Gran Tierra Energy reported its Q2 earnings and held a conference call covering current well activity and production. Excerpts from the Q2 earnings call are below:
Q : I’ll start with production. I’d like to drill you a bit more on production please. You increased your spending twice this year now, granted the – majority of that was for infrastructure, but you also expanded your drilling program. And now production at the same time – production guidance for the year has not changed.
Now, Acordionero has been exceeding expectations, so are Costayaco and Moqueta then underperforming your expectations. And if that’s the case, what specifically are you doing to try to mitigate declines there. And, do I understand it correctly from your answer to one of the prior questions that you expect the 4,000 barrels a day in production additions between now and year end to largely come from your drilling of the new Costayaco and Acordionero wells?
Gran Tierra Energy CFO Ryan Ellson: With respect to the capital increases, you’re right that the first capital increase that we did in Q1, as you know that that was for the gas-to-power project which has about a year payback. Not to mention the increased reliability, so there is no production adds. With respect to the second half drilling program, a lot of that in Q4. So it will impact our exit rate as well as potentially reserve additions. But where we really will see the benefit is Q1 of 2019. And so really just the math and when those wells come on in Q4 and you average that over the year, it has a fairly minimal impact. And then we do have a fairly large range in our production guidance.
Q: Okay. And what about Costayaco and Moqueta, how are they performing versus your expectations?
Gran Tierra Energy CFO Ryan Ellson: Moqueta is performing as expected. Actually, a little bit better. Costayaco, as you saw we did have some positive drilling results. We did have Costayaco-19 go down in the quarter, which we’re remediating right now. And as you’ll recall, that was an older well that Gran Tierra drilled in the past, that was sidetracked three times. And so, the bridge plug failed, so that wasn’t very helpful, because that was a great producer in the field. So, we’re actually – right now we’re in the middle of remediating that well, and we expect that to be on – back on production. So, I don’t think that the – when you look at how we – our internal budget, we’re right on track, so we don’t think there’s been that much underperformance or overperformance in any of the fields.
The Oil and Gas Conference®
Gran Tierra Energy is presenting at EnerCom’s The Oil & Gas Conference® at the Denver Downtown Westin Hotel, Denver, Colo. Aug. 19-22, 2018. EnerCom expects to have more than 80 presenting oil and gas companies and more than 2000 financial professionals attending this year’s conference.
To learn more about the conference and presenter schedule please visit the conference website here.
