Gran Tierra Energy Announces Corporate Update

Source: 1/18/2022, Location: South America

- Total Company Current Average Production of Approximately 30,000 BOPD
- Achieved 2021 Total Company Average Production of 26,500 BOPD, In-Line with Guidance
- Paid Down Credit Facility to $67.5 Million as of December 31, 2021, Representing Debt Reduction of $122.5 Million During 2021
- SASB Report Published

Gran Tierra Energy Inc. is pleased to announce a corporate update. All dollar amounts are in United States (“U.S.”) dollars and all production volumes are on a working interest before royalties basis and are expressed in barrels ("bbl") of oil per day ("BOPD"), unless otherwise stated.

- 2022 Production Year to Date: Gran Tierra’s current average production1 is approximately 30,000 BOPD.
- 2021 Production In-Line with Guidance: Total Company 2021 average production was approximately 26,500 BOPD, in-line with prior guidance.
- Significant Debt Reduction: Gran Tierra’s credit facility has been reduced to a remaining balance of $67.5 million as of December 31, 2021, down $122.5 million or 64% from a balance of $190 million as of December 31, 2020. With forecast 2022 free cash flow2 and recovery of tax receivables, Gran Tierra expects to fully pay off the remaining balance of its credit facility in the first half of 2022.
- Key Upcoming 2022 Catalysts: At a $70/bbl Brent price, Gran Tierra’s 2022 capital program of $220-240 million is expected to generate 2022 cash flow2 of $270-290 million and EBITDA2 of $360-380 million. At an $80/bbl Brent price, the Company forecasts 2022 cash flow2 of $330-350 million and EBITDA2 of $440-460 million. The Company’s development program continues to focus on asset optimization, maintaining a low operating cost structure and increasing oil recovery factors across its extensive portfolio. Gran Tierra’s 2022 exploration campaign of up to 6-7 wells is expected to be fully-funded from forecast internally generated cash flow2 and is designed to focus on near-field prospects in proven basins with access to infrastructure, providing short cycle times from discovery to bringing production on-stream.

Key upcoming catalysts include:
- Acordionero: Gran Tierra has allocated capital of $70 million towards 2022 development activities for the Acordionero field (14-16 development wells) in the Middle Magdalena Valley Basin. Drilling is expected to commence in the first quarter of 2022 with one rig on the Southwest Pad. Gran Tierra plans to continue to focus on quick-cycle times, thereby driving down drilling and operating costs and increasing oil recovery factors through its waterflood program. Since Gran Tierra acquired Acordionero in 2016, this field has produced approximately 27 million bbl of oil and generated about $1.3 billion in oil and gas sales and $353 million of free funds flow from operations3 (both figures are estimates as of December 31, 2021).
- Costayaco and Moqueta: Gran Tierra has allocated capital of $40 million and $30 million respectively to the Costayaco (4-5 development wells) and Moqueta (3 development wells) fields in the Putumayo Basin in 2022. The first Costayaco well is scheduled to spud in the first quarter of 2022. The Moqueta work program is expected to commence in the second half of 2022 and is planned to continue into 2023.
- Ecuador: Gran Tierra expects to drill 2-3 exploration wells in 2022, targeting multi-zone prospects near existing fields with access to infrastructure. Gran Tierra’s first exploration well in Ecuador is scheduled to spud in the second quarter of 2022 on the Chanangue Block.
- Additional 2022 Hedges In-Place Designed To Protect Cash Flows2: The Company recently added to its 2022 hedging program and currently has the following Brent oil price hedges in place:

- The Company expects to hedge approximately 25-40% of forecast production on a rolling basis.
SASB Report Published: Gran Tierra has released its first Sustainability Accounting Standards Board (“SASB”) Report. The Company continues to enhance its Environmental, Social and Governance (“ESG”) disclosure to drive a stronger understanding of the ESG risks and opportunities that its business faces and seeks to show how the Company is positioning itself to mitigate key risks and capture opportunities. Gran Tierra’s SASB report can be accessed here:

Message to Shareholders
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "Gran Tierra is in a strong position for the continued development and enhanced oil recovery activities in 2022 to optimize value from each of our assets. In addition, we plan to allocate modest capital to prioritized, high-impact exploration drilling opportunities. Gran Tierra is well-positioned to navigate the current volatile environment with our low base decline, conventional oil asset base and our operational control for capital allocation and timing. Our waterflood programs across all of our assets continue to perform well and we expect another strong year of free cash flow2 from these high quality, low decline assets. "

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