Q4/12 Production Below, Cash Flow Ahead: "Q4/12 production,
after inventory adjustments, was 17,196 boe/d NAR and below our
estimate of 18,922 boe/d NAR. However, cash flow of US$117 mm was
higher than our forecast of US$93 mm, primarily due to higher than
anticipated deferred taxes. Capital expenditures during 2012A was
also lower at US$312 mm, relative to our US$339 projection."
Revised Estimates: "Incorporating year end results and
consideration of YTD production of ~21,000 boe/d NAR, which was
higher than our estimate of 19,917 boe/d NAR, we have made
non-material positive production revisions moving forward, but have
offset this with higher opex estimates."
Moqueta-9 Likely Sooner than "Late March": "Despite the
company's formal guidance of anticipating initial well results at
Moqueta-9 in late March 2013, we believe the production testing
could complete a few weeks earlier in mid-March. As this well looks
to drill beyond a bounding fault, positive results could further
enlarge this field. We currently carry this well at US$0.30
Catalysts: "Aside from Moqueta, the next likely catalyst are the
hz multistage frac well results in Brazil, which could come
sometime in Q2/13."
Recommendation: "We reiterate our Outperform rating and maintain
our target price of US$8.50. We continue to favor Gran Tierra in
South America and we believe the company is on the cusp of hatching
its prospects, potentially resulting in a multiyear growth platform
from three pillars, including Moqueta in Colombia, Bretana in Peru
and the Reconcavo in Brazil."