Q4 2023 Gran Tierra Energy Inc Earnings Call
Livia: www.stanton.com Good morning, ladies and gentlemen. Welcome to Gran Tierra Energy's conference call for the fourth quarter and year-end 2023 results. My name is Livia, and I'll be your coordinator for today. At this time, all participants are in a listen-only mode.
Okay.
Yeah.
Good morning, ladies and gentlemen, welcome to Gran Tierra Energy's conference call.
Water and year end 2023 results my.
My name is levy and I'll be your coordinator for today.
At this time all participants are in a listen only mode.
Livia: Following the initial remarks, we will conduct a question and answer session with securities analysts and institutions. Instructions will be provided at that time for you to queue up for your questions. I would like to remind everyone that this conference call is being webcast and recorded today, Tuesday, February 20, 2024, at 11 a.m. Eastern Time. Today's discussion may include certain forward-looking information, oil and gas information, and non-GAP financial measures. Please refer to the earnings and operational update press release we issued yesterday for important advisories and disclaimers with regard to this information and for reconciliations of any non-GAAP measures discussed on today's call.
Following the initial remarks, we will conduct a question and answer session for securities analysts and institutions instructions.
Instructions will be provided at that time for you to queue up for your questions.
I would like to remind everyone that this conference call is being webcast and recorded today Tuesday October 22024 at 11, a M eastern time.
Today's discussion may include certain forward looking information oil and gas information and non-GAAP financial measures.
Please refer to the earnings and operational update press release, we issued yesterday from fund advisors and disclaimers with regard to this information and for reconciliations of any non-GAAP measures discussed on today's call.
Livia: Finally, this earnings call is the property of Gran Tierra Energy Inc. Any copying or re-broadcasting of this call is expressly forbidden without the express consent of Gran Tierra Energy. I will now turn the conference call over to Gary Guidry, President and Chief Executive Officer of Gran Tierra. Mr. Guidry, please go ahead.
Finally, this earnings call is the property of Gran Tierra Energy, Inc.
Any copying or broadcasting this call is expressly forbidden without written consent of Gran Tierra energy.
I will now turn the conference call over to Gary Guidry, President and Chief Executive Officer of Grant Yeah.
Mr. <unk>. Please go ahead.
Gary Guidry: Thank you, operator. Good morning, and welcome to Gran Tierra's fourth quarter and year-end 2023 results conference call. My name is Gary Guidry, Gran Tierra's President and Chief Executive Officer, and with me today are Ryan Elson, our Executive Vice President and Chief Financial Officer, and Sebastian Morin, our Chief Operating Officer. This morning, we issued a press release that included detailed information about our fourth quarter and year-end 2023 results. In addition, Gran Tierra's 2023 annual report on Form 10-K has been filed with EDGAR and is available on our website.
Thank you operator.
Good morning, and welcome to Gran Tierra is fourth quarter and year end 2023 results conference call.
My name is Gary Guidry, Gran Tierra is president and Chief Executive Officer, and with me today are Ryan Nelson, Our executive Vice President and Chief Financial Officer, and Sebastian Morton, Our Chief operating officer.
This morning, we issued a press release that included detailed information about our fourth quarter and year end 2023 results. In addition, Gran Tierra <unk> 2023 annual report on Form 10-K has been filed on Edgar and is available on our website.
Gary Guidry: Ryan and Sebastian will make a few brief comments, and then we will open the line for questions. I will now turn the call over to Ryan to discuss our financial results. Ryan, please go ahead.
Brian It's Sebastian will make a few brief comments and then we will open the line for questions I will now turn the call over to Ryan to discuss our financial results. Brian. Please go ahead.
Ryan Elson: Good morning, everyone. We are delighted to announce that Gran Tierra successfully achieved its targets for 2023 in terms of production, funds flow from operations, and free cash flow. These milestones underscore the quality of our assets and our unwavering commitment to operational excellence. Our focused efforts on asset development have yielded strong performance across various key metrics.
Good morning, everyone.
We're delighted to announce that Gran Tierra successfully achieved its targets for 2023 in terms of production funds flow from operations and free cash flow. These milestones underscore the quality of our assets and our unwavering commitment to operational excellence our focus efforts on asset development have yielded strong performance.
