Gran Tierra Energy Inc. · AMEX:GTE
Gran Tierra Energy — Investor Presentation (August 2024)
54 slides from Gran Tierra Energy's investor presentation, Aug 19, 2024
Slide 1: Generating Long-Term Value Internationally
August 2024 GENERATING LONG-TERM VALUE INTERNATIONALLY www.grantierra.com
Slide 2: General Advisory
GENERAL ADVISORY Forward-Looking Information Cautionary Advisory including the ongoing conflicts in Ukraine and the Gaza region are based on certain assumptions made by Gran Tierra based The information contained in this presentation does or from the imposition or lifting of crude oil production quo
Slide 3: Introduction
INTRODUCTION Slide 3 Generating Long-Term Value Internationally | August 2024 www.grantierra.com
Slide 4: Well Positioned for Future Growth
WELL POSITIONED FOR FUTURE GROWTH With top tier conventional oil assets under water flood, GTE RESERVES STRENGTH delivered strong reserve replacement metrics: 154% 1P, 242% 2P and 303% 3P EXCITING EXPLORATION & Southern Putumayo and Northern Ecuador is a key future DEVELOPMENT CORRIDOR growth corrid
Slide 5: Who Is Gran Tierra?
WHO IS GRAN TIERRA? Full Cycle Low-Cost Financially Leaders in Focus on Free Company Operator Disciplined Sustainability Cash Flow Reinvest in the Focused on Target net Top quartile safety Full cycle company business to meet continuous debt/EBITDA2 of performance with much of the the worlds growing
Slide 6: Gran Tierra Snapshot
GRAN TIERRA SNAPSHOT INDEPENDENT INTERNATIONAL EXPLORATION AND PRODUCTION COMPANY WITH ASSETS IN COLOMBIA & ECUADOR Llanos Middle Magdalena Valley 100% DIVERSIFIED 100% 25 1.5MM Oil High-quality asset base Operated Production2 Blocks Gross Acres Colombia Ecuador Reserves1 PDP 1P 2P 3P MMBOE 44 90 14
Slide 7: Firing on All Cylinders
FIRING ON ALL CYLINDERS YTD FINANCIAL METRICS ($ Millions) RESERVE METRICS1 (MMBOE) 500 15% and 11% increases while producing ~33 MMboe 100 150 300 100 100 50 50 -100 2 2 Adjusted EBITDA2 Cash Flow Free Cash Flow 0 0 1P 2P 2020 2021 2022 2023 PRODUCTION (KBOPD) BALANCE SHEET (As at, $ Millions) 35 4
Slide 8: 2024 Key Objectives
2024 KEY OBJECTIVES Disciplined 2024 Development plan Continue to High impact budget & significant focused on core asset optimize exploration free cash flow2 corridor waterfloods High impact exploration Profitable production Drilling in Acordionero, Increase reserves with planned for 2024 in growth
Slide 9: WI Production Forecast (kbopd)
WI PRODUCTION FORECAST1 MATERIAL 5 YEAR GROWTH DRIVEN BY ASSET DEVELOPMENT IN COLOMBIA AND ECUADOR Proven Probable Possible Potential Discoveries 2 80 Expected 5-year average WI production 70 60 1P production of 32k bopd 50 (kbopd) 40 30 2P production of 46k bopd 20 10 3P production of 55k 0 bopd 20
Slide 10: Capital Efficient Spend with Strong Production Growth
CAPITAL EFFICIENT SPEND WITH STRONG PRODUCTION GROWTH FORECAST PRODUCTION (KBOPD) OPTIMAL PORTFOLIO FORECAST DEVELOPMENT CAPITAL MAINTAIN STRONG SPEND DELIVER ($MM) STAKEHOLDER DEVELOPMENT BALANCE SHEET VALUE 70 300 63 61 260 60 246 10 54 250 52 10 43 13 50 6 196 44 13 200 77 16 7 4 10 25 40 19 5 11
Slide 11: Attractive Free Cash Flow Generation Profile
GRAN TIERRA OFFERS AN ATTRACTIVE FREE CASH FLOW2 GENERATION PROFILE FORECAST FUNDS FLOW2 ($MM) OPTIMAL PORTFOLIO FORECAST FREE CASH FLOW2 ($MM) MAINTAIN STRONG DELIVER STAKEHOLDER DEVELOPMENT BALANCE SHEET VALUE 700 656 700 645 600 107 600 140 518 512 517 500 500 462 68 91 424 168 131 212 385 400 46
Slide 12: 2024 Capital Allocation
2024 CAPITAL ALLOCATION INCREASED STAKEHOLDER EXPLORATION VALUE 6 to 9 Wells CAPITAL » Production growth CASH $210 to $240M » Reserve growth DEVELOPMENT 13 to 17 Wells » Net asset value growth 2 FLOW » Decreasing net debt $280 to $320M » Improving per share REDUCTION metrics OF NET DEBT2 FREE » Decr
Slide 13: Debt Maturity Profile Aligned with Future Cash Flows
DEBT MATURITY PROFILE ALIGNED WITH FUTURE CASH FLOWS DEBT INSTRUMENTS BRENT HEDGING PROGRAM US$637MM of Senior Notes » Currently Gran Tierra does not have any hedges in » $587 MM: 9.5% p.a. coupon (amortization schedule: 2026: place but anticipates adding hedges in the second 25%; 2027: 5%; 2028: 30
Slide 14: Exploration Overview
EXPLORATION OVERVIEW Slide 14 Generating Long-Term Value Internationally | August 2024 www.grantierra.com
Slide 15: Focused on Portfolio Longevity
FOCUSED ON PORTFOLIO LONGEVITY Ability to fund the Cohembi and Arawana field area development plans through internally Nearby infrastructure, Both Cohembi and generated cash flow continuous reservoir, and the Arawana field prolific rates and recovery area have per well allow for the rapid attractive
Slide 16: High Impact Exploration Portfolio
HIGH IMPACT EXPLORATION PORTFOLIO PUTUMAYO & ORIENTE: UNDEREXPLORED, PROVEN BASINS » Colombia’s Putumayo basin is 6 TIMES the area for seismic underexplored due to past coverage1 in the Oriente above-ground security issues, » 3,400 km2 vs 22,200 km2 now mitigated by Peace Agreement 5 TIMES higher we
Slide 17: Five Consecutive Oil Discoveries in Ecuador
FIVE CONSECUTIVE OIL DISCOVERIES IN ECUADOR Cumulative Onstream Zone Initial Rate1 IP302 IP903 IP30 BS&W API Gas-to-oil Production to Wells Date Date (BOPD) (BOPD) (BOPD) (scf/stb) (MBbl) Charapa-B5 Hollin 11/9/2022 - 1,092 910 2% 28 160 287 Bocachico-J1 Basal Tena 5/30/2023 - 1,296 1,146 <1% 20 204
Slide 18: 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 NBM / deposition. GENESIS » Core area for preservation of outstanding ROSE-1 Disc. reservoir-quality rock. COHEMBI Maps at same scale BOC – ARA – ZAB BOC-
Slide 19: Arawana - Bocachico ≈ Cohembi
ARAWANA - BOCACHICO ≈ COHEMBI COHEMBI 18 o API ARAWANA-BOCACHICO 20 o API N-Sst Net Pay McDaniel Reserve Map Basal Tena Isochron M2 Reef Buildups To Be Appraised To Be Appraised McDaniel 3P Reserves Polygon COHEMBI YE 2023 MCDANIELS RESERVE REPORT CHANANGUE BLOCK BASAL TENA PROSPECTIVITY Cohembi N-S
Slide 20: What's Next?
WHATS NEXT? 2024 2025 & Beyond Continued drilling campaign by Field development of the finishing the Bocachico-Norte well Arawana-Bocachico-Zabaleta field testing other potential reservoirs [T- area and further development of the Sand, B Limestone, and U-Sand] Cumplidor, and Cohembi fields. followed
Slide 21: Leaders in Enhanced Oil Recovery
LEADERS IN ENHANCED OIL RECOVERY Slide 21 Generating Long-Term Value Internationally | August 2024 www.grantierra.com
Slide 22: Successful and Efficient Business Model, Solid Oil Recovery Factors
SUCCESSFUL AND EFFICIENT BUSINESS MODEL RESULTING IN SOLID OIL RECOVERY FACTORS TYPICAL WATERFLOODS SIGNIFICANTLY INCREASE PRODUCTION, RECOVERY WATERFLOOD OIL RECOVERY PROCESS SCHEMATIC1 FACTORS & RESERVES2 Fill Up Incline Period Decline Period Start Injection Increasing PIP4 Gas collapse SECONDARY
Slide 23: Polymer Flood Pilot Project
POLYMER FLOOD PILOT PROJECT (POLYMER OR CHEMICAL ENHANCED OIL RECOVERY, “CEOR”) Injection of a viscous solution (polymer) can accelerate In oil reservoirs, polymer injection results in more oil oil production vs. injecting only water (waterflood) being swept towards producers vs. water injection onl
Slide 24: Costayaco Waterflood Performance - Historical
COSTAYACO WATERFLOOD PERFORMANCE - HISTORICAL Original Recoverable Current ~76% ACR2 ~92% CYC2 watercuts: (early life flood) (later life flood) STARTED INJECTION Waterflood Incremental Above 1P YE2010 Production YE 2010 to 2023 December 31, 2023 Water injection through 2010 YE Reserves (MMbbl) (MMbb
Slide 25: Asset Overview
ASSET OVERVIEW Slide 25 Generating Long-Term Value Internationally | August 2024 www.grantierra.com
Slide 26: Year-End 2023 Reserves
YEAR-END 2023 RESERVES BALANCED PORTFOLIO WITH CASH COWS AND GROWTH ASSETS MATURE CASH FLOW GENERATORS GROWTH ASSETS WITH SIGNIFICANT DEVELOPMENT RUNWAY ACORDIONERO CHAZA2 SOUTH PUTUMAYO3 ECUADOR Reserves by Category Reserves by Category Reserves by Category Reserves by Category 60 45 70 30 59 40 60
Slide 27: Acordionero Snapshot
ACORDIONERO SNAPSHOT ASSET OVERVIEW » 100% WI Gran Tierra ACTIVITY MAP » Since acquisition in 2016, Acordionero has produced ~42 MMbbls and generated ~$2.0 billion in oil and gas sales and ~$892MM of free cash flow1 (as of June 30, 2024) » Increasing water injection has reduced natural declines » Re
Slide 28: Costayaco Snapshot
COSTAYACO SNAPSHOT ASSET OVERVIEW ACTIVITY MAP » 100% WI Gran Tierra » Multiple, high-quality stacked reservoirs; oil concentrated in the T & Kc sandstone reservoirs » Sandstone light oil peripheral waterflood, carbonates light oil development » Favorable conditions for waterflood, mature asset, pre
Slide 29: Costayaco – Strategy
COSTAYACO – STRATEGY TARGETING AREAS OF UNSWEPT, UNDRAINED OIL NORTH REGION: » Unswept Northeast region of the field proven by Injection Well 2009-2020 Wells 2021+ Wells CYC-54, 56, 57, 58 » Potential for larger unswept area depending on location of flood front Sealing » 2024 program to test positio
Slide 30: Future Growth Areas
FUTURE GROWTH AREAS SURORIENTE, ALEA1848-A, CHANANGUE, AND CHARAPA KEY RESERVE METRICS OF CUMULATIVE GROWTH AREAS Reserves1 1P 2P 3P MMBOE 20 44 77 1P Production Profile1 2024 2025 2026 2027 KBOPD 6.2 8.0 9.4 8.0 2P Production Profile1 2024 2025 2026 2027 KBOPD 6.4 8.9 12.7 14.9 DEVELOPMENT AND EXPL
Slide 31: South Putumayo Snapshot
