Benzinga | Dec 9, 2021 09:59PM EST

Gran Tierra Energy Sees 2022 Capital Expenditure Budget Of $220M-$240M

Key Highlights:

* 2022 Guidance: Gran Tierra is forecasting the following ranges for the Company's 2022 budget:

2022 Budget Base Case High Case CaseAnnual Average Brent Oil Price ($/bbl) 70.00 80.00Total Company Production (BOPD) 30,500-32,500 30,500-32,500Operating Netback4 ($ million) 390-410 470-490EBITDA3 ($ million) 360-380 440-460Cash Flow1 ($ million) 270-290 330-350Total Capital ($ million) 220-240 220-240Free Cash Flow2 ($ million) 40-60 100-120Bank Credit Facility Balance @ December 31, 2022 ($ 0 0million)Number of Development Wells (gross) 20-25 20-25Number of Exploration Wells (gross) 6-7 6-7

* 2022 Capital Program -- Profitable Production Growth, Debt Reduction & High Impact Exploration: Gran Tierra has a large, diversified development and exploration portfolio in Colombia. The Company's planned 2022 capital program is a balanced program between development and optimization of existing assets and potentially high-impact exploration. Gran Tierra expects to allocate approximately 70% of its 2022 capital program towards development activities in its core assets: $70 million for the Acordionero field (14-16 development wells) in the Middle Magdalena Valley Basin and $40 million and $30 million respectively to the Costayaco (4-5 development wells) and Moqueta (3 development wells) fields in the Putumayo Basin. The Moqueta work program is expected to commence in the second half of 2022 and is planned to continue into 2023. The remaining 30% of the capital program is expected to be allocated toward exploration-related activities throughout the Company's portfolio, including up to 6-7 new exploration wells: 4 wells in Colombia and 2-3 wells in Ecuador. The exploration program is designed to focus on short-cycle time, near-field prospects in proven basins with access to infrastructure.

* Fully Funded Capital Program Generating Material Free Cash Flow2: Gran Tierra's Base Case 2022 capital budget of $220-240 million is expected to be fully funded from the Base Case 2022 cash flow1 forecast of $270-290 million, based on an assumed $70.00/bbl Brent oil price. Gran Tierra remains focused on generating strong free cash flow2 and accelerated debt repayment. The Company's midpoint 2022 EBITDA3 guidance of $370 million is well above the midpoint of 2022 capital expenditures guidance of $230 million.

* Control of Capital Program: Gran Tierra has 100% working interest in and operatorship of the Company's major assets in Colombia and Ecuador. This full control gives the Company the flexibility to quickly optimize its development and exploration programs with changes, either up or down, in oil prices.

* Clear Path to Debt Reduction: Gran Tierra expects its credit facility to be paid down to a balance of under $70 million by December 31, 2021 and, with 2022 expected free cash flow2 and recovery of taxes receivable, to be fully paid off in the first half of 2022.

* Recent Fitch Upgrade: Fitch Ratings recently upgraded Gran Tierra Energy International Holdings Ltd's long-term foreign and local currency issuer default ratings to 'B-' from 'CCC+' and has also upgraded the Company's senior unsecured notes ratings to 'B-'/'RR4' from 'CCC+'/'RR4' with a stable outlook. The upgrades reflect Gran Tierra's improved debt profile in 2021. Gran Tierra expects approximate 2022 expenses and operating netback per bbl4 to be in the following ranges: