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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event
reported): February 1, 2024
GRAN TIERRA ENERGY INC.
(Exact Name of Registrant as Specified in
its Charter)
Delaware |
|
001-34018 |
|
98-0479924 |
(State or Other Jurisdiction of Incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification No.) |
500
Centre Street S.E.
Calgary,
Alberta, Canada
T2G 1A6
(Address of Principal Executive Offices)
(Zip Code)
(403) 265-3221
(Registrant’s Telephone Number, Including
Area Code)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
Common Stock, par value $0.001 per share |
GTE |
NYSE American
Toronto Stock Exchange
London Stock Exchange
|
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. | Results of Operations and Financial Condition. |
The disclosures set forth in Item 8.01 are incorporated
by reference into this Item 2.02.
Gran Tierra Energy Inc., a Delaware corporation
(“Gran Tierra” or the “Company”) is hereby presenting information regarding its oil and natural
gas reserves at December 31, 2023 and certain operational updates regarding the fourth quarter and the year ended December 31,
2023.
Reserves Information
Gran Tierra’s 2023 reserves were independently
prepared by McDaniel & Associates Consultants Ltd. (“McDaniel”).
See “Glossary” for definitions of
industry terms and abbreviations. All dollar amounts are presented in U.S. dollars.
The following table sets forth Gran Tierra’s
estimated reserves NAR as of December 31, 2023.
| |
Oil | | |
Natural Gas | | |
Oil and Natural Gas | |
Reserves
Category | |
(Mbbl) | | |
(MMcf) | | |
(MBOE) | |
Proved | |
| | | |
| | | |
| | |
Total proved developed reserves | |
| 39,599 | | |
| — | | |
| 39,599 | |
Total proved undeveloped reserves | |
| 34,697 | | |
| — | | |
| 34,697 | |
Total proved reserves | |
| 74,296 | | |
| — | | |
| 74,296 | |
| |
| | | |
| | | |
| | |
Probable | |
| | | |
| | | |
| | |
Total probable developed reserves | |
| 12,139 | | |
| — | | |
| 12,139 | |
Total probable undeveloped reserves | |
| 34,109 | | |
| — | | |
| 34,109 | |
Total probable reserves | |
| 46,248 | | |
| — | | |
| 46,248 | |
| |
| | | |
| | | |
| | |
Possible | |
| | | |
| | | |
| | |
Total possible developed reserves | |
| 11,362 | | |
| — | | |
| 11,362 | |
Total possible undeveloped reserves | |
| 37,144 | | |
| — | | |
| 37,144 | |
Total possible reserves | |
| 48,506 | | |
| — | | |
| 48,506 | |
The product prices that were used to determine
the future gross revenue for each property reflect adjustments to the benchmark prices for gravity, quality, local conditions and/or distance
from market. The average realized prices for reserves in the report are:
Oil (USD/bbl) – Colombia | |
$ | 69.91 | |
Oil (USD/bbl) – Ecuador | |
$ | 77.44 | |
Operations Update
The following table sets forth select estimated
operational data for Gran Tierra for the year ended December 31, 2023.
