UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2023~~March 31, 2024


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 001-34018

GRAN TIERRA ENERGY INC.

(Exact name of registrant as specified in its charter)

Delaware

98-0479924

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

500 Centre Street S.E.

Calgary,

Alberta

Canada

T2G 1A6

(Address of principal executive offices, including zip code)

(403) 265-3221

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value ~~$0.01~~$0.001 per share	GTE	NYSE American
		Toronto Stock Exchange
		London Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

On ~~July 26, 2023,~~April 29, 2024, ~~33,287,055~~31,332,184 shares of the registrant’s Common Stock, ~~$0.01~~$0.001 par value, were ~~issued.~~issued and outstanding.

Gran Tierra Energy Inc.

Quarterly Report on Form 10-Q

Quarterly Period Ended ~~June 30, 2023~~March 31, 2024

Table of contents


		Page
PART I	Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

PART II	Other Information
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 5.	Other information	32
Item 6.	Exhibits	33
SIGNATURES		34

CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q regarding our financial position, estimated quantities and net present values of reserves, business strategy, plans and objectives of our management for future operations, covenant compliance, capital spending plans and benefits of the changes in our capital program or expenditures, our liquidity ~~the impacts of the coronavirus (COVID-19) pandemic~~and financial condition and those statements preceded by, followed by or that otherwise include the words ~~“believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “target,” “goal,” “plan,” “budget,” “objective,” “could,” “should,”~~“believe”, “expect”, “anticipate”, “intend”, “estimate”, “project”, “target”, “goal”, “plan”, “budget”, “objective”, “should”, or similar expressions or variations on these expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct or that, even if correct, intervening circumstances will not occur to cause actual results to be different than expected. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements, including, but not limited to, our operations are located in South America and unexpected problems can arise due to guerilla activity, strikes, local blockades or protests; technical difficulties and operational difficulties may arise which impact the production, transport or sale of our products; other disruptions to local operations; global health ~~events (including the ongoing COVID-19 pandemic);~~events; global and regional changes in the demand, supply, prices, differentials or other market conditions affecting oil and gas, including inflation and changes resulting from a global health crisis, geopolitical events, including the ~~Russian invasion of~~conflicts in Ukraine and the Gaza region, or from the imposition or lifting of crude oil production quotas or other actions that might be imposed by OPEC ~~such as its recent decision to cut production~~ and other producing countries and the resulting company or third-party actions in response to such changes; changes in commodity prices, including volatility or a prolonged decline in these prices relative to historical or future expected levels; the risk that current global economic and credit conditions may impact oil prices and oil consumption more than we currently ~~predicts,~~predict, which could cause further modification of our strategy and capital spending program; prices and markets for oil and natural gas are unpredictable and volatile; the effect of hedges; the accuracy of productive capacity of any particular field; geographic, political and weather conditions can impact the production, transport or sale of our products; our ability to execute ~~its~~our business plan and realize expected benefits from current initiatives; the risk that unexpected delays and difficulties in developing currently owned properties may occur; the ability to replace reserves and production and develop and manage reserves on an economically viable basis; the accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates); the risk profile of planned exploration activities; the effects of drilling down-dip; the effects of waterflood and multi-stage fracture stimulation operations; the extent and effect of delivery disruptions, equipment performance and costs; actions by third parties; the timely receipt of regulatory or other required approvals for our operating activities; the failure of exploratory drilling to result in commercial wells; unexpected delays due to the limited availability of drilling equipment and personnel; volatility or declines in the trading price of our common stock or bonds; the risk that we do not receive the anticipated benefits of government programs, including government tax refunds; our ability to comply with financial covenants in our ~~credit agreement and~~ indentures and make borrowings under any future credit agreement; and those factors set out in Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q and Part I, Item 1A “Risk Factors” in our ~~2022~~2023 Annual Report on Form 10-K (the ~~“2022~~“2023 Annual Report on Form 10-K”), and in our other filings with the Securities and Exchange Commission (“SEC”) during the current fiscal year. The unprecedented nature of the current volatility in the worldwide economy and oil and gas industry makes it more difficult to predict the accuracy of forward-looking statements. The. This information included herein ~~(other than in the context of the financial statements)~~ is given as of the filing date of this Quarterly Report on Form 10-Q with the ~~SEC~~Securities and Exchange Commission (“SEC”) and, except as otherwise required by the ~~federal~~ securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to or to withdraw, any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

GLOSSARY OF OIL AND GAS TERMS

In this document, the abbreviations set forth below have the following meanings:


bbl			barrel
BOPD			barrels of oil per day
NAR			net after royalty

Sales volumes represent production NAR adjusted for inventory changes. Our oil and gas reserves are reported as NAR. Our production is also reported NAR, except as otherwise specifically noted as “working interest production before royalties”.

PART I - Financial Information

Item 1. Financial Statements

Gran Tierra Energy Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(Thousands of U.S. Dollars, Except for Share and Per Share Amounts)


		Three Months Ended June 30,					Six Months Ended June 30,
				Three Months Ended March 31,
				Three Months Ended March 31,
				Three Months Ended March 31,
		2023		2022			2023		2022		2024	2023
OIL SALES (Note 6)	OIL SALES (Note 6)	$	157,902	$	205,785		$	302,092	$	380,354

EXPENSES	EXPENSES
EXPENSES
EXPENSES
Operating
Operating
Operating	Operating	48,491		39,494			89,860		74,429
Transportation	Transportation	3,691		2,513			6,757		5,347
Depletion, depreciation and accretion (Note 3)	Depletion, depreciation and accretion (Note 3)	56,209		42,216			107,930		83,179

General and administrative (Note 9)	General and administrative (Note 9)	9,866		9,836			22,562		22,172
Foreign exchange loss (gain)		4,707		2,722			6,409		(1,003)
Derivative instruments loss (Note 9)		—		5,172			—		26,611
Other gain (Note 4)		—		—			(615)		—
General and administrative (Note 9)
General and administrative (Note 9)
Severance
Foreign exchange (gain) loss
Other gain
Interest expense (Note 4)	Interest expense (Note 4)	12,678		12,194			24,514		24,322
		135,642		114,147			257,417		235,057

INTEREST INCOME	INTEREST INCOME	647		—			1,415		—
INTEREST INCOME
INTEREST INCOME
INCOME BEFORE INCOME TAXES	INCOME BEFORE INCOME TAXES	22,907		91,638			46,090		145,297

INCOME TAX EXPENSE	INCOME TAX EXPENSE
INCOME TAX EXPENSE
INCOME TAX EXPENSE
Current (Note 7)
Current (Note 7)
Current (Note 7)	Current (Note 7)	19,757		25,425			37,363		46,252
Deferred (Note 7)	Deferred (Note 7)	13,975		13,241			29,252		31,954
						17,395
NET AND COMPREHENSIVE LOSS
		33,732		38,666			66,615		78,206
NET AND COMPREHENSIVE (LOSS) INCOME		$	(10,825)	$	52,972		$	(20,525)	$	67,091
NET LOSS PER SHARE (1)
NET LOSS PER SHARE (1)
NET LOSS PER SHARE (1)
- BASIC and DILUTED
- BASIC and DILUTED
- BASIC and DILUTED

NET (LOSS) INCOME PER SHARE (1)
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC and DILUTED (Note 5)
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC and DILUTED (Note 5)
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC and DILUTED (Note 5)

- BASIC		$	(0.33)	$	1.44		$	(0.61)	$	1.82
- DILUTED		$	(0.33)	$	1.42		$	(0.61)	$	1.80
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC (Note 5)		33,299,505		36,857,138			33,872,270		36,798,229
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED (Note 5)		33,299,505		37,423,360			33,872,270		37,297,769

(1) Reflects ~~our~~Company’s 1-for-10 reverse stock split that became effective May 5, 2023. ~~See Note 5 in the notes to the condensed financial statements for further discussion.~~

(See notes to the condensed consolidated financial statements)

Gran Tierra Energy Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(Thousands of U.S. Dollars, Except ~~Share and Per~~for Share Amounts)


		As at June 30, 2023		As at December 31, 2022			As at March 31, 2024	As at December 31, 2023

ASSETS	ASSETS
ASSETS
ASSETS
Current Assets	Current Assets					Current Assets
Cash and cash equivalents (Note 10)	Cash and cash equivalents (Note 10)	$	68,529	$	126,873
Restricted cash and cash equivalents (Note 10)		1,142		1,142
Accounts receivable	Accounts receivable	6,753		10,706
Inventory	Inventory	22,532		20,192
Taxes receivable		82		54
Other current assets (Note 9)		9,108		9,620
Other current assets (Note 9 and 10)
Total Current Assets	Total Current Assets	108,146		168,587

Oil and Gas Properties
Oil and Gas Properties
Oil and Gas Properties	Oil and Gas Properties
Proved	Proved	1,045,686		1,000,424
Unproved	Unproved	66,091		74,471
Total Oil and Gas Properties	Total Oil and Gas Properties	1,111,777		1,074,895
Other capital assets	Other capital assets	29,787		26,007
Total Property, Plant and Equipment (Note 3)	Total Property, Plant and Equipment (Note 3)	1,141,564		1,100,902

Other Long-Term Assets	Other Long-Term Assets
Other Long-Term Assets
Other Long-Term Assets
Deferred tax assets	Deferred tax assets	12,924		22,990
Taxes receivable	Taxes receivable	40,014		27,796
Other long-term assets (Note 9)		6,717		15,335
Other long-term assets (Note 9 and 10)
Total Other Long-Term Assets	Total Other Long-Term Assets	59,655		66,121
Total Assets	Total Assets	$	1,309,365	$	1,335,610

LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities	Current Liabilities					Current Liabilities
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	197,797	$	167,579

Credit facility (Note 4)
Current portion of long-term debt (Note 4 and 9)
Taxes payable	Taxes payable	30,442		58,978
Equity compensation award liability (Note 5)	Equity compensation award liability (Note 5)	4,976		15,082

Total Current Liabilities	Total Current Liabilities	233,215		241,639
Total Current Liabilities
Total Current Liabilities

Long-Term Liabilities	Long-Term Liabilities
Long-term debt (Notes 4 and 9)		585,807		589,593
Long-Term Liabilities
Long-Term Liabilities
Long-term debt (Note 4 and 9)
Deferred tax liabilities	Deferred tax liabilities	22,241		28
Asset retirement obligation	Asset retirement obligation	66,845		63,358
Equity compensation award liability (Note 5)	Equity compensation award liability (Note 5)	5,708		16,437

Other long-term liabilities	Other long-term liabilities	8,131		6,989
Other long-term liabilities
Other long-term liabilities
Total Long-Term Liabilities	Total Long-Term Liabilities	688,732		676,405

Contingencies (Note 8)	Contingencies (Note 8)
Contingencies (Note 8)
Contingencies (Note 8)

Shareholders' Equity (1)	Shareholders' Equity (1)
Common Stock (Note 5) (33,287,055 and 34,615,116 issued, 33,287,055 and 34,615,116 outstanding shares of Common Stock, par value $0.01 per share, as at June 30, 2023, and December 31, 2022, respectively)		10,237		10,272
Shareholders' Equity (1)
Shareholders' Equity (1)
Common Stock (31,429,826 and 32,275,113 issued, 31,401,214 and 32,246,501 outstanding shares of Common Stock, par value $0.001 per share, as at March 31, 2024 and December 31, 2023, respectively), (Note 5)
Additional paid-in capital	Additional paid-in capital	1,254,449		1,291,354
Treasury Stock (Note 5)	Treasury Stock (Note 5)	—		(27,317)
Deficit	Deficit	(877,268)		(856,743)
Total Shareholders’ Equity	Total Shareholders’ Equity	387,418		417,566
Total Liabilities and Shareholders’ Equity	Total Liabilities and Shareholders’ Equity	$	1,309,365	$	1,335,610

(1) Reflects ~~our~~Company’s 1-for-10 reverse stock split that became effective May 5, 2023. ~~See Note 5 in the notes to the condensed financial statements for further discussion.~~

(See notes to the condensed consolidated financial statements)

Gran Tierra Energy Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Thousands of U.S. Dollars)


		Six Months Ended June 30,					Three Months Ended March 31,
		2023		2022			2024	2023
Operating Activities	Operating Activities					Operating Activities
Net (loss) income		$	(20,525)	$	67,091
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net loss
Adjustments to reconcile net loss to net cash provided by operating activities:						Adjustments to reconcile net loss to net cash provided by operating activities:
Depletion, depreciation and accretion (Note 3)	Depletion, depreciation and accretion (Note 3)	107,930		83,179

Deferred tax expense (Note 7)
Deferred tax expense (Note 7)
Deferred tax expense (Note 7)	Deferred tax expense (Note 7)	29,252		31,954
Stock-based compensation expense (Note 5)	Stock-based compensation expense (Note 5)	1,817		6,546
Amortization of debt issuance costs (Note 4)	Amortization of debt issuance costs (Note 4)	1,800		2,018
Unrealized foreign exchange gain		(7,548)		(498)
Other gain (Note 4)		(615)		—
Derivative instruments loss (Note 9)		—		26,611
Cash settlements on derivatives instruments		—		(26,392)

Unrealized foreign exchange (gain) loss
Other gain
Cash settlement of asset retirement obligation	Cash settlement of asset retirement obligation	(156)		(242)
Non-cash lease expenses	Non-cash lease expenses	2,253		1,158
Lease payments	Lease payments	(1,242)		(732)
Net change in assets and liabilities from operating activities (Note 10)	Net change in assets and liabilities from operating activities (Note 10)	(25,836)		56,329
Net cash provided by operating activities	Net cash provided by operating activities	87,130		247,022

Investing Activities	Investing Activities
Investing Activities
Investing Activities
Additions to property, plant and equipment	Additions to property, plant and equipment	(136,627)		(106,682)

Changes in non-cash investing working capital (Note 10)	Changes in non-cash investing working capital (Note 10)	9,088		10,964
Net cash used in investing activities	Net cash used in investing activities	(127,539)		(95,718)

Financing Activities	Financing Activities
Financing Activities
Financing Activities
Proceeds from issuance of Senior Notes, net of issuance costs (Note 4)
Repayment of debt (Note 4)
Debt issuance costs (Note 4)	Debt issuance costs (Note 4)	(1,873)		—
Repayment of debt (Note 4)		—		(67,525)
Re-purchase of Senior Notes (Note 4)		(6,805)		—
Purchase of Senior Notes
Re-purchase of shares of Common Stock (Note 5)	Re-purchase of shares of Common Stock (Note 5)	(10,825)		—
Proceeds from exercise of stock options	Proceeds from exercise of stock options	5		1,285
Lease payments	Lease payments	(3,035)		(1,261)
Net cash used in financing activities		(22,533)		(67,501)
Net cash provided by (used in) financing activities

Foreign exchange gain (loss) on cash, cash equivalents and restricted cash and cash equivalents		5,759		(680)
Foreign exchange (loss) gain on cash, cash equivalents and restricted cash and cash equivalents
Foreign exchange (loss) gain on cash, cash equivalents and restricted cash and cash equivalents
Foreign exchange (loss) gain on cash, cash equivalents and restricted cash and cash equivalents

Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents		(57,183)		83,123
Cash, cash equivalents and restricted cash and cash equivalents, beginning of period (Note 10)		133,358		31,404
Cash, cash equivalents and restricted cash and cash equivalents, end of period (Note 10)		$	76,175	$	114,527
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period (Note 10)
Cash and cash equivalents and restricted cash and cash equivalents, end of period (Note 10)

Supplemental cash flow disclosures (Note 10)	Supplemental cash flow disclosures (Note 10)
Supplemental cash flow disclosures (Note 10)
Supplemental cash flow disclosures (Note 10)

(See notes to the condensed consolidated financial statements)

Gran Tierra Energy Inc.

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

(Thousands of U.S. Dollars)




		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2023		2022		2023		2022				2024	2023
Share Capital (1)	Share Capital (1)									Share Capital (1)
Balance, beginning of period	Balance, beginning of period	$	10,272	$	10,272	$	10,272	$	10,270
Issuance of common stock (Note 5)		—		—		—		2
Re-purchase of shares of common stock		(35)		—		(35)		—

Cancellation of shares of Common Stock (Note 5)
Cancellation of shares of Common Stock (Note 5)
Cancellation of shares of Common Stock (Note 5)
Balance, end of period	Balance, end of period	$	10,237	$	10,272	$	10,237	$	10,272

Additional Paid-in Capital
Additional Paid-in Capital
Additional Paid-in Capital	Additional Paid-in Capital
Balance, beginning of period	Balance, beginning of period	$	1,291,973	$	1,289,162	$	1,291,354	$	1,287,582

Exercise of stock options	Exercise of stock options	5		303		5		1,283
Re-purchase of shares of common stock		(38,107)		—		(38,107)		—
Exercise of stock options
Exercise of stock options
Cancellation of shares of Common Stock (Note 5)
Stock-based compensation (Note 5)	Stock-based compensation (Note 5)	578		610		1,197		1,210
Balance, end of period	Balance, end of period	$	1,254,449	$	1,290,075	$	1,254,449	$	1,290,075

Treasury Stock	Treasury Stock
Treasury Stock
Treasury Stock
Balance, beginning of period	Balance, beginning of period	$	(38,035)	$	—	$	(27,317)	$	—
Purchase of treasury shares (Note 5)		(107)		—		(10,825)		—
Cancellation of treasury shares		38,142		—		38,142		—
Balance, beginning of period
Balance, beginning of period
Re-purchase of shares of Common Stock (Note 5)
Cancellation of shares of Common Stock (Note 5)
Balance, end of period	Balance, end of period	$	—	$	—	$	—	$	—

Deficit	Deficit
Deficit
Deficit
Balance, beginning of period	Balance, beginning of period	$	(866,443)	$	(981,653)	$	(856,743)	$	(995,772)
Net (loss) income		(10,825)		52,972		(20,525)		67,091
Net loss
Balance, end of period	Balance, end of period	$	(877,268)	$	(928,681)	$	(877,268)	$	(928,681)

Total Shareholders’ Equity	Total Shareholders’ Equity	$	387,418	$	371,666	$	387,418	$	371,666
Total Shareholders’ Equity
Total Shareholders’ Equity

(1) Reflects ~~our~~Company’s 1-for-10 reverse stock split that became effective May 5, 2023. ~~See Note 5 in the notes to the condensed financial statements for further discussion.~~

(See notes to the condensed consolidated financial statements)

Gran Tierra Energy Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(Expressed in U.S. Dollars, unless otherwise indicated)

1. Description of Business

Gran Tierra Energy Inc. a Delaware corporation (the “Company” or “Gran Tierra”), is a publicly traded company focused on international oil and natural gas exploration and production with assets currently in Colombia and Ecuador.

2. Significant Accounting Policies

These interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The information furnished herein reflects all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of results for the interim periods.

The note disclosure requirements of annual audited consolidated financial statements provide additional disclosures required for interim unaudited condensed consolidated financial statements. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as at and for the year ended December 31, ~~2022,~~2023, included in the Company’s ~~2022~~2023 Annual Report on Form 10-K.

The Company’s significant accounting policies are described in Note 2 of the consolidated financial statements, which are included in the Company’s ~~2022~~2023 Annual Report on Form 10-K and are the same policies followed in these interim unaudited condensed consolidated financial statements. The Company has evaluated all subsequent events to the date these interim unaudited condensed consolidated financial statements were issued.

3. Property, Plant and Equipment


(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	As at June 30, 2023		As at December 31, 2022		(Thousands of U.S. Dollars)	As at March 31, 2024	As at December 31, 2023
Oil and natural gas properties	Oil and natural gas properties					Oil and natural gas properties
Proved	Proved	$	4,765,640	$	4,617,804
Unproved	Unproved	66,091		74,471
		4,831,731		4,692,275
Other(1)	Other(1)	65,816		61,386
		4,897,547		4,753,661
	5,072,878
Accumulated depletion, depreciation and impairment	Accumulated depletion, depreciation and impairment	(3,755,983)		(3,652,759)
		$	1,141,564	$	1,100,902
	$

(1) The “other” category includes right-of-use assets for operating and finance leases of ~~$44.9~~$60.4 million, which had a net book value of ~~$28.6~~$36.3 million as at ~~June 30, 2023~~March 31, 2024 (December 31, ~~2022~~2023 - ~~$38.9~~$53.3 million, which had a net book value of ~~$24.6~~$32.4 million).

During thethree months ended March 31, 2024, the Company entered into new lease contracts related to power generation and safety equipment, and capitalized $6.1 million right-of-use assets related to those contracts.

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively, the Company had no ceiling test impairment losses. The Company used a 12-month unweighted average of the first-day-of the month Brent price prior to the ending date of the periods ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~ of ~~$88.52~~$81.58 and ~~$87.88~~$95.99 per bbl, respectively, for the purpose of the ceiling test calculations.

4. Debt and Debt Issuance Costs

The Company’s debt as at ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, was as follows:

(Thousands of U.S. Dollars) As at June 30, 2023 As at December 31, 2022
Long-Term
6.25% Senior Notes, due February 2025 $ 271,909 $ 279,909
7.75% Senior Notes, due May 2027 300,000 300,000
Unamortized debt issuance costs (10,830) (10,992)
561,079 568,917
Long-term lease obligation(1)
24,728 20,676
Total debt $ 585,807 $ 589,593


(Thousands of U.S. Dollars)	As at March 31, 2024		As at December 31, 2023
Current
Credit facility	$	—	$	36,364
6.25% Senior Notes, due February 2025 (“6.25% Senior Notes”)	24,828		—
Unamortized debt issuance costs	(151)		(755)
	$	24,677	$	35,609

Long-Term
6.25% Senior Notes, due February 2025 (“6.25% Senior Notes”)	$	—	$	24,828
7.75% Senior Notes, due May 2027 (“7.75% Senior Notes”)	24,201		24,201
9.50% Senior Notes, due October 2029 (“9.50% Senior Notes”)	587,590		487,590
Unamortized Senior Notes discount	(38,164)		(27,958)
Unamortized Senior Notes issuance costs	(17,465)		(15,679)
	556,162		492,982
Long-term lease obligation (1)	26,937		26,550
	$	583,099	$	519,532
Total Debt	$	607,776	$	555,141

(1) The current portion of the lease obligation has been included in accounts payable and accrued liabilities on the Company’s balance sheet and totaled ~~$7.8~~$15.2 million as at ~~June 30, 2023~~March 31, 2024 (December 31, ~~2022~~2023 - ~~$4.8~~$12.1 million).

Credit Facility

As ~~of June 30,~~at December 31, 2023, the Company had a $36.4 million balance outstanding under the Company’s credit ~~facility with a market lender in~~facility. On February 6, 2024, the global commodities industry. The credit facility has a borrowing base of up to $150 million, with $100 million as an initial commitment available at June 30, 2023, and an option for an additional $50 million upon mutual agreement by the Company and the lender. The credit facility bears interest based on the secured overnight financing rate posted by the Federal Reserve Bank of New York plus a credit margin of 6.00% and a credit-adjusted spread of 0.26%. Undrawn amountsoutstanding balance under the credit facility ~~bear interest at 2.10% per annum, based on the amount available. The credit facility is secured by the Company’s Colombian assets~~of $36.4 million was fully re-paid and ~~economic rights. It has a final maturity date of August 15, 2024, which may be extended to February 18, 2025, upon the satisfaction of certain conditions. The availability period for the draws under~~ the credit facility ~~expires on August 20, 2023. As of June 30, 2023, and December 31, 2022, the credit facility remained undrawn.~~

~~Under the terms of the credit facility, the Company is required to maintain compliance with the following financial covenants:~~

i.Global Coverage Ratio of at least 150%, calculated using the net present value of the consolidated future cash flows of the Company up to the final maturity date discounted at 10% over the outstanding amount on the credit facility at each reporting period. The net present value of the consolidated future cash flows of the Company is required to be based on 80% of the prevailing ICE Brent forward strip.

~~ii.~~Prepayment Life Coverage Ratio of at least 150%, calculated using the estimated aggregate value of commodities to be delivered under the commercial contract from the commencement date to the final maturity date based on 80% of the prevailing ICE Brent forward strip and adjusted for quality and transportation discounts over the outstanding amount on the credit facility including interest and all other costs payable to the lender.

i.Liquidity ratio where the Company’s projected sources of cash exceed projected uses of cash by at least 1.15 times in each quarter period included in one year consolidated future cash flows. The future cash flows represent forecasted expected cash flows from operations, less anticipated capital expenditures, and certain other adjustments. The commodity pricing assumption used in this covenant is required to be 90% of the prevailing ICE Brent forward strip for the projected future cash flows.was terminated.

Senior Notes

~~During~~On February 6, 2024, the ~~three~~Company issued an additional $100.0 million of 9.50% Senior Notes due October 2029 (the “new 9.50% Senior Notes”), and ~~six months ended June 30,~~received cash proceeds of $88.0 million. The new 9.50% Senior Notes have the same terms and provisions as the previously issued $487.6 million 9.50% Senior Notes except for the issue price. The new 9.50% Senior Notes accrue interest from October 20, 2023, the date of issuance of previously issued 9.50% Senior Notes. The Company ~~re-purchased in~~received a cash payment of $2.8 million related to the ~~open market nil and $8.0 million, respectively,~~accrued interest of ~~6.25%~~the new 9.50% Senior Notes for cash consideration of $6.8 million. The re-purchase resulted in a $1.1 million gain, which included the write-off of deferred financing fees of $0.1 million. The re-purchase gain was recorded in “other gain” in the Company’s condensed consolidated statements of operations. The re-purchased 6.25% Senior Notes were not canceled and are held by the Company as treasury bonds as of June 30, 2023.Notes.

8Leases

During thethree months ended March 31, 2024, the Company recorded three new finance leases totaling $6.1 million, which have lease terms ranging from two to three years and weighted average discount rates of 9.6%.

Interest Expense

The following table presents the total interest expense recognized in the accompanying interim unaudited condensed consolidated statements of operations:


		Three Months Ended June 30,					Six Months Ended June 30,
				Three Months Ended March 31,
				Three Months Ended March 31,
				Three Months Ended March 31,
(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	2023		2022			2023		2022		(Thousands of U.S. Dollars)	2024	2023
Contractual interest and other financing expenses	Contractual interest and other financing expenses	$	11,659	$	11,063		$	22,714	$	22,304
Amortization of debt issuance costs	Amortization of debt issuance costs	1,019		1,131			1,800		2,018
		$	12,678	$	12,194		$	24,514	$	24,322
						$

5. Share Capital


			Shares of Common Stock
Shares issued at December 31, ~~2022~~2023			~~36,889,862~~32,275,113
~~Shares re-purchased~~Treasury shares			~~(2,274,746)~~(28,612)
Shares issued and outstanding at December 31, ~~2022~~2023			~~34,615,116~~32,246,501
Shares issued on option exercise			~~589~~41,379
Shares re-purchased and cancelled			~~(1,328,650)~~(858,054)
Shares issued at March 31, 2024			31,429,826
Treasury shares			(28,612)
Shares issued and outstanding at ~~June 30, 2023~~March 31, 2024			~~33,287,055~~31,401,214

On May 5, 2023, the Company completed a 1-for-10 reverse stock split of the Company’s common stock. As a result of the reverse stock split, every ten of the Company’s issued shares of common stock were automatically combined into one issued share of common stock, without any change to the par value per share. All share and per share numbers have been adjusted to reflect the reverse stock split. The Company’s outstanding options were also proportionately adjusted as a result of the reverse stock split to increase the exercise price and reduce the number of shares issuable upon exercise.

