Strong Production and Funds Flow, Argentina Business Unit Sale to
Increase Focus on Core Assets and Substantial Brazil Reserves Increase
CALGARY, Aug. 6, 2014 /CNW/ - Gran Tierra Energy Inc. ("Gran Tierra Energy") (NYSE MKT: GTE, TSX: GTE), a company focused on oil and gas exploration and production in South
America, today announced its financial and operating results for the
quarter ended June 30, 2014. All dollar amounts are in United States ("U.S.") dollars unless otherwise indicated.
Financial and operating highlights:
-
On June 25, 2014, Gran Tierra Energy sold its Argentina business unit to
Madalena Energy Inc. ("Madalena") (TSX-V: MVN) for aggregate consideration of $69.3 million, comprising
$55.4 million in cash and $13.9 million in Madalena shares. The results
of the Argentina business unit, together with the loss on sale, are
presented as loss from discontinued operations, net of income taxes, in
Gran Tierra Energy's interim unaudited condensed consolidated
statements of operations. Revenue and other income and expenses include
results from continuing operations and exclude the results of the
Argentina business unit.
-
Quarterly oil and natural gas production net after royalties ("NAR"), adjusted for inventory changes and losses, and including volumes
associated with the discontinued operations of the Argentina business
unit, of 20,121 barrels of oil equivalent per day ("BOEPD"), was an 8% decrease from production of 21,819 BOEPD for the three
months ended March 31, 2014, and represents a decrease of 9% from
22,131 BOEPD in the comparable period in 2013. In 2014, an inventory
increase in Colombia due to pipeline disruptions and deliveries to a
new customer with a protracted sales cycle accounted for reduced
production of 0.2 million barrels ("MMbbl") or 1,293 BOEPD. Gran Tierra Energy expects to sell this additional
inventory during the third quarter of 2014.
-
Production from continuing operations for the second quarter of 2014
averaged 26,261 BOEPD gross working interest ("WI") or 19,857 BOEPD NAR before adjustment for inventory changes and
losses, or 17,524 BOEPD NAR adjusted for inventory changes and losses
(99% oil), compared with 19,373 BOEPD NAR before adjustment for
inventory changes and losses and 19,058 BOEPD NAR adjusted for
inventory changes and losses in the corresponding period in 2013.
-
With production from the Bretaña field expected to start in the fourth
quarter of 2014, Gran Tierra Energy is planning to reach 23,000 BOEPD
NAR or over 30,000 BOEPD gross working interest before adjustments for
inventory changes and losses by year-end.
-
Revenue and other income from continuing operations for the quarter was
$148.5 million, a 2% decrease from $151.9 million in the first quarter
of 2014, and a 1% decrease from $150.6 million in the comparable period
in 2013.
-
Income from continuing operations for the quarter was $31.5 million, or
$0.11 per share basic and diluted, compared with $49.6 million, or
$0.18 per share basic diluted, in the corresponding period in 2013.
-
Net income for the quarter of $9.1 million, or $0.03 per share basic and
diluted, was $36.0 million lower than net income of $45.1 million, or
$0.16 per share basic diluted, in the three months ended March 31,
2014. Net income for the quarter decreased compared with net income of
$47.8 million, or $0.17 per share basic diluted, in the comparable
period in 2013 primarily due to the loss from discontinued operations,
net of income taxes, of $22.3 million, or $0.08 per share basic and
diluted. This included loss from discontinued operations associated
with the sale of the Argentina business unit of $19.3 million in the
three months ended June 30, 2014.
-
Funds flow from continuing operations for the quarter was $85.1 million,
a decrease of 2% ($1.5 million) from $86.7 million in the three months
ended March 31, 2014, and a decrease from $85.8 million in the
comparable period in 2013. The decrease compared with the corresponding period in 2013 was
due primarily to the effect of inventory adjustments.
-
Cash and cash equivalents were $332.4 million at June 30, 2014, compared
with $428.8 million at December 31, 2013.
-
In Colombia, the Moqueta-13 development well was successfully drilled,
tested at approximately 1,500 barrels of oil per day ("bopd"), and tied in. Similarly, the Costayaco-21 development well was
successfully drilled and tested, with production start-up imminent.
Production from both is expected to start in the third quarter of 2014.
-
Exploration drilling in Colombia for the remainder of the year is
expected to include the Eslabón Sur Shallow-1, Eslabón Sur Deep-1,
Corunta-1A and the Cabañas-1 wells, all in the Putumayo Basin.
-
In Peru, Gran Tierra Energy drilled a water disposal well, which also
successfully evaluated the resource potential of a thick untested
oil-water transition zone where reserves have not previously been
assigned. Planning is underway to spud the Bretaña Sur appraisal well
on the southern portion of the field in the fourth quarter of 2014.
Gran Tierra Energy expects long-term test ("LTT") production from the Bretaña 95-2-1XD well to start in the fourth
quarter of 2014 at a rate of approximately 2,500 bopd gross. The LTT
will provide valuable information on the reservoir to optimize field
development, in addition to providing early cash flow.
-
In Brazil, after producing 127.9 thousand barrels ("Mbbl") NAR before inventory adjustments from the Tiê field up to May 31,
2014, new production from the Agua Grande formation, results of seismic
reprocessing, and additional reservoir volume in the Sergi formation,
have led Gran Tierra Energy's independent reserves auditors to
re-evaluate our Brazil reserves. Using Securities and Exchange
Commission ("SEC") reserve reporting guidelines, this has resulted in proved ("1P") reserves increasing 80% to 3.5 million barrels of oil equivalent ("MMBOE"), proved and probable ("2P") reserves increasing 48% to 5.6 MMBOE and proved, probable and
possible ("3P") reserves increasing 44% to 8.2 MMBOE on a company interest basis, and
1P reserves increasing to 3.0 MMBOE, 2P reserves increasing to 4.9
MMBOE and 3P reserves increasing to 7.2 MMBOE, each on a NAR basis.
The net present value (NPV10 before tax) of 2P reserves has increased
to $167 million at May 31, 2014, from $115 million at December 31,
2013.
"Gran Tierra Energy's second quarter was highlighted by the sale of our
Argentina business unit which allows us to focus our human and capital
resources on major projects in Colombia and Peru, and substantial
reserve growth in Brazil," commented Dana Coffield, President and Chief
Executive Officer of Gran Tierra Energy. "Operationally, we drilled the
Moqueta-13 and Costayaco-21 development wells and are initiating
production from those wells. In Peru, Gran Tierra Energy is preparing
to drill an appraisal well on the Bretaña field, and is continuing
preparations to initiate long-term testing from Bretaña Norte 95-2-1XD
in the fourth quarter this year. Finally, preparations continue with
four exploration wells planned in Colombia in the second half of this
year, with the first, Corunta-1A, expected to spud within the next
month," concluded Coffield.
