Gran Tierra Energy Inc. (NYSE Unless otherwise stated, all monetary amounts are in US dollars, and production figures are based on average working interest before royalties ("WI"). The amounts per barrel ("bbl") and per barrel of oil per day ("BOPD") are calculated using WI sales before royalties.
Message to Shareholders
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "Gran Tierra remains on track and on budget with our development and exploration drilling programs for 2022. We are very pleased with the positive production results that we are seeing with both our Acordionero and Costayaco infill development well programs, which have been an important factor in our ongoing ramp up in oil production during 2022.
At the same time, we have achieved a major milestone for the Company by completely paying off our credit facility on June 2, 2022. We have significantly strengthened our balance sheet by steadily reducing our credit facility balance from $207 million as of June 30, 2020 to $0 as of June 2, 2022.
After a two-year pause during the low and volatile oil price environment of 2020 and 2021, we are excited with the restart of Gran Tierra's exploration drilling campaign. We spud the Churuco exploration well in the Putumayo Basin of Colombia on June 2, 2022, which is expected to reach its target depth by mid-June 2022. In Ecuador, we have obtained all necessary licensing and secured a drilling rig which put Gran Tierra on-track to spud its first planned exploration well on the Chanangue Block during third quarter 2022.
We believe Gran Tierra is well positioned to optimize value from each of our assets through continued development and enhanced oil recovery activities in 2022. Our waterflood programs across all of our assets continue to perform well as demonstrated by our current average production(2) of 33,140 BOPD."
Operations Update:
- Production:
- So far during second quarter 2022, Gran Tierra has achieved total average production(1) of 30,556 BOPD.
- As forecast in the Company's May 3, 2022 press release, Gran Tierra has begun to ramp up production in the latter half of second quarter 2022, as newly drilled Acordionero and Costayaco oil wells have been steadily brought online. Gran Tierra's total current average production(2) over the last 16 days is 33,140 BOPD.
- Acordionero:
- During 2022, Gran Tierra has successfully drilled 12 wells (7 oil producers and 5 water injectors) in the Acordionero field with 4 wells remaining to be drilled in the 2022 program.
- The Company continues to make progress with its planned polymer flood pilot project in this field, with polymer injection planned to begin in the newly drilled AC-95i injection well during third quarter 2022.
- Costayaco and Moqueta:
- All five of the 2022 planned Costayaco infill development oil wells have been drilled, with the final well currently on production test.
- On an electric submersible pump, the new CYC-45 infill oil well has produced at an average rate of 1,618 BOPD, at a 10% water cut and gas-oil ratio of 162 standard cubic feet per stock-tank barrel, over the 11-day period of May 21-31, 2022.
- The Moqueta work program of 3 infill development wells is expected to begin in the fourth quarter of 2022 and is planned to continue into 2023.
- Exploration:
- In Ecuador, Gran Tierra is in the final stages of wellsite construction for the planned Bocachico-1 exploration well in the Chanangue Block and has started construction of another wellsite in the Charapa Block.
- The Company has secured a drilling rig for the upcoming exploration campaign in Ecuador and plans to spud the Bocachico-1 exploration well in the Chanangue Block during third quarter 2022.
- Environmental licenses are in place for Gran Tierra's multi-well exploration program in both the Chanangue and Charapa Blocks. Significant progress has also been made with Gran Tierra's environmental licensing for exploration drilling in the Iguana Block with approval expected during second half 2022.
- In Colombia, on June 2, 2022, Gran Tierra spud the Churuco exploration well in the Chaza Block, which is targeting a potential, separate reservoir located between the Company's Costayaco and Moqueta oil fields.
Financial Update:
As of June 2, 2022, Gran Tierra has completely paid off its credit facility. As part of a focus on significant debt reduction, the Company steadily reduced its credit facility balance from $207 million as of June 30, 2020 to $0 as of June 2, 2022. Gran Tierra may, at its discretion, terminate or replace the credit facility.
(1) Gran Tierra's total average production during second quarter-to-date 2022 is for the period of April 1, 2022 to June 6, 2022.
(2) Gran Tierra's total current average production is for the 16-day period of May 22, 2022 to June 6, 2022.
Corporate Presentation:
Gran Tierra's Corporate Presentation has been updated and is available on the Company website at www.grantierra.com.
