GTE - Earnings call transcript Q3 2024 | Gran Tierra Energy Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Gran Tierra Energy's Results Conference Call for the Third 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 is being webcast and recorded today, Monday, November 4, 2024 at 11:00 a.m. Eastern Time.

Today's discussion may include certain forward-looking information as well as certain 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 forbidden property Gran without Energy. consent Gran Inc. is the Tierra of this the or Tierra copy written and rebroadcasting call call earnings Energy, Finally, of Any is expressly of

Chief Executive will Gary and I turn Guidry, call the of to over Officer now conference Tierra. Gran President

go Guidry, Mr. ahead. please

Gary Guidry

Chief Results Thank Officer. for our Morin, you, Guidry, operator. joining today Vice Gran Good Officer. Financial Operating Executive Call. Chief and Ellson, morning, with And and Tierra's Officer; thanks Third My Ryan and Quarter Conference Chief Executive are Gary Sebastian is name me President and our XXXX President

few On turn the on we Monday, we brief release now some which detailed to quarter information to Ryan a XXXX highlights our questions. over of website. our now that third will line a discuss our is for will from Ryan comments, included press results, results. open key call I'll financial November third Sebastian the and make quarter XXXX, the about available then issued X, and

Ryan?

Ryan Ellson

XXX Energy drilling of everyone. acquisition with with totaling operatorship equivalent Thanks, positions iX Gran that into how Ecuador. Gran excited iX XX,XXX XX% per diversified Energy. The on start of believe Gary. we and uniquely booked Good and I Tierra its gas premier off and locations We morning, oil purchase company are adding Tierra while barrels Tierra acquisition diversified in assets average production Colombia Gran October Canada, to oil day. an want by Canada has iX net of completed saying as XX, a the XXXX,

North by Montney barrels oil America. most reserves in the and Canadian Gran landholdings oil XX in an growth million Tierra's of equivalent, include equivalent, has acquisition XX oil increased PDP prolific of of million XXX of Clearwater, XX% The X increase an the million barrels XP growth of XXX%. barrels the of almost gross X.X XX%, by in XP by and or XXX equivalent plays and sections acres XX equaled iX sections increase

online, Gran million Tierra now has XP of of approximately index of XX XP and years million with BOE reserve XX and reserve see XP be believe We LNG BOE XP a we projects a in depressed demand as with XXX North America. of in XXX reserves, along years. will brought electricity alleviated gas the currently Canada include life index major natural prices increased are Canada Western LNG

forward term, of look developing company skill the will short have Gran the operational will We opportunities portfolio opportunities the in still in developing are oil technical the our significant South top-tier its sets. Tierra America. and focus and teams appraising on Canadian high-impact our and In oil-weighted integration confident while to combined

result a million on up as $X.XX that net generated quarter, was onetime of to $XX the flow the Tierra which results. was million or funds the operations from from quarter, of prior generated of per XX% Now Gran quarterly adjustment share, Gran during And compared million. EBITDA income tax prior $X impacted quarter. the Tierra million Adjusted quarter. prior $XXX the $XX in the to mainly

balance approximately by acquisition. million. $XXX the company and cash million to As of down come $XXX We of million a as of funding a balance expect the debt September XX, do XXXX, cash the $XXX net result had iX of

to wider debt-to-EBITDA or from target of net Tierra oil and lower prior oil of We Xx have less. continue sales differentials. Gran the generated X% $XXX due million, long-term to down quarter price

higher our the down the X from Vasconia, $XX.XX than quarter averaged the per of company's The quality which in quarter. discounts differentials Brent quarter, X% the during from during and prior of were all result quarter. transportation prior This the benchmarks, pricing is of $XX.XX and per barrel Castilla widening Speaking barrel, were the the $XX.XX, Oriente.

the as quarter, Brent the differentials. previously, lower to Finally, the combined down mentioned was operating higher per company's netback pricing barrel, and due XX% prior $XX.X from

acquisition shares As a September outstanding XXXX, cash pause at Tierra announced approximately from on XX, X XXXX January or January share shares result of to program August of in shares Gran its the required quarter. free only From XXX,XXX million repurchased flow. company the X, issued the X, was and XX, XX% iX XXXX, the buyback XXXX, during result to repurchased

also of focus with Tierra on issuer As some shareholders' reinforces the renewal of a The announced share to approval component you bid. its may this announcement, TSX commitment to of renewal as course our along buybacks of returns. Gran results the key morning, Gran continue the Tierra's seen have normal

turn results. the to now Sebastian to from over quarter I'll operational our highlights our call discuss third