During the year ended December 31, ~~2022,~~2023, the Company implemented a share re-purchase program (the ~~“2022~~“2023 Program”) through the facilities of the Toronto Stock Exchange (“TSX”), the NYSE American (the “NYSE”) and eligible alternative trading platforms in ~~Canada.~~Canada or the United States. Under the ~~2022~~2023 Program, the Company ~~was~~is able to purchase at prevailing market prices up to ~~3,603,396~~3,234,914 shares of Common Stock, representing approximately 10% of the ~~issued and outstanding shares of Common Stock~~public float as of ~~August 22, 2022.~~October 20, 2023. The ~~2022~~2023 Program ~~expired in May 2023 when~~will expire on November 2, 2024, or earlier if the 10% ~~share~~ maximum ~~was~~is reached.

During the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, the Company re-purchased ~~20,439 and 1,328,650~~886,666 shares at a weighted average price of ~~$5.27 and $8.15~~$5.58 per share ~~respectively~~ (three ~~and six~~ months ended ~~June 30,~~March 31, 2023 - 1,308,212 shares under the 2022 ~~- nil)~~program at a weighted average price of $8.19 per share). As of ~~June 30, 2023, all 3,603,396~~March 31, 2024, the Company cancelled 28,612 shares held as treasury ~~stock were canceled.~~shares at December 31, 2023, and cancelled 858,054 shares re-purchased during the three months ended March 31, 2024. During the period from October 20, 2023 to April 29, 2024, the Company has re-purchased 1,997,500 shares under the 2023 Program.

Equity Compensation Awards

The following table provides information about performance stock units (“PSUs”), deferred share units (“DSUs”), restricted share units (“RSUs”) and stock option activity for the ~~six~~three months ended ~~June 30, 2023:~~March 31, 2024:


		PSUs	DSUs	Stock Options
		Number of Outstanding Share Units		Number of Outstanding Stock Options	Weighted Average Exercise Price/Stock Option ($)
Balance, December 31, 2022		3,152,823	656,186	1,730,286	11.52
	PSUs					PSUs	DSUs	RSUs	Stock Options
	Number of Outstanding Share Units					Number of Outstanding Share Units	Number of Outstanding Share Units		Number of Outstanding Stock Options	Weighted Average Exercise Price/Stock Option ($)
Balance, December 31, 2023
Granted	Granted	1,504,546	46,290	407,627	8.59
Exercised	Exercised	(1,523,408)	—	(589)	7.93
Forfeited	Forfeited	(21,574)	—	(22,336)	5.79
Expired	Expired	—	—	(129,943)	24.87
Balance, June 30, 2023		3,112,387	702,476	1,985,045	10.11
Balance, at March 31, 2024

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, there was ~~$0.3~~$3.4 million and ~~$1.8~~$1.5 million of stock-based compensation expense, ~~respectively. For the three and six months ended June 30, 2022, stock-based compensation expense was $2.0 million and $6.5 million,~~ respectively.

As at ~~June 30, 2023,~~March 31, 2024, there was ~~$10.5~~$26.8 million (December 31, ~~2022~~2023 - ~~$10.5~~$8.6 million) of unrecognized compensation costs related to unvested PSUs, RSUs and stock options, which are expected to be recognized over a weighted-average period of ~~1.9~~2.3 years. During the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, the Company paid out $10.4 million for PSUs vested on December 31, 2023 (three months ended March 31, 2023 - $15.1 million for PSUs vested on December 31, ~~2022 (six~~2022).

During the three months ended ~~June 30, 2022 - $2.4~~March 31, 2024, the Company awarded 0.5 million ~~for PSUs vested on December~~RSUs to employees pursuant to the existing 2007 Equity Incentive Plan. Under the 2007 Equity Incentive Plan, RSU units will vest one-third each year over a three-year period. Upon vesting, RSUs entitle the holder to receive either the underlying number of shares of the Company’s Common Stock or a cash payment equal to the value of the underlying shares of the Company’s Common Stock. The Company intends to settle RSUs outstanding as at March 31, ~~2021).~~2024, in cash.

Net Income (Loss) ~~Income~~ per Share

Basic net ~~loss~~income or ~~income~~loss per share is calculated by dividing net ~~loss~~income or ~~income~~loss attributable to common shareholders by the weighted average number of shares of ~~common stock~~Common Stock issued and outstanding during each period.

Diluted net ~~loss~~income or ~~income~~loss per share is calculated using the treasury stock method for share-based compensation arrangements. The treasury stock method assumes that any proceeds obtained on the exercise of share-based compensation arrangements would be used to purchase ~~common~~ shares of Common Stock at the average market price during the period. The weighted average number of shares is then adjusted by the difference between the number of shares issued from the exercise of share-based compensation arrangements and shares re-purchased from the related proceeds. Anti-dilutive shares represent potentially dilutive securities excluded from the computation of diluted ~~loss~~income or ~~income~~loss per share as their impact would be anti-dilutive.

Weighted Average Shares Outstanding

Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Weighted average number of common shares outstanding 33,299,505 36,857,138 33,872,270 36,798,229
Shares issuable pursuant to stock options — 1,180,686 — 1,235,124
Shares assumed to be purchased from proceeds of stock options — (614,464) — (735,584)
Weighted average number of diluted common shares outstanding 33,299,505 37,423,360 33,872,270 37,297,769

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, all options ~~on a weighted average basis (three and six months ended June 30, 2022, 609,291 and 573,843 options, respectively),~~ were excluded from the diluted ~~(loss) income~~loss per share calculation as the options were anti-dilutive.

6. Revenue

The Company’s revenues are generated from oil sales at prices that reflect the blended prices received upon shipment by the purchaser at defined sales points or defined by contract relative to ICE Brent and adjusted for Vasconia or Castilla (Colombia sales) or Oriente (Ecuador sales) crude differentials, quality and transportation discounts and premiums each month. For the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, 100% of the Company’s revenue resulted from oil sales (three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 - 100%). During the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, quality and transportation discounts were ~~18% and 20%~~19% of the average ICE Brent price (three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 - ~~12%~~22%)~~, respectively. The increase in quality and transportation discounts were primarily a result of higher Vasconia and Castilla discounts.~~.

During the three months ended ~~June 30,~~March 31, 2024 and 2023, the Company’s production was sold primarily to one major customer in Colombia and Ecuador, representing ~~98%~~100% and 97% of the total sales volumes, ~~(three months ended June 30, 2022 - two customers, representing 55% and 44% of the total sales volumes).~~

During the six months ended June 30, 2023, the Company’s production was sold primarily to one major customer in Colombia, representing 98% of the total sales volumes (six months ended June 30, 2022 - two customers, representing 56% and 43% of the total sales volumes).respectively.

As at ~~June 30, 2023,~~March 31, 2024, accounts receivable included nil of accrued sales revenue related to ~~June 2023~~March 2024 production (December 31, ~~2022~~2023 - nil related to December ~~2022~~2023 production).

7. Taxes

The Company’s effective tax rate was ~~145%~~100% for the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~54%~~142% in the comparative period of ~~2022.~~ 2023.

Current income tax expense was ~~$37.4~~$3.9 million for the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~$46.3~~$17.6 million in the corresponding period of ~~2022,~~2023, primarily due to a decrease in taxable income.

The deferred income tax expense for the ~~six~~three months ended ~~June 30,~~March 31, 2024, was $13.5 million compared to $15.3 million in the corresponding period of 2023 ~~was $29.3 million primarily~~mainly as a result of tax depreciation being higher than accounting depreciation and the use of tax losses to offset taxable income in Colombia.

~~The~~For the three months ended March 31, 2023, the deferred income tax expense ~~in the comparative period of 2022~~ was ~~$32.0~~$15.3 million mainly as ~~the~~a result of tax depreciation being higher ~~compared~~than accounting depreciation and the use of tax losses to ~~accounting depreciation~~offset taxable income in Colombia.

For the ~~six~~three months ended ~~June 30,~~March 31, 2024, the difference between the effective tax rate of 100% and the 45% Colombian tax rate was primarily due to an increase in the impact of foreign taxes, increase in the valuation allowance, non-deductible foreign translation adjustments, non-deductible stock-based compensation and other permanent differences.

For the three months ended March 31, 2023, the difference between the effective tax rate of ~~145%~~142% and the 50% Colombian tax rate was primarily due to an increase in non-deductible foreign ~~exchange~~translation adjustments, the impact of foreign taxes, non-deductible ~~royalties~~royalty in Colombia and ~~non-deductible stock-based compensation.~~increase in the valuation allowance. These were partially offset by ~~a decrease in valuation allowance.~~other permanent differences.

For the six months ended June 30, 2022, the difference between the effective tax rate of 54% and the 35% Colombian tax rate was primarily due to an increase in the impact of foreign taxes, foreign translation adjustments, increase in the valuation allowance, non-deductible third-party royalties in Colombia and non-deductible stock-based compensation.

8. Contingencies

Legal Proceedings

Gran Tierra has several lawsuits and claims pending. The outcome of the lawsuits and disputes cannot be predicted with certainty; Gran Tierra believes the resolution of these matters would not have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. Gran Tierra records costs as they are incurred or become probable and determinable.

Letters of ~~credit~~Credit and ~~other credit support~~Other Credit Support

At ~~June 30, 2023,~~March 31, 2024, the Company had provided letters of credit and other credit support totaling ~~$109.4~~$222.6 million (December 31, ~~2022~~2023 - ~~$111.1~~$220.1 million) as a security relating to work commitment guarantees in Colombia and Ecuador contained in exploration contracts, the Suroriente Block extension agreement and other capital or operating requirements. Approximately $123.0 million relates to the Suroriente Block extension agreement.

9. Financial Instruments and Fair Value Measurement

Financial Instruments

Financial instruments are initially recorded at fair value, defined as the price that would be received to sell an asset or paid to market participants to settle liability at the measurement date. For financial instruments carried at fair value, GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels:

•Level 1 - Inputs representing quoted market prices in active markets for identical assets and liabilities

•Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the assets and liabilities, either directly or indirectly

•Level 3 - Unobservable inputs for assets and liabilities

At ~~June 30, 2023,~~March 31, 2024, the Company’s financial instruments recognized on the balance sheet consist of cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, ~~other long-term assets,~~ accounts payable and accrued liabilities, current portion of long-term debt, long-term debt and other long-term liabilities. The Company uses appropriate valuation techniques based on the available information to measure the fair values of assets and liabilities.

Fair Value Measurement

The following table presents the Company’s fair value measurements of its financial instruments as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022:~~2023:

(Thousands of U.S. Dollars)

As at June 30, 2023

As at December 31, 2022

(Thousands of U.S. Dollars)

As at March 31, 2024

As at December 31, 2023

Level 1

Assets

Prepaid equity forward (“PEF”) - current (1)

4,898

5,981

PEF - long-term(2)

—

9,975

4,898

15,956

Prepaid equity forward (“PEF”) - current (1)

Liabilities

6.25% Senior Notes

233,502

243,801

7.75% Senior Notes

227,321

241,455

460,823

485,256

9.50% Senior Notes

Level 2

Assets

Restricted cash and cash equivalents - long-term (2)

Restricted cash and cash equivalents - long-term(2)

6,504

5,343

Liabilities

Credit facility

(1) The current portion of PEF is included in the other current assets on the Company’s condensed consolidated balance ~~sheet~~sheet.

(2) The long-term portion of restricted cash ~~and PEF~~ is included in the other long-term assets on the Company’s condensed consolidated balance ~~sheet~~sheet.

The fair values of cash and cash equivalents, current restricted cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate their carrying amounts due to the short-term maturity of these instruments.

Restricted ~~cash~~Cash - ~~long-term~~Long-Term

The fair value of long-term restricted cash and cash equivalents ~~approximated their~~approximate its carrying value because interest rates are variable and reflective of market rates.

~~PEF~~Prepaid Equity Forward

~~To reduce the Company’s exposure to changes in the trading price of the Company’s common shares on outstanding PSUs and DSUs,~~As at March 31, 2024, the Company ~~entered into a PEF. At the end of the term, the counterparty will pay the Company an amount equivalent to the notional amount of the shares using the price of the Company’s common shares~~had no outstanding PEF asset (As at ~~the valuation date. The Company has the discretion to increase or decrease the notional amount of the PEF or terminate the agreement early. As at June 30,~~December 31, 2023 ~~the Company’s PEF had a notional amount of~~- 1.0 million notional shares with a fair value of ~~$4.9 million (As at December 31, 2022 - 1.6 million shares with a fair value of $16.0~~$5.6 million). ~~During~~For the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, the Company recorded ~~a $4.1~~$0.3 million and ~~$5.8~~$1.7 million loss ~~respectively, on the PEF~~ in general and administrative expenses ~~(three and six~~relating to the PEF, respectively.

During the three months ended ~~June 30, 2022 - $5.2~~March 31, 2024, the Company settled all outstanding notional PEF shares and received net proceeds of $5.1 million resulting in a $0.3 million loss ~~and $2.7 million gain, respectively). The fair value of the PEF asset was estimated using the Company’s share price quoted in active markets at the end of each reporting period.~~on settlement.

Senior Notes

Financial instruments ~~not~~ recorded at ~~fair value~~amortized cost at ~~June 30, 2023,~~March 31, 2024, were the Senior Notes (Note 4).

At ~~June 30, 2023,~~March 31, 2024, the carrying amounts of the 6.25% Senior Notes, 7.75% Senior Notes and ~~the 7.75%~~9.50% Senior Notes were ~~$268.9~~$24.7 million, $23.8 million, and ~~$293.9~~$532.4 million, respectively, which represented the aggregate principal amount less unamortized debt issuance costs and discounts, and the fair values were ~~$233.5~~$23.2 million, $20.7 million, and ~~$227.3~~$549.6 million, respectively.

