Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Expressed in U.S. Dollars, unless otherwise indicated)
1. Description of Business
Gran Tierra Energy Inc., a Delaware corporation (the “Company” or “Gran Tierra”), is a publicly traded company focused on oil and natural gas exploration and production in Colombia and Ecuador.
2. Significant Accounting Policies
These interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The information furnished herein reflects all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of results for the interim periods.
The note disclosure requirements of annual consolidated financial statements provide additional disclosures to that required for interim unaudited condensed consolidated financial statements. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as at and for the year ended December 31, 2019, included in the Company’s 2019 Annual Report on Form 10-K.
The Company’s significant accounting policies are described in Note 2 of the consolidated financial statements which are included in the Company’s 2019 Annual Report on Form 10-K and are the same policies followed in these interim unaudited condensed consolidated financial statements, except as noted below. The Company has evaluated all subsequent events through to the date these interim unaudited condensed consolidated financial statements were issued.
Recently Adopted Accounting Pronouncements
Financial Instruments - Credit Losses (ASC 326)
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses". This ASU replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires a broader range of reasonable and supportable information to support credit loss estimates. In December 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Losses, Derivatives and Hedging and Leases", which is codification improvement of ASU 2016-13. The Company has adopted this ASU on January 1, 2020 and applied a current expected credit loss model to the accounts receivables that has resulted in no impact on the Company's consolidated position, results of operation or cash flows.
At each reporting date, the Company assesses the expected lifetime credit losses on initial recognition of trade accounts receivable. Credit risk is assessed based on the number of days the receivable has been outstanding and the internal credit assessment of the customer. The expected loss rates are based on payment profiles over a period of 36 months before January 1, 2020 and the corresponding historical credit losses experienced within this period. Historical loss rates are adjusted to reflect current and forward looking economic factors of the country where the Company sells oil and gas that affect the ability of the customers to settle the receivables. Trade receivables are written off when there is no reasonable expectation of recovery.
Risks and Measurement Uncertainty
In March 2020, the outbreak of the COVID-19 virus, which was declared a pandemic by the World Health Organization, has spread across the globe and impacted worldwide economic activity. In addition, global commodity prices have declined significantly due to disputes between major oil producing countries combined with the impact of the COVID-19 pandemic and associated reductions in global demand for oil. Governments worldwide, including those in Colombia and Ecuador, the countries where the Company operates, have enacted emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and physical distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions; however, the success of these interventions is not currently determinable. The current challenging economic climate is having and may continue to have significant adverse impacts on the Company including, but not exclusively:
•material declines in revenue and cash flows as a result of the decline in commodity prices;
•declines in revenue and operating activities due to reduced capital programs and the shut-in of production;
•impairment charges (see Note 4);
•inability to comply with covenants and restrictions in debt agreements;
•inability to access financing sources;
•increased risk of non-performance by the Company’s customers and suppliers;
•interruptions in operations as the Company adjusts personnel to the dynamic environment; and
•inability to operate or delay in operations as a result COVID-19 restrictions in the countries the Company operates
The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on the Company is not known at this time. Estimates and judgments made by management in the preparation of the financial statements are increasingly difficult and subject to a higher degree of measurement uncertainty during this volatile period. In the near term, matters in these financial statements that are most subject to be impacted by this volatile period are the Company's assessment of liquidity and access to capital, the carrying value of long-lived assets and the valuation of the deferred tax assets.
3. Property, Plant and Equipment
|
|
|
|
|
|
|
|
|
|
|
|
(Thousands of U.S. Dollars)
|
As at June 30, 2020
|
|
As at December 31, 2019
|
Oil and natural gas properties
|
|
|
|
Proved
|
$
|
3,525,847
|
|
|
$
|
3,850,565
|
|
Unproved
|
289,569
|
|
|
310,809
|
|
|
3,815,416
|
|
|
4,161,374
|
|
Other(1)
|
30,487
|
|
|
26,287
|
|
|
3,845,903
|
|
|
4,187,661
|
|
Accumulated depletion and depreciation and impairment
|
(2,714,400)
|
|
|
(2,610,268)
|
|
|
$
|
1,131,503
|
|
|
$
|
1,577,393
|
|
(1) Included in other are right-of-use assets for operating and finance leases, net book value of which was $4.2 million as at June 30, 2020 ($5.7 million as at December 31, 2019).
