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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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98-0479924
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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200, 150 13 Avenue S.W.
Calgary, Alberta, Canada T2R 0V2
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||
(Address of principal executive offices, including zip code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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PART I
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Financial Information
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Item 1.
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Financial Statements
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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PART II
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Other Information
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 6.
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Exhibits
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SIGNATURES
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||
EXHIBIT INDEX
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bbl
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barrel
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BOE
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barrels of oil equivalent
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Mbbl
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thousand barrels
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MBOE
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thousand barrels of oil equivalent
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MMbbl
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million barrels
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BOEPD
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barrels of oil equivalent per day
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bopd
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barrels of oil per day
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Mcf
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thousand cubic feet
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NAR
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net after royalty
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|
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2015
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2014
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2015
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2014
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||||||||
REVENUE AND OTHER INCOME
|
|
|
|
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||||||||
Oil and natural gas sales (Note 4)
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$
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69,350
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|
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$
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147,888
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|
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$
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145,581
|
|
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$
|
298,993
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Interest income
|
|
382
|
|
|
638
|
|
|
803
|
|
|
1,388
|
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||||
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69,732
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|
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148,526
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|
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146,384
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|
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300,381
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||||
EXPENSES
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|
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||||||||
Operating
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24,133
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|
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25,346
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|
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55,567
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|
|
47,212
|
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||||
Depletion, depreciation, accretion and impairment
|
|
69,473
|
|
|
41,937
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|
|
155,627
|
|
|
86,201
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||||
General and administrative (Note 6)
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10,298
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|
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13,932
|
|
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17,592
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|
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26,795
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||||
Severance (Note 11)
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1,988
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|
|
—
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|
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6,366
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|
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—
|
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||||
Equity tax (Note 8)
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—
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|
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—
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|
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3,769
|
|
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—
|
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||||
Foreign exchange loss (gain)
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|
2,969
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|
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10,044
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(8,569
|
)
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|
5,834
|
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||||
Financial instruments gain (Note 10)
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|
(1,366
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)
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(2,604
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)
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(1,408
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)
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(5,013
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)
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||||
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|
107,495
|
|
|
88,655
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|
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228,944
|
|
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161,029
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||||
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|
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||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
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(37,763
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)
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59,871
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(82,560
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)
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139,352
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INCOME TAX (EXPENSE) RECOVERY
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|
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||||||||
Current
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(5,684
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)
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(26,968
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)
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(8,109
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)
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(58,937
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)
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||||
Deferred
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4,883
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(1,419
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)
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7,239
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841
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||||
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(801
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)
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(28,387
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)
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(870
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)
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(58,096
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)
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||||
(LOSS) INCOME FROM CONTINUING OPERATIONS
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(38,564
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)
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31,484
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(83,430
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)
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81,256
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||||
Loss from discontinued operations, net of income taxes (Note 3)
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—
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(22,347
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)
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—
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|
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(26,990
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)
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||||
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
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|
(38,564
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)
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9,137
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(83,430
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)
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54,266
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||||
RETAINED EARNINGS, BEGINNING OF PERIOD
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194,756
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456,090
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239,622
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410,961
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||||
RETAINED EARNINGS, END OF PERIOD
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$
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156,192
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$
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465,227
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$
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156,192
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$
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465,227
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|
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|
|
|
|
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||||||||
(LOSS) INCOME PER SHARE
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|
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|
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||||||||
BASIC
|
|
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||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS
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$
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(0.13
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)
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|
$
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0.11
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|
|
$
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(0.29
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)
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|
$
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0.29
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LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES
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|
—
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(0.08
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)
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|
—
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|
|
(0.10
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)
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||||
NET INCOME (LOSS)
