Gran Tierra Energy Q3 2025 Earnings Report

Gran Tierra Energy EPS Results

• Actual EPS: -C$0.57
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Gran Tierra Energy Revenue Results

• Actual Revenue: $207.82 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Gran Tierra Energy Announcement Details

• Quarter: Q3 2025
• Date: 10/30/2025
• Time: Before Market Opens
• Conference Call Date: Friday, October 31, 2025
• Conference Call Time: 11:00AM ET

Gran Tierra Energy (TSE:GTE) Inc is an independent energy company. It is engaged in the acquisition, exploration, development, and production of oil and gas properties in proven, under-explored hydrocarbon basins that have access to established infrastructure. The firm produces primarily light crude oil, supplemented with medium crude and natural gas. Gran Tierra holds interests in producing and prospective properties in Colombia and prospective properties in Ecuador. The company has a strategy that focuses on establishing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a base for future growth.

Gran Tierra Energy Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Gran Tierra closed a new prepayment facility backed by Ecuador crude for an initial $150 million (potential additional $50 million), a four‑year SOFR+3.8% structure that improves sales pricing and strengthens liquidity.
• Negative Sentiment: Q3 production averaged 42,685 BOE/day (up ~30% YoY) but was materially impacted by externally driven pipeline outages and a landslide, leading management to expect the annual average at the lower end of guidance despite describing the volumes as deferred rather than lost.
• Positive Sentiment: The company generated $48 million of operating cash flow in Q3, finished the quarter with $49 million cash and plans to reduce 2026 capital spending to prioritize free cash flow and deleveraging.
• Positive Sentiment: Strong operational results — Ecuador exploration wells (Conejo A‑1 flowed ~1,300 bpd; Conejo A‑2 and Chanangue‑1 adding production), Cohembi waterflood doubled northern output to ~6,700 bpd (field >9,000 bpd), and Canadian Lower Montney wells performing at/above expectations.
• Neutral Sentiment: Management expects a year‑end exit of 47,000–50,000 BOE/day and will publish a December budget with a roadmap for free cash flow, portfolio optimization, and steps to address net debt (~$755 million).

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to Gran Tierra Energy's Conference Call for Third Quarter 2025 Results. My name is Shannon, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Following the initial remarks, we will conduct a question-and-answer session for securities analysts and institutions. Instructions will be provided at that time for you to queue up for your questions. I would like to remind everyone that this conference call is being webcast and recorded today, Friday, October 31st, 2025, at 11:00 A.M. Eastern Time. Today's discussion may include certain forward-looking information, oil and gas information, and non-GAAP financial measures. Please refer to the earnings and operational update press release we issued yesterday for important advisories and disclaimers with regard to this information and forward reconciliations of any non-GAAP measures discussed on today's call.

[Operator]

Finally, this earnings call is the property of Gran Tierra Energy, Inc., and the copying or rebroadcasting of this call is expressly forbidden without the written consent of Gran Tierra Energy. I will now turn the conference call over to Gary Guidry, President and Chief Executive Officer of Gran Tierra Energy. Mr. Guidry, please go ahead.

[Gary Guidry, President and CEO at Gran Tierra Energy]

Thank you, Shannon. Good morning and welcome to Gran Tierra Energy's Third Quarter 2025 Results Conference Call. My name is Gary Guidry, Gran Tierra Energy's President and Chief Executive Officer, and with me today are Ryan Ellson, our Executive Vice President and Chief Financial Officer, and Sebastien Morin, our Chief Operating Officer. On Thursday, October 30th, 2025, we issued a press release that included detailed information about our third quarter 2025 results, which is available on our website. Ryan and Sebastien will make a few brief comments, and then we will open the line for questions. I'll now turn the call over to Ryan to discuss our financial results.

[Ryan Ellson, CFO at Gran Tierra Energy]

Thanks, Gary. Good morning, everyone. First, I would like to highlight an announcement made last week relating to the prepayment agreement we closed, which represents a new prepayment facility backed by our Ecuadorian crude production. The initial advance will be $150 million, with the potential for another $50 million once our Ecuador acquisition closes and we reach 10,000 BOE per day in Ecuador. It's a four-year structure, priced at SOFR +3.8%, and includes a three-month grace period on principal before amortizing evenly over the remaining term. Importantly, the commercial terms, or sales price, are an improvement to our previous crude oil sales contract. Overall, this agreement strengthens our balance sheet and gives us added financial flexibility at a very competitive cost.

