Share Capital | 9 Months Ended |
Sep. 30, 2013 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Share Capital | ' |
Share Capital |
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The Company’s authorized share capital consists of 595,000,002 shares of capital stock, of which 570 million are designated as Common Stock, par value $0.001 per share, 25 million are designated as Preferred Stock, par value $0.001 per share, and two shares are designated as special voting stock, par value $0.001 per share. |
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As at September 30, 2013, outstanding share capital consists of 271,872,896 shares of Common Stock of the Company, 6,744,728 exchangeable shares of Gran Tierra Exchangeco Inc., (the "Exchangeco exchangeable shares") and 4,534,127 exchangeable shares of Gran Tierra Goldstrike Inc. (the "Goldstrike exchangeable shares"). The redemption date of the Exchangeco exchangeable shares was previously established as November 14, 2013 (or at an earlier date under certain specified circumstances). However, pursuant to resolutions of the board of directors of Gran Tierra Exchangeco Inc., effective October 25, 2013, the redemption date for the Exchangeco exchangeable shares was extended to such later date as may be established by the board of directors of Gran Tierra Exchangeco Inc. at its discretion. The redemption date of the Goldstrike exchangeable shares was previously established as November 10, 2013. However, pursuant to resolutions of the board of directors of Gran Tierra Goldstrike Inc., effective October 31, 2013, the redemption date for the Goldstrike exchangeable shares was extended to such later date as may be established by the board of directors of Gran Tierra Goldstrike Inc. at its discretion. During the nine months ended September 30, 2013, 1,247,818 shares of Common Stock were issued upon the exercise of stock options, 452,950 shares of Common Stock were issued upon the exchange of the Exchangeco exchangeable shares and 1,689,683 shares of Common Stock were issued upon the exchange of the Goldstrike exchangeable shares. |
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The holders of shares of Common Stock are entitled to one vote for each share on all matters submitted to a stockholder vote and are entitled to share in all dividends that the Company’s board of directors, in its discretion, declares from legally available funds. The holders of Common Stock have no pre-emptive rights, no conversion rights, and there are no redemption provisions applicable to the shares. |
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The Exchangeco exchangeable shares were issued upon acquisition of Solana Resources Limited. The Goldstrike exchangeable shares were issued upon the business combination between Gran Tierra Energy Inc., an Alberta corporation, and Goldstrike, Inc., which is now the Company. Holders of exchangeable shares have substantially the same rights as holders of shares of Common Stock. Each exchangeable share is exchangeable into one share of Common Stock of the Company. |
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Restricted Stock Units and Stock Options |
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In May 2013, the Company issued RSUs and stock options, which will vest as to 1/3 of the awards on each of March 1, 2014, March 1, 2015 and March 1, 2016. The term of options granted starting May 2013 is five years or three months after the grantee’s end of service to the Company, whichever occurs first. Options granted prior to May 2013 continue to have a term of ten years or three months after the grantee’s end of service to the Company, whichever occurs first. Once an RSU is vested, it is immediately settled and considered to be at the end of its term. |
The following table provides information about long-term incentive plan ("LTIP") activity for the nine months ended September 30, 2013: |
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| RSUs | Options | | | | | | | | |
| Number of Outstanding Share Units | | Number of Outstanding Options | | Weighted Average Exercise Price $/Option | | | | | | | | |
Balance, December 31, 2012 | — | | | 15,399,662 | | | 5.11 | | | | | | | | | |
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Granted | 939,365 | | | 2,066,935 | | | 6.27 | | | | | | | | | |
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Exercised | — | | | (1,247,818 | ) | | (2.79 | ) | | | | | | | | |
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Forfeited | (21,655 | ) | | (284,835 | ) | | (6.17 | ) | | | | | | | | |
Expired | — | | | (102,593 | ) | | (6.57 | ) | | | | | | | | |
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Balance, September 30, 2013 | 917,710 | | | 15,831,351 | | | 5.42 | | | | | | | | | |
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For the nine months ended September 30, 2013, 1,247,818 shares of Common Stock were issued for cash proceeds of $3.5 million upon the exercise of 1,247,818 stock options (nine months ended September 30, 2012 - $3.8 million). |
