Gran Tierra Energy Inc.

Good morning, ladies and gentlemen, and welcome to Grand Tierra Energy's results conference call for the second quarter of 2024. My name is Michelle, and I'll be your coordinator for today. At this time, all participants are in listening 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. Thursday, August 1st, 2024 at 11 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 regards 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'll now turn the conference call over to Gary Guidry, President and Chief Executive Officer of Grand Tierra. Mr. Guidry, please go ahead.

Thank you, Operator. Good morning, and thanks for joining Grand Tierra's second quarter 2024 results conference calls. My name is Gary Guidry, President and Chief Executive Officer, and with me today are Ryan Elson, our Executive Vice President and Chief Financial Officer, and Sebastian Morin, our Chief Operating Officer. On Wednesday, July 31st, 2024, we issued a press release that included detailed information on our second quarter 2024 results, which is available on our website. Ryan and Sebastian will make a few brief comments and then we will open the line for questions. Ryan, please go ahead.

Thank you, Gary. Good morning, everyone. I will start off by saying that we're very pleased with how Grand Tierra has wrapped up the first half of 2024. During the second quarter, we were able to begin our high-impact exploration campaign that started off with the previously announced discovery of In addition, we have also progressed a number of our development programs, including initiating civil works in the Soriente block to kick off a five-well drilling campaign with the second rig in the second half of 2024. During the quarter, Grand Tierra delivered net income of $36 million, or $1.16 per share. Further, Grand Tierra achieved operating net back of $113 million, which is up from $105 million in the prior quarter, adjusted EBITDA of $103 million, which was up from $95 million in the prior quarter. The company also strategically revised its 2022 tax return during the quarter to use its long-term tax receivable balance to offset current tax liabilities, rather than applying net operating loss carry-fors. This decision was driven by higher current and future tax rates and increased profitability in Colombia. As a result, the current tax expense increased by $28 million, but this was offset by long-term tax receivable resulting in no cash outflow. We were able to preserve our net operating loss carry forwards of approximately $85 million for future periods, providing greater tax benefit in 2024 and in the future. The tax initiative also allowed us to recover $18 million of taxes receivable in 2024 and accelerate the recovery of an estimated $65 million of taxes receivable over the next three years. During the quarter, the company spent $61 million in capital expenditures, which were higher than the $55 million in the prior quarter due to the commencement of the 3D seismic program in Ecuador and the drilling campaign. We also installed the final completion and artificial lift systems in the Costiaco development wells. As of June 30th, the company had a cash balance of $115 million and net debt of $521 million. The 12-month trailing net debt EBITDA, adjusted EBITDA, was 1.3 times and expected to be less than one times by the year end 2024 from a combination of increased EBITDA and lower net debt. Grantier generated oil sales, $166 million, up 5% from the prior quarter due to higher Brent pricing and narrow Castilla and Vasconia oil differentials. Looking at pricing during the quarter, Brent averaged $85.03 per barrel, up 4% from the prior quarter. The company's quality and transportation discounts per barrel during the quarter were $12.79, which significantly narrowed from the $15.36 in the prior quarter. The company's operating net back was $38.80 per barrel, up 10% from the prior quarter. Share buybacks continue to be a key area in which we allocate our free cash flow. Since January 1st, 2023, Granterra has repurchased approximately 3.9 million, or 11% of the outstanding shares. During the quarter, Granterra has repurchased approximately 400,000 shares. We're looking forward to the second half of the year where we plan to drill the remainder of our high-impact near-field exploration wells in Ecuador, including drilling two wells to further appraise the exciting Arowana discovery. As part of the fast-track appraisal program at Arowana, the drilling schedule and civil works have been accelerated to allow the drilling of these two wells prior to year-end. From a development perspective, we're completing the civil works associated with the building infrastructure in the Cohembe pad in the Soriente block to begin drilling the five wells from the single pad in the fourth quarter of 2024. We're very pleased about our first half results, and there's still many more catalysts in the second half of 2024. Lastly, I want to highlight that we also issued S3 yesterday, updating our shelf prospectus that was set to expire in August 2024. This filing is routine in nature and the timing of its issuance is a direct result of the timing of the expiry. The process renews our S3 shelf prospectus for a further three years. I'll now turn the call over to Sebastian to discuss our operational highlights from our second quarter.