Across various key metrics. Additionally, in 2023, we show cased, our confidence and Gran Tierra is future prospects by repurchasing six 8% of our outstanding shares through our normal course issuer bid or CIP program demonstrate our dedication to creating long term shareholder value. We're currently trading at a discount.
Ryan Elson: Additionally, in 2023, we showcased our confidence in Gran Tierra's future prospects by repurchasing 6.8% of our outstanding shares through our Normal Course Issuer Bid, or NCIB, program, demonstrating our dedication to creating long-term shareholder value. We are currently trading at a discount to our Approved Developed Producing, or PDP, asset value per share by about 46%. Our average cost for each share purchase was $7 per share.
Our proved developed producing or PDP net asset value per share by about 46% of our average cost of each for each share purchase was $7 per share.
Ryan Elson: Our many achievements during the year resulted in year-over-year production growth of 6%, strong reserve replacement ratios well above 100%, and the highest 1P, 2P, and 3P year-end reserves in the company's history. In another major milestone, in 2023, Gran Tierra issued $488 million of new 9.5% senior-secured amortizing notes due 2029 in exchange for its existing notes to improve its balance sheet, reduce overall leverage, and provide additional financial flexibility by extending the maturity schedule to better align with expected future cash flows. Approximately 92% of bond holders' bonds were exchanged, highlighting the support from bond holders. Subsequent to year-end, Gran Tierra issued an additional $100 million of 9.5% senior secured amortizing notes due June 29. The company used a portion of these proceeds to repay $50 million of borrowings outstanding under a current facility, which subsequently was terminated.
Our many achievements.
During the year, resulting year over year production growth of 6% strong reserves replacement ratio was well above 100%.
The highest one P to P and three P yearend reserves in the company's history.
Another major milestone in 2023, Gran Tierra issued $488 million of new nine 5% senior secured amortizing notes due 2029 in exchange for its existing notes to improve our balance sheet reduce overall leverage and provide additional financial flexibility by extending the maturity schedule to bear.
We're aligned with expected future cash flows approximately 92% of holders.
Loans were exchanged highlighting the support from bondholders.
Subsequent to year end, the Gran Tierra issued an additional $100 million of nine 5% senior secured amortizing notes due 2029. The company used a portion of these proceeds to repay $50 million of borrowings outstanding under our current facility, which subsequently was terminated.
Despite a net loss of $6 million in 2023, Gran Tierra achieved a return on average capital employed of 15% showcasing solid performance and capital utilization.
<unk> capital expenditures were at the low end of our guidance at $219 million fully funded by funds flow from operations of $277 million or $8 27 per share, resulting in free cash flow of $58 million or $1 73 per share demonstrating effective financial management and positive.
Ryan Elson: Despite a net loss of $6 million in 2023, Gran Tierra achieved a return on average capital employed of 15%, showcasing solid performance in capital utilization. Gran Tierra's capital expenditures were at the low end of our guidance at $219 million, fully funded by funds flow from operations of $277 million, or $8.27 per share, resulting in free cash flow of $58 million, or $1.73 per share, demonstrating effective financial Although 2023 Adjusted EBITDA decreased by 17%, the company realized Adjusted EBITDA of close to $400 million, indicating substantial operational resilience amid challenges with volatile oil prices. Gran Tierra's net sales for the year were $637 million, compared to $711 million in 2022.
Cash generation.
Although 2023, adjusted EBITDA decreased by 17% the company realized adjusted EBIT.
<unk> $400 million.
Indicating substantial operational resilience and mid challenges with volatile oil prices Gran Tierra has net sales for the year were $637 million compared to $711 million. In 2022. This decrease was primarily driven by a 17% decrease in Brent price at higher cost year Invesco ahead.
Differentials, partially offset by 7% higher sales volumes and lower transportation discounts in 2023.
Despite higher operating expenses 2023 ground youre effectively manage inflationary pressures showcasing the resilience and cost control and maintenance activities.
One final item I would like to highlight was the successful completion of this oriented continuation agreement by securing the continuation Gran Tierra is committed to long term capital projects and development programs with plans of optimizing the oil recovery and value for this oriented block. We believe the combination of Gran Tierra is robust operational expertise in the pool.