During the three and six months ended June 30, 2023, the Company did not incur any gains or losses related to derivatives (three and six months ended June 30, 2022 - $5.2 million and $26.6 million, respective ~~loss related to commodity price derivatives).~~

10. Supplemental Cash Flow Information

The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents shown as a sum of these amounts in the interim unaudited condensed consolidated statements of cash flows:

As at June 30, As at December 31,
(Thousands of U.S. Dollars) 2023 2022 2022 2021
Cash and cash equivalents $ 68,529 $ 108,558 $ 126,873 $ 26,109
Restricted cash and cash equivalents - current 1,142 1,142 1,142 392
Restricted cash and cash equivalents -
long-term (1)
6,504 4,827 5,343 4,903
$ 76,175 $ 114,527 $ 133,358 $ 31,404


	As at March 31,				As at December 31,
(Thousands of U.S. Dollars)	2024		2023		2023		2022
Cash and cash equivalents	$	126,618	$	105,684	$	62,146	$	126,873
Restricted cash and cash equivalents - current (1)	1,142		1,142		1,142		1,142
Restricted cash and cash equivalents - long-term (2)	7,778		5,710		7,750		5,343
	$	135,538	$	112,536	$	71,038	$	133,358

(1)Included in other current assets on the Company’s condensed consolidated balance sheet.

~~(1)~~(2) Included in other long-term assets on the Company’s condensed consolidated balance ~~sheet~~sheet.

Net changes in assets and liabilities from operating activities were as follows:


		Six Months Ended June 30,
	Three Months Ended March 31,								Three Months Ended March 31,
(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	2023		2022		(Thousands of U.S. Dollars)	2024	2023
Accounts receivable and other long-term assets	Accounts receivable and other long-term assets	$	3,898	$	2,356
Derivatives		—		4,254
PEF	PEF	11,887		(11,215)

Prepaids & Inventory		(3,035)		(3,811)
Prepaids and inventory
Accounts payable and accrued and other long-term liabilities	Accounts payable and accrued and other long-term liabilities	(3,383)		8,264
Taxes receivable and payable	Taxes receivable and payable	(35,203)		56,481
Net changes in assets and liabilities from operating activities	Net changes in assets and liabilities from operating activities	$	(25,836)	$	56,329

Changes in non-cash investing working capital for the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, were comprised of an increase in accounts payable and accrued liabilities of ~~$9.1~~$16.6 million ~~(six~~and an increase in accounts receivable of $0.1 million (three months ended ~~June 30, 2022,~~March 31, 2023, an increase in accounts payable and accrued liabilities of ~~$11.2 million and an increase in accounts receivable of $0.2~~$14.9 million).

The following table provides additional supplemental cash flow disclosures:


	Three Months Ended March 31,								Three Months Ended March 31,
(Thousands of U.S. Dollars)						(Thousands of U.S. Dollars)	2024	2023
		Six Months Ended June 30,
(Thousands of U.S. Dollars)		2023		2022
Cash paid for income taxes		$	71,457	$	20,468
Cash paid for withholding taxes
Cash paid for withholding taxes
Cash paid for withholding taxes
Cash paid for interest	Cash paid for interest	$	20,406	$	21,975

Non-cash investing activities:	Non-cash investing activities:
Non-cash investing activities:
Non-cash investing activities:
Net liabilities related to property, plant and equipment, end of period	Net liabilities related to property, plant and equipment, end of period	$	64,206	$	41,106
Net liabilities related to property, plant and equipment, end of period
Net liabilities related to property, plant and equipment, end of period

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the “Financial Statements” as set out in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the “Financial Statements and Supplementary Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Items 7 and 8, respectively, of our ~~2022~~2023 Annual Report on Form 10-K. Please see the cautionary language at the beginning of this Quarterly Report on Form 10-Q regarding the identification of and risks relating to forward-looking statements and the risk factors described in Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, as well as Part I, Item 1A “Risk Factors” in our ~~2022~~2023 Annual Report on Form 10-K. On May 5, 2023, the Company completed 1-for-10 reverse stock split of the Company’s ~~common stock.~~Common Stock. As a result of the reverse stock split, every ten of the Company’s issued shares of ~~common stock~~Common Stock were automatically combined into one issued share of ~~common stock, without any change to the par value per share.~~Common Stock. All share and per share data included in this quarterly report have been retroactively adjusted to reflect the reverse stock split.

Financial and Operational Highlights

Key Highlights for the ~~second~~first quarter of ~~2023~~2024

•Net loss in the ~~second~~first quarter of ~~2023~~2024 was ~~$10.8~~$0.1 million, ~~or $(0.33) per share basic and diluted,~~ compared to a net ~~income~~loss of ~~$53.0~~$9.7 million ~~or $1.44 per share basic and $1.42 per share diluted~~ in the ~~second~~first quarter of ~~2022~~2023

•Income before income taxes in the ~~second~~first quarter of ~~2023~~2024 was ~~$22.9~~$17.3 million, compared to an income before income taxes of ~~$91.6~~$23.2 million in the ~~second~~first quarter of ~~2022~~2023

•~~During~~Adjusted EBITDA(2) increased to $94.8 million, compared to $89.9 million in the ~~second~~first quarter of 2023 ~~we re-purchased 20,439 of our common shares at a weighted average price of $5.27 per share~~and $93.0 million in the prior quarter

•Funds flow from operations(2) ~~decreased~~increased by ~~49%~~24% to ~~$53.1~~$74.3 million, compared to $60.0 million in the ~~second~~first quarter of ~~2022~~2023 and decreased by 12% from ~~$60.0~~$84.7 million in the prior ~~quarter. During~~ quarter

•In the first quarter ~~funds flow~~of 2024, we re-purchased 0.9 million shares of Common Stock through the 2023 share re-purchase program, representing 3% of outstanding shares as of March 31, 2024

•In the first quarter of 2024, the outstanding balance of $36.4 million under the Company’s credit facility was ~~reduced by $12.8 million of realized foreign exchange loss primarily associated with~~fully re-paid and the ~~payment of income taxes in the second quarter~~credit facility was terminated

•NAR production for the ~~second~~first quarter of ~~2023 increased by 17%~~2024 was 25,845, comparable to ~~27,204~~25,526 BOPD ~~compared to 23,215 BOPD~~ in ~~the second quarter of 2022 and increased by 7% from~~ the first quarter of 2023 and increased by 4% from 24,892 BOPD in the prior quarter

•Sales volumes for the ~~second~~first quarter of ~~2023~~2024 increased by ~~19%~~4% to ~~27,271~~26,080 BOPD, compared to ~~22,847~~25,171 BOPD in the ~~second~~first quarter of ~~2022~~2023 and increased by 8%5% from 24,949 BOPD in the ~~first~~prior quarter ~~of 2023~~

•Oil sales for the first quarter of 2024 were ~~$157.9~~$157.6 million, ~~23% lower~~9% higher compared to the ~~second~~first quarter of ~~2022,~~2023, primarily due to a ~~31%~~ decrease in ~~Brent price, an~~Castilla, Vasconia and Oriente differentials and a 4% increase ~~of 8%~~ in ~~the quality and transportation discounts and offset by 19% higher~~ sales volumes. Oil sales increased by ~~10%~~2% from ~~$144.2~~$154.9 million in the ~~first~~prior quarter, ~~of 2023~~primarily due to a ~~8% higher~~5% increase in sales volumes and lower ~~quality~~Castilla differential, partially offset by higher Vasconia and ~~transportation discounts~~Oriente differentials

•Operating expenses increased by ~~23%~~17% to $48.5 million or by ~~$0.54~~$2.16 per bbl to ~~$19.54~~$20.42 per bbl when compared to the ~~second~~first quarter of ~~2022,~~2023, primarily as a result of higher workovers and higher lifting costs ~~offset by lower workover~~associated with preventative maintenance activities. Operating expenses increased from ~~$41.4~~$47.6 million ~~or $18.26 per bbl~~ in the prior quarter ~~primarily~~as a result of higher workovers, offset by lower lifting costsrelated to power generation optimizations in major fields. On a per bbl basis, operating expenses decreased from $20.75 in the prior quarter due to higher ~~lifting costs~~sales volumes in the current quarter

•Transportation expenses per bbl increased by ~~$0.28 in the second quarter of 2023 due to higher transportation tariffs affecting Acordionero sales, utilization of new transportation routes~~ ~~for new exploration wells~~$0.58 and ~~Ecuador sales~~$0.21 when compared to the ~~second quarter of 2022 and increased $0.14 from the~~ first quarter of 2023 and the prior quarter, respectively, due to higher trucking costs resulting from the utilization of longer distance delivery points ~~and depreciation of U.S. dollar against the Colombian peso~~in response to lower river levels in Colombia caused by El Niño.

•Operating netback(2) ~~decreased~~increased to ~~$105.7~~$104.5 million compared to ~~$163.8 million in the second quarter of 2022 and increased from~~ $99.8 million in the ~~prior~~first quarter

•~~Adjusted EBITDA(2)~~ ~~decreased to $84.5 million compared to $140.1~~ of 2023 and $103.4 million in the ~~second quarter of 2022 and decreased from $88.7 million in the~~ prior ~~quarter. During the quarter, Adjusted EBITDA was reduced by $12.8 million due to realized foreign exchange loss primarily associated with the payment of income taxes in the second~~ quarter

•Quality and transportation discounts for the ~~second~~first quarter of ~~2023 increased~~2024 decreased to ~~$14.10~~$15.36 per bbl compared to ~~$13.00~~$18.45 per bbl in the ~~second~~first quarter of ~~2022,~~2023, primarily as a result of the ~~widening~~tightening of the Castilla, Vasconia, and ~~Vasconia~~Oriente differentials, and ~~decreased from $18.45 per bbl in~~were comparable to the prior quarter

•General and administrative (“G&A”) expenses before stock-based compensation ~~increased by 22% compared to the second quarter of 2022 due to higher costs attributed to optimization projects and decreased by 15% from~~for the first quarter of 2024 decreased by 15% due to lower legal fees and information technology expenses compared to the first quarter of 2023 and decreased by 14% from the prior quarter due to lower legal fees and lower headcount

•Capital additions for the ~~second~~first quarter of ~~2023~~2024 were ~~$65.6~~$55.3 million ~~an increase of 1%~~ compared to ~~the second quarter of 2022, and decreased 8% from~~$71.1 million in the first quarter of 2023 due to ~~the acceleration~~cost optimization of the ~~2023~~2024 drilling program and $39.2 million in the ~~first~~prior quarter ~~of 2023~~due to lower drilling activity


(Thousands of U.S. Dollars, unless otherwise indicated)
(Thousands of U.S. Dollars, unless otherwise indicated)
(Thousands of U.S. Dollars, unless otherwise indicated)	(Thousands of U.S. Dollars, unless otherwise indicated)	Three Months Ended June 30,					Three Months Ended March 31,		Six Months Ended June 30,					Three Months Ended March 31,	Three Months Ended December 31,
		2023		2022		% Change	2023		2023		2022		% Change			2024	2023	% Change	2023
Average Daily Volumes (BOPD)	Average Daily Volumes (BOPD)
Consolidated	Consolidated
Consolidated
Consolidated
Working Interest (“WI”) Production Before Royalties
Working Interest (“WI”) Production Before Royalties
Working Interest (“WI”) Production Before Royalties	Working Interest (“WI”) Production Before Royalties	33,719		30,607		10	31,611		32,671		29,988		9
Royalties	Royalties	(6,515)		(7,392)		(12)	(6,085)		(6,301)		(6,962)		(9)
Production NAR	Production NAR	27,204		23,215		17	25,526		26,370		23,026		15
Decrease (Increase) in Inventory	Decrease (Increase) in Inventory	67		(368)		(118)	(355)		(143)		(236)		39
Sales(1)	Sales(1)	27,271		22,847		19	25,171		26,227		22,790		15

Net (Loss) Income	Net (Loss) Income	$	(10,825)	$	52,972	(120)	$	(9,700)	$	(20,525)	$	67,091	(131)
Net (Loss) Income
Net (Loss) Income

Operating Netback	Operating Netback
Operating Netback
Operating Netback
Oil Sales
Oil Sales
Oil Sales	Oil Sales	$	157,902	$	205,785	(23)	$	144,190	$	302,092	$	380,354	(21)
Operating Expenses	Operating Expenses	(48,491)		(39,494)		23	(41,369)		(89,860)		(74,429)		21

Transportation Expenses	Transportation Expenses	(3,691)		(2,513)		47	(3,066)		(6,757)		(5,347)		26
Transportation Expenses
Transportation Expenses
Operating Netback(2)	Operating Netback(2)	$	105,720	$	163,778	(35)	$	99,755	$	205,475	$	300,578	(32)

G&A Expenses Before Stock-Based Compensation
G&A Expenses Before Stock-Based Compensation
G&A Expenses Before Stock-Based Compensation	G&A Expenses Before Stock-Based Compensation	$	9,549	$	7,847	22	$	11,196	$	20,745	$	15,626	33
G&A Stock-Based Compensation Expense	G&A Stock-Based Compensation Expense	317		1,989		(84)	1,500		1,817		6,546		(72)
G&A Expenses, Including Stock-Based Compensation	G&A Expenses, Including Stock-Based Compensation	$	9,866	$	9,836	—	$	12,696	$	22,562	$	22,172	2

Adjusted EBITDA(2)	Adjusted EBITDA(2)	$	84,522	$	140,113	(40)	$	88,677	$	173,199	$	259,491	(33)
Adjusted EBITDA(2)
Adjusted EBITDA(2)

Funds Flow From Operations(2)
Funds Flow From Operations(2)
Funds Flow From Operations(2)	Funds Flow From Operations(2)	$	53,106	$	103,625	(49)	$	60,016	$	113,122	$	190,935	(41)

Capital Expenditures	Capital Expenditures	$	65,565	$	65,199	1	$	71,062	$	136,627	$	106,682	28
Capital Expenditures
Capital Expenditures

(1) Sales volumes represent production NAR adjusted for inventory changes.

