UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 001-34018 GRAN TIERRA ENERGY INC. (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of registrant as specified in its charter) Delaware 98-0479924 ( ...

First Quarter 2024 Total Average WI Production of 32,242 BOPD, a 3% increase from Prior QuarterPositive Preliminary Results in the Arawana Exploration WellTotal Current(1) Average Production of Approximately 33,400 BOPDFunds Flow from Operations of $74 Million, Free Cash Flow of $19 Million and Adjusted EBITDA of $95 Million(2) CALGARY, Alberta, May 01, 2024 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. ("Gran Tierra" or the "Company") (NYSE:GTE)(TSX:GTE)(LSE:GTE) today announced the Company's financial and o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Exact name of registrant as specified in its charter) (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 001-34018 GRAN TIERRA ENERGY INC. Delaware 98-0479924 (State ...

[PART I - Financial Information](index=4&type=section&id=PART%20I%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements, management's analysis of operations, market risks, and internal controls [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including statements of operations, balance sheets, cash flows, and shareholders' equity, along with detailed notes providing context on business operations, accounting policies, debt, share capital, revenue, taxes, contingencies, and financial instruments [Condensed Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) This statement provides a summary of the company's revenues, expenses, and net income or loss for the specified periods Net Income (Loss) | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Three Months Ended Sep 30 | 6,527 | 38,663 | (83)% | | Nine Months Ended Sep 30 | (13,998) | 105,754 | (113)% | Oil Sales | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Three Months Ended Sep 30 | 179,921 | 168,397 | 7% | | Nine Months Ended Sep 30 | 482,013 | 548,751 | (12)% | Net Income (Loss) Per Share - Basic | Period | 2023 (USD) | 2022 (USD) | Change (%) | | :--------------------- | :--------- | :--------- | :--------- | | Three Months Ended Sep 30 | 0.20 | 1.05 | (81)% | | Nine Months Ended Sep 30 | (0.42) | 2.88 | (115)% | [Condensed Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This statement provides a snapshot of the company's financial position, detailing its assets, liabilities, and shareholders' equity at specific points in time Total Assets | As at | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Sep 30, 2023 | 1,386,035 | 1,335,610 | 3.77% | Total Liabilities | As at | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Sep 30, 2023 | 991,495 | 918,044 | 7.99% | Total Shareholders' Equity | As at | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Sep 30, 2023 | 394,540 | 417,566 | (5.51)% | - The company drew **$49,067 thousand** from its credit facility as of September 30, 2023, compared to nil at December 31, 2022[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This statement outlines the cash inflows and outflows from operating, investing, and financing activities over the reporting periods Net Cash Provided by Operating Activities | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Nine Months Ended Sep 30 | 157,511 | 355,846 | (55.73)% | Net Cash Used in Investing Activities | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Nine Months Ended Sep 30 | (190,758) | (160,462) | 18.88% | Net Cash Provided by (Used in) Financing Activities | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Nine Months Ended Sep 30 | 25,402 | (99,959) | 125.41% | - Proceeds from debt, net of issuance costs: **$48,125 thousand** for the nine months ended September 30, 2023, compared to nil in 2022[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity%20(Unaudited)) This statement presents the changes in the company's shareholders' equity over the reporting periods, including net income, share repurchases, and other comprehensive income Total Shareholders' Equity | As at | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Sep 30, 2023 | 394,540 | 417,566 | (5.51)% | - Net loss of **$(13,998) thousand** for the nine months ended September 30, 2023, compared to a net income of **$105,754 thousand** in the prior year[16](index=16&type=chunk) - The company repurchased **1,328,650 shares** for the nine months ended September 30, 2023, and cancelled all **3,603,396 shares** held as treasury stock[16](index=16&type=chunk)[31](index=31&type=chunk) [Notes to the Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed explanations and additional information regarding the figures presented in the condensed consolidated financial statements [Note 1. Description of Business](index=8&type=section&id=Note%201.%20Description%20of%20Business) This note outlines the company's primary business activities, focusing on international oil and natural gas exploration and production - Gran Tierra Energy Inc. is a publicly traded company focused on international oil and natural gas exploration and production[17](index=17&type=chunk) - Assets are currently located in Colombia and Ecuador[17](index=17&type=chunk) [Note 2. Significant Accounting Policies](index=8&type=section&id=Note%202.%20Significant%20Accounting%20Policies) This note describes the key accounting principles and methods applied in the preparation of the interim financial statements - Interim unaudited condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP")[18](index=18&type=chunk) - The company's significant accounting policies are consistent with those in its 2022 Annual Report on Form 10-K[20](index=20&type=chunk) [Note 3. Property, Plant and Equipment](index=8&type=section&id=Note%203.%20Property%2C%20Plant%20and%20Equipment) This note provides information on the company's property, plant, and equipment, including contract extensions and related capital commitments Total Property, Plant and Equipment | As at | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Sep 30, 2023 | 1,140,955 | 1,100,902 | 3.64% | - The contract for the Suroriente Block was extended for **20 years** from September 1, 2023[21](index=21&type=chunk) - In connection with the contract extension, the company paid **$6.2 million** cash and provided **$123.0 million** in letters of credit for committed capital investments[21](index=21&type=chunk) - No ceiling test impairment losses were recorded for the three and nine months ended September 30, 2023 and 2022[22](index=22&type=chunk) [Note 4. Debt and Debt Issuance Costs](index=9&type=section&id=Note%204.%20Debt%20and%20Debt%20Issuance%20Costs) This note provides details on the company's debt obligations, including credit facility terms and recent exchange offers for senior notes Total Debt | As at | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Sep 30, 2023 | 636,511 | 589,593 | 7.96% | - The credit facility's initial commitment was adjusted from **$100 million** to **$50 million**, and **$50 million** was drawn during Q3 2023, bearing interest at SOFR + 6.00% + 0.26% spread, with a final maturity date of August 15, 2024[23](index=23&type=chunk) - Subsequent to the quarter, the company completed exchange offers for **$247.1 million** of 6.25% Senior Notes and **$275.8 million** of 7.75% Senior Notes for **$487.6 million** newly issued 9.50% Senior Secured Notes due 2029[27](index=27&type=chunk) - The company was in compliance with all financial covenants under the credit facility as of September 30, 2023[24](index=24&type=chunk) [Note 5. Share Capital](index=10&type=section&id=Note%205.%20Share%20Capital) This note details changes in the company's share capital, including a reverse stock split, share repurchases, and stock-based compensation expenses - A **1-for-10 reverse stock split** of the company's common stock became effective on May 5, 2023[29](index=29&type=chunk) - The company repurchased **1,328,650 shares** at a weighted average price of **$8.15 per share** during the nine months ended September 30, 2023, under its 2022 Program, which expired in May 2023[31](index=31&type=chunk) Stock-Based Compensation Expense | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Three Months Ended Sep 30 | 1,931 | (170) | 1,236% | | Nine Months Ended Sep 30 | 3,748 | 6,376 | (41)% | [Note 6. Revenue](index=11&type=section&id=Note%206.%20Revenue) This note provides an analysis of the company's revenue, which is entirely derived from oil sales, and the factors influencing its changes - **100%** of the company's revenue is generated from oil sales[38](index=38&type=chunk) - Oil sales for the three months ended September 30, 2023, increased by **7%** due to lower quality and transportation discounts and utilization of 'M pricing' arrangements[38](index=38&type=chunk)[74](index=74&type=chunk) - Oil sales for the nine months ended September 30, 2023, decreased by **12%** due to a **20% decrease** in Brent price and higher differentials, partially offset by **14% higher sales volumes**[38](index=38&type=chunk)[75](index=75&type=chunk) - In Q3 2023, **96%** of total sales volumes were sold to one major customer in Colombia (9M 2023: **97%**)[39](index=39&type=chunk)[40](index=40&type=chunk) [Note 7. Taxes](index=12&type=section&id=Note%207.