| |
Year Ended December 31, | |
| |
2023 | | |
% Change | | |
2022 | | |
% Change | | |
2021 | |
SEC Compliant Reserves, NAR (MMBOE) | |
| | | |
| | | |
| | | |
| | | |
| | |
Estimated proved oil and gas reserves | |
| 74 | | |
| 12 | | |
| 66 | | |
| (1 | ) | |
| 67 | |
Estimated probable oil and gas reserves | |
| 46 | | |
| 28 | | |
| 36 | | |
| — | | |
| 36 | |
Estimated possible oil and gas reserves | |
| 49 | | |
| 26 | | |
| 39 | | |
| 26 | | |
| 31 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Average Consolidated Daily Volumes (BOPD) | |
| | | |
| | | |
| | | |
| | | |
| | |
Working interest production before royalties | |
| 32,647 | | |
| 6 | | |
| 30,746 | | |
| 16 | | |
| 26,507 | |
Royalties | |
| (6,548 | ) | |
| (6 | ) | |
| (6,931 | ) | |
| 41 | | |
| (4,919 | ) |
Production NAR | |
| 26,099 | | |
| 10 | | |
| 23,815 | | |
| 10 | | |
| 21,588 | |
(Increase) decrease in inventory | |
| (152 | ) | |
| (28 | ) | |
| (119 | ) | |
| (1,290 | ) | |
| 10 | |
Sales(1) | |
| 25,947 | | |
| 9 | | |
| 23,696 | | |
| 10 | | |
| 21,598 | |
| (1) | Sales volumes represent production NAR adjusted for inventory changes. |
The net present value (“NPV”)
discounted at 10% (“NPV10”) after tax of Gran Tierra’s estimated proved oil and gas reserves is as follows:
(US$ thousands) | |
Colombia | | |
Ecuador | | |
Total Company | |
December 31, 2023 | |
| | | |
| | | |
| | |
Net present value after tax | |
$ | 1,843,425 | | |
$ | 64,987 | | |
$ | 1,908,412 | |
10% discount | |
| (516,451 | ) | |
| (22,924 | ) | |
| (539,375 | ) |
Net present value at 10% discount after tax | |
$ | 1,326,974 | | |
$ | 42,063 | | |
$ | 1,369,037 | |
Gran Tierra provides the following additional
financial and production information as part of this update:
| · | Gran Tierra achieved total company average production of approximately 31,309 BOPD for the fourth quarter of 2023, and approximately
32,647 BOPD for the year ended December 31, 2023, an increase of 6% from 2022 and 23% from 2021. |
| | |
| · | Estimated capital expenditures, including and excluding acquired properties, for the year ended December 31, 2023 were approximately
$218.9 million. |
| | |
| · | Estimated
net debt(*) at December 31, 2023 was approximately US$510.8 million,
comprised of senior notes outstanding of $536.6 million (gross) plus $36.4 million (gross)
of borrowings outstanding under the Company’s credit facility less cash and cash equivalents
of $62.2 million. |
| | |
| · | Oil sales for the fourth quarter of 2023 is estimated to be $154.9 million, or $54.04 per bbl, per WI sales volume. |
| | |
| · | Operating netback(*) for the fourth quarter of 2023 is estimated to be $103.4 million, or $36.05 per bbl, per working interest production before royalties (“WI”) sales volume. |
| | |
| · | During 2023, the Company repurchased 2,370,454 shares of common stock, or approximately 7.1% of its outstanding shares. |
| | |
| · | Revenue for the year ended December 31, 2023 is estimated to be $637.0 million. |
| | |
| · | Operating expenses for the year ended December 31, 2023 is estimated to be $186.9 million. |
| | |
| · | Transportation expenses for the year ended December 31, 2023 is estimated to be $14.6 million. |
| | |
| · | Operating netback(*)
for the year ended December 31, 2023 is estimated to be $435.5 million. |
| | |
| · | Adjusted EBITDA(*)
for the year ended December 31, 2023 is estimated to be between $390 million
to $410 million. |
| | |
| (*) | Each of net debt, Operating netback and Adjusted EBITDA is a non-GAAP measure which does not have any
standardized meaning prescribed under generally accepted accounting principles in the United States of America (“GAAP”).
Refer to “Non-GAAP Measures” for a description of these non-GAAP measures. |
Non-GAAP Measures
This Current Report on Form 8-K includes
non-GAAP measures which do not have a standardized meaning under GAAP. Investors are cautioned that these measures should not be construed
as alternatives to oil sales, net income or loss or other measures of financial performance as determined in accordance with GAAP. Gran
Tierra’s method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to similar
measures used by other companies.
Net debt as presented is defined as Gran Tierra’s senior notes and borrowings under Gran Tierra’s credit facility, less cash
and cash equivalents.
