Gran Tierra Energy Inc.

Good morning, ladies and gentlemen, and welcome to the Grand Tierra Energy's conference call for first quarter 2026 results. My name is Tanya, 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, Friday, May 8, 2026, 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 issued yesterday for important advisories and disclaimers with regard to this information and for reconciliations of any non-GAAP measures discussed on today's call. 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, Tanya. Good morning, and welcome to Grand Tierra's first quarter 2026 results conference call. My name is Gary Guidry, Grantier's 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 Thursday, May 7, 2026, we issued a press release that included detailed information about our first quarter 2026 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. Immediately following this earnings call at 10 a.m. Mountain Time, 12 noon Eastern Time, we will be holding our annual general meeting of stockholders. During the meeting, I will give a brief overview of Grand Sierra and where the company is heading. We invite you to join us on this call, and dial-in instructions can be found on our website. I will now turn the call over to Ryan to discuss our financial results.

Thanks, Gary, and good morning, everyone. Our first quarter performance marks a solid start to 2026, with production aligning within expectations and capital spending coming in under plan, highlighting disciplined execution across the organization. With assignment asset disposition and bond exchange completed during the quarter, we have materially strengthened the balance sheet as we exited the quarter with $125 million in cash and extended maturities. Additionally, we signed an exploration, development, and production sharing agreement with a state oil company of the Republic of Azerbaijan, which provides access to a world-class proven basin with established infrastructure and contiguous acreage with significant development, appraisal, and exploration opportunities. Lastly, we entered a strategic partnership with EC Patrol, where Grand Tierra expects to earn a 49% working interest in the Tiscarama Block, located in the middle Magdalena Valley basin of Colombia. Combined with our existing Accord Narrow operations, this expands our operated position in the basin and is expected to drive operational synergies and enhance long-term value. From a hedging standpoint, oil volumes are hedged throughout the year using a mix of three ways, callers, and puts, with an average ceiling of approximately $76 per barrel. For gas, we have eight cold swaps covering an average of 15,600 GJs per day, at approximately $2.71 per GJ for 2026. We continue to evaluate market conditions and will add to our hedge position where options align with our established hedging policy and support our objectives of protecting cash flow while maintaining exposure to higher commodity prices. As a result of our strategic developments in the evolving market environment, our 2026 guidance has been revised to reflect how our portfolio and the market has changed since the original guidance announced in December 2025. The primary drivers of revised guidance were the higher commodity price assumptions, our completed Simonette disposition, the addition of the Tiscarano block through our partnership with F-Patrol, and incremental hedges put in place after the original guidance was announced. Despite higher oil prices improving the backdrop, the benefit is partially offset by energy losses forecast between $70 and $72 million, the loss of Simonette production, and incremental calculations capital spend tied to our new portfolio additions. An approximately $84 rent average for the year, we're guiding to production of 40 to 45,000 barrels of oil equivalent per day, even of 345 to 395 million, and free cash flow of 95 to 115 million, with a capital program of 130 to 170 million. Turning now to our financial results for the first quarter of 2026, Grand Care incurred a net loss of $119 million compared to a net loss of $141 million in the prior quarter and a net loss of $19 million in the first quarter of 2025. The net loss position was primarily the result of non-cash charges such as unrealized hedging losses, the remeasurement of equity compensation funds, coupled with non-recurring charges such as a senior note exchange and severance. Ecuador pricing late during the quarter due to our M-1 structure, reducing revenue by approximately $16 million versus the average Brent. With Brent moving higher in April and May, we expect the time and effect to reverse and support stronger realizations from Ecuador in the second quarter. The company generated just even of $74 million versus $52 million in the prior quarter and $85 million in the first quarter of 2025. Fundful from operations were $43 million or $1.21 per share. up 60% from the prior quarter and down 20% from the first quarter of 2025. Grand Hero's capital expenditures of $45 million were lower than the $53 million in the prior quarter and $95 million in the first quarter of 2025. During the quarter, the company spent three development wells in Columbia and three development wells in Canada in the Somna area, which was disposed in March 2026. Grand Hero recouped the costs associated with the drilling of the Montney Wells through the purchase price adjustment related to the transaction, as it effectively was January 1st. At quarter end, the grantee ran a cash balance of $125 million, total gross debt of $606 million, and net debt of $481 million. Furthermore, we repurchased approximately $9.2 million in face value of the company's 9.75% senior notes due April 15, 2031. The repurchase represents a discount of 12% to the face value of the repurchase loss. Alongside the $125 million of cash as of March 31, 2026. The company currently has approximately 54 million undrawn credit and lending facilities. Grand Terror generated oil sales of 172 million, which was up 2% from the first quarter of 2025 and up 32% from the prior quarter, primarily due to a 24% increase in rent price and a 12% increase in sales volume as a result of higher wallet sale volumes in Ecuador, first offset by higher differentials. On a per BUE basis, operating expenses decreased by 3% when compared to the first quarter of 2025 due to lower work over activities, with parts offset by higher lifting costs with inventory fluctuations resulting from the Ecuador sales. With the portfolio changes and current market conditions, we remain focused on generating free cash flow, reducing debt, and maintaining the flexibility to adjust capital allocation as conditions evolve. I'll now turn the call over to Sebastian to discuss some of the operational highlights.

