10-Q: Gran Tierra Energy Q3 2025: Net Loss Widens Amid Production Gains

Sentiment:

Quarterly Report 30 October 2025 9:51 PM

Gran Tierra Energy reported a net loss of $19.95 million in Q3 2025, despite a 38% increase in production, driven by lower oil prices and higher operating costs.

Delay expectedThe acquisition of GeoPark Ecuador S.A.'s and Frontera Energy Colombia Corp Sucursal Ecuador's interests in the Perico and Espejo Blocks is anticipated to close no earlier than the fourth quarter of 2025, implying a potential delay from an earlier expectation or a longer-than-usual closing process.

Capital raiseThe company entered into a crude oil sale and purchase agreement on October 24, 2025, to receive an advance of up to $150.0 million related to Ecuador production.An additional advance of $50.0 million is available to the company, at the sole discretion of the lender and subject to completion of certain conditions.The company may require access to debt or equity capital markets beyond the next 12 months to raise additional capital, increase liquidity, fund acquisitions, or refinance debt.

Worse than expectedNet loss for Q3 2025 was $19.95 million, a significant deterioration from a net income of $1.1 million in Q3 2024.Adjusted EBITDA decreased by 26% year-over-year, and funds flow from operations decreased by 31% year-over-year.Gross profit decreased by 70% year-over-year.Operating expenses increased by 48% year-over-year, outpacing the 38% increase in production.Brent oil prices decreased by 13% year-over-year, negatively impacting revenue.Quality and transportation discounts increased significantly, further reducing realized prices.

Summary

Net loss for Q3 2025 was $19.95 million, or $(0.57) per share basic and diluted, compared to a net income of $1.1 million, or $0.04 per share, in Q3 2024 and a net loss of $12.7 million in Q2 2025.
Loss before income taxes for Q3 2025 was $31.2 million, compared to income before income taxes of $21.9 million for Q3 2024.
Brent oil price averaged $68.17 per bbl during Q3 2025, a 13% decrease from Q3 2024, but a 2% increase from Q2 2025.
Adjusted EBITDA decreased to $69.0 million for Q3 2025, from $92.8 million in Q3 2024 and $77.0 million in Q2 2025.
Funds flow from operations decreased to $41.7 million in Q3 2025, compared to $60.3 million in Q3 2024 and $53.9 million in Q2 2025.
NAR production for Q3 2025 increased by 38% to 35,962 BOEPD, compared to 25,988 BOEPD in Q3 2024, but decreased by 10% from 39,800 BOEPD in Q2 2025 due to a landslide in Ecuador and trunk line repairs at the Moqueta field.
NAR sales volumes for Q3 2025 increased by 47% to 37,353 BOEPD, compared to 25,464 BOEPD in Q3 2024, but decreased by 3% from 38,331 BOEPD in Q2 2025.
Oil, natural gas and NGL sales for Q3 2025 decreased by 1% to $149.3 million, compared to Q3 2024, primarily due to lower oil prices partially offset by an increase in sales volumes.
Operating expenses increased by 48% to $68.4 million in Q3 2025 compared to Q3 2024, and by 22% from $55.9 million in Q2 2025.
Transportation expenses increased by 10% in Q3 2025 compared to Q3 2024.
Gross profit decreased 70% to $14.7 million in Q3 2025 compared to $48.8 million in Q3 2024.
Operating Netback decreased to $76.6 million in Q3 2025 compared to $101.4 million in Q3 2024.
Capital expenditures for Q3 2025 were $57.3 million, compared to $52.9 million in Q3 2024 and $51.2 million in Q2 2025.
Current production from October 1, 2025, to October 29, 2025, is approximately 45,200 BOEPD.
A crude oil sale and purchase agreement was entered into on October 24, 2025, for an advance of up to $150.0 million related to Ecuador production, with an additional $50.0 million available.
The Canadian revolving credit facility was amended on October 30, 2025, to increase available commitment from C$50.0 million to C$75.0 million and extend the term to October 30, 2027.
The Colombian RBL facility was amended on October 23, 2025, reducing the borrowing base to $60.0 million and requiring repayment of amounts outstanding in excess of $20.0 million upon funding the oil prepayment agreement.

Sentiment

Score: 3

Explanation: While the company achieved significant year-over-year production growth and secured new liquidity, the substantial net loss, sharp decline in profitability metrics (EBITDA, FFO, gross profit), and rising costs indicate significant financial underperformance. Operational disruptions also highlight ongoing challenges.

