Gran Tierra Energy Inc.

Good morning, ladies and gentlemen, and welcome to Granteer Energy's conference call for fourth quarter and year-end 2021 results. My name is Olivia, and I will be your conference coordinator for today. At this time, all participants are on 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 questions. If at any time during the call you require audio assistance, please press star zero and the coordinator will be happy to assist you. I would like to remind everyone that this conference call is being webcast and recorded today, Wednesday, February 23, 2022, at 11 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 used yesterday for important advisories and disclaimers with regard to the information and for reconciliation of any non-GAAP measures discussed on today's call. Finally, this earnings call is the property of Grand Sierra Energy, Inc. Any copying or repodcasting of this call is expressly forbidden without the current consent of Grand Sierra Energy. I will now turn the conference call over to Mr. Gary Guidry, President and Chief Executive Officer of Grand Sierra. Mr. Guidry, please go ahead.

Thank you, operator. Good morning and welcome to Grand Tierra's fourth quarter and year-end 2021 results conference call. My name is Gary Guidry, Grand Tierra's President and Chief Executive Officer, and with me today are Ryan Elson, our Executive Vice President and Chief Financial Officer, and Rob Will, our Vice President of Asset Management. We issued a press release yesterday that included detailed information about our fourth quarter and year-end 2021 results. In addition, Grantiera's 2021 Annual Report on Form 10-K has been filed on EDGAR and is available on our website. Ryan and Rob will make a few brief comments to summarize and provide context, and then we will open the line for questions. I'll now turn the call over to Ryan. Over to you, Ryan.

Thanks, Gary. Good morning, everyone. After the many challenges in 2020 that the world faced, 2021 was a year of strong recovery for the energy industry and Grand Tierra. Our top-tier, low-decline, onshore conventional asset base continued to prove its high quality as the company returned to strong growth in 2021. Our production, approved reserves, funds flow from operations, free cash flow, and after-tax net asset value, or NAV per share, all saw increases from the previous year. We continue to show strong reserve replacement ratios on both approved and approved developed producing basis, driven by our successful on-budget development programs and water flood initiatives, which Rob will describe later. During 2021, our net income was $42 million, the highest realized since 2018, while our adjusted EBITDA was $242 million. Fund flow from operations were $186 million, resulting in free cash flow of $37 million, which was the highest GTE has achieved since 2012. Grantier's on-budget capital spend totaled $150 million for the year and focused on development activities. You may recall that a year ago, we made a commitment to reduce our credit facility balance and we were able to repay approximately $123 million during 2021, resulting in a credit facility balance at the end of the year of $68 million with cash and cash equivalents of $26 million. With forecasted free cash flow during 2022, We plan to have our credit facility completely paid off before the end of June this year. During 2021, through direct tax refunds and value-added tax on our oil sales, Grand Tierra collected a net cash inflow of $21 million, compared to $55 million net collections in 2020. Grand Tierra's strong operating net back of $34.13 per barrel for the year was up 146%, from $13.86 in 2020. Looking to 2022, we announced a capital budget of $220 million to $240 million, allocating 70% to development value optimization of existing assets and 30% to high-impact exploration in Colombia and Ecuador. We are forecasting production of approximately 31,000 barrels of oil per day, the midpoint of our guidance, which is a 19% increase over 2021, with current production being approximately 30,000 barrels per day. Our balance sheet has strengthened significantly, and with the substantial capital expenditures incurred in 2017 to 2019 behind us, we're well positioned for material-free cash flow in 2022 and beyond. At $80 per barrel Brent, we are forecasting year-end 2022 net debt to EBITDA of approximately one times, Free cash flow of $180 million before exploration and $110 million after exploration. Grand Pierre's 2022 exploration campaign of up to six to seven wells will be fully funded from internally generated cash flow and designed to focus on near field prospects and proven basins with access to infrastructure, providing short cycle times from discovery to bringing production on stream. We're also very excited to be drilling our first exploration well in Ecuador in 2022. We've entered into Brent oil hedges on 9,000 barrels of working interest production during the first half of 2022, and no hedges beyond mid-year. These hedges represent just under 30% of our forecasted first half 2022 production, providing downside production as we execute most of our development activities and pay off our credit facility. The weighted average ceiling of the hedges is approximately $87 per barrel, with a floor of $75.50 per barrel. which has allowed you to participate in the significant recent oil price rally. We will continue to look at learning some hedges for the second half of 2022. Before I hand it over to Rob, I want to mention some of our beyond compliance policy initiatives. We're going to identify significant opportunities and benefits to the environment communities. We voluntarily strive to go beyond what is legally required to protect the environment and provide social benefits because it's the right thing to do. In 2021, for the first time, GTE reported Scope 2 greenhouse gas, or GHG, emissions in addition to Scope 1 emissions in the company's yearly GHG emissions report. The 2022 results saw an overall GHG emission reduction in excess of 60% relative to 2019, which was achieved via the company's gas-to-power projects and additional operational efficiencies. Starting in 2016 with Conservation International, we committed to reforesting 1,000 hectares of land and securing and maintaining 18,000 hectares of forest through our flagship natural Amazonas project over a five-year period in southern Colombia. For context, 19,000 hectares is about 48,000 American football fields. Over the life of the project, it is expected 8.7 million tons of CO2 will be sequestered. In 2021, Grand Tierra continued with a stringent implementation of COVID-19 protocols by conducting approximately 65,000 PCR and antigen tests and ended the year with a very low positivity rate of 0.7% among its employees. Grand Tierra also acquired and donated COVID-19 vaccines for all its employees in Columbia. Grand Tierra is committed to work with the Columbia national and local governments and local communities to further their peace building efforts in 2021 The company invested 2.9 million locally in projects identified by the communities to meet their needs. The projects include the installation of sanitary units for rural families and infrastructure improvements to local schools and rural roads. In 2021, as part of its commitment to the UN guiding principles for business and human rights, Grand Tierra continued with its humanitarian demining efforts in the Putumayo, clearing a total of 31,000 hectares in partnership with local communities. These are just some of the initiatives we've undertaken in 2021. And I highly encourage everyone to take a look at our 2021 Sustainability Report, which will be available in the second quarter of 2022. I'll now turn the call over to Rob Will to discuss some of the highlights of our current operations.