[Ryan Ellson, CFO at Gran Tierra Energy]

In addition, we increased our current facility secured by our Canadian assets to $75 million, an equally important move from a 1.1 structure to a two-year structure with maturity in October 2027. Now, on to the quarter. During the third quarter of 2025, Gran Tierra Energy averaged 42,685 BOE per day. That's up roughly 30% from a year ago, driven by our Canadian acquisition and continued success from our exploration in Ecuador. Production during the quarter was temporarily impacted by unusual and externally driven events across our operations, including a landslide in Ecuador, which impacted the main export pipelines in the country, requiring us to shut in production, and trunk line repairs at the Makeda Fuel Group, which resulted in the field being shut in for the quarter. The pipeline repairs took longer than anticipated due to ongoing heavy rains through July and August.

[Ryan Ellson, CFO at Gran Tierra Energy]

All pipelines are restored as of October 10th. We want to emphasize that these volumes represent deferred barrels rather than lost production, and we are ready to see a strong recovery with current production averaging 45,200 BOE per day. Based on the deferrals, we are forecasting the lower end of our production guidance range. The underlying assets continue to perform well, and our teams remain focused on ongoing optimization and maximizing production efficiency and cash flow, with an expected exit rate to 47,000 BOE to 50,000 BOE per day. From a cash perspective, it was a solid quarter where we generated $48 million of operating cash flow, up 39% from Q2. We ended the quarter with $49 million in cash and net debt position of approximately $755 million.

[Ryan Ellson, CFO at Gran Tierra Energy]

In terms of pricing, we saw improving differentials across South America, especially in Ecuador, which helped offset some of the impact from temporary facility downtime and pipeline outages. On the capital side, we invested $57 million that focused mainly on high-return projects in Colombia, Ecuador, and Canada. Overall, despite some temporary production headwinds this quarter, we're expecting a strong finish to the year, which sets us up for a strong 2026, with production already back above 45,200 barrels a day and the added liquidity from our new prepayment facility and increase and extension of our Canadian asset-backed facility. We're in a great position to finish 2025. The 2025 capital program was primarily focused on fulfilling exploration commitments, which resulted in numerous material discoveries.

[Ryan Ellson, CFO at Gran Tierra Energy]

We also invested in facility expansion in Suroriente, including gas to power, which provides us with sufficient process capacity to increase production in the field and lower costs. With substantially all commitments behind us, the focus turns to free cash flow and deleveraging from our large, diversified resource base. We release our 2026 budget in mid-December, which will include a decrease in capital expenditures and an emphasis on free cash flow generation. I'll now turn the call over to Sebastien to discuss some of the highlights of our current operations.

[Sebastien Morin, COO at Gran Tierra Energy]

Good morning, everyone, and thank you, Ryan. The third quarter highlighted continued operational strength across our entire portfolio, with solid execution in Ecuador, Colombia, and Canada despite contemporary external challenges. In Ecuador, we had another strong quarter, achieving record production: greater than 5,000 barrels of oil per day in August and greater than 6,000 barrels of oil per day in early October, with the delivery of the Conejo A-1 exploration well, which was drilled on budget and successfully tested both the Hollin and Basal Tena sands, flowing over 1,300 barrels a day of 26.9 degree API oil under normal natural flow conditions. We plan to re-enter Conejo A-1 later this quarter and install the final completion and selectively test each zone to optimize long-term production. We also recently cased and cemented the Conejo A-2 well, targeting multiple prospective reservoirs, including the Basal Tena and Hollin.

[Sebastien Morin, COO at Gran Tierra Energy]

The well discovered 41 feet of net reservoir with an average porosity of 14% in the Hollin formation, suggesting a well-connected reservoir with high deliverability potential over the full Conejo structural trap. In addition, we also confirmed a new oil discovery at Chanangue-1, which was a legacy well drilled in 1990 and suspended in 1992 that we re-entered to test the bypassed Basal Tena interval. It's currently producing 600 barrels a day on jet pumps and has opened up new follow-up drilling opportunities on the eastern side of the block. With the delivery of the Conejo A-2 well, Gran Tierra Energy has completed all of the exploration commitments in Ecuador, and we are now well-positioned to continue to increase production into the development phase and help sustain stable field output. At Cohembi, the waterflood program continues to deliver excellent results.

