GTE - Earnings call transcript Q4 2017 | Gran Tierra Energy Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to Gran Tierra Energy's Conference Call for Fourth Quarter and Year End 2017 Results. My name is Bruce, and I will be your coordinator for today. At this time, all participants are in a listen-only mode.

Following the initial remarks, we will conduct a question-and-answer session for securities, analysts and institutions. Instructions will be provided at that time to queue up for your question. Time. like webcast everyone February and at AM would call this XX, I XX being is recorded Eastern Instructions] to that remind conference XXXX, [Operator today, Wednesday, oil Today's and measures. discussion certain may forward-looking gas and non-GAAP include information, financial information, earnings any to update operational on call. non-GAAP for measures the issued this information press regard disclaimers discussed with Please to we and yesterday and refer release important reconciliation of today's

of call earnings Gran Any the property call Tierra without Gran forbidden Incorporated. Gran rebroadcasting will Tierra now of is of copying turn over Energy, the or ahead. and President Tierra. the Officer Finally, Guidry, Chief this I consent of expressly Guidry, is Mr. conference go this written Gary Executive to Energy. please

Gary Guidry

Relations. and Fourth Gran Guidry, Ryan today Good Gran Results Ellson, to XXXX End Chief Operator. me XXXX Quarter Year Financial a fourth CEO. Call. and you, My is our yesterday Tierra's Rodger Conference are And and with press on Trimble, our Thank President, Officer morning included name end financial and Tierra's year information and Gary We welcome quarter release the operational issued results. that detailed Investor Vice

successfully XXXX we filed will on Ryan, open performance. the available then annual our Tierra XX-K on for has I strong, in Form transforming will After execution been portfolio our financial and XXXX Rodger focus In delivered Gran our website addition, brief in few on and comments Energy’s is and XXXX, grantierra.com. Edgar report on at make XXXX questions. a line

XXXX, of production mostly the a we our flow our barrels $XX for XXXX, to and XX% than has reached we all lower dramatically the growth our Gran net higher million more In high to with XX,XXX per relative XXXX to on operations QX, than quarter equivalent In XXXX value loss an XXXX, per million drill the of refocused results. funds Tierra focused share was strategy while generated company’s XX% production from of Colombia to profitable Our fourth In when through doubled basis up XXXX on compared Colombia strategy. was time XXXX. approximately bit. achieved oil only down average $XXX day, in million XX% XX% $XXX great emphasis from

XXXX financial our impressive in marketing greatly price XXXX flow the growth the strategies. increase results sharp in strong our quarter developments, cost Our now in a the key optimizing and the indicator funds is exceeded structure and for oil summarize oil and on Ryan from milestones controlling of and focus XX% Brent operations will year.

Ryan Ellson

following of by $XXX $XXX in facilities. primarily $X XX% acceleration everyone. morning, up million which active QX XXXX QX were flow exceeded funds production as up QX. from In XXXX Gran QX, $XXX on million with and increased to of Good QX, basis. result or Oil the $XX to Acordionero from million Tierra flow had annualized a was and our $XX investment million gas million from in XXXX XX% an funds million up sales capital XX%

continued XX% term in from on XX% and top which we to weighted capital. and have long operating per oil on to performance terms QX XXXX our everything to in which Tierra, in peers in return have do basis at approximately center at rise increased a We on quartile grew capital the exceed greatly we increases Brent is stake relative achieved the price. sales interest relative netback is BOE holder These of invested value efficiency oil $XX by by QX. Creation believe working of focusing of XXXX Gran to

XX% total delivered dollars. our in NPV XXXX, NAV share, reserves, XX% XX% billion share of per during ago, proved month a plus in in approximately U.S. and in $X.XX reserves growth per all reported share we per robust XX% As portfolio to to probable $X.X

of Our Basin, fairways high BOE, Report. XX N now designed per of Sands. the A-Limestone, With to is day resource portfolio A XX,XXX mid to base, including other of we our forecasted X.X to in to are resources the carbonates large our billion wells PetroLatina in our set part by our transformation the BOE Reserve Tierra by be exploration of XXXX was plan from test approximately of production Putumayo at achieve unrisked funded Gran XP XX class funds of dominant years, is acquisition campaign strategic majority successful of drill oil over vast play Independent which our next prospective This mean forecast position assets and expected big exploration of world to our quality the three based on flow. XXXX.

you on As major we the field. Acordionero that the oil $XXX Magdalena value doubts some paid whose PetroLatina time for the paid. we was acquisition of in know were there million in Valley external asset Middle the At

some substantially significant overview operational Gran this spectacular to months our A acquisition. allows with company normally to the assets now In Tierra XX has there most top these or also owned at significant been available have results stellar and date. I’ll operated prices. that been achievements if of has a of assets highlights. represents and our the give However, downturn higher be available acquire that tier the wouldn’t brief

to this XX,XXX well injectors tripled source Acordionero have increased water and production one per two Middle bringing our oil roughly more XX drilling time, wells, production and have BOE day. Mag During XX,XXX than water day to and approximately we total on BOE by per

of and X.X are another to of water tripled during XX% we In source Mag as period million gas recap, full we Middle free and in NPV the four have than value other of times billion development Middle finished. been acquisition, Mag drill. touch assets assets. million the cash our since from and three XP And we the $XXX and injectors oil another original wells, the far of acquisition we Over XP more briefly some oil covering flow in cost. well has net while is time. plan to our flow engine to from discounted NPV – have XX PetroLatina a for our generating sales water XP of To BOE the billion the million from grown operating back still Acordionero XX assets, same well this $XXX capital investment $XXX I’ll we what now have or close highlights reserves positive generating cash budget. on the XP while production paid the time and added tripled XXXX the have capital

we program of is per day BOE disclosed and represents of to to production range million our Central in our December of Acordionero’s to dedicated As to cash approximately nine XXXX at are XX,XXX to our facility. track we target plan $XXX by directed our Based the ongoing be Approximately production this the approximately royalties. to drill Basin of year-on-year to and plan some [XX,XXX] XXXX, processing achieve minor production activities. we in seven day. in far of our where the be Putumayo [ph] growth capital will results XXXX majority production portfolio fields. XX% XXXX we on delivered of development to in XXXX is of with over drill development XX% profitable on strong XXXX with Elsewhere our BOE which XX,XXX XX wells only in to total forecasted flow development current expand so growth before development Colombia guidance the This XX% per wells a

at barrel of $XXX wells funds price Basin the XD to approximately paying calls now After million down to we which million cash approximately of excess At exploration EBITDA is Our and Colombia as vote A-Limestone of facility XXXX six our of by approximately roughly term. Putumayo XXXX long believe with for revolving five pro $XXX focused have our million. investments XXXX, $XXX offering to leverage a $XXX million expected N where of delivered represent which evidenced $XXX XXXX one drilling a XX, market will capital of represents wells and million end, year XXXX debt exploration campaign our successful of capital and than $XXX $XX designed our on majority oil million. the $XX Subsequent seven to which planned we to of XXXX December new placing to both budgeted to strategy the plays. is forecast forecast debt midpoint our Brent, confidence annual million focused flow. of senior roughly cash program more cover $XXX expenditures of sheet, Brent program QX and $XXX times annualized At million. are our seismic in credit our once flow of which be we cash eight Sand again of a balance strong $XXX and XX% The our test notes term per forecast of year net million to be XXXX low forma on we X.XX% eleven would the XXXX total

in In XXXX current of projects strong of flexibility Trimble, positioned discuss liquidity. addition, left potentially is such accelerate XXXX. substantial Tierra Relations turn We potential our Acordionero now and believe revolver operations and provided Mag improved with our credit and Vice our million call as Rodger upcoming a is such or Investor XXX us in Middle discoveries as President, Gran over well undrawn some Putamayo future to in available capitals to the I’d facility financial and [Indiscernible] highlights liquidity us exploration the Basins. our to the position

