GTE - Earnings call transcript Q1 2024 | Gran Tierra Energy Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to Gran Tierra Energy's Results Conference Call for the First Quarter 2024. My name is Shannon, and I will be your coordinator for today. [Operator Instructions] I would like to remind everyone that this conference call is being webcast and recorded today, Thursday, May 2, 2024 at 11:00 a.m. Eastern Time. Today's discussion may include certain forward-looking information as well as our non-GAAP financial measures. measures earnings important update this disclaimers reconciliations any the issued release information to call. of for today's yesterday with non-GAAP refer and press operational we and Please on discussed regard to Any production interest royalties. on sales before are volumes based working

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

Gary Guidry

our Mountain comments that few General available And Thank questions this Time, Meeting Sebastian Quarter at me a included make line Ellson, Ryan detailed information open and Executive will morning, will now the our XXXX On and is our Eastern today Good Vice you, a.m. Ryan Call. our Chief X, Financial Officer. press earnings Operating President first quarter Conference our Morin, holding we'll following website. for Wednesday, on Officer. XX Annual for results, brief and releases time, My we comments, Sebastien name are operator. May and -- joining Officer; XXXX, noon with First Results X Chief President and immediately Gary are Gran Tierra's which Guidry, XXXX we and call thanks about be shareholders. Executive issued of Chief

join this Dial-in found website. call is results. Gran Ryan turn of will I'll meeting, over be where our quarter I of for on discuss the that financial company call. to I you now first give key heading. highlights Tierra can to our the a from overview brief to instructions invite During us

Ryan Ellson

morning, Good had a Gary. Tierra everyone. start to XXXX. Gran you, great Thank

development portion are XXXX of now campaign, along a development focused we the During of completed with exploration Block. ] substantial first the our on quarter, our [ have Suroriente plan and

During quarter of flow, million million delivered the Gran per Adjusted free $X.XX of $XX the from the in first XXXX, approximately the was $XX of million resulted incurring EBITDA for flow expenditures, $XX Tierra flow quarter, the in capital in funds prior generated quarter, company approximately After funds from cash $XX quarter. million. which share. $XX up up XX% of million

than company from As net had expected trailing debt was is EBITDA of the a a year-end million balance EBITDA less net and adjusted at debt of $XXX XX, March by and $XXX lower increased combination cash XXXX, X.Xx million. Xx The to of adjusted net be to XX-month debt. and

company's quarter, terminated. facility $XX and the During first of received of an portion was on Castilla, due the million, issued from of facility $XXX X% the repaid of $XX oil to the the generated million Gran quarter XXXX lower With fully outstanding differentials. notes sales volumes additional Tierra senior sales higher balance the X.X% million. up and Oriente $XXX Vasconia and of and million, of a we proceeds cash the funds, company credit

issued the shares has XXXX. or from company the January quarter. Tierra Gran January XX% The of X X, barrel, repurchased the quarter, $XX.XX flow. at were from from prior was significantly narrowed up approximately which X.X as X% of and the barrel, offering $XX.XX the barrel per shares during Brent during million averaged pricing $XX.XX has per X, X% first from quarter the back The cash at Since the of approximately during company's million Looking quarter. $XX.XX the from up per that company's quarter first XXXX, outstanding quarter repurchased shares discounts transportation quality XXXX, XXXX. free

sheet quarter our turn first results. we which to from pleased We core I'll exploration in to is excellent now shape, in will are excellent Arawana call we Sebastian Sebastian about very the The results well, XXXX, highlights balance excited our and how having our operational the we're highlight. over and waterflood. started have very assets are under discuss

Sebastien Morin

Good Ryan. morning, everyone. Thanks,

$XX down As than were compared of quarter capital to the of ] Ryan higher XXXX. quarter million $XX down XX of million [ million the $XX first prior expenditures mentioned, from -- and

conduct the drilled XX-day will of pleased optimized day, in has confirmed the stimulation expect and north had average as During approximately approximately our in production of To the and barrels without which note, reduction install savings working reservoir the very Acordionero rapidly barrels in of achieving barrels the The up $X.X quarter was as installation production are per of further. artificial north issue during completions, the per expectations. prior production Costayaco program wells social back now production as programs. we Post field. increase was result pump. over that completed XX,XXX significantly in of million discovered a per of program, the on a is combined oil drilling quarter, the majority between despite deferred program our costs, of successful increase X,XXX X% final day, work the of In lift, extended XX% zonal X,XXX day Acordionero the drilling disruption, about drilling the a both we to of of Costayaco ramped back approximately Total the per oil south. jet ] barrels an a XX,XXX oil and oil Costayaco X company's to quarter producing interpretation the unstimulated field testing particular, rate in XXXX. was per to day the of we and at final well initial over originally commenced disruptions Currently, interest [ selected and field

as program program Our block was we April. Chanangue XXXX. high-impact well, in production the since XXXX Arawana-X level highest has to which spud initiated increased on press early the our release, exploration the with We highlighted in the --

