Gran Tierra Energy Inc. (GTE) stock prices were up 5.27% shortly after the trading day commenced on April 28th, 2021, bringing the price per share up to USD$0.69.
BOPD Numbers Surge
GTE has seen consistent growth in Barrels of Oil Produced per Day (BOPD) over the last several quarters, with the current quarter expecting Total Company averages of 28,930 BOPD. This is nearly 10,000 BOPD more than the 18,944 reported in Q3 2020. Q1 2020 reported total company production of 24,463 BOPD. Extrapolating from the strong numbers reported, the company has production guidance of 30,000 BOPD for the fiscal year of 2021.
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GTE’s Liquidity Position
The company reported cash and cash equivalents amounting to USD$20 million as of March 31st, 2021, with the company having paid USD$10 million towards its credit facility balance which left it at USD$180 million. Cash and cash equivalents had a balance of USD$14 million as of December 31st, 2020, while the credit facility balance was USD$190 million.
Ramping up Production
Q1 2021 reported the company attempting to workover wells that it had sent offline in 2020 on account of very low oil prices. GTE is making use of two workover rigs to bring them back online, with the average workover cost having gone down by 28% year-over-year. Average costs of drilling per well has gone down for its Acordionero Oil Field by a margin of 36% since 2019, with AC-75 boasting a record cycle time of 10.6 days at a cost of USD$1.9 million.
Develops in Costayaco
March 2021 saw the infill development drilling campaign commence in GTE’s Costayaco Oil Field, the first program initiated in the area since November 2019. Of the three oil producers being drilled, CYC-42 was completed in 12.1 days at a cost of USD$1.9 million, representing savings of 30% in comparison to the last four wells drilled in the region. The remaining two wells are on their way to start producing by the second quarter of 2021, with workovers on 6 producing wells having been completed in that time period.
More Efficient Drilling
Due largely to the company’s ongoing cost saving initiatives, GTE has successfully brought down costs associated with well drilling and completion capital at their Acordionero site. Compared to reports from 2019, costs of drilling were down by 18% in the first quarter of 2021 while completion capital costs were down by a massive 52%. GTW expects a similar reduction of costs by 18% at their Costayaco oil field, where drilling will commence in Q2 2021.
Future Outlook for GTE
With the restarting of production and ramping up of existing production in wells across its oil field sites, GTE has a well-balanced liquidity position that the company can leverage to facilitate further sustained growth. In conjunction with the impressive reduction in drilling costs, the company is primed for profitability, with current and potential investors confident in the company’s drive to maximize shareholder value.
