Elsewhere in Latin America, Gary Guidry's Colombian oil producer, Gran Tierra Energy Inc. (GTE), lost seven cents to $1.46 on 2.96 million shares. Investors learned late on Friday that the company is being kicked out of the S&P/TSX Composite Index. The change, which comes as part of the index's latest quarterly rebalancing, will take effect next Monday, Dec. 23. Gran Tierra thus becomes the latest in a long line of index-deletion casualties in the energy sector over the last five or so years. Since mid-2015, when the index began to react to the 2014 oil price crash, nearly two dozen E&P companies have been deleted from the index, with a mere 17 now remaining, out of the total index population about 230. As the S&P/TSX Composite is Canada's broadest index and is tracked by numerous funds, deletion often leads to selling pressure.
Friday's bad news topped off a wobbly week for Gran Tierra, which on Tuesday released its 2020 guidance, failing to impress analysts or investors. The company is planning to spend $200-million (U.S.) to $210-million (U.S.) in 2020. This is down from $335-million (U.S.) in 2019, which itself was a reduction from the original 2019 budget of $370-million (U.S.). The 2020 production target of 36,500 barrels of oil equivalent a day is not much greater than the 2019 target of 34,900 barrels a day, which, again, represented a reduction; the original 2019 goal was about 41,000 barrels a day. The silver lining to the conservative budget was a greater emphasis on free cash flow. Gran Tierra forecast that it could achieve free cash flow of $70-million (U.S.) in 2020. To Scotia Capital analyst Gavin Wylie, however, this was not good enough. Mr. Wylie noted that Gran Tierra's previous hints were that it could achieve 2020 free cash flow of $75-million (U.S.) to $100-million (U.S.). Over all, he viewed the guidance as "negative," "lacklustre" and leaving "very little room for error." He trimmed his price target to $2 from $2.25.