%20Taxes) This note explains the company's tax expenses, including the effective tax rate and the factors contributing to its changes - The effective tax rate for the nine months ended September 30, 2023, was **115%**, compared to **49%** in the comparative period of 2022[41](index=41&type=chunk) - The increase in the effective tax rate was primarily due to higher non-deductible foreign exchange adjustments, foreign taxes, non-deductible royalties in Colombia, and non-deductible stock-based compensation, partially offset by a decrease in valuation allowance[45](index=45&type=chunk) - Current income tax expense was **$63.7 million** for the nine months ended September 30, 2023, compared to **$63.1 million** in 2022[42](index=42&type=chunk) - Deferred income tax expense for the nine months ended September 30, 2023, was **$43.2 million**, mainly due to higher tax depreciation and utilization of tax losses in Colombia[43](index=43&type=chunk) [Note 8. Contingencies](index=12&type=section&id=Note%208.%20Contingencies) This note addresses potential liabilities from lawsuits and disputes, along with details on letters of credit and other credit support - Management believes the resolution of pending lawsuits and disputes would not have a material adverse effect on the company's consolidated financial position, results of operations, or cash flows[47](index=47&type=chunk) Letters of Credit and Other Credit Support | As at | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Sep 30, 2023 | 220,100 | 111,100 | 98.11% | - Credit support is primarily for work commitment guarantees in Colombia and Ecuador, including the Suroriente Block extension[48](index=48&type=chunk) [Note 9. Financial Instruments and Fair Value Measurement](index=13&type=section&id=Note%209.%20Financial%20Instruments%20and%20Fair%20Value%20Measurement) This note describes the company's financial instruments, their fair value measurement, and the impact of derivative instruments - The company uses a fair value hierarchy (Level 1, 2, 3) for financial instruments, with PEF and Senior Notes primarily valued using Level 1 inputs[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - The Prepaid Equity Forward (PEF) notional amount decreased from **1.6 million shares** to **1.0 million shares**, with its fair value decreasing from **$16.0 million** to **$7.0 million** as of September 30, 2023[52](index=52&type=chunk) - A **$3.6 million loss** on the PEF was recorded for the nine months ended September 30, 2023[52](index=52&type=chunk) - The company did not have any derivative instruments in 2023, compared to a **$26.6 million loss** from commodity price derivatives in the nine months ended September 30, 2022[54](index=54&type=chunk) [Note 10. Supplemental Cash Flow Information](index=14&type=section&id=Note%2010.%20Supplemental%20Cash%20Flow%20Information) This note provides additional details on cash flows, including net changes in assets and liabilities from operating activities, and cash paid for income taxes and interest Net Changes in Assets and Liabilities from Operating Activities | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Nine Months Ended Sep 30 | (34,235) | 72,838 | (146.99)% | Cash Paid for Income Taxes | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Nine Months Ended Sep 30 | 85,203 | 29,881 | 185.14% | Cash Paid for Interest | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Nine Months Ended Sep 30 | 29,446 | 31,455 | (6.39)% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and operational results for the three and nine months ended September 30, 2023, highlighting key changes in income, expenses, production, and liquidity, and discussing the factors influencing these trends [Financial and Operational Highlights](index=16&type=section&id=Financial%20and%20Operational%20Highlights) This section provides a concise overview of the company's key financial and operational performance metrics for the reporting period - Net income in Q3 2023 was **$6.5 million**, an **83% decrease** from **$38.7 million** in Q3 2022[60](index=60&type=chunk) - Adjusted EBITDA increased **3%** to **$119.2 million** in Q3 2023, compared to **$116.1 million** in Q3 2022[60](index=60&type=chunk) - NAR production for Q3 2023 increased **14%** to **26,776 BOPD**, compared to **23,472 BOPD** in Q3 2022[60](index=60&type=chunk) - Oil sales for Q3 2023 were **$179.9 million**, **7% higher** than Q3 2022, primarily due to lower quality and transportation discounts and 'M pricing' arrangements[60](index=60&type=chunk) - Capital additions for Q3 2023 were **$43.1 million**, a **24% decrease** compared to Q3 2022, due to the completion of the 2023 drilling program in the first half[60](index=60&type=chunk) [Additional Operational Results](index=20&type=section&id=Additional%20Operational%20Results) This section offers a more detailed breakdown of the company's operational performance, including production, sales volumes, and various expenses [Oil Production and Sales Volumes, BOPD](index=21&type=section&id=Oil%20Production%20and%20Sales%20Volumes%2C%20BOPD) This note analyzes the company's oil production and sales volumes, highlighting changes and the impact of royalties - Oil production NAR for the three and nine months ended September 30, 2023, increased by **14%** in each period compared to 2022, driven by successful drilling and workover campaigns in Colombia and exploration success in Ecuador[68](index=68&type=chunk) - Oil production NAR decreased by **2%** compared to the prior quarter due to higher royalties from an increase in benchmark oil prices[69](index=69&type=chunk) - Royalties as a percentage of WI production decreased to **21%** for Q3 2023 and **20%** for 9M 2023, compared to 2022, commensurate with the decrease in benchmark oil prices and the price-sensitive royalty regime in Colombia[70](index=70&type=chunk) [Realized Price and Oil Sales](index=22&type=section&id=Realized%20Price%20and%20Oil%20Sales) This note examines the realized price per barrel and total oil sales, explaining the factors influencing these figures - Realized price per bbl for Q3 2023 decreased by **5%** compared to Q3 2022, primarily due to a **12% decrease** in Brent price, offset by lower differentials[71](index=71&type=chunk) - Realized price per bbl for 9M 2023 decreased by **23%** compared to 9M 2022, primarily due to a **20% decrease** in Brent price and higher differentials[72](index=72&type=chunk) - Oil sales for Q3 2023 increased by **7%** to **$179.9 million** compared to Q3 2022, due to lower Castilla and Vasconia differentials and the use of 'M pricing' marketing arrangements[74](index=74&type=chunk) - Oil sales for 9M 2023 decreased by **12%** to **$482.0 million** compared to 9M 2022, due to a **20% decrease** in Brent price and higher differentials, partially offset by **14% higher sales volumes**[75](index=75&type=chunk) [Operating Netback](index=24&type=section&id=Operating%20Netback) This note presents the company's operating netback, both in total and on a per-barrel basis, for the reporting periods Operating Netback | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Three Months Ended Sep 30 | 126,712 | 124,143 | 2% | | Nine Months Ended Sep 30 | 332,187 | 424,721 | (22)% | Operating Netback per bbl Sales Volumes NAR | Period | 2023 (USD) | 2022 (USD) | Change (%) | | :--------------------- | :--------- | :--------- | :--------- | | Three Months Ended Sep 30 | 52.18 | 57.38 | (9)% | | Nine Months Ended Sep 30 | 46.30 | 67.55 | (31)% | [Operating Expenses](index=25&type=section&id=Operating%20Expenses) This note analyzes the company's operating expenses, explaining the factors contributing to their changes - Operating expenses for Q3 2023 increased by **18%** to **$49.4 million** (**$20.33 per bbl**) compared to Q3 2022[79](index=79&type=chunk) - Operating expenses for 9M 2023 increased by **20%** to **$139.2 million** (**$19.40 per bbl**) compared to 9M 2022[80](index=80&type=chunk) - Increases were primarily due to higher lifting costs (road/pipeline maintenance, power generation due to El Niño drought and increased compressed natural gas purchases, equipment rental) and the depreciation of the U.S. dollar against the Colombian peso[79](index=79&type=chunk)[80](index=80&type=chunk) [Transportation Expenses](index=26&type=section&id=Transportation%20Expenses) This note details the company's transportation expenses, explaining the reasons for their fluctuations - Transportation expenses for Q3 2023 increased by **59%** to **$3.8 million** (**$1.58 per bbl**) compared to Q3 2022[83](index=83&type=chunk)[84](index=84&type=chunk) - Transportation expenses for 9M 2023 increased by **37%** to **$10.6 million** (**$1.48 per bbl**) compared to 9M 2022[83](index=83&type=chunk)[84](index=84&type=chunk) - The increase was due to higher transportation tariffs affecting Acordionero sales and the utilization of