Rodger Trimble

since operational into an to XXX% we starting barrels XXX A-Limestone XX first Vonu-X it total October at A-Limestone. of XXX% mention of a of total have the water encouraging natural September XXXX. barrels star some far. Vonu-X XXX,XXX performer per the A-Limestone in and with no decline all briefly has X, of the the average oil today, than oil a produced at I’ll no X, has with on re-completed since XXXX gross morning. of in the our day vertical Good oil per On after other yielded production on day basis, Costayaco XXXX essentially XX% observed initial of with barrels XXX,XXX oil produced and well working modest results well Gran oil so XXXX a cut. A-Limestone XXXX. is which averaged gross Since where The that only rate Costayaco-XX, barrels the Tierra million during XXXX water. interest The PUT-X produced completion. virtually the less of from in roughly continues an in water July we Block be operated highlights X% produced key XXXX, has well of total, October In targeted X.X a basis vertical has barrels

formation. the indicates pressure damage that fluids after completion analysis simulation However, the

A-Limestone. We are working should which completion to redesign and be the the fluids compactable optimize more then with

and further inch the and is being net in oil square has Shallower static a pounds Costayaco to with well to well of at on XXXX currently potential the more the with the assessment new A-Limestone. pressure Sand finger this the of recommence print X,XXX Costayaco An Sand as test resource oil the and to the during back the conventional production wireline we N and still analysis rate suggest stimulated old. completion in Block, December is year PUT-X Well MX than is learings to At Sand for had oil source Limestone, and that well. API the the of Siriri-X, a we A-Limestone the point our Vonu-X Exploration shut oil gradient Siriri gauges to future oil Siriri-X a XX wellbore in out and XX full well completed. the feet of restimulate barely in pay A-Limestone XX We from identified brought play completion its have XX potential and Pepino time, is oil fluids been pressure infancy in We our the Upper in perforated currently were testing. this studied. is using feet per of A-Limestone. degree to samples measured in pay Also, after and stimulation plan the At N similar wells in the of plan optimized the XX A-Limestone the was apply recovered. to is

the drilling by optimize indicated As techniques with all achieve to the more unrisked resource at by very in We than look more BOEs in years encouraged world new of around as about mean Basin. to play perspective other McDaniel assigned this massive of year-end of plays time A-Limestone. resources drilling exciting to many the to prospectively maximize best We recoveries remain this it completion the the will economics. and and take million XXXX XXX Putumayo the play forward

– follows. analyst sorry in XXXX from upcoming exploration XXXX catalyst, could result as our Some active program that be might

Acordionero at Ayombero drilling have Middle are designed First, Magdalena. Lisama and we the analysis the encouraging in as Testing sand signs produce Ayombero-X log Putumayo of the and several to but while drilling wells wells structure. mentioning these exploration from It’s worth a LaLuna well could is in currently weeks. us the we’ve well. of of test The during from seen Ayombero-X same drill the of that targeting carbonate separate the the Putumayo-X the oil we take well formation, is that

we exploration Second, other Basin. their Northwest plan as The Sand N wells and drill Pomorroso test A-Limestone wells in both well PUT-X perspective Putumayo all the as are block formation. carbonate to designed and three the in Pecari, the down to the

late in drill our we are Sand Confianza the the in plan prospect in we PUT-X Third, drilling exploration at several of also briefly Four, and it’s N excited back program, the two wells worth development Cumplidor mentioning side, oil Putumayo starting development in A-Limestone QX. field to XXXX. other well during exploration the on to

the example, XXXXA Alea the [Indiscernible] on PUT-X. [Indiscernible] For well [Indiscernible] and on a on PUT-X,

Our mean to questions. perspective back operator massive I total billion unrisked will now on our A-Limestone is very represents much the XXXX please BOEs, exploration and take XX% drilling call focus Gary, go turn X.X our of of this and I happy so Operator, Ryan play ahead. conventional accessing space. will be resource to resource resources

Operator

from first UBS. question. [Operator the question for Thank of Marcondes you. And line One Leonardo our Instructions] from moment comes our first

now line open. Your is

Leonardo Marcondes

aggressive extra in level, for the expect Thanks drilling first XXXX with call. $XX current per do How guys. do Thanks. we question has][ph] regarding consider I last [Brent barrel, could year? compared many oil our more see production is at My wells but guidance guidance. you Hi, a this the the to number? And

Gary Guidry

respect questions. the development for With to Thanks wells.

change most capital are program. our XX wells at in respect this gross and XX program don't capital Our wells, to to - that field our development intend with focused total to Acordionero but is increase of in we point increase

Leonardo Marcondes

Okay. guys. That's perfect. Thanks

Gary Guidry

Thanks.