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|
$
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(0.13
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)
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$
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0.03
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|
|
$
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(0.29
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)
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|
$
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0.19
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DILUTED
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|
|
|
|
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||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS
|
|
$
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(0.13
|
)
|
|
$
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0.11
|
|
|
$
|
(0.29
|
)
|
|
$
|
0.29
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LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES
|
|
—
|
|
|
(0.08
|
)
|
|
—
|
|
|
(0.10
|
)
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||||
NET INCOME (LOSS)
|
|
$
|
(0.13
|
)
|
|
$
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0.03
|
|
|
$
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(0.29
|
)
|
|
$
|
0.19
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC (Note 6)
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|
286,393,772
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283,773,204
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|
286,294,595
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|
|
283,505,690
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|
||||
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED (Note 6)
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|
286,393,772
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|
|
287,856,959
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|
|
286,294,595
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|
|
288,338,698
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|
|
June 30,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
166,399
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|
|
$
|
331,848
|
|
Restricted cash
|
347
|
|
|
1,836
|
|
||
Accounts receivable
|
51,332
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|
|
83,227
|
|
||
Marketable securities (Note 10)
|
9,686
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|
|
7,586
|
|
||
Inventory (Note 5)
|
33,459
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|
|
17,298
|
|
||
Taxes receivable
|
28,732
|
|
|
15,843
|
|
||
Prepaids
|
3,867
|
|
|
6,000
|
|
||
Deferred tax assets
|
1,416
|
|
|
1,552
|
|
||
Total Current Assets
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295,238
|
|
|
465,190
|
|
||
|
|
|
|
||||
Oil and Gas Properties
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|
|
|
|
|
||
Proved
|
721,951
|
|
|
801,075
|
|
||
Unproved
|
324,979
|
|
|
316,856
|
|
||
Total Oil and Gas Properties
|
1,046,930
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|
|
1,117,931
|
|
||
Other capital assets
|
10,339
|
|
|
11,013
|
|
||
Total Property, Plant and Equipment (Note 5)
|
1,057,269
|
|
|
1,128,944
|
|
||
|
|
|
|
||||
Other Long-Term Assets
|
|
|
|
|
|
||
Restricted cash
|
3,847
|
|
|
2,037
|
|
||
Deferred tax assets
|
567
|
|
|
601
|
|
||
Taxes receivable
|
13,654
|
|
|
9,684
|
|
||
Other long-term assets
|
6,068
|
|
|
5,013
|
|
||
Goodwill
|
102,581
|
|
|
102,581
|
|
||
Total Other Long-Term Assets
|
126,717
|
|
|
119,916
|
|
||
Total Assets
|
$
|
1,479,224
|
|
|
$
|
1,714,050
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
34,260
|
|
|
$
|
112,401
|
|
Accrued liabilities
|
53,346
|
|
|
75,430
|
|
||
Foreign currency derivative (Note 10)
|
—
|
|
|
3,057
|
|
||
Taxes payable
|
2,440
|
|
|
25,412
|
|
||
Deferred tax liabilities
|
23
|
|
|
1,040
|
|
||
Asset retirement obligation (Note 7)
|
5,582
|
|
|
8,026
|
|
||
Total Current Liabilities
|
95,651
|
|
|
225,366
|
|
||
|
|
|
|
||||
Long-Term Liabilities
|
|
|
|
|
|
||
Deferred tax liabilities
|
156,194
|
|
|
175,324
|
|
||
Asset retirement obligation (Note 7)
|
25,657
|
|
|
27,786
|
|
||
Other long-term liabilities
|
7,178
|
|
|
8,889
|
|
||
Total Long-Term Liabilities
|
189,029
|
|
|
211,999
|
|
||
|
|
|
|
||||
Contingencies (Note 9)
|
|
|
|
|
|
||
Shareholders’ Equity
|
|
|
|
|
|
||
Common Stock (Note 6) (277,728,335 and 276,072,351 shares of Common Stock and 8,703,666 and 10,119,745 exchangeable shares, par value $0.001 per share, issued and outstanding as at June 30, 2015, and December 31, 2014, respectively)
|
10,190
|
|
|
10,190
|
|
||
Additional paid in capital
|
1,028,162
|
|
|
1,026,873
|
|
||
Retained earnings
|
156,192
|
|
|
239,622
|
|
||
Total Shareholders’ Equity
|
1,194,544
|
|
|
1,276,685
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
1,479,224
|
|
|
$
|
1,714,050
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Operating Activities
|
|
|
|
||||
Net income (loss)
|
$
|
(83,430
|
)
|
|
$
|
54,266
|
|
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
|
|
|
|
|
|||
Loss from discontinued operations, net of income taxes (Note 3)
|
—
|
|
|
26,990
|
|
||
Depletion, depreciation, accretion and impairment
|
155,627
|
|
|
86,201
|
|
||
Deferred tax recovery
|
(7,239
|
)
|
|
(841
|
)
|
||
Non-cash stock-based compensation
|
582
|
|
|
2,624
|
|
||
Unrealized foreign exchange (gain) loss
|
(8,436
|
)
|
|
4,567
|
|
||
Unrealized financial instruments gain
|
(5,157
|
)
|
|
(351
|
)
|
||
Equity tax
|
—
|
|
|
(1,642
|
)
|
||
Cash settlement of asset retirement obligation (Note 7)
|
(1,964
|
)
|
|
—
|
|
||
Net cash provided by operating activities of continuing operations before changes in operating assets and liabilities
|
49,983
|
|
|
171,814
|
|
||
Net change in assets and liabilities from operating activities of continuing operations
|
|
|
|
|
|
||
Accounts receivable and other long-term assets
|
23,652
|
|
|
(67,862
|
)
|
||
Inventory
|
(7,697
|
)
|
|
(9,348
|
)
|
||
Prepaids
|
2,133
|
|
|
1,642
|
|
||
Accounts payable and accrued and other long-term liabilities
|
(21,102
|
)
|
|
9,747
|
|
||
Taxes receivable and payable
|
(44,273
|
)
|
|
(77,306
|
)
|
||
Net cash provided by operating activities of continuing operations
|
2,696
|
|
|
28,687
|
|
||
Net cash used in operating activities of discontinued operations
|
—
|
|
|
(4,792
|
)
|
||
Net cash provided by operating activities
|
2,696
|
|
|
23,895
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
(Increase) decrease in restricted cash
|
(320
|
)
|
|
351
|
|
||
Additions to property, plant and equipment
|
(91,785
|
)
|
|
(173,440
|
)
|
||
Changes in non-cash investing working capital
|
(76,642
|
)
|
|
15,269
|
|
||
Net cash used in investing activities of continuing operations
|
(168,747
|
)
|
|
(157,820
|
)
|
||
Proceeds from sale of Argentina business unit, net of cash sold and transaction costs
|
—
|
|
|
42,755
|
|
||
Net cash used in investing activities of discontinued operations
|
—
|
|
|
(12,384
|
)
|
||
Net cash used in investing activities
|
(168,747
|
)
|
|
(127,449
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Proceeds from issuance of shares of Common Stock (Note 6)
|
602
|
|
|
7,113
|
|
||
Net cash provided by financing activities
|
602
|
|
|
7,113
|
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(165,449
|
)
|
|
(96,441
|
)
|
||
Cash and cash equivalents, beginning of period
|
331,848
|
|
|
428,800
|
|
||
Cash and cash equivalents, end of period
|
$
|
166,399
|
|
|
$
|
332,359
|
|
|
|
|
|
||||
Non-cash investing activities:
|
|
|
|
|
|
||
Net liabilities related to property, plant and equipment, end of period
|
$
|
33,658
|
|
|
$
|
76,506
|
|
|
Six Months Ended June 30,
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
||||
Share Capital
|
|
|
|
||||
Balance, beginning of period
|
$
|
10,190
|
|
|
$
|
10,187
|
|
Issue of shares of Common Stock (Note 6)
|
—
|
|
|
3
|
|
||
Balance, end of period
|
10,190
|
|
|
10,190
|
|
||
|
|
|
|
||||
Additional Paid in Capital
|
|
|
|
|
|
||
Balance, beginning of period
|
1,026,873
|
|
|
1,008,760
|
|
||
Exercise of stock options (Note 6)
|
602
|
|
|
11,137
|
|
||
Stock-based compensation (Note 6)
|
687
|
|
|
6,976
|
|
||
Balance, end of period
|
1,028,162
|
|
|
1,026,873
|
|
||
|
|
|
|
||||
Retained Earnings
|
|
|
|
|
|
||
Balance, beginning of period
|
239,622
|
|
|
410,961
|
|
||
Net loss
|
(83,430
|
)
|
|
(171,339
|
)
|
||
Balance, end of period
|
156,192
|
|
|
239,622
|
|
||
|
|
|
|
||||
Total Shareholders’ Equity
|
$
|
1,194,544
|
|
|
$
|
1,276,685
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||
(Thousands of U.S. Dollars)
|
|
2014
|
|
2014
|
||||
Revenue and other income
|
|
$
|
14,161
|
|
|
$
|
31,985
|
|
|
|
|
|
|
||||
Loss from operations of discontinued operations before income taxes
|
|
$
|
(2,079
|
)
|
|
$
|
(6,252
|
)
|
Income tax expense
|
|
(988
|
)
|
|
(1,458
|
)
|
||
Loss from operations of discontinued operations
|
|
(3,067
|
)
|
|
(7,710
|
)
|
||
|
|
|
|
|
||||
Loss on sale before income taxes
|
|
(18,235
|
)
|
|
(18,235
|
)
|
||
Income tax expense
|
|
(1,045
|
)
|
|
(1,045
|
)
|
||
Loss on sale
|
|
(19,280
|
)
|
|
(19,280
|
)
|
||
Loss from discontinued operations, net of income taxes
|
|
$
|
(22,347
|
)
|
|
$
|
(26,990
|
)
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||
Oil and natural gas sales
|
$
|
67,627
|
|
|
$
|
—
|
|
|
$
|
1,723
|
|
|
$
|
—
|
|
|
$
|
69,350
|
|
Interest income
|
93
|
|
|
2
|
|
|
78
|
|
|
209
|
|
|
382
|
|
|||||
Depletion, depreciation, accretion and impairment
|
37,061
|
|
|
5,432
|
|
|
26,575
|
|
|
405
|
|
|
69,473
|
|
|||||
Income (loss) from continuing operations before income taxes
|
3,197
|
|
|
(8,261
|
)
|
|
(28,211
|
)
|
|
(4,488
|
)
|
|
(37,763
|
)
|
|||||
Segment capital expenditures
|
8,087
|
|
|
6,856
|
|
|
2,505
|
|
|
316
|
|
|
17,764
|
|
|||||
|
Three Months Ended June 30, 2014
|
||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||
Oil and natural gas sales
|
$
|
139,350
|
|
|
$
|
—
|
|
|
$
|
8,538
|
|
|
$
|
—
|
|
|
$
|
147,888
|
|
Interest income
|
184
|
|
|
—
|
|
|
434
|
|
|
20
|
|
|
638
|
|
|||||
Depletion, depreciation, accretion and impairment
|
39,348
|
|
|
103
|
|
|
2,241
|
|
|
245
|
|
|
41,937
|
|
|||||
Income (loss) from continuing operations before income taxes
|
62,481
|
|
|
(2,408
|
)
|
|
3,750
|
|
|
(3,952
|
)
|
|
59,871
|
|
|||||
Segment capital expenditures
|
45,688
|
|
|
41,912
|
|
|
3,433
|
|
|
306
|
|
|
91,339
|
|
|||||
|
Six Months Ended June 30, 2015
|
||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||
Oil and natural gas sales
|
$
|
141,694
|
|
|
$
|
—
|
|
|
$
|
3,887
|
|
|
$
|
—
|
|
|
$
|
145,581
|
|
Interest income
|
160
|
|
|
2
|
|
|
218
|
|
|
423
|
|
|
803
|
|
|||||
Depletion, depreciation, accretion and impairment
|
83,316
|
|
|
38,380
|
|
|
33,169
|
|
|
762
|
|
|
155,627
|
|
|||||
Income (loss) from continuing operations before income taxes
|
6,125
|
|
|
(43,703
|
)
|
|
(35,092
|
)
|
|
(9,890
|
)
|
|
(82,560
|
)
|
|||||
Segment capital expenditures
|
29,454
|
|
|
44,890
|
|
|
16,406
|
|
|
1,035
|
|
|
91,785
|
|
|||||
|
Six Months Ended June 30, 2014
|
||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||
Oil and natural gas sales
|
$
|
284,285
|
|
|
$
|
—
|
|
|
$
|
14,708
|
|
|
$
|
—
|
|
|
$
|
298,993
|
|
Interest income
|
321
|
|
|
—
|
|
|
859
|
|
|
208
|
|
|
1,388
|
|
|||||
Depletion, depreciation, accretion and impairment
|
80,598
|
|
|
311
|
|
|
4,820
|
|
|
472
|
|
|
86,201
|
|
|||||
Income (loss) from continuing operations before income taxes
|
148,492
|
|
|
(4,466
|
)
|
|
5,700
|
|
|
(10,374
|
)
|
|
139,352
|
|
|||||
Segment capital expenditures
|
96,231
|
|
|
62,805
|
|
|
13,799
|
|
|
605
|
|
|
173,440
|
|
|
As at June 30, 2015
|
||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||
Property, plant and equipment
|
$
|
826,824
|
|
|
$
|
93,700
|
|
|
$
|
131,834
|
|
|
$
|
4,911
|
|
|
$
|
1,057,269
|
|
Goodwill
|
102,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,581
|
|
|||||
All other assets
|
176,055
|
|
|
23,602
|
|
|
3,421
|
|
|
116,296
|
|
|
319,374
|
|
|||||
Total Assets
|
$
|
1,105,460
|
|
|
$
|
117,302
|
|
|
$
|
135,255
|
|
|
$
|
121,207
|
|
|
$
|
1,479,224
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As at December 31, 2014
|
||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||
Property, plant and equipment
|
$
|
888,822
|
|
|
$
|
87,028
|
|
|
$
|
148,457
|
|
|
$
|
4,637
|
|
|
$
|
1,128,944
|
|
Goodwill
|
102,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,581
|
|
|||||
All other assets
|
157,549
|
|
|
40,613
|
|
|
14,724
|
|
|
269,639
|
|
|
482,525
|
|
|||||
Total Assets
|
$
|
1,148,952
|
|
|
$
|
127,641
|
|
|
$
|
163,181
|
|
|
$
|
274,276
|
|
|
$
|
1,714,050
|
|
(Thousands of U.S. Dollars)
|
As at June 30, 2015
|
|
As at December 31, 2014
|
||||
Oil and natural gas properties
|
|
|
|
|
|||
Proved
|
$
|
1,920,806
|
|
|
$
|
1,876,371
|
|
Unproved
|
324,979
|
|
|
316,856
|
|
||
|
2,245,785
|
|
|
2,193,227
|
|
||
Other
|
28,499
|
|
|
27,287
|
|
||
|
2,274,284
|
|
|
2,220,514
|
|
||
Accumulated depletion, depreciation and impairment
|
(1,217,015
|
)
|
|
(1,091,570
|
)
|
||
|
$
|
1,057,269
|
|
|
$
|
1,128,944
|
|
|
Shares of Common Stock
|
Exchangeable Shares of Gran Tierra Exchangeco Inc.
|
Exchangeable Shares of Gran Tierra Goldstrike Inc.