new transportation routes for new exploration wells in Colombia and Ecuador[83](index=83&type=chunk) - Compared to the prior quarter, transportation expenses increased by **4%** due to higher trucking costs from longer distance delivery points and depreciation of the U.S. dollar against the Colombian peso[85](index=85&type=chunk) [DD&A Expenses](index=27&type=section&id=DD%26A%20Expenses) This note analyzes the company's depreciation, depletion, and amortization (DD&A) expenses, explaining the factors driving their changes - DD&A expenses for Q3 2023 increased by **21%** to **$55.0 million** (**$22.66 per bbl**) compared to Q3 2022[86](index=86&type=chunk) - DD&A expenses for 9M 2023 increased by **27%** to **$162.9 million** (**$22.71 per bbl**) compared to 9M 2022[86](index=86&type=chunk) - The increases were due to increased production and higher costs in the depletable base[86](index=86&type=chunk) [G&A Expenses](index=28&type=section&id=G%26A%20Expenses) This note examines general and administrative (G&A) expenses, both before and including stock-based compensation, and the reasons for their changes - G&A expenses before stock-based compensation for Q3 2023 were comparable to Q3 2022, but on a per bbl basis, decreased by **$0.41** to **$3.42** due to higher sales volumes[88](index=88&type=chunk) - G&A expenses before stock-based compensation for 9M 2023 increased by **22%** to **$29.1 million** (**$4.05 per bbl**) due to higher consulting costs and legal fees[89](index=89&type=chunk) - G&A expenses including stock-based compensation for Q3 2023 increased **26%** compared to Q3 2022, and by **$0.47 per bbl**, due to share price appreciation[90](index=90&type=chunk) [Foreign Exchange Gains and Losses](index=29&type=section&id=Foreign%20Exchange%20Gains%20and%20Losses) This note discusses the company's foreign exchange gains and losses, primarily driven by the U.S. dollar's fluctuation against the Colombian peso - The company recorded a **$1.7 million foreign exchange loss** for Q3 2023 and an **$8.1 million loss** for 9M 2023[93](index=93&type=chunk) - The primary source of foreign exchange losses was the weakening of the U.S. dollar against the Colombian peso (**3%** in Q3 2023, **16%** in 9M 2023), impacting the translation of monetary items[93](index=93&type=chunk)[94](index=94&type=chunk) [Income Tax Expense](index=29&type=section&id=Income%20Tax%20Expense) This note analyzes the company's income tax expense, including the effective tax rate and the factors influencing it - The effective tax rate for the nine months ended September 30, 2023, was **115%**, significantly higher than **49%** in the prior year[94](index=94&type=chunk) - The higher effective tax rate was primarily due to increased non-deductible foreign exchange adjustments, foreign taxes, non-deductible royalties in Colombia, and non-deductible stock-based compensation[96](index=96&type=chunk) - Current income tax expense for 9M 2023 was **$63.7 million**, and deferred income tax expense was **$43.2 million**[95](index=95&type=chunk) [Net Income (Loss) and Funds Flow from Operations (a Non-GAAP Measure)](index=32&type=section&id=Net%20Income%20(Loss)%20and%20Funds%20Flow%20from%20Operations%20(a%20Non-GAAP%20Measure)) This note discusses the company's net income or loss and funds flow from operations, explaining the drivers behind their changes - Net income for Q3 2023 decreased by **83%** year-over-year, and the company reported a net loss for 9M 2023[99](index=99&type=chunk) - Funds flow from operations decreased by **16%** to **$79.0 million** for Q3 2023 and by **33%** to **$192.1 million** for 9M 2023 compared to the corresponding periods in 2022[61](index=61&type=chunk)[99](index=99&type=chunk) - The decrease in funds flow from operations was primarily due to lower Brent prices, higher operating costs, and realized foreign exchange losses[110](index=110&type=chunk) [Capital expenditures](index=33&type=section&id=Capital%20expenditures) This note provides a breakdown of capital expenditures by category and region, along with details on drilling programs and contract extensions Capital Expenditures (Q3 2023) | Category | Colombia (Millions USD) | Ecuador (Millions USD) | Total (Millions USD) | | :--------------------- | :---------------------- | :--------------------- | :------------------- | | Exploration | 4.0 | 2.9 | 6.9 | | Development: Drilling and Completions | 9.3 | — | 9.3 | | Development: Facilities | 5.2 | 0.6 | 5.8 | | Development: Workovers | 4.8 | — | 4.8 | | Other | 14.0 | 2.3 | 16.3 | | **Total** | **37.3** | **5.8** | **43.1** | - No wells were spudded in Colombia or Ecuador during Q3 2023, as the 2023 drilling program was completed in the first half[100](index=100&type=chunk) - The Suroriente Block contract extension involved committed capital investments over a three-year period[101](index=101&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its financial obligations, detailing its capital resources, credit facilities, and debt restructuring - The company believes its capital resources, including cash on hand and cash generated from operations, will provide sufficient liquidity for the next **12 months**[102](index=102&type=chunk) - The credit facility was amended, adjusting the initial commitment to **$50 million**, which was drawn during Q3 2023, and is secured by Colombian assets with a maturity date of August 15, 2024[103](index=103&type=chunk) - Subsequent to the quarter, the company completed exchange offers for its 6.25% and 7.75% Senior Notes, replacing them with **$487.6 million** newly issued 9.50% Senior Secured Notes due 2029[106](index=106&type=chunk) - The 2022 share repurchase program expired in May 2023 after reaching its **10% share maximum**[108](index=108&type=chunk) - As of September 30, 2023, the company was in compliance with all financial covenants under its credit facility[104](index=104&type=chunk) [Cash Flows](index=35&type=section&id=Cash%20Flows) This section analyzes the company's cash flow changes, including the decrease in funds flow from operations and additions to property, plant, and equipment Net (Decrease) Increase in Cash and Cash Equivalents and Restricted Cash and Cash Equivalents | Period | 2023 (Thousands USD) | 2022 (Thousands USD) | Change (%) | | :--------------------- | :------------------- | :------------------- | :--------- | | Nine Months Ended Sep 30 | (1,948) | 93,429 | (102.08)% | - Funds flow from operations decreased by **33%** for the nine months ended September 30, 2023, compared to the prior year, primarily due to lower Brent prices, higher operating costs, and realized foreign exchange losses[109](index=109&type=chunk)[110](index=110&type=chunk) - Additions to property, plant and equipment for 9M 2023 were **$(179,707) thousand**, an increase from **$(163,717) thousand** in 9M 2022[109](index=109&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms that there have been no material changes to the company's critical accounting policies and estimates since the last annual report - The company's critical accounting policies and estimates have not changed materially since the filing of its 2022 Annual Report on Form 10-K[111](index=111&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to various market risks, including commodity price risk, foreign currency risk, and interest rate risk, and how these factors can impact its financial performance [Commodity price risk](index=36&type=section&id=Commodity%20price%20risk) This note identifies the company's primary market risk as the volatility of oil prices, which directly affects its revenues - The company's principal market risk relates to volatile and unpredictable oil prices, which directly influence its revenues from oil sales[112](index=112&type=chunk) - Revenues are from oil sales at ICE Brent adjusted for quality differentials[112](index=112&type=chunk) [Foreign currency risk](index=36&type=section&id=Foreign%20currency%20risk) This note explains the company's exposure to foreign currency fluctuations, particularly between the U.S. dollar and the Colombian peso - Foreign currency risk primarily stems from the fluctuation of the U.S. dollar against the Colombian peso[114](index=114&type=chunk) - This impacts local currency-denominated operating and G&A expenses, and current/deferred tax assets and liabilities in Colombia[113](index=113&type=chunk)[114](index=114&type=chunk) - The risk is somewhat ameliorated as **100%** of revenues and the majority of capital expenditures are U.S. dollar-related[113](index=113&type=chunk) [Interest Rate Risk](index=36&type=section&id=Interest%20Rate%20Risk) This note describes the company's exposure to interest rate fluctuations on its credit facility - The company is exposed to interest rate fluctuations on its credit facility, which bears floating rates of interest[115](index=115&type=chunk) - As of September 30, 2023, the outstanding balance under the credit facility was **$50 million**[115](index=115&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the company's assessment of its disclosure controls