Tomorrow Basin.
<unk> technical knowledge will continue our joint success in the development of our Psoriatic They block.
Ryan Elson: This decrease was primarily driven by a 17% decrease in the Brent price and higher Castilla and Vascone differentials, partially offset by 7% higher sales volumes and lower transportation discounts in 2023. Despite a higher operating expense in 2023, Gran Tierra effectively managed inflationary pressures, showcasing resilience in cost control and maintenance activities. One final item I would like to highlight was the successful completion of the Soriente Continuation Agreement. By securing the continuation, Gran Tierra is committed to long-term capital projects and development programs with plans for optimizing oil recovery and value for the Soriente Bloc.
Now I'll turn the call over to Sebastian Warren to discuss some of the highlights of our current operations.
Thanks, Brian Good morning, everyone I'll briefly cover a few operational highlights from today's press release as well as our recent press release regarding 2023 year end reserves.
Operationally, we are building off a successful year in 2023 to start off 2024 on a strong note.
Since December 2023, Gran Tierra has drilled horizontal wells and the cost the agco field in which we are seeing excellent initial production results.
First well cost Jaco 56 has been on production since early January.
<unk> been producing at stable average rate of around 1900 barrels of oil per day, and a 2% water cut.
Our second well cost Jaco 57 was spud on January six and brought on production in late January It has been producing at a stable average rate of around 1100 barrels of oil per day, and a 10% water cut.
The third well.
Ladies and gentlemen, pardon the interruption speaker has disconnected please hold while we reconnect the speaker.
Sebastian Morin: We believe the combination of Gran Tierra's robust operational expertise in the Putumayo Basin and Equipatrol's technical knowledge will continue our joint success in the development of our Soriente Bloc. I'll now turn the call over to Sebastian Warren to discuss some of the highlights of our current operation. Thanks, Ryan. Good morning, everyone.
Being drilled and will be followed by the final well accordion narrow 128.
All wells from this development program are expected to be drilled completed and on production before the end of the first quarter of the year.
Back down in the southern Putumayo Basin Gran Tierra intends to commence development drilling in the hem B oilfield located in the <unk> block during the later half of the year.
Operator: I'll briefly cover a few operational highlights from today's press release, as well as our recent press release regarding 2023 year-end reserves. Operationally, we are building off a successful year in 2023 to start off 2024 on a strong note. Since December 2023, Gran Tierra has drilled four oil wells in the Cossiacal Field where we are seeing excellent initial production results. The first well, Casiaco 56, has been on production since early January and has been producing a stable average rate of around 1,900 barrels of oil per day and a 2% water cut. The second well, Casiaco 57, was spudded on January 6th and brought on production in late January. It has been producing at a stable average rate of around 1,100 barrels of oil per day and a 10% water cut. The third well. Ladies and gentlemen, pardon the interruption. The speaker has been disconnected.
We plan to expand the block's production facilities.
Increased gas power generation construct new development, well pads and make social investments in the area all with the goal of substantial production growth in 2025 and 2026.
From an exploration perspective around 40% to 45% of Gran Tierra is 2024 capital program will target high impact near field and low risk exploration activities.
<unk> the drilling of six to nine exploration wells in Colombia and Ecuador.
Defining our dedication to unlocking potential new reserves and fostering sustainable production growth.
Building on promising results from the 2022 exploration program, we plan to focus on short cycle time prospects in proven basins with established transportation infrastructure.
In addition, as part of our 2024 capital program. We are currently in the early phases of execution to acquire 238 kilometer square a three D seismic over the trap of blocking Ecuador and to pre invest in advancing drilling licenses building pads for the 2025 exploration program in Colombia, and Ecuador, which will.
Set the stage for future growth opportunities for the company on.
Sebastian Morin: Please hold while we reconnect the speaker, being drilled and will be followed by the final well, Accordionero 128. All wells from this development program are expected to be drilled, completed, and on production before the end of the first quarter of the year. Back down in the southern Putumayo Basin, Gran Tierra intends to commence development drilling in the Cohimbe oil field located in the Soriente block during the latter half of the year.
