Gran Tierra Energy (GTE) Finds itself Ahead of Oil Production Targets and Possible Royalty Payments
Being in the right place with the right product is more than half the game when it comes to making profit. The oil commodity market is a prime example. There will be times when the price for the commodity is down and a company needs to retrench. Other times find the market flying high with profits flowing nicely. In either event, a company must be ready for the cycle to change. If a company can time there activities to match what “may” happen in the pricing cycle, large profit windfalls can occur.
Gran Tierra Energy Inc., an oil and gas exploration company, works to explore and exploit oil and gas in Columbia, Argentina and Peru. The company’s headquarters are located in Calgary, Canada. The company is currently focusing its exploration and development work on the southern basin of Columbia, South America. To date, schedules to meet 19,000 BOPD are running ahead of schedule. In this regard, if schedules are met, increased royalty payments are likely in the near term as the company’s final well is drilled and tied into the system. Additionally, costs are likely to be lower than most like operations as water residue has been lower than one might expect.
Although the price of oil and gas has been at lower levels of late, there does appear to be a trend forming for higher targets. Given the company’s recent production increases, increased weight might be assigned to it. As recently as June 2009, the company was finding production of just 11,000 BOPD. Currently, this same production is estimated at approximately 19,000+ BOPD with the likelihood of additional production in the near future. Costs in the regions where the company operates are always a factor to consider, but Gran Tierra Energy does appear to be in the right place at the right time to capitalize on what may be another “run-up” in oil prices.