4. Impairment
Asset Impairment
(i) Oil and gas property impairment
For the three and six months ended June 30, 2020, Gran Tierra recorded ceiling test impairment losses of $398.3 million as a result of lower oil prices. The Company follows the full cost method of accounting for its oil and gas properties. Under this method, the net book value of properties on a country-by-country basis, less related deferred income taxes, may not exceed a calculated “ceiling”. The ceiling is the estimated after-tax future net revenues from proved oil and gas properties, discounted at 10% per year. In calculating discounted future net revenues, oil and natural gas prices are determined using the average price for the 12-month period prior to the ending date of the period covered by the balance sheet, calculated as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period. That average price is then held constant, except for changes which are fixed and determinable by existing contracts. Therefore, ceiling test estimates are based on historical prices discounted at 10% per year and it should not be assumed that estimates of future net revenues represent the fair market value of the Company's reserves. In accordance with GAAP, Gran Tierra used an average Brent price of $52.32 per bbl for the purposes of the June 30, 2020 ceiling test calculations (June 30, 2019 - $69.38). There was no ceiling test impairment for the three and six months ended June 30, 2019.
(ii) Inventory Impairment
For the three and six months ended June 30, 2020, the Company recorded $0.2 and $4.1 million, respectively, relating to the impairment of oil inventory due to the decline in commodity pricing. There was no inventory impairment for the three and six months ended June 30, 2019.
Goodwill Impairment
For the three and six months ended June 30, 2020, the Company recorded nil and $102.6 million, respectively, of goodwill impairment relating to its Colombia business unit. The impairment was due to the carrying value of the unit exceeding its fair
value as a result of the impact of lower forecasted commodity prices. The estimated fair value of the Colombia business unit for the goodwill impairment test was based on the discounted after-tax cash flows associated with the proved and probable reserves of the reporting unit. There was no goodwill impairment for the three and six months ended June 30, 2019.
5. Debt and Debt Issuance Costs
The Company's debt at June 30, 2020 and December 31, 2019 was as follows:
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|
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|
|
|
|
|
|
|
|
|
(Thousands of U.S. Dollars)
|
As at June 30, 2020
|
|
As at December 31, 2019
|
6.25% Senior Notes
|
$
|
300,000
|
|
|
$
|
300,000
|
|
7.75% Senior Notes
|
300,000
|
|
|
300,000
|
|
Revolving credit facility
|
207,000
|
|
|
118,000
|
|
Unamortized debt issuance costs
|
(19,764)
|
|
|
(21,081)
|
|
Long-term debt
|
787,236
|
|
|
696,919
|
|
Long-term lease obligation(1)
|
2,075
|
|
|
3,540
|
|
|
$
|
789,311
|
|
|
$
|
700,459
|
|
(1) The current portion of the lease obligation has been included in accounts payable and accrued liabilities on the Company's balance sheet and totaled $3.2 million as at June 30, 2020 (December 31, 2019 - $3.3 million).
On June 1, 2020, the Company completed the semi-annual re-determination of the Company's Senior Secured Credit Facility (the " revolving credit facility") resulting in a reduction of the borrowing base from $300 million to $225 million. Management has obtained a relief from compliance with certain financial covenants until October 1, 2021 ("the covenant relief period"), permitting the ratio of total debt to Covenant EBITDAX ("EBITDAX") to be greater than 4.0 to 1.0, Senior Secured Debt to EBITDAX ratio must not exceed 2.5 to 1.0, and EBITDAX to interest expense ratio for the trailing four quarter periods measured as of the last day of the fiscal quarters ending June 30, 2020 and September 30, 2020, must be at least 2.5 to 1.0; as of the last day of the fiscal quarters ending December 31, 2020 and March 31, 2021, must be at least 2.0 to 1.0; and back to at least 2.5 to 1.0 thereafter. The Company is required to comply with various covenants, which as disclosed above, have been modified in response to the current market conditions and the COVID-19 pandemic. As of June 30, 2020, the Company was in compliance with all applicable covenants in the revolving credit facility.
After the expiration of covenant relief period, the Company must maintain compliance with the following financial covenants: limitations on Company's ratio of debt to EBITDAX to a maximum of 4.0 to 1.0; limitations on Company's ratio of Senior Secured Debt to EBITDAX to a maximum of 3.0 to 1.0; and the maintenance of a ratio of EBITDAX to interest expense of at least 2.5 to 1.0. If the Company fails to comply with these financial covenants, it would result in a default under the terms of the credit agreement, which could result in an acceleration of repayment of all indebtedness under the Company's revolving credit facility.
The unprecedented decline in oil prices has materially reduced the Company’s forecasted EBITDAX. Based on current forecasted Brent pricing and production levels, which can change materially in very short time frames, the Company is forecasted to be in compliance with the amended financial covenants contained in the revolving credit facility for at least the next year from the date of these financial statements. However, the risk of non-compliance is heightened in the current period of volatility coupled with the unprecedented disruption caused by the COVID-19 pandemic. Management currently expects that the Company will continue to be able to meet the terms of the credit facility and/or obtain further amendments or waivers if and when required.
Interest Expense
The following table presents total interest expense recognized in the accompanying interim unaudited condensed consolidated statements of operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Thousands of U.S. Dollars)
|
2020
|
2019
|
|
2020
|
2019
|
Contractual interest and other financing expenses
|
$
|
12,273
|
|
$
|
9,617
|
|
|
$
|
24,239
|
|
$
|
16,717
|
|
Amortization of debt issuance costs
|
1,092
|
|
947
|
|
|
1,936
|
|
1,785
|
|
|
$
|
13,365
|
|
$
|
10,564
|
|
|
$
|
26,175
|
|
$
|
18,502
|
|
6. Share Capital
|
|
|
|
|
|
|
Shares of Common Stock
|
|
|
Balance at December 31, 2019 and June 30, 2020
|
366,981,556
|
|
Equity Compensation Awards
The following table provides information about performance stock units (“PSUs”), deferred share units (“DSUs”), and stock option activity for the six months ended June 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
DSUs
|
|
Stock Options
|
|
|
Number of Outstanding Share Units
|
Number of Outstanding Share Units
|
|
Number of Outstanding Stock Options
|
Weighted Average Exercise Price/Stock Option ($)
|
Balance, December 31, 2019
|
11,371,367
|
|
1,251,994
|
|
|
10,612,872
|
|
2.78
|
|
Granted
|
16,063,219
|
|
1,204,236
|
|
|
8,545,823
|
|
0.71
|
|
Exercised
|
(2,531,995)
|
|
—
|
|
|
—
|
|
—
|
|
Forfeited
|
(1,245,857)
|
|
—
|
|
|
(799,271)
|
|
2.08
|
|
Expired
|
—
|
|
—
|
|
|
(2,542,970)
|
|
3.61
|
|
Balance, June 30, 2020
|
23,656,734
|
|
2,456,230
|
|
|
15,816,454
|
|
1.56
|
|
For the three and six months ended June 30, 2020, stock-based compensation expense was $1.3 million and stock-based compensation recovery was $0.8 million, respectively (three and six months ended June 30, 2019 - recovery of $0.6 million and expense of $1.1 million, respectively).
At June 30, 2020, there was $8.2 million (December 31, 2019 - $6.7 million) of unrecognized compensation cost related to unvested PSUs and stock options, which is expected to be recognized over a weighted average period of 2.1 years. During the six months ended June 30, 2020, the Company paid out $3.2 million for PSUs which were vested on December 31, 2019 (six months ended June 30, 2019 - $10.2 million for PSU's which were vested December 31, 2018).
Net (Loss)Income per Share
Basic net (loss) income per share is calculated by dividing net (loss) income by the weighted average number of shares of Common Stock issued and outstanding during each period. Diluted net income per share is calculated using the treasury stock method for share-based compensation arrangements. The treasury stock method assumes that any proceeds obtained on exercise of share-based compensation arrangements would be used to purchase common shares at the average market price during the period. The weighted average number of shares is then adjusted by the difference between the number of shares issued from the exercise of share-based compensation arrangements and shares repurchased from the related proceeds. Anti-dilutive shares represent potentially dilutive securities that are excluded from the computation of diluted income or loss per share as their impact would be anti-dilutive.
Weighted Average Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
2020
|
2019
|
|
2020
|
2019
|
Weighted average number of common shares outstanding
|
366,981,556
|
|
379,942,355
|
|
|
366,981,556
|
|
383,491,798
|
|
Shares issuable pursuant to stock options
|
—
|
|
—
|
|
|
—
|
|
126,325
|
|
Shares assumed to be purchased from proceeds of stock options
|
—
|
|
—
|
|
|
—
|
|
(125,609)
|
|
Shares issuable pursuant to convertible notes
|
—
|
|
35,814,393
|
|
|
—
|
|
35,814,393
|
|
Weighted average number of diluted common shares outstanding
|
366,981,556
|
|
415,756,748
|
|
|
366,981,556
|
|
419,306,907
|
|
Common shares outstanding, as at period end
|
366,981,556
|
|
376,636,307
|
|
|
366,981,556
|
|
376,636,307
|
|
For the three and six months ended June 30, 2020, all options (three and six months ended June 30, 2019 - 10,373,522 and 9,945,406, respectively), on a weighted average basis, were excluded from the diluted income per share calculation as the options were anti-dilutive.
