Gran Tierra Energy Inc (GTE) has been in the news for the past few months. It has become quite a hot topic among investors and stockholders. Therefore, we have gathered the lasted updates regarding the company and its stocks for you in this article. But, first, let’s discuss the history of the company and how far it has come.
What is Gran Tierra Energy Inc (GTE)?
Gran Tierra Energy Inc. is an oil and gas exploration and production business based in Colombia and Ecuador. They are establishing a track record of accomplishment in a transparent, safe, secure, and responsible manner. GTE is the ticker symbol for the Company’s common shares on the NYSE American, the London Stock Exchange, and the Toronto Stock Exchange. The company believes that by using its team’s global operating knowledge, it can create value for all of our stakeholders through oil and gas exploration and production.
Who is the President of Gran Tierra Energy Inc?
Mr. Gary S. Guidry is the President and Chief Executive Officer of GTE Inc. Mr. Guidry is an APEGA member and an Alberta-registered Professional Engineer. In 1980, he earned a Bachelor of Science in Petroleum Engineering from Texas A&M University. He is a qualified engineer with over 35 years of expertise in the international oil and gas business. Mr. Gary has firsthand knowledge of managing significant worldwide projects. These include assets in Latin America, Africa, the Middle East, and Asia. He received the Oil Council Executive of the Year award in 2014 for his leadership position with Caracal.
Latest Updates on GTE
On November 2, 2021, a conference call was webcast and recorded at 11 a.m. Eastern Time. The discussion of the session included certain forward-looking information along with certain non-GAAP financial measures. The main points discussed by the Chief Financial Officer & Executive Vice President Ryan Paul Ellson were:
Material Production Growth
GTE has achieved material production growth, with third-quarter 2021 oil production totaling around 29,000 barrels per day. It is up 26 percent from the second quarter of 2021 and 53% from the third quarter of 2020.
Production Halted due to Blockade
Suroriente and PUT-7 production has been temporarily halted due to a blockade directed at the Colombian government. Once the government lifts the blockade, we expect Suroriente and PUT-7 to quickly resume production at their current capacity of 4,400 to 4,700 BOE per day. The total corporate output is currently around 26,000 barrels per day. And, once the blockade is lifted, we anticipate quickly restoring manufacturing to 30,000 to 31,000 barrels per day.
Brent prices averaged around $84 per barrel in October. It is 16% higher than the $72 price we expected for budget purposes in the fourth quarter of 2021. Due to higher production volumes and good Brent pricing, Q3 cash flow from operations grew 758 percent to $69.1 million. As compared to the third quarter of 2020 and 197 percent compared to the second quarter of 2021.
Gran Tierra is additionally maintaining a great focus on debt reduction. The company has paid down the credit facility debt of $150 million at the end of September. And paid an additional $20 million in October, for a current balance of $130 million. By December 31, 2021, it is expected the bank facility to be paid down to a balance of $80 million. The operating netback of $34.95 per barrel increased by 5%, or $1.51, over the previous quarter.
Net Income during Quater
Gran Tierra made a net income of $35 million during the quarter. A nearly 300 percent increase over the prior quarter’s net loss of $18 million. The adjusted EBITDA for the quarter has increased significantly to $82 million.
Third-quarter capital expenditures of $35 million remained flat in regards to Capex. The company generated $34 million in free cash flow in the third quarter. It is the most since the fourth quarter of 2012, which was used to improve the balance sheet.
GTE has hedges in place for 10,000 barrels per day for the rest of the year. They are with a weighted average floor of $57 and a weighted average ceiling of $65.29. The company experienced $7 million in hedging losses throughout the quarter. It currently has no hedges in place for 2022.
GTE believes their team’s prudent reservoir management of Acordionero’s waterflood has restored the field’s production. Moving to an average of 14,427 barrels per day in the third quarter of 2021. It is a 49 percent increase over the previous year and the highest quarterly average production since the fourth quarter of 2019. The drilling campaign in Acordionero for 2021 was a huge success. And an aggressive drilling program of both oil producers and water injectors in 2022 is anticipated based on results.
Infill Development Drilling Campaign
An update was also provided on the infill development drilling campaign at Costayaco which includes three oil producers. All three of these successful new oil wells have begun production in the third quarter. It resulted in a considerable rise in Costayaco’s oil production to 6,292 barrels per day in the third quarter. Going up 50% from the first quarter of 2021. They anticipate drilling further development wells in Costayaco in 2022 based on the results of this year’s program.
At Moqueta GTE has finished a work program aimed at optimizing the waterflood. It is anticipated would that it’ll boost the field’s overall oil recovery. The workover program was a huge success. And the company plans to drill more development wells in Moqueta in the second half of 2022.
Suroriente’s plant expansion development is also moving successfully. And increased production is slated to begin in Q4 2021. GTE intends to reduce debt further in the fourth quarter of 2021. Even after the short impediment caused by the recent Suroriente and PUT-7 embargo. It is following the previously disclosed capital allocation scheme.
Free Cash Flow
GTE is on target to earn significant 2021 free cash flow in 2021 and 2022. This is due to a higher Brent oil price environment and the restored production volumes.
GTE Goal for 2022
GTE wants to focus on maintaining our balance-sheet strength next year. Moreover, they want to continue to develop their key assets. And measure the company’s progress through a high-impact exploration program.
Where is Gran Tierra Energy Inc located?
The company has three branches in Canada, Colombia, and Ecuador. The addresses are:
Corporate Headquarters in Calgary, Canada
Gran Tierra Energy Inc.
Suite 900, 520 – 3rd Avenue SW
Calgary, Alberta, Canada, T2P 0R3
Phone +1 (403) 265-3221
Fax +1 (403) 265-3242
Colombia Headquarters in Bogota, Colombia
Gran Tierra Energy Colombia
Calle 113 No. 7 – 80, 17th Floor
Bogota D. C., Colombia
Main +57 (1) 658-5757
Fax +57 (1) 213-9327
Ecuador Headquarters in Quito, Ecuador
Avenida Coruña No. 27-36 y Av. Orellana
Edificio La Moraleja, Oficina 404