Positives

NAR production for Q3 2025 increased by 38% year-over-year to 35,962 BOEPD, driven by the acquisition of Canadian operations and successful exploration well drilling results in Ecuador.
NAR sales volumes for Q3 2025 increased by 47% year-over-year to 37,353 BOEPD.
Current production from October 1 to October 29, 2025, is approximately 45,200 BOEPD, indicating a strong start to the fourth quarter.
The Canadian revolving credit facility's available commitment was increased from C$50.0 million to C$75.0 million, and its term extended to October 30, 2027, enhancing liquidity and debt maturity profile.
A crude oil sale and purchase agreement was secured for an advance of up to $150.0 million (with an additional $50.0 million available) related to Ecuador production, providing significant liquidity.
Royalties as a percentage of production decreased by 5% and 4% for the three and nine months ended September 30, 2025, respectively, due to lower benchmark oil prices and lower royalties for Canadian operations.

Negatives

Net loss for Q3 2025 was $19.95 million, a significant deterioration from a net income of $1.1 million in Q3 2024 and a wider loss than $12.7 million in Q2 2025.
Loss before income taxes was $31.2 million in Q3 2025, compared to income of $21.9 million in Q3 2024.
Brent oil price averaged $68.17 per bbl in Q3 2025, a 13% decrease from Q3 2024.
Adjusted EBITDA decreased by 26% year-over-year to $69.0 million in Q3 2025.
Funds flow from operations decreased by 31% year-over-year to $41.7 million in Q3 2025.
NAR production decreased by 10% from Q2 2025 due to a landslide in Ecuador that required the shut-in of all Ecuador production for several weeks and trunk line repairs at the Moqueta field, which was shut in for the quarter.
Oil, natural gas, and NGL sales decreased by 1% year-over-year, primarily due to lower oil prices.
Operating expenses increased by 48% year-over-year to $68.4 million, and by 22% quarter-over-quarter, attributed to new Canadian operations, ramp-up in Ecuador, and higher workover activities/lifting costs.
Gross profit decreased by 70% year-over-year to $14.7 million.
Operating Netback decreased by 24% year-over-year to $76.6 million.
Quality and transportation discounts increased to $24.74 per boe in Q3 2025 from $14.10 per boe in Q3 2024, due to changes in production mix and higher Castilla and Vasconia differentials.
General and administrative (G&A) expenses before stock-based compensation increased by 42% year-over-year to $13.5 million due to the addition of new Canadian operations and higher business development costs.
Foreign exchange resulted in a $0.3 million loss in Q3 2025, compared to a $3.1 million gain in Q3 2024.
The Colombian RBL facility's borrowing base was reduced to $60.0 million from $75.0 million, and repayment of amounts outstanding in excess of $20.0 million is required upon funding the oil prepayment agreement.

Risks

Ability to successfully integrate the assets and operations of i3 Energy Plc and realize the anticipated benefits and operating synergies expected from the 2024 acquisition.
Operations in South America are subject to unexpected problems due to guerrilla activity, strikes, local blockades, or protests.
Technical difficulties and operational difficulties may arise which impact the production, transport or sale of products.
Global and regional changes in the demand, supply, prices, differentials or other market conditions affecting oil and natural gas, including inflation, tariffs, trade policies, global health crises, geopolitical events (Ukraine, Middle East conflicts), or actions by OPEC and other producing countries.
Changes in commodity prices, including volatility or a prolonged decline in these prices relative to historical or future expected levels.
The risk that current global economic and credit conditions may impact oil prices and oil consumption more than predicted, which could cause further modification of strategy and capital spending program.
Geographic, political and weather conditions can impact the production, transport or sale of products.
Ability to execute the business plan, which may include acquisitions, and realize expected benefits from current or future initiatives.
The risk that unexpected delays and difficulties in developing currently owned properties may occur.
Ability to replace reserves and production and develop and manage reserves on an economically viable basis.
Accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates).
The risk profile of planned exploration activities.
The effects of drilling down-dip, waterflood and multi-stage fracture stimulation operations.
The extent and effect of delivery disruptions, equipment performance and costs.
Actions by third parties.
The timely receipt of regulatory or other required approvals for operating activities.
The failure of exploratory drilling to result in commercial wells.
Unexpected delays due to the limited availability of drilling equipment and personnel.
Volatility or declines in the trading price of common stock or bonds.
The risk that the company does not receive the anticipated benefits of government programs, including government tax refunds.
Ability to access debt or equity capital markets from time to time to raise additional capital, increase liquidity, fund acquisitions or refinance debt.
Ability to comply with financial covenants in indentures and make borrowings under credit agreements.
The temporary excise tax levied on oil sales by the Colombian government under a state of emergency is currently under review by the Constitutional Court, the ruling of which could potentially invalidate these measures.
The unprecedented nature of ongoing conflicts in several parts of the world, along with volatility in the worldwide economy and oil and gas industry may make it more difficult to identify all the risks to the business, results of operations and financial condition and the ultimate impact of identified risks.