On January 23, 2024, we were pleased to release, our 2023 year end Reserve report as evaluated by Mcdaniel.
2023 saw the highest year end reserves in our company's history.
90 million barrels of oil equivalent one P $147 million a barrel of oil equivalent to P and 207 million barrels of oil equivalent Threep and we achieved excellent reserve replacement of 154%, one Pete 242% to Pete and 303% three peat.
This also represented the fifth consecutive year that we achieved a one P reserve growth.
Sebastian Morin: We plan to expand the block's production facilities, increase gas power generation, construct new development well pads, and make social investments in the area, all with the goal of substantial production growth in 2025 and 2026. From an exploration perspective, around 40 to 45% of Gran Tierra's 2024 capital program will target high-impact, near-field, and low-risk exploration activities, including the drilling of six to nine exploration wells in Colombia and Ecuador, signifying our dedication to unlocking potential new reserves and fostering sustainable production growth. Building on promising results from the 2022 exploration program, we plan to focus on short cycle time prospects and proven basins with established transportation infrastructure.
These results were driven by success with with development drilling and water flooding resulted in the charge of block, which contains the cost Jaco Mckenna fields.
And disoriented continuation agreement as outlined by Ryan.
During 2023, a combination of our strong reserves growth ongoing reductions in debt and share buybacks allowed Gran tierra to achieve net asset values per share before tax of $44 48, 1% up.
288% from 2020.
And $79 in 13th to peak at 144% from 2020.
With this significant growth in our net asset values per share over the last three years, we believe Gran Tierra is well positioned to offer exceptional long term stakeholder value.
The success, we achieved in 2023 also reflects our ongoing conversion of reserves from the probable the proved category.
With 147 booked proved plus probable undeveloped future drilling locations Gran Tierra is well positioned to continue to grow the company's production and reserves in 2024 and beyond.
Sebastian Morin: In addition, as part of our 2024 capital program, we are currently in the early phases of execution to acquire 238 kilometers of 3D seismic over the Chirrapa block in Ecuador and to pre-invest in advancing drilling licenses, building pads for the 2025 exploration program in Colombia and Ecuador, which will set the stage for future growth opportunities for the company. On January 23, 2024, we were pleased to release our 2023 year-end reserve report as evaluated by McDaniel. 2023 saw the highest year-end reserves in our company's history. 90 million barrels of oil equivalent 1P, 147 million barrels of oil equivalent 2P, and 207 million barrels of oil equivalent 3P.
I will now turn the call back to the operator, and Gary and Ryan and I will be happy to take questions. Operator. Please go ahead.
Thank you, ladies and gentlemen, we will now conduct a question and answer session for Securities analysts. If you have a question. Please press the star Keith.
One one on your Touchtone phone.
We will then have an automatic Mr. Johannes suite.
Your question please.
Thank you Steve.
Please please you can lift the handset if youre using a speakerphone before pressing any keys.
One moment. Please for your first of month of January.
Operator.
One moment for your first question.
Okay.
Thank you, ladies and gentlemen, we will now conduct a question and answer that the securities analyst. We have any questions. Please press star Starkey followed by one one.
Can you touch on your Touchtone phone.
You will then hear an automated message advising your hand is raise your question we'll be pulled in the order. They are received please ensure that you lift your handset when you're using a speaker phone before pressing any keys.
Operator: And we achieved excellent reserve replacement of 154% 1P, 42% 2P, and 303% 3P. This also represented the fifth consecutive year that we achieved 1P reserve growth. These results were driven by success with development, drilling, and water flooding results in the Chaza block, which contains the Cosillaco and Moqueta fields, and the Soriente Continuation Agreement, as outlined by Ryan. During 2023, a combination of our strong reserve growth, ongoing reductions in debt, and share buybacks allowed Gran Tierra to achieve net asset values per share before tax of $44.48 1p, up With this significant growth in our net asset values per share over the last three years, we believe Gran Tierra is well positioned to offer exceptional long-term stakeholder value.
One moment please for the first question.
First question is coming from Rodman Rossi with Canaccord Genuity. Your line is open.
Thank you.
Good morning, and thanks for taking my questions.
Hi, I have a couple.
Tango one by one.
The first one is regarding liquidity in transportation discount CCP.
