Gran Tierra Energy Inc. · AMEX:GTE
Gran Tierra Energy — Merger or Acquisition (August 2024)
42 slides from Gran Tierra Energy's merger presentation, Aug 20, 2024
Slide 1: Recommended Acquisition of i3 Energy plc
www.grantierra.com August 2024 CREATING A DIVERSIFIED PLATFORM FOR LONG - TERM VALUE RECOMMENDED ACQUISITION OF i3 ENERGY PLC
Slide 2: Disclaimer
D I S C L A I M E R The information contained in this presentation is for information purposes only and not intended to and does not constitute, or form any part of, an offer for sale, an offer to acquire or subscription or any solicitation for any offer to purchase, acquire or subscribe for any sec
Slide 3: The information contained in this presentation does not purport to be all - inclusive
The information contained in this presentation does not purport to be all - inclusive or contain all information that readers may require. You are encouraged to conduct your own analysis and review of Gran Tierra Energy Inc. (“Gran Tierra”, “GTE”, or the “Company”) and of the information contained i
Slide 4: Acquisition Overview
www.grantierra.com ACQUISITION OVERVIEW Slide 4
Slide 5: Compelling Transaction Rationale
COMPELLING TRANSACTION RATIONALE HIGH QUALITY, INTERNATIONALLY DIVERSIFIED ASSET BASE SUPPORTING SUSTAINABLE GROWTH i3 is an excellent fit for Gran Tierra’s growth and diversification strategy Diversification across multiple geographies and product streams Strong platform for future growth Increased
Slide 6: Key Acquisition Terms
KEY ACQUISITION TERMS » Gran Tierra to acquire 100% of i3 shares in a cash and share transaction − One Gran Tierra share for every 207 shares of i3, plus; − 10.43 pence of cash for each i3 share, plus; Key Terms − 0.2565 pence of cash for each i3 share through payment of an Acquisition Dividend » Va
Slide 7: Pro Forma Asset Highlights
Pro Forma Asset Highlights DIVERSIFIED High - quality asset base 81% / 19% Liquids / Gas (1) 36% Production from Canada (1) NEW CORE P L A T F O R M Canadian Assets 1. Based on Q2 2024 working interest production results announced by Gran Tierra on July 31, 2024 and i3 on August 13, 2024. 2. Gran Ti
Slide 8: Combined Asset Portfolio
COMBINED ASSET PORTFOLIO Prominent oil weighted full - cycle E&P , with top tier producing assets and exploration portfolio Colombia (2) 1P Reserves 82 MMBOE 2P Reserves 130 MMBOE 3P Reserves 179 MMBOE » Acordionero » Chaza (3) » Putumayo - 7 » Suroriente Canadian Assets South American Assets Asset
Slide 9: Inventory of Growth Opportunities
INVENTORY OF GROWTH OPPORTUNITIES COMBINED BUSINESS POSITIONED TO CAPITALIZE ON ORGANIC & INORGANIC GROWTH Baseline P ro d ucti o n N e a r - T erm Growth M e d i um - T erm Growth Key Strategic Focus Areas » Management focus on optimum value of each asset » Continual portfolio optimization, capital
Slide 10: Diversified Asset Exposure
Current Production Pro Forma Production Increased exposure to a variety of international commodity streams and geographies Production by Geographical Location (1) Production by Commodity Mix (1) Ec uado r 4% Co l o m b i a 96% Current Production Pro Forma Production Building an asset portfolio in we
Slide 11: Proven High Quality Production Base
PROVEN HIGH QUALITY PRODUCTION BASE STRONG PRODUCTION GROWTH UNDERPINS CASH FLOW GENERATION Slide 11 Generating Long - Term Value Internationally | August 2024 2 0 2 1 1. Gran Tierra 2024 production guidance, announced on January 23, 2024 of 32,000 - 35,000 BOEPD and i3 production guidance, announce
Slide 12: Significant Cash Flow Generation
SIGNIFICANT CASH FLOW GENERATION SUPPORT SIGNIFICANT INVESTMENT ACROSS COMBINED GROUP & DELIVER ENHANCED RETURNS Meaningful expected increase in combined cash flows » Gran Tierra 2024E Adjusted EBITDA guidance ranging between $335 to $540 million, depending on oil prices (1) » Gran Tierra 2024E FCF
Slide 13: Reserve Base for Long-Term Growth
$1,286 $342 Combined Company $1,887 $725 i3 Combined Company Gran Tierra i3 Gran Tierra 1. Per Gran Tierra McDaniel Reserves Report and Gran Tierra Valuation Report, each with an effective date of December 31, 2023 and i3 Valuation Report with an effective date of July 31, 2024, as applicable. 2. FX
Slide 14: Material Oil Weighted Producer
47% 79% 35% 100% 97% 67% 98% 99% 32% 67% 81% 99% 89% 86% 11% 18% 18 30 31 33 35 36 38 38 39 48 51 54 63 64 66 75 0 15 30 45 60 75 90 Pro Forma Gran Tierra will become a material oil - weighted mid - cap producer (1) MATERIAL OIL WEIGHTED PRODUCER COMBINED COMPANY MAINTAINS STRONG PRO FORMA OIL WEIGH
Slide 15: Expected Synergies
Gran Tierra expects to capture material synergies , not possible on standalone basis » Listing cost reduction through consolidation of i3’s AIM and TSX listings » Optimize Board and executive team » Consolidation of advisors to eliminate duplicate costs » Cost savings in service contracts expected g
Slide 16: Gran Tierra's Funding Framework
GRAN TIERRA’S FUNDING FRAMEWORK INCREASED SCALE TO SUPPORT MORE FAVORABLE CREDIT RATING FUNDING STRUCTURE ACQUISITION COST & FUNDING SOURCES Slide 16 Generating Long - Term Value Internationally | August 2024 Gran Tierra has prioritized favourable non - equity financing to complete the acquisition 1
Slide 17: Transaction Timeline
TRANSACTION TIMELINE Transaction completion expected Q4 2024 August 19 2024 August 2024 Q3 / Q4 2024 Q4 2024 » Announcement of recommended offer » Scheme Document published and sent to i3’s shareholders » i3 shareholder meeting and court meeting » Scheme sanction and effective date, de - listing of
Slide 18: i3 Asset Overview
www.grantierra.com i3 ASSET OVERVIEW Slide 18
Slide 19: High Quality Canadian Asset Portfolio
HIGH QUALITY CANADIAN ASSET PORTFOLIO Balanced asset portfolio which includes low risk, delineated assets and high growth opportunities » i3’s acreage spans four key regions across the Western Canadian Sedimentary Basin, including Central AB, Simonette, Wapiti and Clearwater » Assets are 76% operate
Slide 20: i3 Operational Performance
i3 OPERATIONAL PERFORMANCE Slide 20 Generating Long - Term Value Internationally | August 2024 1. Per i3 Valuation Report with an effective date of July 31, 2024. 2. FX rate conversion of C$1.372 per US$1.000. 3. Based on Q2 2024 working interest production results announced by i3 on August 13, 2024
Slide 21: Gran Tierra Asset Overview
www.grantierra.com GRAN TIERRA ASSET OVERVIEW Slide 21
Slide 22: Gran Tierra Snapshot
GRAN TIERRA SNAPSHOT INDEPENDENT INTERNATIONAL EXPLORATION AND PRODUCTION COMPANY WITH ASSETS IN COLOMBIA & ECUADOR DIVERSIFIED High - quality asset base High Quality Conventional Portfolio - 100% Oil & 100% Operated 100% Oil 100% Operated Production 25 Blocks 1.4MM Net Acres GTE LISTINGS NYSE AMEX
Slide 23: Gran Tierra Year-End 2023 Reserves
14 35 62 0 10 20 30 40 50 60 70 1P 2P 3P 37 49 59 60 50 40 30 20 10 0 1P 2P 3P 26 35 41 45 40 35 30 25 20 15 10 5 0 1P 2P 3P 8 17 28 0 5 10 15 20 25 30 1P 2P 3P GRAN TIERRA YEAR - END 2023 RESERVES (1) 1) Per Gran Tierra McDaniel Reserves Report and Gran Tierra Valuation Report, each with an effecti
Slide 24: Debt Maturity Profile Aligned with Future Cash Flows
DEBT MATURITY PROFILE ALIGNED WITH FUTURE CASH FLOWS Ratings (2)(3) : Fitch B, S&P B & Moody’s B2 $115 – $25 $147 $54 $176 $235 Q2 2 0 2 4 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 USD bonds (MM) DEBT INSTRUMENTS US$637MM of Senior Notes » $587 MM: 9.5% p.a. coupon (amortization schedule: 2026
Slide 25: Suroriente 2024/25 Program
2024/25 commitment drilling program will harvest proven reserves as well as push field limits to the North and West of existing well control. Potential for 2P/3P growth. » Historical Cohembi field development completely constrained to area accessible by existing infrastructure and contract, not Geol
Slide 26: High Impact Exploration Portfolio
HIGH IMPACT EXPLORATION PORTFOLIO 1. IHS Edin. 2. https://www.anh.gov.co / and https://www.controlrecursosyenergia.gob.ec / 3. Certain information in this slide may constitute "analogous information" as defined in NI 51 - 101. Refer to Appendix for "Presentation of Oil & Gas Information - Analogous
Slide 27: Five Consecutive Oil Discoveries in Ecuador
FIVE CONSECUTIVE OIL DISCOVERIES IN ECUADOR Wells Zone Onst r eam Date Initial Rate IP30 (1) IP90 (2) IP30 BS&W (3) API Gas - to - oil Cumulative Production to Date (BOPD) ( BOPD) (BOPD) (scf/stb) (MBbl) Charapa - B5 Hollin 11/9/2022 - 1 , 09 2 910 2% 28 160 287 Bocachico - J1 Basal Tena 5/30/2023 -
Slide 28: Basal Tena/N-Sand Core Exploration Fairway
