).
Material reserves additions from exploration discoveries: 5 MMBOE (1P), 16 MMBOE (2P) and 32 MMBOE (3P).
Gran Tierra's four major oil assets, Acordionero, Costayaco, Moqueta and Suroriente (all on waterflood) represent 81% of the Company's 1P reserves and 68% of its 2P reserves.
The Company is benefiting from ongoing material cost reductions for development drilling, completions and workovers in the Acordionero oil field, Gran Tierra's largest oil asset:
The Company drilled 22 development wells in Acordionero during 2022.
These new wells were drilled for an average cost of approximately $1.1 million per well, a reduction of 47% from the average for 2019.
These new wells' completion costs averaged approximately $0.7 million per well, a reduction of 41% from the average for 2019.
The average 2022 workover cost of an existing well was $0.4 million per well, down 51% from the 2019 average.
PDP reserves account for 56% of 1P reserves and 1P reserves account for 64% of 2P reserves, demonstrating strength of the Company's reserves base via the potential future conversion of Probable reserves into 1P reserves and Proved Undeveloped reserves into PDP reserves.
Gran Tierra's mature waterflood assets, Costayaco and Moqueta, continued to grow and deliver value, with total 2022 reserves additions of 2 MMBOE (2P) and 1 MMBOE (2P), respectively.
FDC are forecast to be $403 million for 1P reserves and $677 million for 2P reserves. Gran Tierra's 2023 base case mid-point guidance for cash flow** of $295 million is equivalent to 73% of 1P FDC and 44% of 2P FDC, which highlights the Company's potential ability to fund future development capital. Increases in FDC relative to 2021 reflect that McDaniel has now recognized that Gran Tierra has 78 Proved Undeveloped future drilling locations (up from 61 in 2021) and 115 Proved plus Probable Undeveloped future drilling locations (up from 94 in 2021).
2023 Production
Gran Tierra's 2023 year-to-date total average Company production is off to a strong start with an approximate average of 33,000 bopd5, within the Company's 2023 guidance range of 32,000-34,000 bopd.
* F&D recycle ratio is defined as fourth quarter 2022 operating netback per WI sales volume boe divided by the appropriate F&D costs on a per boe basis. Operating netback does not have a standardized meaning under generally accepted accounting principles in the United States of America ("GAAP") and is a non-GAAP measure. Operating netback is defined as oil sales less operating and transportation expenses. See "Non-GAAP Measures" in this press release.
** "Cash flow" refers to GAAP line item "net cash provide by operating activities". Gran Tierra's 2023 base case guidance is based on a forecast 2023 average Brent oil price of $85/bbl.
Future Net Revenue
Future net revenue reflects McDaniel’s forecast of revenue estimated using forecast prices and costs, arising from the anticipated development and production of reserves, after the deduction of royalties, operating costs, development costs, abandonment and reclamation costs and taxes but before consideration of indirect costs such as administrative, overhead and other miscellaneous expenses. The estimate of future net revenue below does not necessarily represent fair market value.
