GTE - Earnings call transcript Q3 2018 | Gran Tierra Energy Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to Gran Tierra's Energy Results Conference Call for the Third Quarter 2018. My name is Emani and I will be your conference 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 for you to queue up for questions. Instructions]. [Operator to recorded this XXXX today, a.m. like being call at everyone and webcast Friday, remind would conference that is XX I November X, Time. Eastern Today's well as and non-GAAP financial information, about discussion Tierra's certain certain including Gran as information, information oil resources, perspective measures. may include gas forward-looking release call. non-GAAP regard refer information to Please press and the measures for yesterday reconciliations and earnings issued to any discussed this today's on important update on operational we disclaimers with on available SEDAR. also see XX-XXXFX Please Tierra's Gran Per equivalent sale based royalties. oil barrel a on are of amounts BOE or working before interest

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

Gary Guidry

to conference quarter Ryan the capital results third Chief Vice and you, our and efficiency Tierra's Rodger Trimble, this Investor quarter Emani. President are focusing of strategy invested today that Gran capital returns me our on of results are welcome Relations. XXXX many Ellson, Officer fronts. on With and Overall morning Good demonstrated delivering Financial Thank on our call.

done up XX% from basis. was ago, all For share example, average production was a organically. on that this XX% of per a year I'll out point

failures power is in XX% a and production, the at in cost in power we power our deferred us grow we an issue high when fired challenges Field. our barrels which did the third BOEs than the all-time issue day own at We power, of believe and premature higher upgrading quarter, reached gas We over resolved, mitigating we primarily have being since the to supplier have operating our which production XX,XXX Colombia. generation that clean strategy We natural quarter. company the that pump third years faced natural Field in are by which was gas our generation was cost over Colombia Acordionero the and has both refocused X,XXX per been installing but of day ago few three Costayaco a that

at have looking pumps. about of that also suppliers those are particular of Ryan performance the more We will later.

would I acquisitions two point like we during to Lastly, the out that tuck-in made quarter. accretive

discovery Putumayo-X The Block, working we our Putumayo from first announced earlier. that acreage XXX% the XXX in XX% that increased being Block contains to we the

Valley, working barrel is tuck-in of acquired X.X in The it also combination the reservoir. VMM-X reserves. spent or for roughly We the interest plus of proven $X sandstone a a a those million Lisama about reserves. plus Middle probable probable million We XX% Block two proven $XX barrels Magdalena in added acquisitions

different. are previous Our these focus however, with no acquisitions,

recovery on through Officer blocks. is turn the those Our highlights. financial over oil focus Financial enhanced discuss the exploration Chief the we organic I'll now see and assets that to on those Ellson, upside of our on Ryan some to call and

Ryan Ellson

Good morning, everyone. Thank you, Gary.

flow There funds XX EBITDA was higher capital XXX for up in ramp-up million reasons on funds XX and roughly or had XXX quarter million, than flow. XXX XX% of capital was million annualized with QX active the are a or quarter. quarterly million significantly to investment was in of basis, XXX income our major which net annualized two quarterly million versus from figure increase operations million. from QX We ago Our our million XX year-over-year. XX% an grew year an of million during XX to an our

part and to rigs of running the turbines program, Acordionero spend, facilities when at large including the for two because at project, power we we drilling a had secondly First, for Acordionero gas amount active the purchased quarter. of

full forecasted million, XXXX our Oil However, our year X% quarter. to and up increased will still XXX last capital expect recover gas from funds that program. sales XXXX we

operating netbacks. have top to continue We quartile

compared world flow. we test as growth over a Our we quality of drive to designed large after the this wells resource set an Gary Mag forecasted development position electric program of exploration funded of back XP forecast International we in XX% in XX within This to like plays drill looking the Exchange Basin. larger of our development improve we oil plan actions BOE investor Report. a any on XX this taken ago already Boe portfolio. Putumayo XX% base cash netback throughout UN which the is our conventional have With QX. per October day unusual continue the Stock our Boe, increased are years large the cross XXXX is be X.X has the situation pumps, which historically of Middle focus per campaign nine on listed base. workover occurred next by can by by Colombia carbonate expected We deliver described year at well the commenced list common portfolio mentioned to submersible from not to also as which to believe on organic in additional will to active Luna $XX our as of acquisitions $X.XX confident lower in down quarter to replacement to undertake down to will currently expense class comparable QX, trading London approximately exploration expenses have be increased on CADXX. production We're unrest stock of approximately the to XXXX. on workover approximately our I'd exciting and our XX,XXX dominant backs with levels. to three our per remain Reserve the broaden our majority billion to to the mention assets by perspective Based high La mean our Gary exploration Boe,

