Gran Tierra Energy, Inc. (GTE)
Q2 2010 Earnings Call Transcript
August 6, 2010 10:00 am ET
Dana Coffield – President and CEO
Martin Eden – CFO
Shane O'Leary – COO
Martin Molyneaux – FirstEnergy Capital Corporation
Jamie Somerville – TD Securities
Rafi Khouri – Raymond James
Cristina Lopez – Macquarie
Neal Dingmann – Wunderlich Securities
Alexander Klein – Dundee Securities
George Toriola – UBS Canada
David Dudlyke – Stifel Nicolaus
Frederick Cozak – Cannacord
Previous Statements by GTE
» Gran Tierra Energy, Inc. Q1 2010 Earnings Call Transcript
» Gran Tierra Energy, Inc. Q4 2009 Earnings Call Transcript
» Gran Tierra Energy, Inc. Q3 2009 Earnings Call Transcript
Good morning, ladies and gentlemen and welcome to the Gran Tierra Energy’s result conference call for the three months ended June 30, 2010. My name is Michelle and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Following the presentation, we will be conducting a question-and-answer session for security analysts and institutions. Instructions will be provided at that time for you to queue up for questions. (Operator Instructions)
I would like to remind everyone that this conference call is being webcast and recorded today, Friday, August 5, 2010, at 10 o’clock a.m., Eastern Standard Time. 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, belief, estimate, except, intent, predict and hope or similar expressions. Such statements which include estimated or forward-looking prediction and financial information or results are based on management's current expectations and are 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 and its reports filed with the Securities and Exchange Commission, including those risks set forth in the Gran Tierra Energy's quarterly report on Form 10-Q filed with the SEC on August 6, 2010. And its annual report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission, February 26, 2010. If one or more of these risks or uncertainties materialize or if the underlying assumptions prove incorrect, Gran Tierra Energy's actual results may vary materially from those expected or projected.
Listeners are urged not to place undue reliance on forward-looking statements made in today's conference calls. Gran Tierra Energy assumes no obligation to update these forward-looking statements other than as may be required by applicable law or regulation.
Today's conference call also includes non-GAAP measures; funds flow from operations, the press release, disseminated by Gran Tierra Energy last night includes a reconciliation of the non-GAAP item with the company's GAAP non-income as well as information about why management believes this measure is useful in evaluating the company's performance and is available on Gran Tierra Energy’s website at www.grantierra.com. All dollar amounts mentioned in today's conference are in U.S. dollars unless otherwise stated.
Finally, this earnings call is the property of Gran Tierra Energy Incorporated. Any 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.
Thank you, Michelle. Good morning and thank you for joining us, for the Gran Tierra Energy's second quarter 2010 results conference call. With me today is Martin Eden, our Chief Financial Officer and Shane O'Leary, our Chief Operating Officer. Last night, 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 with three months ending June 30, 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 then I will return to provide an outlook followed by closing remarks.
The second quarter of 2010 was highlighted by Gran Tierra Energy oil discovery as Moqueta-1 in the Chaza Block of the Putumayo Basin, subsequent drilling and logging at the Moqueta-2 delineation well, the second well in the Moqueta discovery, had additional positive results suggesting a net oil pay increased to 44 feet from a 26 feet in Caballos in Moqueta-1.
Gran Tierra Energy production sales in the second quarter averaged 13,234 barrels of oil per day, a net after royalty, comprised of 12,515 barrels of oil per day in Columbia and 719 barrels of oil per day in Argentina.
This is a 5% increase compared to same quarter of 2009 and a decrease from the first quarter of 2010 production of 14,908 barrels of oil per day, due to certain well pump failures and required recompletion of wells in both Argentina and Columbia and by the OTA pipeline in Columbia being offline for seven days during the second quarter.
Funds flow from operations of $44.3 million for the current and $98.6 million for the six month ended June 30, 2010 contribute to a cash and cash equivalent balance of $293.2 million at the end of second quarter, as before Gran Tierra Energy remain debt free. In June, the company was awarded the Putumayo-10, Cauca-6 and Cauca-10 in the Colombian National Hydrocarbon Agency, 2010 Bid Round.