Consolidated Properties at December 31, 2022
| Proved (1P) Total Future Net Revenue ($ million)
| Forecast Prices and Costs
|
| Sales
Revenue
| Total
Royalties
| Operating
Costs
| Future
Development
Capital
| Abandonment
and
Reclamation
Costs
| Future Net
Revenue
Before
Future
Taxes
| Future
Taxes
| Future
Net
Revenue
After
Future
Taxes*
| 2023-2027
(5 Years)
| 4,074
| (840
| )
| (782
| )
| (403
| )
| (2
| )
| 2,047
| (677
| )
| 1,370
| Remainder
| 1,850
| (335
| )
| (662
| )
| —
|
| (63
| )
| 790
| (321
| )
| 469
| Total (Undiscounted)
| 5,924
| (1,175
| )
| (1,444
| )
| (403
| )
| (65
| )
| 2,837
| (998
| )
| 1,839
| Total (Discounted @ 10%)
| 4,225
| (853
| )
| (943
| )
| (353
| )
| (23
| )
| 2,053
| (725
| )
| 1,328
|
Consolidated Properties at December 31, 2022
| Proved Plus Probable (2P) Total Future Net Revenue ($ million)
| Forecast Prices and Costs
| Years
| Sales
Revenue
| Total
Royalties
| Operating
Costs
| Future
Development
Capital
| Abandonment
and
Reclamation
Costs
| Future Net
Revenue
Before
Future
Taxes
| Future
Taxes
| Future
Net
Revenue
After
Future
Taxes*
| 2023-2027
(5 Years)
| 5,357
| (1,119
| )
| (908
| )
| (677
| )
| (2
| )
| 2,651
| (994
| )
| 1,657
| Remainder
| 3,958
| (780
| )
| (1,204
| )
| —
|
| (82
| )
| 1,892
| (782
| )
| 1,110
| Total (Undiscounted)
| 9,315
| (1,899
| )
| (2,112
| )
| (677
| )
| (84
| )
| 4,543
| (1,776
| )
| 2,767
| Total (Discounted @ 10%)
| 6,078
| (1,252
| )
| (1,238
| )
| (566
| )
| (23
| )
| 2,999
| (1,166
| )
| 1,833
|
Consolidated Properties at December 31, 2022
| Proved Plus Probable Plus Possible (3P) Total Future Net Revenue ($ million)
| Forecast Prices and Costs
| Years
| Sales
Revenue
| Total
Royalties
| Operating
Costs
| Future
Development
Capital
| Abandonment
and
Reclamation
Costs
| Future Net
Revenue
Before
Future
Taxes
| Future
Taxes
| Future
Net
Revenue
After
Future
Taxes*
| 2023-2027
(5 Years)
| 6,428
| (1,355
| )
| (1,008
| )
| (854
| )
| (2
| )
| 3,209
| (1,284
| )
| 1,925
| Remainder
| 6,876
| (1,474
| )
| (1,825
| )
| —
|
| (93
| )
| 3,484
| (1,495
| )
| 1,989
| Total (Undiscounted)
| 13,304
| (2,829
| )
| (2,833
| )
| (854
| )
| (95
| )
| 6,693
| (2,779
| )
| 3,914
| Total (Discounted @ 10%)
| 7,988
| (1,692
| )
| (1,503
| )
| (696
| )
| (22
| )
| 4,075
| (1,666
| )
| 2,409
|
* The after-tax net present value of the Company's oil and gas properties reflects the tax burden on the properties on a stand-alone basis. It does not consider the corporate tax situation, or tax planning. It does not provide an estimate of the value at the Company level which may be significantly different. The Company's financial statements, when available for the year ended December 31, 2022, should be consulted for information at the Company level.
Total Company WI Reserves
The following table summarizes Gran Tierra’s NI 51-101 and COGEH compliant reserves in Colombia and Ecuador derived from the GTE McDaniel Reserves Report calculated using forecast oil and gas prices and costs. Gran Tierra has determined that Ecuador reserves, included in the Total Proved, Total Probable and Total Possible reserve categories for Light and Medium Crude Oil, are not material enough to present separately on a country basis. Therefore all amounts are presented on a consolidated basis by foreign geographic area.
| Light and
Medium
Crude Oil
| Heavy Crude
Oil
| Conventional
Natural Gas
| 2022Year-
End
| Reserves Category
| Mbbl*
| Mbbl*
| MMcf**
| Mboe***
| Proved Developed Producing
| 23,737
| 23,261
| 883
| 47,145
| Proved Developed Non-Producing
| 2,713
| 715
| —
| 3,428
| Proved Undeveloped
| 15,831
| 17,183
| 662
| 33,124
| Total Proved
| 42,281
| 41,159
| 1,545
| 83,697
| Total Probable
| 25,781
| 20,589
| 352
| 46,430
| Total Proved plus Probable
| 68,062
| 61,748
| 1,897
| 130,127
| Total Possible
| 27,157
| 25,309
| 357
| 52,525
| Total Proved plus Probable plus Possible
| 95,219
| 87,057
| 2,254
| 182,652
|
* Mbbl (thousand bbl of oil).
