Gran Tierra Energy Inc (GTE) 2017 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Gran Tierra Energy's Results Conference Call for the Third Quarter 2017. My name is Kevin, and I'll be your coordinator for today. (Operator Instructions)

I would like to remind everyone this conference call is being webcast and recorded today, Friday, November 3, 2017, at 11 a.m. Eastern Time.

Today's discussion may include certain forward-looking information, oil and gas information and non-GAAP financial measures. Please refer to the earnings press release and the operational update press release we issued yesterday for important disclaimers with regards to the information and reconciliation of any non-GAAP measures discussed on today's call.

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 Gary Guidry, President and Chief Executive Officer of Gran Tierra. Mr. Guidry, please go ahead.

Thank you, Kevin. Good morning, and welcome to Gran Tierra's Third Quarter 2017 Results Conference Call. My name is Gary Guidry, Gran Tierra's President and Chief Executive Officer. And today with me is Ryan Ellson, our Chief Financial Officer. We're going to use the same approach today as we used with our last conference call.

As you know, we released our third quarter financial results, and an operations update yesterday, and we hope you've had time to review those releases. Instead of reiterating some of the information in the press releases, we are going to open -- go directly to an open question-and-answer session.

I'll turn the call back over to the operator, and Ryan and I will be glad to answer any questions. Operator?

(Operator Instructions) Our first question comes from Nathan Piper with RBC.

I do want to ask a couple of broader questions, please. First of all, on production, you haven't been that clear on how production is looking for Q4 and into deep 2018. So I wonder if you could give a bit of color on how the success at Acordionero balances out with what's going on at Costayaco and Moqueta? And then secondly, the limestone play in southern Colombia is obviously very exciting. I wondered if you could give a little bit more color on what the B-Limestone might mean that you insected with Siriri. But at the same time, how you're actually going to exploit it, given some of the initial results of the horizontal wells at Costayaco?

Sure. On production, Nathan, we're not changing our guidance for the fourth quarter. We're currently drilling at roughly 34-plus thousand barrels per day, we've got a few more Acordionero wells that will be on during the quarter. And regarding Costayaco and Moqueta, we're managing best we can with power interruptions. And as we said in our release, we hope to be commissioning the gas to power project here towards the end of the year and alleviate completely the issues that we've been having. In terms of the A-Limestone, the B-Limestone and really, it's just a carbonate play, it's just a deeper water sequence. As you move west in the basin, the sequence develops. And we're approaching it the same way as we are the A-Limestone. And that is at the moment just getting production results at Siriri. That's where we're at now. We're just starting the testing operations, and we'll look at different ways to stimulate. As we said in our operations release, we're getting great results from the vertical wells. And our -- what our focus is now with our industry partner, Halliburton, is looking how -- at how we can best stimulate both vertical and horizontal wells as we move down the learning curve. I hope that answers your questions.

And then, Nathan, for 2018, guidance will be coming out in mid-December.

Maybe one quick follow-up. One quick follow-up on the A-Limestone side. I mean, I guess, at some point, we hope that you'll be able to prosecute a campaign of kind of development appraisal drilling to the A-Limestone and then the B-Limestone, i.e. deliver a couple of well results a quarter and increase production as a consequence. And have you learned enough that you could put a program on that together next year? Or are there a couple more quarters of learnings to be undertaken before you can be confident on how you're going to exploit the resource?

Yes. We -- the well that we just drilled and actually, we're just cleaning up Costayaco-30. We cored it. We collected quite a bit of information, rock property information. We cored it. We ran some preserved sidewall cords to get fluids and get pressures. We ran some NMR, a magnetic resonance tool. So we effectively collected as much data as we could on this well. We've given ourselves a 2-month window. But during those 2 months, we're building pads, we're building cellars because we're confident enough in the regional play at Costayaco, where we have facilities. We will be programming in our 2018 budget some wells that will be adding production. Whether those are vertical or horizontal, we're not in a position to say yet, but we're ready for either.

Our next question comes from Josef Schachter with Schachter Energy Research.

The production numbers you mentioned here, about 34,000, how much volumes are you still waiting behind pipe? Question #1. And 2, how much volume was impacting you negatively in the quarter from the south of Costayaco and Moqueta?

The behind pipe we -- we try to bring wells on as quickly as we can. We actually have 2 wells that we're just bringing on at Acordionero. One, we're running a BSP, a seismic profile. The other, we're literally bringing on over the next day or 2. So there's probably 2,000 barrels a day in those 2 wells, and we're -- we have a continuous drilling program. In terms of the impact from Mocoa during the quarter, roughly 1,000 to 1,500 barrels a day is what our impact was on those wells or the shutdowns. If you look at both the injection as well as the production response, we're behind by about 1,000 to 1,500 barrels a day.

Okay. One more question. Given how cheap the stock is and how strong your cash flow was in the quarter and your guidance on the CapEx, are you going to pick up the pace of stock buybacks, given how cheap the stock is?

Yes. Good question, Josef. We have a normal course issuer bid in place. And right now, we're just in the midst of putting together our 2018 budget program. So -- and part of that is -- will entail looking at additional free cash flow that we could deploy to share buyback.

(Operator Instructions) Gentlemen, there are no further questions at this time. Please continue.

Okay. Thank you, operator. I would again like to thank everyone for joining us today. We look forward to speaking with you over the next quarter to update you on our ongoing progress. Thank you very much.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.