Gran Tierra Energy Inc.
(“
Gran Tierra”
or
the “
Company”
) (NYSE
American:GTE) (TSX:GTE) (LSE:GTE) is pleased to announce
that the Company has entered into an agreement with Ecopetrol S.A.
(“Ecopetrol”), the national oil company of
Colombia, by which the parties renegotiated the terms and the
duration of the contract for the Suroriente Block
(
“Suroriente”) in the Department of Putumayo,
which was scheduled to end in mid-2024 (the
“Agreement”). All dollar amounts are in United
States (
“U.S.”) dollars unless otherwise
indicated.
The Agreement provides an opportunity to add
significant value, as well as economic life, to Suroriente by
continuing its duration for 20 years from the Agreement’s effective
date. The additional term of the contract allows long-term
investment in infrastructure and work programs to enhance oil
recovery efficiency in existing fields, and appraisal drilling to
potentially prolong the life of the fields. Gran Tierra will
continue to be the operator of Suroriente and is committing to a
capital investment program of $123 million over a three-year period
from the Agreement’s effective date, expected to be funded by Gran
Tierra’s internal cash flow.
The Agreement is subject to certain conditions
precedent including regulatory approval by the Superintendence of
Industry and Commerce of Colombia (“SIC”). The
satisfaction of such conditions precedent will determine the
Agreement’s effective date.
Gran Tierra became the operator of Suroriente in
March 2019 with a 52% working interest (“WI”),
with Ecopetrol holding the remaining 48% WI. Since becoming the
operator, Gran Tierra has been able to increase 100% gross oil
production from an average of 6,203 barrels
(“bbl”) of oil per day (“bopd”)
in February 2019 to an average of 8,167 bopd during first quarter
2023, an increase of 32%. The Company has also expanded the Cohembi
enhanced oil recovery (“EOR”) project, which is
designed to increase the ultimate oil recovery and value of the
block. Suroriente’s first quarter 2023 average production of 8,167
bopd gross (4,247 bopd WI) was its second highest quarterly average
production average since second quarter 2015, despite no
development wells being drilled since first quarter 2018.
The Agreement further strengthens and
consolidates Gran Tierra's position as a premier operator and the
top contracted area holder in the Putumayo Basin and provides
continuity to the Company’s long-term business relationship with
Ecopetrol. Gran Tierra is the operator of 100% of its Putumayo
blocks. The Agreement is also consistent with Gran Tierra's focused
strategy to grow the Company's reserves and its portfolio of
development and exploration opportunities in the proven,
underexplored Putumayo Basin, with access to established
infrastructure.
By continuing the tenure of its operatorship of
Suroriente, Gran Tierra expects to expand the EOR project in the
block through long-term investments, which the Company forecasts to
further increase value for all stakeholders. The capital commitment
associated with the Agreement also aligns with the Company’s
preexisting long-term plans to develop Suroriente.
Gary Guidry, President and Chief Executive
Officer of Gran Tierra, commented: “The Agreement represents a
unique and significant opportunity in Colombia in terms of scale
and upside potential while maintaining our long-term partnership
with Ecopetrol in the prolific Putumayo Basin. We are excited by
the opportunity to continue to develop and expand Suroriente's
already successful EOR project in the N Sand zone of the Cohembi
oil field. By securing the Agreement, Gran Tierra can now commit to
long-term capital projects and development programs with plans of
optimizing the oil recovery and value for the Suroriente Block. We
believe the combination of Gran Tierra's robust operational
expertise in the Putumayo Basin and Ecopetrol’s technical knowledge
will continue our joint success in the Suroriente Block.”
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 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 https://data.fca.org.uk/#/nsm/nationalstoragemechanism. 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 satisfaction of the conditions to the
closing of the Agreement, future production and prospects, and the
anticipated benefits of the Agreement to Gran Tierra, its
shareholders and other stakeholders. 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 EOR and 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 comply with
financial covenants in its credit agreement and indentures and make
borrowings under any credit agreement; capital market disruptions;
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, 2022 and its other filings with the Securities and
Exchange Commission. These filings are available on the Securities
and Exchange Commission website at http://www.sec.gov and 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.
Gran Tierra Energy (TSX:GTE)
Historical Stock Chart
From Sep 2024 to Oct 2024
Gran Tierra Energy (TSX:GTE)
Historical Stock Chart
From Oct 2023 to Oct 2024