Operating netback as presented is defined as oil
sales less operating and transportation expenses. Management believes that operating netback is a useful supplemental measure for investors
to analyze financial performance and provide an indication of the results generated by Gran Tierra’s principal business activities
prior to the consideration of other income and expenses. A reconciliation of operating netback per boe to the most directly comparable
measure calculated and presented in accordance with GAAP is as follows:
| |
Three months ended December 31, 2023 | | |
Year Ended December 31, 2023 | |
| |
(Thousands of U.S. dollars) | | |
($/bbl, per NAR sales volume) | | |
($/bbl, per WI sales volume) | | |
(Thousands of U.S. dollars) | | |
($/bbl, per NAR sales volume) | | |
($/bbl, per WI sales volume) | |
Oil sales | |
$ | 154,944 | | |
$ | 67.51 | | |
$ | 54.04 | | |
$ | 636,957 | | |
$ | 62.26 | | |
$ | 53.70 | |
Operating expenses | |
| (47,637 | ) | |
| (20.75 | ) | |
| (16.61 | ) | |
| (186,864 | ) | |
| (19.73 | ) | |
| (15.75 | ) |
Transportation expenses | |
| (3,947 | ) | |
| (1.72 | ) | |
| (1.38 | ) | |
| (14,546 | ) | |
| (1.54 | ) | |
| (1.23 | ) |
Operating netback | |
$ | 103,360 | | |
$ | 45.04 | | |
$ | 36.05 | | |
$ | 435,547 | | |
$ | 45.99 | | |
$ | 36.72 | |
Adjusted EBITDA is defined
as EBITDA (defined as net income or loss adjusted for depletion, depreciation and accretion expenses, interest expense and income
tax expense or recovery) adjusted for inventory impairment, non-cash lease expense, lease payments, foreign exchange gain or loss,
stock-based compensation expense, unrealized derivative instruments gain or loss, other non-cash gain or loss, and other financial
instruments gain or loss. Management uses this supplemental measure to analyze performance and income generated by our principal
business activities prior to the consideration of how non-cash items affect that income, and believes that this financial measure is
useful supplemental information for investors to analyze our performance and our financial results. A reconciliation from net income
to Adjusted EBITDA is not available due to certain components of net income, including taxes and gain on debt securities, not being
reasonably estimable at this time.
Cautionary Statement - Unaudited Financial Information
The following results reflect the Company’s
preliminary expectations of results for the year ended December 31, 2023, based on currently available information. The preliminary financial
and operational results included in this report reflect management’s estimates based solely upon information available to the Company
as of the date of this report and are the responsibility of management. The preliminary consolidated financial results presented above
are not a comprehensive statement of the Company’s financial results for the year ended December 31, 2023 and have not been audited,
reviewed or compiled by the Company’s independent registered public accounting firm. The preliminary results presented above are
subject to the completion of the Company’s financial closing procedures, which have not yet been completed. The Company’s
actual results for the year ended December 31, 2023 will not be available until completion of the Company’s audited financial statements
for the year ended December 31, 2023 and may differ materially from these estimates. Estimates are subject to risks and uncertainties,
many of which are not within the Company’s control. See “Cautionary Statement Regarding Forward-looking Statements.”
Gran Tierra anticipates filing its audited financial statements and related management’s discussion and analysis for the year ended
December 31, 2023 on or before February 20, 2024.
| Item 9.01. | Financial Statements and Exhibits. |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K contains
opinions, forecasts, projections, plans, and other statements about future events or results that constitute forward-looking statements
within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward looking information
within the meaning of applicable Canadian securities laws (collectively, “forward-looking statements”), which can be identified
by such terms as “expect,” “plan,” “can,” “will,” “should,” “guidance,”
“estimate,” “forecast,” “signal,” “progress,” “anticipate,” and “believes,”
derivations thereof and similar terms identify forward-looking statements.
The forward-looking statements contained in this
Current Report on Form 8-K reflect several material factors and expectations and assumptions of Gran Tierra including, without limitation,
that Gran Tierra will continue to conduct its operations in a manner consistent with its current expectations, the accuracy of testing
and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates),
rig availability, the effects of drilling down-dip, the effects of waterflood and multi-stage fracture stimulation operations, the extent
and effect of delivery disruptions, and the general continuance of current or, where applicable, assumed operational, regulatory and industry
conditions including in Colombia and Ecuador and areas of potential expansion, and the ability of Gran Tierra to execute its current business
and operational plans in the manner currently planned. Gran Tierra believes the material factors, expectations and assumptions reflected
in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions
will prove to be correct.
