Gran Tierra Energy today announced the Company's financial and operating results for the quarter ended September 30, 2020.

Key Highlights:

• Production: The Quarter's production averaged 18,944 bbl per day ("BOPD"), down 6% from second quarter 2020 ("the Prior Quarter"); production during October 2020 averaged approximately 22,000 BOPD
• Collection of VAT & Income Tax Receivables: Through both direct refunds and value-added tax ("VAT") on the Company's oil sales, Gran Tierra has collected total VAT and income tax receivables of $97 million during 2020
• Credit Facility Paid Down and Cash Balance Increased: By the end of the Quarter, the Company paid down its credit facility balance to $200 million and had $21 million in cash and cash equivalents, compared to a balance on the credit facility of $207 million and cash and cash equivalents of $17 million at the end of the Prior Quarter
• Significant Reductions in Operating & G&A Costs: During the Quarter, Gran Tierra's combined operating, workover and transportation expenses ($12.63/bbl) were down 31% relative to first quarter 2020 ($18.33/bbl); the Company's cash general and administrative ("G&A") costs were down 8% on a per bbl basis over the same timeframe; on an aggregate basis, these expenses decreased from $56 million in first quarter 2020 to $27 million in this Quarter, a 53% reduction; the majority of the cost reductions represent structural improvements in the Company's operations, which are expected to be maintained even if oil prices recover further; as a result of ongoing cost saving initiatives, the Company also expects future per well drilling and completion capital costs to be reduced by approximately 27% at Acordionero and 18% at Costayaco compared to 2019
• Capital Expenditures and Net Loss: With the significant oil price volatility and logistical challenges due to COVID-19, Gran Tierra elected to keep the Quarter's capital expenditures at a relatively low $7 million; the Quarter's net loss was $108 million (including a non-cash ceiling test impairment of $105 million), as compared to the Prior Quarter's net loss of $371 million (including a non-cash ceiling test impairment of $398 million)
• Increase in Adjusted EBITDA and Funds Flow from Operations: Adjusted EBITDA(1) during the Quarter was $22 million, up from the Prior Quarter's $18 million; this Quarter's funds flow from operations(1) was $8 million (up from the Prior Quarter's $6 million), and completely covered the Quarter's capital expenditures

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: 
"We are pleased with the progress that Gran Tierra has achieved with the safe restart of operations throughout our extensive Colombian portfolio. The safety of our staff, contractors and the local communities where we operate is always paramount. We commend our teams in Colombia, Canada and Ecuador for their excellent work during the many challenges of 2020 and their diligent management of COVID-19 safety protocols, which has allowed an earlier recommencement of development activities than originally forecast.

We also greatly appreciate the ongoing support that the Colombian government continues to provide the local oil industry, as evidenced by the ongoing payments of VAT and income tax refunds. These refunds have helped Gran Tierra to strengthen the Company's financial position and liquidity profile.

One of our key objectives is to finish 2020 strong to set up Gran Tierra for an exciting 2021. We believe we are well-positioned to withstand the current volatile environment with our low base decline, conventional oil asset base and the operational control for capital allocation and timing, while maintaining a low cost structure and the safety of our people."

Operations Update

Acordionero (100% WI and Operator)
Gran Tierra forecasts the following activities during the fourth quarter 2020 and into 2021; the evolving situation with the COVID-19 pandemic, and the Company's strict adherence to COVID-19 safety protocols, may result in changes to the cost and timing of these planned activities and their potential incremental production additions:

• The first workover rig restarted operations on September 1, 2020 and is currently on its fourth workover; this first workover rig is forecast to continue operations in the field through the end of 2020 and into first quarter 2021
• A second workover rig up has started up at Acordionero to accelerate workover activity; a total of 8 to 10 offline oil wells are expected to be worked over by 2020 year-end to restore production; the total combined productive capacity of the 10 highest priority wells for workover is estimated to be approximately 3,500 BOPD, with weighted averages for water cut of 13%, gas-oil ratio of 639 standard cubic feet per bbl and API oil gravity of 17 degrees (based on 30-day averages prior to each well going offline earlier this year)
• Development drilling is scheduled to commence during the fourth quarter; a drilling rig is expected to restart operations during fourth quarter 2020 to drill 1 to 2 new oil wells by 2020 year-end; these new wells are expected to begin production during first quarter 2021; the drilling rig is forecast to continue drilling new development oil wells at Acordionero throughout 2021; the next 10 planned wells (8 oil producers and 2 water injectors) are scheduled to be drilled from the new southwest pad currently under construction; each of these new wells is expected to have an initial oil production rate of approximately 550 BOPD (initial 30-day average rate), in line with the strong performance of wells drilled in the field during 2019 and first quarter 2020

Suroriente (52% WI and Operator)

• Restart of production on this block commenced on August 28, 2020 and the Company is steadily ramping up production; the block's WI productive capacity is estimated to be approximately 3,600 BOPD (based on the 30-day average prior to the block being shut-in earlier this year)
• Prior to the blockades in late February 2020, activities were underway to expand the Cohembi water treatment, injection and processing facilities under a two-phased expansion program; the combined phased expansion would be expected to boost gross water injection capacity significantly to potentially increase ultimate oil recovery

Majority of Minor Fields Resuming Production

• The restart of the majority of minor fields has commenced and the fields are coming back online at rates higher than recorded just prior to the shut-ins; current production from these restarted minor fields is approximately 1,800 BOPD

Moqueta (100% WI and Operator)

• During the Quarter, Gran Tierra continued to optimize the waterflood at Moqueta, where oil production and water injection were in-line with expectations
• As previously announced in Gran Tierra's August 4, 2020 press release, on June 21, 2020, Moqueta was shut-in immediately after a leak was detected in the pipeline that transports the field's production to Costayaco; repairs were made during July 2020 and the field was brought back on production on July 27, 2020; the temporary shut-in of Moqueta impacted the Quarter's production by approximately 850 BOPD; Moqueta is currently producing approximately 2,600 BOPD

KeyFacts Energy: Gran Tierra Energy Colombia country profile