Gran Tierra forecasts 2026 EBITDA of $345M-$395M while revising portfolio after Simonette sale and new Colombia block

Earnings Call Insights: Gran Tierra Energy (GTE) Q1 2026

MANAGEMENT VIEW

* CEO Gary Guidry framed the quarter as a straightforward results update, saying, "Good morning, and welcome to Gran Tierra's First Quarter 2026 Results Conference Call," and highlighted the company’s near-term investor touchpoint by adding, "Immediately following this earnings call... we will be holding our Annual General Meeting of Stockholders."
* CFO Ryan Ellson described execution and balance sheet actions, stating, "Our first quarter performance marks a solid start to 2026 with production aligning within expectations and capital spending coming in under plan," and added, "With the Simonette asset disposition and bond exchange completed during the quarter, we have materially strengthened the balance sheet as we exited the quarter with $125 million in cash and extended maturities."
* Ellson emphasized portfolio expansion in two regions, saying, "we signed an exploration, development and production sharing agreement with the state oil company of the Republic of Azerbaijan," and "we entered a strategic partnership with Ecopetrol, where Gran Tierra expects to earn a 49% working interest in the Tisquirama Block... in the Middle Magdalena Valley Basin of Colombia."
* On risk management, Ellson said, "oil volumes are hedged throughout the year using a mix of 3-ways, collars and puts with an average ceiling of approximately $76 per barrel," and added, "For gas, we have AECO swaps covering an average of 15,600 GJs per day at approximately $2.71 per GJs for 2026."
* COO Sebastien Morin positioned operations around waterflood execution and new blocks, stating, "In Ecuador, we commenced water injection at Chanangue in early February, with early results exceeding expectations," and "we expect to initiate operations at Tisquirama in the second half of 2026."

OUTLOOK

* Ellson tied guidance changes to portfolio moves and hedging, stating, "our 2026 guidance has been revised to reflect how our portfolio and the market has changed since our original guidance announced in December 2025," and added, "the benefit is partially offset by hedging losses forecast between $70 million to $72 million, the loss of Simonette production and incremental capital spend tied to our new portfolio additions."
* For 2026 at a stated price deck, Ellson said, "At approximately $84 Brent average for the year, we are guiding to production of 40,000 to 45,000 barrels of oil equivalent per day, EBITDA of $345 million to $395 million and free cash flow of $95 million to $115 million with a capital program of $130 million to $170 million."
* The provided analysts estimates data could not be validated against the required format (it does not include a Q1-Q4 fiscalQuarter field and does not include EPS estimates), and the transcript did not provide EPS or revenue guidance to compare.

FINANCIAL RESULTS

* Ellson reported, "Gran Tierra incurred a net loss of $119 million compared to a net loss of $141 million in the prior quarter and net loss of $19 million in the first quarter of 2025," and attributed the result to "noncash charges such as unrealized hedging losses" and "nonrecurring charges such as a senior note exchange and severance."
* He flagged Ecuador pricing timing as a key swing factor, saying, "Ecuador pricing lagged during the quarter due to our M-1 structure, reducing revenue by approximately $16 million versus the average Brent," and added, "we expect the timing effect to reverse and support stronger realizations from Ecuador in the second quarter."
* Ellson said, "The company generated adjusted EBITDA of $74 million versus $52 million in the prior quarter and $85 million in the first quarter of 2025," and added, "Funds flow from operations were $43 million or $1.21 per share."
* On spending and capital discipline, Ellson stated, "Gran Tierra's capital expenditures of $45 million were lower than the $53 million in the prior quarter and $95 million in the first quarter of 2025," and noted activity included "3 development wells in Colombia and 3 development wells in Canada in the Simonette area, which was disposed in March 2026."
* On liquidity and leverage, Ellson reported, "At quarter end, Gran Tierra had a cash balance of $125 million, total gross debt of $606 million and net debt of $481 million," and added, "we repurchased approximately $9.2 million face value of the company's 9.75% senior notes due April 15, 2031" at "a discount of 12% to the face value."

Q&A

* Massimiliano Pilato, Stifel: "2026 CapEx guidance has increased slightly. Can you please elaborate on that?... what prices do you need to see to ramp up activity in Canada?" Ryan Ellson: "that really just reflects us securing the Tisquirama Block" and "We expect to spend $15 million to $20 million this year in the Tisquirama Block," adding on Canada, "we need to see AECO north of $3 in order to allocate capital in Canada on the gas side."

SENTIMENT ANALYSIS

* Analyst tone was neutral and implementation-focused, concentrating on capital allocation and regional activity levels (Pilato: "how should we be thinking about a normalized CapEx level going forward?").
* Management tone was slightly positive on execution and disciplined on capital, with Ellson emphasizing, "production aligning within expectations" and "disciplined execution," while reiterating constraint-based spending decisions ("We're happy with the capital program").
* Compared with the prior quarter’s broader, more probing Q&A (pricing exposure, Azerbaijan capital, hedging expansion, debt targets), the current quarter’s single-question format narrowed to CapEx mix and Canada price thresholds.

QUARTER-OVER-QUARTER COMPARISON

* Portfolio and capital-structure messaging carried over, with both calls highlighting Azerbaijan entry and balance sheet actions; Q1 explicitly stated completion, "the Simonette asset disposition and bond exchange completed during the quarter," versus Q4 describing actions as recently executed and/or pending ("we are still waiting to get the PSC ratified" for Azerbaijan).
* Hedging framing shifted from coverage levels and floors in Q4 to ceilings and specific gas volumes in Q1, with Q1 stating an "average ceiling of approximately $76 per barrel" and AECO swaps of "15,600 GJs per day," while Q4 emphasized oil being "approximately 50% hedged" with an "average floor around $60."
* Operational emphasis moved from reserves/NAV discussion in Q4 to delivery against plan and waterflood execution milestones in Q1 (Morin: "commenced water injection" and moving toward waterflooding at additional Ecuador blocks).

RISKS AND CONCERNS

* Ellson identified forecast headwinds embedded in guidance, citing "hedging losses forecast between $70 million to $72 million" alongside "the loss of Simonette production" and "incremental capital spend tied to our new portfolio additions."
* He also described realized pricing timing risk in Ecuador, stating, "Ecuador pricing lagged during the quarter due to our M-1 structure," while positioning mitigation as timing normalization: "we expect the timing effect to reverse" in Q2.
* Morin pointed to operational timing sensitivity in Colombia, attributing production drivers to "the timing of waterflood optimization responses in Colombia" alongside the Simonette disposition impact.

FINAL TAKEAWAY

Management positioned Q1 2026 as an execution-and-portfolio transition quarter, emphasizing that Simonette and the bond exchange were completed, liquidity ended the quarter at $125 million, and 2026 guidance was revised to reflect higher price assumptions, hedging impacts, and new assets. The company’s outlook centered on a $84 Brent planning case with production, EBITDA, free cash flow, and capital ranges, while operational messaging focused on accelerating waterflood initiatives in Ecuador and preparing to start work at the Tisquirama Block in the second half of 2026.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/gte/earnings/transcripts]

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