|
|||
Balance, December 31, 2014
|
276,072,351
|
|
5,595,118
|
|
4,524,627
|
|
Options exercised
|
240,000
|
|
—
|
|
—
|
|
Exchange of exchangeable shares
|
1,415,995
|
|
(530,257
|
)
|
(885,738
|
)
|
Shares canceled
|
(11
|
)
|
(84
|
)
|
—
|
|
Balance, June 30, 2015
|
277,728,335
|
|
5,064,777
|
|
3,638,889
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Weighted average number of common and exchangeable shares outstanding
|
|
286,393,772
|
|
|
283,773,204
|
|
|
286,294,595
|
|
|
283,505,690
|
|
Weighted average shares issuable pursuant to stock options
|
|
—
|
|
|
13,373,568
|
|
|
—
|
|
|
13,462,797
|
|
Weighted average shares assumed to be purchased from proceeds of stock options
|
|
—
|
|
|
(9,289,813
|
)
|
|
—
|
|
|
(8,629,789
|
)
|
Weighted average number of diluted common and exchangeable shares outstanding
|
|
286,393,772
|
|
|
287,856,959
|
|
|
286,294,595
|
|
|
288,338,698
|
|
|
RSUs
|
Options
|
||||||
|
Number of Outstanding Share Units
|
|
Number of Outstanding Options
|
|
Weighted Average Exercise Price $/Option
|
|||
Balance, December 31, 2014
|
1,236,963
|
|
|
13,790,220
|
|
|
5.93
|
|
Granted
|
1,041,450
|
|
|
4,726,260
|
|
|
3.17
|
|
Exercised
|
(497,409
|
)
|
|
(240,000
|
)
|
|
(2.51
|
)
|
Forfeited
|
(683,261
|
)
|
|
(1,314,380
|
)
|
|
(5.68
|
)
|
Expired
|
—
|
|
|
(3,727,376
|
)
|
|
(6.83
|
)
|
Balance, June 30, 2015
|
1,097,743
|
|
|
13,234,724
|
|
|
4.77
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Thousands of U.S. Dollars)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Compensation costs for stock options
|
|
$
|
1,109
|
|
|
$
|
1,847
|
|
|
$
|
687
|
|
|
$
|
3,863
|
|
Compensation costs for RSUs
|
|
597
|
|
|
2,397
|
|
|
537
|
|
|
3,641
|
|
||||
|
|
1,706
|
|
|
4,244
|
|
|
1,224
|
|
|
7,504
|
|
||||
Less: Stock-based compensation costs capitalized
|
|
(80
|
)
|
|
(1,039
|
)
|
|
(111
|
)
|
|
(1,822
|
)
|
||||
Stock-based compensation expense
|
|
$
|
1,626
|
|
|
$
|
3,205
|
|
|
$
|
1,113
|
|
|
$
|
5,682
|
|
|
Six Months Ended
|
|
Year Ended
|
||||
(Thousands of U.S. Dollars)
|
June 30, 2015
|
|
December 31, 2014
|
||||
Balance, beginning of period
|
$
|
35,812
|
|
|
$
|
21,973
|
|
Settlements
|
(5,565
|
)
|
|
(1,137
|
)
|
||
Liability incurred
|
432
|
|
|
11,956
|
|
||
Liabilities associated with the Argentina business unit sold (Note 3)
|
—
|
|
|
(10,170
|
)
|
||
Foreign exchange
|
—
|
|
|
(53
|
)
|
||
Accretion
|
631
|
|
|
1,406
|
|
||
Revisions in estimated liability
|
(71
|
)
|
|
11,837
|
|
||
Balance, end of period
|
$
|
31,239
|
|
|
$
|
35,812
|
|
|
|
|
|
||||
Asset retirement obligation - current
|
$
|
5,582
|
|
|
$
|
8,026
|
|
Asset retirement obligation - long-term
|
25,657
|
|
|
27,786
|
|
||
Balance, end of period
|
$
|
31,239
|
|
|
$
|
35,812
|
|
|
|
As at
|
||||||
(Thousands of U.S. Dollars)
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Trading securities
|
|
$
|
9,686
|
|
|
$
|
7,586
|
|
|
|
|
|
|
||||
Foreign currency derivative liability
|
|
$
|
—
|
|
|
$
|
3,057
|
|
Contingent consideration liability
|
|
1,061
|
|
|
1,061
|
|
||
|
|
$
|
1,061
|
|
|
$
|
4,118
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Thousands of U.S. Dollars)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Trading securities gain
|
$
|
(1,688
|
)
|
|
$
|
(339
|
)
|
|
$
|
(2,100
|
)
|
|
$
|
(339
|
)
|
Foreign currency derivatives loss (gain)
|
322
|
|
|
(2,265
|
)
|
|
692
|
|
|
(4,674
|
)
|
||||
|
$
|
(1,366
|
)
|
|
$
|
(2,604
|
)
|
|
$
|
(1,408
|
)
|
|
$
|
(5,013
|
)
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||
Severance expenses
|
$
|
71
|
|
|
$
|
901
|
|
|
$
|
—
|
|
|
$
|
1,016
|
|
|
$
|
1,988
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||
|
Colombia
|
|
Peru
|
|
Brazil
|
|
All Other
|
|
Total
|
||||||||||
Severance expenses
|
$
|
1,237
|
|
|
$
|
1,424
|
|
|
$
|
109
|
|
|
$
|
3,596
|
|
|
$
|
6,366
|
|
(Thousands of U.S. Dollars)
|
Six Months Ended June 30, 2015
|
||
Balance, beginning of period
|
$
|
—
|
|
Liability incurred
|
6,366
|
|
|
Settlements
|
(4,090
|
)
|
|
Balance, end of period
|
$
|
2,276
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
|
2015
|
2014
(2)
|
% Change
|
|
2015
|
2014
(2)
|
% Change
|
||||||||||
Volumes (MBOE)
|
|
|
|
|
|
|
|
|
||||||||||
Working Interest Production Before Royalties
|
|
2,101
|
|
2,390
|
|
(12
|
)
|
|
4,263
|
|
4,662
|
|
(9
|
)
|
||||
Royalties
|
|
(418
|
)
|
(583
|
)
|
(28
|
)
|
|
(768
|
)
|
(1,142
|
)
|
(33
|
)
|
||||
Production NAR
|
|
1,683
|
|
1,807
|
|
(7
|
)
|
|
3,495
|
|
3,520
|
|
(1
|
)
|
||||
Inventory Adjustments and Losses
|
|
(321
|
)
|
(212
|
)
|
51
|
|
|
(387
|
)
|
(237
|
)
|
63
|
|
||||
Sales
(1)
|
|
1,362
|
|
1,595
|
|
(15
|
)
|
|
3,108
|
|
3,283
|
|
(5
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||||
Average Daily Volumes (BOEPD)
|
|
|
|
|
|
|
|
|
||||||||||
Working Interest Production Before Royalties
|
|
23,094
|
|
26,261
|
|
(12
|
)
|
|
23,552
|
|
25,756
|
|
(9
|
)
|
||||
Royalties
|
|
(4,600
|
)
|
(6,404
|
)
|
(28
|
)
|
|
(4,240
|
)
|
(6,311
|
)
|
(33
|
)
|
||||
Production NAR
|
|
18,494
|
|
19,857
|
|
(7
|
)
|
|
19,312
|
|
19,445
|
|
(1
|
)
|
||||
Inventory Adjustments and Losses
|
|
(3,524
|
)
|
(2,333
|
)
|
51
|
|
|
(2,140
|
)
|
(1,310
|
)
|
63
|
|
||||
Sales
(1)
|
|
14,970
|
|
17,524
|
|
(15
|
)
|
|
17,172
|
|
18,135
|
|
(5
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Oil and Gas Sales ($000s)
|
|
$
|
69,350
|
|
$
|
147,888
|
|
(53
|
)
|
|
$
|
145,581
|
|
$
|
298,993
|
|
(51
|
)
|
Operating Expenses ($000s)
|
|
(24,133
|
)
|
(25,346
|
)
|
(5
|
)
|
|
(55,567
|
)
|
(47,212
|
)
|
18
|
|
||||
Operating Netback ($000s)
(3)
|
|
$
|
45,217
|
|
$
|
122,542
|
|
(63
|
)
|
|
$
|
90,014
|
|
$
|
251,781
|
|
(64
|
)
|
|
|
|
|
|
|
|
|
|
||||||||||
General and Administrative Expenses ("G&A")
|
|
|
|
|
|
|
|
|
|
|
||||||||
G&A Expenses Before Stock-Based Compensation, Gross
|
|
$
|
17,288
|
|
$
|
24,504
|
|
(29
|
)
|
|
$
|
37,551
|
|
$
|
48,001
|
|
(22
|
)
|
Stock-Based Compensation
|
|
1,540
|
|
1,957
|
|
(21
|
)
|
|
1,010
|
|
4,100
|
|
(75
|
)
|
||||
Capitalized G&A and Overhead Recoveries
|
|
(8,530
|
)
|
(12,529
|
)
|
(32
|
)
|
|
(20,969
|
)
|
(25,306
|
)
|
(17
|
)
|
||||
|
|
$
|
10,298
|
|
$
|
13,932
|
|
(26
|
)
|
|
$
|
17,592
|
|
$
|
26,795
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA
(4)
|
|
$
|
31,710
|
|
$
|
101,808
|
|
(69
|
)
|
|
$
|
73,067
|
|
$
|
225,553
|
|
(68
|
)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income (Loss)
|
|
$
|
(38,564
|
)
|
$
|
9,137
|
|
(522
|
)
|
|
$
|
(83,430
|
)
|
$
|
54,266
|
|
(254
|
)
|
|
|
|
|
|
|
|
|
|
||||||||||
Funds Flow from Continuing Operations ($000s)
(5)
|
|
$
|
24,425
|
|
$
|
85,145
|
|
(71
|
)
|
|
$
|
49,983
|
|
$
|
171,814
|
|
(71
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Capital Expenditures for Continuing Operations ($000s)
|
|
$
|
17,764
|
|
$
|
91,339
|
|
(81
|
)
|
|
$
|
91,785
|
|
$
|
173,440
|
|
(47
|
)
|
|
As at
|
|||||||
|
June 30, 2015
|
December 31, 2014
|
% Change
|
|||||
Cash & Cash Equivalents ($000s)
|
$
|
166,399
|
|
$
|
331,848
|
|
(50
|
)
|
|
|
|
|
|||||
Working Capital (including Cash & Cash Equivalents) ($000s)
|
$
|
199,587
|
|
$
|
239,824
|
|
(17
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
EBITDA - Non-GAAP Measure ($000s)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss)
|
|
$
|
(38,564
|
)
|
|
$
|
9,137
|
|
|
$
|
(83,430
|
)
|
|
$
|
54,266
|
|
Adjustments to reconcile net income (loss) to EBITDA
|
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations, net of income taxes
|
|
—
|
|
|
22,347
|
|
|
—
|
|
|
26,990
|
|
||||
DD&A expenses
|
|
69,473
|
|
|
41,937
|
|
|
155,627
|
|
|
86,201
|
|
||||
Income tax (recovery) expense
|
|
801
|
|
|
28,387
|
|
|
870
|
|
|
58,096
|
|
||||
EBITDA
|
|
$
|
31,710
|
|
|
$
|
101,808
|
|
|
$
|
73,067
|
|
|
$
|
225,553
