Gran Tierra Energy today announced an operational update. All dollar amounts are in United States ("U.S.") dollars and production amounts are on an average working interest before royalties ("WI") basis unless otherwise indicated. Per barrel ("bbl") of oil equivalent ("BOE") amounts are based on WI sales before royalties.

Key Highlights:

• Production Restarted: during third quarter 2020 to date (July 1-September 21, 2020), production has averaged approximately 18,700 BOE per day ("BOEPD"); during September 1-21, 2020, production has increased to an approximate average of 21,250 BOEPD (second quarter 2020 averaged 20,165 BOEPD); Gran Tierra's oil production volumes have been positively impacted by the resumption of production at the Suroriente and PUT-7 Blocks in the southern Putumayo region, as well as at several minor fields, and by the recommencement of workover activities at the Acordionero oil field
• Waterfloods Outperforming: waterflood response across all of Gran Tierra’s core assets has continued to outperform management's expectations; in particular, Acordionero has continued to see material increases in reservoir pressures during third quarter 2020 to date; the continued focus on surveillance, analysis and optimization of Acordionero's waterflood has led to a shallowing of the field’s oil production decline rate
• Resumption of Operations: with the recent partial recovery in oil prices and tightening of differentials, Gran Tierra's operations team has seamlessly restarted several field activities throughout the Company's Colombian portfolio, in strict accordance with COVID-19 safety protocols for the Company's employees and local communities; Gran Tierra has performed in excess of 2,500 COVID-19 tests and managed to safely move more than 1,500 employees in and out of the Company's operations during five separate crew-changes since the pandemic started; although the evolving situation with the COVID-19 pandemic may impact the timing of current and planned activities, Gran Tierra remains confident that its COVID-19 protocols should allow ongoing progress in the resumption of operations
   
• Resumption of Acordionero Workover and Development Activities (100% WI):
  • Acordionero Development Drilling Expected To Commence Q4/2020: 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 over the last year
  • Acordionero Workover Activity Underway: the first workover rig restarted operations on September 1, 2020 and is currently on its third workover, the AC-58 oil well; the AC-52 and AC-53 oil wells have already been returned to production on schedule and under budget; 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 is expected to arrive at Acordionero in October 2020 to accelerate well workover activity; a total of 10 to 12 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 bbl of oil per day ("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)
  • Costayaco/Vonu Workovers Expected to Resume in October 2020 (100% WI): a workover rig is expected to start operations in October 2020 to workover 3 offline oil wells and recomplete 2 wells to add U Sand water injection; the total combined productive capacity of the offline oil wells is estimated to be approximately 1,000 BOPD with weighted averages for water cut of 44%, gas-oil ratio of 811 standard cubic feet per bbl and API oil gravity of 29 degrees (based on 30-day averages prior to each well going offline earlier this year)
  • Suroriente Block (52% WI) Production Ramping Up: restart of the Cohembi field, previously shut-in due to local farmer blockades, commenced on August 28, 2020; Cohembi's average WI production (September 1-21, 2020) is approximately 2,160 BOPD; volumes are expected to continue to increase to the block’s estimated WI capacity of approximately 3,600 BOPD (based on the 30-day average prior to the block being shut-in earlier this year)
  • Majority of Minor Oil Fields Production Back Online: 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 1,600 BOPD, with an additional 400 BOPD expected to be added during fourth quarter 2020; the cost optimizations achieved across the Company's assets are being realized in these reactivations, both in processes and personnel, as well as operating strategy going forward
• Operating Cost Reductions: the Company's optimization programs have reduced operating costs by approximately $3.00/bbl; these cost-saving initiatives included personnel optimization, contract renegotiations and increased utilization of associated gas in gas-to-power operations; additional operational improvements have been identified and are forecasted to provide a further operating cost reduction of approximately $0.50/bbl in fourth quarter 2020

VAT & Income Tax Refunds Received: as of August 31, 2020, Gran Tierra has collected total value-added tax ("VAT") and income tax receivables of approximately $51 million; the Company expects to collect approximately another $25 to $35 million before the end of 2020; therefore, Gran Tierra forecasts a total collection of approximately $76 to $86 million in VAT and income tax receivables during 2020

• Gran Tierra Positioned to Thrive in 2021: The Company's initiatives during the severe downturn of 2020 have been focused on portfolio optimization and the preservation of liquidity and value; with the recovery in oil prices, Gran Tierra is now pacing projects to allow the safe resumption of operations while following strict COVID-19 safety protocols; the Company is analyzing multiple scenarios focused on providing strong returns and free cash flow in 2021 in order to reduce debt, and to optimize the ultimate oil recovery, free cash flow and long-term value from all assets; Gran Tierra believes its robust asset base will resume average production in excess of 30,000 BOEPD in 2021, based on current assumptions, including commodity prices remaining at current levels and that the level of global economic disruption from the COVID-19 pandemic does not increase next year

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented:
"We are very pleased we have safely and diligently recommenced operations throughout our extensive Colombian portfolio. The safety of our staff, contractors and the local communities where we operate is paramount. Gran Tierra's proper management of COVID-19 safety protocols has led to an earlier restart of activities than originally forecast and we commend our teams in Colombia and Canada for all of their excellent work during the many challenges of 2020. We are also greatly appreciate the support the Colombian government continues to provide the local oil industry, as evidenced by the ongoing payments of VAT and income tax refunds. 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."

KeyFacts Energy: Gran Tierra Energy Colombia country profile