(2)

~~(2)~~ Non-GAAP ~~measures~~measures.

Operating netback, EBITDA, adjusted EBITDA, and funds flow from operations are non-GAAP measures that do not have any standardized meaning prescribed under GAAP. Management views these measures as financial performance measures. Investors are cautioned that these measures should not be construed as alternatives to oil sales, net (loss) income or other measures of financial performance as determined in accordance with GAAP. Our method of calculating these measures may differ from other companies and, accordingly, may not be comparable to similar measures used by other companies. Disclosure of each non-GAAP financial measure is preceded by the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.

Operating netback, as presented, is defined as oil sales less operating and transportation expenses. Management believes that operating netback is a useful supplemental measure for management and investors to analyze financial performance and provides an indication of the results generated by our principal business activities prior to the consideration of other income and expenses. A reconciliation from oil sales to operating netback is provided in the table above.

EBITDA, as presented, is defined as net (loss) income adjusted for depletion, depreciation and accretion (“DD&A”) expenses, interest expense and income tax expense. Adjusted EBITDA, as presented, is defined as EBITDA adjusted for non-cash lease expense, lease payments, ~~unrealized~~ foreign exchange gain or loss, stock-based compensation expense, ~~or recovery, unrealized derivative instruments~~other gain or loss and ~~other gain.~~financial instruments loss. Management uses this supplemental measure to analyze performance and income generated by our principal business activities prior to the consideration of how non-cash items affect that income and believes that this financial measure is useful supplemental information for investors to analyze our performance and our financial results. A reconciliation from net (loss) income to EBITDA and adjusted EBITDA is as follows:




		Three Months Ended June 30,				Three Months Ended March 31,		Six Months Ended June 30,					Three Months Ended March 31,			Three Months Ended December 31,
(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	2023		2022		2023		2023		2022		(Thousands of U.S. Dollars)		2024	2023		2023
Net (loss) income	Net (loss) income	$	(10,825)	$	52,972	$	(9,700)	$	(20,525)	$	67,091
Adjustments to reconcile net (loss) income to EBITDA and Adjusted EBITDA	Adjustments to reconcile net (loss) income to EBITDA and Adjusted EBITDA
DD&A expenses	DD&A expenses	56,209		42,216		51,721		107,930		83,179
DD&A expenses
DD&A expenses
Interest expense	Interest expense	12,678		12,194		11,836		24,514		24,322
Income tax expense	Income tax expense	33,732		38,666		32,883		66,615		78,206
EBITDA (non-GAAP)	EBITDA (non-GAAP)	$	91,794	$	146,048	$	86,740	$	178,534	$	252,798
Non-cash lease expense	Non-cash lease expense	1,109		747		1,144		2,253		1,158
Lease payments	Lease payments	(636)		(388)		(606)		(1,242)		(732)
Unrealized foreign exchange (gain) loss		(8,062)		4,341		514		(7,548)		(498)
Foreign exchange (gain) loss
Stock-based compensation expense	Stock-based compensation expense	317		1,989		1,500		1,817		6,546
Unrealized derivative instruments (gain) loss		—		(12,624)		—		—		219
Other gain		—		—		(615)		(615)		—
Other (gain) loss

Financial instruments loss
Financial instruments loss
Financial instruments loss
Adjusted EBITDA (non-GAAP)	Adjusted EBITDA (non-GAAP)	$	84,522	$	140,113	$	88,677	$	173,199	$	259,491

Funds flow from operations, as presented, is defined as net (loss) income adjusted for DD&A expenses, deferred income tax expense, ~~or recovery,~~ stock-based compensation expense, ~~or recovery,~~ amortization of debt issuance costs, non-cash lease expense, lease payments, unrealized foreign exchange gain or loss, ~~derivative instruments~~other gain or loss ~~cash settlement on derivative~~and financial instruments ~~and other gain.~~loss. Management uses this financial measure to analyze performance and income generated by our principal business activities prior to the consideration of how non-cash items affect that income and believes that this financial measure is also useful supplemental information for investors to analyze performance and our financial results. A reconciliation from net (loss) income to funds flow from operations is as follows:




		Three Months Ended June 30,				Three Months Ended March 31,		Six Months Ended June 30,					Three Months Ended March 31,				Three Months Ended December 31,
(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	2023		2022		2023		2023		2022		(Thousands of U.S. Dollars)		2024		2023			2023
Net (loss) income	Net (loss) income	$	(10,825)	$	52,972	$	(9,700)	$	(20,525)	$	67,091
Adjustments to reconcile net (loss) income to funds flow from operations	Adjustments to reconcile net (loss) income to funds flow from operations
DD&A expenses	DD&A expenses	56,209		42,216		51,721		107,930		83,179
DD&A expenses
DD&A expenses

Deferred income tax expense
Deferred income tax expense
Deferred income tax expense	Deferred income tax expense	13,975		13,241		15,277		29,252		31,954
Stock-based compensation expense	Stock-based compensation expense	317		1,989		1,500		1,817		6,546
Amortization of debt issuance costs	Amortization of debt issuance costs	1,019		1,131		781		1,800		2,018
Non-cash lease expense	Non-cash lease expense	1,109		747		1,144		2,253		1,158
Lease payments	Lease payments	(636)		(388)		(606)		(1,242)		(732)
Unrealized foreign exchange (gain) loss	Unrealized foreign exchange (gain) loss	(8,062)		4,341		514		(7,548)		(498)
Derivative instruments loss		—		5,172		—		—		26,611
Cash settlements on derivative instruments		—		(17,796)		—		—		(26,392)
Other gain		—		—		(615)		(615)		—

Other (gain) loss
Financial instruments loss
Funds flow from operations (non-GAAP)	Funds flow from operations (non-GAAP)	$	53,106	$	103,625	$	60,016	$	113,122	$	190,935	Funds flow from operations (non-GAAP)		$	74,307	$	60,016	$	$	84,663

Additional Operational Results




		Three Months Ended June 30,					Three Months Ended March 31,			Six Months Ended June 30,						Three Months Ended March 31,		Three Months Ended December 31,
(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	2023		2022		% Change	2023			2023		2022		% Change	(Thousands of U.S. Dollars)		2024		2023	% Change	2023
Oil sales	Oil sales	$	157,902	$	205,785	(23)	$	144,190		$	302,092	$	380,354	(21)
Operating expenses	Operating expenses	48,491		39,494		23	41,369			89,860		74,429		21
Transportation expenses	Transportation expenses	3,691		2,513		47	3,066			6,757		5,347		26
Operating netback(1)	Operating netback(1)	105,720		163,778		(35)	99,755			205,475		300,578		(32)

DD&A expenses	DD&A expenses	56,209		42,216		33	51,721			107,930		83,179		30
DD&A expenses
DD&A expenses

G&A expenses before stock-based compensation	G&A expenses before stock-based compensation	9,549		7,847		22	11,196			20,745		15,626		33
G&A expenses before stock-based compensation
G&A expenses before stock-based compensation
G&A stock-based compensation expense	G&A stock-based compensation expense	317		1,989		(84)	1,500			1,817		6,546		(72)
Foreign exchange loss (gain)		4,707		2,722		73	1,702			6,409		(1,003)		739
Derivative instruments loss		—		5,172		(100)	—			—		26,611		(100)
Other gain		—		—		—	(615)			(615)		—		100
Severance
Foreign exchange (gain) loss
Other (gain) loss
Financial instruments loss
Interest expense	Interest expense	12,678		12,194		4	11,836			24,514		24,322		1
									87,902
		83,460		72,140		16	77,340			160,800		155,281		4

Interest income
Interest income
Interest income	Interest income	647		—		100	768			1,415		—		100

Income before income taxes	Income before income taxes	22,907		91,638		(75)	23,183			46,090		145,297		(68)
Income before income taxes
Income before income taxes

Current income tax expense		19,757		25,425		(22)	17,606			37,363		46,252		(19)
Current income tax expense (recovery)
Current income tax expense (recovery)
Current income tax expense (recovery)
Deferred income tax expense	Deferred income tax expense	13,975		13,241		6	15,277			29,252		31,954		(8)
		33,732		38,666		(13)	32,883			66,615		78,206		(15)
									17,395
Net (loss) income	Net (loss) income	$	(10,825)	$	52,972	(120)	$	(9,700)		$	(20,525)	$	67,091	(131)

Sales Volumes (NAR)
Sales Volumes (NAR)
Sales Volumes (NAR)	Sales Volumes (NAR)

Total sales volumes, BOPD	Total sales volumes, BOPD	27,271		22,847		19	25,171			26,227		22,790		15

Total sales volumes, BOPD

Total sales volumes, BOPD

Brent Price per bbl
Brent Price per bbl
Brent Price per bbl	Brent Price per bbl	$	77.73	$	111.98	(31)	$	82.10		$	79.91	$	104.94	(24)

Consolidated Results of Operations per bbl Sales Volumes NAR	Consolidated Results of Operations per bbl Sales Volumes NAR
Consolidated Results of Operations per bbl Sales Volumes NAR
Consolidated Results of Operations per bbl Sales Volumes NAR
Oil sales
Oil sales
Oil sales	Oil sales	$	63.63	$	98.98	(36)	$	63.65		$	63.64	$	92.21	(31)
Operating expenses	Operating expenses	19.54		19.00		3	18.26			18.93		18.04		5
Transportation expenses	Transportation expenses	1.49		1.21		23	1.35			1.42		1.30		9
Operating netback(1)	Operating netback(1)	42.60		78.77		(46)	44.04			43.29		72.87		(41)

DD&A expenses	DD&A expenses	22.65		20.31		12	22.83			22.74		20.17		13
DD&A expenses
DD&A expenses

G&A expenses before stock-based compensation	G&A expenses before stock-based compensation	3.85		3.77		2	4.94			4.37		3.79		15
G&A expenses before stock-based compensation
G&A expenses before stock-based compensation
G&A stock-based compensation expense	G&A stock-based compensation expense	0.13		0.96		(86)	0.66			0.38		1.59		(76)
Foreign exchange loss (gain)		1.90		1.31		45	0.75			1.35		(0.24)		663
Derivative instruments loss		—		2.49		(100)	—			—		6.45		(100)
Severance
Foreign exchange (gain) loss
Other (gain) loss


Other gain		—		—		—	(0.27)			(0.13)		—		100
Financial instruments loss
Financial instruments loss
Financial instruments loss
Interest expense	Interest expense	5.11		5.87		(13)	5.22			5.16		5.90		(13)
									37.04
		33.64		34.71		(3)	34.13			33.87		37.66		(10)

Interest income
Interest income
Interest income	Interest income	0.26		—		100	0.34			0.30		—		100

Income before income taxes	Income before income taxes	9.22		44.06		(79)	10.25			9.72		35.21		(72)
Income before income taxes
Income before income taxes

Current income tax expense		7.96		12.23		(35)	7.77			7.87		11.21		(30)
Current income tax expense (recovery)
Current income tax expense (recovery)
Current income tax expense (recovery)
Deferred income tax expense	Deferred income tax expense	5.63		6.37		(12)	6.74			6.16		7.75		(21)
		13.59		18.60		(27)	14.51			14.03		18.96		(26)
									7.33
Net (loss) income	Net (loss) income	$	(4.37)	$	25.46	(117)	$	(4.26)		$	(4.31)	$	16.25	(127)

(1) Operating netback is a non-GAAP measure that does not have any standardized meaning prescribed under GAAP. Refer to “Financial and Operational Highlights—non-GAAP measures” for a definition of this measure.

Oil Production and Sales Volumes, BOPD


		Three Months Ended June 30,				Three Months Ended March 31,				Six Months Ended June 30,
		2023		2022		2023				2023		2022
								Three Months Ended March 31,
								Three Months Ended March 31,
								Three Months Ended March 31,						Three Months Ended December 31,
									2024												2024	2023	2023
Average Daily Volumes (BOPD)	Average Daily Volumes (BOPD)
WI Production Before Royalties
WI Production Before Royalties
WI Production Before Royalties	WI Production Before Royalties	33,719		30,607		31,611				32,671		29,988
Royalties	Royalties	(6,515)		(7,392)		(6,085)				(6,301)		(6,962)
Production NAR	Production NAR	27,204		23,215		25,526				26,370		23,026
Decrease (Increase) in Inventory	Decrease (Increase) in Inventory	67		(368)		(355)				(143)		(236)
Sales	Sales	27,271		22,847		25,171				26,227		22,790

Royalties, % of WI Production Before Royalties	Royalties, % of WI Production Before Royalties	19	%	24	%	19	%			19	%	23	%
Royalties, % of WI Production Before Royalties
Royalties, % of WI Production Before Royalties															20	%	19	%	20	%

Oil production NAR for the three ~~and six~~ months ended ~~June 30, 2023, increased by 17% and 15%, respectively, compared~~March 31, 2024, was comparable to the corresponding ~~periods~~period of ~~2022 due to successful drilling and workover campaigns in Acordionero, Costayaco and Moqueta fields in Colombia.~~2023.

Oil production NAR increased by 7%4% compared to the prior quarter ~~for the same reasons mentioned above.~~as a result of our successful drilling and workover campaigns in Acordionero and Costayaco fields in Colombia and increased production in Charapa Norte field in Ecuador.

Royalties as a percentage of WI production for the three ~~and six~~ months ended ~~June 30, 2023, decreased by 19% compared to~~March 31, 2024 were comparable with the corresponding ~~periods~~period of ~~2022 commensurate with the decrease in benchmark oil prices~~2023 and ~~the price sensitive royalty regime in Colombia. Royalties as a percentage of WI production were comparable to~~ the prior quarter.

