Gran Tierra Energy Inc.
("Gran Tierra" or
the "Company") (NYSE American:GTE) (TSX:GTE) (LSE:GTE),
today announced revisions to its 2020 capital program in response
to recent commodity price volatility. All dollar amounts are in
United States
(“U.S.”) dollars, unless otherwise
indicated.
Gary Guidry, President and Chief Executive
Officer of Gran Tierra, commented: "We operate 29 of our 31 blocks
and over 95% of our producing assets and therefore have significant
control over capital allocation and timing. As a result of current
and foreseeable oil price weakness, we have reduced operating
activities and our capital program. We plan to continue operating
at reduced activity levels until there are clear signs of a
recovery in oil prices. We are revising our 2020 capital budget to
a maintenance range of $60 to 80 million and are implementing
reductions in operating costs and general and administrative
expenses (“G&A”). In addition to reducing our
costs, we are also benefiting from the recent depreciation of the
Canadian dollar and Colombian peso. The Colombian peso has declined
15% versus the U.S. dollar from our original budget estimate. The
majority of our operating costs and G&A within Colombia are
denominated in Colombian pesos. All of our G&A in Canada is
denominated in Canadian dollars.
We have elected to shut-in 1,000 to 1,500
barrels of oil per day of higher cost production to focus on our
core, low cost, higher netback production. While these decisions
are expected to result in lower production than originally
forecast, Gran Tierra is focused on protecting the Company’s
balance sheet and preserving value over the long term. At current
oil prices, over 95% of our production is generating positive
netbacks.
Despite this planned reduction in capital
investment, we remain focused on the continued development of the
Acordionero, Costayaco, Cohembi and Moqueta oil fields
(“Core Assets”). We plan to direct the majority of
our revised 2020 program to the Core Assets. We will continue
with regulatory, planning and land access activities on key future
growth projects which have a minimal cost but can take a
significant period of time to complete.
Gran Tierra is focused on rigorously assessing
project economics and will not deploy capital if commodity prices
do not support sufficient returns. With our low decline and low
cost producing assets, we believe Gran Tierra is prepared for these
challenging times for the oil industry.”
Contact Information
For investor and media inquiries please contact:
Gary GuidryChief Executive Officer
Ryan EllsonExecutive Vice President & Chief Financial
Officer
Rodger TrimbleVice President, Investor Relations
+1-403-265-3221info@grantierra.com
About Gran Tierra Energy
Inc.
Gran Tierra Energy Inc. together with its
subsidiaries is an independent international energy company focused
on oil and natural gas exploration and production in Colombia and
Ecuador. The Company’s common shares trade on the NYSE American,
the Toronto Stock Exchange and the London Stock Exchange under the
ticker symbol GTE. Additional information concerning Gran Tierra is
available at www.grantierra.com. Information on the Company's
website does not constitute a part of this press release. Investor
inquiries may be directed to info@grantierra.com or (403)
265-3221.
Gran Tierra's Securities and Exchange Commission
(“SEC”) filings are available on the SEC website
at http://www.sec.gov and on SEDAR at http://www.sedar.com. UK
regulatory filings are available on the National Storage Mechanism
website at www.morningstar.co.uk/uk/nsm.
