Business Context and Reporting Period
Company: Gran Tierra Energy Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: January 30, 2019
Reporting Period: Fourth quarter and full year ended December 31, 2018.
Context: The filing provides unaudited operational updates, reserve estimates prepared by McDaniel & Associates Consultants Ltd., and preliminary financial data regarding the company's oil and natural gas operations, primarily in Colombia.
Key Financial and Operational Metrics
Reserves (Net After Royalty - NAR)
| Category | Oil (Mbbl) | Natural Gas (MMcf) | Total (MBOE) |
|---|---|---|---|
| Total Proved Reserves | 53,922 | 2,182 | 54,286 |
| Total Probable Reserves | 61,391 | 1,272 | 61,603 |
| Total Possible Reserves | 48,696 | 1,407 | 48,930 |
Standardized Measure of Discounted Future Net Cash Flows (Proved Reserves): $1,194.5 million (as of Dec 31, 2018).
Realized Prices Used for Reserves: Oil and NGLs at $61.16/bbl; Natural Gas at $3.67/Mcf.
Production and Volumes (2018 Full Year)
- Average Daily Production (NAR): 29,053 BOEPD (up 8% from 2017).
- Working Interest Production (Gross): 36,209 BOEPD (up 13% from 2017).
- Sales Volumes: 28,717 BOEPD average (up 8% from 2017).
- Q4 2018 Average Production: 31,196 BOEPD (NAR).
Financial Position (Unaudited Estimates)
- Net Working Capital Deficit and Debt: $366.6 million (as of year-end 2018).
- Capital Expenditures (Colombia E&D): $355.6 million (excluding acquired properties).
Material Changes vs. Prior Period
- Proved Reserves: Decreased by 8% to 54 MMBOE in 2018 compared to 59 MMBOE in 2017.
- Probable Reserves: Increased by 13% to 62 MMBOE in 2018 compared to 55 MMBOE in 2017.
- Possible Reserves: Decreased by 16% to 49 MMBOE in 2018 compared to 58 MMBOE in 2017.
- Production Growth: Net after royalty (NAR) production increased 8% year-over-year, while gross working interest production increased 13%.
Guidance, Outlook, and Risks
Management Commentary: The company anticipates filing audited financial statements and MD&A for the year ended December 31, 2018, on or before February 27, 2019. Current figures are unaudited estimates subject to material change upon audit completion.
Risks and Contingencies:
- Unaudited Data: Financial and operating results included are unaudited and prepared by management; independent auditors have not reviewed this specific information.
- Forward-Looking Statements: Actual results may vary materially due to audit outcomes, commodity price fluctuations, and operational risks detailed in the 2018 Form 10-K.
- BOE Conversion: The filing notes that Barrels of Oil Equivalent (BOE) ratios (6 Mcf:1 bbl) are based on energy equivalency and may be misleading regarding value equivalency.
Investor Verification Checklist
- Audited Financials: Verify the final audited net working capital deficit and debt figures against the unaudited estimate of $366.6 million.
- Reserve Audit: Confirm the final proved reserve count of 54.3 MMBOE once the independent audit is complete.
- Capital Allocation: Review the final 2018 capital expenditure report to confirm the $355.6 million Colombia E&D spend and any changes to the capital spending program.
- Production Volumes: Cross-reference the reported 29,053 BOEPD NAR average with the final audited production data.