Hello and welcome to the Annual Meeting of Stockholders of Grand Tierra Energy Incorporated. Please note that today's meeting is being recorded. Today's discussion may include certain forward-looking information, oil and gas information, and non-GAAP financial measures. Please refer to the Earnings and Operational Update press release we issued yesterday for important advisories and disclaimers with regard to the information and for reconciliations of any non-GAAP measures discussed in today's AGM. Finally, this AGM webcast is the property of Grand Tierra Energy. Any copying or rebroadcasting of this webcast is expressly forbidden without the written consent of Grand Tierra Energy. It is now my pleasure to turn today's meeting over to Bob Hodgins, Chairman of the Board of Directors of Grand Tierra Energy Incorporated. Mr. Hodgins, the floor is yours.
you very much good morning ladies and gentlemen and welcome to the 2025 annual meeting of stockholders of grand tiara energy inc which is being held by webcast my name is robert hodgens and i'm the chairman of the board of directors of grand tiara energy inc and will act as the chairman of the 2025 annual meeting of stockholders of grand tiara energy inc i am pleased to you join us at this webcast and i want to open by thanking grand tiara's board of directors who joining us today and to thank members of grant here management who also have joined us as well phil abraham our corporate secretary will act as secretary for this meeting it is 10 a.m and the meeting will now officially come to order we will proceed with the formal business of the meeting as set forth in your notice of annual meeting and proxy statement if you need a copy of the annual report of the proxy statement the links are provided online The agenda and rules of conduct have been provided on the virtual meeting website and outline how we will proceed with today's meeting. As stated in the rules of conduct, if you would like to submit a question, you may do so by following the instructions on the meeting website. We ask that you limit yourself to two questions or comments and restrict your questions to matters of general interest to our stockholders. Thank you for your cooperation with these rules. will the secretary please report at this time with respect to the record date stockholders list in the mailing of notice of the annual meeting
we have received an affidavit signed by odyssey trust company that notice of this meeting along with related proxy and annual report materials was mailed or made available on march 18th 2025 to grant tariff stockholders of record as of the close of business on march 6 2025 our record date A list of stockholders as of the record date is available for inspection by verified stockholders upon emailing info at grantiera.com.
At this time, I'd like to confirm that Gloria Garrison of Odyssey Trust Company will act as inspector of the election at this meeting. She has taken and described the customary oath of office to execute duties of inspector of election with strict impartiality. The function of the Inspector of Election is to decide upon the qualifications of the voters, accept their votes, and when balloting on all matters is completed, to tally the final votes. The polls are open. If you have not voted or wish to change your vote, you may do so now by clicking on the link provided online. Stockholders who have already voted and do not want to change their vote need not take any further action. Will the Secretary please report at this time with respect of the existence of a quorum?
We have been informed by the Inspector of Election that proxies have been received for 22,178,606 shares of the outstanding shares of Grand Tierra Energy, Inc. Common Stock. Collectively, the votes for which these proxies were received represent approximately 61.8% of the total number of votes that may be cast by the outstanding shares. This constitutes a quorum for the meeting today.
We will now proceed with the formal business of this meeting. There are three proposals to be considered by the stockholders at this meeting, and I will summarize and more fully describe them, and they're more fully described in the proxy statement for the meeting, which has been filed with the Securities and Exchange Commission, or mail or made available to stockholders. The first item of business is the election of nine directors to serve until the 2026 annual meeting of stockholders and until their successors are elected and qualified. This proposal is described in detail in the Notice and Proxy Statement delivered to stockholders in connection with this meeting. The nominees for directors are Peter Day, Gary Guidry, Evan Hazel, Robert Hodgins, Alison Redford, Ronald Royal, Sandra Scott, David Smith, and Brooke Wade. the second item of business is the ratification of the selection by the board of directors of kpmg llp as the independent registered accounting public accounting firm of the company for the fiscal year 2025 and the third item of business today is the advisory vote on the compensation of grantier as named executive officers as disclosed in the proxy statement
we will now pause to address any stockholder questions we have received relating to these proposals. Seeing there are no questions on the proposals, the polls for voting at our 2025 annual meeting will now be closed. The preliminary report of the Inspector of Election covering the proposals presented at this meeting is as follows. Each of the nominees for election of the board, Peter Day, Gary Guidry, Evan Hazel, Robert Hodgins, Alison Redford, Ronald Royal, Sandra Scott, David Smith, and Brooke Wade have been duly elected. The proposal to ratify the appointment of KPMG LLLP as the independent registered public accounting firm of the company for 2025 has been approved. The proposal to approve on an advisory basis the compensation of Grand TR's named executive officers, as disclosed in the proxy statement, has been approved the final voting results of today's meeting will be reported on a form 8k and filed