Forward Looking Information
Advisory
This press release contains opinions, forecasts,
projections, and other statements about future events or results
that constitute forward-looking statements within the meaning of
the United States Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and
financial outlook and forward looking information within the
meaning of applicable Canadian securities laws (collectively,
“forward-looking statements”). All statements
other than statements of historical facts included in this press
release regarding our financial position, business strategy, plans
and objectives for future operations, capital spending plans and
those statements preceded by, followed by or that otherwise include
the words “believe”, “expect”, “forecast”, “budget”, “will”,
“project”, “plan”, “should”, "guidance" or similar expressions are
forward-looking statements. Such forward-looking statements
include, but are not limited to, the Company’s capital budget
amount and uses, drilling and capital program including the changes
thereto, along with the expected costs and the allocation of
capital and drilling including trends, infrastructure schedules and
the expected timing and drilling sequence of certain projects; the
Company's operations, including operating costs and G&A costs;
future projected production, expected future cash flow, and certain
associated metrics; our strategy regarding changing oil prices;
anticipated capital expenditures, including the location and impact
of capital expenditures; our business strategies; the plans,
objectives, expectations and intentions of the Company regarding
production exploration and development; and the future development
of the Company's business. The forward-looking statements contained
in this press release reflect several material factors and
expectations and assumptions of Gran Tierra including, without
limitation, as to the impact of falling commodity prices, reduced
capital expenditures, the shutting-in of wells, reduced operating
costs and G&A costs and exchange rate fluctuations, pricing and
cost estimates (including with respect to commodity pricing and
exchange rates), rig, crew and employee availability, the effects
of drilling down-dip, the effects of waterflood and stimulation
operations, the extent and effect of delivery disruptions and the
general continuance of current or, where applicable, assumed
operational, regulatory and industry conditions including in areas
of potential expansion, the receipt of approval from the ANH and
the ability of Gran Tierra to execute its current business and
operational plans in the manner currently planned. Gran Tierra
believes the material factors, expectations and assumptions
reflected in the forward-looking statements are reasonable at this
time but no assurance can be given that these factors, expectations
and assumptions will prove to be correct.
Among the important factors that could cause
actual results to differ materially from those indicated by the
forward-looking statements in this press release are: sustained or
future declines in commodity prices and potential resulting future
impairments and reductions in proved and probable reserve
quantities and value; Gran Tierra’s operations are located in South
America, and unexpected problems can arise due to guerrilla
activity or community or regional blockades or other protests
against the Company, the oil industry or the Colombian government;
technical difficulties and operational difficulties may arise which
impact the production, transport or sale of our products;
geographic, political and weather conditions can impact the
production, transport or sale of our products; the risk that
current global health, safety, economic and credit conditions may
impact oil prices and oil consumption more than Gran Tierra
currently predicts; the ability of Gran Tierra to execute its
business plan; the risk that unexpected delays and difficulties in
developing currently owned properties may occur; the timely receipt
of regulatory or other required approvals for our operating
activities; the failure of exploratory drilling to result in
commercial wells; unexpected delays due to the limited availability
of drilling equipment and personnel and the risk that such
personnel may become ill or be subjected to quarantine; the risk
that oil prices could continue to decline or be volatile, or
current global health, economic and credit market conditions may
impact current oil prices or expectations regarding future oil
prices and oil consumption, which could cause Gran Tierra to
further modify its strategy and capital spending program; and the
risk factors detailed from time to time in Gran Tierra’s periodic
reports filed with the Securities and Exchange Commission,
including, without limitation, under the caption “Risk Factors” in
Gran Tierra's Annual Report on Form 10-K filed February 27, 2020
and its other filings with the SEC. These filings are available on
the SEC website at http://www.sec.gov and on SEDAR at
http://www.sedar.com. Although the current guidance, capital
spending program and long term strategy of Gran Tierra are based
upon the current expectations of the management of Gran Tierra,
should any one of a number of issues arise, Gran Tierra may find it
necessary to alter its business strategy and/or capital spending
program and there can be no assurance as at the date of this press
release as to how those funds may be reallocated or strategy
changed and how that would impact Gran Tierra's results of
operations and financing position.
All forward-looking statements are made as of
the date of this press release and the fact that this press release
remains available does not constitute a representation by Gran
Tierra that Gran Tierra believes these forward-looking statements
continue to be true as of any subsequent date. Actual results may
vary materially from the expected results expressed in
forward-looking statements. Gran Tierra disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as expressly required by applicable securities laws. Gran
Tierra’s forward-looking statements are expressly qualified in
their entirety by this cautionary statement.
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