- Highest Year-End Total Company Reserves in Company History - 90 MMBOE 1P, 147 MMBOE 2P and 207 MMBOE 3P
- Added Total Company Reserves of 18 MMBOE 1P, 29 MMBOE 2P and 36 MMBOE 3P
- Achieved 154% 1P, 242% 2P and 303% 3P Reserves Replacement
- Fifth Consecutive Year of 1P Total Company Reserves Growth
- Incurred F&D Costs, Excluding Change in FDC, of $11.96 (1P), $7.58 (2P) and $6.06 (3P) per boe
- Net Present Value Before Tax Discounted at 10% of $1.9 Billion (1P), $3.1 Billion (2P), and $4.3 Billion (3P)
- Net Asset Value per Share of $18.79 Before Tax and $10.46 After Tax (PDP), $44.48 Before Tax and $24.06 After Tax (1P), and $79.13 Before Tax and $42.71 After Tax (2P)
CALGARY, Alberta, Jan. 23, 2024 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. ("Gran Tierra" or the "Company") (NYSE:GTE)(TSX:GTE)(LSE:GTE), a company focused on international oil exploration and production with assets currently in Colombia and Ecuador, today announced the Company's 2023 year-end reserves as evaluated by the Company's independent qualified reserves evaluator McDaniel & Associates Consultants Ltd. ("McDaniel") in a report with an effective date of December 31, 2023 (the "GTE McDaniel Reserves Report").
All dollar amounts are in United States ("U.S.") dollars and all reserves and production volumes are on a working interest before royalties ("WI") basis. Production is expressed in barrels ("bbl") of oil per day ("bopd"), while reserves are expressed in bbl, bbl of oil equivalent ("boe") or million boe ("MMBOE"), unless otherwise indicated. The following reserves categories are discussed in this press release: Proved Developed Producing ("PDP"), Proved ("1P"), 1P plus Probable ("2P") and 2P plus Possible ("3P").
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "During 2023, a combination of our strong reserves growth, ongoing reductions in debt and share buybacks allowed Gran Tierra to achieve net asset values per share** before tax of $44.48 (1P), up 288% from 2020, and $79.13 (2P), up 144% from 2020. With this significant growth in our net asset values per share** over the last three years, we believe Gran Tierra is well positioned to offer exceptional long-term stakeholder value.
Gran Tierra achieved strong 154% (1P), 242% (2P) and 303% (3P) reserves replacement through our successful results from our development drilling, waterflooding programs, field performance and the Suroriente Block Continuation Agreement*. This multi-faceted success resulted in record highs for the Company's year-end 1P, 2P and 3P oil reserves.
We completed our 2023 development plan on-budget including waterflooding efforts and development drilling in the Acordionero, Costayaco and Moqueta oil fields. We also continued to evaluate our successful ongoing production from key 2022 exploration discoveries in Colombia and Ecuador to plan for 2024 follow-up exploration drilling. We believe our success on multiple fronts during 2023 demonstrates Gran Tierra's ability to be a full-cycle oil and gas exploration, development and production company focused on value creation for all our stakeholders.
The success the Company achieved in 2023 also reflects our ongoing conversion of reserves from the Probable to the Proved category. With 147 booked Proved plus Probable Undeveloped future drilling locations, Gran Tierra is well positioned to continue to grow the Company's production and reserves in 2024 and beyond.
We have started 2024 strong with two rigs currently drilling our planned series of development wells in Acordionero and Costayaco. Both rigs began their development campaigns in December 2023. Later in 2024, we look forward to our planned resumption of exploration drilling in Colombia and Ecuador to build upon our successful exploration results in 2022, and the first development drilling in the Suroriente Block since 2018. Through our ongoing focus on the development of our existing assets, appraisal of our 2022 discoveries and exploration drilling, we plan to continue to strengthen our balance sheet, profitably increase production, grow our reserve base and return capital to shareholders through share buybacks."
*See the section below titled "Suroriente Continuation Agreement".
**See the below tables for the definitions of net asset values per share.
Highlights
2023 Year-End Reserves and Values
Before Tax (as of December 31, 2023) | Units | 1P | 2P | 3P |
Reserves | MMBOE | 90 | 147 | 207 |
Net Present Value at 10% Discount ("NPV10") | $ million | 1,945 | 3,063 | 4,269 |
Net Debt1 | $ million | (511) | (511) | (511) |
Net Asset Value (NPV10 less Net Debt) ("NAV") | $ million | 1,434 | 2,552 | 3,759 |
Outstanding Shares2 | million | 32.25 | 32.25 | 32.25 |
NAV per Share | $/share | 44.48 | 79.13 | 116.56 |
After Tax (as of December 31, 2023) | Units | 1P | 2P | 3P |
Reserves | MMBOE | 90 | 147 | 207 |
NPV10 | $ million | 1,287 | 1,888 | 2,552 |
Net Debt1 | $ million | (511) | (511) | (511) |
NAV | $ million | 776 | 1,377 | 2,041 |
Outstanding Shares2 | million | 32.25 | 32.25 | 32.25 |
NAV per Share | $/share | 24.06 | 42.71 | 63.29 |
1Based on estimated 2023 year-end net debt of $511 million comprised of Senior Notes of $537 million (gross) plus the Credit Facility of $36 million (gross) less cash and cash equivalents of $62 million, prepared in accordance with GAAP.
2Outstanding Shares. Reflects Gran Tierra's 1-for-10 reverse stock split that became effective May 5, 2023.
- As of December 31, 2023, Gran Tierra achieved:
- Before Tax NAV of $1.4 billion (1P), $2.6 billion (2P), and $3.8 billion (3P)
- After Tax NAV of $0.8 billion (1P), $1.4 billion (2P), and $2.0 billion (3P)
- Strong reserves replacement ratios of:
- 154% 1P, with 1P reserves additions of 18 MMBOE.
- 242% 2P, with 2P reserves additions of 29 MMBOE.
- 303% 3P, with 3P reserves additions of 36 MMBOE.
- Meaningful 1P, 2P and 3P reserves additions largely driven by success with development drilling and waterflooding results in the Chaza Block (which contains Costayaco and Moqueta fields) and the Suroriente Continuation Agreement*.
- Finding and development costs ("F&D"), including change in future development costs ("FDC"), on a per boe basis of $20.58 (1P), $16.09 (2P) and $14.67 (3P).
- F&D costs excluding change in FDC, on a per boe basis of $11.96 (1P), $7.58 (2P) and $6.06 (3P).
- F&D recycle ratios**, including change in FDC, of 1.8 times (1P), 2.2 times (2P) and 2.5 times (3P).
- Gran Tierra's four major oil assets, Acordionero, Costayaco, Moqueta and Suroriente (all on waterflood) represent 83% of the Company's 1P reserves and 73% of its 2P reserves.
- The Company's PDP reserves account for 48% of 1P reserves and 1P reserves account for 61% of 2P reserves, which demonstrate the strength of Gran Tierra's reserves base via the potential future conversion of Probable reserves into 1P reserves and Proved Undeveloped reserves into PDP reserves.
- FDC are forecast to be $561 million for 1P reserves and $923 million for 2P reserves. Gran Tierra's 2024 base case mid-point guidance for cash flow*** of $300 million is equivalent to 54% of 1P FDC and 33% of 2P FDC, which highlights the Company's potential ability to fund future development capital. Increases in FDC relative to 2022 year-end reflect that the GTE McDaniel Reserves Report now assigns Gran Tierra 95 Proved Undeveloped future drilling locations (up from 78 at 2022 year-end) and 147 Proved plus Probable Undeveloped future drilling locations (up from 115 at 2022 year-end).
*See the section below titled "Suroriente Continuation Agreement".
