UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): December 17, 2015
____________________
GRAN TIERRA ENERGY INC.
(Exact name of Registrant as specified in
its charter)
____________________
|
|
|
Nevada |
001-34018 |
98-0479924 |
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
|
|
|
200, 150 13 Avenue S.W.
Calgary, Alberta, Canada T2R 0V2
(Address of principal executive offices
and zip code)
Registrant’s telephone number,
including area code: (403) 265-3221
(Former name or former address, if changed
since last report.)
____________________
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation
FD Disclosure.
On December 17, 2015, Gran Tierra Energy
Inc. (“Gran Tierra” or the “Company”) (TSX:GTE) (NYSE:GTE) issued a press release announcing the completion
of independent assessments of resource estimates associated with the Company’s Columbian and Peruvian exploration properties,
each in accordance with the standards established by the Canadian Securities Administrators in National Instrument 51-101 Standards
of Disclosure of Oil and Gas Activities. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference
herein in its entirety.
The information in this Item 7.01 and in
Exhibit 99.1 attached to this report is being furnished and shall not be deemed “filed” for the purposes of Section
18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities
of that section, nor shall it be deemed to be incorporated by reference into any filing by Gran Tierra under the Securities Act
or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.
Item 9.01. Financial
Statements and Exhibits.
Exhibit
Number |
Description |
99.1 |
Press Release issued on December 17, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
GRAN TIERRA ENERGY INC. |
|
|
|
|
|
|
|
By: |
/s/ David Hardy |
|
|
David Hardy |
|
|
V.P. Legal and General Counsel |
Dated: December 18, 2015
EXHIBIT INDEX
Exhibit
Number |
Description |
99.1 |
Press Release issued on December 17, 2015. |
Exhibit 99.1
GRAN TIERRA ANNOUNCES INDEPENDENT
RESOURCE ESTIMATES
CALGARY, Alberta, December
17, 2015, Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (TSX and NYSE: GTE) is pleased to announce
that an independent assessment of the Company’s prospective resources on its Colombian exploration properties has been completed
by McDaniel & Associates Consultants Ltd. ("McDaniel & Associates"), and an updated independent assessment of
the Company’s contingent and prospective resources on its Peruvian exploration properties has been completed by GLJ Petroleum
Consultants Ltd. (“GLJ”). The independent assessments were carried out in accordance with the standards established
by the Canadian Securities Administrators in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. The
effective date of both reports is September 30, 2015.
It should be noted that these
assessments do not include the oil and gas interests associated with the proposed acquisition of Petroamerica Oil Corp. (“Petroamerica”),
announced on November 12, 2015. Once the acquisition of all of the outstanding common shares of Petroamerica is completed, the
Company plans to release an update on risked prospective resources at a consolidated level.
The results of the McDaniel
& Associates assessment demonstrate significant prospective resources in the Company’s Colombian business unit as at
September 30, 2015. The contingent and prospective resources assessment for the Company’s Peruvian business unit, effective
September 30, 2015, was not significantly different than what was previously reported by GLJ effective January 1, 2015 for contingent
resources, and effective October 1, 2013 for prospective resources.
The tables below summarize
certain information contained in the independent assessments prepared by McDaniel & Associates and GLJ.
