CALGARY, Alberta, May 17, 2021 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE) (TSX:GTE) (LSE:GTE) today announced an update on the impact of the ongoing national protests in Colombia on the Company’s operations. All production volumes are unaudited and on a working interest before royalties (“WI”) basis and are expressed in barrels of oil per day (“bopd”), unless otherwise stated.
Colombian National Protests and Blockades:
As has been widely reported in the media, there are a number of protests and blockades across Colombia. Several key transportation routes have been blockaded throughout the country, actions which have led to food, fuel and medicine shortages in both urban and rural communities. All Colombian industries have been widely and negatively impacted as mobility is currently very restricted.
The protests initially did not impact the Colombian operations of Gran Tierra and other energy companies. However, in the last few days, blockades of key roads have started to cause the temporary shut-in of some oil wells and oil fields throughout Colombia and are now affecting almost all energy companies in the country.
A National Strike Committee, which includes Government and major union representatives, has been created to foster national dialogue and began meeting last week in order to negotiate an end to the protests and the blockades.
Current Impact on Gran Tierra’s Production:
Road blockades in the Putumayo Basin (the “Putumayo”) and the Middle Magdalena Valley Basin (the “MMV”) have caused Gran Tierra to temporarily reduce oil production from the Company’s operations. Though these blockades are not directed at Gran Tierra, they are currently impeding the Company’s mobilization of supplies, food, water, fuel and oil sales, all of which are necessary for operations.
The Company’s temporary oil production reductions comprise a combination of slowdowns of some oil wells’ production rates, the shut-in of some oil wells in certain fields and the complete shut-in of certain other fields.
As of May 16, 2021, Gran Tierra has shut-in production of approximately 5,250 bopd, leaving the Company’s total current production at approximately 24,350 bopd, down from a recent level prior to the national blockades of about 29,600 bopd.
If the National Strike Committee is successful at negotiating an end to the blockades of key transportation routes, Gran Tierra expects to be able to restore the shut-in production in a matter of one to two weeks.
Assuming a lifting of blockades within the next two weeks, Gran Tierra expects to maintain the Company’s 2021 production guidance of 28,000-30,000 bopd.
However, if the current blockade situation worsens, Gran Tierra may have to shut-in additional production.
No Impact Expected on Gran Tierra’s Oil Reserves:
With the proper and safe shut-in of certain wells and fields in connection with the Company’s temporary oil production reductions, Gran Tierra is confident that production can be resumed efficiently to the same pre-suspension production levels once the blockades are lifted.
Gran Tierra also believes that these temporary shut-ins will not have any negative impact on the Company’s oil reserves.
Gran Tierra’s oil fields have previously demonstrated their resiliency during 2020 when world oil prices crashed. At that time, the Company temporarily shut-in some wells and fields to protect the balance sheet and liquidity.
Those temporary shut-ins in 2020 had no negative impact on Gran Tierra’s oil production capacity and reserves, as clearly demonstrated by the Company’s ability to restore total production to its current capacity of 28,000-30,000 bopd and the Company’s strong 2020 year-end oil reserves replacement.
Costayaco Oil Field (100% WI)
The Company has successfully finished its 2021 development drilling campaign of 3 new oil wells, prior to any impact from the national protests. Currently, none of these 3 wells are on production, but Gran Tierra expects to bring them all on-line by the end of the second quarter of 2021.
As of May 16, 2021, the Costayaco field continues to produce approximately 5,100 bopd.
Moqueta Oil Field (100% WI)
As of May 16, 2021, the Moqueta field continues to produce approximately 2,300 bopd.
Suroriente Block (52% WI and Operator) and PUT-7 Block (100% WI)
Several blockades in the southern Putumayo have caused Gran Tierra to temporarily shut-in the Suroriente and PUT-7 Blocks, representing production of approximately 3,000 bopd and 800 bopd, respectively.
Gran Tierra’s operations team is ready to safely and quickly restore production from these fields once the blockades are lifted.
Acordionero Oil Field (100% WI)
The Company has successfully finished its 2021 development drilling campaign of 11 new oil wells and 2 new water injection wells, prior to any impact from the national protests.
With regional blockades affecting the Company’s ability to transport oil sales to some delivery points, Gran Tierra has temporarily slowed down some wells’ production rates and shut-in certain other wells.
As of May 16, 2021, these temporary actions have reduced Acordionero’s production by 1,300 bopd, from approximately 16,000 bopd to 14,700 bopd.
Gran Tierra’s operations team is ready to safely and quickly restore production from these wells once the blockades are lifted.
