Business Context and Reporting Period
Gran Tierra Energy Inc. filed this Form 8-K on December 23, 2013, reporting the entry into material definitive agreements. The company, incorporated in Nevada, operates through wholly owned indirect subsidiaries, Gran Tierra Energy Colombia Ltd. and Petrolifera Petroleum (Colombia) Limited.
Key Financial Metrics
This filing does not provide specific financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on the terms of a new commercial agreement.
Material Changes
The primary material change is the execution of new Purchase Agreements with Ecopetrol S.A. to replace prior agreements that had expired. These agreements cover the sale of all crude oil production volumes from the Chaza, Santana, and Guayuyaco Blocks (excluding government royalties).
Agreement Terms and Outlook
- Counterparty: Ecopetrol S.A.
- Term: December 1, 2013, to November 30, 2014.
- Termination: Either party may terminate with 30 days' prior written notice.
- Pricing Mechanism: Based on a "marker" price (average export price of a specified Ecopetrol crude blend) less fees.
- Fees: Aggregate deductions for port operations, marketing, transport, and taxes range from $2.70 to $8.00 per barrel, depending on delivery point and transport method.
- Adjustments: Price negotiation is permitted if crude oil quality changes or the marker crude ceases to exist.
Investor Verification Checklist
- Verify the specific "marker" crude blend used for pricing in the upcoming quarter.
- Confirm the exact delivery points for the Chaza, Santana, and Guayuyaco Blocks to determine the applicable fee deduction ($2.70 vs. $8.00 per barrel).
- Monitor production volumes from the three blocks to estimate total revenue impact under the new pricing structure.
- Review subsequent filings for any early termination notices given the 30-day termination clause.