Gran Tierra Energy (GTE) Announces 2022 Guidance

Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American: GTE)(TSX: GTE)(LSE: GTE) today announced its 2022 capital budget and production guidance. All dollar amounts are in United States dollars and all production volumes are on a working interest before royalties basis and are expressed in barrels (“bbl”) of oil per day (“BOPD”), unless otherwise stated.

Key Highlights:

• 2022 Guidance:
  • Gran Tierra is forecasting the following ranges for the Company’s 2022 budget:

• 2022 Capital Program – Profitable Production Growth, Debt Reduction & High Impact Exploration: Gran Tierra has a large, diversified development and exploration portfolio in Colombia. The Company’s planned 2022 capital program is a balanced program between development and optimization of existing assets and potentially high-impact exploration. Gran Tierra expects to allocate approximately 70% of its 2022 capital program towards development activities in its core assets: $70 million for the Acordionero field (14-16 development wells) in the Middle Magdalena Valley Basin and $40 million and $30 million respectively to the Costayaco (4-5 development wells) and Moqueta (3 development wells) fields in the Putumayo Basin. The Moqueta work program is expected to commence in the second half of 2022 and is planned to continue into 2023. The remaining 30% of the capital program is expected to be allocated toward exploration-related activities throughout the Company’s portfolio, including up to 6-7 new exploration wells: 4 wells in Colombia and 2-3 wells in Ecuador. The exploration program is designed to focus on short-cycle time, near-field prospects in proven basins with access to infrastructure.
• Fully Funded Capital Program Generating Material Free Cash Flow2: Gran Tierra’s Base Case 2022 capital budget of $220-240 million is expected to be fully funded from the Base Case 2022 cash flow1 forecast of $270-290 million, based on an assumed $70.00/bbl Brent oil price. Gran Tierra remains focused on generating strong free cash flow2 and accelerated debt repayment. The Company’s midpoint 2022 EBITDA3 guidance of $370 million is well above the midpoint of 2022 capital expenditures guidance of $230 million.
• Control of Capital Program: Gran Tierra has 100% working interest in and operatorship of the Company's major assets in Colombia and Ecuador. This full control gives the Company the flexibility to quickly optimize its development and exploration programs with changes, either up or down, in oil prices.
• Clear Path to Debt Reduction: Gran Tierra expects its credit facility to be paid down to a balance of under $70 million by December 31, 2021 and, with 2022 expected free cash flow2 and recovery of taxes receivable, to be fully paid off in the first half of 2022.
• Recent Fitch Upgrade: Fitch Ratings recently upgraded Gran Tierra Energy International Holdings Ltd’s long-term foreign and local currency issuer default ratings to ‘B-’ from ‘CCC+’ and has also upgraded the Company’s senior unsecured notes ratings to ‘B-’/‘RR4’ from ‘CCC+’/‘RR4’ with a stable outlook. The upgrades reflect Gran Tierra’s improved debt profile in 2021.
• Gran Tierra expects approximate 2022 expenses and operating netback per bbl4 to be in the following ranges:

• 2022 Hedges In Place Designed To Protect Cash Flows: The Company currently has the following Brent oil price hedges in place:

The Company expects to hedge approximately 25-40% of forecasted production on a rolling basis.

• On Track to Achieve 2021 Production Guidance: Following the latest blockades in early fourth quarter 2021, Gran Tierra quickly restored production volumes from the Suroriente and PUT-7 Blocks.

Message to Shareholders

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "Our teams’ excellent work throughout 2021 has strongly positioned the Company for continued development and enhanced oil recovery activities in 2022 to optimize the value from each of our assets. In addition, we plan to allocate modest capital to prioritized exploration drilling opportunities. Our forecast 2022 capital budget is a balanced, returns-focused program which is expected to provide free cash flow2 generation, ongoing strengthening of our balance sheet, optimization of ultimate oil reserves value and exposure to exploration upside. We see material potential in our exploration portfolio located in highly prospective geological trends in Colombia and Ecuador. We believe Gran Tierra is well-positioned to navigate the current volatile environment with our low base decline, conventional oil asset base and the operational control for capital allocation and timing, while maintaining a low-cost structure and the safety of our people."

1 “Cash flow” refers to line item “net cash provided by operating activities” under generally accepted accounting principles in the United States of America (“GAAP”).2 “Free cash flow” is a non-GAAP measure and does not have a standardized meaning under GAAP. Free cash flow is defined as “net cash provided by operating activities” less capital spending. Refer to "Non-GAAP Measures" in this press release.3 Earnings before interest, taxes and depletion, depreciation and accretion (“EBITDA”) is a non-GAAP measure and does not have a standardized meaning under GAAP. Refer to "Non-GAAP Measures" in this press release.4 “Operating netback” and “Operating netback per bbl” are non-GAAP measures and do not have standardized meanings under GAAP. Refer to “Non-GAAP Measures” in this press release.

You May Also Be Interested In

• Intel (INTC) PT Lowered to $92 at Mizuho
• Samsara hits $2.1B in ARR with 30% year-over-year growth
• lululemon athletica (LULU) Tops Q2 EPS by $1.10, Cuts Guidance