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Funds Flow From Continuing Operations - Non-GAAP Measure ($000s)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss)
|
|
$
|
(38,564
|
)
|
|
$
|
9,137
|
|
|
$
|
(83,430
|
)
|
|
$
|
54,266
|
|
Adjustments to reconcile net income (loss) to funds flow from continuing operations
|
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations, net of income taxes
|
|
—
|
|
|
22,347
|
|
|
—
|
|
|
26,990
|
|
||||
DD&A expenses
|
|
69,473
|
|
|
41,937
|
|
|
155,627
|
|
|
86,201
|
|
||||
Deferred tax (recovery) expense
|
|
(4,883
|
)
|
|
1,419
|
|
|
(7,239
|
)
|
|
(841
|
)
|
||||
Non-cash stock-based compensation
|
|
1,095
|
|
|
1,144
|
|
|
582
|
|
|
2,624
|
|
||||
Unrealized foreign exchange loss (gain)
|
|
601
|
|
|
8,745
|
|
|
(8,436
|
)
|
|
4,567
|
|
||||
Unrealized financial instruments (gain) loss
|
|
(2,758
|
)
|
|
2,058
|
|
|
(5,157
|
)
|
|
(351
|
)
|
||||
Equity tax
|
|
—
|
|
|
(1,642
|
)
|
|
—
|
|
|
(1,642
|
)
|
||||
Cash settlement of asset retirement obligation
|
|
(539
|
)
|
|
—
|
|
|
(1,964
|
)
|
|
—
|
|
||||
Funds flow from continuing operations
|
|
$
|
24,425
|
|
|
$
|
85,145
|
|
|
$
|
49,983
|
|
|
$
|
171,814
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
|
2015
|
|
2014
(2)
|
|
% Change
|
|
2015
|
|
2014
(2)
|
|
% Change
|
||||||||||
(Thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas sales
|
|
$
|
69,350
|
|
|
$
|
147,888
|
|
|
(53
|
)
|
|
$
|
145,581
|
|
|
$
|
298,993
|
|
|
(51
|
)
|
Interest income
|
|
382
|
|
|
638
|
|
|
(40
|
)
|
|
803
|
|
|
1,388
|
|
|
(42
|
)
|
||||
|
|
69,732
|
|
|
148,526
|
|
|
(53
|
)
|
|
146,384
|
|
|
300,381
|
|
|
(51
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
24,133
|
|
|
25,346
|
|
|
(5
|
)
|
|
55,567
|
|
|
47,212
|
|
|
18
|
|
||||
DD&A expenses
|
|
69,473
|
|
|
41,937
|
|
|
66
|
|
|
155,627
|
|
|
86,201
|
|
|
81
|
|
||||
G&A expenses
|
|
10,298
|
|
|
13,932
|
|
|
(26
|
)
|
|
17,592
|
|
|
26,795
|
|
|
(34
|
)
|
||||
Severance expenses
|
|
1,988
|
|
|
—
|
|
|
—
|
|
|
6,366
|
|
|
—
|
|
|
—
|
|
||||
Equity tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,769
|
|
|
—
|
|
|
—
|
|
||||
Foreign exchange loss (gain)
|
|
2,969
|
|
|
10,044
|
|
|
(70
|
)
|
|
(8,569
|
)
|
|
5,834
|
|
|
(247
|
)
|
||||
Financial instruments gain
|
|
(1,366
|
)
|
|
(2,604
|
)
|
|
48
|
|
|
(1,408
|
)
|
|
(5,013
|
)
|
|
72
|
|
||||
|
|
107,495
|
|
|
88,655
|
|
|
21
|
|
|
228,944
|
|
|
161,029
|
|
|
42
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) income from continuing operations before income taxes
|
|
(37,763
|
)
|
|
59,871
|
|
|
(163
|
)
|
|
(82,560
|
)
|
|
139,352
|
|
|
(159
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current income tax expense
|
|
(5,684
|
)
|
|
(26,968
|
)
|
|
(79
|
)
|
|
(8,109
|
)
|
|
(58,937
|
)
|
|
(86
|
)
|
||||
Deferred income tax recovery (expense)
|
|
4,883
|
|
|
(1,419
|
)
|
|
(444
|
)
|
|
7,239
|
|
|
841
|
|
|
761
|
|
||||
|
|
(801
|
)
|
|
(28,387
|
)
|
|
(97
|
)
|
|
(870
|
)
|
|
(58,096
|
)
|
|
(99
|
)
|
||||
(Loss) income from continuing operations
|
|
(38,564
|
)
|
|
31,484
|
|
|
(222
|
)
|
|
(83,430
|
)
|
|
81,256
|
|
|
(203
|
)
|
||||
Loss from discontinued operations, net of income taxes
|
|
—
|
|
|
(22,347
|
)
|
|
100
|
|
|
—
|
|
|
(26,990
|
)
|
|
100
|
|
||||
Net income (loss)
|
|
$
|
(38,564
|
)
|
|
$
|
9,137
|
|
|
(522
|
)
|
|
$
|
(83,430
|
)
|
|
$
|
54,266
|
|
|
(254
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales volumes
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's, bbl
|
|
1,349,127
|
|
|
1,573,071
|
|
|
(14
|
)
|
|
3,084,025
|
|
|
3,250,049
|
|
|
(5
|
)
|
||||
Natural gas, Mcf
|
|
78,578
|
|
|
129,711
|
|
|
(39
|
)
|
|
144,605
|
|
|
194,490
|
|
|
(26
|
)
|
||||
Total sales volumes, BOE
|
|
1,362,223
|
|
1,594,690
|
|
(15
|
)
|
|
3,108,126
|
|
3,282,464
|
|
(5
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total sales volumes, BOEPD
|
|
14,970
|
|
|
17,524
|
|
|
(15
|
)
|
|
17,172
|
|
|
18,135
|
|
|
(5
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and NGL's per bbl
|
|
$
|
51.18
|
|
|
$
|
93.72
|
|
|
(45
|
)
|
|
$
|
47.03
|
|
|
$
|
91.74
|
|
|
(49
|
)
|
Natural gas per Mcf
|
|
$
|
3.78
|
|
|
$
|
4.01
|
|
|
(6
|
)
|
|
$
|
3.82
|
|
|
$
|
4.79
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated Results of Operations per BOE sales volumes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Oil and natural gas sales
|
|
$
|
50.91
|
|
|
$
|
92.74
|
|
|
(45
|
)
|
|
$
|
46.84
|
|
|
$
|
91.09
|
|
|
(49
|
)
|
Interest income
|
|
0.28
|
|
|
0.40
|
|
|
(30
|
)
|
|
0.26
|
|
|
0.42
|
|
|
(38
|
)
|
||||
|
|
51.19
|
|
|
93.14
|
|
|
(45
|
)
|
|
47.10
|
|
|
91.51
|
|
|
(49
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating expenses
|
|
17.72
|
|
|
15.89
|
|
|
12
|
|
|
17.88
|
|
|
14.38
|
|
|
24
|
|
DD&A expenses
|
|
51.00
|
|
|
26.30
|
|
|
94
|
|
|
50.07
|
|
|
26.26
|
|
|
91
|
|
||||
G&A expenses
|
|
7.56
|
|
|
8.74
|
|
|
(14
|
)
|
|
5.66
|
|
|
8.16
|
|
|
(31
|
)
|
||||
Severance expenses
|
|
1.46
|
|
|
—
|
|
|
—
|
|
|
2.05
|
|
|
—
|
|
|
—
|
|
||||
Equity tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.21
|
|
|
—
|
|
|
—
|
|
||||
Foreign exchange loss (gain)
|
|
2.18
|
|
|
6.30
|
|
|
(65
|
)
|
|
(2.76
|
)
|
|
1.78
|
|
|
(255
|
)
|
||||
Financial instruments gain
|
|
(1.00
|
)
|
|
(1.63
|
)
|
|
39
|
|
|
(0.45
|
)
|
|
(1.53
|
)
|
|
71
|
|
||||
|
|
78.92
|
|
55.60
|
|
42
|
|
|
73.66
|
|
49.05
|
|
50
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(Loss) income from continuing operations before income taxes
|
|
(27.73
|
)
|
|
37.54
|
|
|
(174
|
)
|
|
(26.56
|
)
|
|
42.46
|
|
|
(163
|
)
|
||||
Current income tax expense
|
|
(4.17
|
)
|
|
(16.91
|
)
|
|
(75
|
)
|
|
(2.61
|
)
|
|
(17.96
|
)
|
|
(85
|
)
|
||||
Deferred income tax recovery (expense)
|
|
3.58
|
|
|
(0.89
|
)
|
|
(502
|
)
|
|
2.33
|
|
|
0.26
|
|
|
(796
|
)
|
||||
|
|
(0.59
|
)
|
|
(17.80
|
)
|
|
(97
|
)
|
|
(0.28
|
)
|
|
(17.70
|
)
|
|
(98
|
)
|
||||
(Loss) income from continuing operations
|
|
$
|
(28.32
|
)
|
|
$
|
19.74
|
|
|
(243
|
)
|
|
$
|
(26.84
|
)
|
|
$
|
24.76
|
|
|
(208
|
)
|
|
Three Months Ended June 30, 2015
|
|
Three Months Ended June 30, 2014
|
||||||||||
Average Daily Volumes (BOEPD)
|
Colombia
|
Brazil
|
Total
|
|
Colombia
|
Brazil
|
Total
|
||||||
Working Interest Production Before Royalties
|
22,601
|
|
493
|
|
23,094
|
|
|
25,117
|
|
1,144
|
|
26,261
|
|
Royalties
|
(4,531
|
)
|
(69
|
)
|
(4,600
|
)
|
|
(6,253
|
)
|
(151
|
)
|
(6,404
|
)
|
Production NAR
|
18,070
|
|
424
|
|
18,494
|
|
|
18,864
|
|
993
|
|
19,857
|
|
Inventory Adjustments and Losses
|
(3,503
|
)
|
(21
|
)
|
(3,524
|
)
|
|
(2,320
|
)
|
(13
|
)
|
(2,333
|
)
|
Sales
|
14,567
|
|
403
|
|
14,970
|
|
|
16,544
|
|
980
|
|
17,524
|
|
|
Six Months Ended June 30, 2015
|
|
Six Months Ended June 30, 2014
|
||||||||||
Average Daily Volumes (BOEPD)
|
Colombia
|
Brazil
|
Total
|
|
Colombia
|
Brazil
|
Total
|
||||||
Working Interest Production Before Royalties
|
22,947
|
|
605
|
|
23,552
|
|
|
24,741
|
|
1,015
|
|
25,756
|
|
Royalties
|
(4,157
|
)
|
(83
|
)
|
(4,240
|
)
|
|
(6,172
|
)
|
(139
|
)
|
(6,311
|
)
|
Production NAR
|
18,790
|
|
522
|
|
19,312
|
|
|
18,569
|
|
876
|
|
19,445
|
|
Inventory Adjustments and Losses
|
(2,145
|
)
|
5
|
|
(2,140
|
)
|
|
(1,293
|
)
|
(17
|
)
|
(1,310
|
)
|
Sales
|
16,645
|
|
527
|
|
17,172
|
|
|
17,276
|
|
859
|
|
18,135
|
|
|
Three Months Ended June 30, 2015
|
|
Three Months Ended June 30, 2014
|
||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
Brazil
|
Total
|
|
Colombia
|
Brazil
|
Total
|
||||||||||||
Oil and gas sales
|
$
|
67,627
|
|
$
|
1,723
|
|
$
|
69,350
|
|
|
$
|
139,350
|
|
$
|
8,538
|
|
$
|
147,888
|
|
Operating expenses
|
(21,269
|
)
|
(2,864
|
)
|
(24,133
|
)
|
|
(23,281
|
)
|
(2,065
|
)
|
(25,346
|
)
|
||||||
Operating netback
(1)
|
$
|
46,358
|
|
$
|
(1,141
|
)
|
$
|