Sebastien Morin

thank which were quarter. the drilling and you, during X expenditures compared we million timing we was when XX,XXX was quarter which the program, everyone, From to interest oil rig operated during the consistent rig only in $XX prior quarter average our the This per Ryan. of million, production quarter. morning, to where day, working prior compared to with than the during lower X was Good perspective, due quarter. barrels incurred capital Total the prior of the of a primarily $XX capital quarter,

were had workovers. production in higher company field field, quarter, and Ecuador. increased by the in in Charapa was the Chanangue blocks caused production offset the related decrease the The lower which by and Colombia Acordionero Costayaco downtime volumes in increased partially from the to During

touch campaign, As which will a later. upon result successful of the drilling exploration I

to million, expenses lower compared the offset in costs associated of costs, workover fluctuations points. of operating XX% by due distance to higher lifting prior result by inventory primarily overall of a by $XX with shorter as decreased which million, quarter, to primarily expenses The company's delivery $X.X were Ecuador. prior the million quarter Gran to transportation utilization to compared $X.X the Tierra's decreased X%

smoothly restrictions sufficient levels Operationally, QX, to returned operations. which Magdalena barging the field later continue development civil drilling quarter been Cohembi water preparation in construction progress the to part barging for commence Block, in of reported now facility the levels, on in with we progressing have to have River increased and Suroriente the As in our resolved plan XXXX. fourth the with program works

our will handling expected also on currently field a completed treatment capacity at projects in a are with which working be This fluid increasing to expansion in performance. per of consistent to expansion capacity. Acordionero optimizing We an addition represents handling the treatment approach of mid-December. water waterflood The result increase water water in XX,XXX our barrels with long-term is our day, XX% facilities

at growing and maintaining fluid per production year continue increased steadily and has water Acordionero while Tierra to XX% Gran total production by sweep efficiencies oil improving injection and recoveries.

XXXX, wells API The Looking highest from to impressive the Tena. production Ecuador well our consecutive day. of on with Charapa-BX and rate any X% Charapa-BX oil X,XXX barrels water of exploration. Spud well The of initial our the sixth Ecuador. of Basal an than per had less marks to XX-day August in oil XX, XX date discovery cut

Block Charapa All only success production, X major allowed east Zabaleta-KX the The and Block drill up wells earlier JX milestone the is assess is this has to to wells. has as Chanangue now is from of U-Sand and Both and well, formation been Arawana Basal limestone. Zabaleta Oeste-KX will structure. year exploration B potential the The well XXX feet Zabaleta-KX Tena well located wells, in drilled the as to target the we exploration oil barrels Ecuador X moved this X kilometers and T-Sand, had in have of the to and mobilized million beginning. the the cumulative drilling us rig over of achieve a

over XD will drilling data Preliminary interest, We Charapa confirm acquired locations and further have also is Charapa interpretations delineate structure. in development over planning. for now further being Which The high-quality including initial processing support the completed additional seismic scheduled currently the data future reserves, definition areas the XD our of data future XXXX the of better Block. underpin of prospectivity newly potential interpreted.

Cardium gears book only Clearwater, to drilling, to Canada. and continue and team its look areas on of is further a note. Overall, its assets, Other there Switching locations following reserves. locations in long-term with high-quality where value with company Simonette the are and the a Cardium XXXX finishing include driving is booked. the forward the will of The Rimbey [indiscernible] drilling to and we X Nisku, we on active through portfolio Wapiti the is goal currently completion high diversified currently drilling managing drilling an place. areas, The delineation core Dunvegan, including expectation increase campaign on

core I'll we now the successes acquired XXXX answer will well any turn in Canada, operator, expansions optimization growth fields, Ecuador, the be to With our Colombian the in are we positioned waterflood questions. call in beyond. assets back and to and exploration for and happy in newly

ahead. go please Operator,

Operator

Markets. first RBC line Our of the Instructions] with question [Operator Pardy Capital Greg from comes

Greg Pardy

came mean expecting. types of sets cash different of we in higher the couple were than part I questions. a tax is tax. first had Really of But cash

wondering look tax your Now with the position you as acquisition under your I'm just what like, will into head XXXX? particularly belt.

