Mr. Gary Guidry reports

GRAN TIERRA ENERGY INC. ANNOUNCES FIRST QUARTER 2024 RESULTS

Gran Tierra Energy Inc. has released the company's financial and operating results for the quarter ended March 31, 2024. All dollar amounts are in United States dollars, and production amounts are on an average working interest (WI) before royalties basis unless otherwise indicated. Per barrel (bbl) and bbl per day (BOPD) amounts are based on WI sales before royalties. For per bbl amounts based on net after royalty (NAR) production, see Gran Tierra's quarterly report on Form 10-Q filed May 1, 2024.

• First quarter 2024 total average WI production of 32,242 BOPD, a 3-per-cent increase from prior quarter;
• Positive preliminary results in the Arawana exploration well;
• Total current average production of approximately 33,400 BOPD;
• Funds flow from operations of $74-million, free cash flow of $19-million and adjusted EBITDA of $95-million.

Message to shareholders

Gary Guidry, president and chief executive officer of Gran Tierra, commented: "During the quarter we made significant progress in our development drilling programs. We are very pleased about the successful drilling program in Costayaco that confirmed the company's reservoir interpretation and extended the field both to the north and the south. In a field that was originally discovered in 2007, our 2024 program increased production to the highest level since 2017, helping to ensure the company is well on track to meet its previously announced guidance for 2024.

"In addition, we are having excellent results in our core assets under waterflood, the balance sheet is strong, and we are very excited about the initial drilling and open-hole logging results of the Arawana exploration well in the Chanangue block in Ecuador. The analog for the Arawana exploration well is the company's Cohembi field 20 kilometres to the north. Arawana is drilling 1.5 km across a fault from the recent Bocachico-1 well. Bocachico-1 had initial 90-day production rates in the Basal Tena (N-Sand geologic equivalent to Cohembi) of greater than 1,100 BOPD and continues to produce at approximately 850 BOPD, 20 degree API oil, has less than 1 per cent water cut and has recovered over 330,000 barrels since drilled.

"Our mapped area of closure, and the rock properties observed in the Arawana-1 well compares to the Cohembi field. As of the end of 2023, the Cohembi field has produced 28 million barrels of oil equivalent (MMBOE) and has remaining reserves of 25 MMBOE proved, 54 MMBOE proved plus probable and 95 MMBOE proved plus probable plus possible.

"We are very excited to get this well cased and start testing Arawana-1 in May."

Key highlights of the quarter:

• Production: Gran Tierra's total average WI production was 32,242 BOPD, an increase of 3 per cent compared with the fourth quarter 2023 (the prior quarter) and up 2 per cent from the first quarter 2023. During the quarter we had deferred production of approximately 1,000 BOPD as a result of social disruptions in the Acordionero field. Post disruption the field is back to expected production levels of over 17,000 BOPD.
• Net income: Gran Tierra incurred a net loss of $100,000, compared with net income of $8-million in the prior quarter and a net loss of $10-million in the first quarter of 2023.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): Adjusted EBITDA was $95-million compared with $93-million in the prior quarter and $90-million in the first quarter of 2023. Twelve-month-trailing net debt to adjusted EBITDA was 1.3 times and is expected to be less than 1.0 times by year end 2024.
• Funds flow from operations: Funds flow from operations was $74-million ($2.34 basic per share), down 12 per cent from the prior quarter and up 24 per cent from the first quarter of 2023.
• Free cash flow: During the quarter, the company generated free cash flow of approximately $19-million.
• Cash and debt: As of March 31, 2024, the company had a cash balance of $127-million, total debt of $637-million and net debt of $510-million. During the quarter, the company issued an additional $100-million of 9.50 per cent senior notes due October, 2029, and received cash proceeds of $88-million.
• Credit facility: During the quarter, Gran Tierra fully repaid the outstanding balance on company's credit facility of $36-million and the facility was terminated.
• Share buybacks: Gran Tierra purchased approximately 900,000 shares during the quarter. Since Jan. 1, 2023, the company has repurchased approximately 3.3 million shares, or 10 per cent of shares issued and outstanding at Jan. 1, 2023, from free cash flow.
• Return on average capital employed: Achieved return on average capital employed of 14 per cent during the quarter and 16 per cent over the trailing 12 months.

Additional key financial metrics:

• Capital expenditures: Capital expenditures of $55-million were higher than the $39-million in the prior quarter due to higher drilling activity during the quarter and down from $71-million compared with the first quarter of 2023 due to cost optimization of the 2024 drilling program. During the quarter, Gran Tierra completed its development program in Acordionero and the majority of the program in Costayaco.
• Oil sales: Gran Tierra generated oil sales of $158-million, up 2 per cent from the prior quarter and 9 per cent from the first quarter of 2023. Oil sales increased compared with the prior quarter primarily due to a 5-per-cent increase in sales volumes resulting from the sale of inventory in Ecuador and a decrease in the Castilla differential, offset by higher Vasconia and Oriente differentials. Compared with the first quarter of 2023, oil sales increased due to lower Castilla, Vasconia and Oriente differentials.
• Quality and transportation discounts: The company's quality and transportation discounts per bbl were consistent during the quarter at $15.36, compared with $15.34 in the prior quarter and down from $18.45 in the first quarter of 2023. The Castilla oil differential per bbl narrowed to $8.82 from $9.68 in the prior quarter and from $15.17 in the first quarter of 2023 (Castilla is the benchmark for the company's Middle Magdalena Valley basin oil production). The Vasconia differential per bbl widened to $5.05 from $4.58 in the prior quarter, and narrowed from $7.87 in the first quarter of 2023. Finally, the Ecuadorian benchmark, Oriente, per bbl was $8.02, up from $7.07 in the prior quarter, and down from $13.43 one year ago. The current Castilla differential is approximately $7.60 per bbl, the Vasconia differential is approximately $3.70 per bbl and the Oriente differential is approximately $7.60 per bbl.
• Operating expenses: Gran Tierra's operating expenses increased by 2 per cent to $48-million, compared with the prior quarter primarily due to higher workovers offset by lower lifting costs primarily related to power generation optimizations in Costayaco, Acordionero and Cohembi fields. Compared with the first quarter of 2023, operating expenses increased by 12 per cent on a per bbl basis due to higher workovers and lifting costs associated with preventative maintenance activities, which were partially offset by lower environmental and equipment rental expenses.
• Transportation expenses: The company's transportation expenses increased by 16 per cent to $4.6-million, compared with the prior quarter of $3.9-million and increased by 50 per cent or $3.1-million when compared with the first quarter of 2023. During the quarter, Gran Tierra utilized longer distance delivery points due to low river levels in Colombia caused by El Nino preventing, resulting in higher transportation costs.
• Operating netback: The company's operating netback was $35.37 per bbl, a decrease of 2 per cent from the prior quarter and up 1 per cent from the first quarter of 2023.
• General and administrative (G&A) expenses: G&A expenses before stock-based compensation were $3.22 per bbl, down from $3.86 per bbl in the prior quarter due to lower legal expenses and lower headcount and down from $3.95 per barrel, when compared with the first quarter of 2023 due to lower legal fees and information technology expenses.
• Cash netback: Cash netback per bbl was $25.13, compared with $29.53 in the prior quarter primarily as a result of current tax expenses of $1.33 per bbl compared with a recovery of $2.80 per bbl in the prior quarter. Compared with one year ago, cash netback per bbl increased by $3.97 to $25.13 per bbl as a result of lower current taxes in the quarter.

Development campaign:

• Costayaco
  • Since December, 2023, Gran Tierra has drilled seven wells of which six are oil producers and one is a water injector.
  • The aggregate IP30 rates from the four wells drilled in the north was 5,707 BOPD, unstimulated and on a jet pump. Starting in May, 2024, the recently drilled wells will undergo stimulation and installation of optimized artificial lift systems such as electric submersible pumps. This will allow for higher total fluid rates, allowing the wells to produce at full potential for the remainder of the year.
• Acordionero
  • An 11-well development drilling program was started in December, 2023. All 11 wells have been drilled to date including nine producers and two water injection wells. All wells are on production and injection. The results from the campaign are consistent with budget while continuing to add material free cash flow for the company.
  • Upon completion of the program the drilling rig was mobilized and transported to Ecuador to begin the exploration campaign.

Gran Tierra's commitment to go "beyond compliance" in environmental, social and governance

• Safety:
  • Two thousand twenty-three was the safest year in company history, with over 19 million work hours without any incidents causing lost time since June 9, 2022.
• Environment:
  • Through all of Gran Tierra's reforestation efforts, the company has planted over 1.6 million trees, and has conserved, preserved or reforested approximately 4,500 hectares of land since 2018.
• Reducing greenhouse gas (GHG) emissions:
  • Gran Tierra is reducing GHG emissions at its facilities through gas-to-power projects that conserve excess natural gas that would otherwise be flared, using the gas instead for power generation. In 2023, Gran Tierra's gas-to-power projects generated 68 per cent of the total energy used in all of the company's operations.
• Social and human rights:
  • Over 350,000 people participated in and benefited from Gran Tierra's voluntary social investment programs over the past six years in Colombia and Ecuador.
  • Gran Tierra has been accepted by the Voluntary Principles Initiative (VPI) as an official member of the Voluntary Principles for Security and Human Rights worldwide initiative.
  • Installed residential water filters to approximately 150 households in Campo Alegre, Colombia, providing clean drinking water to a local community and their two schools.
  • Gran Tierra's flagship social program in Ecuador, Sucumbios Sostenible, provided training and delivered approximately 59,000 cacao plants and over 600 cattle to local community members near the company's operations in 2023.

Conference call information

Gran Tierra will host its first quarter 2024 results conference call on Wednesday, May 2, 2024, at 9 a.m. Mountain Time, 11 a.m. Eastern Time. Interested parties may access the conference call by registering on-line. The call will also be available via webcast through the company's website.

Corporate presentation

Gran Tierra's corporate presentation has been updated and is available on the company website.

About Gran Tierra Energy Inc.

Gran Tierra, together with its subsidiaries, is an independent international energy company currently focused on oil and natural gas exploration and production in Colombia and Ecuador. The company is currently developing its existing portfolio of assets in Colombia and Ecuador, and will continue to pursue additional growth opportunities that would further strengthen the company's portfolio. The company's common stock trades on the NYSE American, the Toronto Stock Exchange and the London Stock Exchange under the ticker symbol GTE. Additional information concerning Gran Tierra is available on its website.

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