Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-34018 | ||
Entity Registrant Name | GRAN TIERRA ENERGY INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 98-0479924 | ||
Entity Address, Address Line One | 900, 520 - 3 Avenue SW | ||
Entity Address, City or Town | Calgary, | ||
Entity Address, State or Province | AB | ||
Entity Address, Country | CA | ||
Entity Address, Postal Zip Code | T2P 0R3 | ||
City Area Code | 403 | ||
Local Phone Number | 265-3221 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | GTE | ||
Security Exchange Name | NYSEAMER | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 96.8 | ||
Entity Common Stock, Shares Outstanding | 366,981,556 | ||
Documents Incorporated by Reference | The information required by Part III of this report, to the extent not set forth herein, is incorporated by reference from the registrant’s definitive proxy statement relating to the 2021 annual meeting of stockholders, which definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after December 31, 2020. | ||
Entity Central Index Key | 0001273441 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
OIL SALES (NOTE 11) | $ 237,838,000 | $ 570,983,000 |
EXPENSES | ||
Operating | 111,888,000 | 183,204,000 |
Transportation | 10,543,000 | 20,400,000 |
COVID-19 related costs (Note 12) | 2,679,000 | 0 |
Depletion, depreciation and accretion (Note 5) | 164,233,000 | 225,033,000 |
Goodwill impairment (Note 6) | 102,581,000 | 0 |
Asset impairment (Note 6) | 564,495,000 | 0 |
General and administrative | 23,722,000 | 34,730,000 |
Severance | 1,628,000 | 1,771,000 |
Foreign exchange loss | 4,184,000 | 627,000 |
Financial instruments loss (gain) (Note 15) | 50,982,000 | (46,215,000) |
Interest expense (Note 8) | 54,140,000 | 43,268,000 |
TOTAL EXPENSES | 1,091,075,000 | 462,818,000 |
OTHER LOSS | (469,000) | (12,886,000) |
INTEREST INCOME | 345,000 | 696,000 |
(LOSS) INCOME BEFORE INCOME TAXES | (853,361,000) | 95,975,000 |
INCOME TAX EXPENSE (RECOVERY) | ||
Current (Note 13) | 754,000 | 17,058,000 |
Deferred (Note 13) | (76,148,000) | 40,227,000 |
INCOME TAX EXPENSE (RECOVERY) | (75,394,000) | 57,285,000 |
NET AND COMPREHENSIVE (LOSS) INCOME | $ (777,967,000) | $ 38,690,000 |
NET (LOSS) INCOME PER SHARE - BASIC AND DILUTED (in USD per share) | $ (2.12) | $ 0.10 |
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC (Note 9) (in shares) | 366,981,556 | 376,495,306 |
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED (Note 9) (in shares) | 366,981,556 | 376,507,812 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 13,687 | $ 8,301 |
Restricted cash and cash equivalents (Note 10) | 427 | 516 |
Accounts receivable (Note 3) | 8,044 | 36,291 |
Investment (Note 15) | 48,323 | 94,741 |
Taxes receivable (Note 4) | 49,962 | 135,838 |
Other current assets | 13,459 | 15,001 |
Total Current Assets | 133,902 | 290,688 |
Oil and Gas Properties (using the full cost method of accounting) | ||
Proved | 797,355 | 1,258,934 |
Unproved | 161,763 | 310,809 |
Total Oil and Gas Properties | 959,118 | 1,569,743 |
Other capital assets | 5,364 | 7,650 |
Total Property, Plant and Equipment (Note 5) | 964,482 | 1,577,393 |
Other Long-Term Assets | ||
Taxes receivable (Note 4) | 42,635 | 25,869 |
Deferred tax assets (Note 13) | 57,318 | 44,003 |
Other long-term assets | 3,425 | 4,130 |
Goodwill (Note 6) | 0 | 102,581 |
Total Other Long-Term Assets | 103,378 | 176,583 |
Total Assets | 1,201,762 | 2,044,664 |
Current Liabilities | ||
Accounts payable and accrued liabilities (Note 7) | 100,784 | 195,513 |
Derivatives (Note 15) | 12,050 | 775 |
Taxes payable | 37 | 0 |
Equity compensation award liability (Note 9 and 15) | 805 | 3,053 |
Total Current Liabilities | 113,676 | 199,341 |
Long-Term Liabilities | ||
Long-term debt (Note 8) | 774,770 | 700,459 |
Deferred tax liabilities (Note 13) | 0 | 59,762 |
Asset retirement obligation (Note 10) | 48,214 | 43,419 |
Equity compensation award liability (Note 9 and 15) | 3,955 | 4,806 |
Other long-term liabilities | 4,113 | 4,267 |
Total Long-Term Liabilities | 831,052 | 812,713 |
Commitments and Contingencies (Note 14) | ||
Shareholders’ Equity | ||
Common Stock (Note 9) (366,981,556 and 366,981,556 shares of Common Stock, par value $0.001 per share, issued and outstanding as at December 31, 2020 and December 31, 2019, respectively) | 10,270 | 10,270 |
Additional paid in capital | 1,285,018 | 1,282,627 |
Deficit | (1,038,254) | (260,287) |
Total Shareholders’ Equity | 257,034 | 1,032,610 |
Total Liabilities and Shareholders’ Equity | $ 1,201,762 | $ 2,044,664 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common shares, issued (in shares) | 366,981,556 | 366,981,556 |
Common shares, outstanding (in shares) | 366,981,556 | 366,981,556 |
Common shares, par value (in USD per share) | $ 0.001 | $ 0.001 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Activities | ||
Net (loss) income | $ (777,967,000) | $ 38,690,000 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depletion, depreciation and accretion (Note 5) | 164,233,000 | 225,033,000 |
Goodwill impairment (Note 6) | 102,581,000 | 0 |
Asset impairment (Note 6) | 564,495,000 | 0 |
Deferred tax (recovery) expense (Note 13) | (76,148,000) | 40,227,000 |
Stock-based compensation (Note 9) | 1,216,000 | 1,430,000 |
Amortization of debt issuance costs (Note 8) | 3,625,000 | 3,376,000 |
Non-cash lease expenses | 1,951,000 | 1,806,000 |
Lease payments | (1,926,000) | (1,969,000) |
Unrealized foreign exchange loss | 5,271,000 | 1,803,000 |
Financial instruments loss (gain) (Note 15) | 50,982,000 | (46,215,000) |
Cash settlement of financial instruments | 4,874,000 | (3,273,000) |
Cash settlement of asset retirement obligation (Note 10) | (201,000) | (870,000) |
Other non-cash loss | 2,026,000 | 0 |
Loss on redemption of Convertible Notes | 0 | 11,501,000 |
Net change in assets and liabilities from operating activities (Note 16) | 36,062,000 | (93,874,000) |
Net cash provided by operating activities | 81,074,000 | 177,665,000 |
Investing Activities | ||
Additions to property, plant and equipment (Note 5) | (96,281,000) | (379,314,000) |
Property acquisitions (Note 5) | 0 | (77,772,000) |
Changes in non-cash investing working capital | (48,642,000) | (7,851,000) |
Net cash used in investing activities | (144,923,000) | (464,937,000) |
Financing Activities | ||
Proceeds from issuance of Senior Notes, net of issuance costs (Note 8) | 0 | 289,271,000 |
Proceeds from bank debt, net of issuance costs | 88,332,000 | 342,575,000 |
Repayment of debt | (17,000,000) | (349,219,000) |
Lease payments | (879,000) | 0 |
Repurchase of shares of Common Stock (Note 9) | 0 | (37,561,000) |
Net cash provided by financing activities | 70,453,000 | 245,066,000 |
Foreign exchange loss on cash and cash equivalents and restricted cash and cash equivalents | (156,000) | (1,027,000) |
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents | 6,448,000 | (43,233,000) |
Cash and cash equivalents and restricted cash and cash equivalents, beginning of year (Note 16) | 11,075,000 | 54,308,000 |
Cash and cash equivalents and restricted cash and cash equivalents, end of year (Note 16) | $ 17,523,000 | $ 11,075,000 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Share Capital | Additional Paid in Capital | Deficit | DeficitCumulative Effect, Period of Adoption, Adjustment |
Balance, beginning of year at Dec. 31, 2018 | $ 10,290 | $ 1,318,048 | $ (298,588) | $ (389) | |
Increase (Decrease) in Stockholders' Equity | |||||
Repurchase of Common Stock (Note 9) | (20) | (37,541) | |||
Stock-based compensation (Note 9) | 2,120 | ||||
Net (loss) income | $ 38,690 | 38,690 | |||
Balance, end of year at Dec. 31, 2019 | 1,032,610 | 10,270 | 1,282,627 | (260,287) | $ 0 |
Increase (Decrease) in Stockholders' Equity | |||||
Repurchase of Common Stock (Note 9) | 0 | 0 | |||
Stock-based compensation (Note 9) | 2,391 | ||||
Net (loss) income | (777,967) | (777,967) | |||
Balance, end of year at Dec. 31, 2020 | $ 257,034 | $ 10,270 | $ 1,285,018 | $ (1,038,254) |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 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. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Significant accounting policies are: Basis of Consolidation These consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include: oil and natural gas reserves and related present value of future cash flows; depreciation, depletion, amortization (“DD&A”) and impairment; impairment assessments of goodwill; timing of transfers from oil and gas properties not subject to depletion to the depletable base; asset retirement obligations; determining the value of the consideration transferred and the net identifiable assets acquired and liabilities assumed in connection with business combinations and determining goodwill; assessments of the likely outcome of legal and other contingencies; income taxes; stock-based compensation; and determining the fair value of derivatives. Although management believes these estimates are reasonable, changes in facts and circumstances or discovery of new information may result in revised estimates and actual results may differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash and Cash Equivalents Restricted cash and cash equivalents comprises cash and cash equivalents pledged to secure letters of credit and to settle asset retirement obligations. Letters of credit currently secured by cash relate to work commitment guarantees contained in exploration contracts. Restrictions will lapse when work obligations are satisfied pursuant to the exploration contract or an asset retirement obligation is settled. Cash and claims to cash that are restricted as to withdrawal or use for other than current operations or are designated for expenditure in the acquisition or construction of long-term assets are excluded from the current asset classification. The long-term portion of restricted cash and cash equivalents is included in other long-term assets on the Company's balance sheet. Allowance for Doubtful Accounts At each reporting date, the Company assesses the expected lifetime credit losses on initial recognition of trade accounts receivable. Credit risk is assessed based on the number of days the receivable has been outstanding and the internal credit assessment of the customer. The expected loss rates are based on payment profiles over a period of 36 months prior to the period-end and the corresponding historical credit losses experienced within this period. Historical loss rates are adjusted to reflect current and forward looking economic factors of the country where the Company sells oil that affect the ability of the customers to settle the receivables. Trade receivables are written off when there is no reasonable expectation of recovery. Investment in PetroTal Corp. During December 2017, the Company acquired an investment in common shares of PetroTal Corp. ("PetroTal") in connection with the sale of its Peru business unit. At December 31, 2020, this investment represented approximately 30% of PetroTal's issued and outstanding common shares. The Company determined that it did not have a controlling financial interest in PetroTal, but could exert significant influence over PetroTal's operating and financial policies as a result of its ownership interest in PetroTal and the right to nominate two directors to PetroTal's board of directors. Accordingly, Gran Tierra accounted for its investment in the common shares of PetroTal as an equity method investment, but elected the fair value option for this investment to reflect the value that market participants would use to value the investment. The fair value of the investment in PetroTal's common shares is recorded as "Investment" on the Company's consolidated balance sheet, and the change in fair value is recorded in the consolidated statements of operations as financial instruments gains or losses. As at December 31, 2020, we held 246,100,000 common shares of PetroTal and subsequent to December 31, 2020 we disposed of 109,006,250 common shares resulting in 137,093,750 common shares held (17% of all total outstanding shares). Derivatives The Company records derivative instruments on its balance sheet at fair value as either an asset or liability with changes in fair value recognized in the consolidated statements of operations as financial instruments gains or losses. While the Company utilizes derivative instruments to manage the price risk attributable to its expected oil production and foreign exchange risk, it has elected not to designate its derivative instruments as accounting hedges under the accounting guidance. Inventory Inventory consists of oil in tanks and third party pipelines and supplies and is valued at the lower of cost and net realizable value. The cost of inventory is determined using the weighted average method. Oil inventories include expenditures incurred to produce, upgrade and transport the product to the storage facilities and include operating, depletion and depreciation expenses and cash royalties. Income Taxes Income taxes are recognized using the liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax base, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. Valuation allowances are provided if, after considering available evidence, it is not more likely than not that some or all of the deferred tax assets will be realized. The tax benefit from an uncertain tax position is recognized when it is more likely than not, based on the technical merits of the position, that the position will be sustained on examination by the taxing authorities. Additionally, the amount of the tax benefit recognized is the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. The Company recognizes potential penalties and interest related to unrecognized tax benefits as a component of income tax expense. Oil and Gas Properties The Company uses the full cost method of accounting for its investment in oil and natural gas properties as defined by the Securities and Exchange Commission (“SEC”). Under this method, the Company capitalizes all acquisition, exploration and development costs incurred for the purpose of finding oil and natural gas reserves, including salaries, benefits and other internal costs directly attributable to these activities. Costs associated with production and general corporate activities; however, are expensed as incurred. Separate cost centers are maintained for each country in which the Company incurs costs. The Company computes depletion of oil and natural gas properties on a quarterly basis using the unit-of-production method based upon production and estimates of proved reserve quantities. Future development costs related to properties with proved reserves are also included in the amortization base for computation of depletion. The costs of unproved properties are excluded from the amortization base until the properties are evaluated. The cost of exploratory dry wells is transferred to proved properties, and thus is subject to amortization, immediately upon determination that a well is dry in those countries where proved reserves exist. The Company performs a ceiling test calculation each quarter in accordance with SEC Regulation S-X Rule 4-10. In performing its quarterly ceiling test, the Company limits, on a country-by-country basis, the capitalized costs of proved oil and natural gas properties, net of accumulated depletion and deferred income taxes, to the estimated future net cash flows from proved oil and natural gas reserves discounted at 10%, net of related tax effects, plus the lower of cost or fair value of unproved properties included in the costs being amortized. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to net income or loss. Any such write-down will reduce earnings in the period of occurrence and results in a lower DD&A rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling. The Company calculates future net cash flows by applying the unweighted average of prices in effect on the first day of the month for the preceding 12-month period, adjusted for location and quality differentials. Such prices are utilized except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts. Unproved properties are not depleted pending the determination of the existence of proved reserves. Costs are transferred into the depletable base on an ongoing basis as the properties are evaluated and proved reserves are established or impairment is determined. Unproved properties are evaluated quarterly to ascertain whether impairment has occurred. This evaluation considers, among other factors, seismic data, requirements to relinquish acreage, drilling results and activity, remaining time in the commitment period, remaining capital plans, and political, economic, and market conditions. During any period in which factors indicate an impairment, the cumulative costs incurred to date for such property are transferred to the full cost pool and are then subject to depletion. For countries where a reserve base has not yet been established, the impairment is charged to earnings. In exploration areas, related seismic costs are capitalized in unproved property and evaluated as part of the total capitalized costs associated with a property. Seismic costs related to development projects are recorded in proved properties and therefore subject to depletion as incurred. Gains and losses on the sale or other disposition of oil and natural gas properties are not recognized, unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and natural gas attributable to a country. Asset Retirement Obligation The Company records an estimated liability for future costs associated with the abandonment of its oil and gas properties including the costs of reclamation of drilling sites. The Company records the fair value of a liability for a legal obligation to retire an asset in the period in which the liability is incurred with an offsetting increase to the related oil and gas properties. The fair value of an asset retirement obligation is measured by reference to the expected future cash outflows required to satisfy the retirement obligation discounted at the Company’s credit-adjusted risk-free interest rate. Accretion expense is recognized over time as the discounted liabilities are accreted to their expected settlement value, while the asset retirement cost is amortized over the estimated productive life of the related assets. The accretion of the asset retirement obligation and amortization of the asset retirement cost are included in DD&A. If estimated future costs of an asset retirement obligation change, an adjustment is recorded to both the asset retirement obligation and oil and gas properties. Revisions to the estimated asset retirement obligation can result from changes in retirement cost estimates, revisions to estimated inflation rates and changes in the estimated timing of abandonment. Other Capital Assets Other capital assets, including additions and replacements, are recorded at cost upon acquisition and include furniture, fixtures and leasehold improvement, computer equipment, automobiles and right-of-use assets for operating and finance leases. Depreciation for furniture and fixtures, computer equipment and automobiles is provided using the straight-line method over the useful life of the asset. Leasehold improvements and right-of-use assets for operating and finance leases are depreciated on a straight-line basis over the shorter of the estimated useful life and the term of the related lease. The cost of repairs and maintenance is charged to expense as incurred. Goodwill Goodwill represents the excess of the aggregate of the consideration transferred over the net identifiable assets acquired and liabilities assumed. The Company assesses qualitative factors annually, or more frequently if necessary, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount and whether it is necessary to perform the goodwill impairment test. The impairment test requires allocating goodwill and certain other assets and liabilities to assigned reporting units. The fair value of each reporting unit is estimated and compared with its net book value. An impairment loss is recognized if the estimated fair value of the reporting unit is less than its carrying amount, not exceeding the carrying amount of goodwill allocated to that reporting unit. Because quoted market prices are not available for the Company’s reporting unit, the fair value of the reporting unit is estimated based upon estimated future cash flows of the reporting unit. The goodwill relates entirely to Colombia. The Company performed step 1 of the goodwill impairment test for the year-ended December 31, 2020 which resulted in a full write-down of goodwill. Leases At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At inception of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Company has applied judgment to determine the lease term for contracts which include renewal or termination options. The assessment of whether the Company is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognized. All leases identified as part of the transition on January 1, 2019 relate to office leases. The transition resulted in the recognition of a right-of-use asset presented in other capital assets of $3.8 million at January 1, 2019, the recognition of lease liabilities of $4.2 million and a $0.4 million impact on retained earnings. When measuring the lease liabilities, the Company's incremental borrowing rate was used. At January 1, 2019 the rates applied ranged between 5.6% and 9.1%. Revenue from Contracts with Customers The Company's revenue relates to oil sales in Colombia. The Company recognizes revenue when it transfers control of the product to a customer. This generally occurs at the time the customer obtains legal title to the product and when it is physically transferred to the delivery point agreed with the customer. Payment terms are generally within three business days following delivery of an invoice to the customer. Revenue is recognized based on the consideration specified in contracts with customers. Revenue represents the Company's share and is recorded net of royalty payments to governments and other mineral interest owners. The Company evaluates its arrangement with third parties and partners to determine if the Company acts as a principal or an agent. In making this evaluation, management considers if the Company obtains control of the product delivered, which is indicated by the Company having the primary responsibility for the delivery of the product, having ability to establish prices or having inventory risk. If the Company acts in the capacity of an agent rather than as a principal in transaction, then the revenue is recognized on a net-basis, only reflecting the fee realized by the Company from the transaction. Tariffs, tolls and fees charged to other entities for use of pipelines owned by the Company are evaluated by management to determine if these originate from contracts with customers or from incidental arrangements. When determining if the Company acted as a principal or as an agent in transactions, management determines if the Company obtains control of the product. As part of this assessment, management considers criteria for revenue recognition set out in ASC 606. Stock-based Compensation The Company records stock-based compensation expense in its consolidated financial statements measured at the fair value of the awards that are ultimately expected to vest. Fair values are determined using pricing models such as the Black-Scholes-Merton or Monte Carlo simulation stock option-pricing models and/or observable share prices. For equity-settled stock-based compensation awards, fair values are determined at the grant date and the expense, net of estimated forfeitures, is recognized using the accelerated method over the requisite service period. An adjustment is made to compensation expense for any difference between the estimated forfeitures and the actual forfeitures. For cash-settled stock-based compensation awards, fair values are determined at each reporting date and periodic changes are recognized as compensation costs, with a corresponding change to liabilities. The Company uses historical data to estimate the expected term used in the Black-Scholes option pricing model, option exercises and employee departure behavior. Expected volatilities used in the fair value estimate are based on the historical volatility of the Company’s shares. The risk-free rate for periods within the expected term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant. Stock-based compensation expense is capitalized as part of oil and natural gas properties or expensed as part of general and administrative (“G&A”) or operating expenses, as appropriate. Foreign Currency Translation The functional currency of the Company, including its subsidiaries, is the United States dollar. Monetary items are translated into the reporting currency at the exchange rate in effect at the balance sheet date and non-monetary items are translated at historical exchange rates. Revenue and expense items are translated in a manner that produces substantially the same reporting currency amounts that would have resulted had the underlying transactions been translated on the dates they occurred. DD&A expense on assets is translated at the historical exchange rates similar to the assets to which they relate. Gains and losses resulting from foreign currency transactions, which are transactions denominated in a currency other than the entity’s functional currency, are recognized in net income or loss. Earnings (Loss) per Share Basic earnings (loss) per share is calculated by dividing net income or loss 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 or loss 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. Recently Adopted Accounting Pronouncements Financial Instruments - Credit Losses (ASC 326) In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses". This ASU replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires a broader range of reasonable and supportable information to support credit loss estimates. In December 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Losses, Derivatives and Hedging and Leases", which is codification improvement of ASU 2016-13. The Company adopted this ASU on January 1, 2020, the adoption of which had no material impact on the Company's consolidated balance sheet, results of operations or cash flows. Risks and Measurement Uncertainty In March 2020, the outbreak of the COVID-19 virus, which was declared a pandemic by the World Health Organization, has spread across the globe and impacted worldwide economic activity. In addition, global commodity prices declined significantly due to disputes between major oil producing countries combined with the impact of the COVID-19 pandemic and associated reductions in global demand for oil. Governments worldwide, including those in Colombia and Ecuador, the countries where the Company operates, enacted emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and physical distancing, caused material disruption to businesses globally resulting in an economic slowdown. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions; however, the success of these interventions is not currently determinable. The current challenging economic climate is having and may continue to have significant adverse impacts on the Company including, but not exclusively: • material declines in revenue and cash flows as a result of the decline in commodity prices; • declines in revenue and operating activities due to reduced capital programs and the shut-in of production; • impairment charges (see Note 6); • inability to comply with covenants and restrictions in debt agreements; • inability to access financing sources; • increased risk of non-performance by the Company’s customers and suppliers; • interruptions in operations as the Company adjusts personnel to the dynamic environment; and • inability to operate or delay in operations as a result COVID-19 restrictions in the countries in which the Company operates. The unprecedented decline in oil prices has materially reduced the Company’s forecasted EBITDAX and the estimated value of its oil reserves. Based on current forecasted Brent pricing and production levels, which can change materially in very short time frames, the Company is forecasted to be in compliance with the amended financial covenants contained in the Company's Senior Secured Credit Facility (the "revolving credit facility") for at least the next year from the date of these financial statements. The amount available under the Company’s senior secured credit facility is based on the lenders determination of the borrowing base. The borrowing base is determined, by the lenders, based on the Company’s reserves and commodity prices. The next renewal of the borrowing base is scheduled for May 2021 and there is risk that the borrowing base may be reduced by the lenders. In addition, the Company’s ability to borrow under the credit facility may be limited by the terms of the indentures for the 6.25% Senior Notes and 7.75% Senior Notes. The risk of non-compliance with the covenants in the lending agreements and the risk associated with maintaining the borrowing base is heightened in the current period of volatility coupled with the unprecedented disruption caused by the COVID-19 pandemic. Management currently expects that the Company will continue to meet the terms of the credit facility or obtain further amendments or waivers if and when required. The Company also expects to be able to maintain the borrowing base at a level in excess of the amount borrowed. However, there can be no assurances that the Company’s liquidity can be maintained at or above current levels during this period of volatility and global economic uncertainty. The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on the Company is not known at this time. Estimates and judgments made by management in the preparation of the financial statements are increasingly difficult and subject to a higher degree of measurement uncertainty during this volatile period. In the near term, matters in these financial statements that are most subject to be impacted by this volatile period are the Company's assessment of liquidity and access to capital, the carrying value of long-lived assets and the valuation of the deferred tax assets. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable As at December 31, (Thousands of U.S. Dollars) 2020 2019 Trade $ 3,799 $ 24,890 Other 4,245 11,401 Total Accounts Receivable $ 8,044 $ 36,291 |
Taxes Receivable
Taxes Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Tax Receivable Agreement [Abstract] | |
Taxes Receivable | Taxes Receivable The table below shows the break-down of taxes receivable which are comprised of value added tax ("VAT") and income tax receivables. Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Current VAT Receivable $ 35,977 $ 92,777 Income Tax Receivable 13,985 43,061 $ 49,962 $ 135,838 Long-Term VAT Receivable $ 28,485 $ 25,869 Income Tax Receivable 14,150 — $ 42,635 $ 25,869 Total Taxes Receivable $ 92,597 $ 161,707 The following table shows the movement of VAT and income tax receivables for the past two years: (Thousands of U.S. Dollars) VAT Receivable Income Tax Receivable Total Taxes Receivable Balance, December 31, 2018 $ 72,497 $ 1,613 $ 74,110 Collected through sales contracts (18,197) — (18,197) Taxes paid 65,114 58,494 123,608 Current tax expense — (17,058) (17,058) Foreign exchange loss (768) 12 (756) Balance, December 31, 2019 $ 118,646 $ 43,061 $ 161,707 Collected through direct government refunds (40,884) (26,471) (67,355) Collected through sales contracts (46,326) — (46,326) Taxes paid 43,719 14,648 58,367 Current tax expense — (754) (754) Foreign exchange loss (10,693) (2,349) (13,042) Balance, December 31, 2020 $ 64,462 $ 28,135 $ 92,597 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment As at December 31, (Thousands of U.S. Dollars) 2020 2019 Oil and natural gas properties Proved $ 4,106,768 $ 3,850,565 Unproved 161,763 310,809 4,268,531 4,161,374 Other (1) 32,135 30,255 4,300,666 4,191,629 Accumulated depletion, depreciation and impairment (3,336,184) (2,614,236) $ 964,482 $ 1,577,393 (1) The "other" category includes $11.4 million right-of-use assets for operating and finance leases which had a net book value of $4.4 million as at December 31, 2020 (December 31, 2019 - $9.7 million which had a net book value of $5.7 million). Depletion and depreciation expense on property, plant and equipment for the year ended December 31, 2020, was $160.8 million (2019 - $220.8 million). A portion of depletion and depreciation expense was recorded as oil inventory in each year. 2019 Acquisitions On February 20, 2019, the Company acquired 36.2% working interest ("WI") in the Suroriente Block and a 100% WI of the Llanos-5 Block for cash consideration of $79.1 million and a promissory note of $1.5 million included in current accounts payable on the Company's consolidated balance sheet. The cost of the assets was allocated to proved properties using relative fair values. (Thousands of U.S. Dollars) 2019 Cost of Asset Acquisition: Cash $ 79,100 Promissory note 1,500 $ 80,600 Allocation of Consideration Paid: Oil and gas properties Proved $ 52,530 Unproved 44,768 97,298 Net working capital (including cash acquired of $5.3 million) (16,698) $ 80,600 Unproved Oil and Natural Gas Properties At December 31, 2020, unproved oil and natural gas properties consist of exploration lands held in Colombia and Ecuador. Unproved oil and natural gas properties are being held for their exploration value and are not being depleted pending determination of the existence of proved reserves. Gran Tierra will continue to assess the unproved properties over the next several years as proved reserves are established and as exploration warrants whether or not future areas will be developed. The Company expects that approximately 100% of costs not subject to depletion at December 31, 2020, will be transferred to the depletable base within the next five years. The following is a summary of Gran Tierra’s oil and natural gas properties not subject to depletion as at December 31, 2020: Costs Incurred in (Thousands of U.S. Dollars) 2020 2019 Prior to 2019 Total Acquisition costs - Colombia $ — $ 5,582 $ 32,558 $ 38,140 Exploration costs - Colombia 4,652 57,328 56,429 118,409 Exploration costs - Ecuador 2,006 3,208 — 5,214 $ 6,658 $ 66,118 $ 88,987 $ 161,763 |
Impairment
Impairment | 12 Months Ended |