Ryan Ellson

Thanks. oil you surtax. come expect looking down Canada, We tax only think cash hover we'd grow continues prices very the a above can threshold taxes surtax. actually. at think actually, in we'll Colombia came continues that When down to in Yes, move the the favorable Alberta over Yes. to of is to price just oil the the particular, I regime And -- XX% in still in that fourth XX%. XX% quarter,

to expect on decrease overall would continue And so we an that to basis.

lower in in be XXXX XXXX. than expect tax We rate our to

Greg Pardy

That's cash that that Ryan, think mean, the the Okay. is you generation how helpful. Is then of the relating flow company? that to opportunistic, that reviewed NCIB. buyback, yes, free connected to buyback? should -- see we did just And function about I a I is

Ryan Ellson

Yes.

an I plan is we'll back -- purchase continue think so on stock. did buy to put buyback share we is, the automatic

we really blackout, through if look even free if cash funded can are XXXX, at have buy. we flow. to think in you we So I continue that in But buyback

way value. net the that for shareholders in trading expect to we to we to so continue discount PDP, us, it's think at great long-term we're capital to And when and a And asset a increase return future.

Greg Pardy

Okay.

you under with outlook you allocation going just really us number reserve a you're through with beyond. just the motivation reserve number is as X to thinking last the should how diversification. want remind then comes and belt. go back Just an maybe capital 'XX consummating understand one. Can one, even or from for now about it, that into company what and do the you we And think deal maybe perspective, iX focus to your Really life to of drove

Gary Guidry

Yes. Thanks.

iX a with really to to basin. And opportunity of assets as conventional that overall entry but trying team. I the an lots on years, think platform find for Canada we've Canada the set considered of as couple growing of the real should be for well company. and provided the for we on as right a been enter the company, Western really the strategy us, basin. emphasis of into a It's ourselves see continue unconventional entered conventional in the We assets to

a see gas. we oil of this that also of diversification assets. one attractions and that's And the particular We of see set both for

allocation, In capital position. terms we're a of very in unique

have underdeveloped other we -- as well the think the Ecuador, as several Montney recent Clearwater, Montney in areas We which within the are the here and both some material in discoveries, portfolio. some assets Simonette Canadian

from in see discoveries to things you'll Ecuador, and interesting in Colombia as the mature is very Canada. what us Western in so our here oil new opportunities of oil as here, continued allocating well waterfloods XXXX some development And

our term, excited. but be would allocation our we're near quite That

those Canada, and the Western we're of here vigorously. we'll excited quite mentioned, underdevelopment about quite Ryan the As pursuing in be assets

Operator

next from Bank line Our Anne of question America. of of Milne comes the

Anne Milne

lower of the That of indications first -- year? be Do then that's XXXX will anyway, beginning of on this last are the on end of middle a morning. end looks XX-month in any sort have And my you the XXXX? the maybe the right, in you think you on basis. case the slightly guidance questions for It on for the have guidance? guidance. towards EBITDA of the your right for iX year acquisition. XXXX like couple One, now of closing the level up I question. just for when your you'll middle, your on would assume maybe EBITDA Congratulations sort lower I

Ryan Ellson

while. Anne. guidance. that oil Obviously, price little comfortable Thanks, Great. last within Yes, we'll end has we're been up a the choppy little

So with range. out then in we'll the in couple that come months will to that in comfortable expect of an But XXXX guidance year. early -- quite last of have we're And January. guidance be impact we the

Anne Milne

little the the a be XXXX? CapEx bit could And think for to I for us Okay. you you'll you'll your talk plan change year? much how Canada increasing How higher assume be because about acquisition. you do will of

Ryan Ellson

Yes.

right of plan than assets. But Canada, Canada, which in half-cyle is I as a the drilling our through capital of lots And Colombia the to wells. is look the I of now. economics. we're opportunities still think it working X-year Ecuador, think beauty Canadian mentioned, way lot at Gary the and of is there's different Most

expect as commensurate so allocate increase see And we in to capital, we production.

