Gran Tierra Energy Inc.

Good morning, ladies and gentlemen, and welcome to Grand Tierra Energy's results conference call for the first quarter of 2023. 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 questions. I would like to remind everyone that this conference call is being webcast and recorded today, Wednesday, May 3, 2023, at 11 o'clock a.m. Eastern Time. Today's discussion may include certain forward-looking information as well as certain non-GAAP financial measures. Please refer to the earnings and operational update press release we issued yesterday for important disclaimers with regard to this information and reconciliations of any non-GAAP measures discussed on today's call. Any production volumes are based on working interest sales before royalties. Finally, this earnings call is the property of Grand Tierra Energy, Inc. Any copying or rebroadcasting of this call is expressly forbidden without the written consent of Grand Tierra Energy. I will now turn the conference call over to Gary Guidry, President and Chief Executive Officer of Grand Tierra. Mr. Guidry, please go ahead.

Thank you, Shannon. Good morning, and thanks for joining Granteer's first quarter 2023 results conference call. My name is Gary Guidry, President and Chief Executive Officer, and with me today are Ryan Nelson, our Executive Vice President and Chief Financial Officer, and Rob Will, our Vice President of Asset Management. On Tuesday, May 2nd, 2023, we issued a press release that included detailed information on our first quarter 2023 results, which is available on our website. Ryan and Rob will make a few brief comments, and then we will open the line for questions. Immediately following this earnings call at 10 a.m. Mountain Time and 12 noon Eastern Time, we will be holding our annual general meeting of stockholders. During the meeting, I will give an overview of Grand Tierra and where the company is heading. We invite you to join us after this call. Dial-in instructions can be found on our website. I'll now turn the call over to Ryan.

Thank you Gary. Good morning everyone. Grand Tierra achieved a strong quarter by delivering $60 million of funds flow while delivering on our front end loaded development program, which saw the drilling of 14 development wells out of the total 2023 budget plan for 18 to 23 development wells. Given the increased activity during the quarter, Grand Tierra spent $71 million on capital expenditures which exceeded fund flow slightly by $11 million. By completing the majority of our development program in the first three months of 2023, we expect to benefit from higher oil production rates for the remainder of the year and with the goal of maximizing our production and cash flow in 2023. Over the last 12 months, we generated net income of $115 million, adjusted EBITDA of $459 million, funds flow of $339 million, and free cash flow of $73 million. This free cash flow allowed us to execute on our share buyback plan and strengthen our balance sheet via bond buybacks. During the quarter, Grand Tierra purchased approximately 13.1 million shares for a total purchase price of $10.7 million, an average price of approximately $0.82 per share. We also exited the year with a healthy net debt to adjust to EBITDA ratio of one times. As part of Grand Tierra's ongoing commitment to reduce its net debt during the quarter, The company bought back $8 million in face value of Grand Tierra's 6.25% senior notes. The cost of the 2025 bond buyback was approximately $6.8 million, representing a discount of about 15% to the face value of the 2025 bonds. The company exited the quarter with $106 million of cash on the balance sheet and net debt of $466 million, with their credit facility remaining completely undrawn. During Q1, The Brent price averaged $82 per barrel, down 16% from one year ago, and down 7% from the prior quarter. The company's quality and transportation discounts narrowed to $18.45 per barrel, down from $19.74 per barrel in the prior quarter, and up from $12.56 per barrel one year ago. The Kaseya oil differential increased to $15.17 from $6.38 per barrel in the corresponding period in 2022. Castilla is the benchmark for our coordinated production. The Vasconia differential increased to $7.87 from $3.60 in the corresponding period of 2022. Vasconia is the benchmark for our Putumayo production. The good news is that differentials narrowed in March this year and continued to narrow in April. The current Vasconia differential is down to approximately $6.50 per barrel, and the Castilla differential is down to approximately $11.50. Even more encouraging is in the last couple of days, differentials have narrowed to $10.50 and $5.50 for Castilla and Vasco, respectively. Oil prices continue to remain volatile, and Brent has sold off the last couple of weeks. Whilst Brent averaged $82 in Q1, it hit a low of $73 and a high of $87. So the recent volatility is nothing new. Grand Tierra's total production for the quarter was 31,611 BOE per day, up 8% from one year ago and decreased 3% compared to the prior quarter. The company's second quarter production to date, 2023, is approximately 32,400 BOPD, and we are on track on our targets this year. The company's operating net back was $35.18 per barrel, down 33% from one year ago and down 9% from the prior quarter. Changes in funds flow and operating net back were largely driven by the decrease in Brent oil price and the widening of the quality and transportation discounts over the same time period. We're very pleased with our recent announced agreement with Equipatrol, the national oil company of Columbia, by which Grantier and Equipatrol renegotiated the agreement for the Soriente Block in the Putamayo Basin, which was scheduled to end in mid 2024. Grantier will continue to be the operator of the Soriente Block and is committing to a capital investment program of $123 million over a three-year period from the agreement's effective date, expected to be funded by grant carers' internal cash flows. The agreement provides an opportunity to add significant value as well as economic life to Soriente by continuing the duration for 20 years. The additional term of the agreement allows long-term investment in infrastructure and work programs to enhance oil recovery efficiency in existing fields and appraisal drilling to extend the life of the fields. Lastly, we're happy to report that Grand Tierra has issued the company's 2022 sustainability report, creating long-term value and delivering on our environmental, social, and government's commitments, which can be found on the company's website at www.grandtierra.com.esg. I'll now turn the call over to Rob to discuss some of the operational highlights from our first quarter results.