Page 14 - LatAmOil Week 41 2022

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.

P14 www. NEWSBASE .com Week 41 12•October•2022