Gran Tierra Energy, Inc. (GTE) Q1 2010 Earnings Call May 12, 2010 10:00 am ET Executives Dana Coffield – President and Chief Executive Officer Martin Eden – Chief Financial Officer Shane O’Leary – Chief Operating Officer Analysts Alex Klein - Dundee Securities Corporation Frederick Kozak - Canaccord Adams Cristina Lopez - Macquarie Research Equities Presentation Operator
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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. Dana Coffield 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. Read the rest of this transcript for free on seekingalpha.com