and procedures and reports on any changes in internal control over financial reporting [Disclosure Controls and Procedures](index=36&type=section&id=Disclosure%20Controls%20and%20Procedures) This note confirms management's assessment of the effectiveness of the company's disclosure controls and procedures - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[116](index=116&type=chunk) - These controls are designed to provide reasonable assurance that required information is recorded, processed, summarized, and reported within specified time periods[116](index=116&type=chunk) [Changes in Internal Control over Financial Reporting](index=37&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This note reports that there were no material changes in internal control over financial reporting during the quarter - There were no changes in internal control over financial reporting during the quarter ended September 30, 2023, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[117](index=117&type=chunk) [PART II - Other Information](index=37&type=section&id=PART%20II%20Other%20Information) This section provides additional information, including legal proceedings, risk factors, equity sales, other disclosures, and a list of exhibits [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed disclosures on legal proceedings provided in Note 8 of the financial statements, indicating no new material developments - The company refers to Note 8 in Part I, Item 1 of this Quarterly Report on Form 10-Q for material developments regarding legal proceedings[119](index=119&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section highlights the various factors that could affect the company's business and results of operations, directing readers to the 2022 Annual Report on Form 10-K for a comprehensive list and noting the increased uncertainty from current global events - Readers should carefully review the risk factors outlined in Part I, Item 1A of the 2022 Annual Report on Form 10-K[120](index=120&type=chunk) - The unprecedented nature of ongoing global conflicts and volatility in the worldwide economy and oil and gas industry makes it more difficult to identify all risks and their ultimate impact[120](index=120&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period covered by this report - No unregistered sales of equity securities or use of proceeds were reported[121](index=121&type=chunk) [Item 5. Other information](index=37&type=section&id=Item%205.%20Other%20information) This section confirms that no directors or Section 16 officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the third quarter of 2023 - No director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended September 30, 2023[122](index=122&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all documents filed as exhibits to the Form 10-Q, including corporate governance documents, amendments to the credit agreement, and various certifications required by regulatory bodies, along with XBRL data files - Key exhibits include the Certificate of Incorporation, Bylaws, Deed of Amendment and Restatement to Credit Agreement, and certifications pursuant to the Sarbanes-Oxley Act of 2002[123](index=123&type=chunk) - XBRL (eXtensible Business Reporting Language) documents are also included, such as the Instance Document and Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents[123](index=123&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) This section contains the official signatures of the company's President, Chief Executive Officer, and Chief Financial Officer, certifying the report - The report was signed on October 31, 2023, by Gary S. Guidry, President and Chief Executive Officer, and Ryan Ellson, Executive Vice President and Chief Financial Officer[126](index=126&type=chunk)

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2023 was $85 million, down from $89 million in the previous quarter, impacted by a $13 million realized foreign exchange loss due to the strengthening of the Colombian peso against the U.S. dollar [5][30] - Average production for Q2 2023 was 33,719 barrels per day, a 10% increase year-over-year and a 7% increase from the prior quarter [6][30] - Operating netback decreased to $34.58 per barrel, down 42% year-over-year and down 2% from the prior quarter [6][30] - Cash balance as of June 30, 2023, was $69 million, with net debt at $503 million, and expected to exit 2023 with over $150 million in cash [30][42] Business Line Data and Key Metrics Changes - The company completed its 2023 development campaign, drilling 21 development wells across major fields, with significant contributions from Acordionero and Costayaco [29][32] - Acordionero's production averaged approximately 18,000 barrels of oil per day, attributed to the successful drilling program and enhanced oil recovery management [81] Market Data and Key Metrics Changes - Brent oil price averaged $77.73 per barrel during the quarter, down 31% year-over-year and down 5% from the prior quarter [30] - The quality and transportation discount narrowed to $14.10 per barrel from $18.45 in the previous quarter, with Vasconia and Castilla differentials also narrowing significantly [70] Company Strategy and Development Direction - The company plans to focus on exploration wells in Ecuador in Q4 2023, building on the successful 2022 exploration campaign [79] - Gran Tierra aims to maintain low operating costs and continue its share buyback program while exploring value-add acquisitions [26][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of 2023, citing strong production, narrowing differentials, and a favorable Brent oil price above $80 per barrel [80] - The company acknowledged the impact of the Colombian peso on operating costs but indicated that inflationary pressures would not have a material impact on results [93] Other Important Information - The company achieved record reserves, with 94 million barrels of oil equivalent on a 1P basis, 150 million boe on a 2P basis, and 212 million boe on a 3P basis [82] - Gran Tierra is committed to environmental initiatives, including the NaturAmazonas project, which focuses on reforestation and community benefits [31] Q&A Session Summary Question: Guidance for cash taxes for the second half of the year - Management indicated that cash taxes would primarily consist of withholding tax, which is about 8% of revenue, and original guidance for total cash taxes was $210 million to $250 million for the year [86][89] Question: Conditions for reinstating hedges - Management stated that they are currently unhedged and will evaluate hedging options in Q4 based on capital allocation for 2024 [92] Question: Plans to address the 2025 maturity and use of excess cash - Management confirmed that they plan to repay debts as they come due and will consider using excess cash for bond repurchases or share repurchases [61][100] Question: Insight into Acordionero's lower production - Management explained that the decrease in Acordionero production was due to timing of well completions and some wells being down during the quarter [56]

[General Information](index=1&type=section&id=General%20Information) This section provides foundational details of Gran Tierra Energy Inc.'s Form 10-Q, including filing specifics, cautionary statements for forward-looking information, and a glossary of industry terms [Filing Details](index=1&type=section&id=Filing%20Details) This section provides the standard filing information for Gran Tierra Energy Inc.'s Form 10-Q for the quarterly period ended June 30, 2023, including its incorporation state, address, telephone number, and securities registered - Gran Tierra Energy Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2023[1](index=1&type=chunk)[7](index=7&type=chunk) Title of each class and exchange on which registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value $0.01 per share | GTE | NYSE American, Toronto Stock Exchange, London Stock Exchange | - The registrant is an accelerated filer[4](index=4&type=chunk)[5](index=5&type=chunk) [Cautionary Language Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Language%20Regarding%20Forward-Looking%20Statements) This section outlines the inherent risks and uncertainties associated with forward-looking statements made in the report, advising readers that actual results may differ materially due to various factors including operational difficulties, commodity price volatility, and geopolitical risks in South America - The report contains forward-looking statements subject to risks and uncertainties, meaning actual results may differ materially from expectations[9](index=9&type=chunk) - Key risks include operational issues in South America (guerilla activity, strikes, blockades), technical difficulties, global health events (COVID-19), and volatility in oil and gas demand, supply, and prices[9](index=9&type=chunk) - The company disclaims any obligation to publicly release updates or revisions to forward-looking statements, except as required by federal securities laws[9](index=9&type=chunk) [Glossary