Production review
|
Three Months Ended June 30, 2014
|
|
Three Months Ended June 30, 2013
|
(Barrels of Oil Equivalent) (1)
|
Colombia
|
Brazil
|
Total
|
|
Colombia
|
Brazil
|
Total
|
Gross production
|
2,285,615
|
104,148
|
2,389,763
|
|
2,275,972
|
87,792
|
2,363,764
|
Royalties
|
(569,016)
|
(13,793)
|
(582,809)
|
|
(590,032)
|
(10,771)
|
(600,803)
|
Inventory adjustment (2)
|
(211,126)
|
(1,138)
|
(212,264)
|
|
(18,640)
|
(10,062)
|
(28,702)
|
Production, NAR
|
1,505,473
|
89,217
|
1,594,690
|
|
1,667,300
|
66,959
|
1,734,259
|
|
|
|
|
|
|
|
|
Production per day, NAR (BOEPD)
|
16,544
|
980
|
17,524
|
|
18,322
|
736
|
19,058
|
|
Six Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2013
|
(Barrels of Oil Equivalent) (1)
|
Colombia
|
Brazil
|
Total
|
|
Colombia
|
Brazil
|
Total
|
Gross production
|
4,478,106
|
183,690
|
4,661,796
|
|
4,459,463
|
167,705
|
4,627,168
|
Royalties
|
(1,117,055)
|
(25,231)
|
(1,142,286)
|
|
(1,166,971)
|
(20,477)
|
(1,187,448)
|
Inventory adjustment (2)
|
(234,127)
|
(2,919)
|
(237,046)
|
|
121,134
|
(16,435)
|
104,699
|
Production, NAR
|
3,126,924
|
155,540
|
3,282,464
|
|
3,413,626
|
130,793
|
3,544,419
|
|
|
|
|
|
|
|
|
Production per day, NAR (BOEPD)
|
17,276
|
859
|
18,135
|
|
18,860
|
723
|
19,583
|
(1) Excludes amounts relating to discontinued operations. Oil and gas
production, NAR and adjusted for inventory
changes and losses, associated with discontinued operations in Argentina
was 2,597 BOEPD and 2,744 BOEPD
for the three and six months ended June 30, 2014, and 3,073 BOEPD and
3,192 BOEPD for the corresponding
periods in 2013. Argentina production for the three and six months ended
June 30, 2014, was calculated to the
date of sale of June 25, 2014.
|
(2) Adjusted for losses.
|
Financial review
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2014
|
|
|
2013
|
|
|
% Change
|
|
2014
|
|
|
2013
|
|
|
% Change
|
Revenue and Other Income ($000s) (1)
|
$
|
148,526
|
|
|
$
|
150,574
|
|
|
(1)
|
|
$
|
300,381
|
|
|
$
|
337,161
|
|
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations ($000s) (1)
|
$
|
31,484
|
|
|
$
|
49,584
|
|
|
(37)
|
|
$
|
81,256
|
|
|
$
|
109,584
|
|
|
(26)
|
Loss from Discontinued Operations, Net of Income Taxes ($000s)
|
|
(22,347)
|
|
|
|
(1,801)
|
|
|
—
|
|
|
(26,990)
|
|
|
|
(3,888)
|
|
|
594
|
Net Income ($000s)
|
$
|
9,137
|
|
|
$
|
47,783
|
|
|
(81)
|
|
$
|
54,266
|
|
|
$
|
105,696
|
|
|
(49)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Per Share - Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations (1)
|
$
|
0.11
|
|
|
$
|
0.18
|
|
|
(39)
|
|
$
|
0.29
|
|
|
$
|
0.38
|
|
|
(24)
|
|
Loss from Discontinued Operations, Net of Income Taxes
|
|
(0.08)
|
|
|
|
(0.01)
|
|
|
700
|
|
|
(0.10)
|
|
|
|
(0.01)
|
|
|
900
|
|
Net Income
|
$
|
0.03
|
|
|
$
|
0.17
|
|
|
(82)
|
|
$
|
0.19
|
|
|
$
|
0.37
|
|
|
(49)
|
Income (Loss) Per Share - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations (1)
|
$
|
0.11
|
|
|
$
|
0.18
|
|
|
(39)
|
|
$
|
0.28
|
|
|
$
|
0.38
|
|
|
(26)
|
|
Loss from Discontinued Operations, Net of Income Taxes
|
(0.08)
|
|
|
(0.01)
|
|
|
7
|
|
(0.09)
|
|
|
$
|
(0.01)
|
|
|
800
|
|
Net Income
|
$
|
0.03
|
|
|
$
|
0.17
|
|
|
(82)
|
|
$
|
0.19
|
|
|
$
|
0.37
|
|
|
(49)
|
(1)
|
Excludes amounts relating to discontinued operations.
|
Net income reconciled to funds flow from continuing operations(2) is as follows:
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
Funds Flow From Continuing Operations - Non-GAAP
Measure ($000s)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net income
|
$
|
9,137
|
|
$
|
47,783
|
|
$
|
54,266
|
|
$
|
105,696
|
Adjustments to reconcile net income to funds flow from
continuing operations
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of income taxes
|
22,347
|
|
1,801
|
|
26,990
|
|
3,888
|
|
Depletion, depreciation, accretion and impairment expenses
|
41,937
|
|
55,592
|
|
86,201
|
|
106,054
|
|
Deferred tax expense (recovery)
|
1,419
|
|
(8,213)
|
|
(841)
|
|
(15,715)
|
|
Non-cash stock-based compensation
|
1,144
|
|
2,213
|
|
2,624
|
|
4,110
|
|
Unrealized foreign exchange loss (gain)
|
8,745
|
|
(11,622)
|
|
4,567
|
|
(18,366)
|
|
Unrealized financial instruments loss (gain)
|
2,058
|
|
—
|
|
(351)
|
|
—
|
|
Equity tax
|
(1,642)
|
|
(1,718)
|
|
(1,642)
|
|
(1,718)
|
|
Other loss
|
—
|
|
—
|
|
—
|
|
4,400
|
Funds flow from continuing operations
|
$
|
85,145
|
|
$
|
85,836
|
|
$
|
171,814
|
|
$
|
188,349
|
(2) Funds flow from continuing operations 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"). Management uses this financial measure to analyze
operating performance and the income generated by Gran Tierra Energy's
principal business activities prior to the consideration of how
non-cash items affect that income, and believes that this financial
measure is also useful supplemental information for investors to
analyze
operating performance and Gran Tierra Energy's financial results.