SOUTH PUTUMAYO SNAPSHOT ASSET OVERVIEW ACTIVITY MAP » By obtaining the continuation of the Suroriente Block and discovering oil in the Rose field through its 2022 exploration campaign, Gran Tierra has secured an asset base in the South Putumayo that offers a strong reserve base with attractive ROSE
Slide 32: Suroriente – 2024/25 Program
SURORIENTE – 2024/25 PROGRAM RESERVE POLYGONS AND DEVELOPMENT LOCATIONS » Historical Cohembi field development completely 3P outline constrained to area accessible by existing infrastructure and contract, not Geology or Reservoir quality » Revised mapping grounded in geology, and reflects a true 3P+
Slide 33: Ecuador Snapshot
ECUADOR SNAPSHOT ASSET OVERVIEW ACTIVITY MAP » Gran Tierra holds three blocks in the Oriente basin » Gran Tierra drilled its first two (Charapa B5 and Bocachico J1) exploration wells drilled in 2022 and both discovered oil » The 2024 drilling program focused on further near field and high impact exp
Slide 34: Transportation
TRANSPORTATION Slide 34 Generating Long-Term Value Internationally | August 2024 www.grantierra.com
Slide 35: Access to Existing Transportation Infrastructure
ACCESS TO EXISTING TRANSPORTATION INFRASTRUCTURE Gran Tierra benefits from large spare capacity in pipelines & trucking throughout Colombia & Ecuador, which leads to: Quick access to world markets through major export Strong oil prices Narrow oil price Short terminals linked to Brent differentials c
Slide 36: ESG
ESG Slide 36 Generating Long-Term Value Internationally | August 2024 www.grantierra.com
Slide 37: HSE Is a Key Priority at Gran Tierra
HSE IS A KEY PRIORITY AT GRAN TIERRA HEALTH AND SAFETY ACHIEVEMENTS LTIF1,3 TRIF2,3 0.8 1.6 0.7 1.4 0.6 1.2 0.5 1 0.4 0.8 0.3 0.6 0.2 0.4 0.3 0.07 0.07 0.16 0.12 0.1 0.06 0.2 0.08 0.07 0.08 0.02 0.02 0.04 0.00 0.00 0 0 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 2023 Bottom
Slide 38: Impact Investment & Human Rights
IMPACT INVESTMENT & HUMAN RIGHTS GRAN TIERRA IS COMMITTED TO PROVIDING MEANINGFUL LOCAL EMPLOYMENT OPPORTUNITIES, BUYING LOCAL GOODS AND SERVICES, VOLUNTARILY INVESTING IN LOCAL SOCIAL AND ENVIRONMENTAL PROJECTS AND WILL CONTINUE TO PROMOTE HUMAN RIGHTS PROJECTS IN THE COMMUNITIES NEIGHBOURING OUR O
Slide 39: Environmental Highlights
ENVIRONMENTAL HIGHLIGHTS 26% 92% 76% 68% DECREASE IN SCOPE 1 & 2 OPERATIONAL INJECTED DECREASE IN FLARING TOTAL ENERGY USED IN CARBON EMISSIONS WATER WAS RECYCLED EMISSIONS SINCE 2019 GTE’S OPERATIONS WAS SINCE 2019 GENERATED BY GAS-TO- POWER Emissions reduction, Scope 1 and Scope 2 statistics refle
Slide 40: Appendix
APPENDIX Slide 40 Generating Long-Term Value Internationally | August 2024 www.grantierra.com
Slide 41: Gran Tierra's Focused Strategy
GRAN TIERRA’S FOCUSED STRATEGY STRATEGY TACTICS Proven, Under-Explored Conventional Hydrocarbon Basins World-class exploration program targeting Apply Proven Technology large prospect inventory across proven plays GTE has been able to reduce and in Colombia & Ecuador maintain drilling times/costs si
Slide 42: Reserves Growth
RESERVES GROWTH 2015 TO DECEMBER 31, 2023 2015 TO DECEMBER 31,2023 1P RESERVE MOVEMENT1 2P RESERVE MOVEMENT1 1P Reserves (MMBOE) 2P Reserves (MMBOE) STRONG 1P GROWTH 2P RESULTS THROUGH ACQUISITIONS & DEVELOPMENT » 150% 1P reserves replacement from 2015 to 2023 » Grew 2P reserves by 160% in addition
Slide 43: Acordionero Development & Continuous Improvement
ACORDIONERO DEVELOPMENT & CONTINUOUS IMPROVEMENT RAPID FIELD DEVELOPMENT AVERAGE DRILLING & COMPLETION COSTS & TIME $4.50 45 AUGUST 2016 DECEMBER 2023 $4.00 40 » D&C cost and time Total Drill & Complete Days per Well Drilling & Completion Cost per Well $3.50 35 $3.00 30 reduced by ~50% over $2.50 25
