REG-Gran Tierra Energy Inc. Reports Second Quarter 2025 Results & Another Quarter of Record Production
30/07/2025 23:00
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* Achieved Record Total Company Average Quarterly Production of 47,196 boepd
* Funds Flow From Operations((1)) of $54 million, Adjusted EBITDA((1)) of $77
million and Return to Free Cash Flow
* Signed Mandate Letter for Funding of Up to $200 Million
* Entered into Binding Agreement to Exit the UK North Sea
* Achieved Company Record Total of 32 Million Hours Without a Lost Time Injury
* Recorded Operating Costs per boe of $13.42 for the Quarter - the Lowest
Since The First Quarter of 2022
CALGARY, Alberta, July 30, 2025 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc.
(“Gran Tierra” or the “Company”) (NYSE American:GTE) (TSX:GTE) (LSE:
GTE) announced the Company’s financial and operating results for the
quarter ended June 30, 2025 (the “Quarter”) and provided an operational
update. All dollar amounts are in United States (“U.S.”) dollars and all
production volumes are on an average working interest before royalties
(“WI”) basis unless otherwise indicated. Production is expressed in
barrels (“bbl”) of oil equivalent (“boe”) per day (“boepd” or
“boe/d”) and are based on WI sales before royalties. For per boe amounts
based on net after royalty (“NAR”) production, see Gran Tierra’s
Quarterly Report on Form 10-Q filed July 30, 2025.
Message to Shareholders
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented:
“Gran Tierra delivered record-setting production this quarter, reflecting
the strength of our diversified portfolio and consistent operational execution
across Colombia, Ecuador, and Canada.
In Ecuador, we are building on the momentum of our Iguana Block discoveries
with the planned drilling of two high-impact exploration wells in the Charapa
Block later this year. In Colombia, the successful development drilling at
Costayaco and Cohembi, along with the strong early waterflood response in
Cohembi’s north area, underscores the ongoing potential of our core assets
and validates our disciplined approach to reservoir management. In
Acordionero, our proactive waterflood management, surface facility upgrades,
pump upsizes and ongoing improvement in electrical submersible pump run lives
continue to mitigate base decline.
In Canada, our Montney and Clearwater assets are delivering encouraging
results, with three gross-wells (1.2 net) brought on stream in the Quarter,
outperforming expectations. These outcomes further reinforce our strategy of
disciplined capital allocation and balanced growth as we focus on generating
long-term value for our stakeholders.
We continue to optimize our portfolio with the signed disposition of the UK
North Sea assets, which is expected to close in the third quarter of 2025.”
Operational Update:
* Safety: Since 2022, Gran Tierra has achieved a record of 32 million
person-hours equating to more than 3 years without a lost time injury.
* Ecuador * Building on the successful discoveries in the Iguana Block during
the first quarter of 2025, civil works are currently underway to support the
drilling of the final two wells under Gran Tierra’s exploration commitments
in the country. These wells are planned for the Charapa Block in the Conejo
prospect, with drilling expected to commence toward the end of the third
quarter of 2025.
* Colombia * Gran Tierra successfully drilled the first of three development
wells planned for 2025 in the northern area of the Costayaco field. The
Costayaco-63 well was perforated in four productive sands, stimulated, and
placed on immediate production. The well is currently producing ~800 bbls of
oil per day (“bopd”) with a 48% watercut compared to an average field
watercut of 92%. In July, the second well—Costayaco-64—was drilled,
stimulated and completed. The well is currently producing ~1,300 bopd with a
13% watercut. The final well, Costayaco-65, was spud on July 20, 2025 and is
scheduled to be brought on production in August 2025.
* During the Quarter the remaining two wells of the 2025 five well Cohembi
program were brought onto production. The average drilling cost of the five
wells was ~$3.0 million per well, representing a 47% reduction from the prior
operator’s average last five wells drilled in 2017/18. As part of the
program and to support pressure, water injection began on May 30, 2025. A
strong waterflood response and increase of greater than 2,600 bopd gross
across the northern part of the field has been observed and continues to
improve.
* The Cristobal well in LLA-85 was drilled below budget to total depth
(“TD”) and abandoned, fulfilling all the commitments on the block.
* In Acordionero, production in the Quarter averaged ~14,200 bopd compared to
~13,800 bopd in the first quarter of 2025 (the “Prior Quarter”). Increases
in base production were achieved by increasing total fluid production through
planned electrical submersible pump upsizes, additional surface injection
capacity allowing for continued growth of total fluid production and water
injection. Record highs were achieved in both total fluid production (~89,400
bbls/day) and water injection (~85,000 bbls/day) during the Quarter.
* Canada * In the Simonette, the first two (1.0 net) Lower Montney wells were
completed successfully and brought on stream on April 5, 2025. Results from
both wells are currently out-performing management’s current type curves.
The third Montney well was spud on June 29, 2025 and reached TD on July 18,
2025. The fourth Montney well was spud on July 22, 2025 and is expected to
reach total depth in the first half of August.
