Q3 2025 Gran Tierra Energy Inc Earnings Call

Operator: Good morning, ladies and gentlemen, welcome to Gran Tierra Energy's conference call for Q3 2025 results. My name is Shannon, I will be your coordinator for today. At this time, all participants are on a listen only mode. Following the initial remarks, we will conduct a question and answer session for 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, Friday, 31 October 2025 at 11:00 AM 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 for important advisories and disclaimers with regard to this information and forward re-reconciliations of any non-GAAP measures discussed on today's call.

Speaker #1: At this time, all participants are in listen-only mode. Following the initial remarks, we will conduct a question-and-answer session for securities analysts and institutions.

Speaker #1: 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, Friday, October 31, 2025, at 11:00 AM Eastern Time.

Speaker #1: 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 for important advisories and disclaimers with regard to this information and forward reconciliations of any non-GAAP measures discussed on today's call.

Shannon: Finally, this earnings call is the property of Gran Tierra Energy Inc., and the copying or rebroadcasting of this call is expressly forbidden without the written consent of Gran Tierra Energy Inc. I will now turn the conference call over to Gary Guidry, President and Chief Executive Officer of Gran Tierra Energy Inc. Mr. Guidry, please go ahead. Thank you, Shannon. Good morning and welcome to Gran Tierra Energy Inc.'s third quarter 2025 results conference call. My name is Gary Guidry, Gran Tierra Energy Inc.'s President and Chief Executive Officer, and with me today are Ryan Ellson, our Executive Vice President and Chief Financial Officer, and Sebastien Morin, our Chief Operating Officer. On Thursday, October 30, 2025, we issued a press release that included detailed information about our third quarter 2025 results, which is available on our website.

Operator: Finally, this earnings call is the property of Gran Tierra Energy Inc. Any copying or rebroadcasting of this call is expressly forbidden without the written 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.

Speaker #1: Finally, this earnings call is the property of GRAN TIERRA ENERGY Inc. Any copying or rebroadcasting of this call is expressly forbidden without the written consent of GRAN TIERRA ENERGY.

Speaker #1: I will now turn the conference call over to Gary Guidry, President and Chief Executive Officer of Gran Tierra. Mr. Guidry, please go ahead.

Gary Guidry: Thank you, Shannon. Good morning, and welcome to Gran Tierra's Q3 2025 results conference call. My name is Gary Guidry, Gran Tierra's President and Chief Executive Officer. With me today are Ryan Elson, our Executive Vice President and Chief Financial Officer, and Sebastian Morahan, our Chief Operating Officer. On Thursday, 30 October 2025, we issued a press release that included detailed information about our Q3 2025 results, which is available on our website. Ryan and Sebastian will make a few brief comments. Then we will open the line for questions. I'll now turn the call over to Ryan to discuss our financial results.

Speaker #2: Thank you, Shannon. Good morning and welcome to GRAN TIERRA's third quarter 2025 results conference call. My name is Gary Guidry, GRAN TIERRA's President and Chief Executive Officer, and with me today are Ryan Ellson, our Executive Vice President and Chief Financial Officer, and Sebastien Morin, our Chief Operating Officer.

Speaker #2: On Thursday, October 30, 2025, we issued a press release that included detailed information about our third quarter 2025 results, which is available on our website.

Shannon: Ryan and Sebastien 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. Thanks, Gary. Good morning, everyone. First, I would like to highlight an announcement made last week relating to the prepayment agreement we closed, which represents a new prepayment facility backed by our Ecuadorian crude production. The initial advance will be $150 million, with the potential for another $50 million once our Ecuador acquisition closes and we reach 10,000 BOE per day in Ecuador. It's a four-year structure, priced SOFR plus 3.8%, and includes a three-month grace period on principal before amortizing evenly over the remaining term. Importantly, the commercial terms, or sales price, are an improvement to our previous crude oil sales contract.

Speaker #2: Ryan and Sebastien 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 Elson: Thanks, Gary. Good morning, everyone. First, I would like to highlight the announcement made last week relating to the prepayment agreement we closed, which represents a new prepayment facility backed by our Ecuadorian crude production. The initial advance will be $150 million, with the potential for another $50 million once our Perico Ecuador acquisition closes and we reach 10,000 BOE per day in Ecuador. It's a 4-year structure priced at SOFR plus 3.8% and includes a 3-month grace period on principal before amortizing evenly over the remaining term. Importantly, the commercial terms or sales price are an improvement to our previous crude oil sales contract. Overall, this agreement strengthens our balance sheet and gives us added financial flexibility at a very competitive cost.