of Oil and Gas Terms](index=3&type=section&id=Glossary%20of%20Oil%20and%20Gas%20Terms) This section provides definitions for key abbreviations and terms used in the oil and gas industry within the report, such as 'bbl' for barrel and 'BOPD' for barrels of oil per day, clarifying how sales volumes and production are reported Abbreviation Meanings | Abbreviation | Meaning | | :----------- | :------ | | bbl | barrel | | BOPD | barrels of oil per day | | NAR | net after royalty | - Sales volumes represent production Net After Royalty (NAR) adjusted for inventory changes, and production is also reported NAR unless specified as 'working interest production before royalties'[11](index=11&type=chunk) [PART I - Financial Information](index=4&type=section&id=PART%20I%20-%20Financial%20Information) This part presents Gran Tierra Energy Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition, operations, market risks, and internal controls [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Gran Tierra Energy Inc.'s unaudited condensed consolidated financial statements, including statements of operations, balance sheets, cash flows, and shareholders' equity, along with detailed notes explaining significant accounting policies, property, debt, share capital, revenue, taxes, contingencies, financial instruments, and supplemental cash flow information for the periods ended June 30, 2023 [Condensed Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%28Unaudited%29) This statement details Gran Tierra Energy Inc.'s revenues, expenses, and net income or loss for the three and six months ended June 30, 2023 and 2022 Net (Loss) Income and Oil Sales (Thousands of U.S. Dollars) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Oil Sales | $157,902 | $205,785 | $302,092 | $380,354 | | Net (Loss) Income | $(10,825) | $52,972 | $(20,525) | $67,091 | | Basic EPS | $(0.33) | $1.44 | $(0.61) | $1.82 | | Diluted EPS | $(0.33) | $1.42 | $(0.61) | $1.80 | - The company experienced a significant shift from net income to **net loss**, with a **120% decrease in Q2 2023** and a **131% decrease in 6M 2023** compared to the prior year[13](index=13&type=chunk) [Condensed Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) This statement presents Gran Tierra Energy Inc.'s financial position, including assets, liabilities, and shareholders' equity, as of June 30, 2023, and December 31, 2022 Key Balance Sheet Metrics (Thousands of U.S. Dollars) | Metric | As at June 30, 2023 | As at December 31, 2022 | | :-------------------------- | :------------------ | :---------------------- | | Total Assets | $1,309,365 | $1,335,610 | | Total Liabilities | $921,947 | $918,044 | | Total Shareholders' Equity | $387,418 | $417,566 | | Cash and cash equivalents | $68,529 | $126,873 | - Total assets decreased by **$26.2 million**, and total shareholders' equity decreased by **$30.1 million** from December 31, 2022, to June 30, 2023[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) This statement summarizes Gran Tierra Energy Inc.'s cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Cash Flow Summary (Six Months Ended June 30, Thousands of U.S. Dollars) | Activity | 2023 | 2022 | | :-------------------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $87,130 | $247,022 | | Net cash used in investing activities | $(127,539) | $(95,718) | | Net cash used in financing activities | $(22,533) | $(67,501) | | Net (decrease) increase in cash | $(57,183) | $83,123 | - Net cash provided by operating activities decreased significantly by **64.7% in 6M 2023** compared to 6M 2022[15](index=15&type=chunk) - The company experienced a **net decrease in cash, cash equivalents, and restricted cash of $57.2 million** in 6M 2023, contrasting with an increase of $83.1 million in 6M 2022[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity%20%28Unaudited%29) This statement outlines changes in Gran Tierra Energy Inc.'s shareholders' equity, including net income/loss and share repurchases, for the six months ended June 30, 2023 and 2022 Shareholders' Equity Changes (Six Months Ended June 30, Thousands of U.S. Dollars) | Metric | 2023 | 2022 | | :-------------------------- | :--------- | :--------- | | Balance, beginning of period | $10,272 | $10,270 | | Re-purchase of shares | $(35) | — | | Balance, end of period | $10,237 | $10,272 | - The company reported a **net loss of $(20,525)K** for the six months ended June 30, 2023, compared to a net income of $67,091K in the prior year[16](index=16&type=chunk) - Treasury Stock balance was reduced to zero as of June 30, 2023, after the cancellation of repurchased shares[16](index=16&type=chunk) [Notes to the Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, property, debt, and other financial aspects [Note 1. Description of Business](index=8&type=section&id=Note%201.%20Description%20of%20Business) This note describes Gran Tierra Energy Inc.'s primary business activities as an international oil and natural gas exploration and production company - Gran Tierra Energy Inc. is a publicly traded company focused on international oil and natural gas exploration and production, with assets primarily located in Colombia and Ecuador[17](index=17&type=chunk) [Note 2. Significant Accounting Policies](index=8&type=section&id=Note%202.%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing Gran Tierra Energy Inc.'s interim unaudited condensed consolidated financial statements - The interim unaudited condensed consolidated financial statements are prepared in accordance with GAAP and reflect all normal recurring adjustments[18](index=18&type=chunk) - Significant accounting policies remain consistent with those described in the Company's 2022 Annual Report on Form 10-K[20](index=20&type=chunk) [Note 3. Property, Plant and Equipment](index=8&type=section&id=Note%203.%20Property%2C%20Plant%20and%20Equipment) This note details Gran Tierra Energy Inc.'s oil and natural gas properties, including proved and unproved categories, and reports on any impairment losses Oil and Natural Gas Properties (Thousands of U.S. Dollars) | Category | As at June 30, 2023 | As at December 31, 2022 | | :--------- | :------------------ | :---------------------- | | Proved | $4,765,640 | $4,617,804 | | Unproved | $66,091 | $74,471 | | Total | $4,831,731 | $4,692,275 | - The company reported no ceiling test impairment losses for the three and six months ended June 30, 2023, or 2022[21](index=21&type=chunk) [Note 4. Debt and Debt Issuance Costs](index=9&type=section&id=Note%204.%20Debt%20and%20Debt%20Issuance%20Costs) This note provides a breakdown of Gran Tierra Energy Inc.'s long-term debt, including senior notes and lease obligations, and details debt repurchase activities Long-Term Debt (Thousands of U.S. Dollars) | Debt Type | As at June 30, 2023 | As at December 31, 2022 | | :-------------------------- | :------------------ | :---------------------- | | 6.25% Senior Notes, due Feb 2025 | $271,909 | $279,909 | | 7.75% Senior Notes, due May 2027 | $300,000 | $300,000 | | Unamortized debt issuance costs | $(10,830) | $(10,992) | | Long-term lease obligation | $24,728 | $20,676 | | Total debt | $585,807 | $589,593 | - The company repurchased **$8.0 million of 6.25% Senior Notes** for $6.8 million cash in the six months ended June 30, 2023, resulting in a **$1.1 million gain**[23](index=23&type=chunk) - A credit facility with a borrowing base of up to $150 million remained undrawn as of June 30, 2023[22](index=22&type=chunk) [Note 5. Share Capital](index=10&type=section&id=Note%205.%20Share%20Capital) This note describes Gran Tierra Energy Inc.'s share capital structure, including details on a reverse stock split, share repurchases, and stock-based compensation expenses - On May 5, 2023, the company completed a **1-for-10 reverse stock split** of its common stock[25](index=25&type=chunk) Share Repurchases (Six Months Ended June 30, 2023) | Metric | Shares Repurchased | Weighted Average Price per Share | | :---------------- | :----------------- | :----------------------------- | | 6 Months Ended June 30, 2023 | 1,328,650 | $8.15 | - Stock-based compensation expense for the six months ended June 30, 2023, was **$1.8 million**, a significant decrease from $6.5 million in the prior year[29](index=29&type=chunk) [Note 6. Revenue](index=11&type=section&id=Note%206.%20Revenue) This note details Gran Tierra Energy Inc.'s revenue sources, primarily from oil sales, and discusses factors affecting realized prices and customer concentration - **100% of the company's revenue** for the three and six months ended June 30, 2023, was generated from oil sales[34](index=34&type=chunk) - Quality and transportation discounts increased to **18% and 20%** of the average ICE Brent price for the three and six months ended June 30, 2023, respectively, up from 12% in the prior year, primarily due to higher Vasconia and Castilla discounts[34](index=34&type=chunk) - During the three and six months ended June 30, 2023, **98% of the company's production** was sold to one major customer in Colombia[35](index=35&type=chunk)[36](index=36&type=chunk) [Note 7. Taxes](index=13&type=section&id=Note%207.