Nov. 6, 2009 (PR Newswire) -- Record Quarterly Production of 12,945 Barrels of Oil Per Day, Net After Royalty, Attained
CALGARY, Nov. 6 /PRNewswire-FirstCall/ - Gran Tierra Energy Inc. (NYSE Amex: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today announced financial and operating results for the quarter ended September 30, 2009. All dollar amounts are in United States dollars (unless otherwise indicated.
Key highlights of the quarter ended September 30, 2009 include:
- Increased production 209% to 12,945 barrels of oil per day (BOPD) net
after royalty (NAR) for the quarter ended September 30, 2009,
compared with 4,194 BOPD NAR for the same period in 2008;
- Reached daily production plateau target of 19,000 BOPD gross for the
Costayaco field at the end of August, ahead of schedule. In addition,
the Costayaco gross field production reached five million cumulative
barrels of oil on September 10, 2009 triggering an increase in
government royalties for Costayaco;
- Net loss for the quarter was $2.8 million and includes a foreign
exchange loss of $18.9 million, due to a 20.3 million unrealized
non-cash foreign exchange loss, offset in part by a realized foreign
exchange gain of $1.4 million;
- Funds flow from operations for the quarter was $53.1 million compared
with $17.8 million for the same period in 2008 (see table below);
- Ecopetrol's Trans-Andean oil pipeline in Southern Colombia was
disrupted between July 10, 2009 and August 10, 2009; consolidated
production averaged 4,700 BOPD NAR during this period;
- Costayaco-9 logging indicates that reservoirs lie completely within
the field's oil column; the well was subsequently tested and put on
production at approximately 2,000 BOPD gross from the lower
(Caballos) of two reservoirs;
- Gran Tierra Energy opened an office in Brazil and appointed Julio
Cesar Moreira as President of the Brazil business unit;
- Cash and cash equivalents of $151.6 million at September 30, 2009;
and
- Gran Tierra Energy remains debt free.
"During the third quarter we executed our exploration and development program and grew production to record levels in spite of a period of reduced production due to a disruption in Ecopetrol's pipeline system. In addition, we achieved our daily production target of 19,000 BOPD gross from the Costayaco field ahead of schedule, and generated strong funds flow from operations in both Colombia and Argentina," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. "With a strong balance sheet and consistent funds flow from operations, we are positioned to support future growth and fund our ongoing development and exploration program, including an extensive exploration drilling campaign in Colombia and Peru beginning in late 2009 and continuing through 2010. We are expanding our South American operations into Brazil to increase our access to material exploration opportunities and to leverage our operating capabilities in a country in which our senior management already has extensive experience."
Production Review
Three Months Ended Three Months Ended
September 30, 2009 September 30, 2008
-------------------------------- -----------------------------
(Barrels
of Oil) Colombia Argentina Total Colombia Argentina Total
-------------------------------- -----------------------------
Gross
Production 1,364,021 104,233 1,468,254 415,203 71,242 486,445
Royalties (227,667) (11,654) (239,321) (72,762) (8,172) (80,934)
Inventory
Adjustment (29,089) (8,890) (37,979) (10,059) (9,586) (19,645)
-------------------------------- -----------------------------
Production
Net After
Royalties
(NAR) 1,107,265 83,689 1,190,954 332,382 53,484 385,866
-------------------------------- -----------------------------
-------------------------------- -----------------------------
Barrels of
Oil Per Day
(BOPD)(NAR) 12,035 910 12,945 3,613 581 4,194
-------------------------------- -----------------------------
-------------------------------- -----------------------------
Nine Months Ended Nine Months Ended
September 30, 2009 September 30, 2008
-------------------------------- -----------------------------
(Barrels
of Oil) Colombia Argentina Total Colombia Argentina Total
-------------------------------- -----------------------------
Gross
Production 3,555,577 302,842 3,858,419 998,967 183,601 1,182,568
Royalties (508,689) (36,105) (544,794) (168,222) (21,655) (189,877)
Inventory
Adjustment (27,359) (10,218) (37,577) (24,363) (14,371) (38,734)
-------------------------------- -----------------------------
Production
Net After
Royalties
(NAR) 3,019,529 256,519 3,276,048 806,382 147,575 953,957
-------------------------------- -----------------------------
-------------------------------- -----------------------------
Barrels of
Oil Per Day
(BOPD)(NAR) 11,060 940 12,000 2,943 539 3,482
-------------------------------- -----------------------------
-------------------------------- -----------------------------
Financial Review
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- -----------------------------
2009 2008 % Change 2009 2008 % Change
-------------------------------- -----------------------------
(Thousands of
U.S. Dollars)
Revenue and
Interest $ 75,354 $ 40,339 87 $167,430 $ 94,302 78
-------------------------------- -----------------------------
-------------------------------- -----------------------------
Net income
(loss) $ (2,816) $ 22,987 (112) $(16,884) $ 36,189 (147)
-------------------------------- -----------------------------
-------------------------------- -----------------------------
(US Dollars
per Share)
Net Income
(Loss) Per
Share -
Basic $ (0.01) $ 0.20 (105) $ (0.07) $ 0.34 (121)
