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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 001-34018
GRAN TIERRA ENERGY INC.
(Exact name of registrant as specified in its charter)
Delaware | 98-0479924 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
900, 520 - 3 Avenue SW | |
Calgary, Alberta Canada | T2P 0R3 |
(Address of principal executive offices, including zip code)
(403) 265-3221
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |
Common Stock, par value $0.001 per share | GTE | NYSE American | |
Toronto Stock Exchange | |||
London Stock Exchange | |||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☒ |
Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
On July 30, 2021, 366,991,788 shares of the registrant's Common Stock, $0.001 par value, were issued.
Gran Tierra Energy Inc.
Quarterly Report on Form 10-Q | |||
Quarterly Period Ended June 30, 2021 | |||
Table of contents | |||
Page | |||
PART I | Financial Information | ||
Item 1. | Financial Statements | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 16 | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 35 | |
Item 4. | Controls and Procedures | 35 | |
PART II | Other Information | ||
Item 1. | Legal Proceedings | 35 | |
Item 1A. | Risk Factors | 35 | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 36 | |
Item 6. | Exhibits | 37 | |
SIGNATURES | 38 | ||
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CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q regarding our financial position, estimated quantities and net present values of reserves, business strategy, plans and objectives of our management for future operations, covenant compliance, capital spending plans and benefits of the changes in our capital program or expenditures, our liquidity, the impacts of the coronavirus (COVID-19) pandemic and those statements preceded by, followed by or that otherwise include the words "believe", "expect", "anticipate", "intend", "estimate", "project", "target", "goal", "plan", "budget", "objective", "could", "should", or similar expressions or variations on these expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct or that, even if correct, intervening circumstances will not occur to cause actual results to be different than expected. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements, including, but not limited to, our ability to comply with covenants in our credit agreement and indentures and make borrowings under our credit agreement; our ability to obtain amendments to the covenants in our credit agreement so as to avoid an event of default under our credit agreement and senior notes; a reduction in our borrowing base and our ability to repay any excess borrowings; sustained or future declines in commodity prices and the demand for oil; sustained or future excess supply of oil and natural gas; potential future impairments and reductions in proved reserve quantities and value; continuation of the COVID-19 pandemic and responses thereto, including possible future restrictions against oil and gas activity in Colombia and Ecuador; our current operations are located in South America, and unexpected problems can arise due to guerilla activity and other local conditions; technical difficulties and operational difficulties may arise which impact the production, transport or sale of our products; geographic, political and weather conditions can impact the production, transport or sale of our products; our ability to raise capital; our ability to identify and complete successful acquisitions, including in new countries and basins from our current operations; our ability to execute business plans; unexpected delays and difficulties in developing currently owned properties may occur; the timely receipt of regulatory or other required approvals for our operating activities; the failure of exploratory drilling to result in commercial wells; unexpected delays due to the limited availability of drilling equipment and personnel; current global economic and credit market conditions and the regulatory environment may impact oil prices and oil consumption differently than we currently predict, which could cause us to further modify our strategy and capital spending program; volatility or declines in the trading price of our common stock and the continued listing of our shares on a national stock exchange; and those factors set out in Part II, Item 1A "Risk Factors" in this Quarterly Report on Form 10-Q and Part I, Item 1A "Risk Factors" in our 2020 Annual Report on Form 10-K (the "2020 Annual Report on Form 10-K"), and in our other filings with the Securities and Exchange Commission ("SEC"). The unprecedented nature of the COVID-19 pandemic and volatility in the worldwide economy and oil and gas industry makes, including the unpredictable nature of the resurgence of cases, possible variants and governmental responses, it more difficult to predict the accuracy of forward-looking statements. The information included herein is given as of the filing date of this Quarterly Report on Form 10-Q with the SEC and, except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to, or to withdraw, any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
GLOSSARY OF OIL AND GAS TERMS
In this document, the abbreviations set forth below have the following meanings:
bbl | barrel |
BOPD | barrels of oil per day |
NAR | net after royalty |
Sales volumes represent production NAR adjusted for inventory changes. Our oil and gas reserves are reported NAR. Our production is also reported NAR, except as otherwise specifically noted as "working interest production before royalties."