[Sebastien Morin, COO at Gran Tierra Energy]

The production from the northern area has more than doubled, up roughly 135% from 2,800 barrels to 6,700 barrels a day. Total field production recently reached over 9,000 barrels a day, the highest since 2014. We are now executing the final six-well drilling program to continue to ramp the field production and extend the Cohembi field boundary, including an exploration well to the north as part of the agreed carry program under our contract extension, which we expect to complete by the end of the first half of 2026. In Canada, we drilled and brought two additional Lower Montney wells on stream in September, both performing at or above expectations. That brings our 2025 activity at Simonett to 4.0 gross or 2.0 net wells. Stepping back, what really stands out this quarter is the progress we've made in advancing our technical capabilities and field execution.

[Sebastien Morin, COO at Gran Tierra Energy]

From the exploration success we had in Ecuador to optimizing mature waterfloods in Colombia and efficiently scaling our Canadian program, our focus remains on disciplined execution and continuous improvement to ensure our assets deliver strong value over time. As Ryan summarized, we had several unplanned production deferrals. Although our average production for the year will be at the lower end of our annual guidance, we'll finish the year strong with an expected exit rate between 47,000 to 50,000 barrels of oil per day. I will now turn the call back to the operator, and Gary, Ryan, and I will be happy to take questions. Operator, please go ahead.

[Operator]

Thank you. Ladies and gentlemen, we will now conduct a question-and-answer session for securities analysts. If you have a question, please press the star key followed by one, one on your touch-tone phone. You will then hear an automated message advising your hand is raised. Your questions will be polled in the order they are received. Please ensure you lift the handset if you're using a speakerphone before pressing any keys. One moment, please, for your first question. Our first question comes from the line of David Round with Stifel. Your line is now open.

[David Round, Managing Director, Energy Equity Research at Stifel]

Thanks for the presentation, guys. First one, just on Suroriente, please. You seem to have seen and experienced a very sudden production response there, I mean, positively. Great to see. Can you just talk about, though, please, just sort of what exactly has happened as that program has been going on over the course of this year? What are the new production? Is it due to new wells? What is waterflood? How sustainable is it, please?

[Sebastien Morin, COO at Gran Tierra Energy]

Yes, I'll take that one. In a phasing approach, really, it was the start of injection on the north pattern where we're injecting essentially 5,000 barrels of water per day in that north pattern on Cohembi-25. The other catalyst was well upsized, so we had a few really key workovers. The one well just south of the pattern, Cohembi-20, was upsized, and that went from 500 barrels a day gross to over 2,000. That one's included in the North pattern. Now, as pressure comes up and we continue to increase our injection, we're seeing some really amazing performance from that sand. Just to recall, those are essentially Darcy sands, so the response is very quick.

[David Round, Managing Director, Energy Equity Research at Stifel]

Okay. If I think about the production number you've put out there at the moment, how do we think about that just conceptually going into next year with continual drilling? Is that sort of a base, and we should be looking at higher than that?

[Sebastien Morin, COO at Gran Tierra Energy]

I think that's extremely fair, what you've just described. That's exactly where we're going. With the extra six wells that we're putting into the field, we expect to continue to increment that production from here.

[Gary Guidry, President and CEO at Gran Tierra Energy]

Production and reserves.

[Sebastien Morin, COO at Gran Tierra Energy]

Production and reserves.

[David Round, Managing Director, Energy Equity Research at Stifel]

Okay. Great. Just the second one, please. Just on the prepayment facility, how does that work in terms of availability once the repayments start?

[Ryan Ellson, CFO at Gran Tierra Energy]

Effectively, you draw the cash at the beginning, the entire amount, the $150 million, and then just repay those funds over the course of the four years.

[David Round, Managing Director, Energy Equity Research at Stifel]

Okay, over the course of four years, is it fairly linear in terms of how?