The first one.
So we still have 30%, 30% in one of our core.
Good morning.
Let me highlight Dominion.
Thank you.
But at any point.
Yes.
The room.
Rami do you hear me okay.
Yes.
Yes.
Can you can you hear me now.
I can hear you Gary.
Thanks Bill.
Echo.
Okay, Yes.
Quoted differentials there mostly is just from the quality <unk> and casino did widen during the fourth quarter and so we have seen that fairly consistent into Q1, there hasnt been a substantial change from Q1 to Q4.
Currently the Chrystia differentials around $9 and Invesco news around $5, which is effectively what we budgeted for this year.
Okay, and do you think that the widening.
Well, thank you Andrew and turning that Michael.
Operator: The success we achieved in 2023 also reflects our ongoing conversion of reserves from the probable to the proved category. With 147 booked, approved, plus probable undeveloped future drilling locations, Gran Tierra is well positioned to continue to grow the company's production and reserves in 2024 and beyond. I will now turn the call back to the operator, and Gary and Ryan, and I will be happy to take questions. Operator, please go ahead. Ladies and gentlemen, we will now conduct a question and answer session for the security panelists. If you have a question, please press the star key followed by 1-1 on your touch-tone phone. You will then hear an automatic message stating that your hand is raised. Your questions will be called when you are ready to proceed. Please ensure you lift the handset if you are using a speakerphone before pressing any keys.
The market do you think that's do you think that's changed.
In the United States.
Got you.
You have reached the voice mailbox.
Okay.
So you're going to get can you give me I think the question was.
As a result of Venezuela, yes, that's part of I think there is two issues is Venezuela.
Total potential crude from Venezuela, as well as actually three as well as as OPEC.
Search releasing some of their cuts we expect more of the heavy sours coming to the market as well as the startup of the <unk> line.
In Canada, which will get more Canadian heavy crude to tidewater. So its combination of those three factors, but it's there's really no surprise to us is right around in our budgeted numbers.
Okay. Thank you and one last question regarding Opex.
There was a bomb that increase.
Yes.
Got it.
That's helpful.
Oh well production.
Alright.
In patients.
H E R.
Sure.
Yes.
Just driven by the lower production.
Operator: One moment, please, for your first question. Operator. One moment for our first question. Okay, well, we'll proceed. Thank you, ladies and gentlemen, and we'll now conduct a question and answer session with the securities analysts. If you have any questions, please press star, the star key, followed by 1-1. And then you touch on your touchtone phone.
And so we expect our our gross operating cost.
<unk> flat to come down slightly in 2024, coupled with increased production. So we expect our per unit cost to drop.
Okay. Thank you very much thank.
Thank you very much thank.
Thank you.
Okay.
Thank you.
Our next mine.
Question.
Yes.
Sure.
And our next question mainly from the line of Mariana.
Operator: You will then hear an automated message advising your hand is raised. Your question will be polled in the order it is received. Please ensure that you lift your handset when you're using a speakerphone before pressing any keys.
Your line is now open your line is open.
Hi, this is <unk>.
Hi.
I believe that Theres, a beat includes against will be sustainable.
With Ingram.
I'm going to try to put I have two questions.
Roman Rossi: One moment, please, for the first question. The first question comes from Roman Rossi with Canaccord Genuity. Your line is open. Good morning and thanks for taking my questions. I have a couple, if I can go one by one.
Nick.
So the first one is regarding your guidance.
Okay.
Thank you Ed.
What would it take.
Yes.
Pete.
Yeah.
Either.
Yes, with respect to hedging knew who we did have 15000 barrels hedged with a floor or we do still actually until the end of Q1, we had 15000 barrels hedged with a floor.
Roman Rossi: The first one is regarding quality and transportation discounts in the 4th quarter. So, we saw a 30% increase in the 4th quarter. I just wanted to know what the reason behind this increase is and where you take that for 2024. Yeah, I think the room. Can you hear me okay?
Floor of $80 would put premiums around $3, which is really part of our physical contracts with the <unk>.
Ill figure.
We're looking at adding additional puts in for the remainder of the year.
Orders in the process of doing that right now.
Okay, so that would take.