Summary of Prospective Resources as of September
30, 2015:
|
Working Interest Prospective Resources – Unrisked (1)(2) |
Risked
Resources
Mean (2) |
Colombia |
|
Low |
P50 |
Mean |
High |
Basin |
Prospects / (Leads) |
MMbbl/ MMcf |
MMbbl/ MMcf |
MMbbl/ MMcf |
MMbbl/ MMcf |
MMbbl/ MMcf |
Light and Medium Crude Oil |
|
|
|
|
|
Putumayo (3)(5) |
30 |
102.0 |
262.2 |
371.3 |
764.6 |
99.4 |
Llanos (3)(5) |
3 |
4.5 |
16.1 |
25.7 |
58.5 |
5.0 |
Sinu (3)(5) |
4 (Leads) |
8.4 |
43.4 |
83.1 |
210.7 |
11.7 |
Total (3)(4)(5) |
|
114.9 |
321.7 |
480.1 |
1,033.9 |
116.1 |
Conventional Natural Gas (MMcf) |
|
|
|
|
Putumayo (3)(5) |
30 |
- |
- |
- |
- |
- |
Llanos (3)(5) |
3 |
- |
- |
- |
- |
- |
Sinu (3)(5) |
4 (Leads) |
13.4 |
67.1 |
126.3 |
318.1 |
18.1 |
Total (3)(4)(5) |
|
13.4 |
67.1 |
126.3 |
318.1 |
18.1 |
BOE (6) |
|
|
|
|
|
|
Putumayo (3)(5) |
30 |
102.0 |
262.2 |
371.3 |
764.6 |
99.4 |
Llanos (3)(5) |
3 |
4.5 |
16.1 |
25.7 |
58.5 |
5.0 |
Sinu (3)(5) |
4 (Leads) |
10.6 |
54.5 |
104.1 |
263.7 |
14.8 |
Total (3)(4)(5) |
|
117.1 |
332.8 |
501.2 |
1,086.9 |
119.2 |
| (1) | There
is no certainty that any portion of the resources will be discovered. If discovered,
there is no certainty that it will be commercially viable to produce any portion of the
resources. See “Disclosure of Oil and Gas Information” below for important
cautionary notes regarding prospective resources. |
| (2) | The
risked resources are partially risked prospective resources that have been risked for
chance of discovery, but have not been risked for the chance of development. The chance
of development is defined as the probability of a project being commercially viable.
Quantifying the chance of development requires consideration of both economic contingencies
and other contingencies, such as legal, regulatory, market access, political, social
license, internal and external approvals and commitment to project finance and development
timing. As many of these factors are extremely difficult to quantify, the chance of development
is uncertain and must be used with caution. The chance of development was estimated to
be 75 percent in the Putumayo and Llanos Basins and 60 percent in the Sinu basin. |
| (3) | Total
based on the probabilistic aggregation of zones within a prospect and arithmetic aggregation
of the individual prospects to the Total level. The estimates of prospective resources
for individual properties may not reflect the same confidence level as estimates of prospective
resources for all properties, due to the effects of aggregation. |
| (4) | The
unrisked total assumes every prospect is successful and as such is not representative
of the exploration portfolio unrisked total as defined in COGE Handbook Volume 2 Section
2.8.2. |
| (5) | Company
gross resources are based on working interest share of the property gross resources. |
| (6) | Based
on a Mcf to BOE conversion of 6 to 1. |
|
Working Interest Prospective Resources – Unrisked(1)(2) |
Risked
Resources
Mean (2) |
Peru |
|
Low |
P50 |
Mean |
High |
Basin |
Prospects / (Leads) |
MMbbl/ MMcf |
MMbbl/ MMcf |
MMbbl/ MMcf |
MMbbl/ MMcf |
MMbbl/ MMcf |
Light and Medium Crude Oil |
|
|
|
|
|
Maranon (3)(5) |
5 |
159.9 |
774.8 |
1,604.8 |
3,274.7 |
317.1 |
Ucayali (3)(5) |
1 |
61.1 |
218.3 |
312.9 |
682.8 |
60.1 |
Total (3)(4)(5) |
|
221.0 |
993.1 |
1,917.7 |
3,957.5 |
377.2 |
Conventional Natural Gas (MMcf) |
|
|
|
|
Maranon (3)(5) |
5 |
- |
- |
- |
- |
- |
Ucayali (3)(5) |
1 |
- |
- |
- |
- |
- |
Total (3)(4)(5) |
|
- |
- |
- |
- |
- |
BOE (6) |
|
|
|
|
|
|
Maranon (3)(5) |
5 |
159.9 |
774.8 |
1,604.8 |
3,274.7 |
317.1 |
Ucayali (3)(5) |
1 |
61.1 |
218.3 |
312.9 |
682.8 |
60.1 |
Total (3)(4)(5) |
|
221.0 |
993.1 |
1,917.7 |
3,957.5 |
377.2 |
| (1) | There
is no certainty that any portion of the resources will be discovered. If discovered,
there is no certainty that it will be commercially viable to produce any portion of the
resources. See “Disclosure of Oil and Gas Information” below for important
cautionary notes regarding prospective resources. |
| (2) | The
risked resources are partially risked prospective resources that have been risked for
chance of discovery, but have not been risked for the chance of development. The chance
of development is defined as the probability of a project being commercially viable.