%20Taxes) This note provides an analysis of Gran Tierra Energy Inc.'s income tax expense and effective tax rate, explaining the factors influencing tax variations Effective Tax Rate and Current Income Tax Expense (Six Months Ended June 30, Thousands of U.S. Dollars) | Metric | 2023 | 2022 | | :-------------------------- | :--------- | :--------- | | Effective Tax Rate | 145% | 54% | | Current Income Tax Expense | $37,363 | $46,252 | - The increase in the effective tax rate for 6M 2023 was primarily due to non-deductible foreign exchange adjustments, foreign taxes, non-deductible royalties in Colombia, and non-deductible stock-based compensation, partially offset by a decrease in valuation allowance[41](index=41&type=chunk) [Note 8. Contingencies](index=13&type=section&id=Note%208.%20Contingencies) This note discloses Gran Tierra Energy Inc.'s pending lawsuits, claims, and credit support for work commitment guarantees - Gran Tierra has several pending lawsuits and claims, but management believes their resolution would not have a material adverse effect on the company's financial position, results of operations, or cash flows[43](index=43&type=chunk) - As of June 30, 2023, the company provided **$109.4 million in letters of credit** and other credit support for work commitment guarantees in Colombia and Ecuador[44](index=44&type=chunk) [Note 9. Financial Instruments and Fair Value Measurement](index=13&type=section&id=Note%209.%20Financial%20Instruments%20and%20Fair%20Value%20Measurement) This note details Gran Tierra Energy Inc.'s financial instruments, including the fair value of senior notes and derivative instruments Fair Value of Senior Notes (Thousands of U.S. Dollars) | Senior Notes | Carrying Amount (June 30, 2023) | Fair Value (June 30, 2023) | | :-------------------------- | :------------------------------ | :------------------------- | | 6.25% Senior Notes | $268,900 | $233,502 | | 7.75% Senior Notes | $293,900 | $227,321 | - The company recorded a **$5.8 million loss** on its Prepaid Equity Forward (PEF) for the six months ended June 30, 2023[48](index=48&type=chunk) - No gains or losses related to derivative instruments were incurred for the three and six months ended June 30, 2023, compared to a **$26.6 million loss in 6M 2022**[50](index=50&type=chunk) [Note 10. Supplemental Cash Flow Information](index=15&type=section&id=Note%2010.%20Supplemental%20Cash%20Flow%20Information) This note provides additional details on Gran Tierra Energy Inc.'s cash and cash equivalents reconciliation and cash paid for income taxes Cash and Cash Equivalents Reconciliation (Thousands of U.S. Dollars) | Metric | As at June 30, 2023 | As at December 31, 2022 | | :-------------------------------------- | :------------------ | :---------------------- | | Cash and cash equivalents | $68,529 | $126,873 | | Restricted cash and cash equivalents - current | $1,142 | $1,142 | | Restricted cash and cash equivalents - long-term | $6,504 | $5,343 | | Total | $76,175 | $133,358 | - Cash paid for income taxes significantly increased to **$71.5 million** for the six months ended June 30, 2023, from $20.5 million in the corresponding period of 2022[52](index=52&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's detailed analysis of Gran Tierra Energy Inc.'s financial condition and operational performance for the second quarter and six months ended June 30, 2023. It highlights key financial metrics, production volumes, revenue drivers, expense trends, capital expenditures, and liquidity, explaining the factors contributing to the company's net loss and decreased funds flow from operations [Financial and Operational Highlights](index=16&type=section&id=Financial%20and%20Operational%20Highlights) This section summarizes Gran Tierra Energy Inc.'s key financial and operational performance metrics for Q2 and 6M 2023, including net income, production, and funds flow from operations Key Financial and Operational Highlights (Q2 2023 vs Q2 2022) | Metric | Q2 2023 | Q2 2022 | % Change | | :-------------------------- | :--------- | :--------- | :------- | | Net (Loss) Income | $(10.8)M | $53.0M | (120)% | | Income Before Income Taxes | $22.9M | $91.6M | (75)% | | Funds Flow From Operations | $53.1M | $103.6M | (49)% | | Production NAR (BOPD) | 27,204 | 23,215 | 17% | | Sales Volumes (BOPD) | 27,271 | 22,847 | 19% | | Oil Sales | $157.9M | $205.8M | (23)% | | Operating Netback | $105.7M | $163.8M | (35)% | | Adjusted EBITDA | $84.5M | $140.1M | (40)% | | Capital Additions | $65.6M | $65.2M | 1% | - Net loss in Q2 2023 was **$10.8 million**, a significant decrease from $53.0 million net income in Q2 2022, primarily due to a **31% decrease in Brent price** and higher quality and transportation discounts[55](index=55&type=chunk) - NAR production increased by **17% in Q2 2023** compared to Q2 2022, reaching **27,204 BOPD**, driven by successful drilling and workover campaigns[55](index=55&type=chunk) [Additional Operational Results](index=19&type=section&id=Additional%20Operational%20Results) This section provides further details on Gran Tierra Energy Inc.'s oil production, sales volumes, and realized prices, highlighting factors influencing these operational metrics [Oil Production and Sales Volumes, BOPD](index=20&type=section&id=Oil%20Production%20and%20Sales%20Volumes%2C%20BOPD) This section presents Gran Tierra Energy Inc.'s average daily oil production and sales volumes, both before and after royalties, for the reported periods Average Daily Volumes (BOPD) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | WI Production Before Royalties | 33,719 | 30,607 | 32,671 | 29,988 | | Production NAR | 27,204 | 23,215 | 26,370 | 23,026 | | Sales | 27,271 | 22,847 | 26,227 | 22,790 | | Royalties, % of WI Production | 19% | 24% | 19% | 23% | - Oil production NAR increased by **17% and 15%** for the three and six months ended June 30, 2023, respectively, compared to the corresponding periods of 2022, due to successful drilling and workover campaigns in Colombia[63](index=63&type=chunk) [Realized Price per bbl](index=21&type=section&id=Realized%20Price%20per%20bbl) This section analyzes Gran Tierra Energy Inc.'s realized oil prices per barrel, explaining the impact of Brent prices and quality differentials - Realized price per bbl decreased by **36% and 31%** for the three and six months ended June 30, 2023, respectively, compared to the corresponding periods of 2022[66](index=66&type=chunk) - This decrease was primarily due to a **31% and 24% decrease in Brent price** and higher Castilla and Vasconia differentials[66](index=66&type=chunk) [Oil Sales](index=22&type=section&id=Oil%20Sales) This section details Gran Tierra Energy Inc.'s total oil sales revenue for the reported periods, attributing changes to price and volume factors Oil Sales (Thousands of U.S. Dollars) | Period | Oil Sales | | :-------------------------- | :--------- | | Three Months Ended June 30, 2023 | $157,902 | | Three Months Ended June 30, 2022 | $205,785 | | Six Months Ended June 30, 2023 | $302,092 | | Six Months Ended June 30, 2022 | $380,354 | - Oil sales decreased by **23% and 21%** for the three and six months ended June 30, 2023, respectively, compared to the corresponding periods of 2022, mainly due to lower Brent prices and higher differentials[67](index=67&type=chunk) - Oil sales in Ecuador contributed **$1.8 million and $4.8 million** for the three and six months ended June 30, 2023, respectively[67](index=67&type=chunk) [Operating Netback](index=23&type=section&id=Operating%20Netback) This section analyzes Gran Tierra Energy Inc.'s operating netback, both in total and per barrel, highlighting the impact of realized prices and operating costs Operating Netback (Thousands of U.S. Dollars and Per bbl Sales Volumes NAR) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating Netback (Total) | $105,720 | $163,778 | $205,475 | $300,578 | | Operating Netback (per bbl) | $42.60 | $78.77 | $43.29 | $72.87 | - Operating netback decreased by **35% and 32%** for the three and six months ended June 30, 2023, respectively, compared to the prior year, primarily due to lower realized prices[69](index=69&type=chunk) [Operating Expenses](index=24&type=section&id=Operating%20Expenses) This section details Gran Tierra Energy Inc.'s operating expenses, including total costs and per barrel figures, explaining the drivers of changes Operating Expenses (Thousands of U.S. Dollars and Per bbl) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating Expenses (Total) | $48,491 | $39,494 | $89,860 | $74,429 | | Operating Expenses (per bbl) | $19.54 | $19.00 | $18.93 | $18.04 | - Operating expenses increased by **23% and 21%** for the three and six months ended June 30, 2023, respectively, compared to the prior year, mainly due to higher lifting costs associated with environmental activities and equipment rental in Ecuador[71](index=71&type=chunk)[72](index=72&type=chunk) [Transportation Expenses](index=25&type=section&id=Transportation%20Expenses) This section outlines Gran Tierra Energy Inc.'s transportation expenses, both in total and per barrel, and discusses factors such as tariffs and new routes Transportation Expenses (Thousands of U.S. Dollars and Per bbl) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Transportation Expenses (Total) | $3,691 | $2,513 | $6,757 | $5,347 | | Transportation Expenses (per bbl) | $1.49 | $1.21 | $1.42 | $1.30 | - Transportation expenses increased by **47% and 26%** for the three and six months ended June 30, 2023, respectively, due to higher tariffs affecting Acordionero sales and the utilization of new transportation routes for exploration wells and Ecuador sales[75](index=75&type=chunk) [DD&A Expenses](index=26&type=section&id=DD%26A%20Expenses) This section presents Gran Tierra Energy Inc.'s depreciation, depletion, and amortization expenses, explaining the impact of production volumes and asset costs DD&A Expenses (Thousands of U.S. Dollars and Per bbl) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | DD&A Expenses (Total) | $56,209 | $42,216 | $107,930 | $83,179 | | DD&A Expenses (per bbl) | $22.65 | $20.31 | $22.74 | $20.17 | - DD&A expenses increased by **33% and 30%** for the three and six months ended June 30, 2023, respectively, compared to the prior year, driven by increased production and higher costs in the depletable base[78](index=78&type=chunk) [G&A Expenses](index=27&type=section&id=G%26A%20Expenses) This section details Gran Tierra Energy Inc.'s general and administrative expenses, including stock-based compensation, and identifies factors contributing to changes G&A Expenses (Thousands of U.S. Dollars and Per bbl) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | G&A Expenses Before Stock-Based Compensation | $9,549 | $7,847 | $20,745 | $15,626 | | G&A Stock-Based Compensation Expense | $317 | $1,989 | $1,817 | $6,546 | | Total G&A Expenses | $9,866 | $9,836 | $22,562 | $22,172 | - G&A expenses before stock-based compensation increased by **22% and 33%** for the three and six months ended June 30, 2023, respectively, due to higher consulting costs and legal fees[80](index=80&type=chunk) - Total G&A expenses (including stock-based compensation) were comparable for Q2 2023 YoY and increased by **2% for 6M 2023 YoY**[80](index=80&type=chunk)[82](index=82&type=chunk) [Foreign Exchange Gains and Losses](index=28&type=section&id=Foreign%20Exchange%20Gains%20and%20Losses) This section reports Gran Tierra Energy Inc.'s foreign exchange gains and losses, primarily due to currency fluctuations against the Colombian peso Foreign Exchange Loss (Thousands of U.S. Dollars) | Period | Foreign Exchange Loss (Gain) | | :-------------------------- | :--------------------------- | | Three Months Ended June 30, 2023 | $4,707 | | Three Months Ended June 30, 2022 | $2,722 | | Six Months Ended June 30, 2023 | $6,409 | | Six Months Ended June 30, 2022 | $(1,003) | - The company recorded a **$4.7 million and $6.4 million foreign exchange loss** for the three and six months ended June 30, 2023, respectively, primarily due to the weakening of the U.S. dollar against the Colombian peso[84](index=84&type=chunk)[85](index=85&type=chunk) [Income Tax Expense](index=28&type=section&id=Income%20Tax%20Expense) This section analyzes Gran Tierra Energy Inc.'s income tax expense and effective tax rate, explaining the key factors influencing tax liabilities Income Tax Expense (Thousands of U.S. Dollars) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income before income tax | $22,907 | $91,638 | $46,090 | $145,297 | | Current income tax expense | $19,757 | $25,425 | $37,363 | $46,252 | | Deferred income tax expense | $13,975 | $13,241 | $29,252 | $31,954 | | Total Income tax expense | $33,732 | $38,666 | $66,615 | $78,206 | | Effective tax rate | 147% | 42% | 145% | 54% | - The effective tax rate for the six months ended June 30, 2023, was **145%**, significantly higher than 54% in 2022, primarily due to non-deductible foreign exchange adjustments, foreign taxes, and non-deductible royalties[88](index=88&type=chunk) - Current income tax expense decreased due to a decrease in taxable income[87](index=87&type=chunk) [Net (Loss) Income and Funds Flow from Operations (a Non-GAAP Measure)](index=29&type=section&id=Net%20%28Loss%29%20Income%20and%20Funds%20Flow%20from%20Operations%20%28a%20Non-GAAP%20Measure%29) This section presents Gran Tierra Energy Inc.'s net income or loss and funds flow from operations, explaining the drivers of changes in these key financial metrics Net (Loss) Income and Funds Flow from Operations (Thousands of U.S. Dollars) | Metric | Q2 2023 | Q2 2022 | 6M 2023 | 6M 2022 | | :-------------------------- | :--------- | :--------- | :--------- | :--------- | | Net (loss) income | $(10,825) | $52,972 | $(20,525) | $67,091 | | Funds flow from operations | $53,106 | $103,625 | $113,122 | $190,935 | - Funds flow from operations decreased by **49% and 41%** for the three and six months ended June 30, 2023, respectively, compared to the prior year[99](index=99&type=chunk) - This decrease was primarily attributed to lower Brent prices, higher quality and transportation discounts, increased operating costs, and realized foreign exchange losses[99](index=99&type=chunk) [Capital Expenditures](index=30&type=section&id=Capital%20Expenditures) This section details Gran Tierra Energy Inc.'s capital expenditures by category and region, highlighting investments in exploration, development, and facilities Capital Expenditures (Three Months Ended June 30, 2023, Millions of U.S. Dollars) | Category | Colombia | Ecuador | Total | | :-------------------------- | :--------- | :-------- | :------ | | Exploration | $3.6 | $7.5 | $11.1 | | Development: Drilling and Completions | $38.9 | — | $38.9 | | Facilities | $9.5 | $0.8 | $10.3 | | Workovers | $2.8 | — | $2.8 | | Other | $2.5 | — | $2.5 | | Total | $57.3 | $8.3 | $65.6 | - Total capital expenditures for Q2 2023 were **$65.6 million**, with the majority allocated to drilling and completions in Colombia[91](index=91&type=chunk) - During Q2 2023, the company spud **7 wells in Colombia** (4 development and 3 water injection wells)[91](index=91&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses Gran Tierra Energy Inc.'s financial liquidity and capital resources, including cash, debt, and credit facilities, to meet future obligations Liquidity Metrics (Thousands of U.S. Dollars) | Metric | As at June 30, 2023 | As at December 31, 2022 | % Change | | :-------------------------- | :------------------ | :---------------------- | :------- | | Cash and Cash Equivalents | $68,529 | $126,873 | (46)% | | 6.25% Senior Notes | $271,909 | $279,909 | (3)% | | 7.75% Senior Notes | $300,000 | $300,000 | — | - The company believes its capital resources, including cash on hand, cash from operations, and available borrowings under its credit facility, will provide sufficient liquidity for the next 12 months[92](index=92&type=chunk) - A credit facility with a borrowing base of up to **$150 million**, with $100 million initially available, remained undrawn as of June 30, 2023[93](index=93&type=chunk) [Cash Flows](index=32&type=section&id=Cash%20Flows) This section provides an overview of Gran Tierra Energy Inc.'s cash flow performance, focusing on the drivers behind changes in funds flow from operations - Funds flow from operations decreased by **49% and 41%** for the three and six months ended June 30, 2023, respectively, compared to the prior year[99](index=99&type=chunk) - This decrease was primarily attributed to lower Brent prices, higher quality and transportation discounts, increased operating costs, and realized foreign exchange losses[99](index=99&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms the consistency of Gran Tierra Energy Inc.'s critical accounting policies and estimates with previous annual reports - The company's critical accounting policies and estimates have not materially changed since the filing of its 2022 Annual Report on Form 10-K[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details Gran Tierra Energy Inc.'s exposure to various market risks, including commodity price risk, foreign currency risk, and interest rate risk, and how these factors can impact its financial performance and cash flows [Commodity price risk](index=33&type=section&id=Commodity%20price%20risk) This section discusses Gran Tierra Energy Inc.'s primary market risk related to volatile oil prices and their impact on revenues - The company's principal market risk is related to oil prices, which are volatile and unpredictable, influenced by global supply and demand and other external market factors[101](index=101&type=chunk) - Revenues are derived from oil sales at ICE Brent prices, adjusted for quality differentials[101](index=101&type=chunk) [Foreign currency risk](index=33&type=section&id=Foreign%20currency%20risk) This section addresses Gran Tierra Energy Inc.'s exposure to foreign currency fluctuations, particularly the U.S. dollar against the Colombian peso - Foreign currency risk is present but mitigated by U.S. dollar-denominated