7. Revenue
The Company's revenues are generated from oil sales at prices which reflect the blended prices received upon shipment by the purchaser at defined sales points or are defined by contract relative to ICE Brent and adjusted for Vasconia or Castilla crude differentials, quality, and transportation discounts each month. For the three and six months ended June 30, 2020, 100% (three and six months ended June 30, 2019 - 100%) of the Company's revenue resulted from oil sales. During the three and six months ended June 30, 2020, quality and transportation discounts were 42% and 29%, respectively, of the average ICE Brent price (three and six months ended June 30, 2019 - 13% and 15%, respectively). During the three and six months ended June 30, 2020, the Company's production was sold primarily to two major customers in Colombia (three and six months ended June 30, 2019 - three).
As at June 30, 2020, accounts receivable included $5.4 million of accrued sales revenue related to June 2020 production (December 31, 2019 - $0.1 million related to December 31, 2019 production).
8. Taxes
The Company's effective tax rate was 6% for the six months ended June 30, 2020, compared to 46% in the comparative period of 2019. Current income tax expense was lower in the six months ended June 30, 2020, compared to the corresponding period in 2019, primarily as a result of lower income in Colombia. The deferred income tax recovery for the six months ended June 30, 2020, was the result of a ceiling test impairment loss in Colombia; which was partially offset by losses incurred in Colombia that are now fully offset by a valuation allowance. The deferred income tax expense in the comparative period of 2019 was mainly the result of tax depreciation being higher than accounting depreciation in Colombia.
For the six months ended June 30, 2020, the difference between the effective tax rate of 6% and the 32% Colombian tax rate was primarily due to an increase in the valuation allowance, the non-deductibility of goodwill impairment for tax purposes, foreign translation adjustments and the non-deductible portion (50%) of the unrealized loss on the PetroTal shares.
For the six months ended June 30, 2019, the difference between the effective tax rate of 46% and the 33% Colombian tax rate was primarily due to foreign currency translation adjustments and an increase in the valuation allowance.
9. Contingencies
Legal Proceedings
Gran Tierra has a number of lawsuits and claims pending, including a dispute with the Agencia Nacional de Hidrocarburos (National Hydrocarbons Agency) ("ANH") relating to the calculation of HPR royalties. Discussions with the ANH are ongoing. Although the outcome of these lawsuits and disputes cannot be predicted with certainty, Gran Tierra believes the resolution of
these matters would not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Gran Tierra records costs as they are incurred or become probable and determinable.
Letters of credit and other credit support
At June 30, 2020, the Company had provided letters of credit and other credit support totaling $107.7 million (December 31, 2019 - $120.6 million) as security relating to work commitment guarantees in Colombia and Ecuador contained in exploration contracts and other capital or operating requirements.
10. Financial Instruments and Fair Value Measurement
Financial Instruments
At June 30, 2020, the Company’s financial instruments recognized on the balance sheet consisted of: cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, investment, accounts payable and accrued liabilities, derivatives, long-term debt, equity compensation award liability and other long-term liabilities.
Fair Value Measurement
The fair value of investment, derivatives and Performance Share Units ("PSUs") liability is remeasured at the estimated fair value at the end of each reporting period.
Investment in PetroTal
The fair value of the Company's investment in PetroTal was estimated to be $33.4 million at June 30, 2020, based on the closing stock price of PetroTal of $0.185 CAD and the foreign exchange rate at that date. PetroTal is a publicly-traded energy company incorporated and domiciled in Canada engaged in exploration, appraisal and development of crude oil and natural gas in Peru. PetroTal's shares are listed on the Toronto Stock Exchange Venture under the trading symbol 'TAL' and on the London Stock Exchange Alternative Investment Market under the trading symbol 'PTAL'. Gran Tierra through a subsidiary holds approximately 246 million common shares representing approximately 30% of PetroTal's issued and outstanding common shares. Gran Tierra has the right to nominate two directors to the board of PetroTal.