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The weighted average grant date fair value for options granted in the three months ended September 30, 2013, was $2.34 (three months ended September 30, 2012 - $2.62) and for the nine months ended September 30, 2013, was $2.62 (nine months ended September 30, 2012 - $3.36). As a result of the change in the term of stock options to five years for stock options granted starting May 2013, the weighted average volatility used in the Black-Scholes option pricing model was reduced to 43% for the three months ended September 30, 2013 and 53% for the nine months ended September 30, 2013, from 75% for the year ended December 31, 2012, resulting in a lower grant date fair value per share than in prior periods. |
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The amounts recognized for stock-based compensation were as follows: |
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(Thousands of U.S. Dollars) | | Three Months Ended September 30, | | Nine Months Ended September 30, |
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Compensation costs for stock options | | $ | 2,132 | | | $ | 3,268 | | | $ | 6,314 | | | $ | 10,721 | |
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Compensation costs for RSUs | | 1,282 | | | — | | | 1,901 | | | — | |
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| | 3,414 | | | 3,268 | | | 8,215 | | | 10,721 | |
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Less: stock-based compensation costs capitalized | | (1,717 | ) | | (336 | ) | | (2,102 | ) | | (867 | ) |
Total stock-based compensation expense | | $ | 1,697 | | | $ | 2,932 | | | $ | 6,113 | | | $ | 9,854 | |
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Of the total compensation expense for the three months ended September 30, 2013, $1.3 million (three months ended September 30, 2012 - $2.6 million) was recorded in G&A expenses and $0.4 million (three months ended September 30, 2012 – $0.3 million) was recorded in operating expenses. Of the total compensation expense for the nine months ended September 30, 2013, $5.3 million (nine months ended September 30, 2012 – $8.9 million) was recorded in G&A expenses and $0.8 million (nine months ended September 30, 2012 – $0.9 million) was recorded in operating expenses. |
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At September 30, 2013, there was $11.3 million (December 31, 2012 - $8.2 million) of unrecognized compensation cost related to unvested LTIP units which is expected to be recognized over a weighted average period of 2.1 years. |
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Net income per share |
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Basic net income per share is calculated by dividing net income attributable to common shareholders by the weighted average number of shares of Common Stock and exchangeable shares issued and outstanding during each period. Diluted net income per share is calculated by adjusting the weighted average number of shares of Common Stock and exchangeable shares outstanding for the dilutive effect, if any, of share equivalents. The Company uses the treasury stock method to determine the dilutive effect. This method assumes that all Common Stock equivalents have been exercised at the beginning of the period (or at the time of issuance, if later), and that the funds obtained thereby were used to purchase shares of Common Stock of the Company at the volume weighted average trading price of shares of Common Stock during the period. |
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| | Three Months Ended September 30, | | Nine Months Ended September 30, | | | | |
| | 2013 | | 2012 | | 2013 | | 2012 | | | | |
Weighted average number of common and exchangeable shares outstanding | | 283,092,224 | | | 281,695,212 | | | 282,687,871 | | | 280,387,484 | | | | | |
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Shares issuable pursuant to warrants | | — | | | — | | | — | | | 235,582 | | | | | |
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Shares issuable pursuant to stock options | | 12,428,489 | | | 5,643,730 | | | 10,823,968 | | | 5,947,880 | | | | | |
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Shares assumed to be purchased from proceeds of stock options | | (9,494,194 | ) | | (2,733,780 | ) | | (7,691,832 | ) | | (2,602,562 | ) | | | | |
Weighted average number of diluted common and exchangeable shares outstanding | | 286,026,519 | | | 284,605,162 | | | 285,820,007 | | | 283,968,384 | | | | | |
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For the three months ended September 30, 2013, 3,472,472 options (three months ended September 30, 2012 - 9,957,585 options) were excluded from the diluted income per share calculation as the options were anti-dilutive. For the nine months ended September 30, 2013, 5,584,732 options (nine months ended September 30, 2012 - 9,808,758 options) were excluded from the diluted income per share calculation as the options were anti-dilutive. |