Speaker #3: Thanks, Gary. Good morning, everyone. First, I would like to highlight the announcement made last week relating to the prepayment agreement we closed which represents a new prepayment facility backed by our Ecuadorian crude production.

Speaker #3: The initial events will be 150 million, with a potential for another 50 million once our Ecuador acquisition closes and we reach 10,000 BOE per day in Ecuador.

Speaker #3: It's a four-year structure priced at SOFR plus 3.8% and includes a three-month grace period on principal before amortizing evenly over the remaining term. Importantly, the commercial terms or sales price are an improvement to our previous crude oil sales contract.

Shannon: Overall, this agreement strengthens our balance sheet and gives us added financial flexibility at a very competitive cost. In addition, we increased our current facility secured by our Canadian assets to $75 million, an equally important move from a 1.1 structure to a two-year structure with maturity in October 2027. Now on to the quarter. During the third quarter of 2025, Gran Tierra Energy Inc. averaged 42,685 BOE per day. That's up roughly 30% from a year ago, driven by our Canadian acquisition and continued success from our exploration in Ecuador. Production during the quarter was temporarily impacted by unusual and externally driven events across our operations, including a landslide in Ecuador, which impacted the main export pipelines in the country, requiring us to shut in production, and trunk line repairs at the Makeda Fuel Group, which resulted in the field being shut in for the quarter.

Speaker #3: Overall, this agreement strengthens our balance sheet and gives us added financial flexibility at a very competitive cost. In addition, we increased our current facility secured by our Canadian assets to $75 million and, equally important, moved from a 1.1 structure to a two-year structure with maturity in October of 2027.

Ryan Elson: In addition, we increased our current facility secured by our Canadian assets to $75 million and, equally important, moved from a 1.1 structure to a 2-year structure with maturity in October 2027. Now on to the quarter. During Q3 2025, Gran Tierra averaged 42,685 BOE per day. That's up roughly 30% from a year ago, driven by our Canadian acquisition and continued success from our exploration in Ecuador. Production during the quarter was temporarily impacted by unusual and externally driven events across our operations, including a landslide in Ecuador, which impacted the main export pipelines in the country, requiring us to shut in production, and trunk line repairs at the McKenna Field Group, which resulted in the field being shut in for the quarter.

Speaker #3: Now, on to the quarter. During the third quarter of 2025, Gran Tierra averaged 42,685 BOE per day. That's up roughly 30% from a year ago, driven by our Canadian acquisition and continued success from our exploration in Ecuador.

Speaker #3: Production during the quarter was temporarily impacted by unusual and externally driven events across our operations, including a landslide in Ecuador that affected the main export pipelines in the country. This required us to shut in production and perform trunk line repairs at the Makeda Field Group, which resulted in the field being shut in for the quarter.

Shannon: The pipeline repairs took longer than anticipated due to ongoing heavy rains through July and August. All pipelines are restored as of October 10th. We want to emphasize that these volumes represent deferred barrels rather than lost production, and we already are seeing a strong recovery with current production averaging 45,200 BOE per day. Based on the deferrals, we are forecasting the lower end of our production guidance range. The underlying assets continue to perform well, and our teams remain focused on ongoing optimization and maximizing production efficiency and cash flow, with an expected year-end exit rate of 47,000 to 50,000 BOE per day. From a cash perspective, it was a solid quarter where we generated $48 million of operating cash flow, up 39% from Q2. We ended the quarter with $49 million in cash and net debt position of approximately $755 million.

Ryan Elson: The pipeline repairs took longer than anticipated due to ongoing heavy rain through July and August. All pipelines are restored as of 10 October. We want to emphasize that these volumes represent deferred barrels rather than lost production, and we already are seeing a strong recovery with current production averaging 45,200 BOE per day. Based on the deferrals, we are forecasting the lower end of our production guidance range. The underlying assets continue to perform well. Our teams remain focused on ongoing optimization and maximizing production efficiency and cash flow with an expected exit rate to 47,000 to 50,000 BOE per day. From a cash perspective, it was a solid quarter where we generated $48 million of operating cash flow, up 39% from Q2.