Quantifying the chance of development requires consideration of both economic contingencies
and other contingencies, such as legal, regulatory, market access, political, social
license, internal and external approvals and commitment to project finance and development
timing. As many of these factors are extremely difficult to quantify, the chance of development
is uncertain and must be used with caution. The chance of development was estimated to
be 69 percent in the Maranon and Ucayali Basins. |
| (3) | Probabilistic
aggregation of the individual prospect distributions was undertaken to report the best
estimate unrisked and risked prospective resources of the portfolio. The estimates of
prospective resources for individual properties may not reflect the same confidence level
as estimates of prospective resources for all properties, due to the effects of aggregation. |
| (4) | The
unrisked total assumes every prospect is successful and as such is not representative
of the exploration portfolio unrisked total as defined in COGE Handbook Volume 2 Section
2.8.2. |
| (5) | Company
gross resources are based on working interest share of the property gross resources. |
| (6) | Based
on a Mcf to BOE conversion of 6 to 1. |
Summary of Contingent Resources as of September
30, 2015:
|
Summary of Contingent Resources (1)(2)(3) |
|
|
1C |
2C |
3C |
Peru |
|
MMbbl |
MMbbl |
MMbbl |
Heavy Oil |
|
|
|
|
Bretaña |
|
34.2 |
53.0 |
80.9 |
Total |
|
34.2 |
53.0 |
80.9 |
| (1) | All
of the Company's contingent resources have been classified as heavy oil. There is uncertainty
that it will be commercially viable to produce any portion of the resources. |
| (2) | “Contingent
Resources” are 100% of the volumes estimated to be recoverable from the field in
the event that it is developed. |
| (3) | The
volumes reported here are “unrisked” in the sense that no adjustment has
been made for the risk that the field may not be developed in the form envisaged or may
not be developed at all (i.e. no “Chance of Development” factor has been
applied). |
Gary Guidry, President and
Chief Executive Office of Gran Tierra, commented: “the independent assessments performed by McDaniel & Associates and
GLJ confirm significant contingent and prospective resources in the basins in Colombia and Peru. During 2016, the Company will
continue to aggressively advance the permitting process in Colombia to be able to start testing and exploring this exciting resource.
We expect the next 18 to 24 months to be transformational as we drill and open up the highly prospective resource in the Putumayo
basin, and continue to advance our plans of maximizing value of the resources in Peru”.
The Company will release full
comprehensive 2016 budget guidance in January 2016, after the expected finalization of the acquisition of all of the outstanding
common shares of Petroamerica.
GRAN TIERRA ENERGY INC.
Gary Guidry, Chief Executive
Officer
Tel: +1.403.767.6500
Ryan Ellson, Chief Financial
Officer
Tel: +1.403.767.6501
Chris Metcalfe, Director Investor
Relations
Tel: +1.403.698.7946
FOR MORE INFORMATION ON
GRAN TIERRA ENERGY INC., PLEASE GO TO:
www.grantierra.com
DISCLAIMER
This press release contains
opinions, forecasts, projections, and other statements about future events or results that constitute forward-looking statements
within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward looking
information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements").
Such forward-looking statements include, but are not limited to, statements about: future projected or target production and the
growth of production including the product mix of such production and expectations respecting production growth, forecasted production;
our intention to provide an updated, consolidated estimate of prospective resources following the completion of the acquisition
of Petroamerica; our ability to grow in both the near and long term and the funding of our growth opportunities; our possible creation
of new core areas; estimated resources; estimated reserves growth and estimated barrels of oil equivalent gross working interest;
our prospects and leads; estimated cash flow from operations; the plans, objectives, expectations and intentions of the company
regarding production, exploration and exploration upside, development; our capital program including the changes thereto along
with the expected costs and the allocation of the capital program; Gran Tierra’s financial position and the future development
of the company’s business. Statements respecting reserves, contingent resources, and prospective resources are forward-looking
statements as they involve the implied assessment, based on estimates and assumptions, that the reserves, contingent resources,
and prospective resources described exist in the quantities predicted or estimated and can be profitably produced in the future.
