Gran Tierra Energy Inc. (NASDAQ: GTE) stock soared by 2.15% to 0.61 at the last close on Wednesday. Gran Tierra Energy along with its subsidiaries is a privately held worldwide energy business focusing on oil and gas exploration and production in Colombia and Ecuador.
What is happening?
GTE provided an update on the effects of current nationwide demonstrations in Colombia on their operations on May 18, 2021.
- Gran Tierra has temporarily reduced oil output from GTE’s activities due to roadblocks in the Putumayo Basin and the Middle Magdalena Valley Basin. Although these road blocks are not aimed at Gran Tierra, they are preventing GTE from mobilizing supplies, food, water, gasoline, and oil sales, which are all essential for operations.
- GTE’s interim oil production cuts are composed of a mix of slowing down the production levels of some oil wells, shutting down some oil wells in some areas, and completely shutting down other fields.
- Gran Tierra has shut down around 5,250 bopd of output as of May 16, 2021, leaving GTE’s total current production at roughly 24,350 bopd, lower from a recent high of nearly 29,600 bopd before to the national blockades.
- Gran Tierra hopes to be able to resume production in one to two weeks if the National Strike Committee is effective in negotiating a halt to the blockades of major transportation routes.
- Gran Tierra plans to retain its 2021 production projection of 28,000-30,000 bopd, if the blockades are lifted over the next two weeks.
- Gran Tierra might just have to shut down more production if the present blockade scenario worsens.
Gran Tierra is optimistic that once the blockades are removed, production may be restarted effectively at pre-suspension levels owing to the appropriate and safe shut-in of certain wells and fields in line with GTE’s interim oil production restrictions. Gran Tierra further thinks that GTE’s oil reserves will not be harmed as a result of the temporary shutdowns.
The oil fields of Gran Tierra previously shown their endurance in the year 2020, when global oil prices plummeted. To safeguard the balance sheet and liquidity, GTE temporarily shut down several wells and fields at the time.