Page 14 - LatAmOil Week 41 2022
P. 14

LatAmOil                                     NEWS IN BRIEF                                          LatAmOil










       PERFORMANCE
       Gran Tierra Energy

       provides operational

       and financial updates

       Gran Tierra Energy has announced an opera-
       tional and financial update.
         Gary Guidry, President and CEO of Gran
       Tierra, commented: “We are pleased to
       announce that we started returning value to
       shareholders via share buybacks during the third
       quarter of 2022. In addition to the share buy-
       backs, we are equally as excited to have started
       buying back some of our bonds in the open mar-
       ket to strengthen our balance sheet.
         “During the Quarter, we commenced our  placed on jet pump. The well is still cleaning up  On August 29, 2022, Gran Tierra announced via
       enhanced oil recovery (EOR) polymer injection  and over the last 24-hour flow period (October  press release that the Toronto Stock Exchange
       project in the Acordionero field. This pilot injec-  9-10, 2022), it has produced at stabilised rates of  (TSX) had approved its notice of intention to
       tion test is a milestone after several years of labo-  345 bpd of 34 degrees API gravity oil, 141 bpd  make a normal course issuer bid (the NCIB)
       ratory and modeling indicated the suitability of  of water and 133,000 cubic feet per day of gas.  for its shares of common stock. Pursuant to the
       Acordionero for EOR. We continue to see strong  The Company plans to complete a pressure build  NCIB, the Company will be able to purchase up
       performance from our all of our waterfloods and  up test to assess if there is any reservoir damage  to 36,033,969 shares for cancellation, represent-
       development drilling programs.      in the T Sand and to then test the U Sand and  ing 10% of Gran Tierra’s public float, for a one-
         “On the exploration front, we progressed  Basal Tena immediately after the pressure build  year period commencing on September 1, 2022,
       on several prospects during the Quarter. Our  up. After testing the U Sand and Basal Tena, the  and ending on August 31, 2023. The aggregate
       Gaitas-1 well in the Middle Magdalena Valley  Company plans on returning to the T Sand for  purchase price under the NCIB shall not exceed
       is currently on production and a second, deeper  further production testing.  $37.5mn without further consideration of and
       exploration well in the field is being planned   Oriente Basin: In the Charapa Block, the  approval by Gran Tierra’s board of directors.
       for the fourth quarter of 2022. In Ecuador, the  Company spud its second 2022 exploration well   Share Buybacks: Pursuant to the NCIB, as of
       Bocachico-1 exploration well was cased and has  in Ecuador, the Charapa Norte-1 exploration  September 30, 2022, Gran Tierra had purchased
       commenced a 3-reservoir testing program. In  well, on October 5, 2022. This well is expected to  approximately 10.8mn shares, representing
       the Putumayo Basin of Colombia, our Rose-1  reach its planned total depth in approximately  about 2.9% of shares outstanding, for a total
       well showed encouraging results while drilling  28 days.                 purchase price of $14.4mn at an average price of
       and is currently being cased for testing.”  Colombia Exploration, Middle Magdalena  approximately $1.34 per share.
         Operations Update, Production: Gran Tier-  Valley Basin: Gran Tierra drilled and completed   Bond Buybacks: As part of Gran Tierra’s
       ra’s total average production was approximately  the Gaitas-1 exploration well in July-August  ongoing commitment to reduce its net debt (2),
       30,391 bpd of oil during the Quarter, which was  2022, and the well has been on production test  during September 2022, the Company bought
       5% higher compared to the third quarter of 2021  from the Lisama Formation, which is the same  back approximately $20.1mn in face value of
       and approximately flat with the second quarter  producing formation at the Acordionero oil  Gran Tierra’s 6.25% senior notes due February
       of 2022.                            field. Gaitas-1 is located approximately 7 km  2025, representing approximately 6.7% of the
         The Company’s fourth quarter-to-date 2022  south of Acordionero’s Southwest Pad.  outstanding 2025 bonds.
       total average production (1) has been approxi-  During the last week, Gaitas-1 has produced   The cost of the 2025 bonds’ buyback was
       mately 32,000 bpd of oil.           at stabilised average rates of 171 bpd of oil (17  approximately $17.3mn, representing a discount
         Suroriente: During the Quarter, Suroriente  degrees API gravity oil), 652 bpd of water and 2  of about 14% to the face value of the 2025 bonds.
       experienced occasional disruptions due to tem-  mcf per day.               Gran Tierra intends to hold the 2025 bonds
       porary localised blockades. The impact of these   Based on the encouraging results of Gaitas-1,  which it has bought back on the Company’s bal-
       blockades lowered the Company’s total average  Gran Tierra plans to spud the Gaitas-2 explora-  ance sheet.
       production for the Quarter by approximately  tion well with a projected spud date later in the   Purchasing the bonds reflects a savings of
       920 bpd of oil.                     fourth quarter 2022. The Company expects Gai-  $3.0mn in interest expense that would have been
         Ecuador Exploration, Oriente Basin: In the  tas-2 to target multiple reservoir zones in a struc-  paid over the remaining term to the maturity of
       Chanangue Block, Gran Tierra has finished  turally higher location than the Gaitas-1 well, in  the 2025 bonds.
       drilling the Bocachico-1 exploration well and  a planned effort to test the deeper Umir Sands   Cash and Net Debt (2): As of September 30,
       run production casing to a total depth of 10,815  further away from possible oil-water contacts.  2022, Gran Tierra had approximately $118mn
       feet measured depth. The Company plans to test   Putumayo Basin: In the ALEA-1848A Block,  in cash on its balance sheet and net debt (2) of
       three potential oil zones in the Basal Tena, U  Gran Tierra has finished drilling the Rose-1  approximately $462mn (net of the buyback of
       Sand, and T Sand, over the next several weeks,  exploration well and is currently running pro-  2025 bonds described above).
       as identified by petrophysical log analysis. The T  duction casing in order to test the well.  Gran Tierra’s new credit facility with Trafig-
       Sand was perforated over 23.5 ft of reservoir and   Financial Update, Share Buybacks, NCIB:  ura of up to $150mn remains undrawn.



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