Investors should be cautioned that this measure should not be construed
as an alternative to net income or other measures of financial
performance as determined in accordance with GAAP. Gran Tierra
Energy's
method of calculating this measure may differ from other companies and,
accordingly, it may not be comparable to similar measures used
by other companies. Funds flow from continuing operations, as presented,
is net income adjusted for loss from discontinued operations,
net of income taxes, depletion, depreciation, accretion and impairment
("DD&A") expenses, deferred tax expense or recovery, non-cash
stock-based compensation, unrealized foreign exchange gain or loss,
unrealized financial instrument gain or loss, equity tax and other
loss.
|
Second Quarter 2014 Financial Highlights
On June 25, 2014, Gran Tierra Energy sold its Argentina business unit to
Madalena for aggregate consideration of $69.3 million, comprising $55.4
million in cash and $13.9 million in Madalena shares. The results of
the Argentina business unit, together with the loss on sale, are
presented as loss from discontinued operations, net of income taxes, in
Gran Tierra Energy's interim unaudited condensed consolidated
statements of operations. Revenue and other income and expenses include
results from continuing operations and exclude the results of the
Argentina business unit.
For the three months ended June 30, 2014, revenue and other income
decreased by 1% to $148.5 million compared with $150.6 million in the
corresponding period in 2013. In 2014, an inventory increase in
Colombia accounted for reduced production of 0.2 MMbbl or 1,293 bopd.
Average realized oil prices increased by 8% to $93.72 per barrel ("bbl") for the three months ended June 30, 2014, from $86.71 per bbl in the
comparable period in 2013 due to higher Brent oil price and a lower
percentage of volumes sold in the current period for which the price is
adjusted for trucking costs.
Revenue and other income from continuing operations for the three months
ended June 30, 2014, decreased by 2% to $148.5 million from $151.9
million compared with the first quarter of 2014 due to lower
production, partially offset by higher realized prices. Average
realized oil prices increased by 4% to $93.72 per bbl for the three
months ended June 30, 2014, compared with $89.89 per bbl in the three
months ended March 31, 2014, due to lower volumes sold in the current
period for which the price is adjusted for trucking costs.
For the six months ended June 30, 2014, revenue and other income
decreased by 11% to $300.4 million compared with $337.2 million in the
corresponding period in 2013 due to a large oil inventory increase in
Colombia due to pipeline disruptions and deliveries to a new customer
with a protracted sales cycle which accounted for reduced oil and NGL
production of 0.3MMbbl or 1,617 bopd and lower realized prices. Average
realized oil prices decreased by 3% to $91.74 per bbl for the six
months ended June 30, 2014, from $94.99 per bbl in the comparable
period in 2013 due to a higher percentage of volumes sold in the
current period for which the price is adjusted for trucking costs.
The average Brent oil price for the three and six months ended June 30,
2014, was $109.70 and $108.93 per bbl compared with $102.58 and $107.54
per bbl in the corresponding periods in 2013, and $108.17 per bbl for
the three months ended March 31, 2014. The average West Texas
Intermediate oil price for the three and six months ended June 30,
2014, was $102.99 and $100.84 per bbl compared with $94.22 and $94.31
per bbl in the corresponding periods in 2013, and $98.68 per bbl the
three months ended March 31, 2014.
During the three and six months ended June 30, 2014, 39% and 43% of Gran
Tierra Energy's oil and gas volumes sold in Colombia were to a customer
for which the realized price is adjusted for trucking costs related to
a 1,500 km route. The effect on the Colombian realized price for the
three and six months ended June 30, 2014, was a reduction of
approximately $6.94 and $7.87 per barrel of oil equivalent ("BOE"), respectively, as compared with delivering all of Gran Tierra
Energy's Colombian oil through the Ecopetrol S.A. ("Ecopetrol") operated Trans-Andean oil pipeline (the "OTA pipeline"). Sales to this customer during the corresponding periods in 2013 were
51% and 40% of Gran Tierra Energy's oil and gas volumes sold in
Colombia and the effect on the Colombian realized price was a reduction
of approximately $11.30 and $9.85 per BOE, respectively. Production
during the three and six months ended June 30, 2014, reflected
approximately 41 and 92 days of oil delivery restrictions in Colombia
compared with 70 and 115 days, respectively, of oil delivery
restrictions in the comparable period in 2013.
Operating expenses increased by 6% to $25.3 million for the three months ended June 30,
2014, from $24.0 million and decreased by 16% to $47.2 million for the
six months ended June 30, 2014, from $56.0 million compared with the
comparable periods in 2013.
For the three months ended June 30, 2014, the increase in operating
expenses was due to an increase in the operating cost per BOE, offset
by the impact of lower production. On a per BOE basis, operating
expenses increased by 15% to $15.89 for the three months ended June 30,
2014, from $13.82 in the comparable period in 2013, primarily as a
result of a higher pipeline charges and trucking costs due to a higher
portion of sales to Ecopetrol in 2014.
For the six months ended June 30, 2014, operating expenses decreased as
a result of a decrease in the operating cost per BOE, and lower
production. On a per BOE basis, operating expenses decreased by 9% to
$14.38 for the six months ended June 30, 2014, from $15.80 in the
comparable period in 2013.The decrease in operating costs per BOE in
the six months ended June 30, 2014, was due to inventory volumes
liquidated in the comparative period in 2013 which had high
transportation costs due to the delivery point to which they were sold
and to which Gran Tierra Energy did not deliver in the current period.
Operating expenses per BOE also decreased in the six months ended June
30, 2014 as a result of deferred workover expenses, lower fuel
consumption and lower training costs.
Operating expenses increased by 16% or $3.5 million in the three months
ended June 30, 2014, from $21.9 million in the three months ended
March 31, 2014, due to higher workover, maintenance and health, safety
and environmental expenses in Colombia, partially offset by the effect
of lower production.
DD&A expenses for the three months ended June 30, 2014, decreased to
$41.9 million from $55.6 million in the comparable period in 2013,
primarily due to lower production and a lower depletion rate. DD&A
expenses for the three months ended June 30, 2013, included a $2.0
million ceiling test impairment loss in Gran Tierra Energy's Brazil
cost center. On a per BOE basis, the depletion rate decreased by 18% to
$26.30 from $32.06. On a per BOE basis, in addition to the 2013
impairment charge, the decrease was due to an increase in reserves and
a decrease in costs in the depletable base relating to lower future
development costs and the receipt of a termination payment in Brazil in
the third quarter of 2013 which reduced the cost base. DD&A expenses
for the six months ended June 30, 2014, decreased to $86.2 million
($26.26 per BOE) from $106.1 million ($29.92 per BOE) in the comparable
period in 2013, due to lower production and a decreased depletion rate.