Among the important factors that could cause actual
results to differ materially from those indicated by the forward-looking statements in this Current Report on Form 8-K are: Gran
Tierra’s operations are located in South America and unexpected problems can arise due to guerilla activity, strikes, local blockades
or protests; technical difficulties and operational difficulties may arise which impact the production, transport or sale of Gran Tierra’s
products; other disruptions to local operations; global and regional changes in the demand, supply, prices, differentials or other market
conditions affecting oil and gas, including inflation and changes resulting from a global health crisis, geopolitical events, including
the ongoing conflicts in Ukraine and the Gaza region, or from the imposition or lifting of crude oil production quotas or other actions
that might be imposed by OPEC and other producing countries and resulting company or third-party actions in response to such changes;
changes in commodity prices, including volatility or a prolonged decline in these prices relative to historical or future expected levels;
the risk that current global economic and credit conditions may impact oil prices and oil consumption more than Gran Tierra currently
predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; prices and markets for oil and natural
gas are unpredictable and volatile; the effect of hedges, the accuracy of productive capacity of any particular field; geographic, political
and weather conditions can impact the production, transport or sale of Gran Tierra’s products; the ability of Gran Tierra to execute
its business plan and realize expected benefits from current initiatives; the risk that unexpected delays and difficulties in developing
currently owned properties may occur; the ability to replace reserves and production and develop and manage reserves on an economically
viable basis; the accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity
pricing and exchange rates); the risk profile of planned exploration activities; the effects of drilling down-dip; the effects of waterflood
and multi-stage fracture stimulation operations; the extent and effect of delivery disruptions, equipment performance and costs; actions
by third parties; the timely receipt of regulatory or other required approvals for Gran Tierra’s operating activities; the failure
of exploratory drilling to result in commercial wells; unexpected delays due to the limited availability of drilling equipment and personnel;
volatility or declines in the trading price of Gran Tierra’s common stock or bonds; the risk that Gran Tierra does not receive the
anticipated benefits of government programs, including government tax refunds; Gran Tierra’s ability to comply with financial covenants
in its credit agreement and indentures and make borrowings under its credit agreement; and the risk factors detailed from time to time
in Gran Tierra’s periodic reports filed with the Securities and Exchange Commission (the “SEC”), including, without
limitation, under the caption “Risk Factors” in Gran Tierra’s Annual Report on Form 10-K for the year ended December 31,
2022 filed on February 21, 2023 and its subsequent quarterly reports on Form 10-Q and other filings with the SEC. These filings
are available on the SEC’s website at www.sec.gov and on the System for Electronic Data Analysis and Retrieval (“SEDAR”)
at www.sedarplus.ca. Statements relating to “reserves” are also deemed to be forward-looking statements, as they involve
the implied assessment, based on certain estimates and assumptions, including that the reserves described can be profitably produced in
the future. Should any one of a number of issues arise, Gran Tierra may find it necessary to alter its business strategy and/or capital
spending program and there can be no assurance as at the date of this Current Report on Form 8-K as to how those funds may be reallocated
or strategy changed and how that would impact Gran Tierra’s results of operations and financing position.
All forward-looking statements are made as of
the date of this Current Report on Form 8-K and the fact that this Current Report on Form 8-K remains available does not constitute
a representation by Gran Tierra that Gran Tierra believes these forward-looking statements continue to be true as of any subsequent date.
Actual results may vary materially from the expected results expressed in forward-looking statements. Gran Tierra disclaims any intention
or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise,
except as expressly required by applicable law. Gran Tierra’s forward-looking statements are expressly qualified in their entirety
by this cautionary statement.
DISCLOSURE OF OIL AND GAS INFORMATION
Boe’s have been converted on the basis of
six thousand cubic feet (“Mcf”) of natural gas to 1 bbl of oil. Boe’s may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable
at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current
price of oil as compared with natural gas is significantly different from the energy equivalent of six to one, utilizing a boe conversion
ratio of 6 Mcf: 1 bbl would be misleading as an indication of value.
All reserves values and ancillary information
contained in this Current Report on Form 8-K have been prepared by McDaniel and are derived from the GTE McDaniel Reserves Report,
unless otherwise expressly stated. Any reserves values or related information contained in this Current Report on Form 8-K as of
a date other than December 31, 2023 has an effective date of December 31 of the applicable year. Estimates of net present value
contained herein do not necessarily represent fair market value. Estimates of reserves for individual properties may not reflect the same
level of confidence as estimates of reserves for all properties, due to the effect of aggregation. There is no assurance that the forecast
price and cost assumptions applied by McDaniel in evaluating Gran Tierra’s reserves will be attained and variances could be material.