revenues and a majority of capital expenditures[102](index=102&type=chunk) - Foreign exchange gains and losses primarily result from fluctuations of the U.S. dollar against the Colombian peso, affecting current and deferred tax liabilities denominated in local currency[103](index=103&type=chunk) [Interest Rate Risk](index=33&type=section&id=Interest%20Rate%20Risk) This section outlines Gran Tierra Energy Inc.'s exposure to interest rate fluctuations, specifically concerning its credit facility - The company is exposed to interest rate fluctuations on its credit facility, which bears floating rates of interest[104](index=104&type=chunk) - As of June 30, 2023, the outstanding balance under the credit facility was nil[104](index=104&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of Gran Tierra Energy Inc.'s disclosure controls and procedures and reports on any changes in internal control over financial reporting during the quarter ended June 30, 2023 [Disclosure Controls and Procedures](index=33&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of Gran Tierra Energy Inc.'s disclosure controls and procedures as assessed by management - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[105](index=105&type=chunk) [Changes in Internal Control over Financial Reporting](index=33&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in Gran Tierra Energy Inc.'s internal control over financial reporting during the quarter - There were no changes in internal control over financial reporting during the quarter ended June 30, 2023, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[106](index=106&type=chunk) [PART II - Other Information](index=34&type=section&id=PART%20II%20-%20Other%20Information) This part includes additional disclosures for Gran Tierra Energy Inc., covering legal proceedings, risk factors, equity sales, other information, and a list of exhibits [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed information on legal proceedings provided in the notes to the condensed consolidated financial statements - For information on legal proceedings, refer to Note 8 in the Notes to the Condensed Consolidated Financial Statements (Unaudited) in Part I, Item 1 of this Quarterly Report on Form 10-Q[108](index=108&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the comprehensive discussion of risk factors affecting the company's business and operations, as detailed in its Annual Report on Form 10-K for the year ended December 31, 2022 - Readers should carefully review the risk factors outlined in Part I, Item 1A 'Risk Factors' of the company's 2022 Annual Report on Form 10-K[109](index=109&type=chunk) - The unprecedented volatility in the worldwide economy and oil and gas industry makes it challenging to predict the ultimate impact of identified risks[109](index=109&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the company's share repurchase activities under its 2022 Program, including the number of shares purchased and the program's expiration Issuer Purchases of Equity Securities (Q2 2023) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :---------------- | :------------------------------- | :--------------------------- | | May 1-31, 2023 | 20,439 | $5.27 | - The 2022 share repurchase program expired in May 2023 after reaching its **10% share maximum of 3,603,396 shares**[110](index=110&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section confirms that no Rule 10b5-1 trading arrangements were adopted or terminated by directors or Section 16 officers during the second quarter of 2023 - No director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2023[111](index=111&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, officer certifications, and XBRL data files - Exhibits include the Certificate of Incorporation, Bylaws, and certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1)[112](index=112&type=chunk) - The filing also includes various Inline XBRL Taxonomy Extension documents (101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE) and the cover page formatted in Inline XBRL (104)[112](index=112&type=chunk) [SIGNATURES](index=36&type=section&id=SIGNATURES) This section contains the official certifications by Gran Tierra Energy Inc.'s executive officers, affirming the accuracy of the quarterly report [Signatures](index=36&type=section&id=Signatures) This section contains the official signatures of Gran Tierra Energy Inc.'s President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, certifying the accuracy and completeness of the quarterly report - The report was signed on August 1, 2023, by Gary S. Guidry, President and Chief Executive Officer, and Ryan Ellson, Executive Vice President and Chief Financial Officer[115](index=115&type=chunk)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 001-34018 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) GRAN TIERRA ENERGY INC. (Exact name of registrant as specified in its charter) Delaware 98-0479924 ( ...

Financial Data and Key Metrics Changes - Gran Tierra achieved year-over-year production growth of 16% and recorded the highest annual figures in net income, funds flow from operations, and free cash flow in the company's history [7][39] - Funds flow from operations reached $366 million, resulting in free cash flow of $129 million, both records for the company [8] - Net income for 2022 was $139 million, with earnings per share at $0.38 [39] - Adjusted EBITDA was $490 million, equating to $1.34 on a basic per share basis [39] - The company reduced its debt by $88 million, finishing the year with $127 million in cash and a net debt to adjusted EBITDA ratio of 0.9 times [40] Business Line Data and Key Metrics Changes - Gran Tierra's capital spend totaled $237 million for the year, balanced between exploration and development activities, leading to reserves and profitable production growth [15] - The operating netback was $48.43 per barrel, up 43% from $33.75 in 2021 [16] - Significant growth in year-end reserves was achieved, with 1P NPV10 before tax increasing by 26% compared to 2021 [26] Market Data and Key Metrics Changes - The company reported a strong recovery in oil prices, which contributed to the increase in net asset values per share [52] - The Vasconia and Castilla pricing discounts widened at the end of last year but began to tighten in February 2023, driven by a lack of heavy oil demand, particularly from China [33][60] Company Strategy and Development Direction - Gran Tierra is focused on being a full-cycle oil and gas exploration, development, and production company, emphasizing value creation for stakeholders [29] - The company plans to continue its appraisal of new discoveries and exploration drilling while generating free cash flow to strengthen its balance sheet and potentially return capital to shareholders through share buybacks [51] - Gran Tierra is exploring opportunities in other basins globally, including Africa and the Middle East, to diversify and mitigate risk [132] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's geological understanding of the basins, supported by successful exploration discoveries in 2022 [38] - The company anticipates a steady ramp-up in production volumes throughout 2023, with expectations to exit the year around 34,000 barrels per day [104] - Management is optimistic about the potential for contract renewals and ongoing discussions with Ecopetrol regarding the Suroriente asset [57][92] Other Important Information - Gran Tierra invested over $4.6 million in local projects in Colombia and Ecuador in 2022, focusing on community needs [19] - The company has created approximately 26,000 labor opportunities in Colombia since 2015 [43] Q&A Session Summary Question: What is the outlook on operating costs for 2023? - Management believes operating costs will be similar in 2023 compared to 2022, but per unit costs will decrease due to higher production [30] Question: What is driving the wider discounts in pricing? - The discounts are primarily due to a lack of heavy oil demand, especially from China, but are expected to narrow as the year progresses [60] Question: What is the target debt level going forward? - The company aims for a net debt-to-EBITDA ratio of between 0.8 to 1.0 times, with a gross debt target of between $500 million and $550 million [85] Question: How does the company view potential restrictions on exploration? - Management is confident in their current exploration portfolio and is actively looking for opportunities in other basins, including Ecuador [131] Question: What is the company's approach to share buybacks? - Gran Tierra plans to maximize its share buyback program, especially when trading at a substantial discount to NAV, and is looking to renew the program once the current limit is reached [95][124]

February 2023 GENERATING LONG-TERM VALUE INTERNATIONALLY www.grantierra.com GENERAL ADVISORY | --- | --- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 001-34018 GRAN TIERRA ENERGY INC. (Exact name of registrant as specified in its charter) (State or other jurisdicti ...