General and administrative ("G&A") expenses for the three months ended June 30, 2014, increased by 53%
to $13.9 million ($8.74 per BOE) from $9.1 million ($5.24 per BOE)
compared with the corresponding period in 2013. Increased employee
related costs, higher consulting expenses associated with increased
activity, expanded operations in Peru and higher bank fees, were only
partially offset by higher G&A allocations to capital projects within
the business units. During the three months ending June 30, 2013, Gran
Tierra Energy received $1.0 million from the U.S. Federal Government
for assets recovered from its former U.S. securities counsel as
compensation for damages suffered in 2006. This amount was recorded as
a reduction of G&A expenses in the corresponding period in 2013.
G&A expenses for the six months ended June 30, 2014, increased by 48% to
$26.8 million ($8.16 per BOE) from $18.1 million ($5.11 per BOE),
compared with the corresponding period in 2013. Increased employee
related costs, higher consulting expenses associated with increased
activity, expanded operations in Peru and higher stock-based
compensation expense associated with restricted stock units and stock
options. These increases were partially offset by higher G&A
allocations to capital projects within the business units.
For the three and six months ended June 30, 2014, the foreign exchange
loss was $10.0 million and $5.8 million, respectively. For the three
months ended June 30, 2014, Gran Tierra Energy had realized foreign
exchange losses of $1.3 million and an unrealized non-cash foreign
exchange loss of $8.7 million. For the six months ended June 30, 2014,
Gran Tierra Energy had realized foreign exchange losses of $1.2 million
and an unrealized non-cash foreign exchange loss of $4.6 million. The
unrealized foreign exchange losses in the three and six months ended
June 30, 2014, were a result of a net monetary liability position in
Colombia and the Colombian peso strengthening.
For the three months ended June 30, 2013, there was a foreign exchange
gain of $12.6 million, comprising a $11.6 million unrealized non-cash
foreign exchange gain and realized foreign exchange gains of $1.0
million. For the six months ended June 30, 2013, there was a foreign
exchange gain of $19.0 million, comprising of a $18.4 million
unrealized non-cash foreign exchange gain and realized foreign exchange
gains of $0.6 million. The unrealized non-cash foreign exchange gain
was a result of a net monetary liability position in Colombia and the
Colombian peso weakening.
Financial instruments gain of $2.6 million and $5.0 million in the three and six months ended June
30, 2014, respectively, included a realized financial instrument gain
of $4.7 million. For the three months ended June 30, 2014, the realized
financial instrument gain was partially offset by unrealized financial
instruments losses of $2.1 million. In the six months ended June 30,
2014, Gran Tierra Energy had unrealized financial instruments gains of
$0.4 million. The gains and losses primarily related to gains on Gran
Tierra Energy's Colombia peso non-deliverable forward contracts.
Income tax expense was $28.4 million and $58.1 million for the three and
six months ended June 30, 2014, compared with $25.0 million and $62.0
million in the comparable periods in 2013. The decrease for the six
months ended June 30, 2014, was primarily due to lower taxable income
in Colombia.
Income from continuing operations was $31.5 million, or $0.11 per share
basic and diluted for three months ended June 30, 2014, compared with
$49.6 million or $0.18 per share basic and diluted in the corresponding
period in 2013. For the three months ended June 30, 2014, decreased oil
and natural gas sales, and higher operating, G&A and income tax
expenses and foreign exchange losses, were only partially offset by
decreased DD&A expenses and financial instrument gains.
Income from continuing operations was $81.3 million, or $0.29 per share
basic and $0.28 per share diluted for the six months ended June 30,
2014, compared with $109.6 million or $0.38 per share basic and diluted
in the corresponding period in 2013. For the six months ended June 30,
2014, decreased oil and natural gas sales, increased G&A expenses and
foreign exchange losses, were only partially offset by lower operating,
DD&A and income tax expenses and financial instrument gains.
Loss from discontinued operations, net of income taxes was $22.3 million
and $27.0 million, or $0.08 per share basic and diluted and $0.10 per
share basic and $0.09 per share diluted for the three and six months
ended June 30, 2014, compared with $1.8 million and $3.9 million or
0.01 per share basic and diluted in the corresponding periods in 2013.
Net income for the quarter of $9.1 million, or $0.03 per share basic and
diluted, was $36.0 million lower than net income of $45.1 million, or
$0.16 per share basic and diluted, in the three months ended March 31,
2014. Net income for the quarter decreased compared with net income of
$47.8 million, or $0.17 per share basic and diluted, in the comparable
period in 2013.
Balance Sheet Highlights
Cash and cash equivalents were $332.4 million at June 30, 2014, compared
with $428.8 million at December 31, 2013. The decrease in cash and cash
equivalents during the six months ended June 30, 2014, was primarily
the result of capital expenditures of $158.2 million, cash used in
investing activities of discontinued operations of $12.4 million and a
$143.1 million change in assets and liabilities from operating
activities, partially offset by funds flow from continuing operations
of $171.8 million , net proceeds from the sale of the Argentina
business unit of $42.8 million, cash provided by operating activities
of discontinued operations of $4.8 million and proceeds from the
issuance of shares of common stock of $7.1 million.
Working capital (including cash and cash equivalents) was $328.0 million
at June 30, 2014, an $82.2 million increase from December 31, 2013.
Production Highlights
Production from continuing operations for the second quarter of 2014
averaged 26,261 BOEPD WI or 19,857 BOEPD NAR before adjustment for
inventory changes and losses, or 17,524 BOEPD NAR adjusted for
inventory changes and losses (99% oil), compared with 19,373 BOEPD NAR
before adjustment for inventory changes and losses and 19,058 BOEPD NAR
adjusted for inventory changes and losses in the corresponding period
in 2013. Production for the second quarter of 2014 consisted of 16,544
BOEPD NAR in Colombia (99% oil) and 980 bopd NAR in Brazil, all
adjusted for inventory changes and losses. Production in July 2014
averaged approximately 19,000 BOEPD NAR before adjustment for inventory
changes and losses, with approximately 31 days of oil delivery
restriction in Colombia.