The Midas ~~block~~Block includes the Acordionero ~~Chuira, and Ayombero oil fields,~~field, the Suroriente Block includes the Cohembi field, and the Chaza ~~block~~Block includes the Costayaco and Moqueta ~~oil~~ fields. Ecuador includes the Charapa and Chanangue Blocks.

Realized price per bbl for the three ~~andsix~~ months ended ~~June 30, 2023, decreased~~March 31, 2024, increased by ~~36% and 31%, respectively,~~4% compared to the corresponding ~~periods~~period of ~~2022,~~2023, primarily ~~as a result of a 31%~~due to lower quality and ~~24% decrease in Brent price~~transportation discounts. Castilla, Vasconia and ~~higher differentials. For the three~~Oriente differentials decreased to $8.82, $5.05, and~~six months ended June 30, 2023, Castilla differentials increased to $9.41 and $12.29~~ $8.02 per bbl from ~~$7.82~~$15.17, $7.87, and ~~$7.10~~$13.43 per bbl, ~~respectively, in the corresponding periods of 2022 and Vasconia differentials increased to $5.53 and $6.70 per bbl from $5.09 and $4.35 per bbl, respectively, in the corresponding periods of 2022.~~ respectively.

Compared to the prior quarter, the average realized price per bbl ~~was comparable.~~decreased by 2%, primarily due to a decrease in Brent price.

1920

Oil sales for the three ~~and six~~ months ended ~~June 30, 2023, decreased~~March 31, 2024, increased by ~~23% and 21%~~9% to ~~$157.9~~$157.6 million, ~~and $302.1 million, respectively,~~ compared to the corresponding ~~periods~~period of ~~2022~~2023, due to a ~~31% and 24%~~ decrease in ~~Brent price~~Castilla, Vasconia, and ~~higher Castilla~~Oriente differentials and ~~Vasconia differentials. During~~a 4% increase in sales volumes resulting from the ~~first quarter~~sale of ~~2023, we commenced oil sales~~inventory in Ecuador ~~which contributed $1.8 million and $4.8 million~~during the current quarter compared to ~~oil sales and were subject to a $11.43 and $12.43 per bbl Oriente differential for~~ the ~~three and six months ended June 30, 2023, respectively.~~corresponding period of 2023.

Compared to the prior quarter, oil sales increased by ~~10%~~2%, primarily asdue to a ~~result of an 8%~~5% increase in sales volumes resulting from the sale of inventory in Ecuador and ~~the narrowing of quality and transportation differentials, partially~~a decrease in Castilla differential, offset by ~~a 5% decrease in Brent price.~~higher Vasconia and Oriente differentials.

The following table shows the effect of changes in realized price and sale volumes on our oil sales for the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, compared to the prior quarter and the corresponding ~~periods~~period of ~~2022:~~2023:


(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	Second Quarter 2023 Compared with First Quarter 2023		Second Quarter 2023 Compared with Second Quarter 2022		Six Months Ended June 30, 2023 Compared with Six Months Ended June 30, 2022
(Thousands of U.S. Dollars)
(Thousands of U.S. Dollars)
Oil sales for the comparative period	Oil sales for the comparative period	$	144,190	$	205,785	$	380,354
Realized sales price decrease effect		(56)		(87,731)		(135,636)
Oil sales for the comparative period
Oil sales for the comparative period
Realized sales price (decrease) increase effect
Realized sales price (decrease) increase effect
Realized sales price (decrease) increase effect
Sales volumes increase effect	Sales volumes increase effect	13,768		39,848		57,374
Oil sales for the three and six months ended June 30, 2023		$	157,902	$	157,902	$	302,092
Sales volumes increase effect
Sales volumes increase effect
Oil sales for the three months ended March 31, 2024
Oil sales for the three months ended March 31, 2024
Oil sales for the three months ended March 31, 2024


(U.S. Dollars per bbl Sales Volumes NAR)	First Quarter 2024 Compared with Fourth Quarter 2023			First Quarter 2024 Compared with First Quarter 2023



Average realized price, net of transportation expenses for the comparative period	$	65.79		$	62.30
Decrease in benchmark prices	(1.09)			(0.34)
(Increase) decrease in quality and transportation discounts	(0.02)			3.09
Increase in transportation expenses	(0.21)			(0.58)
Average realized price, net of transportation expenses for the three months ended March 31, 2024	$	64.47		$	64.47

Average realized price, net of transportation expenses as a % of Brent	79		%	79		%

2021

Operating Netback


		Three Months Ended June 30,				Three Months Ended March 31,				Six Months Ended June 30,
								Three Months Ended March 31,
								Three Months Ended March 31,
								Three Months Ended March 31,							Three Months Ended December 31,
(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	2023		2022		2023				2023		2022		(Thousands of U.S. Dollars)		2024	2023	2023

Oil Sales	Oil Sales	$	157,902	$	205,785	$	144,190			$	302,092	$	380,354
Oil Sales
Oil Sales
Transportation Expenses	Transportation Expenses	(3,691)		(2,513)		(3,066)				(6,757)		(5,347)
		154,211		203,272		141,124				295,335		375,007
									152,993
Operating Expenses	Operating Expenses	(48,491)		(39,494)		(41,369)				(89,860)		(74,429)
Operating Netback(1)	Operating Netback(1)	$	105,720	$	163,778	$	99,755			$	205,475	$	300,578

(U.S. Dollars Per bbl Sales Volumes NAR)	(U.S. Dollars Per bbl Sales Volumes NAR)
(U.S. Dollars Per bbl Sales Volumes NAR)
(U.S. Dollars Per bbl Sales Volumes NAR)
Brent
Brent
Brent	Brent	$	77.73	$	111.98	$	82.10			$	79.91	$	104.94
Quality and Transportation Discounts	Quality and Transportation Discounts	(14.10)		(13.00)		(18.45)				(16.27)		(12.73)
Average Realized Price	Average Realized Price	63.63		98.98		63.65				63.64		92.21
Transportation Expenses	Transportation Expenses	(1.49)		(1.21)		(1.35)				(1.42)		(1.30)
Average Realized Price Net of Transportation Expenses	Average Realized Price Net of Transportation Expenses	62.14		97.77		62.30				62.22		90.91
Operating Expenses	Operating Expenses	(19.54)		(19.00)		(18.26)				(18.93)		(18.04)
Operating Netback(1)	Operating Netback(1)	$	42.60	$	78.77	$	44.04			$	43.29	$	72.87

2122

Operating expenses for the three months ended ~~June 30, 2023,~~March 31, 2024, increased by ~~23%~~17% to $48.5 million or by ~~$0.54~~$2.16 per bbl to ~~$19.54~~$20.42 per bbl compared to the corresponding period of ~~2022,~~2023. This was primarily ~~as a result of $1.94~~due to $1.74 per bbl higher workovers and $0.42 per bbl higher lifting costs associated with preventative maintenance activities which were partially offset by lower environmental ~~activities~~ and equipment rental ~~in Ecuador, partially offset by $1.40 per bbl of lower workovers.~~expenses.

Operating expenses for the six months ended June 30, 2023, increased by 21% to $89.9 million or by $0.89 per bbl to $18.93 per bbl, compared to the corresponding period of 2022, primarily as a result of $1.62 higher lifting costs associated with environmental activities, equipment rental in Ecuador and water injection equipment mobilization, offset by $0.73 per bbl lower workovers.

Compared to the prior quarter, operating expenses increased by ~~17% or $1.28 per bbl~~2% from ~~$41.4~~$47.6 million, ~~or $18.26 per bbl,~~ primarily due to ~~$1.35~~higher workovers offset by lower lifting costs related to power generation optimizations in Costayaco, Acordionero and Cohembi fields. On a per bbl basis, operating expenses decreased by $0.33 due to higher ~~lifting costs attributed to road maintenance and environmental activities, partially offset by $0.07 per bbl lower workovers.~~sales volumes in the current quarter.

Transportation expenses

We have options to sell our oil through multiple pipelines and trucking routes. Each option has varying effects on realized sales price and transportation expenses. The following table shows the percentage of oil volumes we sold in Colombia and Ecuador using each option for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ and the prior quarter:


		Three Months Ended June 30,				Three Months Ended March 31,			Six Months Ended June 30,
		2023		2022		2023			2023		2022
								Three Months Ended March 31,
								Three Months Ended March 31,
								Three Months Ended March 31,
									2024
									2024
									2024
Volume transported through pipeline
Volume transported through pipeline
Volume transported through pipeline	Volume transported through pipeline	1	%	—	%	2	%		2	%	—	%
Volume sold at wellhead	Volume sold at wellhead	46	%	48	%	45	%		46	%	48	%
Volume sold at wellhead
Volume sold at wellhead
Volume transported via truck to sales point	Volume transported via truck to sales point	53	%	52	%	53	%		52	%	52	%
		100	%	100	%	100	%		100	%	100	%
Volume transported via truck to sales point
Volume transported via truck to sales point
									100
									100
									100

Volumes transported through pipeline or via truck receive a higher realized price, but incur higher transportation expenses. Conversely, volumes sold at the wellhead have the opposite effect of a lower realized price, offset by lower transportation expenses.

Transportation expenses for the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, increased by ~~47%~~50% and ~~26%~~16% or $0.58 and $0.21 per bbl to ~~$3.7~~$4.6 million ~~and $6.8 million, respectively,~~or $1.93 per bbl, compared to the corresponding ~~periods~~period of ~~2022~~2023 and the prior quarter, respectively, due to ~~higher transportation tariffs affecting Acordionero sales,~~ ~~and~~ ~~the~~ utilization of ~~new transportation routes~~ ~~for new exploration wells~~longer distance delivery points in response to low river levels in Colombia ~~and Ecuador sales.~~

~~On a per bbl basis, transportation expenses increased~~caused by ~~23% and 9% to $1.49 and $1.42 for the three and six months ended June 30, 2023, respectively, compared to the corresponding periods of 2022 for the same reason mentioned above.~~El Niño.

~~Transportation expenses increased by 20% from $3.1 million~~ ~~in the prior quarter due to~~ increased trucking costs from using longer distance delivery points and depreciation of U.S. dollar against the Colombian peso. On a per bbl basis transportation costs increased by $0.14 from the prior quarter for the same reasons mentioned above.

DD&A Expenses

Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30,
2023 2022 2023 2023 2022
DD&A Expenses, thousands of U.S. Dollars $ 56,209 $ 42,216 $ 51,721 $ 107,930 $ 83,179
DD&A Expenses, U.S. Dollars per bbl 22.65 20.31 22.83 22.74 20.17

DD&A expenses for the three and six months ended June 30, 2023, increased by 33% and 30% or by $2.34 and $2.57 per bbl, respectively, due to increased production and higher costs in the depletable base compared to the corresponding periods of 2022.

~~DD&A expenses increased 9% compared to the prior quarter and decreased by $0.18 per bbl when compared to the prior quarter, due to higher production.~~


	Three Months Ended March 31,					Three Months Ended December 31,
		2024		2023			2023
DD&A Expenses, thousands of U.S. Dollars		$	56,150	$	52,196		$	52,635
DD&A Expenses, U.S. Dollars per bbl		$	23.66	$	23.04		$	22.93

GDD&A ~~Expenses~~expenses for the three months ended March 31, 2024, increased by 8% or by $0.62 per bbl due to higher costs in the depletable base compared to the corresponding period of 2023.

Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30,
(Thousands of U.S. Dollars) 2023 2022 % Change 2023 2023 2022 % Change
G&A Expenses Before Stock-Based Compensation $ 9,549 $ 7,847 22 $ 11,196 $ 20,745 $ 15,626 33
G&A Stock-Based Compensation Expense 317 1,989 (84) 1,500 1,817 6,546 (72)
G&A Expenses, Including Stock-Based Compensation $ 9,866 $ 9,836 — $ 12,696 $ 22,562 $ 22,172 2
(U.S. Dollars Per bbl Sales Volumes NAR)
G&A Expenses Before Stock-Based Compensation $ 3.85 $ 3.77 2 $ 4.94 $ 4.37 $ 3.79 15
G&A Stock-Based Compensation Expense 0.13 0.96 (86) 0.66 0.38 1.59 (76)
G&A Expenses, Including Stock-Based Compensation $ 3.98 $ 4.73 (16) $ 5.60 $ 4.75 $ 5.38 (12)

DD&A expenses increased by 7% or by $0.73 per bbl when compared to the prior quarter due to higher costs in the depletable base, lower reserves and higher production during the current quarter.

Severance Expenses

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2024, severance expenses were $1.3 million compared with nil in the corresponding period of 2023 and the prior quarter as a result of headcount optimization. Severance expenses were recorded as incurred based on existing employee contracts, statutory requirements, completed negotiations and company policy.

G&A Expenses


	Three Months Ended March 31,					Three Months Ended December 31,
(Thousands of U.S. Dollars)		2024		2023		% Change	2023
G&A Expenses Before Stock-Based Compensation		$	9,516	$	11,196	(15)	$	11,072
G&A Stock-Based Compensation Expense		3,361		1,500		124	1,974
G&A Expenses, Including Stock-Based Compensation		$	12,877	$	12,696	1	$	13,046
(U.S. Dollars Per bbl Sales Volumes NAR)
G&A Expenses Before Stock-Based Compensation		$	4.01	$	4.94	(19)	$	4.82
G&A Stock-Based Compensation Expense		1.42		0.66		115	0.86
G&A Expenses, Including Stock-Based Compensation		$	5.43	$	5.60	(3)	$	5.68

G&A expenses before stock-based compensation ~~increased~~ for the three months ended March 31, 2024, decreased by ~~22% and 33% to $9.5 million and $20.7 million, respectively,~~15% or $0.93 per bbl primarily due to ~~higher consulting costs and~~lower legal fees ~~attributed to optimization projects when~~and information technology expenses compared to the corresponding ~~periods~~period of ~~2022.~~2023.