balance undrawn $XXX strong We liquidity facility. million cash credit position. our exited sheet QX to on an $XXX over like Finally, highlight and with million I'd our of

such call as QX debt and or debt highlights flow upcoming our like Ayombero and Trimble operations President, development current to EBITDA. net projects catalysts Acordionero are Basins. appraisal the approximately annualized of Relations in X.X represents we debt low QX QX believe $XXX times annualized some future to Investor discoveries now September accelerate further at in our times Valley from the and XXXX roughly XXXX. early discuss XX, exploration significant Vice Rodger Magdalena positioned Middle and well flexibility and turn in Putumayo Our I'll over QX Overall, further potentially have projects to leverage financial X.X million funds of XXXX to we of to

Rodger Trimble

machine. acquiring Boes Good with QX. average of day operational this our per and pleased star in Ryan. were almost August a everyone. have that's oil. now virtually cash achievements Since be continued all morning, we We to Thanks, free and QX in several Acordionero flow XXXX, field quadrupled XX,XXX has production XXXX performer through

low QX, and drilled for wells During from two Acordionero. achieving we drilling seven well times different all costs record pads

to of facility. progress field up in with continue of production construction the enhanced to excellent injection recovery gas make also the our and power facilities, oil for the expansion We water the ramp

barrels expand of to capacity All of to Acordionero maximum facilities designed our work oil XX,XXX this per day. is at

appears In plan testing La test Down the the exploration wells La primary during Case exploration to Block, respective Alea the Putumayo exploration formation. this Middle and XXXXA A-Limestone in Sands potential before south QX. We on well Block, the of to Juglar target, the end N the in Chilanguita-X this also to appears Paloma be begun. Mag, Paloma's well We drilled and the well complete II of have XXXX. in and in the has the Deep the well in

have developments and into XXXX in We QX several in exploration exciting XXXX. early catalyst

main and on wells we in from which drilling four Acordionero On test ramp reservoirs. the south are production Southern passed designed the the plan oil new ongoing development of front, extent to pad, up the development the

exploration are projects. also appraisal and pursuing We several

First, plan in carbon Barrel, alluded XX, to of $XX barrels appraisal meaningful drill We some XXXX. three we resources spudded of Barrel October the oil that appraisal of play to the resource which respective well by with million the X reserves wells Ryan year-end. at conventional La Luna in IM convert into IM unrisked successful the XXXX on earlier, our

in the Pomorroso the A-Limestone well block exploration well, of we Northwest pads. and prospects Second, X it Pomorroso Putumayo drilling plan the to is fourth quarter are XXXX rig XXXX. U [ph] to target the finishing planned Chilanguita and currently further the through drilled the that multi-level basin target quarter zone to and are from to wells same as drill exploration the PUT-X the where first be potential Pomorroso Sands. the the the three N has same designed These X to after sound down expected and Bakari, drilling Tahito moved is exploration drilled and which well, Immediately

operator. our is at mean I very very I of locations. Operator, reserves, XXXX A-Limestone resource the our designed And So, and resource expect we the production. our please conventional Ryan will XX% of rates Overall, exploration our active is much call Putumayo to program XXXX represents our test resources drilling this questions. to ahead. ongoing Gary, the our Putumayo exit QX space. happy take impact year-end unrisked on campaign play focused BOE, X.X prospective large billion five assessing exploration A-Limestone to total Since positively to back be XXXX turn will and go now

Operator

Our conduct gentlemen, question question-and-answer the for and from first with analysts. Nathan now Thank Instructions] comes RBC. you. Ladies session we Piper [Operator will securities

line now Your open. is

Nathan Piper

Thank may. you. from Good me, morning if guys. Three I questions

generation you real bit year Acordionero more I to created this get - year. and on power dedicated when on and of both you're have I've of established guess your on both a the last provide Can power. running productions own and up First been course going little and on all, issues color Costayaco?

comes the success. that how Secondly understand of on to drilling keen we're So, together? pace

rigs are then could you drilling of in production see is whatever for and upcoming drilling, maybe bit of many numbers. year So, by you make us give color sense lastly, successful impact tied production your a a of on actually you XXXX? if and how closed have might active bit on see Thanks. the how And the next quickly campaigns into a can you an