** MMcf (million cubic feet).
*** MBOE (thousand boe).
Net Present Value Summary
Gran Tierra's reserves were evaluated using McDaniel's commodity price forecasts at January 1, 2023. It should not be assumed that the net present value of cash flow estimated by McDaniel represents the fair market value of the reserves.
Total Company
| Discount Rate
| ($ millions)
| 0%
| 5%
| 10%
| 15%
| 20%
| Before tax
|
|
|
|
|
| Proved Developed Producing
| 1,670
| 1,475
| 1,324
| 1,204
| 1,108
| Proved Developed Non-Producing
| 122
| 101
| 85
| 73
| 63
| Proved Undeveloped
| 1,044
| 812
| 644
| 519
| 424
| Total Proved
| 2,836
| 2,388
| 2,053
| 1,796
| 1,595
| Total Probable
| 1,707
| 1,250
| 946
| 738
| 589
| Total Proved plus Probable
| 4,543
| 3,638
| 2,999
| 2,534
| 2,184
| Total Possible
| 2,150
| 1,483
| 1,076
| 813
| 635
| Total Proved plus Probable plus Possible
| 6,693
| 5,121
| 4,075
| 3,347
| 2,819
| After tax
|
|
|
|
|
| Proved Developed Producing
| 1,170
| 1,039
| 934
| 850
| 781
| Proved Developed Non-Producing
| 72
| 58
| 49
| 41
| 35
| Proved Undeveloped
| 596
| 451
| 345
| 266
| 205
| Total Proved
| 1,838
| 1,548
| 1,328
| 1,157
| 1,021
| Total Probable
| 929
| 677
| 505
| 386
| 302
| Total Proved plus Probable
| 2,767
| 2,225
| 1,833
| 1,543
| 1,323
| Total Possible
| 1,147
| 796
| 576
| 433
| 335
| Total Proved plus Probable plus Possible
| 3,914
| 3,021
| 2,409
| 1,976
| 1,658
|
Total Company WI Reserves Reconciliation
| Proved
| Proved plus Probable
| Proved plus Probable plus
Possible
|
| MBOE
| MBOE
| MBOE
| December 31, 2021
| 80,816
| 124,692
| 162,485
| Extensions
| 7,612
| 9,237
| 16,162
| Technical Revisions
| 4,433
| 1,326
| (44)
| Discoveries
| 1,674
| 5,573
| 14,855
| Economic Factors
| 384
| 521
| 416
| Production
| (11,222)
| (11,222)
| (11,222)
| December 31, 2022
| 83,697
| 130,127
| 182,652
|
Reserve Life Index (Years)
| December 31, 2022*
| Total Proved
| 7
| Total Proved plus Probable
| 11
| Total Proved plus Probable plus Possible
| 15
|
* Calculated using average fourth quarter 2022 WI production of 32,595 bopd.
Future Development Costs
FDC reflects McDaniel's best estimate of what it will cost to bring the Proved Undeveloped and Probable reserves on production. Changes in forecast FDC occur annually as a result of development activities, acquisition and disposition activities, and changes in capital cost estimates based on improvements in well design and performance, as well as changes in service costs. FDC for 2P reserves increased to $677 million at year-end 2022 from $578 million at year-end 2021. The increase in FDC in 2022 was predominantly attributed to the increase in the numbers of future development well locations identified by McDaniel in the Acordionero field as well as new locations identified during exploration drilling.
($ millions)
| Total Proved
| Total Proved Plus Probable
| Total Proved Plus Probable
Plus Possible
| 2023
| 157
| 164
| 169
| 2024
| 102
| 144
| 155
| 2025
| 116
| 224
| 258
| 2026
| 28
| 117
| 191
| 2027
| —
| 28
| 81
| Remainder
| —
| —
| —
| Total (undiscounted)
| 403
| 677
| 854
|
($) millions
| Proved
| Proved plus
Probable
| Proved plus
Probable plus
Possible
| Acordionero
| 154
| 154
| 154
| Chaza Block (Costayaco & Moqueta)
| 96
| 132
| 139
| Other
| 153
| 391
| 561
| Total FDC Costs (undiscounted)
| 403
| 677
| 854
|
Finding and Development Costs
Reserves (MBOE)
| Year Ended December 31, 2022
| Proved Developed Producing
| 47,145
| Total Proved
| 83,697
| Total Proved plus Probable
| 130,127
| Total Proved plus Probable plus Possible
| 182,652
| Capital Expenditures ($000s)
|
| - including and excluding acquired properties
| 236,183
| Operating Netback* ($/bbl, per WI sales volumes)
|
| Operating Netback* - fourth quarter 2022
| 38.72
|
*Operating Netback is a Non-GAAP measure and does not have a standardized meaning under GAAP. Operating netback as presented is defined as oil sales less operating and transportation expenses. See "Non-GAAP Measures" in this press release.