-------------------------------- -----------------------------
-------------------------------- -----------------------------
Net Income
(Loss) Per
Share -
Diluted $ (0.01) $ 0.18 (106) $ (0.07) $ 0.30 (123)
-------------------------------- -----------------------------
-------------------------------- -----------------------------
Funds flow from operations (1) reconciled to net income (loss) is as
follows:
Funds flow From Operations - Three Months Ended Nine Months Ended
Non-GAAP Measure September 30, September 30,
------------------- -------------------
2009 2008 2009 2008
------------------- -------------------
(Thousands of U.S. Dollars)
Net income (loss) $ (2,816) $ 22,987 $(16,884) $ 36,189
Adjustments to reconcile
net income (loss) to funds
flows from operations
Depletion, depreciation
and accretion 35,246 6,757 95,466 15,221
Deferred taxes (697) (6,863) (5,650) (7,729)
Stock-based compensation 1,198 418 3,483 1,265
Unrealized (gain) loss on
financial instruments (77) (5,528) 294 242
Unrealized foreign exchange loss 20,273 - 32,982 -
------------------- -------------------
Funds flows from operations $ 53,127 $ 17,771 $109,691 $ 45,188
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(1) Gran Tierra Energy has disclosed a non-GAAP measure "funds flow from
operations" in this press release which does not have any
standardized meaning prescribed under GAAP. Management uses this
financial measure to analyze operating performance and the income
(loss) generated by Gran Tierra Energy's principal business
activities prior to the consideration of how non-cash items affect
that income, and believes that this financial measure is also useful
supplemental information for investors to analyze operating
performance and Gran Tierra Energy's financial results. Investors
should be cautioned that this measure should not be construed as an
alternative to net income (loss) or other measures of financial
performance as determined in accordance with GAAP. Gran Tierra
Energy's method of calculating this measure may differ from other
companies and, accordingly, it may not be comparable to similar
measures used by other companies. Funds flow from operations, as
presented, is based on net income (loss) adjusted for depletion,
depreciation and accretion, deferred taxes, stock based compensation,
unrealized loss (gain) on financial instruments and unrealized
foreign exchange losses.
Third Quarter 2009 Financial Highlights:
Revenue and interest increased by 87% to $75.4 million for the three months ended September 30, 2009 compared with $40.3 million for the same period in 2008. For the nine months ended September 30, 2009 revenue and interest increased by 78% to $167.4 million compared with $94.3 million for the same period the previous year. Increased revenue this quarter reflects a 209% increase in production, primarily due to increased production from the continued development of the Costayaco field in the Chaza Block in Colombia, and the addition of production from Solana Resources' interests in Colombia following the acquisition on November 14, 2008. The impact of higher production was partially offset by the effect of lower oil prices. The average price received per barrel of oil in the third quarter of 2009 decreased 39% to $63.12 per barrel from $103.88 per barrel in the third quarter of 2008 and decreased by 48% to $50.84 per barrel for the nine months ended September 30, 2009 from $98.40 per barrel from the same period in 2008.
Operating expenses increased by 102% to $9.1 million for the quarter ended September 30, 2009 compared with $4.5 million for the same quarter in 2008. On a per barrel basis, operating expenses for the third quarter of 2009 declined by 35% to $7.64 per barrel compared with $11.70 per barrel for the same period in 2008. For the nine months ended September 30, 2009, operating expenses increased by 133% to $25.1 million compared with $10.8 million for the same period in 2008. On a per barrel basis, operating expenses for the nine months ended September 30, 2009 declined by 32% to $7.65 per barrel compared with $11.29 per barrel in the nine months ended September 30, 2008. Per barrel operating expenses in both periods of 2009 were lower due to higher producing wells and increases in operational efficiency.
Depletion, depreciation and accretion expenses (DD&A) for the quarter ended September 30, 2009 increased to $35.2 million, or $29.59 per barrel, from $6.8 million, or $17.51 per barrel, for the same quarter in 2008 due to higher production levels and amortization of $26.9 million in the quarter related to the fair value of property, plant and equipment recorded on the acquisition of Solana Resources. DD&A for the nine months ended September 30, 2009 was $95.5 million, or $29.14 per barrel, compared with $15.2 million, or $15.96 per barrel, for the same period in 2008 due to higher production levels and amortization of $72.4 million in the nine-month period related to the fair value of property, plant and equipment recorded on the acquisition of Solana Resources.
General and administrative expenses (G&A) increased by 75% to $7.1 million for the quarter ended September 30, 2009 compared with $4.0 million for the same period in 2008. However, on a per barrel basis, general and administrative expenses in the third quarter of 2009 decreased by 43% to $5.94 per barrel compared with $10.46 per barrel in the third quarter of 2008. G&A expenses for the nine months ended September 30, 2009 were $19.2 million, or $5.87 per barrel, compared with $12.8 million, or $13.43 per barrel, for the same period in 2008.
