Page 15 - LatAmOil Week 16 2022
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LatAmOil                                    NEWS IN BRIEF                                          LatAmOil








       Andy Yeo, CEO of Baron, commented: “Over  balance of $40mn as of March 31, 2022, down  Middle Magdalena Valley Basin. Drilling began
       the last year or more we have worked hard to  $27.5mn or 41% from a balance of $67.5mn as  on February 15, 2022, with one rig on the South-
       pivot the Company towards assets where we  of December 31, 2021, and down $164mn from  west Pad. Three infill producers and two water
       have significant interests in meaningful and  March 31, 2020. With a cash balance of $59mn  injection wells were drilled before the end of
       active opportunities. On the Chuditch TL-SO-  as of March 31, 2022, forecasted 2022 free cash  first quarter 2022. All producing wells will be
       19-16 PSC, offshore Timor-Leste, we have a  flow and recovery of tax receivables, Gran Tierra  on production in April 2022. Gran Tierra was
       75% interest in a gas discovery and associated  expects to fully pay off the remaining balance of  successful in its ongoing focus on quick-cycle
       prospects and lead that have an aggregate gross  its credit facility in the second quarter 2022.  times, drilling these five wells for an average
       Pmean prospective resource of over 590mn   2022 Financial Forecasts and Plans: At an  per well cost of $1.3mn. Completion costs for
       boe independently validated to the SPE PRMS  $80 per barrel Brent price (The Company’s  the three infill oil wells were on budget at an
       2018 standard. In the UK, we have accelerated  previously announced high budget case), Gran  average cost per well of $0.6mn. The first water
       progress and increased our interest to 32% by  Tierra’s 2022 capital programme of $220-240mn  injector’s completion cost was on budget at
       executing a farm-up agreement in the P2478  is forecast to generate 2022 cash flow of $330-  $0.8mn. The second water injector completion
       licence containing the ‘Dunrobin’ prospect with  350mn, free cash flow of $100-120mn, EBITDA  is planned during April 2022. The drilling rig is
       an internal, non SPE PRMS 2018 standard, esti-  of $440-460mn and a 2022 year-end cash bal-  being moved to Central Pad with recommence-
       mated gross Pmean prospective resource of the  ance of $120-140mn.       ment of development drilling of the next 9-11
       order of 100 MMbbl.                    With Brent currently at significantly higher  wells expected before the end of April 2022. The
         In both cases, we are making good progress  levels than $80/bbl, the Company has increased  results of the development drilling campaign
       on the respective seismic re-processing pro-  its 2022 Brent price forecast to $95/bbl. At this  have met expectations and the benefits to the
       jects and other technical studies with results to  higher oil price, the Company would maintain  Acordionero field’s oil production are expected
       be announced later this year. In 2023 there will  2022 capital at $220-240mn with forecast 2022  to be realised through the course of second
       be the potential to be drilling at Chuditch and  cash flow of $410-430mn, free cash flow of $180-  and third quarter 2022 with increased produc-
       a drill-or-drop decision on Dunrobin. By con-  200mn, EBITDA of $550-570mn and a 2022  tion. A polymer injection project is expected to
       trast, Peru Block XXI has a materially smaller  year-end cash balance of $210-230mn.  begin early in the third quarter of 2022, where
       prospective resource with no certainty around   The Company’s 20-25 well development pro-  the Company plans to inject polymer into one
       pathways or timelines to drilling. Hence the  gramme continues to focus on asset optimiza-  or two waterflood patterns. The main objective
       Company’s decision to relinquish the Licence  tion, maintaining a low operating cost structure  of the polymer is to determine whether this
       and ultimately withdraw from the country.”  and increasing oil recovery factors across its  widely practiced enhanced oil recovery process
       Baron Oil, April 19 2022            extensive portfolio.                 would be successful at increasing Acordionero’s
                                              Gran Tierra’s 2022 exploration campaign of  ultimate oil recovery factors and remaining oil
                                           up to 6-7 wells is expected to be fully funded  reserves.
       PERFORMANCE                         from forecasted internally generated cash flow   Costayaco and Moqueta: Gran Tierra has
                                           and is designed to focus on near-field prospects  allocated capital of $40mn and $30mn respec-
       Gran Tierra Energy                  in proven basins with access to infrastructure,  tively to the Costayaco (4-5 development wells)
                                           providing short cycle times from discovery to  and Moqueta (3 development wells) fields in
       issues corporate update             bringing production on-stream.       the Putumayo Basin in 2022. The first Costay-
                                              The Company continues to have Brent oil  aco well was spud in late February 2022, and as
       Gran Tierra Energy has announced a corporate  price hedges in place for 9,000 bpd in first half  of early April 2022, three infill development oil
       update.                             2022, with an average ceiling price of $87.62 per  wells have been drilled.
         Q1-2022 Production: Gran Tierra’s total  barrel on 8,000 bpd. Therefore, approximately   Two of these wells were the fastest and lowest
       average production was 29,362 bpd during the  73% of Gran Tierra’s oil production, which is  cost wells ever drilled in the field (average per
       first quarter of 2022, which was approximately  unhedged, has been able to fully benefit from  well cost of $1.8mn). The three wells are expected
       flat when compared with fourth quarter 2021  the current high oil price environment.  to be completed and brought on production
       production and up 20% from first quarter 2021’s   Operations Update, Acordionero: Gran  during second quarter 2022. The Moqueta work
       level. The Company’s first quarter 2022 produc-  Tierra has allocated capital of $70mn towards  programme is expected to commence in the
       tion was in-line with management expectations.  2022 development activities for the Acordi-  fourth quarter of 2022 and is planned to con-
         Expect to Meet 2022 Production Guidance:  onero field (14-16 development wells) in the  tinue into 2023.
       Gran Tierra believes its ability to keep produc-
       tion 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 bpd. The ramp up in produc-
       tion 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



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