within four business days of this meeting the 2025 annual meeting of stockholders is now adjourned i want to thank all of you for attending today's meeting and for your interest you have shown in the affairs of our company gary gedry president and ceo will now make a presentation regarding
the company's recent business. Thank you, Bob. Hello, everyone, and welcome to Grand Tierra Energy's virtual annual general meeting. I'm Gary Guidry, President and CEO, and I'm pleased to provide you with a brief overview of the company. Please go to slide three. Grand Tierra is well positioned for the future, supported by our balanced portfolio of production and reserves growth, a strong focus on free cash flow generation, and our mandate to return value to shareholders. 2024 was a strong year for the company as we continued to build on our proven track record of strategic acquisitions and asset optimization. We achieved our sixth consecutive year of proven reserves growth with a reserve replacement, including acquisition, of 702% for proven and 1,249% for proven plus probable. Our recent Canadian acquisition positions Grand Tierra for additional growth by strengthening our oil portfolio and diversifying our asset base into new geographies and product streams. We are confident that the strength of our future development portfolio and exploration prospects, particularly in the southern Putamayo and northern Ecuador regions. With the majority of capital investment already completed for our key cash generating assets, these projects now offer compelling half-cycle economics and strong free cash flow generation potential that will underpin the future development of our recent acquisition, the strengthening of our balance sheet, while also returning value to our shareholders through buybacks. We are uniquely positioned against our peers with an exciting portfolio that has a clear growth trajectory. Our five-year plan outlines significant production growth driven by internally generated cash flows. Next slide. Grand Tierra is a full cycle exploration and production company with integrated capabilities across the exploration development and production optimization we prioritize free cash flow generation which is strategically allocated to high value assets debt repayment and shareholder returns through buybacks our asset base includes a balanced mix of high growth and mature fields across multiple geographies supporting both near term cash flow and long-term value creation. As a low-cost operator, we continue to drive down capital costs, drilling times, and operating costs through innovation and application of advanced technologies. Grand Tierra ranks in the top quartile for safety performance among our international and Colombian peers, underscoring our commitment to responsible operations. Our portfolio spans five proven multi-zone basins, providing a strong foundation for both near-term development and long-term growth. With a current mix of 80% liquids and 20% natural gas, we have exposure to international oil prices while maintaining optionality through our natural gas in Western Canada. In South America, we hold 1.5 million gross acres, which includes the largest land position in Colombia's Putumayo Basin. In Canada, we hold 1.2 million acres. Holding a large land position is a key pillar to grant you a strategy that ensures we have sufficient opportunities for exploration to create new value. As an operator of the majority of our portfolio, 100% in South America and 63% in Canada, we maintain a competitive advantage of having flexibility to adjust programs in response to market conditions and drilling results. This slide highlights how our strategic entry into Canada has added meaningful scale, resource depth, and product diversification all at highly attractive acquisition metrics full cycle acquisition costs underscore the value of the transaction a proven developed producing value of two three dollars and 82 cents a barrel of oil equivalent proven at five dollars and 87 cents and proven plus probable at five dollars and 59 cents beyond valuation the acquisition significantly enhances our overall portfolio and scale 58% increase in production, 40% increase in total acreage, and highly prospective regions. Overall, this transaction strengthens our long-term platform growth while maintaining capital discipline. Grand Tierra has a balanced portfolio between cash flow generating assets that provide stability and long-term returns, returns, and growth assets that have significant development runway, positioning us for long-term growth. This slide effectively illustrates the diversification across our portfolio, showcasing the different stages and life cycle for each of our assets, from mature cash-flowing fields to high-potential early-stage development projects. This slide outlines the 2025 guidance, Base case assumptions, average production of around 50,000 barrels of oil equivalent per day. Assumed $75 Brent price generates $400 million in midpoint EBITDA, $280 million of funds flow, and $20 million of free cash flow. Each Brent case represents a fully funded capital program while maintaining exploration upside and additional growth potential. Compared to where our differentials in South America are currently trading, we benefit roughly $4 a barrel of oil off Brent versus prices used in our budget. Grand Tierra is well positioned to deliver free cash flow in a range of price environments. As operator of the majority of our assets, we have flexibility to adjust capital programs in response to commodity price cycles, ensuring robust cash flow even during periods of volatility. We maintain acutely focused on repaying debt, targeting a net debt to EBITDA ratio of 0.8 to 1.2 times, which strengthens our financial position and enhances our future growth potential. We continue to execute a share buyback program with up to 50% of our free cash flow allocated to repurchasing shares and returning value to shareholders. Our approach to capital allocation is balanced focusing on shareholder returns through buybacks, strengthening our balance sheet through repaying debt, and reinvesting in our asset base to optimize production and reserve growth. Our debt