produce results kilometers across and approximately location, oil fault oil cut the than the to barrels logging since of water barrels open Bocachico-X XXX the north. kilometers the had X,XXX has oil XXXX. XX-day N-Sand production XX X% We from well, day, Basal at day Tena the initial the Basal over an oil hole barrel continues and greater Tena which well. in a than hole of The less to of of of the and equivalent initial June drilling XXX,XXX of API at recovered per are away very X.X to the Bocachico-X rate is per excited located XX-degree Cohembi geologic bottom about is to

field million barrels and XXXX, well in XP, million Our million reserves XX has map area of of produced compares of to XX Cohembi the XP the field. has Arawana-X remaining XX oil Cohembi XP. and properties observed At rock the XX end closure million and of

very are drilling casing start finalize Arawana-X, testing Given excited to and these operations the next in run observations, at few we weeks.

quarter, Looking expenses power offset to the to The compared transportation prior quarter. higher prior operating related Cohembi and lower generation company's X% Costayaco, million XX% by workovers, Gran $X.X Acordionero million by optimizations expenses by to the increased $XX lifting when due financial compared to metrics, to in fields. primarily to Tierra's to primarily costs increased

we I excited Nino go will distance below. levels key in conditions Gran delivery quarter, some river Today, are of also points caused El through our highlights to to the transportation low costs. the dry announce Colombia resulting by longer sustainability Tierra in report. release higher due During utilized XXXX

reforestation However, go has of hectares Tierra's the emissions X, the well entirety. on natural with in projects reducing XX company be June the million XXXX over excess XXXX footing, would emissions. flared through in at approximately time I and incidents safest approximately efforts, you of Tierra its gas Gran XXXX, since started is since company power strong gas years projects without serve to any In company's generation. in planted used gas generated This can work website to using energy XX% invite instead through over total operations. to the a has that the Tierra's of gas all Tierra power Gran and is otherwise current million facilities Gran call X.X and XXXX. the now look or year program. answer to forward X,XXX production to Operator, to initiatives, go ongoing to our has through will gas report questions. history exploration continuing equivalent operator, and and visit happy trees we XX the near-field I'll any its waterflood our greenhouse ahead. new land completions gas reforested to optimization lost hours XXXX. was please of greenhouse power causing be that we preserved turn sequestering Gran back the ramp our exciting

Operator

Thank you. [Operator Our with Milne is Bank of of line Anne from first question America. the Instructions]

Anne Milne

a possibly some terms time? think sense Acordionero. that Congratulations your you expenses XXXX Is outlook rest bit on on could quarter. OpEx social on back? the expenses with and it transportation something have to questions to could first good one mentioned you the of rest that at we for year. have of and in of My of come little the of expect what your for Do your the a -- disruptions information just do that's Just

Sebastien Morin

response. So bottom from I'll start up in

throughout Acordionero, a relationships -- the a so because don't we our at mar social I [ most. the come of really that OpEx that's had From perspective, that think things actually changes the we're ] on created disruption those as handled what at workovers will track year, Acordionero. the back it go back reduce. actually and on way side we was impacted to And this So of expect in lot And Colombia.

our to forward as the we are then coming optimization that. implement side, really power on these And listing projects. down costs looking So generation

see should we as there So improving an trend well.

Operator

from with question Skolnick the line of Phil Eight next comes Our Capital.

Philip Skolnick

terms but of going cost we productivity cost terms ultimate kind the in it the and Arawana Just I size, Cohembi, discovery. how it of the on years on how and we like looks many about develop we it's this. in think the time of guess potential how of -- kind some when lines in -- like think How over you should about wells of of do kind

Ryan Ellson

Yes. -- direct it the we're Phil, I a to is excited so Cohembi. why analog is think

of fault in terms size, in closure of In of trapping, deposition. terms terms

is, reservoir, to seen Cohembi what the thickness at Cohembi. as so this And wells, of similar you've prolific very very

Just on day. XXX,XXX still kilometers as well It's in the [indiscernible] a production producing Sebastian almost barrels well a that's have day mentioned, XXX that's a we formation barrels. away, X,XXX barrel same

of. is So it basing off this we're information -- without that is not that the

talked would we at acres why look the that's this geology. expect The look on waterflood. similar It's to XX,XXX it's volumes Cohembi. structure, And closure at of would closure, We we as very very pre-drill, similar we're you excited. we about If about that this, waterflooding. when

near I development XXX to infrastructure. million Cohembi of million this is type it's using on way you at the reserve think we're that -- of look barrels XX-well in recoveries, seeing XX analog terms basis. that a would at a same And you're

excited we're we so start and as we're on go this very rapidly And field production because appraising. can appraising

And it's so exciting. very

Philip Skolnick

sounds that on water Yes, just be many how would XX like, the those I wells, guess, of injection?