Ryan Elson: Yep. Yeah. Can you hear me now? I can hear you, but there is a little echo. Okay, yeah, with the quality differentials, it's mostly just from the quality.
Thank you.
Thanks.
For production.
Please.
Yes, sorry, I missed the question broke up a little bit on this side.
Ryan Elson: Vasconia and Castilla did widen during the fourth quarter, and so we have seen that fairly consistent into Q1. There hasn't been a substantial change from Q1 to Q4. Currently, the Castilla differential is around $9, and Vasconia is around $5, which is effectively what we budgeted for this year. Do you think that the widening of Venezuela could enter the market? Do you think that that could change if the sanctions are removed in April? Sorry, Roman, can you hear me?
Yeah like it sounds like.
Your thoughts.
Production hedged.
Yes.
Ian.
Yes, we'd like to have.
Looking out six to nine months wed like to have 30% to 50% hedged and then after six to nine months, 25% hedge on a rolling basis.
Using puts and Android is looking for further downside protection.
And you recall too is one of the things we have is a very strong operational hedge given that we operate all of our production. So we have a lot of flexibility on our capital expenditures to the extent that prices were decreases substantially we very quickly cut our capital program. So.
Ryan Elson: I think the question was, you know, is it a result of Venezuela? Yes, that's part of it. I think there are two issues: Venezuela, additional potential crude from Venezuela, as well as, actually three, as well as OPEC starts releasing some of their cuts. We would expect more of the heavy sours to come to the market, as well as the start of the TMX line in Canada, which will get more Canadian heavy crude to Tidewater. So I think it's a combination of those three factors, but it's really no surprise to us, and it's right around in our budget number. Okay, thank you. And one last question regarding OPEC. There was an increase among the petro-barbarians. Is that because of the lower production order, or were there additional inflationary or inflationary expressions there?
Thats one way another way, we protect the business.
Got it well just one last one from my side.
Sure.
You can comment on your comments on that.
Alright.
You can hot.
Okay minimum cash value.
Okay.
Okay.
Thanks Anthony.
Alright.
Yes, I think.
Our guidance out there we're targeting year end net debt to EBITDA of <unk> eight to one two times. So we take the one times, which is fairly consistent with what we've had in the past as a target we continue to target that and we'd like to have.
Cash on the balance sheet of anywhere between $50 million to $100 million and that will fluctuate throughout the year, just with payments to governments capital program et cetera, but over the course of the year, we expect the average in that $50 million to $100 million range.
Ryan Elson: Yeah, it was just driven by the lower production. We expect our gross operating cost to be flat to come down slightly in 2024, coupled with increased production, so we expect the per-unit cost to drop. Okay, thank you very much. Thank you very much. Thank you. Thank you. And our next question coming from the line up, Brianna, Brianna, the line is open. Hi, this is Oriana with balance.
Okay.
Okay. Thank you very much thank you.
Thank you.
Thank you one moment. Please for our next question our next question.
And our next question gentlemen, common line will come from the line job sector with Joe.
Line is open.
Open.
Good morning, everyone. This is good evening, everyone. This is going to be.
A challenging call Jos you can call it.
Oriana: I believe that there's a bit of an error, but I'm going to try to put it, I have two questions, so the first one is regarding your question, what would it take for a year? Yeah, with respect to hedging, we did have 15,000 barrels hedged with a floor, or we will still have it until the end of Q1. We have 15,000 barrels hedged with a floor of $80 and the put premiums around $3, which is really part of our physical contract with the offtaker. We are looking at adding additional puts for the remainder of the year. We're just in the process of doing that right now. So that would take, are you thinking in terms of your energy involvement in terms of production?
Brian if you could.
<unk>.
Absolutely.
First question.
Question.
You have in your guidance.
All right.
Hi.
And you had a very good very good.
If.
You add in the <unk>.
Thank you.
Our success.
Q1 Q3.
Do you get it.
Thanks Harold.
Are you expecting them to Asia.
No more abnormal reactor.
The ratio Jonathan that yet.
Ken.
Yes on that.
I think it's the production is there cost jaco wells have done.
<unk> exceeded our expectations and that's one reason why we give a range and so it's still early days on the wells. So we will see how these wells progresso over the next couple of quarters before providing additional guidance, but we're still comfortable with the range right now.