Commodity and Foreign Currency Derivatives
The fair value of commodity price and foreign currency derivatives is estimated based on various factors, including quoted market prices in active markets and quotes from third parties. The Company also performs an internal valuation to ensure the reasonableness of third party quotes. In consideration of counterparty credit risk, the Company assessed the possibility of whether the counterparty to the derivative would default by failing to make any contractually required payments. Additionally, the Company considers that it is of substantial credit quality and has the financial resources and willingness to meet its potential repayment obligations associated with the derivative transactions.
PSUs and Deferred Share Units ("DSUs")
The fair value of the PSUs liability was estimated based on a pricing model using inputs such as quoted market prices in an active market, and PSUs performance factor.
The fair value of investment, derivatives and PSUs and DSUs) at June 30, 2020, and December 31, 2019, was as follows:
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|
|
|
|
|
|
|
|
|
|
|
(Thousands of U.S. Dollars)
|
As at June 30, 2020
|
|
As at December 31, 2019
|
Investment
|
$
|
33,408
|
|
|
$
|
94,741
|
|
Derivative asset (1)
|
2,193
|
|
|
—
|
|
|
$
|
35,601
|
|
|
$
|
94,741
|
|
|
|
|
|
Derivative liability
|
$
|
8,514
|
|
|
$
|
775
|
|
PSUs and DSUs liability (2)
|
2,664
|
|
|
7,859
|
|
|
$
|
11,178
|
|
|
$
|
8,634
|
|
(1)Included in other current assets on the Company's balance sheet
(2)The current portion of PSUs and DSUs liability of $0.6 million is included in other current liabilities on the Company's balance sheet
The following table presents gains or losses on financial instruments recognized in the accompanying interim unaudited condensed consolidated statements of operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Thousands of U.S. Dollars)
|
2020
|
2019
|
|
2020
|
2019
|
Commodity price derivative loss (gain)
|
$
|
7,542
|
|
$
|
(706)
|
|
|
$
|
(10,777)
|
|
$
|
488
|
|
Foreign currency derivatives (gain) loss
|
(1,919)
|
|
55
|
|
|
3,533
|
|
55
|
|
Investment (gain) loss
|
(6,216)
|
|
(17,689)
|
|
|
59,069
|
|
(15,718)
|
|
Financial instruments loss
|
757
|
|
—
|
|
|
757
|
|
—
|
|
|
$
|
164
|
|
$
|
(18,340)
|
|
|
$
|
52,582
|
|
$
|
(15,175)
|
|
Investment (gain) loss for the three and six months ended June 30, 2020, was related to the fair value (gain) loss on the PetroTal shares Gran Tierra received in connection with the sale of its Peru business unit in December 2017. For the three and six months ended June 30, 2020 and 2019, this investment (gain) loss was unrealized.
Financial instruments not recorded at fair value include the Company's 6.25% Senior Notes due 2025 (the "6.25% Senior Notes") and 7.75% Senior Notes due 2027 (the "7.75% Senior Notes"). At June 30, 2020, the carrying amounts of the 6.25% Senior Notes and the 7.75% Senior Notes were $291.5 million and $290.4 million, respectively, which represented the aggregate principal amount less unamortized debt issuance costs, and the fair values were $132.0 million and $135.0 million, respectively. The fair value of long-term restricted cash and cash equivalents and the revolving credit facility approximated their carrying value because interest rates are variable and reflective of market rates. The fair values of other financial instruments approximate their carrying amounts due to the short-term maturity of these instruments.
GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels. Level 1 inputs consist of quoted prices (unadjusted) in active markets for identical assets and liabilities and have the highest priority. Level 2 and 3 inputs are based on significant other observable inputs and significant unobservable inputs, respectively, and have lower priorities. The Company uses appropriate valuation techniques based on the available inputs to measure the fair values of assets and liabilities.
At June 30, 2020, the fair value of the investment and DSUs liability was determined using Level 1 inputs, the fair value of derivatives and PSUs liability was determined using Level 2 inputs.
The Company uses available market data and valuation methodologies to estimate the fair value of debt. The fair value of debt is the estimated amount the Company would have to pay a third party to assume the debt, including a credit spread for the difference between the issue rate and the period end market rate. The credit spread is the Company’s default or repayment risk. The credit spread (premium or discount) is determined by comparing the Company’s Senior Notes and revolving credit facility to new issuances (secured and unsecured) and secondary trades of similar size and credit statistics for both public and private debt. The disclosure in the paragraph above regarding the fair value of cash and restricted cash and cash equivalents and Senior Notes was based on Level 1 inputs and the fair value of credit facility was based on Level 2 inputs.