Finding and Development Costs, Excluding FDC*
Year Ended December 31, 2022
| Proved Developed Producing
|
| Reserve Additions (MBOE)
| 10,705
| F&D Costs ($/BOE)
| 22.06
| F&D Recycle Ratio
| 1.8
|
Finding and Development Costs, Including FDC*
Year Ended December 31, 2022
| Proved Developed Producing
|
| Change in FDC ($000s)
| (6,735
| )
| Reserve Additions (MBOE)
| 10,705
|
| F&D Costs ($/BOE)
| 21.43
|
| F&D Recycle Ratio
| 1.8
|
|
Finding and Development Costs , Excluding FDC*
Year Ended December 31, 2022
| Total Proved
|
| Reserve Additions (MBOE)
| 14,103
| F&D Costs ($/BOE)
| 16.75
| F&D Recycle Ratio
| 2.3
|
Finding and Development Costs , Including FDC*
Year Ended December 31, 2022
| Total Proved
|
| Change in FDC ($000s)
| 20,201
| Reserve Additions (MBOE)
| 14,103
| F&D Costs ($/BOE)
| 18.18
| F&D Recycle Ratio
| 2.1
|
Finding and Development Costs , Excluding FDC*
Year Ended December 31, 2022
| Total Proved plus Probable
|
| Reserve Additions (MBOE)
| 16,657
| F&D Costs ($/BOE)
| 14.18
| F&D Recycle Ratio
| 2.7
|
Finding and Development Costs , Including FDC*
Year Ended December 31, 2022
| Total Proved plus Probable
|
| Change in FDC ($000s)
| 98,342
| Reserve Additions (MBOE)
| 16,657
| F&D Costs ($/BOE)
| 20.08
| F&D Recycle Ratio
| 1.9
|
Finding and Development Costs , Excluding FDC*
Year Ended December 31, 2022
| Total Proved plus Probable plus Possible
|
| Reserve Additions (MBOE)
| 31,389
| F&D Costs ($/BOE)
| 7.52
| F&D Recycle Ratio
| 5.1
|
Finding and Development Costs , Including FDC*
Year Ended December 31, 2022
| Total Proved plus Probable plus Possible
|
| Change in FDC ($000s)
| 146,738
| Reserve Additions (MBOE)
| 31,389
| F&D Costs ($/BOE)
| 12.20
| F&D Recycle Ratio
| 3.2
|
* In all cases, the F&D number is calculated by dividing the identified capital expenditures by the applicable reserves additions both before and after changes in FDC costs. Both F&D costs take into account reserves revisions during the year on a per BOE basis. F&D recycle ratio is defined as fourth quarter 2022 operating netback per working interest sales volume BOE divided by the appropriate F&D costs on a per BOE basis. The aggregate of the exploration and development costs incurred in the financial year and the changes during that year in estimated future development costs may not reflect the total F&D costs related to reserves additions for that year. Operating Netback is a Non-GAAP measure and does not have a standardized meaning under GAAP. Operating netback is defined as oil sales less operating and transportation expenses. See "Non-GAAP Measures" in this press release.
