Gran Tierra Energy, Inc. ( GTE) Q3 2010 Earnings Conference Call November 8, 2010 10:00 a.m. ET Executives Dana Coffield _ President and CEO Martin Eden – CFO Analysts Nathan Piper – RBC Capital Markets Rafi Khouri – Raymond James Ian Mackwey of CIBC World Markets Alan Knowles – Haywood Securities, Inc. Isaru Rashem - Equinox Partners Neal Dingmann – Wunderlich Securities Presentation Operator
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 Gran Tierra Energy’s quarterly report on Form 10-Q filed with the SEC on November 5, 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 risk 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 call. Gran Tierra Energy assumes no obligation to update these forward-looking statements other than they 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 this non-GAAP item with the company’s GAAP net-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 call are in U.S. dollars unless otherwise stated. Finally, this earnings call is the property of Gran Tierra Energy, Inc. 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. Dana Coffield Good morning and thank you for joining us, for Gran Tierra Energy’s third quarter 2010 results conference call. With me today is Martin Eden, our Chief Financial Officer. On November 4, 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 September 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. I will then provide an operational overview and outlook followed by closing remarks.
The third quarter was highlighted by Gran Tierra Energy’s entry into Brazil.Federal delineation at the Moqueta oil discovery in Colombia, an extension of our exploration portfolio in Peru. Gran Tierra Energy production sales in the third quarter averaged 13,367 barrels of oil per day net after royalty, comprised of 12,641 barrels of oil per day in Colombia and some 126 barrels of oil per day in Argentina. This is a 3% increase compared to the same quarter in 2009 and an increase from the second quarter 2010 production of 13,234 barrels of oil per day. This pressure was below our guidance of 14 to 16,000 barrels of oil per day due to the 22 days of downtime on the Ecopetrol operated pipeline during the quarter. We do expect to finish the balance of the year within our guidance range. Funds flow from operations up $37.2 million for the current quarter and $135.8 million for the nine months ended September 30, 2010, attributed to our cash and cash equivalence balance of $308.4 million at the end of the third quarter. Gran Tierra Energy continues to remain debt free. Now I'll give us the company's (inaudible) on the Moqueta-2 delineation well on the Chaza block in Colombia. The results are very encouraging as the net oil pay increased to 44 feet from 26 feet encountered in Moqueta-1. Subsequent to the end of the quarter, the Moqueta-3 delineation well more than doubled the net oil pay encountered through 118 feet. Read the rest of this transcript for free on seekingalpha.com