Ryan Ellson

Yes.

it's you reservoir [indiscernible] XX very would this think continuous. a because have you... I is feet something that's thick -- XX,

acres, one is viscosity like we're XX,XXX that wells, a better here to of As sure not seeing in we're but can we're And acre Cohembi, reservoir end reservoir spacing. might seeing you is this. XXX we're at on going very put use at our going that Bocachico-X getting Cohembi. The a XXX that's up response to less thing wells, very, at than being XX that horizontal closely that we're from we look wells injection. quick The to

So us. it exciting everything about is to

on reservoir analog with continuity, In we're excited the terms testing. get to of analog, the

Operator

Our next of the Covault question Oriana Balanz. from with comes line

Unknown Analyst

[indiscernible] questions, we if I one. may have go one is with by This X Balanz.

is debt. EBITDA -- one adjusted time the and towards reduce The leverage back on increased net you mentioned net to plan one that first the lower you of

or So do from you are of and targeting And us the that if levels you remind doing be would expect with to could helpful bonds debt? current reduce -- shorter to understand. buybacks in something how terms it you what net it

Ryan Ellson

Yes.

if probably and just adjusted debt, at balance build the now we expect -- our our the where to cash we free to look EBITDA cash another expect we $XX increase. On balance at right throughout million cash would the we're from expect year, net you our and generation build flow

So Xx net that that around get debt-to-EBITDA us ratio. to -- that

Unknown Analyst

cash excess use higher Or seeing And to Perfect. pricing free any update Do more you terms the and flow in it cash incremental up you generation, picking front backdrop? Canada? on any like last increased of uses, do in terms favorable a -- of just that M&A cash from this cash? note in that looks where position expect

Ryan Ellson

Yes.

I to we in look think just general to to in capital continue from at allocation debt M&A. buybacks reduction

the at cash options. those And look it. we'll way capital. best And to progress, all the make things that always We actually then sure have at before we continue as we we to to look spend that allocate like

door, money then in the the talk about is it. once So we'll

Operator

Canaccord Our next the question Roman, Genuity. -- of line Canaccord with comes Rossi from

Roman Rossi

Congrats this quarter. great on

one first significantly. buybacks, what the wanted the right? has appreciated quarters So coming share you is are understand to expecting just share regarding because I in the your

you stop have would XP I PDP do you buying any So price back or don't know, [ the per share? maybe, ] of value like shares, specific where the value

Ryan Ellson

Yes.

think has price well, low that's the performed share but a point. from I starting

So we've of from XX% trading gone at up to XX%. PDP XX% to

we so continue to value buy it's stock. think And still great back to

Roman Rossi

Okay.

a And question tax. good. second regarding Sounds

what will you next taxes the sense paying think be give a expecting? quarter. XXXX I us you on [indiscernible] Can you're

Ryan Ellson

lot tax a in remember of prepay As tax. because in we lot fair tax do we withholding just withholding XXXX, of far as it's paid through XXXX, cash a outflow. -- Yes,

$XX the be outflow So around will million. tax

Operator

Our JPMorgan. Alejandra from comes of the Carrillo question next line with Andrade

Alejandra Andrade Carrillo

questions. I X had

the on case, gas clarifying, correct? the own you now gas coming it just costs, your said remainder, be And power in spot. XX% is First, so generation your from would

a M&A drilling of in of little Just then terms on that bit a opportunities. reminder And breakdown? more

Argentina Colombia, interest discussing and guys? of to been you So could also Canada you've be

Sebastien Morin

actually generation So from either or run comes power XX% connected of on in our the generation diesel power to grids remaining Colombia. the facilities

facilities. displace power trying And to generation so the our from diesel we're

Ryan Ellson

got Mcf for [ gas supplemented. We about ] of CNG XXX

to So where I have the of And but -- spot don't probably question most pricing. was? we exposure the think the

Alejandra Andrade Carrillo

Yes. Great.

Ryan Ellson

Argentina, on now. radar on it's then our right front, Yes. And the M&A not

Operator

of Intelligence. Bloomberg line [indiscernible] Our with comes the from next question

Unknown Analyst

couple a long please. protest Could How time me, you about talk line? did they specifically the last? for Just the

Ryan Ellson

Yes. XX days. around The blockade was

Unknown Analyst

days. XX

in that's So March, right?

Ryan Ellson

Correct, correct.

Unknown Analyst

Perfect. another the program. on impacted is Are any drought in by Colombia? one And optimization water you in currently way

Sebastien Morin

No, the majority take because from makeup our sources. we of water deep

the water up actually different into water we and our from reservoirs reservoirs. bring So produce floodable them

Operator

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

Gary Guidry

again a.m. update. Mountain with you Meeting next Thank to General thank you're would I us for Annual look We everyone for joining like you. in Thank quarter XX today. for our if able, call please to speaking forward at Time. And you.

Operator

concludes This conference participation. your you Thank for call. today's

You may now disconnect.

Gran Tierra Energy (GTE) 2 May 242024 Q1 Earnings call transcript