Dec. 31, 2020 | |
Impairment Disclosure [Abstract] | |
Impairment | Impairment Asset Impairment Asset impairment for the years ended December 31, 2020 and 2019, was as follows: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Impairment of oil and gas properties $ 560,344 $ — Impairment of inventory 4,151 — $ 564,495 $ — (i) Oil and gas property impairment For the year ended December 31, 2020, Gran Tierra recorded ceiling test impairment losses of $560.3 million as a result of lower oil prices. The Company follows the full cost method of accounting for its oil and gas properties. Under this method, the net book value of properties on a country-by-country basis, less related deferred income taxes, may not exceed a calculated “ceiling”. The ceiling is the estimated after-tax future net revenues from proved oil and gas properties, discounted at 10% per year. In calculating discounted future net revenues, oil and natural gas prices are determined using the average price for the 12-month period prior to the ending date of the period covered by the balance sheet, calculated as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period. That average price is then held constant, except for changes which are fixed and determinable by existing contracts. Therefore, ceiling test estimates are based on historical prices discounted at 10% per year and it should not be assumed that estimates of future net revenues represent the fair market value of the Company's reserves. In accordance with GAAP, Gran Tierra used an average Brent price of $43.43 per bbl for the purposes of the December 31, 2020 ceiling test calculations (December 31, 2019 - $64.20 per bbl). There was no ceiling test impairment for the year ended December 31, 2019. Gran Tierra's total proved oil and gas reserves decreased 4% from the prior year. (ii) Inventory impairment For the year ended December 31, 2020, the Company recorded $4.2 million, relating to the impairment of oil inventory due to the decline in commodity pricing. There was no inventory impairment for the year ended December 31, 2019. Goodwill Impairment For the year ended December 31, 2020, the Company recorded $102.6 million of goodwill impairment relating to its Colombia business unit. The impairment was due to the carrying value of the unit exceeding its fair value as a result of the impact of lower forecasted commodity prices. The estimated fair value of the Colombia business unit for the goodwill impairment test was based on the discounted after-tax cash flows associated with the proved and probable reserves of the reporting unit. There was no goodwill impairment for the year ended December 31, 2019. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Trade $ 70,450 $ 151,747 Royalties 1,570 5,758 Employee compensation 1,701 6,861 Other 27,063 31,147 $ 100,784 $ 195,513 |
Debt and Debt Issuance Costs
Debt and Debt Issuance Costs | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Debt Issuance Costs | Debt and Debt Issuance Costs The Company's debt at December 31, 2020 and 2019, was as follows: As at December 31, (Thousands of U.S. Dollars) 2020 2019 6.25% Senior Notes $ 300,000 $ 300,000 7.75% Senior Notes 300,000 300,000 Revolving credit facility 190,000 118,000 Unamortized debt issuance costs (18,124) (21,081) Long-term lease obligation (1) 2,894 3,540 Long-term debt $ 774,770 $ 700,459 (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 $3.3 million as at December 31, 2020 (December 31, 2019 - $3.3 million). Senior Notes At December 31, 2020, the Company had $300.0 million of 7.75% Senior Notes due 2027 (the “7.75% Senior Notes”) and $300.0 million of 6.25% Senior Notes due 2025 (the “6.25% Senior Notes” and, together with the 7.75% Senior Notes, the “Senior Notes”). The Senior Notes are fully and unconditionally guaranteed by the Company and certain subsidiaries of the Company that guarantee its revolving credit facility. The 7.75% Senior Notes bear interest at a rate of 7.75% per year, payable semi-annually in arrears on May 23 and November 23 of each year, beginning on November 23, 2019. The 7.75% Senior Notes will mature on May 23, 2027, unless earlier redeemed or repurchased. Before May 23, 2023, the Company may, at its option, redeem all or a portion of the 7.75% Senior Notes at 100% of the principal amount plus accrued and unpaid interest and a “make-whole” premium. Thereafter, the Company may redeem all or a portion of the 7.75% Senior Notes plus accrued and unpaid interest applicable to the date of the redemption at the following redemption prices: 2023 - 103.875%; 2024 - 101.938%; 2025 and thereafter - 100%. The 6.25% Senior Notes bear interest at a rate of 6.25% per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2018. The 6.25% Senior Notes will mature on February 15, 2025, unless earlier redeemed or repurchased. Before February 15, 2022, the Company may, at its option, redeem all or a portion of the 6.25% Senior Notes at 100% of the principal amount plus accrued and unpaid interest and a make-whole premium. Thereafter, the Company may redeem all or a portion of the 6.25% Senior Notes plus accrued and unpaid interest applicable to the date of the redemption at the following redemption prices: 2022 - 103.125%; 2023 - 101.563%; 2024 and thereafter - 100%. Credit Facility At December 31, 2020, the Company had a revolving credit facility with a syndicate of lenders with a borrowing base of $215.0 million. Availability under the revolving credit facility is determined by the reserves-based borrowing base determined by the lenders. During the year, as part of semi-annual redeterminations, the borrowing base was reduced from $300.0 million to $225.0 million on June 1, 2020 and was further reduced to $215.0 million on December 7, 2020. The credit facility matures on November 10, 2022. The next re-determination of the borrowing base is due to occur no later than May 2021. Management has also obtained a relief from compliance with certain financial covenants until October 1, 2021 (the "covenant relief period"), permitting the ratio of total debt to Covenant EBITDAX ("EBITDAX") to be greater than 4.0 to 1.0, Senior Secured Debt to EBITDAX ratio must not exceed 2.5 to 1.0, and EBITDAX to interest expense ratio for the trailing four quarter periods measured as of the last day of the fiscal quarters ending (i) December 31, 2020 and March 31, 2021, must be at least 1.5 to 1.0 (ii) June 30, 2021 and September 30, 2021 must be at least 2.0 to 1.0, and be at least 2.5 to 1.0 thereafter. The Company is required to comply with various covenants, which as disclosed above, have been modified in response to the current market conditions and the COVID-19 pandemic. As of December 31, 2020, the Company was in compliance with all applicable covenants in the revolving credit facility. Availability for borrowing or issuance of letters of credit during covenant relief period and until June 29, 2021 was reduced by $15.0 million and starting from June 30, 2021 and until the end of covenant relief period by $20.0 million. After the expiration of covenant relief period, the Company must maintain compliance with the following financial covenants: limitations on Company's ratio of debt to EBITDAX to a maximum of 4.0 to 1.0; limitations on Company's ratio of Senior Secured Debt to EBITDAX to a maximum of 3.0 to 1.0; and the maintenance of a ratio of EBITDAX to interest expense of at least 2.5 to 1.0. If the Company fails to comply with these financial covenants, and relief from compliance with the covenants was not obtained, it would result in a default under the terms of the credit agreement, which could result in an acceleration of repayment of all indebtedness under the Company's revolving credit facility. Amounts drawn down under the revolving credit facility bear interest, at the Company's option, at the USD LIBOR rate plus a margin ranging from 2.90% to 4.90% (December 31, 2019 - 1.65% to 3.65%), or an alternate base rate plus a margin ranging from 1.90% to 3.90% (December 31, 2019 - 0.65% to 2.65%), in each case based on the borrowing base utilization percentage. The alternate base rate is currently the U.S. prime rate. Undrawn amounts under the revolving credit facility bear interest from 0.73% to 1.23% (December 31, 2019 - 0.41% to 0.91%) per annum, based on the average daily amount of unused commitments. The Company’s revolving credit facility is guaranteed by and secured against the assets of certain of the Company’s subsidiaries (the "Credit Facility Group"). Under the terms of the credit facility, the Company is subject to certain restrictions on its ability to distribute funds to entities outside of the Credit Facility Group, including restrictions on the ability to pay dividends to shareholders of the Company. Interest Expense The following table presents total interest expense recognized in the accompanying consolidated statements of operations: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Contractual interest and other financing expenses $ 50,515 $ 39,892 Amortization of debt issuance costs 3,625 3,376 $ 54,140 $ 43,268 |
Share Capital
Share Capital | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Share Capital | Share Capital Shares of Common Stock Balance, December 31, 2018 387,079,027 Shares repurchased and canceled (20,097,471) Balance, December 31, 2019 and 2020 366,981,556 The Company’s authorized share capital consists of 595,000,000 shares of capital stock, of which 570,000,000 was designated as Common Stock, par value $0.001 per share and 25,000,000 as Preferred Stock, par value $0.001 per share. Equity Compensation Awards The Company has an equity compensation program in place for its executives, employees and directors. Executives and employees are given equity compensation grants that vest based on a recipient's continued employment and in the case of Performance Share Units (“PSUs”), the number of units that vest is dependent upon the achievement of certain key performance measures. Equity settled awards consist 80% of PSUs and 20% of stock options. The Company’s stock-based compensation awards outstanding as at December 31, 2020, include PSUs, deferred share units (“DSUs”), and stock options. In accordance with the 2007 Equity Incentive Plan, as amended, the Company’s Board of Directors is authorized to issue options or other rights to acquire shares of the Company’s Common Stock. On June 27, 2012, the shareholders of Gran Tierra approved an amendment to the Company’s 2007 Equity Incentive Plan, which increased the Common Stock available for issuance thereunder from 23,306,100 shares to 39,806,100 shares. The following table provides information about PSU, DSU and stock option activity for the year ended December 31, 2020: PSUs DSUs Stock Options Number of Outstanding Share Units Number of Outstanding Share Units Number of Outstanding Stock Options Weighted Average Exercise Price /Stock Option ($) Balance, December 31, 2019 11,371,367 1,251,994 10,612,872 $ 2.78 Granted 15,897,575 2,815,903 8,893,140 0.70 Exercised (2,366,351) — — — Forfeited (1,629,187) — (1,038,093) 2.04 Expired — — (3,022,970) 3.42 Balance, December 31, 2020 23,273,404 4,067,897 15,444,949 $ 1.50 Vested and exercisable, at December 31, 2020 5,443,796 $ 2.39 Vested, or expected to vest, at December 31, 2020 through the life of the options 14,938,829 $ 1.53 Stock-based compensation expense for the year ended December 31, 2020, was $1.2 million (2019 - $1.4 million) and was primarily recorded in G&A expenses. At December 31, 2020, there was $5.9 million (December 31, 2019 - $6.7 million) of unrecognized compensation cost related to unvested PSUs and stock options which is expected to be recognized over a weighted average period of 1.7 years. The weighted-average remaining contractual term of options vested, or expected to vest, at December 31, 2020 was 3.2 years. PSUs PSUs entitle the holder to receive, at the option of the Company, either the underlying number of shares of the Company's Common Stock upon vesting of such units or a cash payment equal to the value of the underlying shares. PSUs will cliff vest after three years, subject to the continued employment of the grantee. Upon vesting, the underlying number of Common Shares or the cash payment equivalent to their value may range from nil to 200% of the number of PSU's vested, based on the Company’s performance with respect to the applicable performance targets. As at December 31, 2020, 2.7 million (December 31, 2019 - 2.4 million) of PSU's had vested and will be settled in cash. The performance targets for the PSUs outstanding as at December 31, 2020, were as follows: (i) 50% of the award is subject to targets relating to the total shareholder return (“TSR”) of the Company against a group of peer companies; (ii) 25% of the award is subject to targets relating to net asset value ("NAV") of the Company per share and NAV is based on before tax net present value discounted at 10% of proved plus probable reserves; and (iii) 25% of the award is subject to targets relating to the execution of corporate strategy. The compensation cost of PSUs is subject to adjustment based upon the attainability of these performance targets. No settlement will occur with respect to the portion of the PSU award subject to each performance target for results below the applicable minimum threshold for that target. PSUs in excess of the target number granted will vest and be settled if performance exceeds the targeted performance goals. The Company currently intends to settle the PSUs in cash. DSUs DSUs entitle the holder to receive, either the underlying number of shares of the Company's Common Stock upon vesting of such units or, at the option of the Company, a cash payment equal to the value of the underlying shares. Once a DSU is vested, it is immediately settled. During the year ended December 31, 2020, DSUs were granted to directors and will vest 100% at such time the grantee ceases to be a member of the Board of Directors. The Company currently intends to settle the DSUs in cash. Stock Options Each stock option permits the holder to purchase one share of Common Stock at the stated exercise price. The exercise price equals the market price of a share of Common Stock at the time of grant. Stock options generally vest over three years. The term of stock options granted starting in May of 2013 is five years or three months after the grantee’s end of service to the Company, whichever occurs first. For the years ended December 31, 2020 and 2019 , no stock options were exercised and no cash proceeds were received. At December 31, 2020, the weighted average remaining contractual term of outstanding stock options was 3.2 years, (exercisable stock options - 1.9 years). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model based on assumptions noted in the following table: Year Ended December 31, 2020 2019 Dividend yield (per share) Nil Nil Volatility 50% to 69% 48% to 54% Weighted average volatility 52 % 51 % Risk-free interest rate 0.3% to 1.7% 1.5% to 2.5% Expected term 5 years 4-5 years The weighted average grant date fair value for options granted in the year ended December 31, 2020 was $0.29 (2019 - $0.89; 2018 - $1.15). The weighted average grant date fair value for options vested in the year ended December 31, 2020 was $0.79 (2019 - $1.10). The total fair value of stock options vested during year ended December 31, 2020 was $1.9 million (2019 - $1.9 million). Weighted Average Shares Outstanding Year Ended December 31, 2020 2019 Weighted average number of common and exchangeable shares outstanding 366,981,556 376,495,306 Shares issuable pursuant to stock options — 87,204 Shares assumed to be purchased from proceeds of stock options — (74,698) Weighted average number of diluted common and exchange shares outstanding 366,981,556 376,507,812 For the year ended December 31, 2020, all options, on a weighted average basis, (2019 - 9,465,737 options) were excluded from the diluted (loss) earnings per share calculation as the options were anti-dilutive. |
Asset Retirement Obligation
Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation | Asset Retirement Obligation Changes in the carrying amounts of the asset retirement obligation associated with the Company’s oil and natural gas properties were as follows: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Balance, beginning of year $ 43,419 $ 43,799 Liability incurred 909 7,034 Settlements (201) (846) Accretion 3,464 3,436 Revisions in estimated liability 623 (10,004) Balance, end of year $ 48,214 $ 43,419 Revisions in estimated liabilities relate primarily to changes in estimates of asset retirement costs and include, but are not limited to, revisions of estimated inflation rates, changes in property lives and the expected timing of settling asset retirement obligations. At December 31, 2020, the fair value of assets that were legally restricted for purposes of settling asset retirement obligations was $3.8 million (December 31, 2019 - $2.8 million). These assets were accounted for as restricted cash and cash equivalents on the Company's balance sheet (Note 16). |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Most of the Company's revenue is generated from oil sales at prices which reflect the blended prices received upon shipment by the purchaser at defined sales points or are defined by contract relative to ICE Brent and adjusted for Vasconia or Castilla crude differentials, and quality and transportation discounts each month. For the year ended December 31, 2020, 100% (2019 - 100%) of the Company's revenue resulted from oil sales and quality and transportation discounts were 25% (2019 - 16%) of the ICE Brent price. During the year ended December 31, 2020, the Company's production was sold primarily to three major customers in Colombia (2019 - three) of which equaled 41%, 31% and 25% of total sales volumes respectively. As at December 31, 2020, accounts receivable included $0.1 million of accrued sales revenue related to December 2020 production (as at December 31, 2019, $0.1 million related to December 2019 production). |
