second quarter 2026
Filed Aug 5, 2026Gran Tierra Energy Inc. Reports Second Quarter 2026 Results
The Company returned to net income, expanded gross profit and operating netback, and generated positive free cash flow, but production declined from both the Prior Quarter and the second quarter of 2025, while net cash provided by operating activities declined from the Prior Quarter.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total average WI productionother | 41,501 boepd | 9% lower than first quarter of 2026 | 12% lower than the second quarter of 2025 |
| Net incomeGAAP | $25 million | – | – |
| Net income per share, basic and dilutedGAAP | $0.70 per share | – | – |
| Gross profitnon-GAAP | approximately $75 million | – | – |
| Gross profit per boenon-GAAP | $19.90 | – | – |
| Operating netbacknon-GAAP | $34.73 per boe | up 49% from the Prior Quarter | up 62% from the second quarter of 2025 |
| Adjusted EBITDAnon-GAAP | $85 million | – | – |
| Twelve-month trailing net debt to Adjusted EBITDAnon-GAAP | 1.7 times | – | – |
| Net Cash Provided by Operating ActivitiesGAAP | $57 million ($1.62 per share) | down 67% from the Prior Quarter | up 66% from the second quarter of 2025 |
| Funds flow from operationsnon-GAAP | $60 million ($1.70 per share) | up 41% from the Prior Quarter | up 12% from the second quarter of 2025 |
| Capital expendituresother | $54 million | – | – |
| Oil, Natural Gas, and Natural Gas Liquids SalesGAAP | $187 million | – | up 25% from the second quarter of 2025 |
| Ecuador productionother | 7,993 bopd | – | – |
Capital returns
- During the six months ended June 30, 2026, Gran Tierra repurchased $9.2 million in face value of the Company’s 9.75% Senior Notes due April 15, 2031 at a discount of 12% to the face value of the repurchased bonds.
- Subsequent to the Quarter, the Company repurchased an additional $15.0 million of 9.75% Senior Notes due April 15, 2031 at a discount of 10% to the face value of the repurchased bonds.
What drove it
- Higher oil prices recognized during the Quarter drove the increase in operating netback.
- Oil, Natural Gas, and Natural Gas Liquids Sales increased due to a 45% increase in Brent price, partially offset by a 16% decrease in sales volumes and higher quality and transportation discounts in Colombia associated with the use of alternative transportation.
- The Company completed its $123.0 million capital carry commitment under the Suroriente joint venture with Ecopetrol S.A.; the post-Suroriente Carry period commenced on July 18, 2026, improving the economics and overall profitability of the block.
- The Cohembi six-well development drilling program was completed, fulfilling the Company's drilling commitment under the Suroriente Carry and delivered under budget.
- Ecuador production was supported by strong performance from Conejo discoveries and an earlier than expected response to water injection at Chanangue.
- Government approval of three additional field development plans for Charapa, Conejo and Perico brought total approvals to five of the Company's six fields, transitioning Ecuador operations from exploration to development.
Concerns
- Total average WI production was 9% lower than the Prior Quarter and 12% lower than the second quarter of 2025.
- The production decline reflected the sale of Simonette and Lodgepole assets and lower production in Colombia; the Prior Quarter comparison also reflected temporary unplanned artificial lift failures in the Acordionero and Cohembi fields.
- Net Cash Provided by Operating Activities was down 67% from the Prior Quarter.
- Twelve-month trailing net debt to Adjusted EBITDA of 1.7 times remains above the Company’s long-term target ratio of 1.0 times.
- For the second half of 2026, oil hedged is roughly 16,000 bbl/d, about 52% of oil production, with floors near US$60 per bbl.
What to watch
- The Company expects capital expenditures to be within previously stated guidance, although the numerical guidance was not included in the supplied filing text.
- Dawson Clearwater and Mount Head will be a focus of drilling activity in 2027.
- The effectiveness and growth potential of the contract under which Gran Tierra will earn a 49% WI in the Tisquirama block.
- Further Ecuador development following field development plan approvals, including the Espejo field development plan that is pending approval.
- The impact of the completed Lodgepole disposition and Clearwater asset exchange on the Canadian portfolio.