During the six months ended June 30, 2014, a net oil inventory increase
accounted for 0.2 MMbbl or 1,310 bopd of reduced oil and NGL production
compared with a net oil inventory reduction in 2013 which accounted for
0.1 MMbbl or 578 bopd increased production. During the six months
ended June 30, 2014, oil inventory in the OTA pipeline and associated
Ecopetrol owned facilities as well as Gran Tierra Energy's tanks in the
Putumayo Basin increased as a result of pipeline disruptions. Also,
Gran Tierra Energy made deliveries to a customer with a protracted
sales cycle whereby the transfer of ownership will not occur until
export, which also increased inventory. Gran Tierra Energy expects to
sell this inventory during the third quarter of 2014. The oil inventory
reduction in 2013 was due to a decrease in oil inventory in the OTA
pipeline and associated Ecopetrol owned facilities in the Putumayo
Basin and reduced oil inventory related to sales to a customer in
Colombia with a protracted sales cycle whereby the transfer of
ownership occurred upon export.
Gran Tierra Energy anticipates 2014 average production from continuing
operations to range between 26,000 BOEPD and 27,000 BOEPD gross WI, or
between 19,500 and 20,500 BOEPD NAR before adjustments for inventory
changes and losses. This includes approximately 18,700 BOEPD NAR from
Colombia, 900 bopd NAR from Brazil and 400 bopd NAR from Peru. Gran
Tierra Energy estimates approximately 99% of this production to consist
of oil, with the balance consisting of natural gas. Gran Tierra Energy
is planning to reach 23,000 BOEPD NAR or over 30,000 BOEPD gross
working interest in December before adjustments for inventory changes
and losses.
Second Quarter 2014 Operational Highlights
Colombia
Chaza Block, Putumayo Basin (100% WI and Operator)
Moqueta Field
The Moqueta-13 development well was drilled in a southeast direction
from the Moqueta-1 well pad and reached total depth ("TD") of 5,020 feet on June 21, 2014. The Moqueta-13 well encountered oil
in the T-Sandstone and Caballos formations. The T-Sandstone was
perforated and tested from 4,562 feet to 4,624 feet measured depth ("MD") for 26 hours at a rate of 1,353 bopd of 27° API oil with a 0.3% water
cut. The underlying Caballos formation was perforated and tested from
4,742 feet to 4,899 feet MD for 131 hours at a rate of 144 bopd of
26.5° API oil with a 25.4% water cut. No material pressure draw down
was witnessed during production testing. The well has been tied in and
initiation of production is imminent. Drilling Moqueta-14 began on
August 5, 2014.
Costayaco Field
The development of the Costayaco field is ongoing with the Costayaco-20
and-22 wells both spud in the first quarter of 2014 and put on
production in the second quarter of 2014 to help maintain production in
the field. Costayaco-21 has been drilled, tested and tied in, with
production start-up imminent. Costayaco-19 development well is
drilling ahead. Production at the Costayaco field remains flat on
plateau at approximately 17,900 bopd gross.
Putumayo-31 Block, Putumayo Basin (65% WI and Operator, Petroamerica Oil
Corp. 35% WI, pending approval)
Subsequent to the end of the second quarter 2014, Gran Tierra Energy was
the successful bidder on the Putumayo-31 Block in the Putumayo Basin of
Colombia in Colombia's National Hydrocarbon Agency ("ANH") 2014 Bid Round and is expected to become operator of the block,
subject to final ANH approval.
Peru
Block 95, Bretaña Field (Gran Tierra Energy 100% WI and Operator)
The Bretaña-1WD water disposal well was spud on April 10, 2014, and
reached a total true vertical depth of 10,038 feet on May 17, 2014.
Modular Dynamics Testing was conducted to investigate a thick oil-water
transition zone where reserves have not previously been assigned.
Planning and construction is underway to initiate drilling of the
Bretaña Sur appraisal well in the fourth quarter of 2014 to gather
additional reservoir data and further substantiate oil reserves in the
field.
Gran Tierra Energy plans to initiate the LTT production from the Bretaña
discovery in the fourth quarter of 2014 and expects to reach a rate of
approximately 2,500 bopd gross. The LTT will provide valuable
information on the reservoir to optimize field development, in addition
to providing early cash flow.
Brazil
Recôncavo Basin (Gran Tierra Energy 100% WI and Operator)
Gran Tierra Energy continues to evaluate the unconventional resource
opportunity in oil saturated tight sands and shales in the Recôncavo
Basin.
In Brazil, after producing 127.9 Mbbl NAR before inventory adjustments
from the Tiê field up to May 31, 2014, new production from the Agua
Grande formation, results of seismic reprocessing, and additional
reservoir volume in the Sergi formation, have led Gran Tierra Energy's
independent reserves auditors to re-evaluate Gran Tierra Energy's
Brazil reserves. Using SEC reserve reporting guidelines, this has
resulted in 1P reserves increasing 80% to 3.5 MMBOE, 2P reserves increasing 48% to 5.6 MMBOE and 3P reserves increasing 44% to 8.2 MMBOE on a company interest basis, and
1P reserves increasing to 3.0 MMBOE, 2P reserves increasing to 4.9
MMBOE and 3P reserves increasing to 7.2 MMBOE, each on a NAR basis.
The net present value (NPV10 before tax) of 2P reserves has increased
to $167 million at May 31, 2014, from $115 million at December 31,
2013.
Possible reserves are those additional reserves that are less certain to
be recovered than probable reserves. There is a 10% probability that
the quantities actually recovered will equal or exceed the sum of
proved plus probable plus possible reserves. The estimates of reserves
and future net revenue for individual properties may not reflect the
same confidence level as estimates of reserves and future net revenue
for all properties, due to the effect of aggregation.
Brazil
|
May 31, 2014
|
May 31, 2014
|
2013 Year-End
|
BOE
(NI 51-101 compliant)
|
Gran Tierra Energy
Company Interest
Reserves
|
Gran Tierra Energy
NAR Reserves
|
Gran Tierra Energy
NAR Reserves
|
Reserves Category
|
MBOE
|
MBOE
|
MBOE
|
Total Proved
|
3,392
|
2,938
|
1,654
|
Total Probable
|
2,083
|
1,830
|
1,559
|
Total Proved plus Probable
|
5,475
|
4,768
|
3,213
|
Total Possible
|
2,617
|
2,280
|
1,632
|
Total PPP
|
8,092
|
7,048
|
4,845
|
Brazil
|
May 31, 2014
|
May 31, 2014
|
2013 Year-End
|
BOE
(SEC compliant)
|
Gran Tierra Energy
Company Interest
Reserves
|
Gran Tierra Energy
NAR Reserves
|
Gran Tierra Energy
NAR Reserves
|
Reserves Category
|
MBOE
|
MBOE
|
MBOE
|
Total Proved
|
3,498
|
3,033
|
1,683
|
Total Probable
|
2,077
|
1,839
|
1,601
|
Total Proved plus Probable
|
5,575
|
4,872
|
3,284
|
Total Possible
|
2,633
|
2,303
|
1,688
|
Total PPP
|
8,208
|
7,175
|
4,972
|
2014 Work Program and Capital Expenditure Program
Gran Tierra Energy's planned capital expenditure program for its
exploration and production operations in Colombia, Brazil and Peru for
2014 has been revised to $482 million from $495 million. This includes:
$249 million for Colombia; $37 million for Brazil; $173 million for
Peru; $18 million for Argentina; and $5 million associated with
corporate activities. The capital expenditure program allocates $278
million for drilling, $77 million for facilities, pipelines and other,
$122 million for geological and geophysical expenditures, and $5
million for corporate activities. Of the $278 million allocated to
drilling, approximately 20% is for exploration and the balance is for
appraisal and development drilling. The 2014 work program currently
contemplates the drilling of 12 gross wells in Colombia and two gross
wells in Peru.
