Gran Tierra Energy today announced the completion of the semi-annual redetermination of the Company's bank-syndicated credit facility. The Company and the syndicate of lenders party to the credit facility have agreed to amend the credit facility (the 'Amendment') effective as of June 1, 2020, as follows:

1. Redetermination of borrowing base limit to $225 million from the prior limit of US$300 million;
2. Grant of relief under financial covenants until October 1, 2021 (the 'Covenant Relief Period'), including relief from compliance with the ratio of Total Debt1 to EBITDAX1 during the Covenant Relief Period; and
3. Amendment of the interest rate to either, at the borrower's option, the London Inter-Bank Offered Rate (LIBOR) plus a spread ranging from 2.9% to 4.9%, or base rate plus a spread ranging from 1.9% to 3.9%, with such spread, in each case, dependent upon the Company's Senior Secured Leverage Ratio1. Based on the Company's current Senior Secured Leverage Ratio, the interest rate would equal 3.2% under the first option and 2.2% under the second option.

The credit facility matures in November 2022. The Amendment does not impact the Company's current bonds outstanding.

Operations Update

Current Production
Gran Tierra remains focused on the ongoing production and waterflooding of the Company's core assets at Acordionero, Costayaco and Moqueta. Consistent with management's expectation, during the second quarter of 2020 to-date, Gran Tierra's total working interest production has averaged approximately 21,000 bopd.

Acordionero (100% Working Interest, Operator)

• Currently, wells awaiting workovers represent productive capacity of over 5,000 bopd; these wells are expected to remain off-line during the low-price environment; if oil markets stabilize at current levels or higher during the second half of 2020, Gran Tierra plans to commence workover operations to restore these wells to production.
• Production from the remaining wells has stabilized at 11,000 bopd during the second quarter of 2020 to-date, with downtime of only approximately 3%; the low downtime reflects excellent reliability from the field's gas-to-power generation so far during the second quarter of 2020 to-date; the stabilization of production, with little to no natural decline, is indicative of positive reservoir response to the ongoing waterflood at Acordionero; this production provides an excellent base to grow production and cash flow from future workovers and development drilling; looking forward, Gran Tierra forecasts that future development wells in Acordionero will cost less than $2 million dollars to drill, complete and tie-in.

Ayombero (100% Working Interest, Operator)

• During the second quarter of 2020, the Company completed a pressure build up test ('PBU') on the Ayombero-1 well, with positive results; the Ayombero-1 well first started producing on March 5, 2018, has produced a cumulative 117,000 bbl of oil to date and has been producing at an average rate of 175 bopd with no water; the estimated initial reservoir pressure was 7,772 pounds per square inch ('psi') when Ayombero-1 first started producing and, based on the PBU, current reservoir pressure is estimated at 7,330 psi; the minimal decrease of only 6% in estimated reservoir pressure supports management's estimate that Ayombero-1 is connected to a potentially large field.
• The Ayombero-Chuira structure is estimated to contain gross working interest mean prospective oil resources of 63 million bbl unrisked and 29 million bbl risked, as evaluated by the Company's independent qualified reserves evaluator McDaniel & Associates Consultants Ltd. ('McDaniel') in a report with an effective date of July 31, 2018.

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: 
'We are very pleased that our bank syndicate continues to be supportive of Gran Tierra during these volatile times. We expect the Company to have sufficient liquidity for the remainder of 2020, since we plan to spend less than anticipated funds flow from operations and have a strong hedge position. The credit facility was drawn to $204 million as at March 31, 2020 and, due to the low forecasted expenditures, the expected positive funds flow from operations at current pricing and the recovery of tax receivables in the range of $50 million to $80 million over the next six months, the Company expects the amount drawn on the credit facility to decrease by the end of 2020.

Furthermore, the waiver of the Total Debt1 to EBITDAX1 covenant until the fourth quarter of 2021 allows the Company greater flexibility to focus on value creation for all stakeholders. Ongoing tax refunds from the Colombian government are expected to further strengthen our balance sheet through the course of 2020.

We forecast that the Company currently has the productive capacity to produce over 30,000 bopd with the future completion of workovers in Acordionero, resumption of production in the Suroriente Block and restart of production from our minor fields for an expected cost of less than $10 million. We expect all shut-in fields and facilities to return to prior production levels once Brent oil prices stabilize and return to a range of $35 to $40/bbl. We continue to prioritize financial strength, liquidity and long-term value creation and believe we will exit strongly from this current period of economic turmoil.'

KeyFacts Energy: Gran Tierra Energy Colombia country profile*