Minor Field Operations:
As of May 16, 2021, the Company has also reduced production from its minor fields to approximately 2,250 bopd, down 150 bopd from a recent level prior to the national blockades of about 2,400 bopd.
Message to Shareholders
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "We have successfully completed our 2021 drilling program on time and under budget with excellent results. Assuming a near-term resolution to the blockades, we remain confident that Gran Tierra can safely and efficiently restore the Company’s total oil production to its current productive capacity of 28,000-30,000 bopd, in the matter of several days to a few weeks. We believe our temporary production reductions are only a deferral, not a loss of oil reserves and that the high quality and value of our low-cost and low-decline conventional oil fields remain fully intact."
For investor and media inquiries please contact:
President & Chief Executive Officer
Executive Vice President & Chief Financial Officer
Vice President, Investor Relations
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. together with its subsidiaries is an independent international energy company currently focused on oil and natural gas exploration and production in Colombia and Ecuador. The Company is currently developing its existing portfolio of assets in Colombia and Ecuador and will continue to pursue additional growth opportunities that would further strengthen the Company’s portfolio. The Company’s common stock trades on the NYSE American, the Toronto Stock Exchange and the London Stock Exchange under the ticker symbol GTE. Additional information concerning Gran Tierra is available at www.grantierra.com. Information on the Company’s website (including the Sustainability Report) does not constitute a part of this press release. Investor inquiries may be directed to email@example.com or (403) 265-3221.
Gran Tierra’s Securities and Exchange Commission filings are available on the SEC website at http://www.sec.gov and on SEDAR at http://www.sedar.com and UK regulatory filings are available on the National Storage Mechanism website at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Forward Looking Statements and Legal Advisories:
This press release contains opinions, forecasts, projections, expectations 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"). The use of the words "believe", "expect", "anticipate", "intend", "estimate", "project" "forecast", "guidance", "target", "goal", "plan", "budget" "objective", "could", "should", and other terms identify forward-looking statements. In particular, but without limiting the foregoing, this press release contains forward-looking statements regarding: the Company's 2021 production guidance and ability to restart production quickly. Among the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements in this press release are the timing and extent of the protests and blockades across Colombia and the risk factors detailed from time to time in Gran Tierra's periodic reports filed with the Securities and Exchange Commission, including, without limitation, under the caption "Risk Factors" in Gran Tierra's Annual Report on Form 10-K for the year ended December 31, 2020, many of which are beyond the Company's control. These filings are available on the SEC website at http://www.sec.gov and on SEDAR at www.sedar.com.
The forward-looking statements contained in this press release are based on certain assumptions made by Gran Tierra based on management's experience and other factors believed to be appropriate. Gran Tierra believes these assumptions to be reasonable at this time, but the forward-looking statements are subject to risk and uncertainties, many of which are beyond Gran Tierra's control, which may cause actual results to differ materially from those implied or expressed by the forward looking statements. All forward-looking statements are made as of the date of this press release and the fact that this press release 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.
The estimates of future production set forth in this press release may be considered to be future-oriented financial information or a financial outlook for the purposes of applicable Canadian securities laws. Financial outlook and future-oriented financial information contained in this press release about prospective financial performance, financial position or cash flows are provided to give the reader a better understanding of the potential future performance of the Company in certain areas and are based on assumptions about future events, including economic conditions and proposed courses of action, based on management’s assessment of the relevant information currently available, and to become available in the future. These projections may not be appropriate for other purposes. These projections contain forward-looking statements and are based on a number of material assumptions and factors set out above. Actual results may differ significantly from the projections presented herein. These projections may also be considered to contain future-oriented financial information or a financial outlook. The actual results of Gran Tierra’s operations for any period will likely vary from the amounts set forth in these projections, and such variations may be material. See above for a discussion of the risks that could cause actual results to vary. The future-oriented financial information and financial outlooks contained in this press release have been approved by management as of the date of this press release. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective operational and financial information has been prepared on a reasonable basis, reflecting management’s best estimates and judgments, and represent, to the best of management’s knowledge and opinion, the Company’s expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results.
Presentation of Oil and Gas Information
References to a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. Gran Tierra’s reported production is a mix of light crude oil and medium and heavy crude oil for which there is not a precise breakdown since the Company’s oil sales volumes typically represent blends of more than one type of crude oil. Well test results should be considered as preliminary and not necessarily indicative of long-term performance or of ultimate recovery. Well log interpretations indicating oil and gas accumulations are not necessarily indicative of future production or ultimate recovery. If it is indicated that a pressure transient analysis or well-test interpretation has not been carried out, any data disclosed in that respect should be considered preliminary until such analysis has been completed. References to thickness of “oil pay” or of a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume.