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Colombia/Ecuador: Gran Tierra Energy provides operations and financial update

14 Oct 2021

  • Achieved Third Quarter 2021 Average Production of Approx. 29,000 BOPD, Up 26% from Prior Quarter
  • Increased Current Average Production(1) to Approx. 30,600 BOPD, Highest Since February 2020
  • Paid Down Credit Facility Balance To $140 Million
Photo - see caption

Gran Tierra Energy, an independent international energy company currently focused on oil and natural gas exploration and production in Colombia and Ecuador, has announced an operations and financial update. All dollar amounts are in United States dollars and all production volumes are on a working interest before royalties ('WI') basis and are expressed in barrels ('bbl') of oil per day ('BOPD'), unless otherwise stated.

Key Highlights:

Photo - see caption

  • Production: Gran Tierra's average production for various time periods is outlined in the table below:

(1) Approximate average production over the period from October 1, 2021 to October 11, 2021.

  • As announced on May 17, 2021, a number of blockades across Colombia impacted several key transportation routes, resulting in the temporary shut-in of some of Gran Tierra's wells and oil fields during the second quarter of 2021.
  • The blockades were not directed at Gran Tierra, but caused the Company to temporarily curtail production during May and June 2021. As a result, approx. 597,000 bbl of oil production were deferred during the second quarter of 2021. Gran Tierra does not expect any negative impact on the Company's oil reserves due to this deferral.
  • As announced on July 12, 2021, the Colombian government successfully negotiated the end of blockades affecting Gran Tierra's operations, which allowed the Company to restore its oil production throughout its entire Colombian portfolio. During the third quarter of 2021, Gran Tierra achieved an average production rate of approx. 29,000 BOPD, the Company's highest average rate since the first quarter of 2020. The Company's current average production(2) is even higher at approx. 30,600 BOPD.
  • Gran's Tierra's average production during the third quarter of 2021 was up 26% from the second quarter of 2021 and up 53% from the third quarter of 2020.
  • Credit Facility Balance:
    • As of September 30, 2021, the Company had paid down its credit facility balance by $25 million to $150 million, compared to balance of $175 million as of June 30, 2021 and $190 million as of December 31, 2020.
    • As of October 8, 2021, the Company paid down its credit facility balance by an additional $10 million to $140 million.
  • Financial Covenants
    • As of October 1, 2021, Gran Tierra has exited the financial covenant relief period, which provided relief from compliance with the ratio of Total Debt3 to EBITDAX3 from June 1, 2020, to October 1, 2021, pursuant to an amendment to the Company's credit facility between the Company and the syndicate of lenders party thereto which had gone into effect on June 1, 2020.
    • Gran Tierra expects to be in full compliance with all financial covenants under its credit facility on December 31, 2021.
Photo - see caption
Colombia represents 100% of Gran Tierra's production

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented:

'After the challenges with blockades during the second quarter of 2021, we are very proud of how our teams safely and diligently ramped operations back up throughout our Colombia portfolio. During the third quarter of 2021, with production back up to an average level of approximately 29,000 BOPD and an average Brent oil price of $73.23/bbl, Gran Tierra was able to further strengthen its balance sheet. The fourth quarter of 2021 is off to an even stronger start with the Company's average current production(2) at approximately 30,600 BOPD and Brent2 averaging $81.74/bbl, which has allowed us to pay down Gran Tierra's credit facility balance to $140 million as of October 8, 2021, down $50 million from a balance of $190 million as of December 31, 2020.

With production restored, a successful 2021 drilling program, strong world oil prices and a strengthened balance sheet, we are very excited about the fourth quarter of 2021 and all of 2022.'

Operations Update

  • Acordionero Oil Field (100% WI)
    • When necessary, a workover rig was deployed during the third quarter of 2021 to restore existing wells to production if they went offline.
    • Gran Tierra believes its prudent reservoir management of Acordionero's waterflood has allowed the Company to restore this field's production to an average level of 14,427 BOPD in the third quarter of 2021, up 49% from one year ago, and the highest quarterly average production since the fourth quarter of 2019.
    • Acordionero's current average production(2) is 14,849 BOPD.
  • Costayaco Oil Field (100% WI)
    • In March 2021, Gran Tierra commenced its infill development drilling campaign to drill 3 oil producers; this drilling program was the first in Costayaco since November 2019.
    • The CYC-42 and CYC-43 infill oil wells were drilled during March and April of 2021 and the CYC-44 infill oil well was drilled in late April 2021.
    • All three of these successful new oil wells started production during the third quarter of 2021 and drove a significant increase in Costayaco's average production to 6,292 BOPD during the third quarter of 2021, up 50% from 4,190 BOPD in the first quarter of 2021.
    • Costayaco's current average production(2) is even higher at 7,144 BOPD.
  • Moqueta Oil Field (100% WI)
    • During the third quarter of 2021, Gran Tierra completed a budgeted workover program that was designed to optimize Moqueta's waterflood, which may potentially increase the field's ultimate oil recovery.
  • Suroriente Block (52% WI and Operator)
    • At the Cohembi oil field in the Suroriente Block, a facility expansion program is progressing, which is expected to allow additional production to be brought online in the fourth quarter of 2021.
    • During the third quarter of 2021, a workover rig was deployed to run larger pumps in some oil wells.
    • The Suroriente Block's average WI production during the third quarter of 2021 was 3,513 BOPD, the highest average WI quarterly rate since the fourth quarter of 2019.
    • Suroriente's current average production2 is even higher at 4,189 BOPD.

(2) Approximate average production and Brent oil price over the period from October 1, 2021 to October 11, 2021.

For further information, see latest Presentation: Creating Value in Colombia (Oct 2021)
& Ecuador

Original article link

Source: Gran Tierra Energy

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