Gran Tierra signs $200-million crude prepay deal

Executive Summary

• Gran Tierra Energy Inc. entered into a crude oil sale and purchase agreement with a prepayment addendum, securing up to $200 million in advance payments against future Ecuadorian Oriente crude oil production.
• The company simultaneously amended its reserve-based credit facility to consent to the prepayment agreement, reducing the borrowing base from $75 million to $60 million and adjusting financial covenants.
• Proceeds from the prepayment are intended to strengthen the company's balance sheet and enhance financial flexibility.

Key Details

• Prepayment Structure: The seller (Gran Tierra Energy Colombia GmbH) receives an initial advance not to exceed $150 million, with the potential for an additional advance of up to $50 million, subject to certain conditions.
• Settlement Mechanism: Advances are satisfied by scheduled deliveries of the seller's Ecuadorian Oriente crude oil production.
• Credit Facility Amendment: The borrowing base under the Colombian credit agreement was reduced from $75 million to $60 million.
• Covenant Adjustments: Financial covenants were adjusted to account for the new prepayment structure.
• Use of Proceeds: Funds are designated to strengthen the balance sheet and enhance financial flexibility.
• Management Commentary: CFO Ryan Ellson stated the agreement demonstrates partner confidence in Gran Tierra's operations and underscores its position as a premier operator in Ecuador, while maintaining a commitment to financial discipline and sustainable free cash flow.