Forecast prices
The pricing assumptions used in estimating NI 51-101 and COGEH compliant reserves data disclosed above with respect to net present values of future net revenue are set forth below. The price forecasts are based on McDaniel’s standard price forecast effective January 1, 2023. McDaniel is an independent qualified reserves evaluator and auditor pursuant to NI 51-101.
| Brent Crude Oil
| WTI Crude Oil
| Year
| $US/bbl
| $US/bbl
|
| January 1, 2023
| January 1, 2023
| 2023
| $84.00
| $80.00
| 2024
| $80.58
| $76.50
| 2025
| $79.59
| $75.43
| 2026
| $78.53
| $74.28
| 2027
| $80.10
| $75.77
|
(1) Based on estimated year-end 2022 net debt of $453 million comprised of Senior Notes of $580 million (gross) less cash and cash equivalents of $127 million, prepared in accordance with GAAP.
(2) Outstanding Shares – Total shares issued less shares repurchased but not yet cancelled.
(3) Net debt adjusted production is calculated by dividing (x) fourth quarter WI production by (y) the sum of (a) the year-end net debt by the closing price of the Company's common shares on the New York Stock Exchange at year-end and (b) the Company's outstanding shares at year-end. Debt adjusted reserves is calculated by dividing (x) year-end reserves by (y) the sum of (a) the unaudited year-end net debt by the closing price of the Company's common shares on the New York Stock Exchange at year-end and (b) the Company's outstanding shares at year-end.
For 2022, the Company had unaudited year-end net debt of $453 million, a closing price on the New York Stock Exchange at December 31, 2022 of $0.99/share and 346,151,157 shares outstanding. Fourth quarter WI production was 32,595 bopd, 1P reserves were 83,697 MMBOE, 2P were 130,127 MMBOE and 3P were 182,652 MMBOE.
For 2021, the Company had audited year-end net debt of $641 million (comprised of gross amount of senior notes of $600 million, gross amount of reserves-based credit facility of $67.5 million and cash of $26 million), a closing price on the New York Stock Exchange at December 31, 2021 of $0.76/share and 367,144,500 shares outstanding. Fourth quarter WI production was 29,493 bopd, 1P reserves were 80,816 MMBOE, 2P were 124,692 MMBOE, and 3P were 162,485 MMBOE.
(4) Net debt adjusted production and reserves per share are non-GAAP financial ratios that are not a standardized financial measure under US GAAP and may not be comparable to similar financial measures disclosed by other issuers. Net debt, defined above, is a non-GAAP financial ratio, is used as a component of this non-GAAP financial ratio. See "Non-GAAP and Other Financial Measures" in this news release for information relating to this non-GAAP financial measure.
(5) Gran Tierra's first quarter-to-date 2023 total Company average production is for the period of January 1 – January 24, 2023.
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, Chief Executive Officer
Ryan Ellson, Executive Vice President & Chief Financial Officer
Rodger Trimble, Vice President, Investor Relations
Tel: +1.403.265.3221
For more information on Gran Tierra please go to: www.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 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 (including the Corporate Presentation referenced above) 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 U.S. Securities and Exchange Commission (“SEC”) filings are available on the SEC website at www.sec.gov. The Company’s Canadian securities regulatory filings are available on SEDAR at www.sedar.com and UK regulatory filings are available on the National Storage Mechanism (“the NSM”) website at data.fca.org.uk. Gran Tierra's filings on the SEC, SEDAR and the NSM websites are not incorporated by reference into this press release.
FORWARD LOOKING STATEMENTS ADVISORY
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"), which can be identified by such terms as “expect,” “plan,” "forecast," “project,” "objective," “will,” “believe,” "should," "could," "allow" and other terms that are forward-looking in nature. Such forward-looking statements include, but are not limited to, the Company's expectations regarding its capital program, and ability to fund the Company’s exploration program over a period of time, 2022 and beyond outlook, the benefits of reduced capital spending and G&A expenses, well performance, production, the restart of production and workover activity, future development costs, infrastructure schedules, waterflood impacts and plans, growth of referenced reserves, forecast prices, five-year expected oil sales and cash flow and net revenue, estimated recovery factors, liquidity and access to capital, the Company’s strategies and results thereof, the Company’s operations including planned operations and developments, the impact of the COVID-19 pandemic and the Company’s response thereto, disruptions to operations and the decline in industry conditions, and expectations regarding environmental commitments.