**F&D recycle ratio is defined as fourth quarter 2023 operating netback per WI sales volume boe divided by the appropriate F&D costs on a per boe basis. Operating netback does not have a standardized meaning under generally accepted accounting principles in the United States of America ("GAAP") and is a non-GAAP measure. Operating netback is defined as oil sales less operating and transportation expenses. See "Non-GAAP Measures" in this press release.
*** "Cash flow" refers to GAAP line item "net cash provided by operating activities". Gran Tierra's 2024 base case guidance is based on a forecast 2024 average Brent oil price of $80/bbl. This forecast price used in Gran Tierra's forecast is higher than the 2024 McDaniel Brent price forecast.
GTE McDaniel Reserves Report
All reserves values, future net revenue and ancillary information contained in this press release have been prepared by McDaniel and calculated in compliance with Canadian National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGEH") and derived from the GTE McDaniel Reserves Report, unless otherwise expressly stated.
Future Net Revenue
Future net revenue reflects McDaniel's forecast of revenue estimated using forecast prices and costs, arising from the anticipated development and production of reserves, after the deduction of royalties, operating costs, development costs and abandonment and reclamation costs but before consideration of indirect costs such as administrative, overhead and other miscellaneous expenses. The estimate of future net revenue below does not necessarily represent fair market value.
Consolidated Properties at December 31, 2023 | |||||||||||||
Proved (1P) Total Future Net Revenue ($ million) | |||||||||||||
Forecast Prices and Costs | |||||||||||||
Sales Revenue | Total Royalties | Operating Costs | Future Development Capital | Abandonment and Reclamation Costs | Future Net Revenue Before Future Taxes | Future Taxes | Future Net Revenue After Future Taxes* | ||||||
2024-2028 (5 Years) | 4,334 | (858 | ) | (939 | ) | (561 | ) | (7 | ) | 1,969 | (629 | ) | 1,340 |
Remainder | 2,013 | (334 | ) | (845 | ) | — | (97 | ) | 737 | (287 | ) | 450 | |
Total (Undiscounted) | 6,347 | (1,192 | ) | (1,784 | ) | (561 | ) | (104 | ) | 2,706 | (916 | ) | 1,790 |
Total (Discounted @ 10%) | 4,453 | (854 | ) | (1,138 | ) | (475 | ) | (39 | ) | 1,947 | (658 | ) | 1,289 |
Consolidated Properties at December 31, 2023 | |||||||||||||
Proved Plus Probable (2P) Total Future Net Revenue ($ million) | |||||||||||||
Forecast Prices and Costs | |||||||||||||
Years | Sales Revenue | Total Royalties | Operating Costs | Future Development Capital | Abandonment and Reclamation Costs | Future Net Revenue Before Future Taxes | Future Taxes | Future Net Revenue After Future Taxes* | |||||
2024-2028 (5 Years) | 5,654 | (1,159 | ) | (1,080 | ) | (865 | ) | (3 | ) | 2,547 | (946 | ) | 1,601 |
Remainder | 4,935 | (870 | ) | (1,664 | ) | (57 | ) | (122 | ) | 2,222 | (890 | ) | 1,332 |
Total (Undiscounted) | 10,589 | (2,029 | ) | (2,744 | ) | (922 | ) | (125 | ) | 4,769 | (1,836 | ) | 2,933 |
Total (Discounted @ 10%) | 6,695 | (1,316 | ) | (1,541 | ) | (736 | ) | (40 | ) | 3,062 | (1,175 | ) | 1,887 |
Consolidated Properties at December 31, 2023 | |||||||||||||
Proved Plus Probable Plus Possible (3P) Total Future Net Revenue ($ million) | |||||||||||||
Forecast Prices and Costs | |||||||||||||
Years | Sales Revenue | Total Royalties | Operating Costs | Future Development Capital | Abandonment and Reclamation Costs | Future Net Revenue Before Future Taxes | Future Taxes | Future Net Revenue After Future Taxes* | |||||
2024-2028 (5 Years) | 6,580 | (1,369 | ) | (1,150 | ) | (979 | ) | (3 | ) | 3,079 | (1,213 | ) | 1,866 |
Remainder | 8,621 |