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Jun 30, 2020
Gran Tierra Q2 2020 Earnings Report
Achieved significant reductions in operating and G&A costs and resumed production, development and workover activities.
Key Takeaways
Gran Tierra Energy Inc. reported a net loss of $371 million for the quarter ended June 30, 2020, which included an oil and gas property impairment of $398 million. Funds flow from operations was a positive $6 million, which more than covered capital expenditures of $5 million. The company achieved significant reductions in operating and G&A costs and resumed production, development and workover activities in the second half of 2020.
The Quarter's production averaged 20,165 BOE per day, down 32% from first quarter 2020.
Reduced operating costs and cash general and administrative costs by 43% and 30%, respectively, from the Prior Quarter.
The borrowing base limit was re-determined to $225 million from the prior limit of $300 million and the Company was granted relief under certain financial covenants until October 1, 2021.
During the Quarter, the Company collected a total of $25 million in VAT and income tax refunds.
Forward Guidance
Gran Tierra forecasts the following activities during the course of second half 2020.
Positive Outlook
- Initiated the required activities to safely resume several operations throughout the Company's Colombian portfolio, in strict accordance with COVID-19 protocols
- Plans call for a restart of the routine workover program, with the first workover rig to begin operations during third quarter 2020, and a second workover rig starting up in fourth quarter 2020
- One drilling rig is expected to restart development drilling operations during fourth quarter 2020 to drill 1-2 new oil wells by 2020 year-end
- The wells can only be worked over one at a time in sequence; the total combined productive capacity for the four priority wells for workover is estimated to be approximately 1,000 BOPD
- The Cohembi and other oil fields in the Suroriente Block were producing at approximately 3,600 BOPD (WI) prior to the blockades, as the field was continuing to positively respond to increased water injection and pump optimizations
Challenges Ahead
- The evolving situation with the COVID-19 pandemic may impact the timing of the planned activities and the resulting amount and timing of incremental production additions
Historical Earnings Impact
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Avg. Return Before/After Earnings
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