COVID-19 Related Costs
COVID-19 Related Costs | 12 Months Ended |
Dec. 31, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
COVID-19 Related Costs | COVID-19 Related Costs The COVID-19 pandemic resulted in extra operating and transportation costs related to COVID-19 health and safety preventative measures including incremental sanitation requirements and enhanced procedures for trucking barrels and crew changes in the field. Below is a break-down of the costs: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Operating expenses $ 2,482 $ — Transportation costs 197 — COVID-19 costs $ 2,679 $ — |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Taxes | Taxes The income tax expense and recovery reported differs from the amount computed by applying the statutory rate to income (loss) before income taxes for the following reasons: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Income (loss) before income taxes United States $ (19,065) $ (27,984) Foreign (834,296) 123,959 (853,361) 95,975 Statutory rate (1) 32 % 33 % Income tax (recovery) expense expected (273,076) 31,672 Impact of foreign taxes 26,668 9,387 Foreign currency translation 48,734 11,527 Goodwill Impairment 32,826 — Stock-based compensation 666 430 Change in valuation allowance 75,241 3,429 Non-deductible third party royalty in Colombia 697 2,240 Other permanent differences 5,349 6,082 Non-deductible investment loss (gain) (PetroTal) 7,501 (7,482) Total income tax (recovery) expense $ (75,394) $ 57,285 Effective tax rate 9 % 60 % Current income tax expense Foreign 754 17,058 754 17,058 Deferred income tax expense (recovery) Foreign (76,148) 40,227 Total income tax (recovery) expense $ (75,394) $ 57,285 (1) The tax rate is the statutory rate in Colombia. In general, it is the Company's practice and intention to reinvest the earnings of our non-U.S. subsidiaries in such subsidiaries' operations. As of December 31, 2020, the Company has not made a provision for U.S. or additional foreign withholding taxes on the investments in foreign subsidiaries that are indefinitely reinvested. Generally, such amounts become subject to taxation upon the remittance of dividends and under certain other circumstances. In the fourth quarter of 2019, the Colombia government enacted a new tax reform to replace the 2018 tax reform, which was overturned by the Colombian Constitutional Court. This new tax reform maintains the same corporate tax rates that were approved by Congress in 2018. The enacted corporate tax rates are 32% for 2020, 31% for 2021 and 30% for 2022 and onwards. The tax rates applied to the calculation of deferred income taxes, before valuation allowances, have been adjusted to reflect these changes. As at December 31, (Thousands of U.S. Dollars) 2020 2019 Deferred tax assets Tax benefit of operating loss carryforwards $ 100,616 $ 73,096 Tax basis in excess of book basis 37,698 544 Foreign tax credits and other accruals 86,664 76,720 Tax benefit of capital loss carryforwards 27,661 22,710 Deferred tax assets before valuation allowance 252,639 173,070 Valuation allowance (195,321) (129,067) Deferred tax assets - long-term 57,318 44,003 Deferred tax liabilities — 59,762 Net deferred tax assets (liabilities) $ 57,318 $ (15,759) At December 31, 2020, the Company has not recognized the benefit of unused non-capital loss carryforwards of $46.0 million (2019 - $50.5 million) for federal purposes in the United States, which expire from 2029 to 2040. At December 31, 2020, the Company has not recognized the benefit of unused non-capital loss carryforwards of $33.1 million (2019 - $31.5 million) for federal and provincial purposes in Canada, which expire from 2029 to 2039. The Company has not recognized the benefit of capital loss carry forwards of $240.5 million (2019 - $197.5 million) for federal and provincial purposes in Canada which can be carried forward indefinitely. At December 31, 2020, the Company has recognized the benefit of unused non-capital loss carryforwards of $115.6 million (2019 - $140.5 million), out of a total of $252.0 million and tax credits of $1.0 million (2019 - $1.5 million), out of a total of $3.9 million, for federal purposes in Colombia. As a result of the 2016 Colombian Tax Reform, Colombian losses can be carryforward for a period of 12 years, and not indefinitely as under the previous tax regime. There is a grandfathering rule for losses incurred prior to 2017, which may continue to be carried forward indefinitely. Colombian losses of $33.7 million can be carried forward indefinitely and $218.3 million are entitled to a carryforward period of 12 years. As at December 31, 2020 and 2019, Gran Tierra had no unrecognized tax benefits and related interest and penalties included in its deferred and current tax liabilities in the consolidated balance sheet. The Company does not anticipate any material changes with respect to unrecognized tax benefit within the next twelve months. The Company had no other significant interest or penalties related to taxes included in the consolidated statement of operations for the quarter ended December 31, 2020. The Company and its subsidiaries file income tax returns in the U.S. and certain other foreign jurisdictions. The Company is subject to income tax examinations for the tax years ended 2012 through 2020 in certain jurisdictions. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Obligations, Firm Agreements and Leases As at December 31, 2020, future minimum payments under non-cancelable agreements with remaining terms in excess of one year were as follows: Year ending December 31 (Thousands of U.S. Dollars) Total 2021 2022 2023 2024 2025 Thereafter Operating leases (1) 4,910 2,330 2,077 503 — — — Finance leases (1) 4,725 3,197 1,444 57 27 — — Software and Telecommunication 900 300 300 300 — — — $ 10,535 $ 5,827 $ 3,821 $ 860 $ 27 $ — $ — (1) Including maintenance and operating costs. Gran Tierra has operating leases for office spaces and finance leases for water flood facilities and storage tanks and commitments relating to compressors, vehicles, equipment and housing. Indemnities Corporate indemnities have been provided by the Company to directors and officers for various items including, but not limited to, all costs to settle suits or actions due to their association with the Company and its subsidiaries and/or affiliates, subject to certain restrictions. The Company has purchased directors’ and officers’ liability insurance to mitigate the cost of any potential future suits or actions. The maximum amount of any potential future payment cannot be reasonably estimated. The Company may provide indemnifications in the normal course of business that are often standard contractual terms to counterparties in certain transactions such as purchase and sale agreements. The terms of these indemnifications will vary based upon the contract, the nature of which prevents the Company from making a reasonable estimate of the maximum potential amounts that may be required to be paid. Letters of Credit At December 31, 2020, the Company had provided letters of credit and other credit support totaling $100.6 million (December 31, 2019 - $120.6 million) as security relating to work commitment guarantees contained in exploration contracts in Colombia and Ecuador and other capital or operating requirements. Contingencies Gran Tierra has a number of lawsuits and claims pending including a dispute with the ANH relating to the calculation of HPR royalties. Although the outcome of these other 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. |
Financial Instruments, Fair Val
Financial Instruments, Fair Value Measurement, Credit Risk and Foreign Exchange Risk | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments, Fair Value Measurement, Credit Risk and Foreign Exchange Risk | Financial Instruments, Fair Value Measurement, Credit Risk and Foreign Exchange Risk Financial Instruments At December 31, 2020, the Company’s financial instruments recognized in the balance sheet consist of cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, investment, derivatives, accounts payable and accrued liabilities, long-term debt, current and long-term equity compensation reward liability and other long-term liabilities. Fair Value Measurement The fair value of investment, derivatives and PSU liabilities is being remeasured at the estimated fair value at the end of each reporting period. The fair value of the Company's investment in PetroTal was estimated to be $48.3 million and $94.7 million as at December 31, 2020 and 2019, respectively, based on the closing stock price of PetroTal of $0.20 ($0.25 CAD) and $0.38 ($0.50 CAD) per share as at December 31, 2020 and 2019, respectively. The fair value of commodity price and foreign currency derivatives is estimated based on various factors, including quoted market prices in active markets and quotes from third parties. The Company also performs an internal valuation to ensure the reasonableness of third party quotes. In consideration of counterparty credit risk, the Company assessed the possibility of whether the counterparty to the derivative would default by failing to make any contractually required payments. Additionally, the Company considers that it is of substantial credit quality and has the financial resources and willingness to meet its potential repayment obligations associated with the derivative transactions. The fair value of the PSU liability was estimated based on option pricing model using the inputs, such as quoted market prices in an active market, and PSU performance factor. The fair value of investment, derivatives, PSU and DSU liabilities at December 31, 2020 and December 31, 2019 were as follows: As at December 31, (Thousands of U.S. Dollars) 2020 2019 Investment $ 48,323 $ 94,741 Derivative liability $ 12,050 $ 775 PSU and DSU liability 4,760 7,859 $ 16,810 $ 8,634 The following table presents gains or losses on financial instruments recognized in the accompanying consolidated statements of operations: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Commodity price derivative (gain) loss $ (220) $ 3,642 Foreign currency derivative loss 3,155 27 Investment loss (gain) 46,883 (49,884) Financial instruments loss 1,164 — $ 50,982 $ (46,215) These gains or losses are presented as financial instruments gains or losses in the consolidated statements of operations and cash flows. 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 consist of quoted prices (unadjusted) in active markets for identical assets and liabilities and have the highest priority. Level 2 and 3 inputs are based on significant other observable inputs and significant unobservable inputs, respectively, and have lower priorities. The Company uses appropriate valuation techniques based on the available inputs to measure the fair values of assets and liabilities. Financial instruments not recorded at fair value at December 31, 2020 include the Senior Notes and the Revolving Credit Facility (Note 8). At December 31, 2020, the carrying amounts of the 6.25% Senior Notes and 7.75% Senior Notes were $292.3 million and $290.9 million, respectively, which represents the aggregate principal amount less unamortized debt issuance costs, and the fair values were $205.5 million and $206.9 million. The fair value of the Revolving Credit Facility approximates its carrying value. The fair value of the Senior Notes is determined based on quoted market prices considered Level 1 inputs. The fair value of the Revolving Credit Facility is estimated based on the amount the Company would have to pay a third party to assume the debt, including the credit spread for the difference between the issue rate and the period end market rate. The credit spread is the Company's default or repayment risk. The credit spread (premium or discount) is determined by comparing the debt to new issuances (secured or unsecured) and secondary trades of similar size and credit statistics for both public and private debt. The fair value of the Revolving Credit Facility was estimated using level 2 inputs. The fair value of long-term restricted cash and cash equivalents and the revolving credit facility approximated their carrying value because interest rates are variable and reflective of market rates. The fair values of other financial instruments approximate their carrying amounts due to the short-term maturity of these instruments. At December 31, 2020, the fair value of the investment and DSU liability was determined using Level 1 inputs and the fair value of derivatives and PSUs was determined using Level 2 inputs. The Company’s non-recurring fair value measurements include asset retirement obligations. The fair value of an asset retirement obligation is measured by reference to the expected future cash outflows required to satisfy the retirement obligation discounted at the Company’s credit-adjusted risk-free interest rate. The significant level 3 inputs used to calculate such liabilities include estimates of costs to be incurred, the Company’s credit-adjusted risk-free interest rate, inflation rates and estimated dates of abandonment. Accretion expense is recognized over time as the discounted liabilities are accreted to their expected settlement value, while the asset retirement cost is amortized over the estimated productive life of the related assets. Commodity Price Risk The Company may at time utilize commodity price derivatives to manage the variability in cash flows associated with the forecasted sale of its oil production, reduce commodity price risk and provide a base level of cash flow in order to assure it can execute at least a portion of its capital spending. As at December 31, 2020, the Company had outstanding commodity price derivative positions as follows: Period and Type of Instrument Volume, Reference Sold Put ($/bbl, Weighted Average) Purchased Put ($/bbl, Weighted Average) Sold Call Premium Three-way Collars: January 1, to June 30, 2021 14,000 ICE Brent 36.43 45.14 51.45 0.21 Collars: January 1, to June 30, 2021 1,000 ICE Brent n/a 45.00 50.40 n/a Swaptions: July 1, to December 31, 2021 3,000 ICE Brent n/a n/a 56.75 n/a Subsequent to year end, the Company entered into the following commodity price derivative positions: Period and Type of Instrument Volume, Reference Sold Put ($/bbl, Weighted Average) Purchased Put ($/bbl, Weighted Average) Sold Call Premium Three-way Collars: July 1, to December 31, 2021 4,000 ICE Brent 45.00 55.00 68.00 n/a Foreign Exchange Risk The Company is exposed to foreign exchange risk in relation to its Colombian operations predominantly in operating costs, general and administrative costs and transportation costs. To mitigate exposure to fluctuations in foreign exchange, the Company may enter into foreign exchange derivatives. As at December 31, 2020 the Company had no outstanding foreign currency derivative positions. Subsequent to year end, the Company entered into the following foreign currency derivative positions: Period and Type of Instrument Amount Hedged U.S. Dollar Equivalent of Amount Hedged (Thousands of U.S. Dollars) (1) Reference Floor Price Cap Price (COP, Weighted Average) Collars: March 1, to December 31, 2021 10,000 3,051 COP 3,500 3,630 (1) At December 31, 2020 foreign exchange rate. Unrealized foreign exchange gains and losses primarily result from fluctuation of the U.S. dollar to the Colombian peso and Canadian dollar due to Gran Tierra’s current and deferred tax assets, taxes receivable and investment, which are monetary assets and liabilities mainly denominated in the local currencies. As a result, foreign exchange gains and losses must be calculated on conversion to the U.S. dollar functional currency. A strengthening in one Colombian peso against the U.S. dollar results in foreign exchange gain of approximately $12,000 on deferred tax asset balance and a foreign exchange gain of approximately $26,000 on taxes receivable. The strengthening of one Canadian cent against the U.S. dollar results in foreign exchange gain of $0.4 million on investment balance. This effect was calculated based on the Company's December 31, 2020, deferred tax asset and investment balances. For the years ended December 31, 2020 and 2019, respectively, 100% of the Company's oil sales were generated in Colombia. In Colombia, the Company receives 100% of its revenues in U.S. dollars and the majority of its capital expenditures are in U.S. dollars or are based on U.S. dollar prices. Credit Risk Credit risk arises from the potential that the Company may incur a loss if counterparty to a financial instrument fails to meet its obligation in accordance with agreed terms. The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash and accounts receivable. The carrying value of cash and cash equivalents, restricted cash and accounts receivable reflects management’s assessment of credit risk. At December 31, 2020, cash and cash equivalents and restricted cash included balances in bank accounts, term deposits and certificates of deposit, placed with financial institutions with investment grade credit ratings. Most of the Company’s accounts receivable relate to sales to customers in the oil and natural gas industry and are exposed to typical industry credit risks. The concentration of revenues in a single industry affects the Company’s overall exposure to credit risk because customers may be similarly affected by changes in economic and other conditions. The Company manages this credit risk by entering into sales contracts with only credit worthy entities and reviewing its exposure to individual entities on a regular basis and obtaining letters of credits from customers which amounted to $8.9 million as of December 31, 2020. For the years ended December 31, 2020 and 2019, respectively, the Company had three customers which were over 10% of sales. To reduce the concentration of exposure to any individual counterparty, the Company utilizes a group of investment-grade rated financial institutions for its derivative transactions. The Company monitors counterparty creditworthiness on an ongoing basis; however, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, the Company may not realize the benefit of some of its derivative instruments. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents with the Company's consolidated balance sheet that sum to the total of the same such amounts shown in the consolidated statements of cash flows: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Cash and cash equivalents $ 13,687 $ 8,301 Restricted cash and cash equivalents - current 427 516 Restricted cash and cash equivalents - long-term (1) 3,409 2,258 $ 17,523 $ 11,075 (1) The long-term portion of restricted cash is included in other long-term assets on the Company's balance sheet. Net changes in assets and liabilities from operating activities were as follows: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Accounts receivable and other long-term assets $ 27,607 $ (5,680) Derivatives 2,302 (638) Inventory (2,628) (3,179) Other prepaids (279) 583 Accounts payable and accrued and other long-term liabilities (47,194) (1,367) Prepaid tax and taxes receivable and payable 56,254 (83,593) Net changes in assets and liabilities from operating activities $ 36,062 $ (93,874) The following table provides additional supplemental cash flow disclosures: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Cash paid for income taxes $ 15,476 $ 49,196 Cash paid for interest $ 50,209 $ 37,767 Non-cash investing activities Net liabilities related to property, plant and equipment, end of year $ 28,711 $ 77,353 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsSubsequent to December 31, 2020, the Company sold 44% percent (109,006,250 common shares) of its interest in PetroTal for cash proceeds of $14.9 million resulting in a loss on sale of $5.1 million. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of consolidation | Basis of ConsolidationThese consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All intercompany accounts and transactions have been eliminated. |
Use of estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include: oil and natural gas reserves and related present value of future cash flows; depreciation, depletion, amortization (“DD&A”) and impairment; impairment assessments of goodwill; timing of transfers from oil and gas properties not subject to depletion to the depletable base; asset retirement obligations; determining the value of the consideration transferred and the net identifiable assets acquired and liabilities assumed in connection with business combinations and determining goodwill; assessments of the likely outcome of legal and other contingencies; income taxes; stock-based compensation; and determining the fair value of derivatives. Although management believes these estimates are reasonable, changes in facts and circumstances or discovery of new information may result in revised estimates and actual results may differ from these estimates. |
Cash and cash equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Restricted cash and cash equivalents | Restricted Cash and Cash Equivalents Restricted cash and cash equivalents comprises cash and cash equivalents pledged to secure letters of credit and to settle asset retirement obligations. Letters of credit currently secured by cash relate to work commitment guarantees contained in exploration contracts. Restrictions will lapse when work obligations are satisfied pursuant to the exploration contract or an asset retirement obligation is settled. Cash and claims to cash that are restricted as to withdrawal or use for other than current operations or are designated for expenditure in the acquisition or construction of long-term assets are excluded from the current asset classification. The long-term portion of restricted cash and cash equivalents is included in other long-term assets on the Company's balance sheet. |
Allowance for doubtful accounts | Allowance for Doubtful Accounts At each reporting date, the Company assesses the expected lifetime credit losses on initial recognition of trade accounts receivable. Credit risk is assessed based on the number of days the receivable has been outstanding and the internal credit assessment of the customer. The expected loss rates are based on payment profiles over a period of 36 months prior to the period-end and the corresponding historical credit losses experienced within this period. Historical loss rates are adjusted to |
Investment in PetroTal Corp | Investment in PetroTal Corp. During December 2017, the Company acquired an investment in common shares of PetroTal Corp. ("PetroTal") in connection with the sale of its Peru business unit. At December 31, 2020, this investment represented approximately 30% of PetroTal's issued and outstanding common shares. The Company determined that it did not have a controlling financial interest in PetroTal, but could exert significant influence over PetroTal's operating and financial policies as a result of its ownership interest in PetroTal and the right to nominate two directors to PetroTal's board of directors. Accordingly, Gran Tierra accounted for its investment in the common shares of PetroTal as an equity method investment, but elected the fair value option for this investment to reflect the value that market participants would use to value the investment. The fair value of the investment in PetroTal's common shares is recorded as "Investment" on the Company's consolidated balance sheet, and the change in fair value is recorded in the consolidated statements of operations as financial instruments gains or losses. As at December 31, 2020, we held 246,100,000 common shares of PetroTal and subsequent to December 31, 2020 we disposed of 109,006,250 common shares resulting in 137,093,750 common shares held (17% of all total outstanding shares). |
Derivatives | Derivatives The Company records derivative instruments on its balance sheet at fair value as either an asset or liability with changes in fair value recognized in the consolidated statements of operations as financial instruments gains or losses. While the Company utilizes derivative instruments to manage the price risk attributable to its expected oil production and foreign exchange risk, it has elected not to designate its derivative instruments as accounting hedges under the accounting guidance. |
Inventory | Inventory Inventory consists of oil in tanks and third party pipelines and supplies and is valued at the lower of cost and net realizable value. The cost of inventory is determined using the weighted average method. Oil inventories include expenditures incurred to produce, upgrade and transport the product to the storage facilities and include operating, depletion and depreciation expenses and cash royalties. |
Income taxes | Income Taxes Income taxes are recognized using the liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax base, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. Valuation allowances are provided if, after considering available evidence, it is not more likely than not that some or all of the deferred tax assets will be realized. The tax benefit from an uncertain tax position is recognized when it is more likely than not, based on the technical merits of the position, that the position will be sustained on examination by the taxing authorities. Additionally, the amount of the tax benefit recognized is the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. The Company recognizes potential penalties and interest related to unrecognized tax benefits as a component of income tax expense. |
Oil and gas properties | Oil and Gas Properties The Company uses the full cost method of accounting for its investment in oil and natural gas properties as defined by the Securities and Exchange Commission (“SEC”). Under this method, the Company capitalizes all acquisition, exploration and development costs incurred for the purpose of finding oil and natural gas reserves, including salaries, benefits and other internal costs directly attributable to these activities. Costs associated with production and general corporate activities; however, are expensed as incurred. Separate cost centers are maintained for each country in which the Company incurs costs. The Company computes depletion of oil and natural gas properties on a quarterly basis using the unit-of-production method based upon production and estimates of proved reserve quantities. Future development costs related to properties with proved reserves are also included in the amortization base for computation of depletion. The costs of unproved properties are excluded from the amortization base until the properties are evaluated. The cost of exploratory dry wells is transferred to proved properties, and thus is subject to amortization, immediately upon determination that a well is dry in those countries where proved reserves exist. The Company performs a ceiling test calculation each quarter in accordance with SEC Regulation S-X Rule 4-10. In performing its quarterly ceiling test, the Company limits, on a country-by-country basis, the capitalized costs of proved oil and natural gas properties, net of accumulated depletion and deferred income taxes, to the estimated future net cash flows from proved oil and natural gas reserves discounted at 10%, net of related tax effects, plus the lower of cost or fair value of unproved properties included in the costs being amortized. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to net income or loss. Any such write-down will reduce earnings in the period of occurrence and results in a lower DD&A rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling. The Company calculates future net cash flows by applying the unweighted average of prices in effect on the first day of the month for the preceding 12-month period, adjusted for location and quality differentials. Such prices are utilized except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts. Unproved properties are not depleted pending the determination of the existence of proved reserves. Costs are transferred into the depletable base on an ongoing basis as the properties are evaluated and proved reserves are established or impairment is determined. Unproved properties are evaluated quarterly to ascertain whether impairment has occurred. This evaluation considers, among other factors, seismic data, requirements to relinquish acreage, drilling results and activity, remaining time in the commitment period, remaining capital plans, and political, economic, and market conditions. During any period in which factors indicate an impairment, the cumulative costs incurred to date for such property are transferred to the full cost pool and are then subject to depletion. For countries where a reserve base has not yet been established, the impairment is charged to earnings. In exploration areas, related seismic costs are capitalized in unproved property and evaluated as part of the total capitalized costs associated with a property. Seismic costs related to development projects are recorded in proved properties and therefore subject to depletion as incurred. |
Asset retirement obligation | Asset Retirement ObligationThe Company records an estimated liability for future costs associated with the abandonment of its oil and gas properties including the costs of reclamation of drilling sites. The Company records the fair value of a liability for a legal obligation to retire an asset in the period in which the liability is incurred with an offsetting increase to the related oil and gas properties. The fair value of an asset retirement obligation is measured by reference to the expected future cash outflows required to satisfy the retirement obligation discounted at the Company’s credit-adjusted risk-free interest rate. Accretion expense is recognized over time as the discounted liabilities are accreted to their expected settlement value, while the asset retirement cost is amortized over the estimated productive life of the related assets. The accretion of the asset retirement obligation and amortization of the asset retirement cost are included in DD&A. If estimated future costs of an asset retirement obligation change, an adjustment is recorded to both the asset retirement obligation and oil and gas properties. Revisions to the estimated asset retirement obligation can result from changes in retirement cost estimates, revisions to estimated inflation rates and changes in the estimated timing of abandonment. |
Other capital assets | Other Capital AssetsOther capital assets, including additions and replacements, are recorded at cost upon acquisition and include furniture, fixtures and leasehold improvement, computer equipment, automobiles and right-of-use assets for operating and finance leases. Depreciation for furniture and fixtures, computer equipment and automobiles is provided using the straight-line method over the useful life of the asset. Leasehold improvements and right-of-use assets for operating and finance leases are depreciated on a straight-line basis over the shorter of the estimated useful life and the term of the related lease. The cost of repairs and maintenance is charged to expense as incurred. |
Goodwill | Goodwill Goodwill represents the excess of the aggregate of the consideration transferred over the net identifiable assets acquired and liabilities assumed. The Company assesses qualitative factors annually, or more frequently if necessary, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount and whether it is necessary to perform the goodwill impairment test. The impairment test requires allocating goodwill and certain other assets and liabilities to assigned reporting units. The fair value of each reporting unit is estimated and compared with its net book value. An impairment loss is recognized if the estimated fair value of the reporting unit is less than its carrying amount, not exceeding the carrying amount of goodwill allocated to that reporting unit. Because quoted market prices are not available for the Company’s reporting unit, the fair value of the reporting unit is estimated based upon estimated future cash flows of the reporting unit. |
Leases | Leases At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At inception of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Company has applied judgment to determine the lease term for contracts which include renewal or termination options. The assessment of whether the Company is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognized. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company's revenue relates to oil sales in Colombia. The Company recognizes revenue when it transfers control of the product to a customer. This generally occurs at the time the customer obtains legal title to the product and when it is physically transferred to the delivery point agreed with the customer. Payment terms are generally within three business days following delivery of an invoice to the customer. Revenue is recognized based on the consideration specified in contracts with customers. Revenue represents the Company's share and is recorded net of royalty payments to governments and other mineral interest owners. The Company evaluates its arrangement with third parties and partners to determine if the Company acts as a principal or an agent. In making this evaluation, management considers if the Company obtains control of the product delivered, which is indicated by the Company having the primary responsibility for the delivery of the product, having ability to establish prices or having inventory risk. If the Company acts in the capacity of an agent rather than as a principal in transaction, then the revenue is recognized on a net-basis, only reflecting the fee realized by the Company from the transaction. Tariffs, tolls and fees charged to other entities for use of pipelines owned by the Company are evaluated by management to determine if these originate from contracts with customers or from incidental arrangements. When determining if the Company acted as a principal or as an agent in transactions, management determines if the Company obtains control of the product. As part of this assessment, management considers criteria for revenue recognition set out in ASC 606. |