Slide 44: Drilling Operations
DRILLING OPERATIONS OUR LEARNING CURVE ACORDIONERO HISTORICAL DRILLING COSTS MAINTAINING THE GAINS & APPLING LEARNINGS Drilling Drill Days per well $3.00 25 » Well cycle times continue to improve well on well Drilling Cost per Well ($MM) 51% ‒ Record well times achieved in both Costayaco and Acordio
Slide 45: Completions and Workovers, Our Learning Curve
COMPLETIONS AND WORKOVERS, OUR LEARNING CURVE ACORDIONERO HISTORICAL COMPLETION COSTS » Developing fit for purpose technology to reduce completion times $2.00 20 » Implementing and designing trials to reduce 58% decrease in Completion Cost per Well ($MM) Total Complete Days per Well completion costs
Slide 46: Colombian Tax Reform – Impact on 2024
COLOMBIAN TAX REFORM – IMPACT ON 2024 1 CORPORATE TAX AND SURTAX SENSITIVITY FOR 2024 CASH FLOW AND EFFECTIVE TAX RATE FOR 2024 40% ($/bbl Brent) ($/bbl Brent) 35% 40% 45% 50% 35% 15% 28-34% 10% 30% 5% 23-29% $350 25% $300 17-23% 20% 35% 35% 35% 35% $260 15% 10% Below ~$69 ~$69 to $76 ~$76 to $82 Ab
Slide 47: McDaniel Price Decks
MCDANIEL PRICE DECKS JANUARY 1, 2024 OIL PRICE (US$/BBL) BRENT COMPARISON (US$/BBL) Brent WTI Jan 1 2024 Jan 1 2023 100 100 95 95 90 90 85 85 80 80 75 75 70 70 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 1) As per McDaniel’s prices deck assumpt
Slide 48: Waterflooding – Footnotes
WATERFLOODING – SLIDE 14 - FOOTNOTES 1) Source: SNF Floerger Oil & Gas – “Enhanced Oil Recovery” 2) Copyright 1991, SPE, from JPT, October 1991 3) https://www.spe.org/en/industry/increasing-hydrocarbon-recovery-factors/ 4) PIP: Pump uptake pressure 5) Based on GTE McDaniel December 31, 2023 Reserves
Slide 49: Glossary of Terms
GLOSSARY OF TERMS NON-GAAP TERMS OIL & GAS Funds flow from operations: is defined as net income or loss adjusted for DD&A expenses, asset impairment, goodwill impairment, deferred tax expense or recovery, stock-based compensation expense, amortization of debt issuance costs, non- Barrel (bbl) cash l
Slide 50: Non-GAAP Measures
NON-GAAP MEASURES EBITDA & Adjusted EBITDA Forward-Looking Non-GAAP Measures EBITDA, as presented, is defined as net income or loss adjusted for depletion, depreciation and accretion This presentation includes forward-looking non-GAAP financial measures as further described herein. These non-GAAP ("
Slide 51: Presentation of Oil & Gas Information
PRESENTATION OF OIL & GAS INFORMATION Presentation of Oil & Gas Information » “proved reserves” or “1P” are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that actual remaining quantities recovered will exceed estimated proved reserves. BOEs have
Slide 52: Presentation of Oil & Gas Information
PRESENTATION OF OIL & GAS INFORMATION Reserves Information (continued) Estimates of reserves provided in this presentation are estimates only and there is no guarantee that estimated » Before tax and after tax free cash flow are non-GAAP terms and are called before tax and after tax reserves will be
Slide 53: Presentation of Oil & Gas 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 Basin
Slide 54: Contact Us
CONTACT US 500 CENTRE STREET SE, CALGARY, ALBERTA, CANADA. T2G 1A6 Investor Relations: Tel: 403-265-3221 Email: info@grantierra.com Slide 54 Generating Long-Term Value Internationally | August 2024
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