Q4 2023 Gran Tierra Energy Inc Earnings Call
Livia: www.stanton.com Oh, good morning, ladies and gentlemen. Welcome to Gran Tierra Energy's conference call for 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.
Good morning, ladies and gentlemen, welcome to Gran Tierra Energy's conference call for fourth quarter and year end 2023 results.
It was lucky 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-GAF 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. Finally, this earnings call is the property of Gran Tierra Energy Inc. Any copying or rebroadcasting 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.
And initial remarks, we will conduct a question and answer session with securities analysts and institutions.
This won't 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 point advisors and disclaimers with regard to this information and for reconciliations of any non-GAAP measures discussed on today's call.
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. It's.
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 Orion 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.
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'll now turn the call over to Ryan to discuss our financial results. Ryan, please go ahead.
Ryan and Sebastien 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: 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 fund flow from operations and free cash flow. These milestones underscore the quality of our assets and our.
Our unwavering commitment to operational excellence, our focus efforts on asset development have yielded strong performance across various key metrics.
Ryan: 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 46%. Our average cost of each share purchase was $7 per
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 to 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: 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 holders' bonds were exchanged, highlighting the support from bond investors. Subsequent to year-end, Gran Tierra issued an additional $100 million of 9.5% senior secured advertising notes due 2029. 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% in the highest one two 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.
Pending the maturity schedule to better align with expected future cash flows approximately 92% of holders.
Bonds were exchanged highlighted and 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 credit facility, which subsequently was terminated.
Net loss of $6 million in 2023, Gran Tierra achieved a return on average capital employed of 15% showcasing solid performance and capital utilization.
Gran Tierra is capital expenditures, we're 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 pause.
Ryan: 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 expansions 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 EBITDA of close to $400 million.
Indicating substantial operational resilience amid 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 <unk>.
<unk>, partially offset by 7% higher sales volumes and lower transportation discounts in 2023 display.
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 disoriented 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 Gran Tierra is robust operational expertise in the pool.
Tomorrow Basin.
Extra patrols technical knowledge will continue our joint success in the development of our Psoriatic They block.
Ryan: 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 activity. 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 four oil wells in the <unk> and which we are seeing excellent initial production results.
First well cost the Alco 56 has been on production since early January.
<unk> been producing a stable average rate of around 1900 barrels of oil per day, and a 2% water cut.
Our second well costs. The article 57 was spud on January six and brought on production in late January It has been producing at a stable average rate at around 1100 barrels of oil per day, and a 10% water cut.
The third well.
Sebastian Warren: We believe the combination of Gran Tierra's robust operational expertise in the Putumayo Basin and Equipetrol'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 operations. Thanks, Ryan. Good morning, everyone.
Ladies and gentlemen, pardon the interruption.
Disconnected please hold while we reconnect the speaker.
Being drilled and will be followed by the final well accordion narrow $1 28.
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 call him. The oilfield located in the sorry anti block during the later half of the year, we plan to expand the block's production facilities increased.
Sebastian Warren: 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. December 2023.
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, including the drilling of six to nine exploration wells in Colombia, and Ecuador, signifying our dedication to unlocking potential new reserves in <unk>.
Sebastian Warren: 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 spud on January 6th and began production in late January.
Austria 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 was.
Sebastian Warren: It has been producing at a stable average rate of around 1,100 barrels of oil per day and a 10% water cut, and Third Well. Ladies and gentlemen, pardon the interruption; the speaker has been disconnected. 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.
Set the stage for future growth opportunities for the company on.
On January 23rd 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 P, 242% to Pete and 303% three peat.
This also represented the fifth consecutive year that we achieved the one P reserve growth.
These results were driven by success with with development drilling and water flooding resulted in the charge of block, which contains a cost jaco Mckenna fields.
Sebastian Warren: 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 percent 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 in proven basins with established transportation infrastructure.
And this oriented continuation agreement as outlined by Ryan.
During 2023, a combination of our strong reserves growth ongoing reductions in debt and share buybacks allow Gran tierra to achieve net asset values per share before tax of $44 48, 1% up.
288% from 2020.
And $79 13 to peak at 144% from 2020.
With this significant growth in our net asset value 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 Warren: In addition, as part of our 2024 capital program, we are currently in the early phases of execution to acquire 238 km2 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 23rd, 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 with analysts. If you have a question. Please press the star key.
One one on your Touchtone phone.
We will then have an automatic Mr. Johannes suite.
Your question please.
Thank you.
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 cold in the order. They are received please ensure that you lift your handset when you're using a speaker phone before pressing any keys.
One moment please for the first question.
First question is coming from Rodman Rossi with Canaccord Genuity. Your line is open.
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 Costillaco 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.
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.
Just wanted to know what do you mean, no let me highlight dominion.
Thank you.
But at any point.
Yes.
The room.
Rumored you hear me okay.
Yes.
Yes.
Can you can you hear me now.
I can hear you Gary.
Thanks Bill.
<unk>.
Okay, Yes.
Quoted differentials there mostly is just from the quality <unk> and Prestea 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.
The market do you think that's do you think that's changed.
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. Thank you. 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 advising 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.
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.
Your line is open.
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 analyst. If you have any questions, please press STAR, the star key, followed by 1-1, and your touch on your touchtone phone. You will then hear an automated message advising your hand is raised, and your question will be polled in the order it is received. Please ensure that you lift your handset when you are using a speakerphone before pressing any keys.
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.
Thank you.
Sure.
And our next question mainly from the line of Mariana.
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.
All right.
Thanks, Jason.
What would it take.
Pete.
<unk>.
<unk>.
Roman Rossi: The first one is regarding quality and transportation discounts. We saw a 30% increase quarter over quarter. I just wanted to know what the meaning behind the increase is and where you are taking that for 2024. Yeah, I think the room kids. Can you hear me OK?
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 of $80 would put premiums around $3, which is really part of our physical contract.
With the off taker.
We are looking at adding additional puts in for the remainder of the year, where it is in the process of doing that right now.
Speaker: Yep. Can you hear me now? I can hear you, but there is a little echo.
Okay, so that would take.
Speaker: Okay, yeah, with the quality differentials, that's mostly just from the quality. Vasconia and Castilla did indeed 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 effective what we've budgeted for this year. Okay, and do you think that the widening of Venezuela could enter the market, and do you think that that could change if the sanctions are removed in April? You have reached the voice mailbox of, Thank you so much. Uh, sorry, Roman, can you hear me?
Thank you.
Thanks.
Thank you.
Yeah.
Yes, sorry, I missed the question.
Broke up a little bit on this side.
Yeah like it sounds like what are your thoughts.
Production hedged production, yes.
No.
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 that.
Speaker: 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: additional potential crude from Venezuela, as well as, actually three, as well as OPEC starts releasing some of their cuts, we'd expect more of the heavy sours to come to the market, as well as the startup of the TMX line in Canada, which will get more Canadian heavy crude to Tidewater. So it's a combination of those three factors, but it's really no surprise to us, and it Okay, thank you. And one last question regarding OPEX. There was an increase in per barrel efficiency. Is that because of the lower production order, or were additional inflationary or inflationary expressions there?
That's one way another way, we protect the business.
Got it well just one last one from my side.
Hi.
You can comment on your comment on in that market.
Please.
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 average in that $50 million to $100 million range.
Speaker: Yeah, it was just driven by lower production. And so we expect our gross operating costs to be flat or 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 of Arianna Ola, Arianna, is the line 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.
Yes.
Yes.
And our next question gentlemen, common line will come from the line job sector with Joe.
Line is open.
Okay.
Good morning, everyone. This is everywhere.
A challenging call Jos you can call it.
Brian if you could.
<unk>.
Absolutely.
The first question.
Arianna Ola: I believe that there's a bit of an error, but I'm going to try to put it this way. I have two questions. So the first one is regarding your hedge invoices, because there are no hedge invoices that you have. What would it take, or are you planning to do this through the year?
Jim.
You have in your guidance.
All right.
Hi.
And you had a very good very good.
Sure.
You add in the <unk>.
Thank you.
Our success.
Q1 Q3.
Do you get it.
Thanks Harold.
Speaker: Yeah, with respect to hedging, we did have 15,000 barrels hedged with a floor, or we will still have them until the end of Q1. We have 15,000 barrels hedged with a floor of $80 and a put premium of around $3, which is really part of our physical contract with the offtaker. And we're looking at adding additional puts in 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? Yeah, sorry, I missed the question. It broke up a little bit on this side.