Stock-based compensation | Stock-based Compensation The Company records stock-based compensation expense in its consolidated financial statements measured at the fair value of the awards that are ultimately expected to vest. Fair values are determined using pricing models such as the Black-Scholes-Merton or Monte Carlo simulation stock option-pricing models and/or observable share prices. For equity-settled stock-based compensation awards, fair values are determined at the grant date and the expense, net of estimated forfeitures, is recognized using the accelerated method over the requisite service period. An adjustment is made to compensation expense for any difference between the estimated forfeitures and the actual forfeitures. For cash-settled stock-based compensation awards, fair values are determined at each reporting date and periodic changes are recognized as compensation costs, with a corresponding change to liabilities. The Company uses historical data to estimate the expected term used in the Black-Scholes option pricing model, option exercises and employee departure behavior. Expected volatilities used in the fair value estimate are based on the historical volatility of the Company’s shares. The risk-free rate for periods within the expected term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant. |
Foreign currency translation | Foreign Currency Translation The functional currency of the Company, including its subsidiaries, is the United States dollar. Monetary items are translated into the reporting currency at the exchange rate in effect at the balance sheet date and non-monetary items are translated at historical exchange rates. Revenue and expense items are translated in a manner that produces substantially the same reporting currency amounts that would have resulted had the underlying transactions been translated on the dates they occurred. |
Earnings (loss) per share | Earnings (Loss) per Share Basic earnings (loss) per share is calculated by dividing net income or loss 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 or loss 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. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Financial Instruments - Credit Losses (ASC 326) |
Risks and Measurement Uncertainty | Risks and Measurement Uncertainty In March 2020, the outbreak of the COVID-19 virus, which was declared a pandemic by the World Health Organization, has spread across the globe and impacted worldwide economic activity. In addition, global commodity prices declined significantly due to disputes between major oil producing countries combined with the impact of the COVID-19 pandemic and associated reductions in global demand for oil. Governments worldwide, including those in Colombia and Ecuador, the countries where the Company operates, enacted emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and physical distancing, caused material disruption to businesses globally resulting in an economic slowdown. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions; however, the success of these interventions is not currently determinable. The current challenging economic climate is having and may continue to have significant adverse impacts on the Company including, but not exclusively: • material declines in revenue and cash flows as a result of the decline in commodity prices; • declines in revenue and operating activities due to reduced capital programs and the shut-in of production; • impairment charges (see Note 6); • inability to comply with covenants and restrictions in debt agreements; • inability to access financing sources; • increased risk of non-performance by the Company’s customers and suppliers; • interruptions in operations as the Company adjusts personnel to the dynamic environment; and • inability to operate or delay in operations as a result COVID-19 restrictions in the countries in which the Company operates. The unprecedented decline in oil prices has materially reduced the Company’s forecasted EBITDAX and the estimated value of its oil reserves. Based on current forecasted Brent pricing and production levels, which can change materially in very short time frames, the Company is forecasted to be in compliance with the amended financial covenants contained in the Company's Senior Secured Credit Facility (the "revolving credit facility") for at least the next year from the date of these financial statements. The amount available under the Company’s senior secured credit facility is based on the lenders determination of the borrowing base. The borrowing base is determined, by the lenders, based on the Company’s reserves and commodity prices. The next renewal of the borrowing base is scheduled for May 2021 and there is risk that the borrowing base may be reduced by the lenders. In addition, the Company’s ability to borrow under the credit facility may be limited by the terms of the indentures for the 6.25% Senior Notes and 7.75% Senior Notes. The risk of non-compliance with the covenants in the lending agreements and the risk associated with maintaining the borrowing base is heightened in the current period of volatility coupled with the unprecedented disruption caused by the COVID-19 pandemic. Management currently expects that the Company will continue to meet the terms of the credit facility or obtain further amendments or waivers if and when required. The Company also expects to be able to maintain the borrowing base at a level in excess of the amount borrowed. However, there can be no assurances that the Company’s liquidity can be maintained at or above current levels during this period of volatility and global economic uncertainty. The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on the Company is not known at this time. Estimates and judgments made by management in the preparation of the financial statements are increasingly difficult and subject to a higher degree of measurement uncertainty during this volatile period. In the near term, matters in these financial statements that are most subject to be impacted by this volatile period are the Company's assessment of liquidity and access to capital, the carrying value of long-lived assets and the valuation of the deferred tax assets. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | As at December 31, (Thousands of U.S. Dollars) 2020 2019 Trade $ 3,799 $ 24,890 Other 4,245 11,401 Total Accounts Receivable $ 8,044 $ 36,291 |
Taxes Receivable (Tables)
Taxes Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tax Receivable Agreement [Abstract] | |
Schedule of Taxes Receivable Components | Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Current VAT Receivable $ 35,977 $ 92,777 Income Tax Receivable 13,985 43,061 $ 49,962 $ 135,838 Long-Term VAT Receivable $ 28,485 $ 25,869 Income Tax Receivable 14,150 — $ 42,635 $ 25,869 Total Taxes Receivable $ 92,597 $ 161,707 |
Schedule of Taxes Receivable Roll Forward | (Thousands of U.S. Dollars) VAT Receivable Income Tax Receivable Total Taxes Receivable Balance, December 31, 2018 $ 72,497 $ 1,613 $ 74,110 Collected through sales contracts (18,197) — (18,197) Taxes paid 65,114 58,494 123,608 Current tax expense — (17,058) (17,058) Foreign exchange loss (768) 12 (756) Balance, December 31, 2019 $ 118,646 $ 43,061 $ 161,707 Collected through direct government refunds (40,884) (26,471) (67,355) Collected through sales contracts (46,326) — (46,326) Taxes paid 43,719 14,648 58,367 Current tax expense — (754) (754) Foreign exchange loss (10,693) (2,349) (13,042) Balance, December 31, 2020 $ 64,462 $ 28,135 $ 92,597 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | As at December 31, (Thousands of U.S. Dollars) 2020 2019 Oil and natural gas properties Proved $ 4,106,768 $ 3,850,565 Unproved 161,763 310,809 4,268,531 4,161,374 Other (1) 32,135 30,255 4,300,666 4,191,629 Accumulated depletion, depreciation and impairment (3,336,184) (2,614,236) $ 964,482 $ 1,577,393 |
Schedule of Asset Acquisition | (Thousands of U.S. Dollars) 2019 Cost of Asset Acquisition: Cash $ 79,100 Promissory note 1,500 $ 80,600 Allocation of Consideration Paid: Oil and gas properties Proved $ 52,530 Unproved 44,768 97,298 Net working capital (including cash acquired of $5.3 million) (16,698) $ 80,600 |
Summary of Oil and Natural Gas Properties | The following is a summary of Gran Tierra’s oil and natural gas properties not subject to depletion as at December 31, 2020: Costs Incurred in (Thousands of U.S. Dollars) 2020 2019 Prior to 2019 Total Acquisition costs - Colombia $ — $ 5,582 $ 32,558 $ 38,140 Exploration costs - Colombia 4,652 57,328 56,429 118,409 Exploration costs - Ecuador 2,006 3,208 — 5,214 $ 6,658 $ 66,118 $ 88,987 $ 161,763 |
Impairment (Tables)
Impairment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Impairment Disclosure [Abstract] | |
Schedule of Asset Impairment | Asset impairment for the years ended December 31, 2020 and 2019, was as follows: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Impairment of oil and gas properties $ 560,344 $ — Impairment of inventory 4,151 — $ 564,495 $ — |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Trade $ 70,450 $ 151,747 Royalties 1,570 5,758 Employee compensation 1,701 6,861 Other 27,063 31,147 $ 100,784 $ 195,513 |
Debt and Debt Issuance Costs (T
Debt and Debt Issuance Costs (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's debt at December 31, 2020 and 2019, was as follows: As at December 31, (Thousands of U.S. Dollars) 2020 2019 6.25% Senior Notes $ 300,000 $ 300,000 7.75% Senior Notes 300,000 300,000 Revolving credit facility 190,000 118,000 Unamortized debt issuance costs (18,124) (21,081) Long-term lease obligation (1) 2,894 3,540 Long-term debt $ 774,770 $ 700,459 (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 $3.3 million as at December 31, 2020 (December 31, 2019 - $3.3 million). |
Schedule of Total Interest Expense Recognized | The following table presents total interest expense recognized in the accompanying consolidated statements of operations: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Contractual interest and other financing expenses $ 50,515 $ 39,892 Amortization of debt issuance costs 3,625 3,376 $ 54,140 $ 43,268 |
Share Capital (Tables)
Share Capital (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Common Stock | Shares of Common Stock Balance, December 31, 2018 387,079,027 Shares repurchased and canceled (20,097,471) Balance, December 31, 2019 and 2020 366,981,556 |
Schedule of Information About PSU, DSU, RSU and Stock Option Activity | The following table provides information about PSU, DSU and stock option activity for the year ended December 31, 2020: PSUs DSUs Stock Options Number of Outstanding Share Units Number of Outstanding Share Units Number of Outstanding Stock Options Weighted Average Exercise Price /Stock Option ($) Balance, December 31, 2019 11,371,367 1,251,994 10,612,872 $ 2.78 Granted 15,897,575 2,815,903 8,893,140 0.70 Exercised (2,366,351) — — — Forfeited (1,629,187) — (1,038,093) 2.04 Expired — — (3,022,970) 3.42 Balance, December 31, 2020 23,273,404 4,067,897 15,444,949 $ 1.50 Vested and exercisable, at December 31, 2020 5,443,796 $ 2.39 Vested, or expected to vest, at December 31, 2020 through the life of the options 14,938,829 $ 1.53 |
Schedule of Assumptions Using the Black-Scholes Option Pricing Model | The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model based on assumptions noted in the following table: Year Ended December 31, 2020 2019 Dividend yield (per share) Nil Nil Volatility 50% to 69% 48% to 54% Weighted average volatility 52 % 51 % Risk-free interest rate 0.3% to 1.7% 1.5% to 2.5% Expected term 5 years 4-5 years |
Schedule of Weighted Average Number of Shares | Weighted Average Shares Outstanding Year Ended December 31, 2020 2019 Weighted average number of common and exchangeable shares outstanding 366,981,556 376,495,306 Shares issuable pursuant to stock options — 87,204 Shares assumed to be purchased from proceeds of stock options — (74,698) Weighted average number of diluted common and exchange shares outstanding 366,981,556 376,507,812 |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Asset Retirement Obligation | Changes in the carrying amounts of the asset retirement obligation associated with the Company’s oil and natural gas properties were as follows: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Balance, beginning of year $ 43,419 $ 43,799 Liability incurred 909 7,034 Settlements (201) (846) Accretion 3,464 3,436 Revisions in estimated liability 623 (10,004) Balance, end of year $ 48,214 $ 43,419 |
COVID-19 Related Costs (Tables)
COVID-19 Related Costs (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Schedule Cost Incurred due to Catastrophic Events | The COVID-19 pandemic resulted in extra operating and transportation costs related to COVID-19 health and safety preventative measures including incremental sanitation requirements and enhanced procedures for trucking barrels and crew changes in the field. Below is a break-down of the costs: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Operating expenses $ 2,482 $ — Transportation costs 197 — COVID-19 costs $ 2,679 $ — |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense Reported | The income tax expense and recovery reported differs from the amount computed by applying the statutory rate to income (loss) before income taxes for the following reasons: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Income (loss) before income taxes United States $ (19,065) $ (27,984) Foreign (834,296) 123,959 (853,361) 95,975 Statutory rate (1) 32 % 33 % Income tax (recovery) expense expected (273,076) 31,672 Impact of foreign taxes 26,668 9,387 Foreign currency translation 48,734 11,527 Goodwill Impairment 32,826 — Stock-based compensation 666 430 Change in valuation allowance 75,241 3,429 Non-deductible third party royalty in Colombia 697 2,240 Other permanent differences 5,349 6,082 Non-deductible investment loss (gain) (PetroTal) 7,501 (7,482) Total income tax (recovery) expense $ (75,394) $ 57,285 Effective tax rate 9 % 60 % Current income tax expense Foreign 754 17,058 754 17,058 Deferred income tax expense (recovery) Foreign (76,148) 40,227 Total income tax (recovery) expense $ (75,394) $ 57,285 (1) The tax rate is the statutory rate in Colombia. |
Schedule of Deferred Tax Assets and Liabilities | As at December 31, (Thousands of U.S. Dollars) 2020 2019 Deferred tax assets Tax benefit of operating loss carryforwards $ 100,616 $ 73,096 Tax basis in excess of book basis 37,698 544 Foreign tax credits and other accruals 86,664 76,720 Tax benefit of capital loss carryforwards 27,661 22,710 Deferred tax assets before valuation allowance 252,639 173,070 Valuation allowance (195,321) (129,067) Deferred tax assets - long-term 57,318 44,003 Deferred tax liabilities — 59,762 Net deferred tax assets (liabilities) $ 57,318 $ (15,759) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments Under Non-Cancelable Agreements | As at December 31, 2020, future minimum payments under non-cancelable agreements with remaining terms in excess of one year were as follows: Year ending December 31 (Thousands of U.S. Dollars) Total 2021 2022 2023 2024 2025 Thereafter Operating leases (1) 4,910 2,330 2,077 503 — — — Finance leases (1) 4,725 3,197 1,444 57 27 — — Software and Telecommunication 900 300 300 300 — — — $ 10,535 $ 5,827 $ 3,821 $ 860 $ 27 $ — $ — (1) Including maintenance and operating costs. |
Financial Instruments, Fair V_2
Financial Instruments, Fair Value Measurement, Credit Risk and Foreign Exchange Risk (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Trading Securities, Derivative Assets, and RSU and PSU Liabilities | The fair value of investment, derivatives, PSU and DSU liabilities at December 31, 2020 and December 31, 2019 were as follows: As at December 31, (Thousands of U.S. Dollars) 2020 2019 Investment $ 48,323 $ 94,741 Derivative liability $ 12,050 $ 775 PSU and DSU liability 4,760 7,859 $ 16,810 $ 8,634 |
Schedule of Losses or Gains on Financial Instruments Recognized | The following table presents gains or losses on financial instruments recognized in the accompanying consolidated statements of operations: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Commodity price derivative (gain) loss $ (220) $ 3,642 Foreign currency derivative loss 3,155 27 Investment loss (gain) 46,883 (49,884) Financial instruments loss 1,164 — $ 50,982 $ (46,215) |