As XXXX. the in oil-weighted Gary assets targeting mentioned, we're

I expect CapEx neutral So flow as be would cash far Canada flow. and essentially to cash as

Anne Milne

had rate Brent. Is that that that Okay. Also to you continue? Do slightly for change year? to this higher quarter, there of the quarter you fourth expect could the in discount a anything

Ryan Ellson

market, barrels Yes. And bit. of coming is Oriente Trans differentials and one which an crude Part Canada, widening the is Castilla which natural Ecuadorian Mountain actually for ironic. the widened pipeline that's the the really because in But little is of drivers extra discount on of competitor XXX,XXX is Colombian that just Vasconia, that of of a a all the somewhat crudes.

Anne Milne

interesting. That's

so how and flow will Yes. time. the fields given and know production South sort things cash idea Canada big I imagine acquired relatively say, road, last picture, it's still going down you've reserve have breakdown to my attractive over far then any right America? now, between, the it's proportion of the And of be that versus mean I away. do in let's Canada on really but base, question, I the a that see small Some level, you strong EBITDA increase you in but

Ryan Ellson

continue oil weight adjusted environment. future had that in in in -- Ecuador I South grow, our expect to all the expect to we guess And conflicting America more a bit Yes. price the we've still with there, grow in majority gas of discoveries to X the the quite especially we There's a that up I things X in We the would Ecuador, of as well. with make kind expect, EBITDA. there's robust sense there

stop will expect them as America, we're not continue Colombia South that are think But Ecuador areas and as going grow us, it's developing I that we evolve. I as for want important to So is remember and far to core still to well. in to

Anne Milne

Okay.

being? South so a be to for majority America the And will forward going continue time

Ryan Ellson

For being, yes. the time

Operator

with of Bowley Jefferies comes next the Our from line question Peter LLC.

Unknown Analyst

in First, capital context Brent in still XXXX, in the of amortization cash to second, regarding from allocation, you do XXXX how And low bond your XXs free are pay expect flow? thinking XXXX you yield? considered and your with be above buybacks part about your trading that the allocation bond thinking you plan? XX% of as will are bonds would How about capital

Ryan Ellson

Yes.

on the on remember XXXX of think then that with and this quite end that amortization. the we're flow amortization, in XXXX, We're cash I an XXXX until quite comfortable we'll comfortable and free cash October. amortization hand between year exit there's

the focus there. have invest allocation, of don't capital right the we think the on longevity a we we'll concern So then And continue to now, assets on and ground. in

in in of and hand the February and maturity all XXXX obviously, have, will to do million just also cash million we those year, we the maturing slight we expect obviously, free $XX which in $XX fund pay and then maturity flow. And X of with XXXX on and the then cash 'XX -- this then

we of we of a in of have Keep have in capital South of with our have remember, operate of mind, our exception our that on flexibility assets one, we do allocation all And -- the assets. given in all blocks we our fact, all America, lot XXX%.

lot we gives So operate then flexibility. with us Canada, that And a XX%. of XX%, in

still again, So on capital flexibility in allocation some have Canada.

Operator

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

Alejandra Andrade Carrillo

X I had X just quick questions.

in was also, thinking as program there's lines? the committed little to bit you year? that I mean, wondering terms in next terms million in any saw $XX you year. of expectation Colombia committed are if maturing of for do well facility And change I how the hedging Canada, then I something First, about next a your

Ryan Ellson

now. for we why bit those don't the proceeds Great. quite Thanks. Yes. of a funds borrowing base Canadian And We support reason facility, have the use is the really higher. reduced just

we a of capital standby We fees. reduced the additional So committed facility more working treated as instead amount. paying of

a conscious decision was Gran that So by Tierra.

stay as to are well. our Colombian then we finalize for facility continue X-year program, as look a our hedging the that. looking capital on And similar will we assets in at allocation. tuned And we putting at plan And

increasing at looking our program. are We hedging

You'll the we that our the that more see XX% on deck in have corporate interesting X they or website for systematic gas outlays hedges XXXX. we of in looking a for X do particular, had XX% acquired iX, months new for continue at We'll hedges XX% then XX% following a with to that quite to hedging next and basis. place, months the the

Operator

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

Gary Guidry

forward for with quarter everyone look and I update progress. ongoing our to thank much. would us joining very next We you speaking you you on like today. to Thank

Operator

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

You may now disconnect.

Gran Tierra Energy (GTE) 4 Nov 242024 Q3 Earnings call transcript