Speaker #3: The pipeline repairs took longer than anticipated due to ongoing heavy rains through July and August. All pipelines are restored as of October 10th. We want to emphasize that these volumes represent deferred barrels rather than lost production.

Speaker #3: And we already are seeing a strong recovery with current production averaging 45,200 barrels of oil equivalent per day. Based on the deferrals, we are forecasting the lower end of our production guidance range.

Speaker #3: The underlying assets continue to perform well and our teams remain focused on ongoing optimization and maximizing production efficiency and cash flow. With an expected X-ray to 47,000 to 50,000 BOE per day.

Speaker #3: From a cash perspective, it was a solid quarter where we generated $48 million of operating cash flow, up 39% from Q2. We ended the quarter with $49 million in cash and net deposits of approximately $755 million.

Ryan Elson: We ended the quarter with $49 million in cash and net debt position of approximately $755 million. In terms of pricing, we saw improving differentials across South America, especially with Ecuador, which helped offset some of the impact from temporary facility downtime and pipeline outages. On the capital side, we invested $57 million that focused mainly on high return projects in Colombia, Ecuador, and Canada. Overall, despite some temporary production headwinds this quarter, we're expecting a strong finish to the year, which sets up for a strong 2026. With production already back above 45,200 barrels a day and the added liquidity from our new prepayment agreement and increase and extension of our Canadian credit facility, we're in a great position to finish 2025. The 2025 capital program was primarily focused on fulfilling exploration commitments, which resulted in numerous material discoveries.

Shannon: In terms of pricing, we saw improving differentials across South America, especially in Ecuador, which helped offset some of the impact from temporary facility downtime and pipeline outages. On the capital side, we invested $57 million that focused mainly on high-return projects in Colombia, Ecuador, and Canada. Overall, despite some temporary production headwinds this quarter, we're expecting a strong finish to the year, which sets up for a strong 2026. With production already back above 45,200 barrels a day and the added liquidity from our new prepayment facility and increase and extension of our credit facility, we're in a great position to finish 2025. The 2025 capital program was primarily focused on fulfilling exploration commitments, which resulted in numerous material discoveries. We also invested in facility expansion in Soriente, including Gas to Power, which provides us with sufficient process capacity to increase production in the field and lower costs.

Speaker #3: In terms of pricing, we saw improving differentials across South America, especially in Ecuador, which helped offset some of the impact from temporary facility downtime and pipeline outages.

Speaker #3: On the capital side, we invested 57 million that focused mainly on high return projects in Colombia, Ecuador, and Canada. So overall, despite some temporary production headwinds this quarter, we're expecting a strong finish to the year, which sets up for a strong 2026.

Ryan Elson: We also invested in facility expansion in Sur Oriente, including gas to power, which provides us with sufficient process capacity to increase production in the field and lower costs. With substantially all commitments behind us, the focus turns to free cash flow and deleveraging from our large diversified resource base. We will release our 2026 budget in mid-December, which will include a decrease in capital expenditures and emphasis on free cash flow generation. I'll now turn the call over to Sebastian to discuss some of the highlights of our current operations.

Shannon: With substantially all commitments behind us, the focus turns to free cash flow and deleveraging from our large, diversified resource base. We released our 2026 budget in mid-December, which will include a decrease in capital expenditures and an emphasis on free cash flow generation. I'll now turn the call over to Sebastien to discuss some of the highlights of our current operations. Good morning, everyone, and thank you, Ryan. The third quarter highlighted continued operational strength across our entire portfolio, with solid execution in Ecuador, Colombia, and Canada despite some temporary external challenges.

Sebastian Morahan: Good morning, everyone, and thank you, Ryan. The Q3 highlighted continued operational strength across our entire portfolio, with solid execution in Ecuador, Colombia, and Canada, despite some temporary external challenges. In Ecuador, we had another strong quarter achieving record production greater than 5,000 barrels of oil per day in August and greater than 6,000 barrels of oil per day in early October, with the delivery of the Conejo A-1 exploration well, which was drilled on budget and successfully tested both the Hollin and Basal Tena sands, flowing over 1,300 barrels a day of 26.9 degree API oil under normal natural flow conditions. We plan to re-enter Conejo A-1 later this quarter and install the final completion and selectively test each zone to optimize long-term production. We also recently cased and cemented the Conejo A-2 well, targeting multiple prospective reservoirs, including the Basal Tena and Hollin.