Wells of interest in Colombia include the Eslabón Sur Shallow-1 and
Eslabón Sur Deep-1 exploration wells, which are targeting the same
Cretaceous Sandstones encountered in the Costayaco and Moqueta
discoveries and are expected to begin drilling in the third and fourth
quarters of 2014, respectively. The Corunta-1A exploration well is
expected to spud in the third quarter of 2014 and will be drilled in a
northeast direction from the Costayaco-17 well pad targeting a
downthrown fault block west of the Moqueta field. Finally, the
Cabañas-1 exploration well is expected to be drilled in the fourth
quarter of 2014 in the Putumayo-1 Block. This block is immediately
south of the Chaza Block in the Putumayo Basin where Gran Tierra Energy
encountered multiple exploration successes. The Cabañas-1 well is
targeting the same Cretaceous Sandstones encountered in the Costayaco
and Moqueta discoveries.
The approved 2014 capital expenditure program also includes funds for
1,699 km of 2-D and 339 km2 of 3-D seismic acquisition programs in Colombia, Peru, Argentina and
Brazil, primarily in preparation for additional exploration and
production drilling operations in 2014 and beyond. Gran Tierra Energy
expects the 2014 work and capital expenditure program to be funded
primarily from cash on hand and cash flows from operations at current
production and commodity price levels.
Conference Call Information:
Gran Tierra Energy Inc. will host its second quarter 2014 results
conference call on Thursday, August 7, 2014, at 2:00 p.m. Mountain
Time.
President and Chief Executive Officer, Dana Coffield, Chief Operating
Officer, Shane O'Leary, and Chief Financial Officer, James Rozon, will
discuss Gran Tierra Energy's financial and operating results for the
quarter and then take questions from securities analysts and
institutional shareholders.
Interested parties may access the conference call by dialing
1-866-515-2914 (domestic) or 1-617-399-5128 (international), pass code
73684748. The call will also be available via webcast at www.grantierra.com, www.streetevents.com, or www.fulldisclosure.com. The webcast will be available on Gran Tierra Energy's website until
the next earnings call.
For interested parties unable to participate, an audio replay of the
call will be available beginning on August 7, 2014, at 9:00 p.m. MDT
until August 21, 2014 at 9:59 p.m. MDT. To access the replay dial
1-888-286-8010 (domestic) or 1-617-801-6888 (international) pass code
19723523.
Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
join the webcast.
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. is an international oil and gas exploration and
production company, headquartered in Calgary, Canada, incorporated in
the United States, trading on the NYSE MKT (GTE) and the Toronto Stock
Exchange (GTE), and operating in South America. Gran Tierra Energy
holds interests in producing and prospective properties in Colombia,
Peru, and Brazil. Gran Tierra Energy has a strategy that focuses on
establishing a portfolio of producing properties, plus production
enhancement and exploration opportunities to provide a base for future
growth. Additional information concerning Gran Tierra Energy is
available at www.grantierra.com. Investor inquiries may be directed to info@grantierra.com or (403)
265-3221.
Gran Tierra Energy's Securities and Exchange Commission filings are
available on a website maintained by the Securities and Exchange
Commission at http://www.sec.gov and on SEDAR at http://www.sedar.com.
Forward Looking Statements and Legal Advisories:
Readers are cautioned that the well-flow test results disclosed in this
press release are not necessarily indicative of long term performance
or of ultimate recovery.
This news release contains certain forward-looking information,
forward-looking statements and forward-looking financial outlook
(collectively, "forward-looking statements") under the meaning of applicable securities laws, including Canadian
Securities Administrators' National Instrument 51-102 - Continuous Disclosure Obligations and the United States Private Securities Litigation Reform Act of 1995.
The use of the words "expect", "plan", "believe", "anticipate", "will",
"potential", "may", "intend", "continue", "contemplate", "targeting"
derivations of these words and similar expressions are intended to
identify forward-looking statements. In particular, but without
limiting the foregoing, forward-looking statements include statements
regarding: drilling, testing and production expectations, including
without limitation, the timing of operations, the oil-bearing potential
of certain reservoirs and expectations with respect to the results of
drilling, testing and exploration activities; expectations and timing
of the sale of inventory; Gran Tierra Energy's planned capital program
and the allocation of capital, including under the caption '2014 Work
Program and Capital Expenditure Program"; expected funding of the
capital program out of cash flow and cash on hand at current production
and commodity price levels; Gran Tierra Energy's 2014 production
expectations, projections and average production rates including the
anticipated product mix of such production; the potential for
additional oil and reserves in the Bretaña structure; Gran Tierra
Energy's planned operations and the anticipated results of such
operations, including as described under the captions "Colombia",
"Peru" and "Brazil" in the section "Second Quarter 2014 Operational
Highlights"; together with all other statements regarding expected or
planned development, testing, drilling, production, expenditures or
exploration, or that otherwise reflect expected future results or
events.
The forward-looking statements contained in this news release reflect
several material factors and expectations and assumptions of Gran
Tierra Energy including, without limitation, assumptions relating to
log evaluations, that Gran Tierra Energy will continue to conduct its
operations in a manner consistent with past operations, the accuracy of
testing and production results and seismic data, pricing and cost
estimates, the effects of drilling down-dip, the effects of waterflood
and multi-stage fracture stimulation operations, the general
continuance of current or, where applicable, assumed operational,
regulatory and industry conditions and the ability of Gran Tierra
Energy to execute its current business and operational plans in the
manner currently planned. Gran Tierra Energy 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.