Ryan Elson: Yeah, sorry, I missed the question. It broke up a little bit on this side. Yeah, like, in some ways, what are your thoughts on what are your thoughts on production hedge production here? Looking out six to nine months, we'd like to have 30% to 50% hedge. And then, after six to nine months, a 25% hedge on a rolling basis, using puts and really just looking for the downside. One of the things we have is a very strong operational hedge, given that we operate all of our production. We have a lot of flexibility in our capital expenditures. To the extent that prices have decreased substantially, we very quickly cut our capital program.
Okay.
How many locations you have.
Alright.
Thanks.
And sorry, just to clarify that question in which area.
We're talking about the demand.
We'll see.
<unk>.
What I see discovery talked about the south cluster Jaco, yes, so out of the 147 <unk> locations that we have.
There is still.
26 locations identified for <unk> for example, and then it's oriented we've got an additional 30.
Okay.
Ryan Elson: That's another way we protect www.stanton.com. Got it. Well, just one last one from my side. You can comment on your NCEP targets for 2024 and how you're looking for minimum cash, the value of NCEP, and how this is going to affect the cash industry during 2024. I think our guidance out there, we're targeting year-end net EBITDA of 0.8 to 1.2 times. So if we take the 1 times, which is fairly consistent with what we've had in the past as a target, we continue to target that. And we'd like to have cash on the balance here of anywhere between $50M and $100M. And that will fluctuate throughout the year, just with payments to governments, capital programs, etc. But over the course of the year, we expect to average in that $50M to $100M range.
That's good.
Okay. Okay.
Okay.
One of the one of the things Joseph one of the things that <unk>.
Sebastian and the team are looking at on coastal Jaco.
Got some very good results with our reservoir modeling and targeting and swept areas Thats whats out performing at post the Apple in the North we have another area in the southern part of the reservoir along strike.
That we're going to try to target. This year. So that's why we're excited about because the outflow.
Okay great.
Last one just one last one.
One out of me.
With the flow.
And then Laurie.
Mark.
You may have.
The map.
Sure.
You've talked about maybe you talked about it.
In Maine.
Annualized everything in Greek wagon right will redeem.
Okay.
Or if you are then.
You add the new App.
Thank you.
Oriana: Thank you very much. Thank you very much. Thank you. Thank you. One moment, please, for our next question. And our next question comes from the line of Shield Sector with Air Inc., let us open. www.stanton.com Good morning, everyone. This is going to be a challenging call.
Tony.
Yes.
The answer to that is that we are always looking for opportunity. We don't see anything specific at the moment, but our our business development initiatives are all long term and so we were looking.
Always for ways to increase value of the company, but we don't have anything specific on the horizon.
Shield Sector: If it breaks up, Brian, if you could call me later. First question: you have in your guidance, already in your guidance, $5,000. And you had a very good, you had a very good, you add up the volume of success in Q1, you get 37,000 barrels. Are you expecting depletion in the lower half of the year, no more exploration? Yeah, on that, I think it's, you know, the production is, you know, the Kosiako wells have done, you know, exceeded our expectations. And that's one reason why we give a range.
Okay.
That's it for me thanks very much.
Very much.
With the success.
Drilling.
Average drilling.
Good luck.
Okay.
Thank you.
Okay.
Thank you one moment please for our next.
Our next question.
Okay.
Sure.
Okay.
Ladies and gentlemen, please standby one the speakers reconnect.
Okay.
Again, ladies and gentlemen, pardon disruption as Steve has been disconnected. Please hold on Libre connect speakers.
Sebastian Morin: And so it's still early days on the wells. So, you know, we'll see how these wells progress. So, we'll wait for a couple of quarters before providing additional guidance, but we're still comfortable with the range right now. How many locations do you still have in the area for drilling? Just to clarify that question, in which area? We're talking about the Putumayo Basin, where you have the... The CYC Discovery, CYC Discovery Center.
Ladies and gentlemen, please continue to spend money.
You guys have been disconnected please.
Please hold while we reconnect our speakers.
Its progress.
Yes.
Hello.
Yes speakers or nonbank connected.
