Strong Balance Sheet and Core Asset Value
Current net debt (1) is under $503 million. As of Q2/23, GTE has repurchased $8 MM par value of bonds and $11 MM in share repurchases.
Forecasting free cash flow of approximately $135 million before exploration and $65 million after exploration for fiscal year 2023. (2) (3)
Currently trading at significant discount to PDP and 1P After Tax Net Asset Value per share of US$14.93/sh and $27.28/sh.(4)
1) "EBITDA” and “net debt” are non-GAAP measure and do not have a standardized meaning under GAAP. Refer to "Non-GAAP Measures" in the appendix.
2) Based on an assumption of an average price of $85 Brent for 2023 (‘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.
3) Based on mid-point exploration budget for 2023.
4) Based on GTE McDaniel June 30, 2023 Reserves Report – AT NAV figures of: PDP/share of US$14.93, 1P/share of US$27.28, 2P/share of US$45.54. Closing share price as of September 7, 2023 of US$6.33/sh.
Top Tier Conventional
Oil Assets Under Waterflood
- All core assets under waterflood leading to higher oil recovery rates & lower natural declines with modest future development costs = material free cash flow (5)
- Low cost operator with 100% 1P reserve replacement over the past 4.5 years
- Large amount of future development opportunities exist within the portfolio including a polymer injection project in Acordionero and a total of 115 Proved plus Probable Undeveloped future drilling locations
5) “Free cash flow“ and “net debt” are non-GAAP measure and do not have a standardized meaning under GAAP. Refer to "Non-GAAP Measures" in the disclaimers below.
Environmental, Social and Governance (ESG)
Since 2019 GTE reduced our scope 1 and scope 2 carbon emissions by 39% (6)
In Colombia, GTE has planted approximately 1.47 million trees and conserved, preserved and reforested over 3,800 hectares of land since 2018
6) Scope 1: direct emissions from owned and controlled sources; Scope 2: indirect operations from external power sources.
High Impact Exploration Catalysts for 2023 and Beyond
GTE plans in 2023 to drill exploration wells, 2-3 wells will be drilled in Colombia and Ecuador
Ecuador exploration wells to be drilled in a basin where over 6 billion bbl of oil have been produced & in the same geological basin as the Putumayo in Colombia
Track Record of Value Creation
Since 2015, at a corporate level, GTE has
added 130 MMbbl in 1P reserves and
170 MMbbl in 2P reserves(7), while producing over 82MMBOE
7) Based on GTE McDaniel Historical Reserves Reports from 2015 - June 20, 2023.
Gran Tierra offers many exciting catalysts for 2023 while building off a successful year in 2022
Investor Relations Press ReleasesClick to view
SNAPSHOTClick to view
2023 Key Objectives
Disciplined 2023 budget & significant free cash flow(2)
Profitable production growth and focus on shareholder returns
Development service contracts locked in for 2023
All development drilling service contracts executed for 2023
Continue to optimize waterfloods
Increase reserves with modest capital expenditures
High impact exploration
2023 flow fully funds exploration program of 2-3 exploration wells
Our Focused Strategy
Forward-Looking Non-GAAP Measures
Free cash flow as presented is defined as GAAP projected "net cash provided by operating activities" less projected 2022 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.
Net debt as presented is defined as $600 million in senior notes and borrowings under the credit facility less projected cash as at December 31, 2022. Management believes that net debt is a useful supplemental measure for management and investors to in order to evaluate the financial sustainability of the Company's business and leverage. The most directly comparable GAAP measure is total debt. Gran Tierra is unable to provide a quantitative reconciliation of forward-looking net debt 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.
Oil and Gas Metrics
This presentation contains a number of oil and gas metrics, including free cash flow, finding and development (“F&D”) costs, operating netback, reserve life index, net asset value per share and reserves replacement, 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 the applicable NPV10 (before or after-tax, as applicable) minus estimated net 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.
For further information and disclaimers on the above measures and metrics refer to the Appendix to our Corporate Presentation.