Shannon: In Ecuador, we had another strong quarter, achieving record production greater than 5,000 barrels of oil per day in August and greater than 6,000 barrels of oil per day in early October, with the delivery of the Conejo A1 exploration well, which was drilled on budget and successfully tested both the Hueyén and Basil tenants, flowing over 1,300 barrels a day of 26.9-degree API oil under normal natural flow conditions. We plan to re-enter Conejo A1 later this quarter and install the final completion and selectively test each zone to optimize long-term production. We also recently cased and cemented the Conejo A2 well, targeting multiple prospective reservoirs, including the Basil tenant and Hueyén. The well discovered 41 feet of net reservoir with an average porosity of 14% in the Hueyén formation, suggesting a well-connected reservoir with high deliverability potential over the full Conejo structural trap.

Sebastian Morahan: The well discovered 41 feet of net reservoir with an average porosity of 14% in the Hoyan formation, suggesting a well-connected reservoir with high deliverability potential over the full Conejo structural trap. We also confirmed a new oil discovery at Chinangue One, which was a legacy well drilled in 1990 and suspended in 1992 that we reentered to test the bypass Basal Tena interval. It's currently producing 600 barrels a day on jet pumps and has opened up a new follow-up drilling opportunities on the eastern side of the block. With the delivery of the Conejo A-2 well, Gran Tierra has completed all of the exploration commitments in Ecuador, we are now well-positioned to continue to increase production into the development phase and establish a life and help sustain stable field output. At Cohembe, the waterflood continues to deliver excellent results.

Shannon: In addition, we also confirmed a new oil discovery at Chenangue One, which was a legacy well drilled in 1990 and suspended in 1992 that we re-entered to test the bypass Basil tenant interval. It's currently producing 600 barrels a day on jet pumps and has opened up a new follow-up drilling opportunity on the eastern side of the block. With the delivery of the Conejo A2 well, Gran Tierra Energy Inc. has completed all of the exploration commitments in Ecuador, and we are now well positioned to continue to increase production into the development phase and establish days and help sustain stable field output. At Cohembí, the waterflood continues to deliver excellent results. The production from the northern area has more than doubled, up roughly 135% from 2,800 barrels to 6,700 barrels a day. Total field production recently reached over 9,000 barrels a day, the highest since 2014.

Sebastian Morahan: The production from the northern area has more than doubled, up roughly 135% from 2,800 barrels to 6,700 barrels a day. Total field production recently reached over 9,000 barrels a day, the highest since 2014. We are now executing the final 6-well drilling program to continue to ramp the field production and extend the Cohembe field boundary, including an exploration well to the north as part of the agreed carry program under our contract extension, which we expect to complete by the end of H1 2026. In Canada, we drilled and brought 2 additional lower Montney wells on stream in September, both performing at or above expectations. That brings our 2025 activity at Simonette to 4 gross or 2 net wells.

As Cohen be the water, flood continues to deliver excellent results. The production from the Northern Area has more than doubled up. Roughly 135% from 2,800, barrels to 6,700 barrels a day.

Shannon: We are now executing the final six well drilling programs to continue to ramp the field production and extend the Cohembí field boundary, including an exploration well to the north as part of the agreed carry program under our contract extension, which we expect to complete by the end of the first half of 2026. In Canada, we drilled and brought two additional Lower Montney wells on stream in September, both performing at or above expectation. That brings our 2025 activity at Simonette to four gross or two net wells. Stepping back, what really stands out this quarter is the progress we've made in advancing our technical capabilities and field execution. From the exploration success we had in Ecuador to optimizing mature waterfloods in Colombia and efficiently scaling our Canadian program, our focus remains on disciplined execution and continuous improvement to ensure our assets deliver strong value over time.

Total field production. Recently reached over 9,000 barrels a day, the highest since 2014.

We are now executing the final six well drilling program to continue to ramp the field production and extend the climbing field boundary, including an exploration well to the north, as part of the agreed carry program under our contract extension, which we expect to complete by the end of the first half of 2026.

