Research Update: Gran Tierra Energy Inc. Outlook Revised To Stable From Positive On Lower-Than-Expected EBITDA, 'B' Ratings Affirmed

Colombia-based oil and gas producer Gran Tierra Energy Inc.'s (GTE) leverage differed from our expectations, leading us to believe that the company will take longer to reduce its debt than expected. EBITDA did not increase as we expected ($400 million in 2023 versus our forecast of $507 million) due to higher operating costs stemming from the El Nino climate pattern that lifted energy expenses, and lower-than-expected reference prices. As a result, the company reported higher-than-expected adjusted debt to EBITDA above 2.0x as of Sept. 30, 2023. On Jan. 30, 2024, S&P Global Ratings revised its outlook on GTE to stable from positive. We also affirmed our 'B' issuer credit rating on GTE and our issue-level rating on its 9.5% senior

...- Colombia-based oil and gas producer Gran Tierra Energy Inc.'s (GTE) leverage differed from our expectations, leading us to believe that the company will take longer to reduce its debt than expected. - EBITDA did not increase as we expected ($400 million in 2023 versus our forecast of $507 million) due to higher operating costs stemming from the El Nino climate pattern that lifted energy expenses, and lower-than-expected reference prices. As a result, the company reported higher-than-expected adjusted debt to EBITDA above 2.0x as of Sept. 30, 2023. - On Jan. 30, 2024, S&P Global Ratings revised its outlook on GTE to stable from positive. We also affirmed our 'B' issuer credit rating on GTE and our issue-level rating on its 9.5% senior secured amortizing notes due 2029. At the same time, we affirmed our 'B-' issue-level rating on its senior unsecured notes due 2025 and 2027. - The stable outlook reflects our view that the company will maintain debt to EBITDA slightly below 2.0x while seeking...

Research Update