Gran Tierra Energy(GTE)2025-02-24 17:34Financial Data and Key Metrics Changes - Gran Tierra Energy closed 2024 with record highs across all reserve categories and achieved its highest ever quarterly production in Q4, with an average working interest production of 34,710 BOE per day, a 6% increase from 2023 [6][9] - The company reported a net income of 0.10 per share in 2024, compared to a net loss of 367 million, an 8% decrease from 223 million or 277 million in 2023 [12] - Cash and cash equivalents increased to 62 million at the end of 2023 [13] Business Line Data and Key Metrics Changes - Gran Tierra's capital expenditures increased by 3% to 622 million, a slight decrease of 2% compared to 2023 [14] - Operating costs for 2024 were 187 million in 2023, with operating expenses per BOE at 35.23 per share [7][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reducing operating costs in 2025, anticipating a decrease due to the ramp-up of production in Ecuador and the transition to more permanent facilities [31][32] - The company expects production growth of 5% to 10% in 2026, supported by its extensive asset base [33] Other Important Information - Gran Tierra achieved year-end reserves of 167 million BOE 1P, 293 million BOE 2P, and 385 million BOE 3P, with excellent reserves replacement results [21] - The company is well-positioned for long-term commodity cycles, with approximately 20% of its production now attributed to natural gas [22] Q&A Session Summary Question: Higher cost of sales in 2024 and future expectations - Management expects costs to trend down in 2025 due to various factors including the removal of diesel subsidies and higher natural gas prices [31][32] Question: Production expectations for 2026 and 2027 - Management is comfortable with a production growth of 5% to 10% based on the current asset base and reserves [33] Question: Sale of production from different regions - Most production in Canada is sold domestically, and management believes the company is insulated from potential tariff impacts [35][36] Question: Capital structure changes and integration of I3 assets - The company plans to fund maturing debt through cash on hand and available credit facilities, with a focus on reducing net debt [46] Question: Discounts in Colombia and additional committed lines - Discounts in Colombia have narrowed significantly, and the company is working on negotiating an additional line of credit [52][54] Question: Expectations for the Iguana exploration well and LNG Canada Phase one - The Iguana well is currently in the completion phase, and management expects natural gas prices to be choppy in the short term but is bullish long-term [57][58] Question: Plans for debt reduction and share repurchases - Management plans to allocate 50% of additional free cash flow to debt reduction and 50% to share repurchases [62] Question: Political environment in Ecuador - Management is optimistic about the political situation in Ecuador, expecting a continuation of a business-friendly approach [65] Question: Market reaction and shareholder support - The company will continue share buybacks as a primary tool to support shareholder value amidst market fluctuations [69]