19 April 2022

Gran Tierra Energy Announces Corporate Update

  • Achieved First Quarter 2022 Total Company Average Production of 29,362 BOPD, Up 20% Year-on-Year
  • Acordionero and Costayaco Infill Development Drilling Campaigns Yielding Encouraging Results
  • Expect to Meet Full Year 2022 Guidance of 30,500-32,500 BOPD
  • As of March 31, 2022, Paid Down Credit Facility to $40 Million and Had Cash Balance of $59 Million
  • Balance of Credit Facility Expected to be Fully Paid in Second Quarter 2022

CALGARY, Alberta, April 19, 2022 (GLOBE NEWSWIRE) — Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE) (TSX:GTE) (LSE: GTE) is pleased to announce a corporate update. All dollar amounts are in United States (“U.S.”) 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.


  • First Quarter 2022 Production: Gran Tierra’s total average production was 29,362 BOPD during the first quarter of 2022, which was approximately flat when compared with fourth quarter 2021 production and up 20% from first quarter 2021’s level. The Company’s first quarter 2022 production was in-line with management expectations.
  • Expect to Meet 2022 Production Guidance: Gran Tierra believes its ability to keep production flat quarter-on-quarter demonstrates the ongoing successful results from the Company’s waterflooding efforts in all major assets. The ongoing infill development drilling campaigns in the Acordionero and Costayaco oil fields are expected to increase the Company’s full year 2022 average production into the guidance range of 30,500-32,500 BOPD. The ramp up in production from first quarter 2022’s level is expected to begin in the latter half of second quarter 2022 as new Acordionero and Costayaco oil wells are brought online.
  • Significant Debt Reduction:
    • Gran Tierra’s credit facility has been reduced to a remaining balance of $40 million as of March 31, 2022, down $27.5 million or 41% from a balance of $67.5 million as of December 31, 2021, and down $164 million from March 31, 2020.
    • With a cash balance of $59 million as of March 31, 2022, forecasted 2022 free cash flow and recovery of tax receivables, Gran Tierra expects to fully pay off the remaining balance of its credit facility in the second quarter 2022.
  • 2022 Financial Forecasts and Plans:
    • At an $80/bbl Brent price (The Company’s previously announced high budget case), Gran Tierra’s 2022 capital program of $220-240 million is forecast to generate 2022 cash flow of $330-350 million, free cash flow of $100-120 million, EBITDA of $440-460 million and a 2022 year-end cash balance of $120-140 million.
    • With Brent currently at significantly higher levels than $80/bbl, the Company has increased its 2022 Brent price forecast to $95/bbl. At this higher oil price, the Company would maintain 2022 capital at $220-240 million with forecast 2022 cash flow of $410-430 million, free cash flow of $180-200 million, EBITDA of $550-570 million and a 2022 year-end cash balance of $210-230 million.
    • The Company’s 20 to 25 well development program continues to focus on asset optimization, maintaining a low operating cost structure and increasing oil recovery factors across its extensive portfolio.
    • Gran Tierra’s 2022 exploration campaign of up to 6-7 wells is expected to be fully funded from forecasted internally generated cash flow and is designed to focus on near-field prospects in proven basins with access to infrastructure, providing short cycle times from discovery to bringing production on-stream.
    • The Company continues to have Brent oil price hedges in place for 9,000 BOPD in first half 2022, with an average ceiling price of $87.62/bbl on 8,000 BOPD. Therefore, approximately 73% of Gran Tierra’s oil production, which is unhedged, has been able to fully benefit from the current high oil price environment.
  • Operations Update:
    • Acordionero:
      • Gran Tierra has allocated capital of $70 million towards 2022 development activities for the Acordionero field (14-16 development wells) in the Middle Magdalena Valley Basin.
      • Drilling began on February 15, 2022, with one rig on the Southwest Pad. Three infill producers and two water injection wells were drilled before the end of first quarter 2022. All producing wells will be on production in April 2022.
      • Gran Tierra was successful in its ongoing focus on quick-cycle times, drilling these five wells for an average per well cost of $1.3 million. Completion costs for the three infill oil wells were on budget at an average cost per well of $0.6 million. The first water injector’s completion cost was on budget at $0.8 million. The second water injector completion is planned during April 2022.
      • The drilling rig is being moved to Central Pad with recommencement of development drilling of the next 9-11 wells expected before the end of April 2022.
      • The results of the development drilling campaign have met expectations and the benefits to the Acordionero field’s oil production are expected to be realized through the course of second and third quarter 2022 with increased production.
      • A polymer injection project is expected to begin early in the third quarter of 2022, where the Company plans to inject polymer into one or two waterflood patterns. The main objective of the polymer is to determine whether this widely practiced enhanced oil recovery process would be successful at increasing Acordionero’s ultimate oil recovery factors and remaining oil reserves.
    • Costayaco and Moqueta:
      • Gran Tierra has allocated capital of $40 million and $30 million respectively to the Costayaco (4-5 development wells) and Moqueta (3 development wells) fields in the Putumayo Basin in 2022.
      • The first Costayaco well was spud in late February 2022, and as of early April 2022, three infill development oil wells have been drilled. Two of these wells were the fastest and lowest cost wells ever drilled in the field (average per well cost of $1.8 million). The three wells are expected to be completed and brought on production during second quarter 2022.
      • The Moqueta work program is expected to commence in the fourth quarter of 2022 and is planned to continue into 2023.
    • Ecuador Exploration:
      • Gran Tierra expects to drill 2-3 exploration wells in 2022, targeting multi-zone prospects near existing fields with access to infrastructure. Gran Tierra’s first exploration well in Ecuador is scheduled to spud in the third quarter of 2022 on the Chanangue Block.
      • Environmental licenses for exploration drilling have been granted by Ecuador’s Ministry of the Environment for both the Chanangue and Charapa Blocks, as well as for seismic activities in the Charapa Block. Approval of the environmental license for the Iguana Block is expected during third quarter 2022.
    • Colombia Exploration:
      • The Company is also progressing its 2022 exploration campaign in Colombia with the first exploration well expected to be spud in the Putumayo Basin in early second half 2022 targeting multiple horizons in a prospect between the Costayaco and Moqueta fields. Another one to two exploration wells in the Putumayo are planned for second half 2022, as is one exploration well in the Middle Magdalena Valley Basin.