Sebastian Morahan: Stepping back, what really stands out this quarter is the progress we have made in advancing our technical capabilities and field execution. From the exploration success we had in Ecuador to optimizing mature waterfloods in Colombia and efficiently scaling our Canadian program, our focus remains on disciplined execution and continuous improvement to ensure our assets deliver strong value over time. As Ryan summarized, we had several unplanned production deferrals. Although our average production for the year will be at the lower end of our annual guidance, we will finish the year strong with an expected exit rate between 47,000 and 50,000 barrels of oil per day. I will now turn the call back to the operator, and Gary, Ryan, and I will be happy to take questions. Operator, please go ahead.

In Canada we drilled and brought 2 additional lower Monty Wells on stream in September both performing at or above expectations. That brings our 2025 activity at symonne to 4 Grouse or 2. Net wealth.

Shannon: As Ryan summarized, we had several unplanned production deferrals. Although our average production for the year will be at the lower end of our annual guidance, we'll finish the year strong with an expected exit rate between 47,000 to 50,000 barrels of oil per day. I will now turn the call back to the operator, and Gary, Ryan, and I will be happy to take questions. Operator, please go ahead. Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session for securities analysts. If you have a question, please press the star key followed by 11 on your touch-tone phone. You will then hear an automated message advising your hand is raised. Your questions will be polled in the order they are received. Please ensure you lift the handset if you're using a speakerphone before pressing any keys. One moment, please, for your first question.

Stepping back. What really stands out? This quarter is the progress. We've made in advancing our technical capabilities and field execution, from the exploration success. We had an Ecuador to optimizing mature water floods in Colombia and efficiently scaling. Our comedian program, our Focus remains on discipline execution and continuous Improvement to ensure our assets deliver strong value over time.

As Ryan. Summarized we had several unplanned production deferrals, Although our average production for the year, will be at the lower end of our annual guidance, we'll finish the year strong with an expected exit rate between 4750 and barrels of oil per day.

Operator: Thank you. Our first question comes from the line of David Round with Stifel. Your line is now open.

I will now turn the call back to the operator and Gary, 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 Securities analysts.

If you have a question, please press the star key. Followed by 1 1 on your touchtone phone,

You would then hear an automated message. Advising. Your hand is raised.

Your questions will be pulled in order. They are received

Please ensure you lift, the handset. If you're using a speaker phone before pressing any Keys 1 moment, please for your first question.

Shannon: Our first question comes from the line of David Round with CFO. Your line is now open. Thanks for the presentation, guys. First one, just on Soriente, please. You seem to have seen and experienced a very sudden production response there, I mean, positively. Great to see. Can you just talk about, though, please, just sort of what exactly has happened as that program has been going on over the course of this year? What of the new production is due to new wells? What is waterflood, and how sustainable is it, please? Yes, I'll take that one. In a phasing approach, really, it was the start of injection on the north pattern where we're injecting essentially 5,000 barrels of water per day in that north pattern on Cohembí 25. The other catalyst was well upsized, so we had a few really key workovers.

David Round: Thanks. Thanks for the presentation, guys. First one just on Sur Oriente, please. You seem to have seen and experienced a very sudden production response there. I mean, positively, so great to see. Can you just talk about, though, please, just sort of what exactly has happened as that program has been going on over the course of this year? You know, what of the new production is due to new wells? What is water flood, and how sustainable is it, please?

Our first question comes from the line of David round with steveo. Your line is now open.

Sebastian Morahan: Yeah. I'll take that one. In a phasing approach, really it was the start of injection on the north pattern where we're injecting essentially 5,000 barrels of water per day in that north pattern on Costayaco-25. The other catalyst was well upsized. We had a few really key workovers. The one well just south of the pattern, Costayaco-20, was upsized, and that went from 500 barrels a day gross to over 2,000. That one's included in the north pattern. Now as pressure comes up and we continue to increase our injection, we're seeing some really amazing performance from that sand. Just to recall, those are essentially Darcy sands, so the response is very quick.

Thanks, thanks for the um, presentation guys. Um, first 1 just on on siente, please. You seem to have have seen and experienced a very sudden production response, that, I mean positively. So, so great to see. Can you just talk about that? Please just sort of what exactly has happened. As as that program has been going on over the course of this year. You know, what of the new production is due to the new wells. What is water flood? And how sustainable is it, please.

Shannon: The one well just south of the pattern, Cohembí 20, was upsized, and that went from 500 barrels a day gross to over 2,000. That one's included in the north pattern. Now, as pressure comes up and we continue to increase our injection, we're seeing some really amazing performance from that sand. Just to recall, those are essentially Darcy sands, so the response is very quick. Okay. If I think about the production number you've put out there at the moment, how do we think about that sort of just conceptually going into next year with continual drilling? Is that sort of a base, and we should be looking at higher than that? I think that's extremely fair, what you've just described. That's exactly where we're going. With the extra six wells that we're putting into the field, we expect to continue to increment that production from here.

