A $5 Energy Stock Whose Best Days Are Ahead
July 4, 2012 by: Bret Jensen | about: GTE, includes: PBR, STO Gran Tierra Energy (GTE) has done a wonderful job in growing production and revenues (CAGR of 70%) over the past three years. It has some solid prospects for continuing growth in South America as well. Unfortunately, it has not been rewarded for those achievements recently due to sharply fluctuating oil prices. It also suffers an unfair discount because of some minor exposure to Argentina and temporary production disruptions in Colombia. However, I think the stock is finally ready to break out and move closer to its intrinsic value.
Recent positives for Gran Tierra:
Global Hunter initiated the shares as a "Buy" on Friday.
complete report here---
http://seekingalpha.com/article/701701- ... urce=yahoo
GTE
Re: GTE ops update
more bad news; dry hole; pipeline diruptions; cap ex cuts
Gran Tierra Energy Announces Production, Capital Budget and Exploration Update 07/12 08:00 AM
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Second quarter production impacted by OTA downtime
CALGARY, July 12, 2012 /PRNewswire/ - Gran Tierra Energy Inc. (GTE:$4.09,00$-0.31,00-7.05%) ("Gran Tierra Energy") , a company focused on oil exploration and production in South America, today provided a production and capital budget update and updates for its exploration operations in Colombia.
Production Update
Preliminary corporate production estimates, net after royalties ("NAR") and before changes in inventory and losses, for the three months ending June 30,2012 averaged approximately 16,300 barrels of oil equivalent per day ("BOEPD") consisting of approximately 12,350 BOEPD in Colombia, 3,800 BOEPD in Argentina and 150 BOEPD in Brazil. Approximately 96% of this production consists of light oil, with the balance consisting of natural gas. Due to changes in inventory and pipeline losses, sales volumes in the quarter may be lower than stated production.
Second quarter 2012 production and sales have been impacted by oil delivery restrictions due to disruptions on the Ecopetrol-operated Oleoducto Transandino ("OTA") pipeline in Colombia, the latest of which occurred on July 3, 2012. Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) continued production at a reduced rate while the OTA pipeline was down, selling a portion of its crude through trucking and storing excess crude. The OTA pipeline continues to be offline with production expected to return to normal levels early next week.
Due to the repeated OTA pipeline disruptions that have occurred to date, Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) does not expect to attain its previously announced expected average production for 2012 of approximately 20,000 - 21,000 BOEPD NAR. Current production capacity stands at approximately 21,000 BOEPD NAR; uninterrupted consolidated production in April 2012 averaged approximately 20,700 BOEPD NAR before inventory adjustments. Revised expected average production guidance will be provided once stable production is established; exit production rate of 20,000 to 21,000 BOEPD NAR remains unchanged.
Capital Budget Update
In connection with curtailed production and lower commodity prices experienced this year, Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) is targeting approximately $60 million capital expenditure deferments from its previously announced 2012 budget of $440 million. Deferred expenditures are expected to be from areas which do not impact production capacity or near term high value reserve addition projects.
Exploration Update
Garibay Block, Llanos Basin, Colombia (Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) 50% working interest, CEPSA 50% working interest and operator)
The Bordon-1 exploration well reached true vertical depth of 9,680 feet on June 16, 2012. Mud log and open hole log data acquired during and after drilling indicate only non-commercial hydrocarbons present. The Bordon-1 well was plugged and abandoned.
Azar Block, Putumayo Basin, Colombia (Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) 40% WI and operator, Lewis Energy 40%, Gold Oil 20%)
La Vega Este-1 oil exploration well is currently drilling ahead after initiating sidetrack operations, and is now expected to reach total depth in early August.
Gran Tierra Energy Announces Production, Capital Budget and Exploration Update 07/12 08:00 AM
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Second quarter production impacted by OTA downtime
CALGARY, July 12, 2012 /PRNewswire/ - Gran Tierra Energy Inc. (GTE:$4.09,00$-0.31,00-7.05%) ("Gran Tierra Energy") , a company focused on oil exploration and production in South America, today provided a production and capital budget update and updates for its exploration operations in Colombia.
Production Update
Preliminary corporate production estimates, net after royalties ("NAR") and before changes in inventory and losses, for the three months ending June 30,2012 averaged approximately 16,300 barrels of oil equivalent per day ("BOEPD") consisting of approximately 12,350 BOEPD in Colombia, 3,800 BOEPD in Argentina and 150 BOEPD in Brazil. Approximately 96% of this production consists of light oil, with the balance consisting of natural gas. Due to changes in inventory and pipeline losses, sales volumes in the quarter may be lower than stated production.
Second quarter 2012 production and sales have been impacted by oil delivery restrictions due to disruptions on the Ecopetrol-operated Oleoducto Transandino ("OTA") pipeline in Colombia, the latest of which occurred on July 3, 2012. Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) continued production at a reduced rate while the OTA pipeline was down, selling a portion of its crude through trucking and storing excess crude. The OTA pipeline continues to be offline with production expected to return to normal levels early next week.
