Gran Tierra Energy Inc. (GTE,GTE.TO) announced Monday its board of directors has approved a flexible 2016 budget focusing capital allocation on projects to grow and expand the assets in Colombia, given the current volatility in commodity prices. The company also aims to maximize the value of assets in Brazil and Peru.
Gary Guidry, President and Chief Executive Officer of Gran Tierra, said, "If the price of oil remains below $50.00 per barrel through the second quarter of 2016, the Company may choose to defer some discretionary components of our exploration and development budget to preserve cash."
The company added that it plans to continue to allocate capital to acquisitions and joint ventures, consistent with strategy of expanding and diversifying the Company's growth portfolio in Colombia.
Based on a $40.00 Brent price, the company is forecasting 20% growth in 2016 working interest production over 2015 average WI production.
The 2016 average WI production from the Company's assets in Colombia and Brazil is expected to average approximately 27,500 to 29,000 barrels of oil equivalent per day, higher than 2015 average production of 23,400 boepd.
The Company also expects to maintain a strong balance sheet in 2016 and does not anticipate utilizing its $200 million undrawn credit facility.
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