The forward-looking statements
contained in this press release reflect several material factors and expectations and assumptions of Gran Tierra including, without
limitation, assumptions relating to log evaluations, the accuracy of resources estimates, that Gran Tierra will continue to conduct
its operations in a manner consistent with its current expectations, the accuracy of testing and production results and seismic
data, pricing and cost estimates (including with respect to commodity pricing and exchange rates), rig availability, the effects
of drilling down-dip, the effects of waterflood and multi-stage fracture stimulation operations, the extent and effect of delivery
disruptions, and the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions
including in areas of potential expansion, and the ability of Gran Tierra to execute its current business and operational plans
in the manner currently planned. Gran Tierra believes the material factors, expectations and assumptions reflected in the forward-looking
statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove
to be correct.
Among the important factors
that could cause actual results to differ materially from those indicated by the forward-looking statements in this press release
are: Gran Tierra’s operations are located in South America, and unexpected problems can arise due to guerilla activity; technical
difficulties and operational difficulties may arise which impact the production, transport or sale of our products; geographic,
political and weather conditions can impact the production, transport or sale of our products; the risk that current global economic
and credit conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts; the risk that unexpected
delays and difficulties in developing currently owned properties may occur; the failure of exploratory drilling to result in commercial
wells; unexpected delays due to the limited availability of drilling equipment and personnel; the risk that oil prices could continue
to fall, or current global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra
currently predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; and the risk factors
detailed from time to time in Gran Tierra’s periodic reports filed with the Securities and Exchange Commission, including,
without limitation, under the caption " Risk Factors" in Gran Tierra's Annual Report on Form 10-K filed March 2, 2015,
and its Quarterly Report on Form 10-Q filed November 3, 2015. These filings are available on the Web site maintained by the Securities
and Exchange Commission at http://www.sec.gov and on SEDAR at www.sedar.com. Although the current capital spending program and
long term strategy of Gran Tierra is based upon the current expectations of the management of Gran Tierra, should any one of a
number of issues arise, Gran Tierra may find it necessary to alter its business strategy and/or capital spending program and there
can be no assurance as at the date of this press release as to how those funds may be reallocated or strategy changed.
All forward-looking statements
are made as of the date of this press release and the fact that this press release remains available does not constitute a representation
by Gran Tierra that Gran Tierra believes these forward-looking statements continue to be true as of any subsequent date. Actual
results may vary materially from the expected results expressed in forward-looking statements. Gran Tierra disclaims any intention
or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise,
except as expressly required by applicable securities laws. Gran Tierra’s forward-looking statements are expressly qualified
in their entirety by this cautionary statement.
DISCLOSURE OF OIL AND GAS
INFORMATION
Contingent resources are the
quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established
technology or technology underdevelopment, but which are not currently considered to be commercially recoverable due to one or
more contingencies. Contingencies are conditions that must be satisfied for a portion of contingent resources to be classified
as reserves that are: (a) specific to the project being evaluated; and (b) expected to be resolved within a reasonable timeframe.
Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets.
It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project
in the early evaluation stage.
Estimates related to contingent
resources:
All dollar amounts are in United
States ("U.S.") dollars.
|
Estimated cost to
achieve commercial
production
($MM) |
General Timeline
including the
estimated date of
first commercial
production
(Years) |
Estimate of
Recovery
Technology
(conventional or
unconventional) |
Basis of Project
(conceptual or pre-development) |
|
|
|
|
|
Bretaña |
440 – 525 |
3 – 10 |
Conventional |
Pre-development study |
|
|
|
|
|
|
Prospective Resources are those
quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application
of future development projects. Prospective resources have both an associated chance of discovery and a chance of development.
Not all exploration projects will result in discoveries. The chance that an exploration project will result in the discovery of
petroleum is referred to as the “chance of discovery.” Thus, for an undiscovered accumulation the chance of commerciality
is the product of two risk components-the chance of discovery and the chance of development. There is no certainty that any portion
of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce
any portion of the prospective resources.
BOE’s may be misleading
particularly if used in isolation. A BOE conversion ratio of 6 thousand cubic feet of gas to 1 barrel of oil is based on an energy
equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
In addition, given that the value ratio based on the current price of oil as compared with natural gas is significantly different
from the energy equivalent of six to one, utilizing a BOE conversion ratio of 6Mcf:1bbl would be misleading as an indication of
value.