We have a question from William Blair Alexandra Shimon.
Danny you line is open.
Hi, Thanks for taking my question.
So you mentioned that 30 something.
Hunter million Tau was used for the credit facility.
Sebastian Morin: Talk about the South and Costiaco. Yeah, so out of the 147 2P locations that we have, there are still 26 locations identified for Casiaco, Moquera, for example.
Where it will be the balance skus.
Yeah on these are out of the $100 million of net proceeds were around $88 million 35 went to repay the.
Facility as you pointed out and the remainder would it be cash on the balance sheet right now.
Sebastian Morin: And then at Soriente, we've got an additional 30. That's good. That's good. Okay. Well, one of the things, Joseph, one of the things that Sebastian and the team are looking at on Costillaco, we've got some very good results with our reservoir modeling and targeting unswept areas. That's what's outperforming Costillaco in the north.
Okay. Thank you.
Thank you.
Thank you one moment please for our next question.
Okay.
And our next question coming from the line of Alexandra <unk> with J P. M. Your line is open.
Gary Guidry: We have another area in the southern part of the reservoir along Stripe that we're going to try to target this year. So that's why we're excited about Costillaco. One last one for me. With the flow in the market, you're going to have some fun. In the past, you've talked about maybe a new area in MENA to analyze everything and fix the right fuel regime. Have you had any talks to secure the new addition? Do you care enough about the company to do that?
Hi, Thanks for taking the question just a quick one for me confirming that after you repaid the committed line you don't have any.
Available lines.
At the moment correct.
Correct, correct, who were repaid and terminated we are looking at.
Our working capital facility.
Gary Guidry: The answer to that is that we are always looking for opportunities. We don't see anything specific at the moment, but our business development initiatives are all long-term. We're always looking for ways to increase the value of the company, but we don't have anything specific on the horizon.
Which coincide better with.
With the business and some of the ebbs and flows of our cash outflows and inflows, but right now we have not been in place and where we're comfortable just with our our free cash flow and cash on the balance sheet.
Great. Thank you.
Thank you.
Shield Sector: That's it for me. Thanks very much. That's it for me.
Okay.
Thank you and.
Operator: Thanks very much. Thank you. Thank you. One moment, please, for our next call. Ladies and gentlemen, please stand by while the speakers reconnect. Again, ladies and gentlemen, pardon the interruption. Our speaker has been disconnected. Please hold while we reconnect the speaker. Ladies and gentlemen, please continue to stand by. Hello.
Gentlemen, there are no further questions at this time please continue.
Thank you to everyone for joining us today, we look forward to speaking with you over the next quarter and update you on our ongoing progress.
I would like to thank the entire Gran Tierra team for their hard work in 2023, the fantastic results and to our shareholders for their continued support.
Thank you.
Okay.
Thank you, ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.
Operator: Yes, because you're now back connected. We have a question from Will and Blair, Alexandra Simondini, and Yolanda Salter. Hi, thanks for... You mentioned that $36 million of the $100 million was used for the grid facility. Where will the balance be? Yeah, so out of the $100 million, the net proceeds were around $88 million.
[music].
Alexandra Simondini: $35 million went to repay the facility, as you pointed out, and the remainder would be cash on the balance sheet right now. Thank you. Thank you. One moment, please, for our next question. And our next question comes from the line of Alejandra Andrade with GPM. Your line is open. Hi, thanks for taking the question. Just a quick one for me. Confirming that after you have repaid the committed line, you don't have any available lines. At the moment, correct.
Ryan Elson: Correct. We repaid it and then terminated it. We are looking at a working capital facility which coincides better with the business and some of the ebbs and flows of our cash outflows and inflows, but right now, we have nothing in place, and we're comfortable just with our free cash flow and cash on the balance sheet.
Yes.
Okay.
[music].
Alejandra Andrade: Great, thank you. Thank you. Thank you. And, gentlemen, there are no further questions at this time. Please continue.
Gary Guidry: Thank you everyone for joining us today. We look forward to speaking with you over the next quarter and updating you on our ongoing progress. I would like to thank the entire Gran Tierra team for their hard work in 2023, the fantastic results, and our shareholders for their continued support.
Gary Guidry: Thank you. Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.
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