G&A expenses after stock-based compensation for the three months ended March 31, 2024, increased by 1% compared to the corresponding period of 2023 due to share price appreciation in the current quarter. On a per bbl basis, G&A expenses ~~before stock-based compensation increased by $0.08 and $0.58 per bbl to $3.85 and $4.37 per bbl, respectively, for the same reason mentioned above.~~

~~G&A expenses~~ after stock-based compensation ~~for the three months ended June 30, 2023 were comparable to the corresponding period of 2022 and~~ decreased by ~~$0.75~~$0.17 per bbl due to a ~~lower share price and higher~~4% increase in sales volumes ~~in the current quarter.~~

G&A expenses after stock-based compensation for the six months ended June 30, 2023, increased by 2% per bbl due to higher G&A expenses before stock-based compensation offset by a lower share price and decreased by $0.63 per bbl due to higher sales volumes when compared to the corresponding period of ~~2022.~~2023.

Compared to the prior quarter, G&A expenses before stock-based compensation decreased by ~~15%~~14% or ~~$1.09 on a~~$0.81 per bbl ~~basis~~ due to lower legal expenses and ~~information technology costs, partially offset by higher consulting fees attributed to optimization projects.~~lower headcount.

Compared to the prior quarter, G&A expenses after stock-based compensation decreased by ~~22%~~1% or ~~$1.62 on a~~$0.25 per bbl ~~basis due to lower G&A expenses before stock-based compensation and a lower~~for the same reason mentioned above, offset by share price appreciation in the ~~second~~first quarter of ~~2023.~~2024.

Foreign Exchange Gains and Losses

For the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, we had a ~~$4.7~~$0.8 million ~~and $6.4 million loss~~gain on foreign exchange compared to a ~~$2.7~~$1.7 million loss ~~and a $1.0 million gain~~ in the corresponding ~~periods~~period of ~~2022, respectively,~~2023 and a ~~$1.7~~$3.7 million loss in the prior quarter. Accounts ~~receivable,~~payable, taxes receivable and payable and deferred income taxes ~~accounts payable, and prepaid equity forward (“PEF”)~~ are considered monetary items and require translation from local currencies to U.S. dollar functional currency at each balance sheet date. This translation was the primary source of the foreign exchange gains and losses in the periods.

The following table presents the change in the U.S. dollar against the Colombian peso and Canadian dollar for the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, and ~~2022:~~2023:


		Three Months Ended June 30,		Six Months Ended June 30,
		2023	2022	2023	2022
					Three Months Ended March 31,
					Three Months Ended March 31,
					Three Months Ended March 31,
						2024				2024	2023
Change in the U.S. dollar against the Colombian peso	Change in the U.S. dollar against the Colombian peso	weakened by	strengthened by	weakened by	strengthened by		Change in the U.S. dollar against the Colombian peso	strengthened by	weakened by
		9%	10%	13%	4%			1%	4%
Change in the U.S. dollar against the Canadian dollar	Change in the U.S. dollar against the Canadian dollar	weakened by	strengthened by	weakened by	strengthened by		Change in the U.S. dollar against the Canadian dollar	strengthened by	weakened by
		2%	3%	2%	2%			2%	—%

Income Tax Expense


		Three Months Ended June 30,							Six Months Ended June 30,
								Three Months Ended March 31,
								Three Months Ended March 31,
								Three Months Ended March 31,
(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	2023			2022				2023			2022			(Thousands of U.S. Dollars)	2024		2023
Income before income tax	Income before income tax	$	22,907		$	91,638			$	46,090		$	145,297

Current income tax expense
Current income tax expense
Current income tax expense	Current income tax expense	$	19,757		$	25,425			$	37,363		$	46,252
Deferred income tax expense	Deferred income tax expense	13,975			13,241				29,252			31,954
Income tax expense	Income tax expense	$	33,732		$	38,666			$	66,615		$	78,206

Effective tax rate	Effective tax rate	147		%	42		%		145		%	54		%
Effective tax rate
Effective tax rate																100	%	142	%

Current income tax expense was ~~$37.4~~$3.9 million for the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~$46.3~~$17.6 million in the corresponding period ~~in 2022,~~of 2023, primarily due to a decrease in taxable income.

The deferred income tax expense for the ~~six~~three months ended ~~June 30,~~March 31, 2023, was ~~$29.3~~$15.3 million mainly as a result of tax depreciation being higher than accounting depreciation and the use of tax losses to offset taxable income in Colombia.

The deferred income tax expense for the three months ended March 31, 2024, was $13.5 million primarily as a result of tax depreciation being higher than accounting depreciation and the use of tax losses to offset taxable income in Colombia.

For the ~~six~~three months ended ~~June 30,~~March 31, 2024, the difference between the effective tax rate of 100% and the 45% Colombian tax rate was primarily due to an increase in the impact of foreign taxes, increase in the valuation allowance, non-deductible foreign translation adjustments, non-deductible royalty in Colombia, non-deductible stock-based compensation and other permanent differences.

For the six months ended June 30, 2022, the difference between the effective tax rate of 54% and the 35% Colombian tax rate was primarily due to $26.6 million of hedging loss, $24.3 million of financing cost related to Senior Notes, and $21.5 million of corporate costs, which were incurred in a jurisdictions where no tax benefit is recognized.other permanent differences.

Net (Loss) Income and Funds Flow from Operations (a Non-GAAP Measure)


(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	Second Quarter 2023 Compared with First Quarter 2023		% change	Second Quarter 2023 Compared with Second Quarter 2022		% change	Six Months Ended June 30, 2023 Compared with Six Months Ended June 30, 2022		% change
Net (loss) income for the comparative period		$	(9,700)		$	52,972		$	67,091
(Thousands of U.S. Dollars)
(Thousands of U.S. Dollars)
Net income (loss) for the comparative period
Net income (loss) for the comparative period
Net income (loss) for the comparative period
Increase (decrease) due to:
Increase (decrease) due to:
Increase (decrease) due to:	Increase (decrease) due to:
Sales price	Sales price	(56)			(87,731)			(135,636)
Sales price
Sales price
Sales volumes
Sales volumes
Sales volumes	Sales volumes	13,768			39,848			57,374
Expenses:	Expenses:
Expenses:
Expenses:
Operating
Operating
Operating	Operating	(7,122)			(8,997)			(15,431)
Transportation	Transportation	(625)			(1,178)			(1,410)
Transportation
Transportation
Cash G&A
Cash G&A
Cash G&A	Cash G&A	1,647			(1,702)			(5,119)
Net lease payments	Net lease payments	(65)			114			585

Net lease payments
Net lease payments
Severance
Severance
Severance
Interest, net of amortization of debt issuance costs
Interest, net of amortization of debt issuance costs
Interest, net of amortization of debt issuance costs	Interest, net of amortization of debt issuance costs	(604)			(596)			(410)
Realized foreign exchange	Realized foreign exchange	(11,581)			(14,388)			(14,462)
Cash settlements on derivative instruments		—			17,796			26,392
Realized foreign exchange
Realized foreign exchange

Current taxes

Current taxes

Current taxes	Current taxes	(2,151)			5,668			8,889
Interest income	Interest income	(121)			647			1,415
Interest income
Interest income
Net change in funds flow from operations(1) from comparative period
Net change in funds flow from operations(1) from comparative period
Net change in funds flow from operations(1) from comparative period	Net change in funds flow from operations(1) from comparative period	(6,910)			(50,519)			(77,813)
Expenses:	Expenses:
Expenses:
Expenses:
Depletion, depreciation and accretion
Depletion, depreciation and accretion
Depletion, depreciation and accretion	Depletion, depreciation and accretion	(4,488)			(13,993)			(24,751)

Deferred tax

Deferred tax	Deferred tax	1,302			(734)			2,702
Amortization of debt issuance costs		(238)			112			218

Deferred tax
Amortization of deferred financing fees
Amortization of deferred financing fees
Amortization of deferred financing fees
Stock-based compensation	Stock-based compensation	1,183			1,672			4,729
Derivative instruments gain or loss, net of settlements on derivative instruments		—			(12,624)			219
Stock-based compensation
Stock-based compensation

Other financial instruments

Other financial instruments

Other financial instruments
Unrealized foreign exchange	Unrealized foreign exchange	8,576			12,403			7,050
Other gain		(615)			—			615
Unrealized foreign exchange
Unrealized foreign exchange
Other loss (gain)
Other loss (gain)
Other loss (gain)
Net lease payments	Net lease payments	65			(114)			(585)
Net change in net (loss) income		(1,125)			(63,797)			(87,616)
Net lease payments
Net lease payments
Net change in net income (loss)
Net change in net income (loss)
Net change in net income (loss)
Net loss for the current period	Net loss for the current period	$	(10,825)	12%	$	(10,825)	120%	$	(20,525)	131%
Net loss for the current period
Net loss for the current period

(1)Funds flow from operations is a non-GAAP measure that does not have any standardized meaning prescribed under GAAP. Refer to "Financial and Operational Highlights—non-GAAP measures" for a definition and reconciliation of this measure.

Capital expenditures during the three months ended ~~June 30, 2023,~~March 31, 2024, were ~~$65.6~~$55.3 million:


(Millions of U.S. Dollars)	(Millions of U.S. Dollars)	Colombia		Ecuador		Total		(Millions of U.S. Dollars)	Colombia	Ecuador	Total
Exploration	Exploration	$	3.6	$	7.5	$	11.1
Development:	Development:
Drilling and Completions	Drilling and Completions	38.9		—		38.9
Drilling and Completions
Drilling and Completions
Facilities	Facilities	9.5		0.8		10.3
Workovers		2.8		—		2.8

Other	Other	2.5		—		2.5
		$	57.3	$	8.3	$	65.6
Other
Other
	$

During the three months ended ~~June 30, 2023,~~March 31, 2024, we commenced drilling the following wells in Colombia:


			Number of wells (Gross and Net)
Colombia

Development			~~4.0~~11
Service			~~3.0~~2
			~~7.0~~13

We spud ~~four~~11 development and ~~three~~two water injection wells, of which ~~two~~eight were in Midas Block and five in Chaza Block. Of the development wells spud during the quarter, ~~three~~ten were completed, and one was in-progress as of ~~June 30, 2023.~~March 31, 2024. During the three months ended ~~June 30, 2023,~~March 31, 2024, we have not spud any wells in Ecuador.

Liquidity and Capital Resources

As at

(Thousands of U.S. Dollars)

June 30, 2023

% Change

December 31, 2022

(Thousands of U.S. Dollars)

March 31, 2024

% Change

December 31, 2023

Cash and Cash Equivalents

68,529

(46)

126,873

Credit Facility

6.25% Senior Notes

271,909

(3)

279,909

7.75% Senior Notes

300,000

—

300,000

7.75% Senior Notes

9.50% Senior Notes

We believe that our capital resources, including cash on hand and cash generated from operations ~~and available borrowings under the credit facility,~~ will provide us with sufficient liquidity to meet our strategic objectives and planned capital program for the next 12 months, given the current oil price trends and production levels. We may also access capital markets to pursue ~~financing or refinance our Senior Notes.~~financing. In accordance with our investment policy, available cash balances are held in our primary cash management banks or may be invested in U.S. or Canadian government-backed federal, provincial or state securities or other money market instruments with high credit ratings and short-term liquidity. We believe that our current financial position provides us with the flexibility to respond to both internal growth opportunities and those available through acquisitions. We intend to pursue growth opportunities and acquisitions from time to time, which may require significant capital, be located in basins or countries beyond our current operations, involve joint ventures, or be sizable compared to our current assets and operations.

~~At June 30,~~As at December 31, 2023, we had a $36.4 million balance outstanding under the Company’s credit ~~facility with a market lender in~~facility. On February 6, 2024, the ~~global commodities industry. The credit facility has a borrowing base~~outstanding balance of ~~up to $150~~$36.4 million ~~with $100 million readily available at June 30, 2023,~~was fully re-paid and a potential option for an additional $50 million of borrowings upon mutual agreement by the lender and us. The credit facility bears interest based on a risk-free rate posted by the Federal Reserve Bank of New York plus a margin of 6.00% and a credit-adjusted spread of 0.26%. Undrawn amounts under the credit facility bear interest at 2.10% per annum, based on the amount available. The credit facility is secured by our Colombian assets and economic rights. It has a final maturity date of August 15, 2024, which may be extended to February 18, 2025, upon the satisfaction of certain conditions. The availability period for the draws under the credit facility expires on August 20, 2023. As of June 30, 2023, the credit facility remained undrawn.was terminated.

~~Under~~On February 6, 2024, we issued an additional $100.0 million of 9.50% Senior Notes due October 2029 (the “new 9.50% Senior Notes”), and received cash proceeds of $88.0 million. The new 9.50% Senior Notes have the same terms and provisions as the previously issued $487.6 million 9.50% Senior Notes except for the issue price. The new 9.50% Senior Notes accrue interest from October 20, 2023, the date of issuance of the ~~credit facility, we are required~~previously issued 9.50% Senior Notes. The Company received cash payment of $2.8 million related to ~~maintain compliance with~~ the ~~following financial covenants:~~

i.~~Coverage ratio of at least 150%, calculated using the net present value~~accrued interest of the consolidated future cash flows of the Company up to the final maturity date discounted at 10% over the outstanding amount on the credit facility at each reporting period. The net present value of the consolidated future cash flows of the Company is required to be based on 80% of the prevailing ICE Brent forward strip.

~~ii.~~Prepayment Life Coverage Ratio of at least 150%, calculated using the estimated aggregate value of commodities to be delivered under the commercial contract from the commencement date to the final maturity date based on 80% of the prevailing ICE Brent forward strip, adjusted for quality and transportation discounts over the outstanding amount on the credit facility including interest and all other costs payable to the lender.

~~iii.~~Liquidity ratio where the Company’s projected sources of cash exceed projected uses of cash by at least 1.15 times in each quarter period included in one year consolidated future cash flows. The future cash flows represent forecasted expected cash flows from operations, less anticipated capital expenditures and certain other adjustments. The commodity pricing assumption used in this covenant is required to be 90% of the prevailing Brent strip forward for the projected future cash flows.new 9.50% Senior Notes.

At ~~June 30, 2023,~~March 31, 2024, we had a ~~$271.9~~$24.8 million aggregate principal amount of 6.25% Senior Notes due 2025 ~~and a $300.0~~(“6.25% Senior Notes”), $24.2 million aggregate principal amount of 7.75% Senior Notes due 2027, ~~outstanding.~~

~~During the three~~ and ~~six months ended June 30, 2023, we re-purchased in the open market nil and $8.0~~$587.6 million ~~respectively,~~aggregate principal amount of ~~6.25%~~9.50% Senior Notes for cash consideration of $6.8 million. The re-purchase resulted in a $1.1 million gain, which included the write-off of deferred financing fees of $0.1 million. The re-purchased 6.25% Senior Notes were not canceled and held by the Company as treasury bonds as of June 30, 2023.due 2029, outstanding.

During the year ended December 31, ~~2022,~~2023, we implemented a share re-purchase program (the ~~“2022~~“2023 Program”) through the facilities of the Toronto Stock Exchange (“TSX”) and eligible alternative trading platforms in ~~Canada.~~Canada or United States. Under the ~~2022~~2023 Program, we ~~were~~are able to purchase at prevailing market prices up to ~~3,603,396~~3,234,914 shares of Common Stock, representing approximately 10% of the ~~issued and outstanding shares of Common Stock~~public float as of ~~August 22, 2022.~~October 20, 2023. Re-purchases are subject to prevailing market conditions, the trading price of our Common Stock, our financial performance and other conditions. ~~The 2022 Program has expired when 10% share maximum was reached in May 2023.~~

During the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, we re-purchased ~~20,439 and 1,328,650~~886,666 shares at a weighted average price of ~~$5.27 and $8.15~~5.58 per ~~share (three and six~~share. During the three months ended ~~June 30, 2022 - nil). As of June 30, 2023, all 3,603,396 shares~~March 31, 2024, we cancelled 28,612 held as treasury ~~stock, were cancelled.~~shares as at December 31, 2023 and cancelled 858,054 shares re-purchased during the three months ended March 31, 2024. During the period from October 20, 2023 to April 29, 2024, we have re-purchased 1,997,500 shares under the 2023 Program.

Cash Flows

The following table presents our primary sources and uses of cash and cash equivalents and restricted cash and cash equivalents for the periods presented:


		Six Months Ended June 30,
	Three Months Ended March 31,								Three Months Ended March 31,
(Thousands of U.S. Dollars)	(Thousands of U.S. Dollars)	2023		2022		(Thousands of U.S. Dollars)	2024	2023
Sources of cash and cash equivalents:	Sources of cash and cash equivalents:
Net (loss) income		$	(20,525)	$	67,091
Net loss
Net loss
Net loss
Adjustments to reconcile net loss to Adjusted EBITDA(1) and funds flow from operations(1)	Adjustments to reconcile net loss to Adjusted EBITDA(1) and funds flow from operations(1)
DD&A expenses
DD&A expenses
DD&A expenses	DD&A expenses	107,930		83,179

Interest expense	Interest expense	24,514		24,322
Interest expense
Interest expense
Income tax expense	Income tax expense	66,615		78,206
Other loss		—		—
Non-cash lease expenses	Non-cash lease expenses	2,253		1,158
Lease payments	Lease payments	(1,242)		(732)
Unrealized foreign exchange gain		(7,548)		(498)
Foreign exchange (gain) loss
Stock-based compensation expense	Stock-based compensation expense	1,817		6,546
Unrealized derivative instruments loss		—		219
Other gain	Other gain	(615)		—

Adjusted EBITDA(1)	Adjusted EBITDA(1)	173,199		259,491
Current income tax expense	Current income tax expense	(37,363)		(46,252)
Contractual interest and other financing expenses	Contractual interest and other financing expenses	(22,714)		(22,304)
Realized foreign exchange loss
Funds flow from operations(1)	Funds flow from operations(1)	113,122		190,935
Proceeds from issuance of Senior Notes, net of issuance costs
Proceeds from exercise of stock options	Proceeds from exercise of stock options	5		1,285

Net changes in assets and liabilities from operating activities		—		56,329
Foreign exchange gain on cash, cash equivalents and restricted cash and cash equivalents		5,759		—
Foreign exchange gain on cash and cash equivalents and restricted cash and cash equivalents
Foreign exchange gain on cash and cash equivalents and restricted cash and cash equivalents
Foreign exchange gain on cash and cash equivalents and restricted cash and cash equivalents
Changes in non-cash investing working capital	Changes in non-cash investing working capital	9,088		10,964
		127,974		259,513
	176,637

Uses of cash and cash equivalents:	Uses of cash and cash equivalents:
Uses of cash and cash equivalents:
Uses of cash and cash equivalents:
Additions to property, plant and equipment
Additions to property, plant and equipment
Additions to property, plant and equipment	Additions to property, plant and equipment	(136,627)		(106,682)
Net changes in assets and liabilities from operating activities	Net changes in assets and liabilities from operating activities	(25,836)		—
Repayment of debt	Repayment of debt	—		(67,525)

Re-purchase of Common Stock		(10,825)		—
Re-purchase of Senior Notes		(6,805)		—
Debt issuance costs	Debt issuance costs	(1,873)		—
Purchase of Senior Notes
Re-purchase of shares of Common Stock
Settlement of asset retirement obligations	Settlement of asset retirement obligations	(156)		(242)
Lease payments	Lease payments	(3,035)		(1,261)
Foreign exchange loss on cash, cash equivalents and restricted cash and cash equivalents		—		(680)
		(185,157)		(176,390)
Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents		$	(57,183)	$	83,123
Foreign exchange loss on cash, and cash equivalents and restricted cash and cash equivalents
	(112,137)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents

(1) Adjusted EBITDA and funds flow from operations are non-GAAP measures which do not have any standardized meaning prescribed under GAAP. Refer to “Financial and Operational Highlights - non-GAAP measures” for a definition and reconciliation of this measure.

One of the primary sources of variability in our cash flows from operating activities is the fluctuation in oil prices. Sales volume changes, costs related to operations and debt ~~service~~transactions also impact cash flows. Our cash flows from operating activities are

also impacted by foreign currency exchange rate changes. During the three ~~and six~~ months ended ~~June 30, 2023,~~March 31, 2024, funds flow from operations ~~decreased~~increased by ~~49% and 41%, respectively,~~24% compared to the corresponding ~~periods~~period of ~~2022,~~2023, primarily due to an increase in sales volumes, lower transportation and quality discounts, and lower tax expenses. This is partially offset by higher operating costs and a decrease in Brent ~~price, higher quality and transportation discounts, higher operating costs and realized foreign exchange loss.~~price.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are disclosed in Item 7 of our ~~2022~~2023 Annual Report on Form 10-K and have not changed materially since the filing of that document.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity price risk

Our principal market risk relates to oil prices. Oil prices are volatile and unpredictable and influenced by concerns over world supply and demand imbalance and many other market factors outside of our control. Our revenues are from oil sales at ICE Brent adjusted for quality differentials.

Foreign currency risk

Foreign currency risk is a factor for our Company but is ameliorated to a certain degree by the nature of expenditures and revenues in the countries where we operate. Our reporting currency is U.S. dollars and 100% of our revenues are related to the U.S. dollar price of Brent adjusted for quality differentials. We receive 100% of our revenues in U.S. dollars and the majority of our capital expenditures is in U.S. dollars or is based on U.S. dollar prices. The majority of value added taxes, operating and G&A expenses in Colombia are in the local currency. Certain G&A expenses incurred at our head office in Canada are denominated in Canadian dollars. While we operate in South America exclusively, the majority of our acquisition expenditures have been valued and paid in U.S. dollars.

Additionally, foreign exchange gains and losses result primarily from the fluctuation of the U.S. dollar to the Colombian peso due to our accounts payable, current and deferred tax assets and liabilities which are monetary assets and liabilities denominated in the local currency of the Colombian foreign operations. As a result, a foreign exchange gain or loss must be calculated on conversion to the U.S. dollar functional currency.

Interest Rate Risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. ~~We are exposed~~As our Senior Notes bear interest at fixed rates, we have no material exposure to interest rate ~~fluctuations on our credit facility, which bears floating rates of interest. At June 30, 2023, our outstanding balance under the credit facility was nil (December 31, 2022 - nil).~~fluctuations.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We have established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or Exchange Act). Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by Gran Tierra in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report, as required by Rule l3a-15(b) of the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that Gran Tierra’s disclosure controls and procedures were effective as of ~~June 30, 2023.~~March 31, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended ~~June 30, 2023,~~March 31, 2024, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II - Other Information

Item 1. Legal Proceedings

See Note 8 in the Notes to the Condensed Consolidated Financial Statements (Unaudited) in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference, for any material developments with respect to matters previously reported in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, and any material matters that have arisen since the filing of such report.

Item 1A. Risk Factors

There are numerous factors that affect our business and results of operations, many of which are beyond our control. In addition to information set forth in this quarterly report on Form 10-Q, including in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, you should carefully read and consider the factors set out in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023. These risk factors could materially affect our business, financial condition and results of operations. The unprecedented nature of ongoing conflicts in several parts of the ~~current pandemic and~~world, the volatility in the worldwide economy and oil and gas industry may make it more difficult to identify all the risks to our business, results of operations and financial condition and the ultimate impact of identified risks.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

(a)
Total Number of Shares Purchased
(b)
Average Price Paid per Share (1)
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(d)
Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (2)
April 1-30, 2023 — $ — — 20,439
May 1-31, 2023 20,439 5.27 20,439 —
June 1-30, 2023 — — — —
Total 20,439 $ 5.27 20,439 —


	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share (1)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (2)
January 1-31, 2024	314,426	$	5.27	314,426	1,878,684
February 1-29, 2024	286,120	$	5.28	286,120	1,592,564
March 1-31, 2024	286,120	$	6.22	286,120	1,306,444
Total	886,666	$	5.58	886,666	1,306,444

~~(1)~~ (1)Including commission fees paid to the broker to re-purchase the shares of Common Stock.

(2)On ~~August 29, 2022,~~October 20, 2023, we ~~announced that we intended to implement~~implemented a share re-purchase program (the ~~“2022~~“2023 Program”) through the facilities of the TSX, the NYSE American and eligible alternative trading platforms in Canada ~~commencing September 1, 2022, and ending on August 31,~~or United States. Under the 2023 ~~or earlier if~~Program, the ~~10% share maximum~~Company is ~~reached. We were~~ able to purchase ~~for cancellation~~ at prevailing market prices up to ~~3,603,396~~3,234,914 shares of Common Stock, representing approximately 10% of ~~our issued and outstanding shares of Common Stock~~the public float as of ~~August 22, 2022.~~October 20, 2023. The ~~2022 program expired when the~~2023 Program will expire on November 2, 2024, or earlier if 10% ~~share~~ maximum ~~was reached in May 2023.~~is reached.

Item 5. Other Information

During the three months ended ~~June 30, 2023,~~March 31, 2024, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

Item 6. Exhibits


Exhibit No.	Description	Reference

3.1	Certificate of Incorporation.	Incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K, filed with the SEC on November 4, 2016 (SEC File No. 001-34018).

3.2	Certificate of Amendment to Certificate of Incorporation of Gran Tierra Energy Inc., effective May 5, 2023	Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on May 5, 2023 (SEC File No. 001-34018).

3.3	Bylaws of Gran Tierra Energy Inc.	Incorporated by reference to Exhibit 3.4 to the Current Report on Form 8-K, filed with the SEC on November 4, 2016 (SEC File No. 001-34018).

3.4	Amendment No.1 to Bylaws of Gran Tierra Energy Inc.	Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2021 (SEC File No. 001-34018).

3.5	Certificate of Retirement dated July 9, 2018	Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on July 9, 2018 (SEC File No. 001-34018).

~~3.5~~	~~Amendment No.1 to Bylaws of Gran Tierra Energy Inc.~~	~~Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2021 (SEC File No. 001-34018).~~

31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.

31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.

32.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith.

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104.The cover page from Gran Tierra Energy Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2023,~~March 31, 2024, formatted in Inline XBRL (included within the Exhibit 101 attachments).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GRAN TIERRA ENERGY INC.


Date: ~~August~~May 1, ~~2023~~2024						/s/ Gary S. Guidry
						By: Gary S. Guidry
						President and Chief Executive Officer
						(Principal Executive Officer)


Date: ~~August~~May 1, ~~2023~~2024						/s/ Ryan Ellson
						By: Ryan Ellson
						Executive Vice President and Chief Financial Officer
						(Principal Financial and Accounting Officer)


	As at June 30,				As at December 31,
(Thousands of U.S. Dollars)	2023		2022		2022		2021
Cash and cash equivalents	$	68,529	$	108,558	$	126,873	$	26,109
Restricted cash and cash equivalents - current	1,142		1,142		1,142		392
Restricted cash and cash equivalents - long-term (1)	6,504		4,827		5,343		4,903
	$	76,175	$	114,527	$	133,358	$	31,404


	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share (1)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (2)
April 1-30, 2023	—	$	—	—	20,439
May 1-31, 2023	20,439	5.27		20,439	—
June 1-30, 2023	—	—		—	—
Total	20,439	$	5.27	20,439	—