All reserves assigned in the GTE McDaniel Reserves Report are located in Colombia and Ecuador and presented on a consolidated basis by
foreign geographic area. There are numerous uncertainties inherent in estimating quantities of crude oil reserves. The reserve information
set forth in the GTE McDaniel Reserves Report are estimates only, and there is no guarantee that the estimated reserves will be recovered.
Actual reserves may be greater than or less than the estimates provided therein.
The Company believes that the presentation of
NPV10 is useful to investors because it presents (i) relative monetary significance of its oil and natural gas properties regardless
of tax structure and (ii) relative size and value of its reserves to other companies. The Company also uses this measure when assessing
the potential return on investment related to its oil and natural gas properties. NPV10 does not purport to present the fair value of
the Company’s oil and gas reserves. The Company has not provided a reconciliation of NPV10 to the standardized measure of discounted
future net cash flows because it is impracticable to do so.
Investors are urged to consider closely the disclosures
and risk factors in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in the other reports and filings
with the SEC, available from the Company’s offices or website. These reports can also be obtained from the SEC website at www.sec.gov.
Glossary of Oil and Gas Terms:
In this document, the abbreviations set forth
below have the following meanings:
bbl |
barrel |
Mcf |
thousand cubic feet |
Mbbl |
thousand barrels |
MMcf |
million cubic feet |
MMbbl |
million barrels |
Bcf |
billion cubic feet |
BOE |
barrels of oil equivalent |
bopd |
barrels of oil per day |
MMBOE |
million barrels of oil equivalent |
NGL |
natural gas liquids |
BOEPD |
barrels of oil equivalent per day |
NAR |
net after royalty |
NAR sales volumes represent production NAR adjusted
for inventory changes and losses. Our oil and gas reserves are reported NAR. Our production is also reported NAR, except as otherwise
specifically noted as “working interest production before royalties.” NGL volumes are converted to BOE on a one-to-one basis
with oil. Gas volumes are converted to BOE at the rate of 6 Mcf of gas per bbl of oil, based upon the approximate relative energy content
of gas and oil. The rate is not necessarily indicative of the relationship between oil and gas prices. BOEs may be misleading, particularly
if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead.
Below are explanations of some commonly used terms
in the oil and gas business and in this report.
| · | Field. An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual
geological structural feature and/or stratigraphic condition. |
| | |
| · | Possible reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable
reserves. The SEC provides a complete definition of possible reserves in Rule 4-10(a)(17) of Regulation S-X. |
| · | Probable reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved
reserves but that, together with proved reserves, are as likely as not to be recovered. The SEC provides a complete definition of probable
reserves in Rule 4-10(a)(18) of Regulation S-X. |
| | |
| · | Proved developed reserves. In general, reserves that can be expected to be recovered from existing wells with existing
equipment and operating methods. The SEC provides a complete definition of developed oil and gas reserves in Rule 4-10(a)(6) of Regulation S-X. |
| | |
| · | Proved reserves. Those quantities of oil and natural gas, which, by analysis of geoscience and engineering data,
can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs and under existing
economic conditions, operating methods and government regulations prior to the time at which contracts providing the right to operate
expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are
used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it
will commence the project within a reasonable time. |
| (i) | The area of the reservoir considered as proved includes: |
| (A) | The area identified by drilling and limited by fluid contacts, if any, and |
| (B) | Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous
with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data. |