Schedule of Price Risk Derivatives | As at December 31, 2020, the Company had outstanding commodity price derivative positions as follows: Period and Type of Instrument Volume, Reference Sold Put ($/bbl, Weighted Average) Purchased Put ($/bbl, Weighted Average) Sold Call Premium Three-way Collars: January 1, to June 30, 2021 14,000 ICE Brent 36.43 45.14 51.45 0.21 Collars: January 1, to June 30, 2021 1,000 ICE Brent n/a 45.00 50.40 n/a Swaptions: July 1, to December 31, 2021 3,000 ICE Brent n/a n/a 56.75 n/a Subsequent to year end, the Company entered into the following commodity price derivative positions: Period and Type of Instrument Volume, Reference Sold Put ($/bbl, Weighted Average) Purchased Put ($/bbl, Weighted Average) Sold Call Premium Three-way Collars: July 1, to December 31, 2021 4,000 ICE Brent 45.00 55.00 68.00 n/a |
Schedule of Derivative Instruments | As at December 31, 2020 the Company had no outstanding foreign currency derivative positions. Subsequent to year end, the Company entered into the following foreign currency derivative positions: Period and Type of Instrument Amount Hedged U.S. Dollar Equivalent of Amount Hedged (Thousands of U.S. Dollars) (1) Reference Floor Price Cap Price (COP, Weighted Average) Collars: March 1, to December 31, 2021 10,000 3,051 COP 3,500 3,630 (1) At December 31, 2020 foreign exchange rate. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Summary of Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents with the Company's consolidated balance sheet that sum to the total of the same such amounts shown in the consolidated statements of cash flows: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Cash and cash equivalents $ 13,687 $ 8,301 Restricted cash and cash equivalents - current 427 516 Restricted cash and cash equivalents - long-term (1) 3,409 2,258 $ 17,523 $ 11,075 (1) The long-term portion of restricted cash is included in other long-term assets on the Company's balance sheet. |
Schedule of Net Changes in Assets and Liabilities | Net changes in assets and liabilities from operating activities were as follows: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Accounts receivable and other long-term assets $ 27,607 $ (5,680) Derivatives 2,302 (638) Inventory (2,628) (3,179) Other prepaids (279) 583 Accounts payable and accrued and other long-term liabilities (47,194) (1,367) Prepaid tax and taxes receivable and payable 56,254 (83,593) Net changes in assets and liabilities from operating activities $ 36,062 $ (93,874) |
Schedule of Additional Supplemental Cash Flow Disclosures | The following table provides additional supplemental cash flow disclosures: Year Ended December 31, (Thousands of U.S. Dollars) 2020 2019 Cash paid for income taxes $ 15,476 $ 49,196 Cash paid for interest $ 50,209 $ 37,767 Non-cash investing activities Net liabilities related to property, plant and equipment, end of year $ 28,711 $ 77,353 |
Significant Accounting Polici_3
Significant Accounting Policies - Investment in PetroTal Corp (Details) | 2 Months Ended | 12 Months Ended |
Feb. 24, 2021shares | Dec. 31, 2020directorshares | |
Schedule of Equity Method Investments [Line Items] | ||
Number of directors eligible to be nominated by the company | director | 2 | |
Petro Tal | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest divested (as a percent) | 30.00% | |
Number of shares held (in shares) | 246,100,000 | |
Petro Tal | Subsequent Event | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest divested (as a percent) | 17.00% | |
Number of shares held (in shares) | 137,093,750 | |
Number of shares disposed (in shares) | 109,006,250 |
Significant Accounting Polici_4
Significant Accounting Policies - Income Taxes - Intra-Entity Transfers of Assets Other than Inventory (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Income tax expense (benefit) | $ (75,394) | $ 57,285 |
Deferred tax asset | $ 57,318 |
Significant Accounting Polici_5
Significant Accounting Policies - Leases (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 |
Lessee, Lease, Description [Line Items] | |||
Retained earnings | $ (1,038,254) | $ (260,287) | |
Cumulative Effect, Period of Adoption, Adjustment | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, right-of-use asset | $ 3,800 | ||
Operating lease, liability | 4,200 | ||
Retained earnings | $ 400 | ||
Incremental borrowing rate used for lease liabilities, lower range | 5.60% | ||
Incremental borrowing rate used for lease liabilities, lower range | 9.10% |
Significant Accounting Polici_6
Significant Accounting Policies - Risk (Narrative) (Details) - Senior Notes | May 20, 2019 | Feb. 15, 2018 |
6.25% Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 6.25% | |
7.75% Senior Notes due 2027 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 7.75% |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 8,044 | $ 36,291 |
Trade | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 3,799 | 24,890 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 4,245 | $ 11,401 |
Taxes Receivable (Details)
Taxes Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current | ||||
VAT Receivable | $ 35,977 | $ 92,777 | ||
Income Tax Receivable | 13,985 | 43,061 | ||
Tax Receivable | 49,962 | 135,838 | ||
Long-Term | ||||
VAT Receivable | 28,485 | 25,869 | ||
Income Tax Receivable | 14,150 | 0 | ||
Tax Receivable | 42,635 | 25,869 | ||
Total Taxes Receivable | $ 161,707 | $ 161,707 | $ 92,597 | $ 161,707 |
VAT Receivable | ||||
Beginning balance | 118,646 | 72,497 | ||
Collected through direct government refunds | (40,884) | |||
Collected through sales contracts | (46,326) | (18,197) | ||
Taxes paid | 43,719 | 65,114 | ||
Current tax expense | 0 | 0 | ||
Foreign exchange loss | (10,693) | (768) | ||
Ending Balance | 64,462 | 118,646 | ||
Income Tax Receivable | ||||
Beginning balance | 43,061 | 1,613 | ||
Collected through direct government refunds | (26,471) | |||
Collected through sales contracts | 0 | 0 | ||
Taxes paid | 14,648 | 58,494 | ||
Current tax expense | (754) | (17,058) | ||
Foreign exchange loss | (2,349) | 12 | ||
Ending balance | 28,135 | 43,061 | ||
Total Taxes Receivable | ||||
Beginning balance | 161,707 | 74,110 | ||
Collected through direct government refunds | (67,355) | |||
Collected through sales contracts | (46,326) | (18,197) | ||
Taxes paid | 58,367 | 123,608 | ||
Current tax expense | (754) | (17,058) | ||
Foreign exchange loss | (13,042) | (756) | ||
Ending balance | $ 92,597 | $ 161,707 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 4,300,666 | $ 4,191,629 |
Accumulated depletion, depreciation and impairment | (3,336,184) | (2,614,236) |
Property, plant, and equipment, net | 964,482 | 1,577,393 |
Right-of-use asset | 11,400 | 9,700 |
Operating lease and finance lease, net | 4,400 | 5,700 |
Oil and natural gas properties | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 4,268,531 | 4,161,374 |
Proved | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 4,106,768 | 3,850,565 |
Unproved | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 161,763 | 310,809 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 32,135 | $ 30,255 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Thousands | Feb. 20, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Depletion and depreciation expense | $ 160,800 | $ 220,800 | |
Payments to acquire assets | $ 79,100 | ||
Consideration transferred, liabilities incurred | $ 1,500 | ||
Costs not expected to be subject to depletion (as a percent) | 100.00% | ||
Period until transferred to depletable base | 5 years | ||
Suroriente block | |||
Property, Plant and Equipment [Line Items] | |||
Percentage of working interests acquired | 36.20% | ||
Llanos-5 Block | |||
Property, Plant and Equipment [Line Items] | |||
Percentage of working interests acquired | 100.00% |
Property, Plant and Equipment_3
Property, Plant and Equipment - Cost of Assets Acquired (Details) $ in Thousands | Feb. 20, 2019USD ($) |
Cost of asset acquisition: | |
Cash | $ 79,100 |
Promissory note | 1,500 |
Consideration transferred | 80,600 |
Oil and gas properties | 97,298 |
Net working capital (including cash acquired of $5.3 million) | (16,698) |
Net assets acquired | 80,600 |
Cash acquired | 5,300 |
Proved | |
Cost of asset acquisition: | |
Oil and gas properties | 52,530 |
Unproved | |
Cost of asset acquisition: | |
Oil and gas properties | $ 44,768 |
Property, Plant and Equipment_4
Property, Plant and Equipment - Summary of Oil and Natural Gas Properties (Details) - USD ($) $ in Thousands | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ||||
Properties not subject to depletion | $ 6,658 | $ 66,118 | $ 88,987 | $ 161,763 |
Reportable Segments | Colombia | ||||
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ||||
Acquisition costs | 0 | 5,582 | 32,558 | 38,140 |
Exploration costs | 4,652 | 57,328 | 56,429 | 118,409 |
Non-Segment | Ecuador | ||||
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ||||
Exploration costs | $ 2,006 | $ 3,208 | $ 0 | $ 5,214 |
Impairment - Asset Impairment (
Impairment - Asset Impairment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Impairment Disclosure [Abstract] | ||
Impairment of oil and gas properties | $ 560,344,000 | $ 0 |
Impairment of inventory | 4,151,000 | 0 |
Asset impairment | $ 564,495,000 | $ 0 |
Impairment - Narrative (Details
Impairment - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)$ / bbl | Dec. 31, 2019USD ($)$ / bbl | |
Property, Plant and Equipment [Line Items] | ||
Impairment of oil and gas properties | $ 560,344,000 | $ 0 |
Oil and gas properties, discounted rate | 10.00% | |
Historical prices, discounted rate | 10.00% | |
Percent of decrease in proved oil and gas reserves from prior year | 4.00% | |
Inventory impairment | $ 4,151,000 | 0 |
Goodwill impairment | $ 102,581,000 | $ 0 |
Crude Oil and NGL | ||
Property, Plant and Equipment [Line Items] | ||
Average Brent price per barrel (in USD per barrel) | $ / bbl | 43.43 | 64.20 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Trade | $ 70,450 | $ 151,747 |
Royalties | 1,570 | 5,758 |
Employee compensation | 1,701 | 6,861 |
Other | 27,063 | 31,147 |
Total | $ 100,784 | $ 195,513 |
Debt and Debt Issuance Costs -
Debt and Debt Issuance Costs - Schedule of Debt (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | May 20, 2019 | Feb. 15, 2018 |
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ (18,124,000) | $ (21,081,000) | ||
Long-term lease obligation | 2,894,000 | 3,540,000 | ||
Long-term debt | 774,770,000 | 700,459,000 | ||
Accounts Payable | ||||
Debt Instrument [Line Items] | ||||
Finance lease, liability, current | 3,300,000 | 3,300,000 | ||
Senior Notes | 6.25% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 6.25% | |||
Long-term debt, gross | 300,000,000 | 300,000,000 | ||
Senior Notes | 7.75% Senior Notes due 2027 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 7.75% | |||
Long-term debt, gross | 300,000,000 | 300,000,000 | ||
Revolving credit facility | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 190,000,000 | $ 118,000,000 |
Debt and Debt Issuance Costs _2
Debt and Debt Issuance Costs - Senior Notes (Details) - Senior Notes - USD ($) | May 23, 2019 | Feb. 15, 2018 | May 20, 2019 |
7.75% Senior Notes due 2027 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 300,000,000 | ||
Stated interest rate | 7.75% | ||
Redemption price (as a percent) | 100.00% | ||
7.75% Senior Notes due 2027 | 2023 | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 103.875% | ||
7.75% Senior Notes due 2027 | 2024 | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 101.938% | ||
7.75% Senior Notes due 2027 | 2025 and Thereafter | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 100.00% | ||
6.25% Senior Notes | |||
Debt Instrument [Line Items] | |||
Face amount | $ 300,000,000 | ||
Stated interest rate | 6.25% | ||
Redemption price (as a percent) | 100.00% | ||
6.25% Senior Notes | 2023 | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 101.563% | ||
6.25% Senior Notes | 2022 | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 103.125% | ||
6.25% Senior Notes | 2024 and Thereafter | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 100.00% |
Debt and Debt Issuance Costs _3
Debt and Debt Issuance Costs - Credit Facility (Details) - Credit Agreement - Revolving Credit Facility - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2020 | Dec. 31, 2019 | Oct. 01, 2021 | Jun. 30, 2021 | Jun. 29, 2021 | Jun. 01, 2020 | May 31, 2020 | |
Line of Credit Facility [Line Items] | |||||||
Current borrowing capacity | $ 225,000,000 | $ 300,000,000 | |||||
Forecast | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity, decrease | $ 20,000,000 | $ 15,000,000 | |||||
Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt to EBITDAX, ratio | 400.00% | ||||||
Interest rate on undrawn amounts | 0.73% | 0.41% | |||||
Minimum | London Interbank Offered Rate (LIBOR) | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.90% | 1.65% | |||||
Minimum | Base Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.90% | 0.65% | |||||
Minimum | December 31, 2020 and March 31, 2021 | |||||||
Line of Credit Facility [Line Items] | |||||||
EBITDAX to interest expense, ratio | 150.00% | ||||||
Minimum | June 30, 2021 and September 30, 2021 | |||||||
Line of Credit Facility [Line Items] | |||||||
EBITDAX to interest expense, ratio | 200.00% | ||||||
Minimum | October 1, 2021 and Thereafter | |||||||
Line of Credit Facility [Line Items] | |||||||
EBITDAX to interest expense, ratio | 250.00% | ||||||
Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior secured debt to EBITDAX ratio | 250.00% | ||||||
Interest rate on undrawn amounts | 1.23% | 0.91% | |||||
Maximum | London Interbank Offered Rate (LIBOR) | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 4.90% | 3.65% | |||||
Maximum | Base Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 3.90% | 2.65% | |||||
Maximum | Forecast | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt to EBITDAX, ratio | 400.00% | ||||||
Senior secured debt to EBITDAX ratio | 300.00% | ||||||
EBITDAX to interest expense, ratio | 250.00% | ||||||
Readily available | |||||||
Line of Credit Facility [Line Items] | |||||||
Current borrowing capacity | $ 215,000,000 |
Debt and Debt Issuance Costs _4
Debt and Debt Issuance Costs - Schedule of Total Interest Expense Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Contractual interest and other financing expenses | $ 50,515 | $ 39,892 |
Amortization of debt issuance costs | 3,625 | 3,376 |
Interest expense | $ 54,140 | $ 43,268 |
Share Capital - Schedule of Com
Share Capital - Schedule of Common Stock (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | |
Increase (Decrease) in Stockholders' Equity | ||
Ending Balance (in shares) | 366,981,556 | |
Common shares, outstanding (in shares) | 366,981,556 | 366,981,556 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity | ||
Beginning Balance (in shares) | 387,079,027 | |
Shares repurchased and canceled (in shares) | (20,097,471) | |
Ending Balance (in shares) | 366,981,556 | |
Common shares, outstanding (in shares) | 366,981,556 | 366,981,556 |
Share Capital - Additional Info
Share Capital - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 27, 2012 | Jun. 26, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Authorized share capital (in shares) | 595,000,000 | |||
Common shares, par value (in USD per share) | $ 0.001 | $ 0.001 | ||
Preferred Stock, shares authorized (in shares) | 25,000,000 | |||
Preferred Stock, par value (in USD per share) | $ 0.001 | |||
Common stock available for issuance (in shares) | 39,806,100 | 23,306,100 | ||
Share-based compensation | $ 1,216 | $ 1,430 | ||
Unrecognized compensation cost | $ 5,900 | $ 6,700 | ||
Weighted average period of recognition | 1 year 8 months 12 days | |||
Weighted average remaining contractual term | 3 years 2 months 12 days | |||
Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Authorized share capital (in shares) | 570,000,000 | |||
PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity awards granted (as a percent) | 80.00% | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity awards granted (as a percent) | 20.00% |
Share Capital - Schedule of Inf
Share Capital - Schedule of Information About PSU, DSU, RSU and Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of Outstanding Stock Options | |
Balance, Beginning of period (in shares) | 10,612,872 |
Granted (in shares) | 8,893,140 |
Exercised (in shares) | 0 |
Forfeited (in shares) | (1,038,093) |
Expired (in shares) | (3,022,970) |
Balance, End of period (in shares) | 15,444,949 |
Exercisable, at end of period (in shares) | 5,443,796 |
Vested, or expected to vest, at end of period through the life of the options (in shares) | 14,938,829 |
Weighted Average Exercise Price /Stock Option ($) | |
Balance, Beginning of period (in USD per share) | $ / shares | $ 2.78 |
Granted (in USD per share) | $ / shares | 0.70 |
Exercised (in USD per share) | $ / shares | 0 |
Forfeited (in USD per share) | $ / shares | 2.04 |
Expired (in USD per share) | $ / shares | 3.42 |
Balance, End of period (in USD per share) | $ / shares | 1.50 |
Exercisable, at end of period (in USD per share) | $ / shares | 2.39 |
Vested, or expected to vest, at end of period through the life of the options (in USD per share) | $ / shares | $ 1.53 |
PSUs | |
Number of Outstanding Share Units | |
Balance, Beginning of period (in shares) | 11,371,367 |
Granted (in shares) | 15,897,575 |
Exercised (in shares) | (2,366,351) |
Forfeited (in shares) | (1,629,187) |
Expired (in shares) | 0 |
Balance, End of period (in shares) | 23,273,404 |