The forward-looking statements contained in this news release are
subject to risks, uncertainties and other factors that could cause
actual results or outcomes to differ materially from those contemplated
by the forward-looking statements, including, among others: Gran Tierra
Energy's operations are located in South America where unexpected
problems can arise due to guerilla activity, labour disruptions,
technical difficulties and operational difficulties which may impact
its testing and drilling operations, and the production, transportation
or sale of its products, including the costs thereof; geographic,
political, regulatory and weather conditions can impact testing and
drilling operations and the production, transportation or sale of its
products; the OTA pipeline may continue to experience disruptions and
if further disruptions occur, service at the OTA pipeline may not
continue on the time lines or to the capacity expected by or favorable
to Gran Tierra Energy; attempts to mitigate the effect of disruptions
of the OTA pipeline may not have the impact currently anticipated by
Gran Tierra Energy; waterflood and multi-stage fracture stimulation
operations may not have the impact, including with respect to reserve
recovery improvements, currently anticipated by Gran Tierra Energy;
permits and approvals from regulatory and governmental authorities may
not be received in the manner or on the time lines expected or at all;
and the risk that current global economic and credit market conditions
may impact oil prices and oil consumption more than Gran Tierra Energy
currently predicts, which could cause Gran Tierra Energy to modify its
exploration, drilling and/or construction activities. Although the
current capital spending program of Gran Tierra Energy is based upon
the current expectations of the management of Gran Tierra Energy, there
may be circumstances in which, for unforeseen reasons, a reallocation
of funds may be necessary as may be determined at the discretion of
Gran Tierra Energy and there can be no assurance as at the date of this
press release as to how those funds may be reallocated. Should any one
of a number of issues arise, Gran Tierra Energy may find it necessary
to alter its current business strategy and/or capital spending program.
Accordingly, readers should not place undue reliance on the
forward-looking statements contained herein. Further information on
potential factors that could affect Gran Tierra Energy are included in
risks detailed from time to time in Gran Tierra Energy's Securities and
Exchange Commission filings, including, without limitation, under the
caption "Risk Factors" in Gran Tierra Energy's Quarterly Report on Form
10-Q filed August 6, 2014. These filings are available on a website
maintained by the Securities and Exchange Commission at
http://www.sec.gov and on SEDAR at www.sedar.com. The forward-looking
statements contained herein are expressly qualified in their entirety
by this cautionary statement. The forward-looking statements included
in this press release are made as of the date of this press release and
Gran Tierra Energy 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 securities legislation.
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.
Basis of Presentation of Financial Results:
Gran Tierra Energy's financial results are reported in United States
dollars and prepared in accordance with generally accepted accounting
principles in the United States.
Gran Tierra Energy Inc.
Condensed Consolidated Statements of Operations and Retained Earnings
(Unaudited)
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
REVENUE AND OTHER INCOME
|
|
|
|
|
|
|
|
|
Oil and natural gas sales
|
$
|
147,888
|
|
$
|
150,250
|
|
$
|
298,993
|
|
$
|
336,490
|
|
Interest income
|
638
|
|
324
|
|
1,388
|
|
671
|
|
148,526
|
|
150,574
|
|
300,381
|
|
337,161
|
EXPENSES
|
|
|
|
|
|
|
|
|
Operating
|
25,346
|
|
23,970
|
|
47,212
|
|
56,013
|
|
Depletion, depreciation, accretion and impairment
|
41,937
|
|
55,592
|
|
86,201
|
|
106,054
|
|
General and administrative
|
13,932
|
|
9,090
|
|
26,795
|
|
18,112
|
|
Foreign exchange loss (gain)
|
10,044
|
|
(12,622)
|
|
5,834
|
|
(18,979)
|
|
Financial instruments gain
|
(2,604)
|
|
—
|
|
(5,013)
|
|
—
|
|
Other loss
|
—
|
|
—
|
|
—
|
|
4,400
|
|
88,655
|
|
76,030
|
|
161,029
|
|
165,600
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
59,871
|
|
74,544
|
|
139,352
|
|
171,561
|
|
Income tax expense
|
(28,387)
|
|
(24,960)
|
|
(58,096)
|
|
(61,977)
|
INCOME FROM CONTINUING OPERATIONS
|
31,484
|
|
49,584
|
|
81,256
|
|
109,584
|
|
Loss from discontinued operations, net of income taxes
|
(22,347)
|
|
(1,801)
|
|
(26,990)
|
|
(3,888)
|
NET INCOME AND COMPREHENSIVE INCOME
|
9,137
|
|
47,783
|
|
54,266
|
|
105,696
|
RETAINED EARNINGS, BEGINNING OF PERIOD
|
456,090
|
|
342,586
|
|
410,961
|
|
284,673
|
RETAINED EARNINGS, END OF PERIOD
|
$
|
465,227
|
|
$
|
390,369
|
|
$
|
465,227
|
|
$
|
390,369
|
|
|
|
|
|
|
|
|
INCOME (LOSS) PER SHARE
|
|
|
|
|
|
|
|
BASIC
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
$
|
0.11
|
|
$
|
0.18
|
|
$
|
0.29
|
|
$
|
0.38
|
|
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES
|
(0.08)
|
|
(0.01)
|
|
(0.10)
|
|
(0.01)
|
|
NET INCOME
|
$
|
0.03
|
|
$
|
0.17
|
|
$
|
0.19
|
|
$
|
0.37
|
DILUTED
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
$
|
0.11
|
|
$
|
0.18
|
|
$
|
0.28
|
|
$
|
0.38
|
|
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES
|
(0.08)
|
|
(0.01)
|
|
(0.09)
|
|
(0.01)
|
|
NET INCOME
|
$
|
0.03
|
|
$
|
0.17
|
|
$
|
0.19
|
|
$
|
0.37
|
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC
|
283,773,204
|
|
282,822,383
|
|
283,505,690
|
|