45,217
|
|
|
$
|
116,069
|
|
$
|
6,473
|
|
$
|
122,542
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Dollars Per BOE
|
|
|
|
|
|
|
|
||||||||||||
Brent
|
|
|
$
|
61.70
|
|
|
|
|
$
|
109.70
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||||||
WTI
|
|
|
$
|
57.87
|
|
|
|
|
$
|
102.99
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||||||
Oil and gas sales
|
$
|
51.02
|
|
$
|
46.92
|
|
$
|
50.91
|
|
|
$
|
92.56
|
|
$
|
95.70
|
|
$
|
92.74
|
|
Operating expenses
|
(16.05
|
)
|
(78.00
|
)
|
(17.72
|
)
|
|
(15.46
|
)
|
(23.15
|
)
|
(15.89
|
)
|
||||||
Operating netback
(1)
|
$
|
34.97
|
|
$
|
(31.08
|
)
|
$
|
33.19
|
|
|
$
|
77.10
|
|
$
|
72.55
|
|
$
|
76.85
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended June 30, 2015
|
|
Six Months Ended June 30, 2014
|
||||||||||||||||
(Thousands of U.S. Dollars)
|
Colombia
|
Brazil
|
Total
|
|
Colombia
|
Brazil
|
Total
|
||||||||||||
Oil and gas sales
|
$
|
141,694
|
|
$
|
3,887
|
|
$
|
145,581
|
|
|
$
|
284,285
|
|
$
|
14,708
|
|
$
|
298,993
|
|
Operating expenses
|
(51,243
|
)
|
(4,324
|
)
|
(55,567
|
)
|
|
(43,486
|
)
|
(3,726
|
)
|
(47,212
|
)
|
||||||
Operating netback
(1)
|
$
|
90,451
|
|
$
|
(437
|
)
|
$
|
90,014
|
|
|
$
|
240,799
|
|
$
|
10,982
|
|
$
|
251,781
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Dollars Per BOE
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Brent
|
|
|
$
|
57.81
|
|
|
|
|
$
|
108.93
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||||||
WTI
|
|
|
$
|
53.25
|
|
|
|
|
$
|
100.84
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||||||
Oil and gas sales
|
$
|
47.03
|
|
$
|
40.77
|
|
$
|
46.84
|
|
|
$
|
90.92
|
|
$
|
94.56
|
|
$
|
91.09
|
|
Operating expenses
|
(17.01
|
)
|
(45.36
|
)
|
(17.88
|
)
|
|
(13.91
|
)
|
(23.96
|
)
|
(14.38
|
)
|
||||||
Operating netback
(1)
|
$
|
30.02
|
|
$
|
(4.59
|
)
|
$
|
28.96
|
|
|
$
|
77.01
|
|
$
|
70.60
|
|
$
|
76.71
|
|
|
Three Months Ended June 30, 2015
|
|
Three Months Ended June 30, 2014
|
||||||||||
|
DD&A expenses, thousands of U.S. Dollars
|
DD&A expenses, U.S. Dollars Per BOE
|
|
DD&A expenses, thousands of U.S. Dollars
|
DD&A expenses, U.S. Dollars Per BOE
|
||||||||
Colombia
|
$
|
37,061
|
|
$
|
27.96
|
|
|
$
|
39,348
|
|
$
|
26.14
|
|
Brazil
|
26,575
|
|
$
|
723.72
|
|
|
2,241
|
|
$
|
25.12
|
|
||
Peru
|
5,432
|
|
$
|
—
|
|
|
103
|
|
$
|
—
|
|
||
Corporate
|
405
|
|
$
|
—
|
|
|
245
|
|
$
|
—
|
|
||
|
$
|
69,473
|
|
$
|
51.00
|
|
|
$
|
41,937
|
|
$
|
26.30
|
|
|
|
|
|
|
|
||||||||
|
Six Months Ended June 30, 2015
|
|
|
Six Months Ended June 30, 2014
|
|
||||||||
|
DD&A expenses, thousands of U.S. Dollars
|
DD&A expenses, U.S. Dollars Per BOE
|
|
DD&A expenses, thousands of U.S. Dollars
|
DD&A expenses, U.S. Dollars Per BOE
|
||||||||
Colombia
|
$
|
83,316
|
|
$
|
27.65
|
|
|
$
|
80,598
|
|
$
|
25.78
|
|
Brazil
|
33,169
|
|
$
|
347.93
|
|
|
4,820
|
|
$
|
30.99
|
|
||
Peru
|
38,380
|
|
$
|
—
|
|
|
311
|
|
$
|
—
|
|
||
Corporate
|
762
|
|
$
|
—
|
|
|
472
|
|
$
|
—
|
|
||
|
$
|
155,627
|
|
$
|
50.07
|
|
|
$
|
86,201
|
|
$
|
26.26
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
(Thousands of U.S. Dollars)
|
|
2015
|
2014
|
% Change
|
|
2015
|
2014
|
% Change
|
||||||||||
G&A Expenses Before Stock-Based Compensation, Gross
|
|
$
|
17,288
|
|
$
|
24,504
|
|
(29
|
)
|
|
$
|
37,551
|
|
$
|
48,001
|
|
(22
|
)
|
Stock-Based Compensation
|
|
1,540
|
|
1,957
|
|
(21
|
)
|
|
1,010
|
|
4,100
|
|
(75
|
)
|
||||
Capitalized G&A and Overhead Recoveries
|
|
(8,530
|
)
|
(12,529
|
)
|
(32
|
)
|
|
(20,969
|
)
|
(25,306
|
)
|
(17
|
)
|
||||
|
|
$
|
10,298
|
|
$
|
13,932
|
|
(26
|
)
|
|
$
|
17,592
|
|
$
|
26,795
|
|
(34
|
)
|
U.S. Dollars Per BOE
|
|
|
|
|
|
|
|
|
||||||||||
G&A Expenses Before Stock-Based Compensation, Gross
|
|
$
|
12.69
|
|
$
|
15.37
|
|
(17
|
)
|
|
$
|
12.08
|
|
$
|
14.62
|
|
(17
|
)
|
Stock-Based Compensation
|
|
1.13
|
|
1.23
|
|
(8
|
)
|
|
0.32
|
|
1.25
|
|
(74
|
)
|
||||
Capitalized G&A and Overhead Recoveries
|
|
(6.26
|
)
|
(7.86
|
)
|
(20
|
)
|
|
(6.75
|
)
|
(7.71
|
)
|
(12
|
)
|
||||
|
|
$
|
7.56
|
|
$
|
8.74
|
|
(14
|
)
|
|
$
|
5.66
|
|
$
|
8.16
|
|
(31
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Thousands of U.S. Dollars)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Trading securities gain
|
$
|
(1,688
|
)
|
|
$
|
(339
|
)
|
|
$
|
(2,100
|
)
|
|
$
|
(339
|
)
|
Foreign currency derivatives loss (gain)
|
322
|
|
|
(2,265
|
)
|
|
692
|
|
|
(4,674
|
)
|
||||
|
$
|
(1,366
|
)
|
|
$
|
(2,604
|
)
|
|
$
|
(1,408
|
)
|
|
$
|
(5,013
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Thousands of U.S. Dollars)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Drilling and completions
|
|
$
|
3,132
|
|
|
$
|
25,715
|
|
|
$
|
14,205
|
|
|
$
|
56,330
|
|
G&G
|
|
1,276
|
|
|
8,848
|
|
|
7,321
|
|
|
19,915
|
|
||||
Facilities and equipment
|
|
3,892
|
|
|
7,316
|
|
|
7,075
|
|
|
13,546
|
|
||||
Other
|
|
(213
|
)
|
|
3,809
|
|
|
853
|
|
|
6,440
|
|
||||
|
|
$
|
8,087
|
|
|
$
|
45,688
|
|
|
$
|
29,454
|
|
|
$
|
96,231
|
|
•
|
On the Chaza Block (100% working interest ("WI"), operated), we incurred costs drilling the Moqueta-18i development well which encountered mechanical difficulties. The well is currently suspended pending the results of injectivity testing at the Zapotero-1 well, which is interpreted to be in the same fault compartment as Moqueta 18i (the Moqueta South Block).
|
•
|
We continued processing and interpretation of 2-D seismic on the Cauca-7 (100% WI, operated) and Sinu-3 (51% WI, operated) Blocks. We also commenced environmental impact assessments ("EIA"s) for future drilling on the Sinu-3 Block.
|
•
|
We continued facilities work at the Costayaco and Moqueta fields on the Chaza Block.
|
•
|
On Block REC-T-155 (100% WI, operated), we continued construction of an infield gas pipeline between the Tiê facilities and 3-GTE-03-BA.
|
•
|
On Blocks REC-T-86, Block REC-T-117 and Block REC-T-118 (100% WI, operated)), we completed processing of 3-D seismic. Interpretation is ongoing.
|
•
|
On Block 95 (100% WI, operated), we incurred contract termination fees associated with the decision not to proceed with the long-term test, restocking fees associated with the cancellation of a multi-lateral trial well, and asset retirement obligation cost estimate revisions.
|
•
|
On Block 107 (100% WI, operated), we continued interpretation and processing of 2-D seismic.
|
|
|
As at December 31, 2014
|
|||||||
Currency
|
|
Contract Type
|
Notional (Millions of Colombian Pesos)
|
Weighted Average Fixed Rate Received (Colombian Pesos - U.S. Dollars)
|
Fair Value of the Forward Contracts (thousands of U.S. Dollars)
|
Expiration
|
|||
Colombian pesos
|
|
Buy
|
51,597.5
|
|
2,006
|
|
(4,175
|
)
|
February and April 2015
|
Colombian pesos
|
|
Sell
|
10,275.3
|
|
1,895
|
|
1,118
|
|
February 2015
|
Date: August 4, 2015
|
|
/s/ Gary Guidry
|
|
|
By: Gary Guidry
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date: August 4, 2015
|
|
/s/ Ryan Ellson
|
|
|
By: Ryan Ellson
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit No.
|
Description
|
|
Reference
|
2.1
|
Arrangement Agreement, dated as of July 28, 2008, by and among Gran Tierra Energy Inc., Solana Resources Limited and Gran Tierra Exchangeco Inc.
|
|
Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed with the SEC on August 1, 2008 (SEC File No. 001-34018).
|
|
|
|
|
2.2
|
Amendment No. 2 to Arrangement Agreement, which supersedes Amendment No. 1 thereto and includes the Plan of Arrangement, including appendices.
|
|
Incorporated by reference to Exhibit 2.2 to the Registration Statement on Form S-3, filed with the SEC on October 10, 2008 (SEC File No. 333-153376).
|
|
|
|
|
2.3
|
Arrangement Agreement, dated January 17, 2011, by and between Gran Tierra Energy Inc. and Petrolifera Petroleum Limited.