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PART I - Financial Information | ||||||||||||
Item 1. Financial Statements | ||||||||||||
Gran Tierra Energy Inc. | ||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||
(Thousands of U.S. Dollars, Except Share and Per Share Amounts) | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
OIL SALES (Note 8) | $ | 96,623 | $ | 33,824 | $ | 192,116 | $ | 119,903 | ||||
EXPENSES | ||||||||||||
Operating | 25,431 | 19,364 | 55,056 | 63,952 | ||||||||
Transportation | 2,921 | 3,226 | 5,427 | 7,263 | ||||||||
COVID-19 related costs (Note 9) | 897 | 421 | 2,036 | 421 | ||||||||
Depletion, depreciation and accretion | 28,927 | 42,484 | 60,245 | 99,778 | ||||||||
Goodwill impairment (Note 5) | - | - | - | 102,581 | ||||||||
Asset impairment (Note 5) | - | 398,458 | - | 402,362 | ||||||||
General and administrative | 9,006 | 6,529 | 18,575 | 11,914 | ||||||||
Severance | - | 25 | 919 | 1,347 | ||||||||
Foreign exchange loss (gain) | 9 1 | (2,988) | 13,174 | 15,819 | ||||||||
Derivative instruments loss (gain) (Note 12) | 21,239 | 5,623 | 44,937 | (7,244) | ||||||||
Other financial instruments loss (gain) (Note 12) | 2,614 | (5,459) | 1,209 | 59,826 | ||||||||
Interest expense (Note 6) | 13,935 | 13,365 | 27,747 | 26,175 | ||||||||
105,061 | 481,048 | 229,325 | 784,194 | |||||||||
INTEREST INCOME | - | - | - | 345 | ||||||||
LOSS BEFORE INCOME TAXES | (8,438) | (447,224) | (37,209) | (663,946) | ||||||||
INCOME TAX EXPENSE (RECOVERY) | ||||||||||||
Current (Note 10) | (1 4) | (375) | (1 4) | (77) | ||||||||
Deferred (Note 10) | 9,203 | (76,200) | 17,854 | (41,594) | ||||||||
9,189 | (76,575) | 17,840 | (41,671) | |||||||||
NET AND COMPREHENSIVE LOSS | $ | (17,627) | $ | (370,649) | $ | (55,049) | $ | (622,275) | ||||
NET LOSS PER SHARE | ||||||||||||
BASIC AND DILUTED | $ | (0.05) | $ | (1.01) | $ | (0.15) | $ | (1.70) | ||||
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||||||
366,982,456 | 366,981,556 | 366,982,008 | 366,981,556 | |||||||||
- BASIC AND DILUTED (Note 7) |
(See notes to the condensed consolidated financial statements)
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Gran Tierra Energy Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
ASSETS
Current Assets
Cash and cash equivalents (Note 13)
Accounts receivable
Investment (Note 12)
Taxes receivable (Note 3)
Other current assets
Total Current Assets
Oil and Gas Properties
Proved
Unproved
Total Oil and Gas Properties
Other capital assets
Total Property, Plant and Equipment (Note 4)
Other Long-Term Assets
Deferred tax assets
Taxes receivable (Note 3)
Restricted cash and cash equivalents (Note 13)
Other
Total Other Long-Term Assets
Total Assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities
Derivatives (Note 12)
Equity compensation award liability (Note 7 and 12)
Total Current Liabilities
Long-Term Liabilities
Long-term debt (Notes 6 and 12)
Asset retirement obligation
Equity compensation award liability (Note 7 and 12)
Other long-term liabilities
Total Long-Term Liabilities
Contingencies (Note 11)
Shareholders' Equity
Common Stock (Note 7) (366,991,788 and 366,981,556 shares issued and outstanding of Common Stock, par value $0.001 per share, as at June 30, 2021, and December 31, 2020, respectively)
Additional paid-in capital
Deficit
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity
(See notes to the condensed consolidated financial statements)
As at December 31, | |||||
As at June 30, 2021 | 2020 | ||||
$ | 19,965 | $ | 14,114 | ||
8,462 | 8,044 | ||||
31,525 | 48,323 | ||||
27,842 | 49,925 | ||||
17,425 | 13,459 | ||||
105,219 | 133,865 | ||||
829,017 | 797,355 | ||||
159,021 | 161,763 | ||||
988,038 | 959,118 | ||||
3,842 | 5,364 | ||||
991,880 | 964,482 | ||||
26,162 | 57,318 | ||
45,985 | 42,635 | ||
3,590 | 3,409 | ||
1,709 | 16 | ||
77,446 | 103,378 | ||
$ | 1,174,545 | $ | 1,201,725 |
$ | 116,437 | $ | 100,784 |
26,594 | 12,050 | ||
1,991 | 805 | ||
145,022 | 113,639 |
759,824 | 774,770 | ||
53,105 | 48,214 | ||
9,762 | 3,955 | ||
3,630 | 4,113 | ||
826,321 | 831,052 | ||
10,270 | 10,270 | |||||
1,286,235 | 1,285,018 | |||||
(1,093,303) | (1,038,254) | |||||
203,202 | 257,034 | |||||
$ | 1,174,545 | $ | 1,201,725 | |||
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Gran Tierra Energy Inc. published this content on 04 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2021 16:25:06 UTC.