282,482,343
|
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED
|
287,856,959
|
|
285,449,708
|
|
288,338,698
|
|
285,646,763
|
Gran Tierra Energy Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
|
June 30, 2014
|
|
December 31, 2013
|
ASSETS
|
|
|
|
Current Assets
|
|
|
|
|
Cash and cash equivalents
|
$
|
332,359
|
|
$
|
428,800
|
|
Restricted cash
|
855
|
|
1,478
|
|
Accounts receivable
|
111,182
|
|
49,703
|
|
Marketable securities
|
14,251
|
|
—
|
|
Other financial instruments
|
12
|
|
—
|
|
Inventory
|
25,410
|
|
13,725
|
|
Taxes receivable
|
14,998
|
|
9,980
|
|
Prepaids
|
4,362
|
|
6,450
|
|
Deferred tax assets
|
1,364
|
|
2,256
|
Total Current Assets
|
504,793
|
|
512,392
|
|
|
|
|
Oil and Gas Properties (using the full cost method of accounting)
|
|
|
|
|
Proved
|
760,483
|
|
794,069
|
|
Unproved
|
479,075
|
|
456,001
|
Total Oil and Gas Properties
|
1,239,558
|
|
1,250,070
|
|
Other capital assets
|
9,118
|
|
10,102
|
Total Property, Plant and Equipment
|
1,248,676
|
|
1,260,172
|
|
|
|
|
Other Long-Term Assets
|
|
|
|
|
Restricted cash
|
2,571
|
|
2,300
|
|
Deferred tax assets
|
1,438
|
|
1,407
|
|
Taxes receivable
|
10,907
|
|
18,535
|
|
Other long-term assets
|
7,037
|
|
7,163
|
|
Goodwill
|
102,581
|
|
102,581
|
Total Other Long-Term Assets
|
124,534
|
|
131,986
|
Total Assets
|
$
|
1,878,003
|
|
$
|
1,904,550
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
Current Liabilities
|
|
|
|
|
Accounts payable
|
$
|
58,352
|
|
$
|
72,400
|
|
Accrued liabilities
|
98,730
|
|
89,567
|
|
Taxes payable
|
13,455
|
|
102,887
|
|
Deferred tax liabilities
|
1,317
|
|
1,193
|
|
Asset retirement obligation
|
4,895
|
|
518
|
Total Current Liabilities
|
176,749
|
|
266,565
|
|
|
|
|
Long-Term Liabilities
|
|
|
|
|
Deferred tax liabilities
|
179,504
|
|
177,082
|
|
Asset retirement obligation
|
15,206
|
|
21,455
|
|
Other long-term liabilities
|
11,394
|
|
9,540
|
Total Long-Term Liabilities
|
206,104
|
|
208,077
|
|
|
|
|
Shareholders' Equity
|
|
|
|
|
Common Stock (274,821,285 and 272,327,810 shares of Common Stock and
10,395,144 and 10,882,440 exchangeable shares, par value $0.001 per
share,
issued and outstanding as at June 30, 2014, and December 31, 2013,
respectively)
|
10,189
|
|
10,187
|
|
Additional paid in capital
|
1,019,734
|
|
1,008,760
|
|
Retained earnings
|
465,227
|
|
410,961
|
Total Shareholders' Equity
|
1,495,150
|
|
1,429,908
|
Total Liabilities and Shareholders' Equity
|
$
|
1,878,003
|
|
$
|
1,904,550
|
Gran Tierra Energy Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Thousands of U.S. Dollars)
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Operating Activities
|
|
|
|
|
|
|
|
Net income
|
$
|
9,137
|
|
$
|
47,783
|
|
$
|
54,266
|
|
$
|
105,696
|
Adjustments to reconcile net income to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of income taxes
|
22,347
|
|
1,801
|
|
26,990
|
|
3,888
|
|
Depletion, depreciation, accretion and impairment
|
41,937
|
|
55,592
|
|
86,201
|
|
106,054
|
|
Deferred tax expense (recovery)
|
1,419
|
|
(8,213)
|
|
(841)
|
|
(15,715)
|
|
Stock-based compensation
|
1,144
|
|
2,213
|
|
2,624
|
|
4,110
|
|
Unrealized foreign exchange gain
|
8,745
|
|
(11,622)
|
|
4,567
|
|
(18,366)
|
|
Unrealized financial instruments loss (gain)
|
2,058
|
|
—
|
|
(351)
|
|
—
|
|
Equity tax
|
(1,642)
|
|
(1,718)
|
|
(1,642)
|
|
(1,718)
|
|
Other loss
|
—
|
|
—
|
|
—
|
|
4,400
|
Net change in assets and liabilities from operating activities
|
|
|
|
|
|
|
|
|
Accounts receivable and other long-term assets
|
(14,466)
|
|
35,370
|
|
(67,862)
|
|
(780)
|
|
Inventory
|
(8,774)
|
|
1,676
|
|
(9,348)
|
|
13,067
|
|
Prepaids
|
1,091
|
|
566
|
|
1,642
|
|
617
|
|
Accounts payable and accrued and other liabilities
|
26,559
|
|
4,948
|
|
9,747
|
|
(9,083)
|
|
Taxes receivable and payable
|
(95,767)
|
|
5,309
|
|
(77,306)
|
|
37,660
|
Net cash provided by operating activities of continuing
operations
|
(6,212)
|
|
133,705
|
|
28,687
|
|
229,830
|
|
Net cash used in operating activities of discontinued
operations
|
(6,003)
|
|
5,284
|
|
(4,792)
|
|
18,950
|
Net cash provided by operating activities
|
(12,215)
|
|
138,989
|
|
23,895
|
|
248,780
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Decrease (increase) in restricted cash
|
(156)
|
|
(3,462)
|
|
351
|
|
(4,285)
|
|
Additions to property, plant and equipment
|
(90,012)
|
|
(90,258)
|
|
(158,171)
|
|
(169,354)
|
|
Proceeds from sale of Argentina business unit, net of cash
sold and transaction costs
|
42,755
|
|
—
|
|
42,755
|
|
—
|
|
Proceeds from oil and gas properties
|
—
|
|
1,500
|
|
—
|
|
1,500
|
Net cash used in investing activities of continuing
operations
|
(47,413)
|
|
(92,220)
|
|
(115,065)
|
|
(172,139)
|
|
Net cash used in investing activities of discontinued
operations
|
(5,452)
|
|
(2,103)
|
|
(12,384)
|
|
(10,300)
|
Net cash used in investing activities
|
(52,865)
|
|
(94,323)
|
|
(127,449)
|
|
(182,439)
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance of shares of Common Stock
|
6,486
|
|
1,402
|
|
7,113
|
|
3,013
|
Net cash provided by financing activities
|
6,486
|
|
1,402
|
|
7,113
|
|
3,013
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
(58,594)
|
|
46,068
|
|
(96,441)
|
|
69,354
|
Cash and cash equivalents, beginning of period
|
390,953
|
|
235,910
|
|
428,800
|
|
212,624
|
Cash and cash equivalents, end of period
|
$
|
332,359
|
|
$
|
281,978
|
|
$
|
332,359
|
|
$
|
281,978
|
|
|
|
|
|
|
|
|
Cash
|
$
|
300,415
|
|
$
|
279,377
|
|
$
|
300,415
|
|
$
|
279,377
|
Term deposits
|
31,944
|
|
2,601
|
|
31,944
|
|
2,601
|
Cash and cash equivalents, end of period
|
$
|
332,359
|
|
$
|
281,978
|
|
$
|
332,359
|
|
$
|
281,978
|
SOURCE Gran Tierra Energy Inc.