Are you expecting them to Asia.
No more abnormal reactor.
The ratio Jonathan that yet.
Jim.
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.
Okay.
How many locations do you have.
Alright.
Thanks.
And sorry, just to clarify that question in which area.
We're talking about the demand.
Speaker: Yeah, like in some, like, what are your thoughts on what are your thoughts on, for example, production hedge, production hedge of the year. Yeah, we'd like to have, you know, looking out six to nine months, we'd like to have 30 to 50% of a hedge, and then after six to nine months, 25% of a hedge on a rolling basis, using puts and really just looking for the downside. And you'll recall, too, that 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 decreased substantially, we'd very quickly cut our capital program.
We'll see.
<unk>.
What I see discovery talk about the south Cristiano, 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.
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.
Speaker: So that's one way, another way we protect capital. www.stanton.com. I got it. Well, just one last one from my side. You can comment on your NSF target for 2024 and how you think of minimum cash, the value of cash, and how this is going to impact cash resources during 2024. Yeah, I think, you know, our guidance out there. We're targeting year-end net EBITDA of 0.8 to 1.2 times. So if 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 and $100 million. 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 $50 to $100 million rate.
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.
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.
Okay.
That's it for me thanks very much.
Very much.
Speaker: Thank you very much, thank you very much. Thank you. Thank you. One moment, please, for our next question. And our next question comes in from the line of Jodh Sector with Jodh Sector. Let us open. Good morning, everyone. This is going to be a challenging call.
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.
Jodh Sector: If it breaks up, Brian, if you could call me later, absolutely. First question. First question. You have already in your guidance 5,000, and you had a very good, you had a very good, you add in the volume of success in Q1, you get a total of 37,000 barrels. Are you expecting deletion in the lower half of the year, with no more exploration?
Again, ladies and gentlemen, pardon disruption as Steve has been disconnected. Please hold on Libre connect speakers.
Ladies and gentlemen, please continue to spend money.
You guys have been disconnected please.
Please hold while we reconnect the speakers.
Its progress.
Yes.
Speaker: Yeah, on that. Yeah, I think 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.
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.
Speaker: And so it's still early days on the wells. So, you know, we'll see how these wells progress over the next couple 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? Sorry, just to clarify that question about which area. We're talking about the Putumayo Basin, where you have the sea.
So you mentioned that 30 something.
Hunter million Tau was used for the credit facility.
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.
Speaker: The CYC Discovery, CYC Discovery. Talk about the south and Costillaco. Yeah, so out of the 147 2P locations that we have, there are still 26 locations identified for Castillaco Moquera, for example.
Facility as you pointed out and the remainder would it be cash on the balance sheet right now.
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.
Speaker: And then at Soriente, we've got an additional 30. That's good. That's good. That's good. 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 at Costillaco in the north.
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.
Speaker: 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. Okay, good. With the flow in the modern space, you're going to have some fun in the past.
Correct, correct, who were repaid and then terminated we are looking at.
Our working capital facility.
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.
Speaker: You've talked about maybe a new area in MENA. You're going to analyze everything and fix the right flow regime. Have you had any thoughts for the new addition, the new addition to the company? Yeah, 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. And so we're always looking for ways to increase the value of the company, but we don't have anything specific on the horizon.
Great. Thank you.
Thank you.
Okay.
Thank you and.
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.
Speaker: Okay, that's it for me. Thanks very much for the successes and the drilling. 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. The speaker has been disconnected.
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: Please hold while we reconnect the speaker. Ladies and gentlemen, please continue to stand by. The speaker has been disconnected
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Okay.
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Operator: Please hold while we reconnect the speakers. Progress, Hello? Yes, because you're now back connected.
Speaker: And we have from Miller Blair, Alexandra, you know, Danny, you'll let yourself... So 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.
Speaker: $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 repaid the committed line, you don't have any available lines at the moment, correct?
Yes.
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Alejandra Andrade: Correct, correct. We repaid it and then terminated it. We are looking at a working capital facility that 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.
Speaker: 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 to our shareholders for their continued support. Thank you. Thank you. Ladies and gentlemen, the Tupac N'Ka conference for today.
Yes.
Yes.
Yes.
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