Gran Tierra Energy(US:GTE)2025-07-31 16:00Financial Data and Key Metrics Changes - Gran Tierra achieved record production of approximately 47,200 BOE per day, a 1% increase from the prior quarter and a 44% increase compared to Q2 2024 [6] - Sales decreased to $152 million, down 8% from 2024, primarily due to a 22% decrease in Brent pricing, partially offset by a 43% increase in sales volume [7] - The company incurred a net loss of $13 million, an improvement from a net loss of $19 million in the prior quarter, but a decline from net income of $36 million in the same quarter last year [7] - Funds flow from operations was $54 million or $1.53 per share, up 17% from 2024 but down 3% from the prior quarter [8] - Adjusted EBITDA was $77 million, down from $85 million in the prior quarter and $103 million in 2024 [8] Business Line Data and Key Metrics Changes - In Colombia, total working interest production averaged approximately 25,100 barrels of oil per day, driven by successful development drilling and improved waterflood execution [16] - The Costayaco wells showed strong initial results, with Costayaco 63 producing 800 barrels of oil per day and Costayaco 64 producing 1,300 barrels of oil per day [17] - In Canada, the Simonette Montney program continues to outperform, with new wells exceeding management's expectations [20] Market Data and Key Metrics Changes - Brent price decreased by 11% per barrel compared to the prior quarter, impacting oil sales [8] - The company has hedged approximately 50% of its South American oil production and 60% of its Canadian oil production for 2025 [13] Company Strategy and Development Direction - Gran Tierra is focused on enhancing liquidity through strategic initiatives, including potential non-core asset sales and a $200 million prepayment facility backed by crude oil deliveries [11] - The company is committed to capital discipline and operational excellence, aiming to deliver free cash flow and strengthen its financial position [14] Management's Comments on Operating Environment and Future Outlook - Management noted that all fields have performed as expected or better, despite normal interruptions in Colombia and Ecuador [26] - The company is optimistic about ramping up production in the second half of the year, particularly in Cohembi and Costayaco [30] Other Important Information - Gran Tierra has signed an MOU for potential entry into the Azerbaijani market, with plans to progress towards a production sharing agreement [57] - The company is actively looking to divest non-core assets and optimize its portfolio [37] Q&A Session Summary Question: Can you elaborate on production performance and expectations for H2? - Management indicated that all fields have performed as expected or better, with specific improvements noted in Cohembi and Ecuador [26][30] Question: What are the details regarding the prepayment facility? - The prepayment will involve selling oil for future prepayments over a four-year term, structured to minimize cash flow impact [31][32] Question: Any updates on asset sales? - Management confirmed ongoing efforts to divest non-core assets, with more details expected in Q3 [37] Question: How will free cash flow be generated? - The primary driver for free cash flow will be lower capital expenditures, alongside supportive oil prices [39] Question: What is the impact of pipeline disruptions in Colombia? - Pipeline disruptions in Ecuador affected production, but operations have returned to normal [43] Question: What is the strategy for hedging? - The company aims to maintain a systematic hedging program, targeting 30-50% coverage six months out [55] Question: Can you provide details on the Azerbaijani market entry? - The project will have a five-year first phase with low costs, and production could start within the same year a discovery is made [66]