• Achieved First Quarter 2022 Total Company Average Production of 29,362 BOPD, Up 20% Year-on-Year
• Acordionero and Costayaco Infill Development Drilling Campaigns Yielding Encouraging Results
• Expect to Meet Full Year 2022 Guidance of 30,500-32,500 BOPD
• As of March 31, 2022, Paid Down Credit Facility to $40 Million and Had Cash Balance of $59 Million
• Balance of Credit Facility Expected to be Fully Paid in Second Quarter 2022

Gran Tierra Energy has announced a corporate update.

Highlights

• First Quarter 2022 Production: Gran Tierra’s total average production was 29,362 BOPD during the first quarter of 2022, which was approximately flat when compared with fourth quarter 2021 production and up 20% from first quarter 2021’s level. The Company’s first quarter 2022 production was in-line with management expectations.
• Expect to Meet 2022 Production Guidance: Gran Tierra believes its ability to keep production flat quarter-on-quarter demonstrates the ongoing successful results from the Company’s waterflooding efforts in all major assets. The ongoing infill development drilling campaigns in the Acordionero and Costayaco oil fields are expected to increase the Company’s full year 2022 average production into the guidance range of 30,500-32,500 BOPD. The ramp up in production from first quarter 2022’s level is expected to begin in the latter half of second quarter 2022 as new Acordionero and Costayaco oil wells are brought online.
• Significant Debt Reduction:
  • Gran Tierra’s credit facility has been reduced to a remaining balance of $40 million as of March 31, 2022, down $27.5 million or 41% from a balance of $67.5 million as of December 31, 2021, and down $164 million from March 31, 2020.
  • With a cash balance of $59 million as of March 31, 2022, forecasted 2022 free cash flow¹ and recovery of tax receivables, Gran Tierra expects to fully pay off the remaining balance of its credit facility in the second quarter 2022.
• 2022 Financial Forecasts and Plans:
  • At an $80/bbl Brent price (The Company’s previously announced high budget case), Gran Tierra’s 2022 capital program of $220-240 million is forecast to generate 2022 cash flow¹ of $330-350 million, free cash flow¹ of $100-120 million, EBITDA¹ of $440-460 million and a 2022 year-end cash balance of $120-140 million.
  • With Brent currently at significantly higher levels than $80/bbl, the Company has increased its 2022 Brent price forecast to $95/bbl. At this higher oil price, the Company would maintain 2022 capital at $220-240 million with forecast 2022 cash flow¹ of $410-430 million, free cash flow¹ of $180-200 million, EBITDA¹ of $550-570 million and a 2022 year-end cash balance of $210-230 million.
  • The Company’s 20 to 25 well development program continues to focus on asset optimization, maintaining a low operating cost structure and increasing oil recovery factors across its extensive portfolio.
  • Gran Tierra’s 2022 exploration campaign of up to 6-7 wells is expected to be fully funded from forecasted internally generated cash flow¹ and is designed to focus on near-field prospects in proven basins with access to infrastructure, providing short cycle times from discovery to bringing production on-stream.
  • The Company continues to have Brent oil price hedges in place for 9,000 BOPD in first half 2022, with an average ceiling price of $87.62/bbl on 8,000 BOPD. Therefore, approximately 73% of Gran Tierra’s oil production, which is unhedged, has been able to fully benefit from the current high oil price environment.
• Operations Update:
  • Acordionero:
    • Gran Tierra has allocated capital of $70 million towards 2022 development activities for the Acordionero field (14-16 development wells) in the Middle Magdalena Valley Basin.
    • Drilling began on February 15, 2022, with one rig on the Southwest Pad. Three infill producers and two water injection wells were drilled before the end of first quarter 2022. All producing wells will be on production in April 2022.
    • Gran Tierra was successful in its ongoing focus on quick-cycle times, drilling these five wells for an average per well cost of $1.3 million. Completion costs for the three infill oil wells were on budget at an average cost per well of $0.6 million. The first water injector’s completion cost was on budget at $0.8 million. The second water injector completion is planned during April 2022.
    • The drilling rig is being moved to Central Pad with recommencement of development drilling of the next 9-11 wells expected before the end of April 2022.
    • The results of the development drilling campaign have met expectations and the benefits to the Acordionero field’s oil production are expected to be realized through the course of second and third quarter 2022 with increased production.
    • A polymer injection project is expected to begin early in the third quarter of 2022, where the Company plans to inject polymer into one or two waterflood patterns. The main objective of the polymer is to determine whether this widely practiced enhanced oil recovery process would be successful at increasing Acordionero’s ultimate oil recovery factors and remaining oil reserves.
  • Costayaco and Moqueta:
    • Gran Tierra has allocated capital of $40 million and $30 million respectively to the Costayaco (4-5 development wells) and Moqueta (3 development wells) fields in the Putumayo Basin in 2022.
    • The first Costayaco well was spud in late February 2022, and as of early April 2022, three infill development oil wells have been drilled. Two of these wells were the fastest and lowest cost wells ever drilled in the field (average per well cost of $1.8 million). The three wells are expected to be completed and brought on production during second quarter 2022.
    • The Moqueta work program is expected to commence in the fourth quarter of 2022 and is planned to continue into 2023.
  • Ecuador Exploration:
    • Gran Tierra expects to drill 2-3 exploration wells in 2022, targeting multi-zone prospects near existing fields with access to infrastructure. Gran Tierra’s first exploration well in Ecuador is scheduled to spud in the third quarter of 2022 on the Chanangue Block.
    • Environmental licenses for exploration drilling have been granted by Ecuador’s Ministry of the Environment for both the Chanangue and Charapa Blocks, as well as for seismic activities in the Charapa Block. Approval of the environmental license for the Iguana Block is expected during third quarter 2022.
  • Colombia Exploration:
    • The Company is also progressing its 2022 exploration campaign in Colombia with the first exploration well expected to be spud in the Putumayo Basin in early second half 2022 targeting multiple horizons in a prospect between the Costayaco and Moqueta fields. Another one to two exploration wells in the Putumayo are planned for second half 2022, as is one exploration well in the Middle Magdalena Valley Basin.

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented:
"Gran Tierra is in a strong position for the continued development and enhanced oil recovery activities in 2022 to optimize value from each of our assets. Gran Tierra’s balance sheet has significantly strengthened since 2020 and paying off the entire credit facility will be a major milestone for the Company. Looking to the end of the year, we are forecasting a net debt¹ to EBITDA¹ ratio of under 0.8 times. In addition, we plan to allocate capital to prioritized, high-impact exploration drilling opportunities. Our waterflood programs across all of our assets continue to perform well and we expect another strong year of free cash flow¹ from these high quality, low decline assets."