+
|
|
Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed with the SEC on January 21, 2011 (SEC File No. 001-34018).
|
|
|
|
|
2.4
|
Share Purchase and Sale Offer, dated May 29, 2014, by Gran Tierra Petroco Inc. +
|
|
Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed with the SEC on July 1, 2014 (SEC File No. 001-34018).
|
|
|
|
|
2.5
|
Share Purchase and Sale Offer, dated May 29, 2014, by Gran Tierra Energy Inc., an Alberta corporation, and PCESA Petroleros Canadienses De Ecuador S.A. +
|
|
Incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K, filed with the SEC on July 1, 2014 (SEC File No. 001-34018).
|
|
|
|
|
3.1
|
Amended and Restated Articles of Incorporation.
|
|
Incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K, filed with the SEC on February 26, 2014 (SEC File No. 001-34018).
|
|
|
|
|
3.2
|
Amended and Restated Bylaws of Gran Tierra Energy Inc.
|
|
Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on February 26, 2014 (SEC File No. 001-34018).
|
|
|
|
|
4.1
|
Reference is made to Exhibits 3.1 to 3.2.
|
|
|
|
|
|
|
4.2
|
Details of the Goldstrike Special Voting Share.
|
|
Incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-KSB/A for the period ended December 31, 2005, and filed with the SEC on April 21, 2006 (SEC File No. 333-111656).
|
|
|
|
|
4.3
|
Goldstrike Exchangeable Share Provisions.
|
|
Incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-KSB/A for the period ended December 31, 2005, and filed with the SEC on April 21, 2006 (SEC File No. 333-111656).
|
|
|
|
|
4.4
|
Provisions Attaching to the GTE–Solana Exchangeable Shares.
|
|
Incorporated by reference to Annex E to the Proxy Statement on Schedule 14A filed with the SEC on October 14, 2008 (SEC File No. 001-34018).
|
|
|
|
|
10.1
|
Amendment to Executive Employment Agreement dated May 7, 2015, between Gran Tierra Energy Canada ULC, Gran Tierra Energy Inc. and Jeffrey Scott
|
|
Filed herewith.
|
|
|
|
|
10.2
|
Amendment to Executive Employment Agreement dated May 7, 2015, between Gran Tierra Energy Canada ULC, Gran Tierra Energy Inc. and Duncan Nightingale
|
|
Filed herewith.
|
|
|
|
|
10.3
|
Amendment to Executive Employment Agreement dated May 7, 2015, between Gran Tierra Energy Canada ULC, Gran Tierra Energy Inc. and James Rozon
|
|
Filed herewith.
|
|
|
|
|
10.4
|
Amendment to Executive Employment Agreement dated May 7, 2015, between Gran Tierra Energy Canada ULC, Gran Tierra Energy Inc. and David Hardy
|
|
Filed herewith.
|
|
|
|
|
10.5
|
Description of terms of employment with Gary Guidry and Ryan Ellson
|
|
Incorporated by reference to Item 5.02 of the Current Report on Form 8-K, filed with the SEC on May 13, 2015 (SEC File No. 001-34018).]
|
|
|
|
|
10.6
|
Settlement Agreement, dated May 7, 2015, between Gran Tierra Energy Inc. and West Face SPV (Cayman) I, L.P.
|
|
Filed herewith.
|
|
|
|
|
10.7
|
Form of Indemnity Agreement for use with Directors and Executive Officers
|
|
Filed herewith.
|
|
|
|
|
31.1
|
Certification of Principal Executive Officer.
|
|
Filed herewith.
|
|
|
|
|
31.2
|
Certification of Principal Financial Officer.
|
|
Filed herewith.
|
|
|
|
|
32.1
|
Section 1350 Certifications.
|
|
Filed herewith.
|
1.
|
Amendment of Article 1.
Article 1—Duties and Responsibilities--is hereby amended and restated in its entirety as follows:
|
2.
|
Amendment of Articles 2-6.
Articles 2 and 4-6 are hereby deleted in their entirety and Article 3 is hereby deleted effective June 24, 2015.
|
3.
|
Amendment of Article 7.
Article 7 is hereby amended and restated in its entirety as follows:
|
4.
|
Amendment of Article 9.
Article 9 is hereby deleted in its entirety.
|
5.
|
Amendment of Article 11.
Article 11 is hereby deleted effective June 24, 2015.
|
6.
|
Amendment of Article 20.
Article 20 is hereby deleted in its entirety.
|
7.
|
Miscellaneous.
|
a.
|
The Company shall reimburse Executive for the rental of a corporate apartment for a period of four months, which amount shall not exceed $15,200CDN.
|
b.
|
Except as specifically provided for in this Amendment, the terms of the Employment Agreement shall be unmodified and shall remain in full force and effect. In the event that any provision of this Amendment and the Agreement conflict, the provision of this Amendment shall govern.
|
c.
|
This Amendment will be effective upon the execution by the Parties.
|
d.
|
This Amendment may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.
|
GRAN TIERRA ENERGY INC., a Nevada corporation
By:
/s/ Ryan Ellson
Name: Ryan Ellson
Title: Chief Financial Officer
Date: May 11, 2015
|
/s/ Jeffrey Scott
JEFFREY SCOTT
Date: May 10, 2015
|
GRAN TIERRA ENERGY CANADA ULC, an Alberta corporation
By:
/s/ D. J. Nightingale
Name: Duncan Nightingale
Title: President
Date: May 11, 2015
|
|
Grant Date
|
Unvested Shares
|
May 8, 2013
|
18,333
|
February 28, 2014
|
66,667
|
March 15, 2015
|
400,000
|
1.
|
Amendment of Article 1, Section 1.1.
Article 1—Duties and Responsibilities—Position, of the Employment Agreement is hereby amended and restated to read in its entirety as follows (and Schedule A referred to therein is removed from the Employment Agreement):
|
2.
|
Amendment of Article 1, Section 1.3.
Article 1—Duties and Responsibilities—Reassignment, of the Employment Agreement is hereby deleted in its entirety;
provided, however,
that the definition of “
Member Company
” and “
Member Companies
” as set forth therein is retained.
|
3.
|
Amendment of Article 2
Article 2—Base Salary, of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
|
4.
|
Amendment of Article 3.
Article 3—Bonus, of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
|
5.
|
Amendment of Article 8.
Article 8—Termination of Employment, of the Employment Agreement is hereby amended and restated in its entirety as follows:
|
6.
|
Miscellaneous.
|
a.
|
Except as specifically provided for in this Amendment, the terms of the Employment Agreement shall be unmodified and shall remain in full force and effect. In the event that any provision of this Amendment and the Agreement conflict, the provision of this Amendment shall govern.
|
b.
|
This Amendment will be effective upon the execution by the Parties.
|
c.
|
This Amendment may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.
|
GRAN TIERRA ENERGY INC., a Nevada corporation
By:
/s/ James Rozon
Name: James Rozon
Title: Chief Financial Officer
Date:
May 7, 2015
|
/s/ Duncan Nightingale
DUNCAN NIGHTINGALE
Date:
May 8, 2015
|
|
GRAN TIERRA ENERGY CANADA ULC, an Alberta corporation
By:
/s/ James Rozon
Name: James Rozon
Title: Chief Financial Officer
Date:
May 7, 2015
|
|
(a)
|
an adverse change in the Executive’s position, titles, duties or responsibilities (including new, additional or changed formal or informal reporting responsibilities) or any failure to re-elect or re-appoint him to any such positions, titles, duties or offices, in each case as in effect as of the date one month from the date of this Amendment (or the date of this Amendment in the case of a change in the Executive’s position, titles, duties or responsibilities that includes a change in the location at which the Executive is to perform such duties or responsibilities), except in connection with the termination of his employment for Cause;
|
(b)
|
a reduction by the Company of the Executive’s Base Salary except to the extent that the annual base salaries of all other executive officers of the Company are similarly reduced or any change in the basis upon which the Executive’s annual compensation is determined or paid if the change is or will be adverse to the Executive except that an award of any annual performance bonuses (including the Bonus) by the Company’s Compensation Committee (and approved by the Board) are discretionary and in no instance shall be considered adverse to Executive if such performance bonus is reduced from a prior year or if an annual performance bonus is not paid;
|
(c)
|
a Change in Control (as defined below) of the Company occurs; or
|
(d)
|
any breach by the Company of any material provision of this Agreement.
|
1.
|
Amendment of Article 1, Section 1.3.
Article 1—Duties and Responsibilities—Reassignment, of the Employment Agreement is hereby amended to add to the end of such section the following sentence:
|
2.
|
Amendment of Article 2.
Article 2—Base Salary, of the Employment Agreement is hereby amended by amending and restating the first sentence thereto to read in its entirety as follows:
|
3.
|
Amendment of Article 3.
Article 3—Bonus, of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
|
4.
|
Amendment of Article 8.
Article 8—Termination of Employment, is hereby amended and restated to read in its entirety as follows:
|
5.
|
Miscellaneous.
|
a.
|
Except as specifically provided for in this Amendment, the terms of the Employment Agreement shall be unmodified and shall remain in full force and effect. In the event that any provision of this Amendment and the Agreement conflict, the provision of this Amendment shall govern.
|
b.
|
This Amendment will be effective upon the execution by the Parties.
|
c.
|
This Amendment may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.
|
GRAN TIERRA ENERGY INC., a Nevada corporation
By:
/s/ David Hardy
Name: David Hardy
Title: Vice President, Legal & General Counsel
Date:
May 7, 2015
|
/s/ James Rozon
JAMES ROZON
Date:
May 7, 2015
|
GRAN TIERRA ENERGY CANADA ULC, an Alberta corporation
By: Duncan Nightingale
Name: Duncan Nightingale
Title: President
Date:
May 8, 2015
|
|
(a)
|
an adverse change in the Executive’s position, titles, duties or responsibilities (including new, additional or changed formal or informal reporting responsibilities) or any failure to re-elect or re-appoint him to any such positions, titles, duties or offices, in each case as in effect as of the date one month from the date of this Amendment, except in connection with the termination of his employment for Cause;
|
(b)
|
a reduction by the Company of the Executive’s Base Salary except to the extent that the annual base salaries of all other executive officers of the Company are similarly reduced or any change in the basis upon which the Executive’s annual compensation is determined or paid if the change is or will be adverse to the Executive except that an award of any annual performance bonuses (including the Bonus) by the Company’s Compensation Committee (and approved by the Board) are discretionary and in no instance shall be considered adverse to Executive if such performance bonus is reduced from a prior year or if an annual performance bonus is not paid;
|
(c)
|
a Change in Control (as defined below) of the Company occurs; or
|
(d)
|
any breach by the Company of any material provision of this Agreement.
|
1.
|
Amendment of Article 1, Section 1.3.
Article 1—Duties and Responsibilities—Reassignment, of the Employment Agreement is hereby amended to add to the end of such section the following sentence:
|
2.
|
Amendment of Article 3
Article 3—Base Salary, of the Employment Agreement is hereby amended by amending and restating the first sentence thereto to read in its entirety as follows:
|
3.
|
Amendment of Article 4
Article 4—Bonus, of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
|
4.
|
Amendment of Article 9.
Article 9—Termination of Employment, is hereby amended and restated to read in its entirety as follows:
|
5.
|
Miscellaneous.
|
a.
|
Except as specifically provided for in this Amendment, the terms of the Employment Agreement shall be unmodified and shall remain in full force and effect. In the event that any provision of this Amendment and the Agreement conflict, the provision of this Amendment shall govern.
|
b.
|
This Amendment will be effective upon the execution by the Parties.
|
c.
|
This Amendment may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.
|
GRAN TIERRA ENERGY INC., a Nevada corporation
By:
/s/ James Rozon
Name: James Rozon
Title: Chief Financial Officer
Date:
May 7, 2015
|
/s/ David Hardy
DAVID HARDY
Date:
May 7, 2015
|
|
GRAN TIERRA ENERGY CANADA ULC, an Alberta corporation
By:
/s/ James Rozon
Name: James Rozon
Title: Chief Financial Officer
Date:
May 7, 2015
|
|
|
|
|
|
|
|
(a)
|
an adverse change in the Executive’s position, titles, duties or responsibilities (including new, additional or changed formal or informal reporting responsibilities) or any failure to re-elect or re-appoint him to any such positions, titles, duties or offices, in each case as in effect as of the date one month from the date of this Amendment, except in connection with the termination of his employment for Cause;
|
(b)
|
a reduction by the Company of the Executive’s Base Salary except to the extent that the annual base salaries of all other executive officers of the Company are similarly reduced or any change in the basis upon which the Executive’s annual compensation is determined or paid if the change is or will be adverse to the Executive except that an award of any annual performance bonuses (including the Bonus) by the Company’s Compensation Committee (and approved by the Board) are discretionary and in no instance shall be considered adverse to Executive if such performance bonus is reduced from a prior year or if an annual performance bonus is not paid;
|
(c)
|
a Change in Control (as defined below) of the Company occurs; or
|
(d)
|
any breach by the Company of any material provision of this Agreement.
|
1.
|
Amendment of Article 1.
Article 1—Duties and Responsibilities--is hereby amended and restated in its entirety as follows:
|
2.
|
Amendment of Articles 2-6.
Articles 2 and 4-6 are hereby deleted in their entirety and Article 3 is hereby deleted effective June 24, 2015.
|
3.
|
Amendment of Article 7.
Article 7 is hereby amended and restated in its entirety as follows:
|
4.
|
Amendment of Article 9.
Article 9 is hereby deleted in its entirety.
|
5.
|
Amendment of Article 11.
Article 11 is hereby deleted effective June 24, 2015.
|
6.
|
Amendment of Article 20.
Article 20 is hereby deleted in its entirety.
|
7.
|
Miscellaneous.
|
a.
|
The Company shall reimburse Executive for the rental of a corporate apartment for a period of four months, which amount shall not exceed $15,200CDN.
|
b.
|
Except as specifically provided for in this Amendment, the terms of the Employment Agreement shall be unmodified and shall remain in full force and effect. In the event that any provision of this Amendment and the Agreement conflict, the provision of this Amendment shall govern.
|
c.
|
This Amendment will be effective upon the execution by the Parties.
|
d.
|
This Amendment may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.
|
GRAN TIERRA ENERGY INC., a Nevada corporation
By:
Name:
Title:
Date:
|
JEFFREY SCOTT
Date:
|
GRAN TIERRA ENERGY CANADA ULC, an Alberta corporation
By:
Name:
Title:
Date:
|
|
Grant Date
|
Unvested Shares
|
May 8, 2013
|
18,333
|
February 28, 2014
|
66,667
|
March 15, 2015
|
400,000
|
A.
AGREEMENT
|
|
|
|||
|
Effective Date
|
|
May __, 2015
|
||
|
Term
|
|
No specified term.
|
||
|
Position
|
|
President and Chief Executive Officer.
|
||
B.
CASH COMPENSATION
|
|
|
|||
1.
|
Base Salary
|
|
$400,000 CDN per year (subject to statutory deductions), subject to future increase (but not decrease) in the Board’s discretion.
|
||
|
Annual Bonus Target
|
|
Maximum of 100% of Base Salary upon achieving all predefined personal and corporate goals.
Bonus shall be payable within sixty (60) days after the end of the fiscal year (but in no event later than March 15 of such following year), and will be based upon the Executive’s performance during the preceding year.
Must be employed through the date of determination of bonus amount to earn any bonus payment.
|
||
3.
|
Vacation
|
|
5 weeks (25 days) paid vacation. (Entitled to carry over up total of 5 days unused vacation into subsequent year.)
|
||
4.
|
Other Benefits
|
|
All other benefits on the same basis as provided to other senior executives (“benefits”).
|
||
C.
|
EQUITY AWARDS
|
|
|
||
1.
|
Stock Options
|
|
600,000 shares, vesting 1/3 after each of one year, two years and three years from grant date. Five year term.
|
||
2.
|
Restricted Stock Units
|
|
95,000 shares, vesting 1/3 after one year, two years and three years from grant date. Settled in cash or shares at Company’s option.
|
D.
TERMINATION
|
|
|
|||
1.
|
Involuntary Termination Without Cause (not including death or disability)
or
Voluntary Termination for Good Reason
|
|
Executive will be entitled to:
(1) Accrued Obligations (those obligations which have accrued up to the Executive’s last day of active service with the Company);
(2) cash severance equal to two years’ Total Cash Compensation (less statutory deductions) in a lump sum on the date that is thirty (30) days after the separation from service;
(3) the vested equity (options) will be exercisable for standard three month period in option agreement; and
(4) identified benefits.
“Total Cash Compensation” is defined as the annualized amount of Base Salary plus Bonus Payment for the prior 12-month period.
Definitions of “Cause” and “Good Reason” are provided on the attachment.
Certain other conditions will apply to be eligible to receive the separation benefits, including signing a release of claims agreement, resigning from all positions and returning company property.
|
||
2.
|
Involuntary Termination for Cause or Voluntary Resignation without Good Reason
|
|
Executive will be entitled to the following:
(1)
Accrued Obligations; and
(2)
The vested equity (options) will be exercisable for standard three month period in option agreement.
|
F.
GENERAL
|
|
The Executive shall be employed at the Company’s location in Calgary, Alberta.
Travel: Executive shall be available for such business related travel as may be required for the purposes of carrying out the Executive’s duties and responsibilities. Executive shall be entitled to business class tickets for domestic or international flights with a duration of more than 1 hour. Executive will be entitled to choose suitable accommodations when travelling on Company business.
Company Policies: Executive is required to comply with, and upon request certify compliance with, all Company policies, including Code of Business Conduct and Ethics, FCPA Policy, Disclosure Policy, Insider Trading Policy (some of which are available at
www.grantierra.com
) – review each one carefully.
Executive will be required to faithfully serve the Company and devote full time and attention to the business and affairs of the Company and the performance of Executive's duties and responsibilities.
Executive cannot engage in any other business, profession or occupation which would conflict with the performance of his duties and responsibilities under this Agreement, either directly or indirectly, including accepting any appointment to the board of directors of another company without the prior written consent of the Board. The Executive may continue to serve on boards of directors identified to the board (publicly traded Africa Oil Corp., ShaMaran Petroleum Corp. and private Bukit Energy Corp.) provided that the Executive’s primary focus will be his duties and responsibilities for the Company.
Executive will not engage in any practice or business in competition with the business of Gran Tierra or any of its Member Companies. Executive will agree that Executive’s fiduciary duties will survive the termination, for any reason, of the Employment Agreement or any obligation of the Executive to provide any services to the Company.
|
|||
|
|
|
(a)
|
an adverse change in the Executive’s position, titles, duties (including any position or duties as a director of the Company) or responsibilities (including new, additional or changed formal or informal reporting responsibilities) or any failure to re-elect or re-appoint him to any such positions, titles, duties or offices, except in connection with the termination of his employment for Cause;
|
(b)
|
a reduction by the Company of the Executive’s Base Salary except to the extent that the annual base salaries of all other executive officers of the Company are similarly reduced or any change in the basis upon which the Executive’s annual compensation is determined or paid if the change is or will be adverse to the Executive except that an award of annual performance bonuses by the Company’s Compensation Committee (and approved by the Board of Directors) are discretionary and in no instance shall be considered adverse to Executive if such performance bonus is reduced from a prior year or if an annual performance bonus is not paid;
|
(c)
|
a Change in Control (as defined below) of the Company occurs; or
|
(d)
|
any breach by the Company of any material provision of the Agreement.
|
8.
|
Amendment of Article 1, Section 1.1.