Message to Shareholders

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: “Gran Tierra is in a strong position for the continued development and enhanced oil recovery activities in 2022 to optimize value from each of our assets. Gran Tierra’s balance sheet has significantly strengthened since 2020 and paying off the entire credit facility will be a major milestone for the Company. Looking to the end of the year, we are forecasting a net debt to EBITDA ratio of under 0.8 times. In addition, we plan to allocate capital to prioritized, high-impact exploration drilling opportunities. Our waterflood programs across all of our assets continue to perform well and we expect another strong year of free cash flow from these high quality, low decline assets.”

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



“Cash flow” refers to line item “net cash provided by operating activities” under generally accepted accounting principles in the United States of America (“GAAP”). “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 spending. Earnings before interest, taxes and depletion, depreciation and accretion (“EBITDA”) is a non-GAAP measure and does not have a standardized meaning under GAAP. “Net debt” as presented is defined as projected senior notes and borrowings under the credit facility less projected cash. Refer to “Non-GAAP Measures” in this press release.

About Gran Tierra Energy Inc.

Gran Tierra Energy Inc. together with its subsidiaries is an independent international energy company currently focused on oil and natural gas exploration and production in Colombia and Ecuador. The Company is currently developing its existing portfolio of assets in Colombia and Ecuador and will continue to pursue additional new growth opportunities that would further strengthen the Company’s portfolio. The Company’s common stock trades on the NYSE American, the Toronto Stock Exchange and the London Stock Exchange under the ticker symbol GTE. Additional information concerning Gran Tierra is available at www.grantierra.com. Except to the extent expressly stated otherwise, information on the Company’s website or accessible from our website or any other website is not incorporated by reference into and should not be considered part of this press release. Investor inquiries may be directed to info@grantierra.com or (403) 265-3221.

Gran Tierra’s Securities and Exchange Commission filings are available on the SEC website at http://www.sec.gov. The Company’s Canadian securities regulatory filings are available on SEDAR at http://www.sedar.com and UK regulatory filings are available on the National Storage Mechanism website at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Forward Looking Statements and Legal Advisories:

This press release contains opinions, forecasts, projections, and other statements about future events or results that constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward looking information within the meaning of applicable Canadian securities laws (collectively, “forward-looking statements”). 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 and free cash flow, the Company’s drilling program and the Company’s expectations as to debt repayment, the Company’s ESG risks and opportunities and its positioning for 2022. 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, 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 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 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 effects 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 http://www.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 cash flow, net income, free cash flow, recovery of taxes receivable, EBITDA, net cash provided by operating activities (described in this press release as “cash flow”), total capital, certain expenses and costs, debt repayments and debt positions (including “net debt”) 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 financial and operational information for 2022. These projections contain forward-looking statements and are based on a number of material assumptions and factors set out above. Actual results may differ significantly from the projections presented herein. The actual results of Gran Tierra’s operations for any period could vary from the amounts set forth in these projections, and such variations may be material. See above for a discussion of the risks that could cause actual results to vary. The future-oriented financial information and financial outlooks contained in this press release have been approved by management as of the date of this press release. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management’s best estimates and judgments, and represent, to the best of management’s knowledge and opinion, the Company’s expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. See Gran Tierra’s press release dated January 8, 2022 for additional information regarding the 2022 guidance referred to herein.

Non-GAAP Measures:

EBITDA as presented is defined as projected 2022 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 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. A quantitative reconciliation of forward-looking free cash flow to its most directly comparable forward-looking GAAP measure is available under “2022 Financial Forecasts and Plans” in this release.

Net debt as presented is defined as GAAP total debt less cash. 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.

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 no precise breakdown since the Company’s oil sales volumes typically represent blends of more than one type of crude oil. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. 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.