Gran Tierra Energy Secures $200M Prepayment Facility, Aims for Free Cash Flow and Production Growth by H2 2025

Gran Tierra Energy has signaled a $200M prepayment facility and targets free cash flow and production ramp-up through H2 2025. The company reported record production and the lowest per-barrel operating cost since early 2022, with enhanced liquidity. CEO Gary Stephen Guidry emphasized the strong operational and financial performance during the Q2 2025 earnings call.

Gran Tierra Energy Inc. (GTE) has signaled a significant financial move by securing a $200 million prepayment facility, aiming to generate free cash flow and ramp up production for the second half of 2025. The company reported record production and the lowest per-barrel operating cost since early 2022, further bolstering its financial position [1].

During the Q2 2025 earnings call, CEO Gary Stephen Guidry highlighted the company's strong operational and financial performance. The company achieved record production of approximately 47,200 barrels of oil equivalent (BOE) per day, a 1% sequential increase and 44% higher than Q2 2024 [1]. Sales for the quarter reached $152 million, with a net loss of $13 million. The company also reported enhanced liquidity through various initiatives and credit capacity [1].

The $200 million prepayment facility, expected to close in Q3 2025, is designed to provide additional liquidity and support the company's strategic initiatives, including non-core asset sales and the disposition of U.K. North Sea assets for approximately $7.5 million [1]. The facility is structured as a loan that amortizes over four years, settled with oil payments, according to the company's CFO, Ryan Paul Ellson [1].

Gran Tierra's operational highlights included the successful completion of the remaining wells at its Cohembi North pad program in Colombia, with average drilling costs reduced by 47% from the previous operator's historical costs [1]. The company also reported progress at Costayaco and Acordionero, as well as the Simonette Montney program in Canada, where wells are exceeding management's type curves expectations [1].

Management indicated that the company's focus for the remainder of 2025 will be on ramping up base production at Cohembi North and Costayaco, optimizing Acordionero production, and initiating high-impact exploration wells in Ecuador [1]. The primary driver for free cash flow generation is expected to be lower capital expenditures (CapEx) [1].

The company's strategic priorities evolved to include the Azerbaijan opportunity and systematic hedging expansion, while maintaining capital discipline and portfolio optimization [1]. Analysts expressed a constructive tone, focusing on production ramp-up, asset sales, and capital allocation, with management maintaining a confident and positive outlook [1].

References:

[1] https://seekingalpha.com/news/4475832-gran-tierra-signals-200m-prepayment-facility-targets-free-cash-flow-and-production-ramp-up