Gran Tierra Energy completes redetermination of credit facility

Gran tierra energy

Gran Tierra Energy, an international oil and natural gas producer currently developing assets in Colombia and Ecuador, announced that it successfully closed its semi-annual redetermination of its bank-syndicated credit facility this Wednesday. The credit facility has a maturity date of November 2022.

Firstly, due to Gran Tierra Energy’s strong cash flow and liquidity, the company will downsize its credit facility capacity to $150 million, with $125 million readily available and $25 million subject to the consent of the majority of the lenders.

Moreover, the company’s previous borrowing base was $215 million, with $200 million readily available and $15 million subject to majority lender consent.

In addition, the company decided to reduce its borrowing base to decrease the carrying costs of maintaining undrawn credit capacity. Also, to better align its credit facility with its forecast for 2022 production, cash flow, and capital program.

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Gran Tierra Energy with $240 million in Capex for 2022

Furthermore, as we reported previously, Gran Tierra Energy announced its capital guidance for 2022 earlier this month. The plan includes $220 to $240 million in capital expenditure budget. In fact, the company’s planned capital program will help fund developments activities in its core assets and possible high-impact exploration. According to the statement, up to 70% of the 2022 capital budget will go to these activities.

Particularly, $70 million will go to the Acordionero field in the Middle Magdalena Valley Basin, in Colombia. Further, $40 million and $30 million respectively will go to the Costayaco and Moqueta fields in the Putumayo Basin.

Moreover, the Moqueta work program will begin in the second half of 2022 through 2023. The company states that the remaining 30% of the capital program will go to exploration-related activities throughout its portfolio; including up to 6-7 new exploration wells: 4 wells in Colombia and 2-3 wells in Ecuador.

Finally, Gran Tierra expects its credit facility to be paid down to a balance of under $70 million by December 31, 2021.

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