[Ryan Ellson, CFO at Gran Tierra Energy]

It is. It is. Effectively, every time we do a lift in Ecuador, we'll pay back a portion of the money borrowed.

[David Round, Managing Director, Energy Equity Research at Stifel]

Perfect. Understood. Thanks, guys.

[Ryan Ellson, CFO at Gran Tierra Energy]

Thanks.

[Operator]

Thank you. Our next question comes from the line of Josef Schachter with SER. Your line is now open.

[Josef Schachter, Energy Analyst at SER]

Good morning, guys. A couple of questions for me. Congratulations on getting Ecuador up to 6,000 in October. You have on slide 26 of your presentation that the potential could be between 11,000 and 19,000. Does that include the last two wells, which have been very encouraging? Guidance potentially would be to the higher end. The question is, what timeline were you using to get to that? Do you need to put waterflood in? Do you have enough water? Maybe just give me a guidance of how Ecuador grows.

[Gary Guidry, President and CEO at Gran Tierra Energy]

Yeah. Good morning, Josef. The answer to your question is the guidance on that slide does not include the Conejo discovery to the northwest. The guidance is based on waterflood of the Basal Tena. We're in a very good position here that we have a water source in the stacked pays that we have in the Hollin and the T, T Sand, and everything is in place to do that. We're working through the field development plans with the ministry in Ecuador. Now that we've fulfilled all of our commitments this year on exploration in Ecuador, we're moving to the development phase. That will start occurring next year during 2026.

[Josef Schachter, Energy Analyst at SER]

Okay. The debt issue, it seems to be the overhang. The market's reaction today, down to a new 52 low disappointingly. Just for the levers, maybe, Ryan. Do we need $75, $80 Brent? Do we need Ecuador over 10,000, 11,000 BOE a day? Do we need some non-core sales of your non-operated assets in Canada? Where do you see getting that debt? Is a debt-to-one target something that will happen before the end of the decade? How do you see the levers to get there?

[Ryan Ellson, CFO at Gran Tierra Energy]

Yeah. No, that's a great question. I think one of the things we wanted to emphasize in the press release and our open remarks is now that the exploration commitments and a lot of the Suroriente commitments are behind us. It really sets us up the stage for generating free cash flow. We're laser-focused on generating free cash flow in 2026 and beyond. I think if you look at this year's capital program, there's about $150 million in there between exploration and facility expansion and gas to power, et cetera. I think with that behind us, when we come up with our budget in mid-December, you'll see the focus on free cash flow. We'll continue to look at how to optimize the portfolios as far as asset sales and whatnot, but that will just be incremental deleveraging. Our base plan is deleveraging as much as possible through our base operations.

[Josef Schachter, Energy Analyst at SER]

Okay. In some of the cases like the drillers, Precision and Ensign, they kind of gave targets to the market and to investors, "We're going to knock off $100 million, $150 million," and then they brag when they get there. Are you guys going to be willing to start throwing numbers like that so that people can see guideposts and, "Yeah, you're heading in the right direction. Therefore, your valuation," which is trading at less than 1x cash flow in Canadian dollars and much below your 1PPD, 1P reserves that you show in your presentation, the new one at $19.51. Is that the kind of thing where we can show. The debt holders are now giving the equity value to the shareholders by doing something like that?

[Ryan Ellson, CFO at Gran Tierra Energy]

Absolutely. When we come out with our budget in December, there'll be a clear roadmap.

[David Round, Managing Director, Energy Equity Research at Stifel]

Okay. Super. Looking forward to seeing that. Thanks very much for taking my questions.

[Ryan Ellson, CFO at Gran Tierra Energy]

Great. Thank you.

[Operator]

Gentlemen, there are no further questions at this time. Please continue.

[Gary Guidry, President and CEO at Gran Tierra Energy]

Thank you, Dana. I'd once again like to thank everyone for joining us today. We look forward to speaking with you next quarter and updating you on our ongoing progress. Thank you.

[Operator]

This concludes today's conference. Thank you for your participation. You may now disconnect.

Participants

Executives

• Sebastien Morin, COO
• Ryan Ellson, CFO
• Gary Guidry, President and CEO

Analysts

• David Round, Managing Director, Energy Equity Research at Stifel
• Josef Schachter, Energy Analyst at SER