Yes. So I think that 1, so in in a phasing approach, uh, really it was the start of injection on the North pattern where, where we're injecting essentially 5,000 barrels of water per day in that North pattern on Columbia 25. The other Catalyst was well, upsized. So we had a few really key work overs, the 1, well just south of the pattern can be 20 with upside and that went from 500 barrels a day gross to over 2,000. So that 1's included in the North.

David Round: Okay. If I think about the production number you've put out there at the moment, I mean, how do we think about that sort of just conceptually going into next year with continual drilling? I mean, is that sort of a base and we should be looking at higher than that?

Mark pattern. So now as pressure comes up and we continue to increase our injection, we're seeing some really amazing performance from that send just to just to recall. Those are essentially, Darcy Sands. So the response is very quick.

Sebastian Morahan: I think that's extremely fair what you've just described. That's exactly where we're going. With the extra 6 wells that we're putting into the field, we expect to continue to increment that production from here.

Okay. And then if I think about the production number you've put out there at the moment, I mean, how do we think about that sort of just conceptually going into next year with continual drilling? I mean, it is that sort of a, a base and and we should be looking at high ends and that

Ryan Elson: Production and reserves.

Shannon: Production and reserves. Production and reserves. Okay. Great. Just the second one, please. Just on the prepayment facility, how does that work in terms of availability once the repayments start? Yeah. Effectively, you draw the cash at the beginning, the entire amount, the $150 million, and then just repay those funds over the course of the four years. Okay. Over the course of four years. Is it fairly linear in terms of how? It is. It is. Effectively, every time we do a lifting in Ecuador, we'll pay back a portion of the money borrowed. Perfect. Understood. Thanks, guys. Thanks. Thank you. Our next question comes from the line of Joseph Schachter with SER. Your line is now open. Good morning, guys. A couple of questions for me. Congratulations on getting Ecuador up to 6,000 in October.

Gary Guidry: Production and reserves.

David Round: Okay, great. Just a second one, please. Just, on the prepayment facility, how does that work in terms of availability once the repayments start?

I I think that's extremely Fair. What you just described? That's exactly where we're going. So with the extra 6, Wells that we're putting into the field, we we expect to continue to increment that production from here, production, production and Reserves.

Okay, great. Um, and then just a second one, please, just um, on the prepayment facility.

Ryan Elson: Effectively, you draw the cash at the beginning, the entire amount, the $150, and then just repay those funds over the course of the 4 years.

How does that work in terms of availability once the repayments start?

David Round: Okay. Over the course of 4 years. Is it fairly linear in terms of how?

Yeah, it's so effectively you draw the cash at the beginning, or the entire amount, the the 150, and then just repay those funds over the course of of the 4 years.

Ryan Elson: It is. It is.

David Round: Okay.

Ryan Elson: Effectively, every time we do a lift in Ecuador, we'll pay back a portion of the money borrowed.

David Round: Perfect. Understood. Thanks, guys.

Okay. Over the course of 4 years and is it fairly linear in terms of how easy it is? It is, it is so, it's effectively every time we do a lift in Ecuador, we we'll pay back a portion of the, the money board.

Ryan Elson: Thanks.

Operator: Thank you. Our next question comes from the line of Josef Schachter with SER. Your line is now open.

Perfect understood. Thanks guys.

Thanks.

Josef Schachter: Good morning, guys. Couple questions for me. Congratulations on getting Ecuador up to 6,000 in October. You have on slide 26 of your presentation that the potential could be between 11,000 and 19,000. Does that include the last two wells, which have been very encouraging? So guidance potentially would be to the higher end. The question is, what timeline were you using to get to that? Do you need to put waterflood in? Do you have enough water? Maybe just give me a guidance of how Ecuador grows.

Thank you. Our next question comes from the line of Joseph Shaker. Your line is now open.

