Page 15 - LatAmOil Week 16 2022

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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