Gran Tierra Energy(US:GTE)2020-02-27 19:45Financial Data and Key Metrics Changes - Average production for 2019 was 34,817 barrels of oil per day, consistent with the revised guidance of 34,800 to 35,000 barrels per day [6] - Net income for 2019 was $39 million or $0.10 per share, with EBITDA of $364 million and adjusted EBITDA of $326 million [6] - Funds flow from operations was $272 million or $0.72 per share [6] - Capital spend in Q4 totaled $69 million, down 41% from Q3 2019 amount of $116 million [7] - 1P reserves increased to 79 million barrels, representing a 200% reserves replacement [9] - 2P reserves maintained at 142 million barrels of oil, with 2P NPV increased to $2.9 billion before tax [10] Business Line Data and Key Metrics Changes - Acordionero production averaged around 15,000 to 16,000 barrels per day for the first part of 2020, on track with budget expectations [30] - Four wells of the 12- to 14-well program at Acordionero have been rig released, with ongoing infill drilling operations [16] - Current instantaneous and cumulative voidage replacement ratios at Acordionero are 1.1 and 0.3 respectively, representing increases of approximately 180% since June 2019 [18] Market Data and Key Metrics Changes - The response to the coronavirus has caused a decrease in Brent oil prices and a widening of crude oil price differentials in Colombia [11] - The company has placed Brent oil hedges of 6,000 BOE per day of production, approximately 20% of net production in the first half of 2020 [15] Company Strategy and Development Direction - The company will focus on balance sheet strength, development of core assets, and a measured, high-impact exploration program in 2020 [10] - The revised capital budget for 2020 is $175 million to $195 million, with deferrals primarily in exploration and infrastructure [12] Management's Comments on Operating Environment and Future Outlook - Management noted that local farmers have set blockades in the Southern Putumayo region, impacting operations but not directed at the oil industry [13] - The company is actively monitoring the blockade situation and has proactively shut-in fields, resulting in approximately 4,000 barrels of oil per day being shut-in [14] - Management expressed confidence in resolving current issues and emphasized ongoing support for government efforts [36] Other Important Information - Gran Tierra achieved its best safety record in 2019, with an LTI ratio of 0.02, 80% below the industry average for Latin American exploration and production companies [23] - The company is committed to environmental initiatives, including reforesting 1,000 hectares and maintaining 18,000 hectares of forest through the NaturAmazonas project [24][25] Q&A Session Summary Question: Current production number at Acordionero and expected trends - Acordionero production has been averaging around 15,000 to 16,000 barrels a day for the first part of the year, on track with budget expectations [30] Question: Operating costs and potential for further savings - Operating costs have come down, with increased power consumption due to water injection, but per unit costs are dropping dramatically [31] Question: Current downtime and its impact on production numbers - There are planned downtimes associated with routine ESP repairs, and a couple of wells are currently down, affecting production numbers [32]