maturity profile is strategically aligned with our projected future cash flows, ensuring we can comfortably meet maturities as they become due. Earlier this month, we announced the signing of a $75 million credit facility. With that, plus our $36 million facility in Canada, we have over $110 million of undrawn capacity providing ample liquidity in this volatile oil environment. At the end of the first quarter of 2025, we finished with $77 million of cash on the balance sheet and $683 million of net debt, which was unchanged since year-end 2024. We remain confident in our ability to repay the $184 million of maturity due in 2026, leveraging a combination of cash on hand and free cash flow generation. Next slide. The majority of Grand Tierra's production and reserves are from fields under water flood. Water flood is a stable, predictable, enhanced oil recovery technique which is proven to be effective. It offers the potential to double the primary ultimate recovery from these fields. A good way to think about the impact of water flood on recovery factors is that for every 1% increase in the oil recovery in South America, we had 12 million barrels of proven plus probable reserves. For context, that is roughly our total annual production from South America and one reason we are able to consistently replace our reserves year over year. Next slide. The sororiente block was initially set to expire and be relinquished in July of 2024. Through successful negotiations with Echo Patrol, we were able to secure a 20-year continuation of the Sororiente contract. This achievement highlights Grantier a strong relationship with Echo Patrol and their continued support for our efforts to develop oil reserves in Colombia for many years to come. With a 20-year extension, we are excited to proceed with implementing our full field development plan, which includes additional facilities, infill drilling, and further extension of the Cohembe field to the north. As shown on this slide, there are numerous future drilling locations and expansion opportunities that hold significant potential for further growth in reserves. The map on this slide highlights how the region's contiguous geology spans across the Colombian-Ecuadorian border, creating a unified, highly prospective exploration corridor. All of our exploration prospects are high-impact, near-field, and benefit from proximity to infrastructure, which enables fast-track commercialization and early cash flow generation. In 2024, Grand Tierra achieved an 85% success rate in our South American exploration campaign, with six out of seven exploration wells providing successful results in Colombia and Ecuador. The high success rate reinforces the strength and reliability of our exploration model, and we remain focused on replicating this success in 2025. We are off to a fantastic start with the first two exploration wells in 2025 testing oil in the Iguana block in Ecuador. Building on this momentum, we have four additional wells scheduled for the remainder of the year. Two wells in Colombia, Cristobal, in the Llanos 85 block, and Rose 2 on the Alea block in the southern Putamayo region. two in ecuador from on from the conejo pad and the chiropa block these wells are part of the strategy to continue unlocking value in our core exploration areas in the southern putamayo and oriente and oriente basin fairway including the recent iguana success grand tierra has now made 10 discoveries in ecuador establishing a robust platform material production growth in the country. These discoveries build on our recent success and highlight the scale and opportunity of our Ecuadorian portfolio. We see significant production potential from these key blocks, up to 30,000 barrels of oil in the Chenange block and another 15,000 barrels a day in the Charafa block in the future. These assets position Ecuador as a meaningful contributor contributor to Grand Tierra's future production. Next slide. This graph is based on IOGP performance data from North and South America. It illustrates Grand Tierra's consistent outperformance in terms of LTIF and TRIF year over year across the North and South America. This achievement is something we take great pride in and highlights how safety is deeply embedded in Grand Tierra's culture and operational process. Next slide. Finally, social license to operate is critical, especially in countries diverse and complex as those we operate in. Grand Tierra is committed to creating meaningful local employment opportunities and voluntarily investing in social and environmental initiatives. This slide highlights some of the key achievements And I encourage you to visit our website to view our recently released 2024 sustainability report for more details. I will conclude with the following. Grand Tierra enters the next phase of our growth story from a position of strength and scale with our recent Canadian acquisition. 2025 is very much an inflection point for Grand Tierra with the fulfillment of our Ecuador exploration commitments, a significant portion of the Suroriente commitments fulfilled, and the integration of Canadian operations. With a diversified and balanced portfolio, a proven track record of operational and financial discipline, and a clear pathway to sustainable free cash flow generation, we are well equipped to deliver value across the commodity cycles for years to come. Our strategic Canadian acquisition, consistent with reserves replacement, exploration success, and a strong operational control, further underpin our five-year growth plan that is supported by a resilient balance sheet. grantiera is uniquely positioned among its fears to capitalize on the future opportunities and continue delivering long-term value to all stakeholders this concludes our presentation thank you for participating today i would like to encourage you to refer to our press release issued on may 1st 2025 and our updated corporate presentation both of which can be found on our website at grantierra.com. Both documents provide an overview of the excellent financial and operational results which Grantierra has achieved so far in 2025. Thank you.