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, the accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates), rig availability, the effects of drilling down-dip, the effects of waterflood and multi-stage fracture stimulation operations, the extent and effect of delivery disruptions, and the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions including in areas of potential expansion, and the ability of Gran Tierra to execute its current business and operational plans in the manner currently planned. Gran Tierra believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct.
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: Gran Tierra's operations are located in South America and unexpected problems can arise due to guerilla activity, strikes, or 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 (including the ongoing COVID-19 pandemic); 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, the Russian invasion of Ukraine, 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 Gran Tierra currently predicts, which could cause Gran Tierra to further modify its 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; the ability of Gran Tierra to execute its business plan and realize expected benefits from current 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 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, 2021 and its other filings with the Securities and Exchange Commission. These filings are available on the Securities and Exchange Commission website at sec.gov and on SEDAR at www.sedar.com.
Statements relating to “reserves” are also deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, including that the reserves described can be profitably produced in the future.
Guidance is uncertain, particularly when given over extended periods of time, and results may be materially different. Although the current capital spending program and long term strategy of Gran Tierra is based upon the current expectations of the management of Gran Tierra, should any one of a number of issues arise, Gran Tierra may find it necessary to alter its business strategy and/or capital spending program and there can be no assurance as at the date of this press release as to how those funds may be reallocated or strategy changed and how that would impact Gran Tierra's results of operations and financing position. In particular, the unprecedented nature of the current pandemic and the resulting economic conditions 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 securities laws. Gran Tierra’s forward-looking statements are expressly qualified in their entirety by this cautionary statement.
The estimates of future net revenue, cash flow and interest and certain expenses 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. In particular, this press release contains projected operational and financial information for 2023 and for the next five years to allow readers to assess the Company's ability to fund its programs. 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.
Non-GAAP Measures
This press release includes non-GAAP measures which do not have a standardized meaning under GAAP. Investors are cautioned that these measures should not be construed as alternatives to net loss 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.
Operating netback as presented is defined as oil sales less operating and transportation expenses. Management believes that operating netback is a useful supplemental measure 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 operating netback per boe to the most directly comparable measure calculated and presented in accordance with GAAP is as follows:
| Three months ended December 31, 2022
|
| (Thousands of U.S
Dollars)
| ($/bbl, per WI sales
volumes)
| Oil sales
| $
| 162,637
|
| $
| 55.33
|
| Operating expenses
|
| (46,385
| )
|
| (15.78
| )
| Transportation expenses
|
| (2,433
| )
|
| (0.83
| )
| Operating netback
| $
| 113,819
|
| $
| 38.72
|
|
Unaudited Financial Information
Certain financial and operating results included in this press release, including debt, capital expenditures, and production information, are based on unaudited estimated results. These estimated results are subject to change upon completion of the Company's audited financial statements for the year ended December 31, 2022, and changes could be material. Gran Tierra anticipates filing its audited financial statements and related management's discussion and analysis for the year ended December 31, 2022 on or before February 21, 2023.
DISCLOSURE OF OIL AND GAS INFORMATION
Gran Tierra's Statement of Reserves Data and Other Oil and Gas Information on Form 51-101F1 dated effective as at December 31, 2022, which will include further disclosure of its oil and gas reserves and other oil and gas information in accordance with NI 51-101 forming the basis of this press release, will be available on SEDAR at www.sedar.com on or before February 21, 2023.
All reserves values, future net revenue and ancillary information contained in this press release as of December 31, 2022 are derived from a report with an effective date of December 31, 2022 prepared by McDaniel and calculated in compliance with NI 51-101 and COGEH.
Estimates of net present value and future net revenue contained herein do not necessarily represent fair market value. Estimates of reserves and future net revenue for individual properties may not reflect the same level of confidence as estimates of reserves and future net revenue for all properties, due to the effect of aggregation. There is no assurance that the forecast price and cost assumptions applied by McDaniel in evaluating Gran Tierra’s reserves will be attained and variances could be material. All reserves assigned in the GTE McDaniel Reserves Report are located in Colombia and Ecuador and presented on a consolidated basis by foreign geographic area.