| (ii) | In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known
hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes
a lower contact with reasonable certainty. |
| (iii) | Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the
potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only
if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty. |
| (iv) | Reserves which can be produced economically through application of improved recovery techniques (including,
but not limited to, fluid injection) are included in the proved classification when: |
| (A) | Successful testing by a pilot project in an area of the reservoir with properties no more favorable than
in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using
reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and |
| (B) | The project has been approved for development by all necessary parties and entities, including governmental
entities. |
| (v) | Existing economic conditions include prices and costs at which economic producibility from a reservoir
is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by
the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless
prices are defined by contractual arrangements, excluding escalations based upon future conditions. |
| · | Proved undeveloped reserves. In general, reserves that are expected to be recovered from new wells on undrilled
acreage or from existing wells where a relatively major expenditure is required for recompletion. The SEC provides a complete definition
of undeveloped oil and gas reserves in Rule 4-10(a)(31) of Regulation S-X. |
| | |
| · | Reserves. Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically
producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there
must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed
means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project. |
| | |
| · | Working interest. The operating interest that gives the owner the right to drill, produce and conduct operating
activities on the property and a share of production and requires the owner to pay a share of the costs of drilling and production operations. |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 1, 2024 |
GRAN TIERRA ENERGY INC. |
|
By: |
/s/ Gary S. Guidry |
|
|
Name: Gary S. Guidry |
|
|
Title: President and Chief Executive Officer |
Exhibit 23.1
Consent
of Independent Reserve Engineers
Mr. Ryan Ellson
Chief Financial Officer
Gran Tierra Energy Inc. (“Gran Tierra”)
500 Centre Street S.E.,
Calgary, Alberta, Canada T2G 1A6
| Re: | Gran Tierra Registration Statement: |
Form S-8 (Reg. Nos. 333-146815, 333-156994, 333-171122
and 333-183029)
Form S-3 (Reg. No. 333-258433)
Filed with the United States Securities Exchange Commission
Dear Mr. Ellson:
As the independent
reserve engineers for Gran Tierra, McDaniel & Associates Consultants Ltd. (“McDaniel”)
hereby confirms that it has granted and not withdrawn its consent to the filing of McDaniel reserve
report and to the reference to McDaniel’s evaluation of Gran Tierra’s reserves
as of December 31, 2023, in the form and context disclosed by Gran Tierra in its Current Report on Form 8-K submission filed
with the U.S. Securities and Exchange Commission on February 1, 2024, and to the incorporation by reference thereof in the registration
statements listed above.
Please do not hesitate to contact
us if you have any questions.
McDaniel & Associates
Consultants Ltd.
/s/
Cam Boulton |
|
Cam Boulton |
|
Executive Vice President |
|
Dated: February 1, 2024
Calgary, Alberta
CANADA
Exhibit 99.1
THIRD PARTY REPORT ON RESERVES
By
McDaniel & Associates Consultants Ltd. (“McDaniel”) - (Independent Qualified Reserves Evaluator)
This
report is provided to satisfy the requirements contained in Item 1202(a)(8) of Regulation S-K (“Regulation S-K”)
of the U.S. Securities and Exchange Commission (the “SEC”) with respect to Gran Tierra Energy Inc.’s
(“Gran Tierra”) oil and gas reserves as of December 31, 2023, and to provide the qualifications of the technical person
primarily responsible for overseeing the reserve estimation process.
The numbering of items below corresponds to the
requirements set out in Item 1202(a)(8) of Regulation S-K. Terms to which a meaning is ascribed in Regulation S-K
and Regulation S-X have the same meaning in this report.