Operator

our And line from Markets. from Adam next of question RBC Naughton comes the Capital

open. is Your line now

Adam Naughton

Yes. Good morning guys.

to result from just when question sometime from the me expect well, on confirm, quick results a Thank we Ayombero we Just and next from should you. Totumillo month? expect

Gary Guidry

in the is, test I next the we Ayombero on think answer month yes, or so. expect have to results

lowermost the tested have We zone.

log process On two well. the We to Totumillo more in zones have test. we’re of to trying the

we have to next that. what on and on see have so we’ll we logs those some decision expect logs, make over a from We again the should week or results so

Adam Naughton

you. Thank Okay.

Operator

our of Schachter And from line question Research. next comes Schachter Josef Energy from the

Your line is now open.

Josef Schachter

Gary, Ryan results and year. the build Rodger, morning, congratulations the the and reserve on Good for

got question, a First I’ve few.

is? how of plans part of discovery locations the development up there for success the good this Vonu-X, the to year Given is latter to see in follow

Gary Guidry

The quick answer to land is that Josef access.

more Chaza potentially or block. block two from wells from We’re capability working one do the the that drilled directionally. Chaza is land on of access We the have actually on drilling well block Vonu-X the

on to block makes is lot ultimately things well get the simpler it -- to access to to itself, well. the preference get and land the direct also drill produce a Our

the so that think looks up Vonu access, And the start appraising land we we to us. will next XX and to we’re have is It answer geared and months exciting quite developing field. the within

Josef Schachter

much. Thanks very Good.

made the war like to and potential you of about Are a for XXXX? for that acquisitions given that? million on horizon, year. some question, CapEx Is the there had coming there cash the potentially do you have chest Ryan and $XXX some given cash something cash in presentation Second that want things have flow for

Gary Guidry

for we anything. I think the necessarily look don't opportunity. We need is always answer

mean half opportunity resources. of barrels very unrisked prospective are and a rich, We billion

what having have so do, upgrading highly lot we’re look do our in at quite and that, look economic we to So we always disciplined at, said we portfolio.

then that Ecopetrol last We quite we've also pace. disciplined elsewhere Mexico. the of they opportunities finally control years have look joint may don't in ventures, And looking joint ventures the that Valley in been several in over announced We at times consider Colombia. Magdalena at couple and

that. do to continue We

the We’re that have on participated with we economically venture joint round that that we what that's quite see at approach competes bid in. in encouraged we by taken least last PEMEX the the And Colombia.

Josef Schachter

immigration affecting been influx from or ELN Liberation has over the Colombia ELN massive the also and me articles there in Last half from Okay. National Army, and into article. in magazine the from about in of Llanos some affect Venezuela a million question Juan XXth the Economist February anything civilians massive with San Does the that Venezuela the basin? Basin the

Gary Guidry

we not the that The operations does the immigration crossing that ongoing. border have impact

infrastructure through help in been we not the not but us active us. have to looking and infrastructure, to country get Colombian can it to been The on operations. Magdalena overall made problem with country, -- the oil. market We’re impact But they does it's Valley have in us the continually impacted the make causing overall quite ways and lots not of have our damage our with which They’ve in in active that infrastructure Magdalena there's that is at the ELN operations. been of though logistically directly alternative our government area but impacted routes active

Josef Schachter

to has your procedures keep that Have cost and changed anything structure? of the that, increased security your people done you or because there safe

Gary Guidry

Yes.

on being always locations. are remote We alert in

general and being was ELN. going We the are managing military in our Josef on is locations. alert remote high in continuous say, are with I would communication in country the in with who But always police the the what’s that

Josef Schachter

Good.

so much year. a Thanks Okay. good and congratulations on

Gary Guidry

Thank you.

Operator

continue. questions are no Gentlemen, this time. at Please further there

Gary Guidry

update over you you, to Thank for forward ongoing you. today. progress. thank us and would like to again on our joining the look Once next everyone with I you Thank operator. quarter speaking We

Operator

the disconnect. program your gentlemen, today’s day. may conclude for conference. This have a Everyone you thank and in all and great does participation Ladies

Gran Tierra Energy (GTE) 28 Feb 182017 Q4 Earnings call transcript