Estimates of the Company’s
contingent resources and prospective resources are based upon the reports prepared by McDaniel & Associates and GLJ, the Company’s
independent qualified reserves evaluators, as at the effective dates that are specified in this press release. The estimates of
contingent and prospective resources provided in this press release are estimates only and there is no guarantee that the estimated
contingent and prospective resources will be recovered. Actual contingent and prospective resources may be greater than or less
than the estimates provided in this in this press release and the differences may be material. There is no assurance that the forecast
price and cost assumptions applied by McDaniel & Associates and GLJ in evaluating Gran Tierra’s contingent and prospective
resources will be attained and variances could be material. There is no certainty that any portion of the prospective resources
will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective
resources. There is also uncertainty that it will be commercially viable to produce any part of the contingent resources.
Estimates of contingent and
prospective resources are by their nature more speculative than estimates of proved reserves and would require substantial capital
spending over a significant number of years to implement recovery. Actual locations drilled and quantities that may be ultimately
recovered from our properties will differ substantially. In addition, we have made no commitment to drill, and likely will not
drill, all of the drilling locations that have been attributable to these quantities.
Except as otherwise set forth
herein, the prospective resources estimates that are referred to herein are un-risked as to both chance of discovery and chance
of development and the contingent resources estimates that are referred to herein are un-risked as to chance of development (i.e.
the level of risk associated with the chance of discovery and chance of development was not assessed by GLJ as part of the evaluations
that were conducted). Risks that could impact the chance of discovery and chance of development include, without limitation: geological
uncertainty and uncertainty regarding individual well drainage areas; uncertainty regarding the consistency of productivity that
may be achieved from lands with attributed resources; potential delays in development due to product prices, access to capital,
availability of markets and/or take-away capacity; and uncertainty regarding potential flow rates from wells and the economics
of those wells.
The following classification
of contingent and prospective resources is used in the presentation:
| · | Low Estimate (or
1C) means there is at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low
estimate. |
| · | Best Estimate (or
2C) means there is at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best
estimate. |
| · | High Estimate (or
3C) means there is at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high
estimate. |
On January 31, 2015, Gran Tierra
received the draft results of a reserves estimate for Bretaña field in Peru, provided by its independent reserves auditor,
GLJ, in response to the drilling results of the Bretaña Sur 95-3-4-1X appraisal well subsequent to year-end 2014. As expected,
this drilling data did result in a reduction of the Probable and Possible reserves associated with the Bretaña Field and,
following a review of the draft report for the updated reserves, and considering the current low oil price environment and the
significant aspects of the Bretaña Field project no longer in line with Gran Tierra’s strategy, the Board of Directors
determined that they would not proceed with the further capital investment required to develop the Bretaña Field. As a result
of this decision, all 2P and 3P reserves associated with the field were reduced to nil and reclassified as contingent resources
in a report prepared by GLJ and effective January 31, 2015. Please see the press release of Gran Tierra dated March 1, 2015 and
filed on SEDAR (www.sedar.com) on March 4, 2015, for a further discussion of these contingent resources. The contingent resource
estimate was prepared in compliance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities
and the Canadian Oil and Gas Evaluation Handbook.
In general, the significant
factors that may change the prospective resources and contingent resources estimates include further delineation drilling, which
could change the estimates either positively or negatively, future technology improvements, which would positively affect the estimates,
and additional processing capacity that could affect the volumes recoverable or type of production. Additional facility design
work, development plans, reservoir studies and delineation drilling is expected to be completed by the Company in accordance with
its long-term resource development plan.
As used in this press release,
“MMbbl” and “MMcf” mean million barrels of crude oil and million cubic feet of conventional natural gas,
respectively.
CAUTIONARY NOTE TO U.S.
INVESTORS
The U.S. Securities and Exchange
Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves
that meet the SEC’s definitions of such terms. In this press release, the Company uses the terms contingent resources and
prospective resources. The SEC guidelines strictly prohibit the Company from including this term in filings with the SEC. Investors
are urged to consider closely the disclosures and risk factors in the Company’s Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q and in the other reports and filings with the SEC, available from the Company’s offices or website. These forms
can also be obtained from the SEC via the internet at www.sec.gov or by calling 1-800-SEC-0330.
Gran Tierra Energy (AMEX:GTE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Gran Tierra Energy (AMEX:GTE)
Historical Stock Chart
From Apr 2023 to Apr 2024