Research Update: Oil And Gas Producer Gran Tierra Energy Downgraded To 'CCC+' From 'B' And Placed On Watch Negative On Weaker Liquidity

Canada-based oil and gas producer Gran Tierra Energy Inc. (GTE) reduced net after royalties (NAR) production to about 25,370 barrels of oil equivalent per day (boepd) during the three months ended March 31, 2020 (20.0% lower than the same period in 2019). This drop, coupled with very low crude oil prices ($22.7 per barrel by the end of March 2020), resulted in a severe EBITDA decline of about 69.0% compared to the first quarter of 2019. The company faces a potential breach on its acceleration and cross-default covenants from its senior secured revolving credit facility if weak EBITDA generation and additional debt funding persist in the upcoming months. We expect GTE to receive a waiver authorization from its lenders by

...- Canada-based oil and gas producer Gran Tierra Energy Inc. (GTE) reduced net after royalties (NAR) production to about 25,370 barrels of oil equivalent per day (boepd) during the three months ended March 31, 2020 (20.0% lower than the same period in 2019). This drop, coupled with very low crude oil prices ($22.7 per barrel by the end of March 2020), resulted in a severe EBITDA decline of about 69.0% compared to the first quarter of 2019. - The company faces a potential breach on its acceleration and cross-default covenants from its senior secured revolving credit facility if weak EBITDA generation and additional debt funding persist in the upcoming months. We expect GTE to receive a waiver authorization from its lenders by the end of this month; however, if it does not receive the waiver, it could lead to a default for the company. - On May 15, 2020, S&P Global Ratings lowered its issuer credit rating on GTE to '###+' from 'B' and the issue-level ratings to '###+' from 'B' on its 6.25%...

Research Update