Future Outlook

The company believes its capital resources, including cash on hand, cash generated from operations, and available borrowings under its credit facilities and prepayment structure, will provide sufficient liquidity to meet strategic objectives and planned capital programs for the next 12 months, including the repayment of 25% of the 9.50% Senior Notes due October 15, 2026, given current oil price trends and production levels. Beyond the next 12 months, the company may require access to debt or equity capital markets to raise additional capital, increase liquidity, fund acquisitions, or refinance debt. The company intends to pursue growth opportunities and acquisitions from time to time.

Management Comments

Management is continuing to review and assess information to accurately determine the acquisition date fair value of the proved oil and natural gas properties and deferred tax assets and liabilities acquired (referring to the i3 Energy acquisition).
We believe that our capital resources, including cash on hand, cash generated from operations and available borrowings under our credit facilities and prepayment structure, will provide us with sufficient liquidity to meet our strategic objectives and planned capital program for the next 12 months.
We intend to pursue growth opportunities and acquisitions from time to time, which may require significant capital to be located in basins or countries beyond our current operations, involve joint ventures, or be sizable compared to our current assets and operations.

Industry Context

The filing highlights the impact of volatile Brent oil prices, which decreased 13% year-over-year, and increased quality and transportation discounts, reflecting common challenges in the oil and gas industry. The acquisition of Canadian operations and exploration success in Ecuador indicate a strategy of geographic diversification and organic growth, contrasting with operational disruptions faced in Colombia and Ecuador (landslide, trunk line repairs). The temporary excise tax in Colombia reflects a trend of governments seeking to capture more revenue from natural resource extraction, adding regulatory uncertainty.

Comparison to Industry Standards

The filing does not provide specific industry benchmarks or comparable company data for direct assessment.
The 38% year-over-year increase in NAR production is a strong operational achievement, potentially outperforming some industry peers facing stagnant or declining production.
However, the widening net loss and significant declines in Adjusted EBITDA (down 26%) and Funds Flow from Operations (down 31%) suggest that the company may be underperforming in terms of profitability and cost management compared to industry leaders, especially given the lower commodity price environment.
Operational disruptions, such as the landslide in Ecuador and trunk line repairs in the Moqueta field, indicate higher operational risks specific to the company's operating regions, which could lead to higher downtime and costs compared to companies operating in more stable environments.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Control Assessment	Gran Tierra has not yet completed its assessment of the disclosure controls and procedures, and internal controls over financial reporting previously used by i3 Energy Plc (acquired October 31, 2024), and integrate them with those of Gran Tierra. A program is in place to complete this assessment by October 31, 2025.	October 31, 2024	Ongoing integration work, potential for control deficiencies until fully integrated.
Credit Facility Amendment	The Canadian revolving credit facility was amended to increase available commitment from C$50.0 million to C$75.0 million and extend the term to October 30, 2027.	October 30, 2025	Improved liquidity and extended debt maturity profile for Canadian operations.
Credit Facility Amendment	The Colombian RBL facility was amended to reduce the borrowing base to $60.0 million and revise certain related terms, including provisions governing borrowings, hedging obligations, and borrowing base redetermination. Repayment of amounts outstanding in excess of $20.0 million is required upon funding the oil prepayment agreement.	October 23, 2025	Reduced borrowing capacity in Colombia and immediate repayment obligation tied to a new prepayment agreement.

Legal Proceedings

The company has several lawsuits and claims pending. Management believes the resolution of these matters would not have a material adverse effect on the company's consolidated financial position, results of operations, or cash flows.

Related Party Transactions

The acquisition of i3 Energy Plc (now Gran Tierra UK Limited) on October 31, 2024, was a business combination.
Permitted Shareholder Debt can be incurred with Gran Tierra Energy International Holdings GmbH or any other subsidiary of the Parent, provided it is subordinated.

Stakeholder Impact

Shareholders: Negative impact due to significant net loss, decreased profitability, and potential share price volatility. The ongoing share repurchase program offers some support but is limited.
Creditors: Mixed impact. Increased debt levels and declining profitability metrics are concerning, but recent credit facility amendments and the oil prepayment agreement provide some liquidity and extended maturities. Compliance with debt covenants is maintained.
Employees: No direct impact on employment or compensation is explicitly mentioned, but operational disruptions could affect local operations.
Customers: While overall sales volumes increased year-over-year, production disruptions in specific fields could impact supply reliability.
Suppliers: No direct impact mentioned.