Enhanced Liquidity:
* Gran Tierra is pleased to announce it has signed a mandate letter with a
syndicate of banks for a $200 million prepayment facility backed by crude oil
deliveries. The Company is progressing toward full documentation, with closing
expected in the third quarter of 2025 and funding anticipated shortly
thereafter. The facility is structured to enhance financial flexibility,
support long-term capital planning, and optimize the Company’s debt maturity
profile. Further details of the prepayment will be announced in due course
once final terms are agreed upon.
* Separately, Gran Tierra recently completed the semi-annual redetermination
of its Canadian credit facility, with lenders confirming an unchanged
borrowing base of C$100 million. This outcome reflects the continued strength
and stability of the Company’s Canadian asset base. The facility provides
C$50 million in available commitments, comprised of a C$35 million syndicated
facility and a C$15 million operating facility with a maturity date of October
31, 2026. The next redetermination is scheduled on or before November 30,
2025.
* Gran Tierra also employs a disciplined, risk-managed hedging strategy
designed to protect cash flow, support capital planning, and enhance financial
stability across commodity cycles. The Company utilizes a diversified mix of
oil and gas hedges that provide downside protection while preserving upside
exposure. This proactive approach contributed to a $14 million derivative
hedging gain booked during the Quarter. The Company also maintains a rolling
12-month hedging program to further mitigate volatility: * South American Oil
Hedges (Brent): For the second half of 2025, Gran Tierra has hedged
approximately 50% of its South American oil production with a weighted average
floor of $63.16 per barrel and a ceiling of $76.50 per barrel. For the first
half of 2026 the Company has hedged approximately 33% of its South American
oil production with a weighted average floor of $61.67 per barrel and a
ceiling of $75.58.
* Canadian Oil Hedges (West Texas Intermediate): For the second half of 2025,
Gran Tierra has hedged approximately 60% of its Canadian oil production with a
weighted average floor of $61.67 per barrel and a ceiling of $72.37 per
barrel. For the first half of 2026 the Company has hedged approximately 50% of
its Canadian oil production with a weighted average floor of $56.82 per barrel
and a ceiling of $72.01.
* Canadian Gas Hedges (AECO): For the second half of 2025, Gran Tierra has
hedged approximately 40% of its Canadian gas production with a weighted
average floor of $2.82 per GJ and a ceiling of $2.96 per GJ.
* FX Hedges (COP to USD): Starting in April 2025, Gran Tierra entered into a
12-month, $10 million per month hedging program for the COP to USD exchange
rate. The hedges have a floor of 4,430 and a ceiling of 4,705.
Key Highlights of the Quarter:
* Production: Gran Tierra’s total average WI production was 47,196 boepd,
which was 44% higher than the second quarter of 2024 due to the production
from the Canadian operations acquired on October 31, 2024 and positive
exploration well drilling results in Ecuador. Total average WI production was
1% higher than the Prior Quarter as a result of successful drilling in
Simonette, Cohembi infill drilling and waterflood management, strong
Acordionero performance and continued exploration success in Ecuador from the
Iguana wells. Working interest sales in the Quarter decreased to 45,727 boepd
primarily due to the deferral of 143,730 barrels of Ecuador oil production,
which were held in inventory at the end of June and subsequently sold in July.
* Net Income (Loss): Gran Tierra incurred a net loss of $13 million, compared
to a net loss of $19 million in the Prior Quarter and net income of $36
million in the second quarter of 2024.
* Adjusted EBITDA((1)): Adjusted EBITDA((1)) was $77 million compared to $85
million in the Prior Quarter and $103 million in the second quarter of 2024.
Twelve-month trailing net debt((1)) to adjusted EBITDA((1)) was 2.3 times
(only accounts for eight months of Canadian operations adjusted EBITDA) and
the Company continues to have a long-term target ratio of 1.0 times.
* Funds Flow from Operations((1)): Funds flow from operations((1)) was $54
million ($1.53 per share), up 17% from the second quarter of 2024 and down 3%
from the Prior Quarter. Brent price decreased by 11% per bbl compared to the
Prior Quarter and our cash netback((1)) decreased by 1% illustrating the
resiliency of the portfolio.
* Net Cash Provided by Operating Activities: Net cash provided by operating
activities was $35 million ($0.98 per share), down 53% from the Prior Quarter
and down 53% from the second quarter of 2024.
* Cash and Debt: As of June 30, 2025, the Company had a cash balance of $61
million, total debt of $807 million and net debt((1)) of $746 million. During
the Quarter, the Company drew a total of $45 million on its credit facilities
to fund capital expenditures. There were significant capital expenditures in
the first quarter, amounting to approximately 40% of budgeted capital
expenditures for the year, which were paid in the Quarter resulting in the
Company drawing on its credit facilities. We currently forecast the facilities
to have a zero balance by the end of the year. In addition to the $61 million
cash on hand as of June 30, 2025, the Company currently has approximately
$112 million in credit and lending facilities with $47 million drawn as of
June 30, 2025.
* Share Buybacks: Gran Tierra repurchased 239,754 shares of common stock
during the Quarter. From January 1, 2023, to July 28, 2025, the Company
repurchased approximately 5.2 million shares, or 15% of shares issued and
outstanding on January 1, 2023.
Additional Key Financial Metrics:
* Capital Expenditures: Capital expenditures were $51 million during the
Quarter which were lower than the $95 million in the Prior Quarter and lower
than $61 million in the second quarter of 2024. During the Quarter the
majority of capital expenditures were incurred in Colombia on Cohembi drilling
and infrastructure.
* Oil, Natural Gas and Natural Gas Liquids (“NGL”) Sales: Gran Tierra
generated sales of $152 million, down 8% from the second quarter of 2024
primarily as a result of a 22% decrease in Brent pricing, partially offset by
43% higher sales volumes due to higher production and lower Castilla, Oriente,
and Vasconia oil differentials. Oil sales decreased 11% from the Prior Quarter
primarily due to an 11% decrease in Brent price, partially offset by lower
Castilla, Oriente, and Vasconia oil differentials.
* South American Quality and Transportation Discounts: The Company’s quality
and transportation discounts in South America per bbl were lower during the
Quarter at $10.30, compared to $11.58 in the Prior Quarter and $12.79 in the
second quarter of 2024. The Castilla oil differential per bbl tightened to
$4.73, down from $5.34 in the Prior Quarter and $8.21 in the second quarter of
2024 (Castilla is the benchmark for the Company’s Middle Magdalena Valley
Basin oil production). The Vasconia differential per bbl tightened to $1.71,
down from $2.27 in the Prior Quarter, and $4.00 in the second quarter of 2024.
The Ecuadorian benchmark, Oriente, per bbl was $7.26, down from $7.65 in the
Prior Quarter and $8.38 in the second quarter of 2024. The current((2))
differentials are approximately $4.38 per bbl for Castilla, $1.38 per bbl for
Vasconia, and $7.64 per bbl for Oriente.
* Operating Expenses: On a per boe basis, operating expenses decreased by 17%
when compared to the second quarter of 2024 and 16% when compared to the Prior
Quarter, primarily due to lower workover activities and lower lifting costs
associated with inventory build-up in Ecuador, power generation, and equipment
rentals. This was the lowest operating expense per boe achieved since the
first quarter of 2022. Total operating expenses decreased by 17% to $56
million, compared to the Prior Quarter, largely driven by lower workover
activities and reduced lifting costs related to power generation, equipment
rental, and inventory fluctuation in Ecuador. Compared to the second quarter
of 2024, total operating expenses increased by 19% from $47 million, primarily
due to the addition of Canadian operations and the ramp-up of activity in
Ecuador. The increase in total operating costs is commensurate with the 44%
increase in production.
* Transportation Expenses: The Company’s transportation expenses increased
by 10% to $8 million, compared to the Prior Quarter’s transportation
expenses of $7 million as a result of incremental sales volumes transported by
Canadian operations resulting in higher tolls. When compared to the second
quarter of 2024 transportation expenses increased from $6 million due to new
Canadian operations, higher sales volumes transported in Ecuador, partially
offset by lower sales volumes transported in Colombia.
* Operating Netback((1)(3)): The Company’s operating netback(1)(3) was
$21.39 per boe, down 6% from the Prior Quarter and down 45% from the second
quarter of 2024, primarily as a result of a decrease in oil pricing. The
decrease from the second quarter of 2024 is a result in the change in the
Company’s production mix with the addition of the Canadian assets.
* General and Administrative (“G&A”) Expenses: G&A expenses before
stock-based compensation were $3.48 per boe, up from $2.86 per boe in the
Prior Quarter, due to the timing of certain annual corporate expenses. G&A
expenses before stock-based compensation were down from $3.77 per boe,
compared to the second quarter of 2024 as a result of higher sales volumes
from the inclusion of Canadian operations in the Quarter.
* Cash Netback((1)): Cash netback((1)) per boe decreased to $12.95, compared
to $13.04 in the Prior Quarter, primarily as a result of lower operating
netback((1)) and were offset by lower current income tax expense and positive
cash settlement on derivative instruments. Compared to one year ago, cash
netback((1)) per boe decreased by $2.90 from $15.85 per boe as a result of
lower operating netback((1)) while being offset by lower current tax expense.
Financial and Operational Highlights (all amounts in $000s, except per share
and boe amounts)
Consolidated Financial Data Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30,
2025 2024 2025 2025 2024
Net (Loss) Income $ (12,741 ) $36,371 $(19,280) $ (32,021 ) $36,293
Per Share - Basic and Diluted $ (0.36 ) $1.16 $(0.54) $ (0.90 ) $1.15
Oil, Natural Gas and NGL Sales $ 152,481 $165,609 $170,533 $ 323,014 $323,186
Operating Expenses (55,855 ) (47,035) (67,354) (123,209 ) (95,501)
Transportation Expenses (7,618 ) (5,690) (6,911) (14,529 ) (10,274)
Operating Netback ((1)(3)) $ 89,008 $112,884 $96,268 $ 185,276 $217,411
G&A Expenses Before Stock-Based Compensation $ 14,460 $10,967 $12,143 $ 26,603 $21,749
G&A Stock-Based Compensation Expense (Recovery) 546 6,160 (517) 29 9,521
G&A Expenses, Including Stock Based Compensation $ 15,006 $17,127 $11,626 $ 26,632 $31,270
Adjusted EBITDA ((1)) $ 76,987 $103,004 $85,162 $ 162,149 $197,796
EBITDA ((1)) $ 84,908 $101,187 $79,710 $ 164,618 $193,078
Net Cash Provided by Operating Activities $ 34,677 $73,233 $73,230 $ 107,907 $134,060
Funds Flow from Operations ((1)) $ 53,906 $46,167 $55,344 $ 109,250 $120,474
Capital Expenditures (Before Changes in Working Capital) $ 51,170 $61,273 $94,727 $ 145,897 $116,604
Free Cash Flow ((1)) $ 2,736 $(15,106) $(39,383) $ (36,647 ) $3,870
Average Daily Production (boe/d)
WI Production Before Royalties 47,196 32,776 46,647 46,923 32,509
Royalties (7,396 ) (6,774) (8,084) (7,738 ) (6,586)
Production NAR 39,800 26,002 38,563 39,185 25,923
Decrease (Increase) in Inventory (1,469 ) (811) 461 (509 ) (288)
Sales 38,331 25,191 39,024 38,676 25,635
Royalties, % of WI Production Before Royalties 16 % 21% 17% 16 % 20%
Cash Netback ($/boe ) ((1))
Average Realized Price before Royalties 43.71 72.24 48.55 46.14 69.27
Royalties (7.07 ) (15.31) (8.33) (7.69 ) (14.16)
Average Realized Price 36.64 56.93 40.22 38.45 55.11
Transportation Expenses (1.83 ) (1.96) (1.63) (1.73 ) (1.75)
Average Realized Price Net of Transportation Expenses 34.81 54.97 38.59 36.72 53.36
Operating Expenses (13.42 ) (16.17) (15.89) (14.67 ) (16.29)
Operating Netback ((1)(3)) 21.39 38.80 22.70 22.05 37.07
G&A Expenses Before Stock-Based Compensation (3.48 ) (3.77) (2.86) (3.17 ) (3.71)
Realized Foreign Exchange (Loss) Gain (0.14 ) 0.37 (0.51) (0.33 ) (0.06)
Cash Settlement on Derivative Instruments 0.39 — 0.10 0.25 —
Interest Expense, Excluding Amortization of Debt Issuance Costs (4.87 ) (5.38) (4.58) (4.72 ) (5.24)
Interest Income 0.06 0.35 0.10 0.08 0.29
Other Gain 0.09 — — 0.04 —
Net Lease Payments 0.04 0.02 0.04 0.04 0.07
Current Income Tax Expense (0.53 ) (14.54) (1.95) (1.25 ) (7.88)
Cash Netback ((1)) $ 12.95 $15.85 $13.04 $ 12.99 $20.54
Share Information (000s)
Common Stock Outstanding, End of Period 35,289 31,022 35,524 35,289 31,022
Weighted Average Number of Shares of Common Stock Outstanding - Basic and Diluted 35,335 31,282 35,777 35,555 31,547
South American Operational Information Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30,
2025 2024 2025 2025 2024
Operating Netback ((1)(3))
Oil Sales $ 118,187 $165,609 $138,671 $ 256,858 $323,186
Operating Expenses (42,554 ) (47,035) (50,827) (93,381 ) (95,501)
Transportation Expenses (4,176 ) (5,690) (4,304) (8,480 ) (10,274)
Operating Netback ((1)(3)) $ 71,457 $112,884 $83,540 $ 154,997 $217,411
Capital Expenditures (Before Changes in Working Capital) $ 49,327 $60,806 $64,984 $ 114,311 $116,137
Average Daily Production (boe/d)
WI Production Before Royalties 29,700 32,776 29,686 29,693 32,509
Royalties (5,209 ) (6,774) (5,844) (5,525 ) (6,586)
Production NAR 24,491 26,002 23,842 24,168 25,923
Decrease (Increase) in Inventory (1,469 ) (811) 461 (509 ) (288)
Sales 23,022 25,191 24,303 23,659 25,635
Royalties, % of WI Production Before Royalties 18 % 21% 20% 19 % 20%
Operating Netback ($/boe) ((1)(3))
Brent $ 66.71 $85.03 $74.98 $ 70.81 $83.42
Quality and Transportation Discount (10.30 ) (12.79) (11.58) (10.82 ) (14.15)
Royalties (10.41 ) (15.31) (12.29) (11.36 ) (14.16)
Average Realized Price 46.00 56.93 51.11 48.63 55.11
Transportation Expenses (1.63 ) (1.96) (1.59) (1.61 ) (1.75)
Average Realized Price Net of Transportation Expenses 44.37 54.97 49.52 47.02 53.36
Operating Expenses (16.56 ) (16.17) (18.73) (17.68 ) (16.29)
Operating Netback ((1)(3)) $ 27.81 $38.80 $30.79 $ 29.34 $37.07
Canadian Operational Information ((4)) Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30,
2025 2024 2025 2025 2024
Operating Netback ((1)(3))
Oil Sales $ 23,196 $— $21,269 $ 44,465 $—
Natural Gas Sales 6,894 — 7,561 14,455 —
NGL Sales 6,364 — 7,997 14,361 —
Royalties (2,158 ) — (4,966) (7,124 ) —
Oil, Natural Gas and NGL Sales After Royalties $ 34,296 $— $31,861 $ 66,157 $—
Operating Expenses (13,301 ) — (16,527) (29,828 ) —
Transportation Expenses (3,442 ) — (2,607) (6,049 ) —
Operating Netback ((1)(3)) $ 17,553 $— $12,727 $ 30,280 $—
Capital Expenditures (Before Changes in Working Capital) $ 1,796 $— $29,360 $ 31,156 $—
Average Daily Production
Crude Oil (bbl/d) 4,335 — 3,623 3,981 —
Natural Gas (mcf/d) 50,124 — 49,860 49,992 —
NGLs (bbl/d) 4,807 — 5,029 4,917 —
WI Production Before Royalties (boe/d) 17,496 — 16,961 17,230 —
Royalties (boe/d) (2,187 ) — (2,240) (2,213 ) —
Production NAR (boe/d) 15,309 — 14,721 15,017 —
Sales (boe/d) 15,309 — 14,721 15,017 —
Royalties, % of WI Production Before Royalties 13 % —% 13% 13 % —%
Benchmark Prices
West Texas Intermediate ($/bbl) 63.81 80.82 71.47 67.60 78.95
AECO Natural Gas Price (C$/GJ) 1.60 1.12 2.05 1.82 1.74
Average Realized Price
Crude Oil ($/bbl) 58.80 — 65.23 61.71 —