The Company’s non-recurring fair value measurements include asset retirement obligations. The fair value of an asset retirement obligation is measured by reference to the expected future cash outflows required to satisfy the retirement obligation discounted at the Company’s credit-adjusted risk-free interest rate.
Commodity Price Derivatives
The Company utilizes commodity price derivatives to manage the variability in cash flows associated with the forecasted sale of its oil production, reduce commodity price risk and provide a base level of cash flow in order to assure it can execute at least a portion of its capital spending.
At June 30, 2020, the Company had outstanding commodity price derivative positions as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period and type of instrument
|
Volume,
bopd
|
Reference
|
Sold Put ($/bbl, Weighted Average)
|
Purchased Put ($/bbl, Weighted Average)
|
Sold Call ($/bbl, Weighted Average)
|
Premium ($/bbl, Weighted Average)
|
Collars: July 1, to December 31, 2020
|
4,000
|
|
ICE Brent
|
25.00
|
|
35.00
|
|
37.72
|
|
n/a
|
Collars: July 1, to December 31, 2020
|
3,000
|
|
ICE Brent
|
25.00
|
|
35.00
|
|
44.25
|
|
1.00
|
|
Collars: July 1, to December 31, 2020
|
1,000
|
|
ICE Brent
|
25.00
|
|
32.50
|
|
39.50
|
|
n/a
|
Collars: July 1, to December 31, 2020
|
3,000
|
|
ICE Brent
|
32.50
|
|
38.33
|
|
51.52
|
|
0.97
|
|
Foreign Currency Derivatives
The Company utilizes foreign currency derivatives to manage the variability in cash flows associated with the Company's forecasted Colombian peso ("COP") denominated expenses. At June 30, 2020, the Company had outstanding foreign currency derivative positions as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period and type of instrument
|
Amount Hedged
(Millions of COP)
|
U.S. Dollar Equivalent of Amount Hedged (Thousands of U.S. Dollars)(1)
|
Reference
|
Floor Price
(COP, Weighted Average)
|
Cap Price (COP, Weighted Average)
|
Collars: July 1, to December 31, 2020
|
73,500
|
|
19,554
|
|
COP
|
3,306
|
|
3,425
|
|
(1) At June 30, 2020 foreign exchange rate.
11. Supplemental Cash Flow Information
The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents with the Company's interim unaudited condensed consolidated balance sheet that sum to the total of the same such amounts shown in the interim unaudited condensed consolidated statements of cash flows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Thousands of U.S. Dollars)
|
As at June 30,
|
|
|
As at December 31,
|
|
|
2020
|
2019
|
|
2019
|
2018
|
Cash and cash equivalents
|
$
|
17,175
|
|
$
|
147,712
|
|
|
$
|
8,301
|
|
$
|
51,040
|
|
Restricted cash and cash equivalents - current
|
424
|
|
699
|
|
|
516
|
|
1,269
|
|
Restricted cash and cash equivalents -
long-term (included in other long-term assets)
|
2,186
|
|
2,265
|
|
|
2,258
|
|
1,999
|
|
|
$
|
19,785
|
|
$
|
150,676
|
|
|
$
|
11,075
|
|
$
|
54,308
|
|
Net changes in assets and liabilities from operating activities were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
(Thousands of U.S. Dollars)
|
2020
|
|
2019
|
Accounts receivable and other long-term assets
|
$
|
15,475
|
|
|
$
|
(7,465)
|
|
Derivatives
|
(2,310)
|
|
|
(659)
|
|
Inventory
|
(1,533)
|
|
|
(1,387)
|
|
Prepaids
|
(750)
|
|
|
870
|
|
Accounts payable and accrued and other long-term liabilities
|
(41,487)
|
|
|
(18,841)
|
|
Taxes receivable and payable
|
9,350
|
|
|
(42,712)
|
|
Net changes in assets and liabilities from operating activities
|
$
|
(21,255)
|
|
|
$
|
(70,194)
|
|
The following table provides additional supplemental cash flow disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
(Thousands of U.S. Dollars)
|
2020
|
|
2019
|
Cash paid for income taxes
|
$
|
8,524
|
|
|
$
|
29,339
|
|
Cash paid for interest
|
$
|
23,540
|
|
|
$
|
13,545
|
|
|
|
|
|
Non-cash investing activities:
|
|
|
|
Net liabilities related to property, plant and equipment, end of period
|
$
|
38,708
|
|
|
$
|
96,320
|
|