Balance sheet and cash flow
- As of June 30, 2026, the Company had a cash balance of $127 million, total gross debt of $606 million and net debt of $479 million.
- In addition to the $127 million cash on hand as of June 30, 2026, the Company currently has approximately $53 million in undrawn availability from its credit and lending facilities.
- Twelve-month trailing net debt to Adjusted EBITDA was 1.7 times; the Company continues to have a long-term target ratio of 1.0 times.
- Net Cash Provided by Operating Activities was $57 million ($1.62 per share).
- Funds flow from operations was $60 million ($1.70 per share).
Analysis
Gran Tierra reported a return to profitability in the second quarter of 2026, with net income of $25 million, compared with a net loss of $119 million in the Prior Quarter and a net loss of $13 million in the second quarter of 2025. Gross profit was approximately $75 million, compared with approximately $37 million in the Prior Quarter and $23 million a year earlier. Operating netback reached $34.73 per boe, up 49% from the Prior Quarter and up 62% from the second quarter of 2025, primarily due to higher oil prices recognized during the Quarter. Adjusted EBITDA increased to $85 million from $74 million in the Prior Quarter and $77 million a year earlier.
Production was the principal operating offset. Total average WI production of 41,501 boepd was 9% lower than the Prior Quarter and 12% lower than the second quarter of 2025. Management attributed the year-over-year decline to lower Colombia production and the sales of Simonette and Lodgepole assets, partly offset by Conejo-1 results and production from Ecuador's Perico Block. The sequential decline also reflected the asset sales and temporary unplanned artificial lift failures at Acordionero and Cohembi, which management said have been rectified. Ecuador production averaged 7,993 bopd, supported by Conejo discoveries and an earlier-than-expected water-injection response at Chanangue.
Cash generation was positive but showed different trends across measures. Net Cash Provided by Operating Activities was $57 million, up 66% from the second quarter of 2025 but down 67% from the Prior Quarter. Funds flow from operations was $60 million, up 41% sequentially and up 12% year over year. Capital expenditures were $54 million, above $45 million in the Prior Quarter and $51 million in the second quarter of 2025, as the Company completed its Suroriente Carry and the Cohembi drilling program. Management stated that the 2026 capital program was planned to be weighted to the first half and that capital expenditures are expected to be within previously stated guidance.
Balance-sheet actions included debt repurchases and asset monetizations. At June 30, 2026, Gran Tierra had $127 million of cash, $606 million of total gross debt and $479 million of net debt, plus approximately $53 million of undrawn availability. The Company repurchased $9.2 million face value of its 9.75% Senior Notes during the six months ended June 30, 2026 and an additional $15.0 million subsequent to the Quarter. Twelve-month trailing net debt to Adjusted EBITDA was 1.7 times, compared with the Company's long-term target ratio of 1.0 times. Strategic developments included completion of the Suroriente Carry, satisfaction of conditions precedent for the Tisquirama contract, additional Ecuador development approvals, the Lodgepole disposition, and a resource report that positions Dawson Clearwater and Mount Head as 2027 drilling priorities.
Management, verbatim
Our second quarter results benefited from a stronger commodity price environment, reduced total operating costs and the continued strength of our portfolio, with production within our guidance range and improved margins and cash generation across the business.
Gary Guidry, President and Chief Executive Officer
Looking ahead, our priorities remain unchanged. We will allocate capital with discipline, operate our fields safely and reliably, and continue to strengthen our balance sheet, generate free cash flow and build long-term value for our shareholders.
Gary Guidry, President and Chief Executive Officer
Not in the filing
stated, not guessed- Numerical 2026 production guidance range
- Numerical 2026 capital-expenditure guidance
- Revenue reported explicitly as total revenue
- Oil, Natural Gas, and Natural Gas Liquids Sales for the Prior Quarter
- Prior-year and Prior-Quarter production volumes
- Gross margin
- Operating income or loss
- Operating margin
- Free cash flow amount and comparative figures
- Segment revenue and segment revenue comparisons
- Net income per share for the Prior Quarter
- Gross profit percentage margin
- Cash, gross debt, net debt and liquidity comparative balances
- Dividend information
- Share repurchase information
- Forward guidance for revenue, gross margin, operating expenses and tax rate
- Prior outlook section needed for comparison with prior guidance
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.