| i. | We have prepared an independent estimate
of the oil and gas reserves of Gran Tierra for the management and the board of directors
of Gran Tierra. The primary purpose of our evaluation report was to provide estimates of
reserves information in support of Gran Tierra’s year-end reserves reporting requirements
under Regulation S-K and for other internal business and financial needs of Gran Tierra. |
| ii. | We estimated the reserves of Gran Tierra
as at December 31, 2023. The completion date of our report is January 23, 2024. |
| iii. | McDaniel evaluated 100% of the reserves
of Gran Tierra. |
The following table sets forth the
net after royalty reserves of Gran Tierra:
Category | |
Crude Oil Mbbl | | |
Natural Gas MMcf | | |
Oil Equivalent MBOE (1) | | |
Portion of Reserves
Evaluated, % | |
Proved | |
| | | |
| | | |
| | | |
| | |
Developed | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| 38,942 | | |
| 0 | | |
| 38,942 | | |
| 100 | |
Ecuador | |
| 657 | | |
| — | | |
| 657 | | |
| 100 | |
Undeveloped | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| 30,725 | | |
| — | | |
| 30,725 | | |
| 100 | |
Ecuador | |
| 3,972 | | |
| — | | |
| 3,972 | | |
| 100 | |
Total Proved | |
| 74,296 | | |
| 0 | | |
| 74,296 | | |
| 100 | |
| |
| | | |
| | | |
| | | |
| | |
Probable | |
| | | |
| | | |
| | | |
| | |
Developed | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| 12,000 | | |
| 0 | | |
| 12,000 | | |
| 100 | |
Ecuador | |
| 138 | | |
| — | | |
| 138 | | |
| 100 | |
Undeveloped | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| 28,243 | | |
| 0 | | |
| 28,243 | | |
| 100 | |
Ecuador | |
| 5,866 | | |
| — | | |
| 5,866 | | |
| 100 | |
Total Probable | |
| 46,247 | | |
| 0 | | |
| 46,247 | | |
| 100 | |
| |
| | | |
| | | |
| | | |
| | |
Possible | |
| | | |
| | | |
| | | |
| | |
Developed | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| 11,211 | | |
| 0 | | |
| 11,211 | | |
| 100 | |
Ecuador | |
| 151 | | |
| — | | |
| 151 | | |
| 100 | |
Undeveloped | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| 30,292 | | |
| 0 | | |
| 30,292 | | |
| 100 | |
Ecuador | |
| 6,852 | | |
| — | | |
| 6,852 | | |
| 100 | |
Total Possible | |
| 48,506 | | |
| 0 | | |
| 48,506 | | |
| 100 | |
| (1) | Oil
equivalence factors: Crude Oil 1 bbl/bbl, Natural Gas 6 Mcf/bbl. |
| iv. | As noted in item iii., our
evaluation covered 100% of the reserves of Gran Tierra. The assumptions, methods, and procedures
followed in the evaluation reflect the standards set out in the Canadian Oil and Gas Evaluation
Handbook (the “COGE Handbook”) modified as necessary to conform to the standards
under the U.S. Financial Accounting Standards Board policies (the “FASB Standards”)
and the U.S. Securities and Exchange Commission Regulations (“SEC requirements”). |
Data used in our evaluation of Gran
Tierra’s reserves was obtained from regulatory agencies, public sources, and Gran Tierra personnel and Gran Tierra files. In the
preparation of our report, we have accepted as presented, and have relied, without independent verification, upon a variety of information
furnished by Gran Tierra such as interests and burdens on properties, recent production volumes, product transportation, and marketing
and sales agreements, historical revenue, capital costs, operating expense data, budget forecasts and capital cost estimates and well
data for recently drilled wells. If in the course of our evaluation, the validity or sufficiency of any material information was brought
into question; we did not rely on such information until such concerns were resolved to our satisfaction.
Gran Tierra warranted in a representation
letter to us that, to the best of its knowledge and belief, all data furnished to us was accurate in all material respects, and no material
data relevant to our evaluation was omitted.
A field examination of the evaluated
properties was not performed, nor was it considered necessary for our report.
In our opinion, estimates provided
in our report have, in all material respects, been determined in accordance with the applicable industry standards, and results provided
in our report and summarized herein are appropriate for inclusion in filings under Regulation S-K.
| v. | As required under Regulation S-X,
reserves are those quantities of oil and gas that are estimated to be economically producible
under existing economic conditions. The primary economic assumptions relate to pricing, capital
and operating costs, recoverable volumes and production forecasts. |
As specified, in determining economic
production, constant product benchmark prices are to be based on a 12-month average price, calculated as the unweighted arithmetic average
of the first-day-of-the-month price for each month within the 12-month period prior to the effective date of our report unless prices
are defined by contractual or other regulatory arrangements. The relevant benchmark price for Gran Tierra’s reserves is Brent Blend
Crude Oil FOB North Sea at $82.51 USD/bbl.
The product prices that were used to
determine the future gross revenue for each property reflect adjustments to the benchmark prices for gravity, quality, local conditions,
and/or distance from market, referred to herein as “differentials.” The differentials used in the preparation of this report
estimated from received price information provided by Gran Tierra.
