Gran Tierra Energy Inc (TSX:GTE, LSE:GTE, NYSE-A:GTE, ETR:G1P) shares were rising in Wednesday morning’s deals as it told investors it paid off its credit facility and confirmed the successful ramp-up in production as new wells were brought online in South America.
The Colombia and Ecuador focussed firm, which specialises in enhanced oil recovery, said production has so far averaged 30,556 barrels of oil per day in the second quarter, and, as well have come online the rate for the past sixteen days had reached 33,140 bopd.
Cash flows of around US$410mln to US$430mln are forecast in the company’s base case, based upon a US$95 per barrel average oil price and production averaging up to 32,500 bopd, according to a recent investor presentation published by the company.
In the year to date, the company has drilled seven oil production wells at the Acordionero field, in Colombia, and four more remain in the schedule, meanwhile, at the Costayaco project all five planned wells have been drilled, with the last one in the sequence currently on production test. At the Moqueta, three wells are planned later this year with production due to follow into 2023.
GTE highlighted that by June 2 it had completely paid off its credit facility, after it had steadily reduced the balance from US$207mln in June 2020.
With its improved financial wherewithal, the company said it is now restarting exploration projects for the first time since the pandemic.
“After a two-year pause during the low and volatile oil price environment of 2020 and 2021, we are excited with the restart of Gran Tierra's exploration drilling campaign,” said chief executive Gary Guidry.
“We spud the Churuco exploration well in the Putumayo Basin of Colombia on June 2, 2022, which is expected to reach its target depth by mid-June 2022.
“In Ecuador, we have obtained all necessary licensing and secured a drilling rig which put Gran Tierra on-track to spud its first planned exploration well on the Chanangue Block during third quarter 2022.”
In London, Gran Tierra share rose by more than 11% to change hands at 150p each.
A separate stock market statement updated on the process for a tender offer by the company to its loan note holders.