Gran Tierra Energy, Inc. (GTE)
Q1 2010 Earnings Call
May 12, 2010 10:00 am ET
Dana Coffield – President and Chief Executive Officer
Martin Eden – Chief Financial Officer
Shane O’Leary – Chief Operating Officer
Alex Klein - Dundee Securities Corporation
Frederick Kozak - Canaccord Adams
Cristina Lopez - Macquarie Research Equities
» Gran Tierra Energy, Inc. Q3 2009 Earnings Call Transcript
» Gran Tierra Energy Inc. Q2 2009 Earnings Call Transcript
Please be advised that in addition to historical information, certain comments made during this conference call, particularly those anticipating future financial performance, business prospects and overall operating strategies constitute forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as anticipate, believe, estimate, expect, intend, predict and hope or similar expressions. Such statements which include estimated or forward-looking predictions and financial information or results are based on management’s current expectations and subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. Listeners are urged to carefully review and consider the various disclosures made by Gran Tierra Energy in its reports filed with the Securities and Exchange Commission, including those risks set forth in Gran Tierra Energy’s quarterly report on Form 10-Q filed with the SEC on May 7, 2010, and in its annual report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission on February 26, 2010.
If one or more of these risks or uncertainties materialize, or if the underlying assumptions provide incorrect, Gran Tierra Energy’s actual results may differ materially from those expected or projected. Listeners are urged not to place undue reliance on forward-looking statements made in today’s conference call. Gran Tierra Energy assumes no obligation to update these forward-looking statements other than may be required by applicable law or regulation.
Today’s conference call also includes non-GAAP measure, funds flow from operations. The press release disseminated by Gran Tierra Energy last night includes a reconciliation of the non-GAAP items with the company’s GAAP income or loss, as well as information about why management believes this measure is useful in evaluating the company’s performance and is available on Gran Tierra’s website, www.grantierra.com. All dollar amounts mentioned in today’s conference call are in U.S. dollars unless otherwise stated.
Finally, this conference call is the property of Gran Tierra Energy, Incorporated and copying or rebroadcasting of this call is expressly forbidden without the written consent of Gran Tierra Energy.
I will now turn the conference over to Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. Mr. Coffield, please go ahead.
Great. Thank you. Good morning and thank you for joining us for Gran Tierra Energy’s first quarter 2010 results conference call. With me today is Martin Eden, our Chief Financial Officer; and Shane O’Leary, our Chief Operating Officer.
On Monday, May 10, 2010 we disseminated a press release that included detailed financial information about the quarter. In addition, Gran Tierra Energy’s 2010 report on Form 10-Q for the three months ending March 31, 2010 has been filed on Edgar and is available on our website at www.grantierra.com.
I’m going to begin today by talking about some of the key developments for the quarter. Martin will then take a few minutes to discuss key aspects of this quarter’s financial results. Shane will provide an operational overview and I will return to provide an outlook followed by closing remarks.
Gran Tierra Energy attained another record daily average oil sales in the first quarter, averaging 14,908 barrels of oil per day net after royalty, comprised of 14,062 barrels of oil per day in Colombia and 846 barrels of oil per day in Argentina. This is a 43% increase compared to the same quarter in 2009 and an increase from fourth quarter 2009 production of 14,714 barrels of oil per day. Funds flow from operations of $54.3 million contributed to a cash and cash equivalents balance of $265.7 million at the end of the first quarter. Gran Tierra Energy remains debt free.
Operationally, Gran Tierra Energy continued preparations for the 2010 work program. In Colombia we completed site construction for Moqueta-1, the first well in an extensive Putumayo Basin exploration program. This well is scheduled to spud in approximately one week. In Argentina, the work was focused on permitting and initiating road improvements and location construction for the re-entry and sidetrack of the Valle Morado discovery well. This drilling is expected to take place in the third quarter of this year.
In Peru, after the successful completion of field work from both the social and environmental impact assessments for Blocks 122 and 128, we have received an Environmental Impact Assessment approval for seismic and drilling for Block 128. We are currently reviewing certain required amendments before commencing operations. Approval for Block 122 remains in the approval process.
Gran Tierra Energy continues to view Brazil as an exciting growth opportunity and we continue our business development effort in this region. Deal flow has been somewhat restrained due to delays in new bid rounds pending new legislation governing pre-salt areas. However, we are currently reviewing several opportunities and hope to add assets in Brazil in 2010.