Gary Guidry

Okay. Thanks, Nathan.

generation, we as operate the announced to we've generation. On an this own to and moved earlier year, strategically opposed on lease power power as

the the on first is big natural so, the have turbines, And gas water. we

we're next looking self-sufficient have floods will expanding And We mid-year ourselves at water important XXXX. starting equally where Acordionero year. Costayaco, at by Moqueta fully mid-year,

have as that will equipment. upgrading year. next will all We And operations. equipments us We'll of we take that our expand leased look that be, at

Costayaco made good in that However, Moqueta we're with we the shape the there. comfortable changes were pretty

next the So, Acordionero, your the an question of next is example Moqueta. year at towards to for year Costayaco, midyear answer end

it's mentioned, one and in license place, Ayombero exploitation drilling. trucking. and is infrastructure is That's on license. both within terms We're the exploitation Ryan pipelines pace In an The of drilling both an of for the Roger of Colombia of beauties roads that already.

We have place. in facilities

minimum. And and where We a so will testing exploration be that for we'll moment, And that at what we in with Tana where have range. through is to Costayaco. Putumayo, believe terms and an have would very also XXXX York with two connecting we're would has be Any And can the we event budget we not about London the the will the look which the events we're working is some drilling through in our look in at discoveries development. plan the of believe talk in a that - be wells. also, to certainly in the forecast. will you that a In of product and market and Gran Tierra the rigs. plans New long maximum that truck of within infrastructure middle way we're immediately. an that But color about we these minimum our we at pipeline planning then. the station our all long-range truly primarily And more talk year at rapid San rigs, earlier our long-range through basin acquisitions be We're that

Nathan Piper

that portfolio we the - IFGs reliability like guess the and so over And and you the I on think next pump months still power themselves then. six stuff manifest exposed can that. come to nine just to however, they say issues, would back to maybe I

or power XXXX portfolio still that failures through and/or there point first six the failures months a cause risk of more could is still that view? to from pump failures the combination robust So, the a which seen be the getting of pump

Gary Guidry

Yeah.

that generation. that risk fire And supplemental fair first I if say have and between even say supplemental mitigated think it's It's diesel generate. just the diesel we power. use that would We've the it's we have supplemented to mitigated to through interim option through our not risk the I mid-year power to power. with now -

Nathan Piper

much very Thanks Okay. clear. that's

Operator

our BMO Round next from comes And with question Market. Capital David you. Thank

Your line is open. now

David Round

Costayaco you of in drilling, a onstream but about would they pore clarify performing I are many add wells sorry. just during how many quarter, can new wells number how quote you how guys, perhaps and if previously, bit the was just you Hi, you touch to actually that of wells given XX There you well you're expect on issue the securities QX? you could situation then on that part maybe an update that maybe And bit that. mentioned just in the quarter? that had have an as a

Gary Guidry

exact come actually you of we completed the during number, total to laps you back we the Sure. that We'll number. were have with have QX some get quarter, an to in

expectations, exceed day we are well, greater how terms an targeted at continue appraising. in also they are A than those the of they of massive per barrels A the average or meet of most are sandstone, performing; per In X,XXX Acordionero, to

Ryan the have as southern first the end itself So and we field well. completed just moved into our mentioned of we

expect some to from is still we that we'll the test we expand and So, as be there produce injection that we real three, The saturations the have success, find plenty and that temporarily, years We four in specific going we the that of upside. know about primarily - structure flood, carbonate shortly. are expanding some that and we is oil, perspective. well to success field that had The was plans Costayaco of Costayaco converting space got at last next as real we very on the but the that water we drilled will talked And quarter reservoirs have to of you our as down an we to had a the new top reservoir be XX see looked forward. reservoir. few did injector itself well design continue

Ryan Ellson

timing. Okay. And the during quarter then we on to six wells on depending bring expect four to

David Round

Okay.

Ryan Ellson

\ Does that answer your questions?

David Round

you It touch then if does. And situation. security the on just

Ryan Ellson

an multiple We were flow There minor did There flows out were of between sabotaged We Right. incident minor, the a back of doing a Moqueta them. and are that fire. couple was had in very agencies can't all stream. tell the the sabotage, you can get the government can top that and Costayaco able we are quickly coming Field. our a we on I that on of We of you country tell source news - on lines the support is country. are everything agencies one to of to we

David Round

Okay. Great. Very helpful. Thank you.