Shannon: You have on slide 26 of your presentation that the potential could be between 11,000 and 19,000. Does that include the last two wells, which have been very encouraging? Guidance potentially would be to the higher end. The question is, what timeline were you using to get to that? Do you need to put waterflood in? Do you have enough water? Maybe just give me a guidance of how Ecuador grows. Good morning, Joseph. The answer to your question is the guidance on that slide does not include the Conejo discovery to the northwest. The guidance is based on waterflood of the Basil tenant. We're in a very good position here that we have a water source in the stacked pays that we have in the Hueyen and the T sand. Everything is in place to do that. We're working through the field development plans with the ministry in Ecuador.

Gary Guidry: Good morning, Josef. The answer to your question is, the guidance on that slide does not include the Conejo discovery to the northwest. The guidance is based on waterflood of the Basal Tena. We're in a very good position here that we have a water source in the stacked pays that we have in the Hoyem and the T sands. Everything is in place to do that. We're working through the field development plans with the ministry in Ecuador. Now that we've fulfilled all of our commitments this year on exploration in Ecuador, we're moving to the development phase. That will start occurring next year during 2026.

Good morning guys. Um, couple questions for me. Um, congratulations on, getting Ecuador up to 6,000 in October. Um, you have in on slide 26 of your presentation, that the potential could be between 11 and 19,000. Does that include the the last 2 Wells, which have been very encouraging? Uh, so guidance potentially, uh, would be to the higher end and uh, the question is, what timeline were you using to, to get to that? And do you need to put water flood in? Uh, do you have enough water? Uh, maybe just give me a guidance of how Ecuador grows.

Yeah. Uh, the

Good morning, Joseph. The answer to your question is that the guidance on that slide does not include the Cano, uh, the discovery to the northwest.

And the the guidance is based on water flood of the basil tenna, we're in a very good position here that we have a water source.

Shannon: Now that we've fulfilled all of our commitments this year on exploration in Ecuador, we're moving to the development phase. That will start occurring next year during 2026. The debt issue, of course, seems to be the overhang. The market's reacting today, down to a new 52-week low, disappointingly. Just for the levers, maybe, Ryan. Do we need $75, $80 Brent? Do we need Ecuador over 10,000, 11,000 BOE/day? Do we need some non-core sales of your non-operated assets in Canada? Where do you see getting that debt? Is it debt to one target, something that will happen before the end of the decade? How do you see the levers to get there? That's a great question.

In the, in the Stacked page that we have in the hoyan and the and the T ten. And so everything is in place to do that. We're working through the field development plans with with the ministry and in Ecuador,

Josef Schachter: Okay. The debt issue, it seems to be the overhang, the market's reaction today, you know, down to a new 52-week low disappointingly. You know, just for the levers maybe, Ryan, do we need $75, $80 Brent? Do we need Ecuador over 10,000, 11,000 BOE day? Do we need some non-core sales of your non-operated assets in Canada? Where do you see getting that debt? You know, is the debt to 1 target something that will happen before the end of the decade? How do you see the levers to get there?

and now that we fulfilled, all of our commitments this year on exploration, in Ecuador, we're moving to the development phase and so that that will start occurring uh, next year during 2026

Okay, um, the debt issue if or seems to be the overhang, the Market's reaction today, you know, down to a new 52, low low disappointingly. Um, you know, if just for the levers, maybe Ryan, um,

Ryan Elson: Yeah, no, that's a great question. I think, you know, one of the things we wanted to emphasize in the press release and our opening remarks is now that the exploration commitments and a lot of the Sur Oriente commitments behind us, you know, it really sets us up the stage for generating free cash flow. You know, we're laser focused on generating free cash flow in 2026 and beyond. I think if you, if you look at this year's capital program, there's about $150 million in there between exploration, facility expansion, and gas to power, et cetera. I think with that behind us, when we come out with our budget in, you know, mid-December, you'll see the focus on free cash flow.

Do we need Ecuador over 10,000 11,000, HBU day? Do we need some non-core sales of your non-operated assets in Canada? Where where do you see getting that debt? You know, is that debt to 1 uh Target something that will happen before the end of the decade? And how do you see the levers to get there?

Shannon: I think one of the things we wanted to emphasize in the press release and our open remarks is now with the exploration commitments and a lot of the Soriente commitments behind us, it really sets us up the stage for generating free cash flow. We're laser-focused on generating free cash flow in 2026 and beyond. If you look at this year's capital program, there's about $150 million in there between exploration and facility expansion and gas to power, etc. With that behind us, when we come up with our budget in mid-December, you'll see the focus on free cash flow. We'll continue to look at how to optimize the portfolio as far as asset sales and whatnot, but that will just be incremental deleveraging. Our base plan is deleveraging as much as possible through our base operations.