Due to the repeated OTA pipeline disruptions that have occurred to date, Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) does not expect to attain its previously announced expected average production for 2012 of approximately 20,000 - 21,000 BOEPD NAR. Current production capacity stands at approximately 21,000 BOEPD NAR; uninterrupted consolidated production in April 2012 averaged approximately 20,700 BOEPD NAR before inventory adjustments. Revised expected average production guidance will be provided once stable production is established; exit production rate of 20,000 to 21,000 BOEPD NAR remains unchanged.
Capital Budget Update
In connection with curtailed production and lower commodity prices experienced this year, Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) is targeting approximately $60 million capital expenditure deferments from its previously announced 2012 budget of $440 million. Deferred expenditures are expected to be from areas which do not impact production capacity or near term high value reserve addition projects.
Exploration Update
Garibay Block, Llanos Basin, Colombia (Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) 50% working interest, CEPSA 50% working interest and operator)
The Bordon-1 exploration well reached true vertical depth of 9,680 feet on June 16, 2012. Mud log and open hole log data acquired during and after drilling indicate only non-commercial hydrocarbons present. The Bordon-1 well was plugged and abandoned.
Azar Block, Putumayo Basin, Colombia (Gran Tierra Energy (GTE:$4.09,00$-0.31,00-7.05%) 40% WI and operator, Lewis Energy 40%, Gold Oil 20%)
La Vega Este-1 oil exploration well is currently drilling ahead after initiating sidetrack operations, and is now expected to reach total depth in early August.
Re: GTE
Gran Tierra Energy Target Price Cut $1.50 at Credit Suisse, Ests Lowered 07/12 11:13 AM
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12:13 PM EDT, 07/12/2012 (MidnightTrader) -- Credit Suisse today lowered its target price on Gran Tierra Energy (GTE:$4.20,00$-0.20,00-4.55%) to C$6.50 (from C$8.00) based on an updated commodities forecast. GTE's "outperform" rating has been maintained.
Credit Suisse Macro View: Credit Suisse recently revised its global GDP forecasts from 3.6% and 4.2% for 2012E and 2013E, respectively, to 3.3% and 3.8%. Based on lower global growth forecasts, Credit Suisse is also now updating its commodity price views.
Brent Price Outlook: In the context of the revised macro outlook, Credit Suisse now expects a base case for Brent to hover around US$100 per barrel over the next few years, with near term downside risks this summer and a more pronounced trajectory towards US$110 per barrel later next year.
Changes to Estimates: We have decreased our cash flow estimates for 2012E and 2013E by roughly 23% and 26%, respectively. We are also lowering our 2012/2013/2014 EPS estimates to $0.40/$0.59/$0.83 (from $0.76/$1.11/$1.25). Our current production forecast remains unchanged, although we note that continued pipeline disruptions on the OTA pipeline continue to weigh on the near term production outlook.
Pipeline Disruptions Could Weigh: The one apparent chink in Gran Tierra's armos has been, and continues to be, the OTA pipeline that has been disrupted in both Q1 and Q2 this year. Further pipeline disruptions could lead to a definitive downward revision in the company's production guidance for the year.
Recommendation: Our new target price of C$6.50 (from C$8) is a reflection of our 50/50 weighted valuation method based on our updated risked NAV of US$6.56 per share and 5.5 times our 2012E cash flow. We have elected to maintain our Outperform rating at this time, given the company's diversified portfolio of opportunities, coupled with a strong balance sheet.
Price: 4.26, Change: -0.25, Percent Change: -5.54
http://www.midnighttrader.com
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12:13 PM EDT, 07/12/2012 (MidnightTrader) -- Credit Suisse today lowered its target price on Gran Tierra Energy (GTE:$4.20,00$-0.20,00-4.55%) to C$6.50 (from C$8.00) based on an updated commodities forecast. GTE's "outperform" rating has been maintained.
Credit Suisse Macro View: Credit Suisse recently revised its global GDP forecasts from 3.6% and 4.2% for 2012E and 2013E, respectively, to 3.3% and 3.8%. Based on lower global growth forecasts, Credit Suisse is also now updating its commodity price views.
Brent Price Outlook: In the context of the revised macro outlook, Credit Suisse now expects a base case for Brent to hover around US$100 per barrel over the next few years, with near term downside risks this summer and a more pronounced trajectory towards US$110 per barrel later next year.
Changes to Estimates: We have decreased our cash flow estimates for 2012E and 2013E by roughly 23% and 26%, respectively. We are also lowering our 2012/2013/2014 EPS estimates to $0.40/$0.59/$0.83 (from $0.76/$1.11/$1.25). Our current production forecast remains unchanged, although we note that continued pipeline disruptions on the OTA pipeline continue to weigh on the near term production outlook.
Pipeline Disruptions Could Weigh: The one apparent chink in Gran Tierra's armos has been, and continues to be, the OTA pipeline that has been disrupted in both Q1 and Q2 this year. Further pipeline disruptions could lead to a definitive downward revision in the company's production guidance for the year.
Recommendation: Our new target price of C$6.50 (from C$8) is a reflection of our 50/50 weighted valuation method based on our updated risked NAV of US$6.56 per share and 5.5 times our 2012E cash flow. We have elected to maintain our Outperform rating at this time, given the company's diversified portfolio of opportunities, coupled with a strong balance sheet.
Price: 4.26, Change: -0.25, Percent Change: -5.54
http://www.midnighttrader.com