Gary Guidry

David. you, Thank

Operator

Thank you.

from Josef Our with Schachter comes next Energy. question Schachter

is Your line open. now

Josef Schachter

quarter. everyone morning congratulations Good on and good

as and First thing, issue ended guys with was there engineers or quality electricity pump going pumps problem pressures the it a and to still if back see the the to was the corrosion sufficient to side pumps, only a an you up the the with the outside demand? what in handle to was used

Gary Guidry

power settlement to did have issue off a we the had cause power, was change have the answer pumps, being these the The We're could pump look is ended into we've of on, it that, of at that the more settle taking - that and couple that Yes. design primary we've pumps precautions re-run. the back to restart. Joseph not and of we in up

body the of cost to avoid corrosion, terms active that focus of program, and also issues not terms unpredicted that so we don't cut the any corrosion program, group and on but in of have very to a In corrosion, corrosion. in we have a only see chemical entirely we corrosion

Josef Schachter

metallurgical fail of no so Okay, issues.

Gary Guidry

No.

Josef Schachter

million. in What second question small quarter statements, your months common is on the only want more talked than my stock amount the process you in know or nine spending process might your you bid? are quarter, this the on I issuer thought cash the your of is? spend, flows financial X.X given where is more and stock normal course in on thought a No. is, repurchase Then active Where you a when about

Ryan Ellson

Yes, seemed is, blackout, activity have perpetual Josef, challenge we've have. amount I'll the that to one. in be just touch the we that we with one that on of

an doing returns at We good free cash those the share and funds of purchase it's doing that. at some of on those to shareholders, some we're think we which plan, will use automatic a is alleviate to so concerns. actively what flow, are do of So, look capital looking

Josef Schachter

reason me I that the you now from reverse. Any can a CADXXX. question can missed? going then we're CADXXX is it's at today the Was was through why last Okay. reaction up stock if there some and shed to action you light the there and a nutty at have anything real positive this on morning, was popped

Rodger Trimble

don't have you We missed it, If we. idea. any so did have

Ryan Ellson

activity I markets now, that. It beginning of been the can the that's where to trending. the kind looks say we've of all at Yes, that's close just day. abnormal Josef, gone on

Josef Schachter

the this on surprising. bit a oil is Yes, morning price. lower market a pop-up trending lower But the was

for it very that's me. my questions quarter. Okay, and a for good you Thank taking much

Ryan Ellson

Thanks.

Operator

Thank you.

next with Our Ian Eight Capital. from Macqueen [ph] comes question

is now line Your open.

Unidentified Analyst

Arana what asset. it do with the the over question. and Canaccord lot the guys. partners is VMM-X Mono I It do barrels going fairly to a first do a talking morning a your of talk happen. time think about to what can day year. it you Simple been for well. think trying is substantial really Arana you half in the be [ph], have production there's but about that as the was quick you There point in XXX undertaking are What at never one asset, been Good block Mono can about with of

Rodger Trimble

that workovers, some see we a Ian. sand in day. it's Lisama, What about project Mono play, potential barrels a the Thanks it's Lisama EOR currently is needs Arana XXX at producing it the

to needs back a it bit day. the more Mono us needs through look going push those water and real getting money potential look we're wells, of real for the X,XXX XXX But the a to it needs as plug, long-term testing needs some Arana field we project or over the and spacing, year spacing, through down so water of two, barrels injection little it the So, sands. up down pilots, it spend to a waterflood at is next

have setting. better iron we more as La that lot a over We're the the barrel, focused as are we Luna. on iron rights moment also barrels not structurally in a have think and we We potential at conventional complex

Arana remedial needs And wells so, Mono with that starting pilots budget and be issues. that get is is we're production, that work the looking some all we'll in some at hope to done done back the field. focus mechanical there and on on our our real wells XXXX flood in quarter look at getting water with We this to

Unidentified Analyst

That's great. Thanks much. very

Operator

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

Gary Guidry

updating you, to you joining with to I'd the look We of speaking like everyone much. progress. you very end us Thank Thank thank quarter operator. at ongoing for and you next today. the forward with

Operator

in gentlemen, you program. conference. and does participating for thank Ladies This the today's conclude

may Everyone all You day. have great disconnect. a

Gran Tierra Energy (GTE) 2 Nov 182018 Q3 Earnings call transcript