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Msg  15237 of 15246  at  12/19/2019 11:30:41 AM  by

DaveAu


IR response to Motley Fool - from stockhouse

 
From: 'info@grantierra.com' Sent: Wednesday, December 18, 2019 13:43 PM Subject: Re: [EXTERNAL] What is Happening at Gran Tierra Energy (TSX:GTE)? Dear David, Thanks for your email. Please allow me to address the points raised below: GTE deletion from S&P/TSX Composite Index: o We are far from alone in this matter, as membership in this index is driven in large part by market capitalization o If a companys market capitalization drops too much, it may be removed from this index o At the end of Q3/2019, several other Canadian-listed E&P shares were dropped from S&P/TSX Composite Index (press release on Sep.13/2019: https://www.newswire.ca/news-releases/s-amp-p-dow-jones-indices-announces-changes-to-the-s-amp-p-tsx-composite-index-858070702.html) such as Birchcliff Energy (BIR), Kelt Exploration (KEL), Nuvista Energy (NVA), Peyto Exploration (PEY) and TORC Oil & Gas (TOG) o None of these companies suffered material drops on this news or for the next 5 trading days o Each of their respective price actions through the course of Q4/2019 were roughly in line with the TSX Capped Energy Indexs movements o Therefore, none of these 5 companies seemed to suffer from being dropped from the S&P/TSX Composite Index The Motley Fool article is full of the following incomplete observations and outright inaccuracies and falsehoods: o While it is true that GTE shares have underperformed the Brent oil price during 2019, the same could be said for many E&P companies o As recently as Dec.03/2019, the S&P Oil & Gas Exploration & Production Select Industry Index hit a 15-year low, as did the S&P/TSX Capped Energy Index o So most E&P companies have been underperforming the Brent oil price for the last couple years o A key risk is the deteriorating security situation in Colombia: the security situation in Colombia has settled down now and even at the height of the recent protests, there was ZERO impact on GTE operations (or the operations of any other E&P company operating in Colombia); there is NO ongoing crisis in Colombia o the Putumayo Basin, which is a highly unstable region : this statement is factually incorrect; the security situation has vastly improved in the Putumayo Basin since a ceasefire between the Colombian national government and the FARC guerilla group came into effect in 2015 and with the subsequent signing of the Peace Agreement in 2016; Gran Tierra has been able to operate effectively, efficiently and safely throughout the Putumayo Basin over the last several years; as for the farmers blockade in the southern Putumayo region which temporarily impacted our oil production there for about 10 days last summer, we believe we have now mitigated the risks of these types of disruptions in the future o the breakdown of the FARC peace process : this statement is false; the Peace Agreement remains in effect between the Colombian government and the FARC; while some dissidents have indicated they will return to a life of organized crime, the overall Peace Agreement remains in place o 32 strikes against oil pipelines in Colombia, with the Cano Limon-Coveas and TransAndino pipelines being favored targets : it is true that the ELN guerilla group has attacked the Cano Limon-Coveas pipeline for several years now, so this is not a recent phenomenon; however these attacks have never affected Gran Tierras operations as we do not use the portion of the line that the ELN targets near the border with Venezuela, which is a several 100 kms away from our main operations o Pipelines are the only cost-effective means of transporting crude from oil fields to ports: FALSE; trucking of oil to markets/ports is economically competitive with pipelines in many regions of Colombia, including where Gran Tierra operates o Gran Tierra is particularly dependent on the TransAndino pipeline: FALSE; none of our Putumayo oil production goes out to market via this pipeline; all of our oil is trucked to the south, across the border into Ecuador, where it then enters the OCP pipeline which ships our oil out to the Ecuadorian port of Esmeraldas; therefore, any attack on the TransAndino pipeline has ZERO impact on our operations o Rising geopolitical and security risk in Colombia is weighing heavily on Gran Tierra: for all of the reasons we list above, we believe this statement is not true; we believe that the market is now waiting for us to prove that our reserves base is intact and growing and that we will meet our 2020 production and cash flow guidance; we are highly confident in our reserves, especially now that we have fully implemented the Acordionero waterflood to maximize that fields oil production and ultimate oil recovery; we also highly confident in our ability to deliver on our stated 2020 goals I hope all of the above information is helpful. Best regards, Gary On Dec 17, 2019, at 12:07 PM,  


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Msg # Subject Author Recs Date Posted
15238 Re: IR response to Motley Fool - from stockhouse tigris72poo 2 12/19/2019 12:39:26 PM






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