DSUs | |
Number of Outstanding Share Units | |
Balance, Beginning of period (in shares) | 1,251,994 |
Granted (in shares) | 2,815,903 |
Exercised (in shares) | 0 |
Forfeited (in shares) | 0 |
Expired (in shares) | 0 |
Balance, End of period (in shares) | 4,067,897 |
Share Capital - PSUs (Narrative
Share Capital - PSUs (Narrative) (Details) - PSUs - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Vested and will be settled in cash (in shares) | 2,700,000 | 2,400,000 |
Award subject to targets relating to total shareholder return (as a percent) | 50.00% | |
Award subject to targets relating to net asset value (as a percent) | 25.00% | |
Net present value discount rate | 10.00% | |
Award subject to targets relating to execution of corporate strategy (as a percent) | 25.00% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of PSUs that vest (as a percent) | 0.00% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of PSUs that vest (as a percent) | 200.00% |
Share Capital - DSUs (Narrative
Share Capital - DSUs (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
DSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
DSUs that will vest at such time the grantee ceases to be a member (as a percent) | 100.00% |
Share Capital - Stock Options (
Share Capital - Stock Options (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2013 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation award, common stock for purchase, exercise price | 1 | |||
Options exercised (in shares) | 0 | |||
Proceeds from exercise of stock options | $ 0 | $ 0 | ||
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding, weighted average remaining contractual term | 3 years 2 months 12 days | |||
Weighted average remaining contractual term of exercisable stock options | 1 year 10 months 24 days | |||
Weighted average grant date fair value for options granted (in USD per share) | $ 0.29 | $ 0.89 | $ 1.15 | |
Weighted average grant date fair value for options vested (in USD per share) | $ 0.79 | $ 1.10 | ||
Total fair value of stock options vested | $ 1,900 | $ 1,900 | ||
Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options exercised (in shares) | 0 | 0 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Expected term during grantee's service | 5 years | 5 years | ||
Expected term after end of grantee's service | 3 months |
Share Capital - Schedule of Ass
Share Capital - Schedule of Assumptions Using the Black-Scholes Option Pricing Model (Details) | 1 Months Ended | 12 Months Ended | |
May 31, 2013 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average volatility (as a percent) | 52.00% | 51.00% | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility, minimum | 50.00% | 48.00% | |
Volatility, maximum | 69.00% | 54.00% | |
Risk free interest rate, minimum | 0.30% | 1.50% | |
Risk free interest rate, maximum | 1.70% | 2.50% | |
Expected term | 5 years | 5 years | |
Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 4 years | ||
Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 5 years |
Share Capital - Schedule Of Wei
Share Capital - Schedule Of Weighted Average Shares Outstanding (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Weighted average number of common and exchangeable shares outstanding (in shares) | 366,981,556 | 376,495,306 |
Shares issuable pursuant to stock options (in shares) | 0 | 87,204 |
Shares assumed to be purchased from proceeds of stock options (in shares) | 0 | (74,698) |
Weighted average number of diluted common and exchangeable shares outstanding (in shares) | 366,981,556 | 376,507,812 |
Share Capital - Weighted Averag
Share Capital - Weighted Average Shares Outstanding (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2019shares | |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average options excluded from diluted loss per share calculation (in shares) | 9,465,737 |
Asset Retirement Obligation - S
Asset Retirement Obligation - Schedule of Changes in Carrying Amount of Asset Retirement Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Asset Retirement Obligation, Roll Forward Analysis | ||
Balance, beginning of year | $ 43,419 | $ 43,799 |
Liability incurred | 909 | 7,034 |
Settlements | (201) | (846) |
Accretion | 3,464 | 3,436 |
Revisions in estimated liability | 623 | (10,004) |
Balance, end of year | $ 48,214 | $ 43,419 |
Asset Retirement Obligation - N
Asset Retirement Obligation - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Asset Retirement Obligation Disclosure [Abstract] | ||
Fair value of assets legally restricted for purposes of settling asset retirement obligations | $ 3.8 | $ 2.8 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | ||
Revenue, information used to assess variable consideration constraint, adjustment for quality and transportation | 25.00% | 16.00% |
Contract with customer, asset, net, current | $ 0.1 | $ 0.1 |
Revenue from Contract with Customer | Product Concentration Risk | ||
Concentration Risk [Line Items] | ||
Sales to each significant customer as % of oil and gas sales | 100.00% | 100.00% |
Revenue from Contract with Customer | Product Concentration Risk | Colombia | Customer 1 | ||
Concentration Risk [Line Items] | ||
Sales to each significant customer as % of oil and gas sales | 41.00% | |
Revenue from Contract with Customer | Product Concentration Risk | Colombia | Customer 2 | ||
Concentration Risk [Line Items] | ||
Sales to each significant customer as % of oil and gas sales | 31.00% | |
Revenue from Contract with Customer | Product Concentration Risk | Colombia | Customer 3 | ||
Concentration Risk [Line Items] | ||
Sales to each significant customer as % of oil and gas sales | 25.00% |
COVID-19 Related Costs (Details
COVID-19 Related Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Unusual or Infrequent Items, or Both [Abstract] | ||
Operating expenses | $ 2,482 | $ 0 |
Transportation costs | 197 | 0 |
COVID-19 costs | $ 2,679 | $ 0 |
Taxes - Schedule of Income Tax
Taxes - Schedule of Income Tax Expense Reported (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (19,065) | $ (27,984) |
Foreign | (834,296) | 123,959 |
(LOSS) INCOME BEFORE INCOME TAXES | $ (853,361) | $ 95,975 |
Statutory rate | 32.00% | 33.00% |
Income tax (recovery) expense expected | $ (273,076) | $ 31,672 |
Impact of foreign taxes | 26,668 | 9,387 |
Foreign currency translation | 48,734 | 11,527 |
Goodwill Impairment | 32,826 | 0 |
Stock-based compensation | 666 | 430 |
Change in valuation allowance | 75,241 | 3,429 |
Non-deductible third party royalty in Colombia | 697 | 2,240 |
Other permanent differences | 5,349 | 6,082 |
Non-deductible investment loss (gain) (PetroTal) | 7,501 | (7,482) |
INCOME TAX EXPENSE (RECOVERY) | $ (75,394) | $ 57,285 |
Effective tax rate | 9.00% | 60.00% |
Current income tax expense | ||
Foreign | $ 754 | $ 17,058 |
Current income tax expense | 754 | 17,058 |
Deferred income tax expense (recovery) | ||
Foreign | $ (76,148) | $ 40,227 |
Taxes - Schedule of Deferred Ta
Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Tax benefit of operating loss carryforwards | $ 100,616 | $ 73,096 |
Tax basis in excess of book basis | 37,698 | 544 |
Foreign tax credits and other accruals | 86,664 | 76,720 |
Tax benefit of capital loss carryforwards | 27,661 | 22,710 |
Deferred tax assets before valuation allowance | 252,639 | 173,070 |
Valuation allowance | (195,321) | (129,067) |
Deferred tax assets - long-term | 57,318 | 44,003 |
Deferred tax liabilities | 0 | 59,762 |
Net deferred tax assets (liabilities) | $ 57,318 | |
Net deferred tax assets (liabilities) | $ 15,759 |
Taxes - Summary of Operating Lo
Taxes - Summary of Operating Loss and Capital Loss Carryforwards (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | $ 252,000,000 | ||
Credit carryforward | 3,900,000 | ||
Operating loss carryforwards, not subject to limitations | $ 33,700,000 | ||
Operating loss carryforwards, subject to limitations | $ 218,300,000 | ||
Unrecognized tax benefits | 0 | $ 0 | |
Impairment of taxes receivable | 1,400,000 | ||
Internal Revenue Service (IRS) | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 50,500,000 | 46,000,000 | |
Canada Revenue Agency | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 31,500,000 | 33,100,000 | |
Canada Revenue Agency | Capital Loss Carryforward | |||
Tax Credit Carryforward [Line Items] | |||
Credit carryforward | 197,500,000 | 240,500,000 | |
Colombian Tax and Customs National Authority | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 140,500,000 | 115,600,000 | |
Colombian Tax and Customs National Authority | Capital Loss Carryforward | |||
Tax Credit Carryforward [Line Items] | |||
Credit carryforward | $ 1,500,000 | $ 1,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Payments Under Non-Cancelable Agreements (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Total | $ 10,535 |
2021 | 5,827 |
2022 | 3,821 |
2023 | 860 |
2024 | 27 |
2025 | 0 |
Thereafter | 0 |
Operating leases | |
Total | 4,910 |
2021 | 2,330 |
2022 | 2,077 |
2023 | 503 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Finance leases | |
Total | 4,725 |
2021 | 3,197 |
2022 | 1,444 |
2023 | 57 |
2024 | 27 |
2025 | 0 |
Thereafter | 0 |
Software and Telecommunication | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Total | 900 |
2021 | 300 |
2022 | 300 |
2023 | 300 |
2024 | 0 |
2025 | 0 |
Thereafter | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Promissory notes as security for letters of credit | $ 100.6 | $ 120.6 |
Financial Instruments, Fair V_3
Financial Instruments, Fair Value Measurement, Credit Risk and Foreign Exchange Risk - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2020$ / shares | Dec. 31, 2019$ / shares | May 20, 2019 | Feb. 15, 2018 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Investment | $ 48,323 | $ 94,741 | ||||
Foreign currency transaction gain, deferred tax assets | 12 | |||||
Foreign currency transaction gain, tax receivable | 26 | |||||
Foreign currency transaction gain, investment | 400 | |||||
Letters of credits from customers | $ 8,900 | |||||
Colombia | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Revenues received in U.S. dollars (as a percent) | 100.00% | |||||
Colombia | Geographic Concentration Risk | Oil and natural gas sales | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Sales to each significant customer as % of oil and gas sales | 100.00% | 100.00% | ||||
6.25% Senior Notes | Senior Notes | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Stated interest rate | 6.25% | |||||
7.75% Senior Notes due 2027 | Senior Notes | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Stated interest rate | 7.75% | |||||
Reported Value Measurement | 7.75% Senior Notes due 2027 | Senior Notes | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Debt instrument, fair value disclosure | $ 290,900 | |||||
Reported Value Measurement | 6.25% Senior Notes due 2025 | Senior Notes | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Debt instrument, fair value disclosure | 292,300 | |||||
Estimate of Fair Value Measurement | 7.75% Senior Notes due 2027 | Senior Notes | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Debt instrument, fair value disclosure | 206,900 | |||||
Estimate of Fair Value Measurement | 6.25% Senior Notes due 2025 | Senior Notes | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Debt instrument, fair value disclosure | 205,500 | |||||
PetroTal | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Investment | $ 48,300 | $ 94,700 | ||||
Closing share price (in dollars per share) | (per share) | $ 0.20 | $ 0.38 | $ 0.25 | $ 0.50 |
Financial Instruments, Fair V_4
Financial Instruments, Fair Value Measurement, Credit Risk and Foreign Exchange Risk - Schedule of Fair Value of Trading Securities, Derivative Assets, and RSU and PSU Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Investment | $ 48,323 | $ 94,741 |
Derivative liability | 12,050 | 775 |
PSU and DSU liability | 4,760 | 7,859 |
Fair value of liabilities | $ 16,810 | $ 8,634 |
Financial Instruments, Fair V_5
Financial Instruments, Fair Value Measurement, Credit Risk and Foreign Exchange Risk - Schedule of Losses or Gains on Financial Instruments Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investment loss (gain) | $ 46,883 | $ (49,884) |
Financial instruments loss | 1,164 | 0 |
Financial instruments loss | 50,982 | (46,215) |
Commodity price derivative (gain) loss | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative loss (gain) | (220) | 3,642 |
Foreign currency derivative loss | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative loss (gain) | $ 3,155 | $ 27 |
Financial Instruments, Fair V_6
Financial Instruments, Fair Value Measurement, Credit Risk and Foreign Exchange Risk - Commodity Price Risk (Details) - Forecast - Commodity Hedge | 6 Months Ended | |
Dec. 31, 2021$ / bblbbl | Jun. 30, 2021$ / bblbbl | |
Three-way Collars: January 1, to June 30, 2021 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Volume (in barrels of oil per day) | bbl | 14,000 | |
Premium (in dollars per barrel) | 0.21 | |
Three-way Collars: January 1, to June 30, 2021 | Purchased | Put | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Floor price (in dollars per barrel) | 45.14 | |
Three-way Collars: January 1, to June 30, 2021 | Sold | Put | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Sold put/call ($/bbl, Weighted Average) | 36.43 | |
Three-way Collars: January 1, to June 30, 2021 | Sold | Call | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Sold put/call ($/bbl, Weighted Average) | 51.45 | |
Collars: January 1, to June 30, 2021 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Volume (in barrels of oil per day) | bbl | 1,000 | |
Collars: January 1, to June 30, 2021 | Purchased | Put | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Floor price (in dollars per barrel) | 45 | |
Collars: January 1, to June 30, 2021 | Sold | Call | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Sold put/call ($/bbl, Weighted Average) | 50.40 | |
Swaptions: July 1, to December 31, 2021 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Volume (in barrels of oil per day) | bbl | 3,000 | |
Swaptions: July 1, to December 31, 2021 | Sold | Call | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Sold put/call ($/bbl, Weighted Average) | 56.75 | |
Three-way Collars: July 1, to December 31, 2021 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Volume (in barrels of oil per day) | bbl | 4,000 | |
Three-way Collars: July 1, to December 31, 2021 | Purchased | Put | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Floor price (in dollars per barrel) | 55 | |
Three-way Collars: July 1, to December 31, 2021 | Sold | Put | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Sold put/call ($/bbl, Weighted Average) | 45 | |
Three-way Collars: July 1, to December 31, 2021 | Sold | Call | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Sold put/call ($/bbl, Weighted Average) | 68 |
Financial Instruments, Fair V_7
Financial Instruments, Fair Value Measurement, Credit Risk and Foreign Exchange Risk - Foreign Exchange Risk (Details) - Forecast - Collars: March 1, to December 31, 2021 $ in Thousands, $ in Thousands | Dec. 31, 2021COP ($)$ / collar | Dec. 31, 2021USD ($)$ / collar |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Amount hedged | $ 10,000 | $ 3,051 |
Sold | Put | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Floor Price (COP, Weighted Average) | 3,500 | 3,500 |
Purchased | Call | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Cap Price (COP, Weighted Average) | 3,630 | 3,630 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Reconciliation of Cash, Cash Equivalents, and Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Supplemental Cash Flow Elements [Abstract] | |||
Cash and cash equivalents | $ 13,687 | $ 8,301 | |
Restricted cash and cash equivalents - current | 427 | 516 | |
Restricted cash and cash equivalents - long-term | 3,409 | 2,258 | |
Cash, cash equivalents, restricted cash, and restricted cash equivalents | $ 17,523 | $ 11,075 | $ 54,308 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Schedule of Net Changes in Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Accounts receivable and other long-term assets | $ 27,607 | $ (5,680) |
Derivatives | 2,302 | (638) |
Inventory | (2,628) | (3,179) |
Other prepaids | (279) | 583 |
Accounts payable and accrued and other long-term liabilities | (47,194) | (1,367) |
Prepaid tax and taxes receivable and payable | 56,254 | (83,593) |
Net changes in assets and liabilities from operating activities | $ 36,062 | $ (93,874) |
Supplemental Cash Flow Inform_5
Supplemental Cash Flow Information - Schedule of Additional Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for income taxes | $ 15,476 | $ 49,196 |
Cash paid for interest | 50,209 | 37,767 |
Non-cash investing activities | ||
Net liabilities related to property, plant and equipment, end of year | $ 28,711 | $ 77,353 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Petro Tal $ in Millions | 2 Months Ended |
Feb. 24, 2021USD ($)shares | |
Subsequent Event [Line Items] | |
Number of shares disposed, percent | 44.00% |
Number of shares disposed (in shares) | shares | 109,006,250 |
Proceeds from sale | $ 14.9 |
Loss on disposition of stock | $ 5.1 |