All evaluations of future net revenue contained in the GTE McDaniel Reserves Report are after the deduction of royalties, operating costs, development costs, production costs and abandonment and reclamation costs but before consideration of indirect costs such as administrative, overhead and other miscellaneous expenses. It should not be assumed that the estimates of future net revenues presented in this press release represent the fair market value of the reserves. There are numerous uncertainties inherent in estimating quantities of crude oil reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth in the GTE McDaniel Reserves Report are estimates only.
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. Drilling locations disclosed herein are derived from the GTE McDaniel Reserves Report and account for drilling locations that have associated Undeveloped and Proved plus Probable Undeveloped reserves, as applicable. 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.
Definitions
Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
Possible reserves are those additional reserves that are less certain to be recovered than Probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of Proved plus Probable plus Possible reserves.
Proved developed producing reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.
Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned.
Certain terms used in this press release but not defined are defined in NI 51-101, CSA Staff Notice 51-324 – Revised Glossary to NI 51-101, Standards of Disclosure for Oil and Gas Activities (“CSA Staff Notice 51-324”) and/or the COGEH and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101, CSA Staff Notice 51-324 and the COGEH, as the case may be.
Oil and Gas Metrics
This press release contains a number of oil and gas metrics, including NAV per share, F&D costs, F&D recycle ratio, operating netback, reserve life index, and reserves replacement, reserves per share and debt-adjusted production and reserves per share, 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. 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.
NAV per share is calculated as NPV10 (before or after tax, as applicable) of the applicable reserves category minus estimated debt, divided by the number of shares of Gran Tierra's common stock issued and outstanding. Management uses NAV per share as a measure of the relative change of Gran Tierra's net asset value over its outstanding common stock over a period of time.
F&D costs are calculated as estimated exploration and development capital expenditures, excluding acquisitions and dispositions, divided by the applicable reserves additions both before and after changes in FDC costs. The calculation of F&D costs incorporates the change in FDC required to bring proved undeveloped and developed reserves into production. The aggregate of the exploration and development costs incurred in the financial year and the changes during that year in estimated FDC may not reflect the total F&D costs related to reserves additions for that year. Management uses F&D costs per boe as a measure of its ability to execute its capital program and of its asset quality.
F&D recycle ratio is calculated as fourth quarter operating netback per WI sales volume divided by the appropriate F&D costs per boe. Management uses F&D recycle ratio as an indicator of profitability of its oil and gas activities.
Operating netback is calculated as described in this press release. Management believes that operating netback is a useful supplemental measure 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.
Reserve life index is calculated as reserves in the referenced category divided by the referenced estimated production. Management uses this measure to determine how long the booked reserves will last at current production rates if no further reserves were added.
Reserves replacement is calculated as reserves in the referenced category divided by estimated referenced production. Management uses this measure to determine the relative change of its reserve base over a period of time.
Reserves per share is calculated as reserves in the referenced category divided by the number of shares of Gran Tierra's common stock issued and outstanding. Management uses reserves per share as a measure of relative change of Gran Tierra's referenced reserves category over its outstanding common stock over a period of time.
Net debt-adjusted production and reserves per share is calculated as described in this press release. Management believes that net debt-adjusted production per share is a useful supplemental measure for investors as it adjusts for the effects of changes in annual production in relation to the Company’s capital structure. Management believes that net debt-adjusted reserves per share is a useful supplemental measures for investors as it adjusts for the effects of changes in reserves in relation to the Company’s capital structure.
Disclosure of Reserve Information and Cautionary Note to U.S. Investors
Unless expressly stated otherwise, all estimates of proved, probable and possible reserves and related future net revenue disclosed in this press release have been prepared in accordance with NI 51-101. Estimates of reserves and future net revenue made in accordance with NI 51-101 will differ from corresponding estimates prepared in accordance with applicable U.S. Securities and Exchange Commission (“SEC”) rules and disclosure requirements of the U.S. Financial Accounting Standards Board (“FASB”), and those differences may be material. NI 51-101, for example, requires disclosure of reserves and related future net revenue estimates based on forecast prices and costs, whereas SEC and FASB standards require that reserves and related future net revenue be estimated using average prices for the previous 12 months. In addition, NI 51-101 permits the presentation of reserves estimates on a “company gross” basis, representing Gran Tierra’s working interest share before deduction of royalties, whereas SEC and FASB standards require the presentation of net reserve estimates after the deduction of royalties and similar payments. There are also differences in the technical reserves estimation standards applicable under NI 51-101 and, pursuant thereto, the COGEH, and those applicable under SEC and FASB requirements.