Ryan Elson: You know, we'll continue to look at how to optimize the portfolio as far as asset sales and whatnot, but that will just be incremental deleveraging. Our, our base plan is deleveraging as much as possible through our base operations.

Josef Schachter: Okay. In some of the cases like the drillers, Precision and Ensign, they kinda gave targets to the market and to investors, we're gonna knock off 100, 150 million, then they brag when they get there. Are you guys gonna be willing to start throwing numbers like that so that people can see guideposts? Yeah, you're heading in the right direction, therefore, your valuation, which is, you know, trading at less than 1 times cash flow in Canadian dollars, and much below your, you know, 1 PDP, you know, 1P reserves that you show in your presentation, the new one at $19.51. Is that the kind of thing where we can show, you know, the debt holders are now giving the equity value to the shareholders, by doing something like that?

Shannon: In some of the cases like the drillers, Precision and Ensign, they kind of gave targets to the market and to investors. We're going to knock off $100 million, $150 million, and then they brag when they get there. Are you guys going to be willing to start throwing numbers like that so that people can see guideposts and, yeah, you're heading in the right direction? Therefore, your valuation, which just traded less than one time's cash flow in Canadian dollars and much below your 1P PD reserves that you show in your presentation, the new one at $19.51 U.S. Is that the kind of thing where we can show the debt holders are now giving the equity value to the shareholders by doing something like that? Absolutely. When we come out with our budget in December, there'll be a clear roadmap. Okay. Super. Looking forward to seeing that.

Yeah, no, that's a great question. And I think, you know, 1 of the things we want to emphasize in, in the press release, and the open remarks is now that the exploration commitments and a lot of the orientation commitments behind us. You know, it really sets us up the stage, we're generating free cash flow. You know, we're laser focused on generating free cash flow in 2026 and Beyond, I think, if you, if you look at this year's Capital program, that's what a $150 $150 million in there between exploration and facility expansion, uh, and gas to power Etc. So I think with that behind us, you, when we come up with our budget in, you know, mid December, you you'll see the the focus on free cash flow, you know, we'll continue to look at how to optimize the the portfolio as far as asset sales and whatnot. But that will just be incremental deleveraging. Our base plan is deleveraging as much as possible through our base operations,

Ryan Elson: Absolutely. When we come out with our budget in December, yeah, there'll be a clear road map.

Okay? And, and some of the cases, like the Drillers, precision and N sign, they kind of gave targets to the market. And to investors, we're going to knock off a 100 150 million, then they brag when they get there. Are you guys going to be willing to start throwing numbers like that? So that people can see guideposts and yeah, you're heading in the right direction, uh, Therefore your valuation which is you know, trading at less than 1 times cash flow and Canadian dollars, uh, and much below your, you know, 1, PPD, you know, 1 P reserves that you show in your presentation, the new 1 at 1951 us, um, is, is that the kind of thing where we can show, um, you know, the debt holders are now giving the equity value to the, to the shareholders, uh, by doing something like that.

Josef Schachter: Okay, super. Looking forward to seeing that. Thanks very much for taking my questions.

Uh, absolutely, when we come out with our, our Budget Inn in 20 in December, and there'll be a clear road map.

Shannon: Thanks very much for taking my questions. Thank you. Gentlemen, there are no further questions at this time. Please continue. Thank you. Shannon. I'd once again like to thank everyone for joining us today. We look forward to speaking with you next quarter and update you on our ongoing progress. Thank you. This concludes today's conference. Thank you for your participation. You may now disconnect.

Ryan Elson: Yeah, thank you.

Okay, so super looking forward to seeing that. Thanks very much for taking my questions.

Operator: Gentlemen, there are no further questions at this time. Please continue.

Thank you.

Gary Guidry: Thank you, Shannon. I'd once again like to thank everyone for joining us today. We look forward to speaking with you next quarter and update you on our ongoing progress. Thank you.

Gentlemen, there are no further questions at this time. Please continue.

Thank you.

Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.

Shannon, I once again like to thank everyone for joining us today. We look forward to speaking with you next quarter and update you. On our ongoing progress, thank you. This conclusion is conference. Thank you for your participation. You may now disconnect