Article 1—Duties and Responsibilities—Position, of the Employment Agreement is hereby amended and restated to read in its entirety as follows (and Schedule A referred to therein is removed from the Employment Agreement):
|
9.
|
Amendment of Article 1, Section 1.3.
Article 1—Duties and Responsibilities—Reassignment, of the Employment Agreement is hereby deleted in its entirety;
provided, however,
that the definition of “
Member Company
” and “
Member Companies
” as set forth therein is retained.
|
10.
|
Amendment of Article 2
Article 2—Base Salary, of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
|
11.
|
Amendment of Article 3.
Article 3—Bonus, of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
|
12.
|
Amendment of Article 8.
Article 8—Termination of Employment, of the Employment Agreement is hereby amended and restated in its entirety as follows:
|
13.
|
Miscellaneous.
|
a.
|
Except as specifically provided for in this Amendment, the terms of the Employment Agreement shall be unmodified and shall remain in full force and effect. In the event that any provision of this Amendment and the Agreement conflict, the provision of this Amendment shall govern.
|
b.
|
This Amendment will be effective upon the execution by the Parties.
|
c.
|
This Amendment may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.
|
GRAN TIERRA ENERGY INC., a Nevada corporation
By:
Name:
Title:
Date:
|
DUNCAN NIGHTINGALE
Date:
|
GRAN TIERRA ENERGY CANADA ULC, an Alberta corporation
By:
Name:
Title:
Date:
|
|
(a)
|
an adverse change in the Executive’s position, titles, duties or responsibilities (including new, additional or changed formal or informal reporting responsibilities) or any failure to re-elect or re-appoint him to any such positions, titles, duties or offices, in each case as in effect as of the date one month from the date of this Amendment (or the date of this Amendment in the case of a change in the Executive’s position, titles, duties or responsibilities that includes a change in the location at which the Executive is to perform such duties or responsibilities), except in connection with the termination of his employment for Cause;
|
(b)
|
a reduction by the Company of the Executive’s Base Salary except to the extent that the annual base salaries of all other executive officers of the Company are similarly reduced or any change in the basis upon which the Executive’s annual compensation is determined or paid if the change is or will be adverse to the Executive except that an award of any annual performance bonuses (including the Bonus) by the Company’s Compensation Committee
|
(c)
|
a Change in Control (as defined below) of the Company occurs; or
|
(d)
|
any breach by the Company of any material provision of this Agreement.
|
14.
|
Amendment of Article 1, Section 1.3.
Article 1—Duties and Responsibilities—Reassignment, of the Employment Agreement is hereby amended to add to the end of such section the following sentence:
|
15.
|
Amendment of Article 3
Article 3—Base Salary, of the Employment Agreement is hereby amended by amending and restating the first sentence thereto to read in its entirety as follows:
|
16.
|
Amendment of Article 4
Article 4—Bonus, of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
|
17.
|
Amendment of Article 9.
Article 9—Termination of Employment, is hereby amended and restated to read in its entirety as follows:
|
18.
|
Miscellaneous.
|
a.
|
Except as specifically provided for in this Amendment, the terms of the Employment Agreement shall be unmodified and shall remain in full force and effect. In the event that any provision of this Amendment and the Agreement conflict, the provision of this Amendment shall govern.
|
b.
|
This Amendment will be effective upon the execution by the Parties.
|
c.
|
This Amendment may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.
|
GRAN TIERRA ENERGY INC., a Nevada corporation
By:
Name:
Title:
Date:
|
DAVID HARDY
Date:
|
GRAN TIERRA ENERGY CANADA ULC, an Alberta corporation
By:
Name:
Title:
Date:
|
|
(e)
|
an adverse change in the Executive’s position, titles, duties or responsibilities (including new, additional or changed formal or informal reporting responsibilities) or any failure to re-elect or re-appoint him to any such positions, titles, duties or offices, in each case as in effect as of the date one month from the date of this Amendment, except in connection with the termination of his employment for Cause;
|
(f)
|
a reduction by the Company of the Executive’s Base Salary except to the extent that the annual base salaries of all other executive officers of the Company are similarly reduced or any change in the basis upon which the Executive’s annual compensation is determined or paid if the change is or will be adverse to the Executive except that an award of any annual performance bonuses (including the Bonus) by the Company’s Compensation Committee (and approved by the Board) are discretionary and in no instance shall be considered adverse
|
(g)
|
a Change in Control (as defined below) of the Company occurs; or
|
(h)
|
any breach by the Company of any material provision of this Agreement.
|
19.
|
Amendment of Article 1, Section 1.3.
Article 1—Duties and Responsibilities—Reassignment, of the Employment Agreement is hereby amended to add to the end of such section the following sentence:
|
20.
|
Amendment of Article 2.
Article 2—Base Salary, of the Employment Agreement is hereby amended by amending and restating the first sentence thereto to read in its entirety as follows:
|
21.
|
Amendment of Article 3.
Article 3—Bonus, of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
|
22.
|
Amendment of Article 8.
Article 8—Termination of Employment, is hereby amended and restated to read in its entirety as follows:
|
23.
|
Miscellaneous.
|
a.
|
Except as specifically provided for in this Amendment, the terms of the Employment Agreement shall be unmodified and shall remain in full force and effect. In the event that any provision of this Amendment and the Agreement conflict, the provision of this Amendment shall govern.
|
b.
|
This Amendment will be effective upon the execution by the Parties.
|
c.
|
This Amendment may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.
|
GRAN TIERRA ENERGY INC., a Nevada corporation
By:
Name:
Title:
Date:
|
JAMES ROZON
Date:
|
GRAN TIERRA ENERGY CANADA ULC, an Alberta corporation
By:
Name:
Title:
Date:
|
|
(i)
|
an adverse change in the Executive’s position, titles, duties or responsibilities (including new, additional or changed formal or informal reporting responsibilities) or any failure to re-elect or re-appoint him to any such positions, titles, duties or offices, in each case as in effect as of the date one month from the date of this Amendment, except in connection with the termination of his employment for Cause;
|
(j)
|
a reduction by the Company of the Executive’s Base Salary except to the extent that the annual base salaries of all other executive officers of the Company are similarly reduced or any change in the basis upon which the Executive’s annual compensation is determined or paid if the change is or will be adverse to the Executive except that an award of any annual performance bonuses (including the Bonus) by the Company’s Compensation Committee (and approved by the Board) are discretionary and in no instance shall be considered adverse to Executive if such performance bonus is reduced from a prior year or if an annual performance bonus is not paid;
|
(k)
|
a Change in Control (as defined below) of the Company occurs; or
|
(l)
|
any breach by the Company of any material provision of this Agreement.
|
24.
|
Section 1(b)
of the Indemnity Agreement is hereby amended and restated to read in its entirety as follows:
|
25.
|
Section 1(c)
of the Indemnity Agreement is hereby amended and restated to read in its entirety as follows:
|
(c)
|
Proceedings
. For purposes of this Agreement, the term “proceeding” shall be broadly construed and shall include, without limitation, any threatened, pending, or completed action, suit, claim, counterclaim, cross claim, mediation, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, and whether formal or informal in any case, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness, or otherwise by reason of: (i) the fact that Indemnitee is or was a director or officer of the Company; (ii) the fact that any action taken by Indemnitee (or a failure to take action by Indemnitee) or of any action (or failure to act) on Indemnitee’s part while acting as director, officer, employee or other agent of the Company; or (iii) the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and in any such case described above, whether or not serving in any such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses may be provided under this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a proceeding, this shall be considered a proceeding under this paragraph.
|
26.
|
Section 3(a)
of the Indemnity Agreement is hereby amended and restated to read in its entirety as follows:
|
(a)
|
Indemnification in Third Party Proceedings
. Subject to Section 10 below, the Company shall indemnify Indemnitee to the fullest extent permitted by the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits Indemnitee to broader indemnification rights than the Code permitted prior to adoption of such amendment), if Indemnitee is a party to or threatened to be made a party to or otherwise involved in any proceeding, for any and all expenses, actually and reasonably incurred by Indemnitee in connection with the investigation, defense, settlement, judgment or appeal of such proceeding.
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27.
|
Section 3(b)
of the Indemnity Agreement is hereby amended and restated to read in its entirety as follows:
|
(a)
|
Indemnification in Derivative Actions and Direct Actions by the Company
. Subject to Section 10 below, the Company shall indemnify Indemnitee to the fullest extent permitted by the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits Indemnitee to broader indemnification rights than
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28.
|
Section 5
of the Indemnity Agreement is hereby amended and restated to read in its entirety as follows:
|
29.
|
Miscellaneous.
|
a.
|
Except as specifically provided for in this Amendment, the terms of the Indemnity Agreement shall be unmodified and shall remain in full force and effect. In the event that any provision of this Amendment and the Indemnity Agreement conflict, the provision of this Amendment shall govern.
|
b.
|
This Amendment will be effective upon the execution by the parties.
|
c.
|
This Amendment may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same instrument.
|
d.
|
This Amendment shall be governed exclusively by and construed according to the laws of the State of Nevada, as applied to contracts between Nevada residents entered into and to be performed entirely within Nevada.
|
|
13.
COMPANY
By:
James Rozon Chief Financial Officer |
|
14.
INDEMNITEE
15.
[ __ ] |
COMPANY
By: ________________________________
Name: Gary Guidry Title: President and Chief Executive Officer |
INDEMNITEE
Signature of Indemnitee Print or Type Name of Indemnitee |
Date: August 4, 2015
|
/s/ Gary Guidry
|
|
By: Gary Guidry
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: August 4, 2015
|
/s/ Ryan Ellson
|
|
By: Ryan Ellson
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
(1)
|
The Report, to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Gary Guidry
|
|
/s/ Ryan Ellson
|
By: Gary Guidry
|
|
By: Ryan Ellson
|
President and Chief Executive Officer
|
|
Chief Financial Officer
|