BASAL TENA/N - SAND CORE EXPLORATION FAIRWAY Cohembi Bocachico/Arawana » Similar structural regimes controlling N - Sandstone / Basal Tena reservoir deposition. » Core area for outstanding reservoir - quality rock. NBM / GENESIS ROSE - 1 Disc. CO H E M B I BOC – ARA – ZAB BOC - 1 Disc. TREND Maps at
Slide 29: Arawana-Bocachico ≈ Cohembi
ARAWANA - BOCACHICO ≈ COHEMBI COHEMBI ARAWANA - BOCACHICO COHEMBI YE 2023 GTE MCDANIEL RESERVE REPORT (1) Cohembi N - Sandstone (Basal Tena Equivalent) 1P (MMBOE) 2P (MMBOE) 3P (MMBOE) OOIP 188 290 391 Original Recoverable 53 82 123 Remaining Recoverable 25 54 95 Area (acres) 7,000 10,250 13,500 Ave
Slide 30: Fully Committed to ESG
FULLY COMMITTED TO ESG ESG FOCUS AREAS ENVIRONMENTAL SOCIAL GOVERNANCE » Emissions Reduction : Reduced scope 1 and 2 emissions by 26% since 2019 » Nature : Planted ~1.6MM trees and conserved, preserved or reforested ~4,500 hectares of land » Gas - to - Power : Reduced flaring emissions by 76% since
Slide 31: Summary
www.grantierra.com SUMMA R Y Slide 31
Slide 32: Compelling Transaction Rationale
COMPELLING TRANSACTION RATIONALE HIGH QUALITY, INTERNATIONALLY DIVERSIFIED ASSET BASE SUPPORTING SUSTAINABLE GROWTH i3 is an excellent fit for Gran Tierra’s growth and diversification strategy Diversification across multiple geographies and product streams Strong platform for future growth Increased
Slide 33: Appendix
www.grantierra.com APP E N D IX Slide 33
Slide 34: Increased Investor Relevance
- 75% Aug - 2 3 Nov - 2 3 - 5 0% 0% - 2 5% 25% 75% 50% B r en t F e b - 24 M a y - 24 Aug - 2 4 WTI GTE i3 INCREASED INVESTOR RELEVANCE COMBINED BUSINESS WILL BENEFIT FROM GRAN TIERRA’S NYSE, TSX AND LSE LISTINGS Share Price 1 - Year Performance Daily Value Traded 2024YTD (US$000s) - 29% + 1 8% Enha
Slide 35: Non-GAAP and Other Definitions
EBITDA and Adjusted EBITDA: Net income adjusted for DD&A expenses, interest expense and income tax expense or recovery (“EBITDA”) and adjusted EBITDA, as presented, is defined as EBITDA adjusted for non - cash lease expense, lease payments, unrealized foreign exchange gain or loss, stock - based com
Slide 36: Non-GAAP Measures: EBITDA & Adjusted EBITDA
NON - GAAP MEASURES EBITDA & Adjusted EBITDA EBITDA, as presented, is defined as net income or loss adjusted for depletion, depreciation and accretion ("DD&A") expenses, interest expense and income tax expense or recovery. Adjusted EBITDA, as presented, is defined as EBITDA adjusted for non - cash l
Slide 37: Adjusted EBITDA Reconciliation
NON - GAAP MEASURES Adjusted EBITDA Reconciliation Slide 37 Generating Long - Term Value Internationally | August 2024 Year Ended - December 31 EBITDA - Non - GAAP Measures ($000s) 2023 2022 2021 Net (loss) income ($6,287) $139 , 02 9 $42 , 48 2 Adjustments to reconcile net (loss) income to EBITDA a
Slide 38: Free Cash Flow Reconciliation
NON - GAAP MEASURES Free Cash Flow Reconciliation Slide 38 Generating Long - Term Value Internationally | August 2024 Year Ended - December 31 Funds Flow from Operations - Non - GAAP Measures ($000s) 2023 2022 2021 Net (loss) income ($6,287) $139 , 02 9 $42 , 48 2 Adjustments to reconcile net (loss)
Slide 39: Presentation of Oil & Gas Information
PRESENTATION OF OIL & GAS INFORMATION Presentation of Oil & Gas Information BOEs have been converted on the basis of six thousand cubic feet (“Mcf”) natural gas to 1 barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy
Slide 40: Presentation of Oil & Gas Information: Reserves Information
PRESENTATION OF OIL & GAS INFORMATION Reserves Information (continued) Estimates of net present value and future net revenue contained herein do not necessarily represent fair market value. Estimates of reserves and future net revenue for individual properties may not reflect the same level of confi
Slide 41: Presentation of Oil & Gas Information: Analogous Information
PRESENTATION OF OIL & GAS INFORMATION Analogous Information Certain information in this presentation may constitute ‘‘analogous information’’ as defined in NI 51 - 101, including, but not limited to, information relating to operations and oil and gas activities in Ecuador, the Putumayo & Oriente Bas
Slide 42: Contact Us
Investor Relations: Tel: 403 - 265 - 3221 Email: info@grantierra.com CONTACT US 500 CENTRE STREET SE, CALGARY, ALBERTA, CANADA. T2G 1A6 Slide 42
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