Natural Gas ($/mcf) 1.51 — 1.69 1.60 —
NGLs ($/bbl) 14.55 — 17.67 16.14 —
Operating Netback ($/boe) ((1)(3))
Average Realized Price $ 22.90 $— $24.12 $ 23.50 $—
Royalties (1.36 ) — (3.25) (2.28 ) —
Transportation Expenses (2.16 ) — (1.71) (1.94 ) —
Operating Expenses (8.35 ) — (10.83) (9.56 ) —
Operating Netback ((1)(3)) $ 11.03 $— $8.33 $ 9.72 $—
((1) Funds flow from operations, operating netback, net debt, cash netback,
earnings before interest, taxes and depletion, depreciation and accretion
(“DD&A”) (“EBITDA”) and EBITDA adjusted for non-cash lease expense,
lease payments, foreign exchange gains or losses, stock-based compensation
expense, other gains or losses, transaction costs and financial instruments
gains or losses (“Adjusted EBITDA”), cash flow and free cash flow are
non-GAAP measures and do not have standardized meanings under generally
accepted accounting principles in the United States of America (“GAAP”).
Cash flow refers to funds flow from operations. Free cash flow refers to funds
flow from operations less capital expenditures. Refer to “Non-GAAP
Measures” in this press release for descriptions of these non-GAAP measures
and, where applicable, reconciliations to the most directly comparable
measures calculated and presented in accordance with GAAP.)
((2) Gran Tierra’s third quarter-to-date 2025 total average differentials
and average production are for the period from July 1 to July 30, 2025.)
((3) Operating netback as presented is defined as oil sales less operating and
transportation expenses. See the table titled Financial and Operational
Highlights above for the components of consolidated operating netback and
corresponding reconciliation.)
((4) Gran Tierra entered Canada with the acquisition of i3 Energy which closed
October 31, 2024, therefore no comparative data is provided for the
corresponding periods of 2024.)
Conference Call Information:
Gran Tierra will host its second quarter 2025 results conference call on
Thursday, July 31, 2025, at 9:00 a.m. Mountain Time, 11:00 a.m. Eastern Time.
Interested parties may access the conference call by registering at the
following link:
https://register-conf.media-server.com/register/BId33e377f2b494c3c95a7fbd1df59627e.
The call will also be available via webcast at www.grantierra.com.
Corporate Presentation:
Gran Tierra’s Corporate Presentation has been updated and is available on
the Company website at www.grantierra.com.
Contact Information
For investor and media inquiries please contact:
Gary Guidry
President & Chief Executive Officer
Ryan Ellson
Executive Vice President & Chief Financial Officer
+1-403-265-3221
info@grantierra.com
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc., together with its subsidiaries is an independent
international energy company currently focused on oil and natural gas
exploration and production in Canada, Colombia and Ecuador. The Company is
currently developing its existing portfolio of assets in Canada, Colombia and
Ecuador and will continue to pursue additional new growth opportunities that
would further strengthen the Company’s portfolio. The Company’s common
stock trades 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. Except to the extent expressly
stated otherwise, information on the Company’s website or accessible from
our website or any other website is not incorporated by reference into and
should not be considered 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 (the “SEC”) filings are
available on the SEC website at http://www.sec.gov. The Company’s Canadian
securities regulatory filings are available on SEDAR+ at
http://www.sedarplus.ca and UK regulatory filings are available on the
National Storage Mechanism website at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Forward Looking Statements and Legal Advisories:
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 business strategy, plans and
objectives of our management for future operations, capital spending plans and
benefits of the changes in our capital program or expenditures, our liquidity
and financial condition, and those statements preceded by, followed by or that
otherwise include the words “expect,” “plan,” “can,” “will,”
“should,” “guidance,” “forecast,” “budget,” “estimate,”
“signal,” “progress”, “anticipates” and “believes,”
derivations thereof and similar terms identify forward-looking statements. In
particular, but without limiting the foregoing, this press release contains
forward-looking statements regarding: : the Company’s expectations regarding
committed funding (including but not limited to the signing of a mandate for
prepayment structure backed by crude oil deliveries), liquidity and its
leverage ratio target, the Company’s plans regarding strategic investments,
acquisitions, dispositions, synergies, and growth, the Company’s drilling
program and capital expenditures and the Company’s expectations of commodity
prices, exploration and production trends and its positioning for 2025. The
forward-looking statements contained in this press release reflect several
material factors and expectations and assumptions of Gran Tierra including,
without limitation, that Gran Tierra will continue to conduct its operations
in a manner consistent with its current expectations, pricing and cost
estimates (including with respect to commodity pricing and exchange rates),
the general continuance of assumed operational, regulatory and industry
conditions in Canada, Colombia and Ecuador, and the ability of Gran Tierra to
execute its business and operational plans in the manner currently planned.
Among the important factors that could cause our actual results to differ
materially from the forward-looking statements in this press release include,
but are not limited to: our ability to successfully integrate the assets and
operations of i3 Energy Plc (“i3Energy”) and realize the anticipated
benefits and operating synergies expected from the 2024 acquisition of i3
Energy; certain of our operations are located in South America and unexpected
problems can arise due to guerilla activity, strikes, local blockades or
protests; technical difficulties and operational difficulties may arise which
impact the production, transport or sale of our products; other disruptions to
local operations; global health events; global and regional changes in the
demand, supply, prices, differentials or other market conditions affecting oil
and gas, including inflation and changes resulting from actual or anticipated
tariffs and trade policies, global health crises, geopolitical events,
including the conflicts in Ukraine and the Middle East, or from the imposition
or lifting of crude oil production quotas or other actions that might be
imposed by OPEC and other producing countries and the resulting company or
third-party actions in response to such changes; changes in commodity prices,
including volatility or a prolonged decline in these prices relative to
historical or future expected levels; the risk that current global economic
and credit conditions may impact oil prices and oil consumption more than we
currently predict, which could cause further modification of our strategy and
capital spending program; prices and markets for oil and natural gas are
unpredictable and volatile; the effect of hedges; the accuracy of productive
capacity of any particular field; geographic, political and weather conditions
can impact the production, transport or sale of our products; our ability to
execute our business plan, which may include acquisitions, and realize
expected benefits from current or future initiatives; the risk that unexpected
delays and difficulties in developing currently owned properties may occur;
the ability to replace reserves and production and develop and manage reserves
on an economically viable basis; the accuracy of testing and production
results and seismic data, pricing and cost estimates (including with respect
to commodity pricing and exchange rates); the risk profile of planned
exploration activities; the effects of drilling down-dip; the effects of
waterflood and multi-stage fracture stimulation operations; the extent and
effect of delivery disruptions, equipment performance and costs; actions by
third parties; 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; volatility or declines in the trading price
of our common stock or bonds; the risk that we do not receive the anticipated
benefits of government programs, including government tax refunds; our ability
to access debt or equity capital markets from time to time to raise additional
capital, increase liquidity, fund acquisitions or refinance debt; the risk
that we are unable to successfully negotiate final terms and close an
anticipated prepayment structure backed by crude oil deliveries, our ability
to comply with financial covenants in our indentures and make borrowings under
our credit agreements; 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 for the year ended December 31, 2024
filed February 24, 2025 and its other filings with the SEC. These filings are
available on the SEC website at http://www.sec.gov and on SEDAR+ at
www.sedarplus.ca.
The forward-looking statements contained in this press release are based on
certain assumptions made by Gran Tierra based on management’s experience and
other factors believed to be appropriate. Gran Tierra believes these
assumptions to be reasonable at this time, but the forward-looking statements
are subject to risk and uncertainties, many of which are beyond Gran
Tierra’s control, which may cause actual results to differ materially from
those implied or expressed by the forward looking statements. The risk that
the assumptions on which the 2025 outlook are based prove incorrect may
increase the later the period to which the outlook relates. 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 law. In
addition, historical, current and forward-looking sustainability-related
statements may be based on standards for measuring progress that are still
developing, internal controls and processes that continue to evolve, and
assumptions that are subject to change in the future.
