Gran Tierra Energy (GTE) Q2 2024 earnings summary

Executive summary

• Reported Q2 2024 net income of $36 million ($1.16 per share), reversing prior losses, with strong operational and exploration progress, including the Arawana discovery and ongoing development in Suroriente and Ecuador blocks.

• Achieved total average working interest production of 32,776 BOPD, up 2% sequentially and 4% per share year-over-year.

• Continued exploration success in Ecuador with strong results from Arawana-J1, Bocachico-J1, and Charapa B6 wells.

• Completed Charapa 3D seismic program, identifying new areas of interest for future drilling.

• Repurchased 3.9 million shares (11% of outstanding shares since Jan 2023) using free cash flow.

Financial highlights

• Net income reached $36 million, or $1.16 per share, for Q2 2024.

• Oil sales totaled $166 million, a 5% increase from the prior quarter, driven by higher Brent prices and narrower oil differentials.

• Adjusted EBITDA was $103 million, up from $95 million in Q1 2024 and $97 million in Q2 2023.

• Operating netback per barrel was $38.80, up 10% from the prior quarter and 12% year-over-year.

• Cash balance stood at $115 million and net debt at $521 million as of June 30, 2024.

Outlook and guidance

• 2024 production guidance reiterated at 32,000–35,000 bopd, supported by strong core field performance and recent exploration success.

• Management expects net debt to adjusted EBITDA to fall below 1.0x by year-end 2024.

• Second half of 2024 to feature continued drilling in Charapa and Chanangue blocks, with further appraisal of Arawana discovery and new drilling in Suroriente.

• Capital guidance remains unchanged, with spending expected to align with first-half results and planned second-half activities.

• Five-year outlook targets average 2P production of 46,000 bopd, with consistent year-over-year free cash flow growth.