The average realized prices for Gran
Tierra’s reserves in the report are:
Oil (USD/bbl) – Colombia | |
$ | 69.91 | |
Oil (USD/bbl) – Ecuador | |
$ | 77.44 | |
In our economic analysis, operating
and capital costs are those costs estimated as applicable at the effective date of our report, with no future escalation. Where deemed
appropriate, the capital costs and revised operating costs associated with the implementation of committed projects designed to modify
specific field operations in the future may be included in economic projections. Capital costs used in this report were provided by Gran
Tierra and actual costs from recent activity. Capital costs are included as required for workovers, new development wells, and production
equipment. Based on our understanding of future development plans, a review of the records provided to us, and our knowledge of similar
properties, we regard these estimated capital costs to be reasonable. Abandonment costs were assigned to the abandonment of wells assigned
reserves, including future wells.
Reserves were assigned by volumetric,
material balance, decline analysis or analogy where considered appropriate. In many cases, where sufficient data were available, a combination
of the methods were applied.
Test data and other related information
were used to estimate the anticipated initial production rates for those wells or analogous locations. For reserves not yet on production,
forecast sales were estimated to commence at an anticipated date furnished by Gran Tierra. Wells or locations that are not currently
producing may start producing earlier or later than anticipated in our estimates due to unforeseen factors causing a change in the timing
to initiate production. Such factors may include delays due to weather, the availability of rigs, the sequence of drilling, completing
and/or recompleting wells and/or constraints set by regulatory bodies.
The future production rates from wells
currently on production or wells or locations that are not currently producing may be more or less than estimated because of changes
including, but not limited to, reservoir performance, operating conditions related to surface facilities, compression and artificial
lift, pipeline capacity and/or operating conditions, producing market demand and/or allowables or other constraints set by regulatory
bodies.
| vi. | Our report has been prepared assuming
the continuation of existing regulatory and fiscal conditions subject to the guidance in
the COGE Handbook and SEC regulations. Notwithstanding that Gran Tierra currently has regulatory
approval to produce the reserves identified in our report, there is no assurance that changes
in regulation will not occur; such changes, which cannot reliably be predicted, could impact
Gran Tierra’s ability to recover the estimated reserves. |
| vii. | Oil and gas reserves estimates have an
inherent degree of associated uncertainty the extent of which is affected by many factors.
Reserves estimates will vary due to the limited and imprecise nature of data upon which the
estimates of reserves are predicated. Moreover, the methods and data used in estimating reserves
are often necessarily indirect or analogical in character rather than direct or deductive.
Furthermore, the persons involved in the preparation of reserves estimates and associated
information are required, in applying geosciences, petroleum engineering and evaluation principles,
to make numerous unbiased judgments based upon their educational background, professional
training, and professional experience. The extent and significance of the judgments to be
made are, in themselves, sufficient to render reserves estimates inherently imprecise. Reserves
estimates may change substantially as additional data becomes available and as economic conditions
impacting oil and gas prices and costs change. Reserves estimates will also change over time
due to other factors such as knowledge and technology, fiscal and economic conditions, contractual,
statutory and regulatory provisions. |
| viii. | In our opinion, the reserves information
evaluated by us have, in all material respects, been determined in accordance with all appropriate
data, assumptions, methods and procedures applicable for the filing of reserves information
under Regulation S-K. All methods and procedures we considered necessary under the circumstances
to prepare the report were used. |
| ix. | A summary of Gran Tierra’s reserves
evaluated by us is provided in item iii. |
McDaniel is a private firm established in 1955
whose business is the provision of independent geological and engineering services to the petroleum industry. McDaniel is among the largest
evaluation firms in North America with over 60 professional and technical support personnel. Mr. Boulton coordinated the evaluation
and is a qualified, independent reserves evaluator as defined in COGE Handbook, and a registered Practicing Professional Engineer
in the Province of Alberta. Mr. Boulton has over 10 years of experience in the evaluation of oil and gas reserves and resources
and has been employed at McDaniel as an evaluator/auditor since 2006.
McDaniel & Associates Consultants Ltd.
2000, Eighth Avenue Place, East Tower,
525 – 8 Avenue SW,
Calgary, Alberta, Canada T2P 1G1
Dated: February 1, 2024
/s/ Cam Boulton |
|
Cam Boulton |
|
Executive Vice President |
|
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Gran Tierra Energy (AMEX:GTE)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Gran Tierra Energy (AMEX:GTE)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024