The forecasts of expected liquidity to address bond amortization in the fourth
quarter of 2026 and that Gran Tierra’s credit facilities would have a zero
balance by the end of the year may be considered to be future-oriented
financial information or a financial outlook for the purposes of applicable
Canadian securities laws. Financial outlook and future-oriented financial
information contained in this press release about prospective financial
performance, financial position or cash flows are provided to give the reader
a better understanding of the potential future performance of the Company in
certain areas and are based on assumptions about future events, including
economic conditions and proposed courses of action, based on management’s
assessment of the relevant information currently available, and to become
available in the future. In particular, this press release contains projected
operational and financial information for the end of 2025 and the fourth
quarter of 2026. These projections contain forward-looking statements and are
based on a number of material assumptions and factors set out above. Actual
results may differ significantly from the projections presented herein. The
actual results of Gran Tierra’s operations for any period could vary from
the amounts set forth in these projections, and such variations may be
material. See above for a discussion of the risks that could cause actual
results to vary. The future-oriented financial information and financial
outlooks contained in this press release have been approved by management as
of the date of this press release. Readers are cautioned that any such
financial outlook and future-oriented financial information contained herein
should not be used for purposes other than those for which it is disclosed
herein. The Company and its management believe that the prospective financial
information has been prepared on a reasonable basis, reflecting management’s
best estimates and judgments, and represent, to the best of management’s
knowledge and opinion, the Company’s expected course of action. However,
because this information is highly subjective, it should not be relied on as
necessarily indicative of future results.
Non-GAAP Measures
This press release includes non-GAAP financial measures as further described
herein. These non-GAAP measures do not have a standardized meaning under GAAP.
Investors are cautioned that these measures should not be construed as
alternatives to net income or loss, cash flow from operating activities or
other measures of financial performance as determined in accordance with GAAP.
Gran Tierra’s method of calculating these measures may differ from other
companies and, accordingly, they may not be comparable to similar measures
used by other companies. Each non-GAAP financial measure is presented along
with the corresponding GAAP measure so as to not imply that more emphasis
should be placed on the non-GAAP measure.
Operating netback, as presented, is defined as oil sales less operating and
transportation expenses. See the table entitled Financial and Operational
Highlights above for the components of consolidated operating netback and
corresponding reconciliation.
Cash netback as presented is defined as net income or loss adjusted for DD&A
expenses, deferred tax expense or recovery, stock-based compensation expense
or recovery, amortization of debt issuance costs, non-cash lease expense,
lease payments, unrealized foreign exchange gain or loss, other gain or loss
and unrealized derivative instruments gain or loss. Management believes that
operating netback and cash netback are useful supplemental measures for
investors to analyze financial performance and provide an indication of the
results generated by Gran Tierra’s principal business activities prior to
the consideration of other income and expenses. A reconciliation from net
income or loss to cash netback is as follows:
Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30,
Cash Netback - (Non-GAAP) Measure ($000s) 2025 2024 2025 2025 2024
Net (Loss) Income $ (12,741 ) $ 36,371 $ (19,280 ) $ (32,021 ) $ 36,293
Adjustments to reconcile net loss or income to cash netback
DD&A expenses 68,635 55,490 72,202 140,837 111,640
Deferred tax expense (recovery) 2,453 (51,361 ) (4,712 ) (2,259 ) (37,882 )
Stock-based compensation expense (recovery) 546 6,160 (517 ) 29 9,521
Amortization of debt issuance costs 4,082 2,760 3,833 7,915 6,066
Non-cash lease expense 1,725 1,381 1,736 3,461 2,794
Lease payments (1,545 ) (1,311 ) (1,567 ) (3,112 ) (2,369 )
Unrealized foreign exchange loss (gain) 3,114 (3,323 ) 1,687 4,801 (5,589 )
Other loss 38 — 52 90 —
Unrealized derivative instrument (gain) loss (12,401 ) — 1,910 (10,491 ) —
Cash netback $ 53,906 $ 46,167 $ 55,344 $ 109,250 $ 120,474
EBITDA, as presented, is defined as net income or loss adjusted for DD&A
expenses, interest expense and income tax expense or recovery. Adjusted
EBITDA, as presented, is defined as EBITDA adjusted for non-cash lease
expense, lease payments, foreign exchange gain or loss, stock-based
compensation expense or recovery, other gain or loss and unrealized derivative
instruments gain or loss. Management uses this supplemental measure to analyze
performance and income generated by our principal business activities prior to
the consideration of how non-cash items affect that income, and believes that
this financial measure is useful supplemental information for investors to
analyze our performance and our financial results. A reconciliation from net
income or loss to EBITDA and adjusted EBITDA is as follows:
Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30, Twelve Month Trailing June 30,
EBITDA - (Non-GAAP) Measure ($000s) 2025 2024 2025 2025 2024 2025
Net (Loss) Income $ (12,741 ) $ 36,371 $ (19,280 ) $ (32,021 ) $ 36,293 $ (65,098 )
Adjustments to reconcile net loss or income to EBITDA and Adjusted EBITDA
DD&A expenses 68,635 55,490 72,202 140,837 111,640 259,816
Interest expense 24,366 18,398 23,235 47,601 36,822 91,245