In addition to being a reporting issuer in certain Canadian jurisdictions, Gran Tierra is a registrant with the SEC and subject to domestic issuer reporting requirements under U.S. federal securities law, including with respect to the disclosure of reserves and other oil and gas information in accordance with U.S. federal securities law and applicable SEC rules and regulations (collectively, "SEC requirements"). Disclosure of such information in accordance with SEC requirements is included in the Company's Annual Report on Form 10-K and in other reports and materials filed with or furnished to the SEC and, as applicable, Canadian securities regulatory authorities. The SEC permits oil and gas companies that are subject to domestic issuer reporting requirements under U.S. federal securities law, in their filings with the SEC, to disclose only estimated proved, probable and possible reserves that meet the SEC's definitions of such terms. Gran Tierra has disclosed estimated proved, probable and possible reserves in its filings with the SEC. In addition, Gran Tierra prepares its financial statements in accordance with United States generally accepted accounting principles, which require that the notes to its annual financial statements include supplementary disclosure in respect of the Company's oil and gas activities, including estimates of its proved oil and gas reserves and a standardized measure of discounted future net cash flows relating to proved oil and gas reserve quantities. This supplementary financial statement disclosure is presented in accordance with FASB requirements, which align with corresponding SEC requirements concerning reserves estimation and reporting.
Proved reserves are reserves which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward from known reservoirs under existing economic conditions, operating methods, and government regulations prior to the time at which contracts providing the right to operate expires, unless evidence indicates that renewal is reasonably certain. Probable reserves are reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered. Estimates of probable reserves which may potentially be recoverable through additional drilling or recovery techniques are by nature more uncertain than estimates of proved reserves and accordingly are subject to substantially greater risk of not actually being realized by us. Possible reserves are reserves that are less certain to be recovered than probable reserves. Estimates of possible reserves are also inherently imprecise. Estimates of probable and possible reserves are also continually subject to revisions based on production history, results of additional exploration and development, price changes, and other factors.
The Company believes that the presentation of NPV10 is useful to investors because it presents (i) relative monetary significance of its oil and natural gas properties regardless of tax structure and (ii) relative size and value of its reserves to other companies. The Company also uses this measure when assessing the potential return on investment related to its oil and natural gas properties. NPV10 and the standardized measure of discounted future net cash flows do not purport to present the fair value of the Company's oil and gas reserves. The Company has not provided a reconciliation of NPV10 to the standardized measure of discounted future net cash flows because it is impracticable to do so.
Investors are urged to consider closely the disclosures and risk factors in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in the other reports and filings with the SEC, available from the Company's offices or website. These reports can also be obtained from the SEC website at www.sec.gov. |
| | Canadian Oil & Gas Companies | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| To: Paul Senior who wrote (24582) | 2/22/2023 2:33:42 PM | | From: LoneClone | | | | There are plenty of lurkers out there reading our posts too, Paul.
As with you, I was impressed by much of this PR (though most of it we already knew), and FWIW, so was RBC, though their new analyst report kept GTE at Sector Perform with a target of $1.75.
My main concern with GTE remains increasing country risk in both Ecuador and Colombia.
LC |
| | Canadian Oil & Gas Companies | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: Stockbull who wrote (24584) | 2/28/2023 7:46:35 PM | | From: stuffbug | | | | PEI ???
pump and dump - look at the share structure
Great story (always needed for a pump) but Prospera doesn't have the cash to quickly develop the asset.
Different story if it was owned by an intermediate oil company. |
| | Canadian Oil & Gas Companies | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| |