Thanks, Ryan, and good morning, everyone. From a production perspective, Grand Tierra delivered first quarter 2026 average working interest production of approximately 45,500 barrels of oil equivalent per day, which was 2% lower than fourth quarter 2025 and 2% lower year over year. This was primarily driven by the timing of water flood optimization responses in Columbia and the disposition of our Simonette assets partially offset by strong performance from the Conejo wells in the Tarapa block and incremental volumes from Perico. Turning to operations in Colombia, we continued to execute efficiently across our development program. We drilled the Rahu 2 wells at Cohembe and initiated infill drilling of three wells on Pad 6 with the drilling of Cohembe 29. Together, these two wells were drilled with a total cost of $7.5 million, approximately 18% below budget. reflecting continued capital discipline. We are currently in the final execution phases of the Kohembe program and expect completion by the end of Q2. In Ecuador, we commenced water injection at Chinenge in early February, with early results exceeding expectations and reinforcing our reservoir management approach. In addition, we finalized all injectivity tests and regulatory submissions to initiate water flooding operations in late Q2, early Q3 at the Iguana and Perico blocks. With water flooding operations full steam ahead in Ecuador, we expect to see both an incremental oil uplift and significant water disposal cost reductions. As Ryan previously mentioned, on the strategic front, we entered into a partnership with Echo Patrol to earn 49% working interest in the Tiscarama Block in Colombia's Middle Magdalena Valley Basin. The block contains approximately 364 million barrels of original oil in place, and has seen limited historical recovery of approximately 7% or 25 million barrels. This represents a clear opportunity to apply our water flood expertise gained at Accordion Arrow to enhance recovery and extend field life in the Tiscarama Block. By comparison, Accordion Arrow, which has a similar original oil in place of 338 million barrels, is directly adjacent and analogous to the Tiscarama Block and has achieved a current recovery factor of 16% or 53 million barrels and has a 2P recovery factor of 27% or 35 million barrels additional to recover. We expect to initiate operations at Tiscarama in the second half of 2026. We also signed an exploration development and production sharing agreement in Azerbaijan, securing a 65% working interest across approximately 400,000 gross acres in a proven basin with established infrastructure and long-term development potential. The agreement includes a five-year exploration and appraisal period followed by a 25-year development term. Overall, the quarter reflects disciplined execution across the base business, supported by capital-efficient operations and targeted portfolio additions that enhance our long-term growth profile. I will now turn the call back to the operator, and Gary, Ryan, and I will be happy to take questions. Operator, please go ahead.

Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session for securities analysts. If you have a question, please press the star 1-1 on your touchtone phone. You will then hear an automated message advising that your hand is raised. Your questions will be polled in the order they are received. Please ensure you lift the handset if you're using a speakerphone before pressing any keys. One moment, please, for your first question. Our first question will be coming from Massimiliano Pilato of Feeble. Your line is open.

Good morning. Thank you for taking my questions. Actually, two. So, personally, 2026 topics guidance has increased slightly. Can you please elaborate on that? And could you confirm if there is any potential spending if prices stay this high? And how should we be thinking about a normalized topics level going forward? And secondly, regional mix. So most of the activity recently has been in Colombia and Ecuador. So the question is, what prices do you need to see to ramp up activity in Canada? Thank you.

Great. Thanks for the questions. Yeah, with respect to the 2026 guidance and capital, yeah, there is a slight increase, and that really just reflects us securing the FISCRAMA block. We expect to spend $15 to $20 million this year in the Tiscarama block in order to get water in the ground and start the injection project where we would earn into the base production in Tiscarama. With respect to increasing capital with a higher oil price, You know, we're going to as fast as we can. We're happy with the capital program. I think it's well thought out. And, you know, we're getting water in the ground in Ecuador. And so we're really going, I think it's the most capital efficient way we could spend the money this year. You know, we've already started our planning for 2027 and 2028. Respectively in Canada, yeah, you know, equal prices continue to struggle. You know, with Shell LNG fully ramping up, you know, there's been more and more activity on the LNG front. We expect ACO prices to firm, and we need to see ACO north of $3 in order to allocate capital to Canada. So, on the gas side.

Thank you very much. Thank you.

Gentlemen, there are no further questions at this time. Please continue.

I would once again like to thank everyone for joining us today. We look forward to speaking with you in the next quarter and our ongoing progress. Please join us for our annual general meeting of stockholders, which will commence at 10 a.m. Mountain Time, 12 noon Eastern Time. I will give a brief overview of Grantiera and where the company is heading. Dial-in instructions can be found on our website. Thank you very much.