Next Steps

Closing of the Perico and Espejo Blocks acquisition (anticipated no earlier than Q4 2025).
Repayment of any amounts outstanding in excess of $20.0 million on the Colombian RBL facility upon funding of the oil prepayment agreement.
Repayment of 25% of the principal amount of 9.50% Senior Notes due October 15, 2026.
Completion of assessment and integration of i3 Energy's disclosure controls and procedures, and internal controls over financial reporting by October 31, 2025.
Continued execution of the 2024 share repurchase program until its expiration on November 5, 2025.
Potential access to capital markets beyond 12 months for financing, acquisitions, or debt refinancing.
Monitoring of the Constitutional Court's review of the Colombian temporary excise tax.

Key Dates

Date	Description
December 2023	FASB issued ASU 2023-09, Improvements to Income Tax Disclosures.
March 22, 2024	Gran Tierra Canada Ltd. entered into a revolving credit facility with National Bank of Canada.
May 1, 2024	Company amended the settlement terms of all outstanding stock option awards.
October 31, 2024	Company acquired all issued and outstanding common shares of i3 Energy Plc (subsequently renamed Gran Tierra UK Limited).
November 6, 2024	Start of the 2024 share repurchase program.
December 31, 2024	End of the fiscal year for which the 2024 Annual Report on Form 10-K was filed.
January 1, 2025	Effective date for the acquisition of GeoPark Ecuador S.A.'s and Frontera Energy Colombia Corp Sucursal Ecuador's interests in the Perico and Espejo Blocks.
January 1, 2025	Company adopted ASU 2023-09, Improvements to Income Tax Disclosures.
January 2025	FASB issued ASU 2025-01, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures.
February 2025	Temporary excise tax levied on oil sales introduced by the Colombian government.
April 16, 2025	Gran Tierra Energy Colombia GmbH entered into a $75.0 million reserve-based lending facility (RBL Facility).
July 2025	FASB issued ASU 2025-05, Financial InstrumentsCredit Losses: Amendments to the Measurement of Credit Losses on Certain Financial Assets.
July 22, 2025	Canadian credit facility borrowing base redetermined by National Bank of Canada at C$100.0 million.
July 31, 2025	Company entered into definitive agreements to acquire GeoPark Ecuador S.A.'s and Frontera Energy Colombia Corp Sucursal Ecuador's interests in the Perico and Espejo Blocks.
September 8, 2025	Company closed the sale agreement for its wholly owned subsidiary, Gran Tierra North Sea Limited (GTNSL), for $7.5 million.
September 30, 2025	End of the quarterly period covered by this Form 10-Q.
October 1, 2025	Current production from this date to October 29, 2025, is approximately 45,200 BOEPD.
October 15, 2026	First principal repayment of 25% of the 9.50% Senior Notes due.
October 15, 2027	Second principal repayment of 5% of the 9.50% Senior Notes due.
October 15, 2028	Third principal repayment of 30% of the 9.50% Senior Notes due.
October 15, 2029	Remainder of the 9.50% Senior Notes due.
October 23, 2025	Colombian RBL facility amended to reduce the borrowing base to $60.0 million.
October 24, 2025	Company entered into a crude oil sale and purchase agreement to receive an advance of up to $150.0 million related to Ecuador production.
October 28, 2025	35,295,753 shares of common stock, $0.001 par value, were issued and outstanding.
October 29, 2025	End of the period for share repurchases under the 2024 Program (1,180,752 shares repurchased).
October 30, 2025	Filing date of the Quarterly Report on Form 10-Q.
October 30, 2025	Canadian revolving credit facility amended to increase available commitment to C$75.0 million and extend the term to October 30, 2027.
October 31, 2025	Deadline for Gran Tierra to complete its assessment and integration of i3 Energy's disclosure controls and procedures, and internal controls over financial reporting.
November 5, 2025	Expiration of the 2024 share repurchase program.
December 2025	Scheduled end of the temporary excise tax levied on oil sales by the Colombian government.
December 15, 2025	Effective date for ASU 2025-05, Financial InstrumentsCredit Losses: Amendments to the Measurement of Credit Losses on Certain Financial Assets.
December 15, 2026	Effective date for annual reporting periods for ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures.
December 15, 2027	Effective date for interim reporting periods for ASU 2024-03.

Recommendation

hold

While the company achieved significant year-over-year production growth and secured new liquidity, the substantial net loss, sharp decline in Adjusted EBITDA and Funds Flow from Operations, and increased operating costs are concerning. The operational disruptions in Ecuador and Colombia highlight execution risks. The recent credit facility amendments and the oil prepayment agreement provide some financial flexibility, but the overall financial performance is weak. Investors should hold to monitor the integration of acquired assets, the resolution of operational issues, and the impact of commodity price trends on future profitability before making further investment decisions.

Keywords

Oil and Gas, Exploration, Production, Colombia, Ecuador, Canada, SEC Filing, 10-Q, Financial Results, Energy, Crude Oil, Natural Gas, NGL, Capital Expenditures, Debt, Hedging, Acquisitions, Dispositions, Gran Tierra Energy

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.