Energy Summary for May 21, 2019: GTE Excerpt | GTE Message Board Posts

Gran Tierra Energy Inc.

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Msg  15140 of 15204  at  5/22/2019 12:44:20 AM  by


Energy Summary for May 21, 2019: GTE Excerpt

Thanks to carswell posting elsewhere! 

In other debt news, Gary Guidry's Colombia-focused Gran Tierra Energy Inc. (GTE), down five cents to $2.82 on 1.53 million shares, has priced the note offering that it announced on May 9. It is looking to raise $300-million (U.S.) by issuing 7.75 per cent notes due 2027. This is Gran Tierra's second $300-million (U.S.) note offering in 15 months, following a previous one in February, 2018 (of 6.25 per cent notes due 2025). Gran Tierra used the proceeds of that offering for credit facility repayments and general purposes. It says it will do much the same this time. Interestingly, it specifically mentions "acquisitions" as a possible general purpose, a word that did not appear in the comparable February, 2018, announcement. This will surely pique the interest of Canaccord Genuity analyst Jenny Xenos, who speculated in a research note on May 9 (when the latest note offering was first proposed) that Gran Tierra was "potentially gearing up for acquisitions" in Colombia or Ecuador or both. She has a "buy" rating on the stock and a $6 price target.

Separately, Gran Tierra got a mention today from a different analyst, RBC's Al Stanton, who likes the company's "significant upside potential" but is nonetheless taking a "more cautious" stance on its prospects in 2020 and beyond. Mr. Stanton pointed out that Gran Tierra's shares have failed to keep up with the recovery in Brent oil prices so far in 2019. (Brent has risen 34 per cent year to date; Gran Tierra has fallen 5 per cent.) Mr. Stanton would like to see the company focus more on development and debt reduction. He would also like the market to be more realistic, as currently Gran Tierra "appears to be underdelivering" against expectations that are "set too high." He lowered his rating to "outperform" from "top pick" and cut his price target to $4.20 from $5.50.

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15141 Re: Energy Summary for May 21, 2019: GTE Excerpt peaceful valley 3 5/22/2019 2:58:05 PM

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