Income tax expense (recovery) 4,648 (9,072 ) 3,553 8,201 8,323 41,267
EBITDA $ 84,908 $ 101,187 $ 79,710 $ 164,618 $ 193,078 $ 327,230
Non-cash lease expense 1,725 1,381 1,736 3,461 2,794 6,590
Lease payments (1,545 ) (1,311 ) (1,567 ) (3,112 ) (2,369 ) (5,778 )
Foreign exchange loss (gain) 3,716 (4,413 ) 3,838 7,554 (5,228 ) 3,974
Stock-based compensation expense (recovery) 546 6,160 (517 ) 29 9,521 215
Other loss 38 — 52 90 — 90
Unrealized derivative instrument (gain) loss (12,401 ) — 1,910 (10,491 ) — (7,117 )
Adjusted EBITDA $ 76,987 $ 103,004 $ 85,162 $ 162,149 $ 197,796 $ 325,204
Funds flow from operations, as presented, is defined as net income or loss
adjusted for DD&A expenses, deferred tax expense or recovery, stock-based
compensation expense or recovery, amortization of debt issuance costs,
non-cash lease expense, lease payments, unrealized foreign exchange gain or
loss, other gain or loss and unrealized gain or loss on derivative
instruments. Management uses this financial measure to analyze performance and
income or loss generated by our principal business activities prior to the
consideration of how non-cash items affect that income or loss, and believes
that this financial measure is also useful supplemental information for
investors to analyze performance and our financial results. Free cash flow, as
presented, is defined as funds flow from operations adjusted for capital
expenditures. Management uses this financial measure to analyze cash flow
generated by our principal business activities after capital requirements and
believes that this financial measure is also useful supplemental information
for investors to analyze performance and our financial results. A
reconciliation from net income or loss to both funds flow from operations and
free cash flow is as follows:
Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30, Twelve Month Trailing June 30,
Funds Flow From Operations - (Non-GAAP) Measure ($000s) 2025 2024 2025 2025 2024 2025
Net (Loss) Income $ (12,741 ) $ 36,371 $ (19,280 ) $ (32,021 ) $ 36,293 $ (65,098 )
Adjustments to reconcile net loss or income to funds flow from operations
DD&A expenses 68,635 55,490 72,202 140,837 111,640 259,816
Deferred tax expense (recovery) 2,453 (51,361 ) (4,712 ) (2,259 ) (37,882 ) 7,735
Stock-based compensation expense (recovery) 546 6,160 (517 ) 29 9,521 215
Amortization of debt issuance costs 4,082 2,760 3,833 7,915 6,066 14,767
Non-cash lease expense 1,725 1,381 1,736 3,461 2,794 6,590
Lease payments (1,545 ) (1,311 ) (1,567 ) (3,112 ) (2,369 ) (5,778 )
Unrealized foreign exchange loss (gain) 3,114 (3,323 ) 1,687 4,801 (5,589 ) 2,497
Other loss 38 — 52 90 — 90
Unrealized derivative instrument (gain) loss (12,401 ) — 1,910 (10,491 ) — (7,117 )
Funds flow from operations $ 53,906 $ 46,167 $ 55,344 $ 109,250 $ 120,474 $ 213,717
Capital expenditures $ 51,170 $ 61,273 $ 94,727 $ 145,897 $ 116,604 $ 285,471
Free cash flow $ 2,736 $ (15,106 ) $ (39,383 ) $ (36,647 ) $ 3,870 $ (71,754 )
Net debt as of June 30, 2025, was $746 million, calculated using the sum of
the aggregate principal amount of 7.75% Senior Notes, 9.50% Senior Notes
outstanding and amount drawn on credit facilities, excluding deferred
financing fees, totaling $807 million, less cash and cash equivalents of $61
million. Management believes that net debt is a useful supplemental measure
for management and investors in order to evaluate the financial sustainability
of the Company’s business and leverage. The most directly comparable GAAP
measure is total debt.
Presentation of Oil and Gas Information
Boes have been converted on the basis of six thousand cubic feet (“Mcf”)
natural gas to 1 boe of oil. Boes may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 Mcf: 1 boe is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead. In addition, given that the
value ratio based on the current price of oil as compared with natural gas is
significantly different from the energy equivalent of six to one, utilizing a
boe conversion ratio of 6 Mcf: 1 boe would be misleading as an indication of
value.
References to a formation where evidence of hydrocarbons has been encountered
is not necessarily an indicator that hydrocarbons will be recoverable in
commercial quantities or in any estimated volume. Gran Tierra’s reported
production is a mix of light crude oil and medium heavy crude oil, tight oil,
conventional natural gas, shale gas and natural gas liquids for which there is
no precise breakdown since the Company’s sales volumes typically represent
blends of more than one product type. Well test results should be considered
as preliminary and not necessarily indicative of long-term performance or of
ultimate recovery. Well log interpretations indicating oil and gas
accumulations are not necessarily indicative of future production or ultimate
recovery. If it is indicated that a pressure transient analysis or well-test
interpretation has not been carried out, any data disclosed in that respect
should be considered preliminary until such analysis has been completed.
References to thickness of “oil pay” or of a formation where evidence of
hydrocarbons has been encountered is not necessarily an indicator that
hydrocarbons will be recoverable in commercial quantities or in any estimated
volume.
This press release contains certain oil and gas metrics, including operating
netback and cash netback, which do not have standardized meanings or standard
methods of calculation and therefore such measures may not be comparable to
similar measures used by other companies and should not be used to make
comparisons. These metrics are calculated as described in this press release
and management believes that they are useful supplemental measures for the
reasons described in this press release.
Such metrics have been included herein to provide readers with additional
measures to evaluate the Company’s performance; however, such measures are
not reliable indicators of the future performance of the Company and future
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