GTE

• Strategic Portfolio Actions

  • Entered into a definitive share purchase agreement to sell all of its Colombia and Ecuador businesses; contractual restrictions limit public disclosure of transaction details at this time.
  • Completed the $123 million capital carry commitment in the Soriente block, with the post-carry period commencing July 18, 2026, improving future project economics and cash generation potential.
  • Satisfied all conditions for the effectiveness of the Tiscarama block agreement, which will allow the company to earn a 49% working interest and expand its operated position in Colombia's Middle Magdalena Valley Basin.
  • Completed the disposition of a 54% working interest in the Lodge Pole area for $9 million USD, removing $13 million in asset retirement obligations from the balance sheet and optimizing the Canadian portfolio.
  • Repurchased $6 million face value of 9.75% senior notes due 2031 at a 12% discount in H1 2026, with an additional $50 million face value repurchased at a 10% discount after quarter end, advancing the company's debt reduction goals.

• Financial Performance

  • Stronger commodity prices, improved margins, and lower operating costs drove the company to positive net income in Q2 2026 after consecutive quarterly net losses.
  • Lower workover activity, reduced field personnel costs, and inventory fluctuations pushed total operating expenses down 22% sequentially and 7% year-over-year.
  • Total liquidity at quarter end includes $127 million in cash and $53 million in undrawn credit facilities.

• Operational Updates

  • Completed the six-well development drilling program at the Cohembe Field under budget, with the final two wells brought online during the quarter.
  • Average Ecuador production hit 7,990 barrels of oil per day, supported by strong performance from the Conejo discoveries and earlier-than-expected response to water injection at Chenangue, reinforcing management confidence in water flooding to improve project economics across the portfolio.
  • Received Ecuadorian government approval for three additional field development plans (Chirapa, Conejo, Perico), bringing total approvals to five of six discovered fields, and allowing transition from exploration to development, retaining 156,000 acres for 20 years with an additional 16,000 acres pending approval.
  • Post-Lodge Pole disposition, the Canadian portfolio is focused on the Dawson Clearwater Area and Mount Head, which hold 6.5 million barrels of 2C contingent resources (Dawson Clearwater) and 67 million barrels of combined unrisked best estimate prospective resources, operated at 100% working interest across 108,000 net acres, and targeted for 2027 drilling activity.

• Full year 2026 capital expenditures are still expected to remain within the company's previously stated guidance range.
  • Q2 2026 average production was within the company's existing annual guidance range.
  • Management will provide detailed 2027 financial and operational guidance, including post-transaction run rate guidance, closer to the closing of the Colombia and Ecuador sale transaction.
  • Field activities at Tiscarama are expected to initiate in H2 2026.
  • Dawson Clearwater and Mount Head in Canada are expected to be the focus of 2027 drilling activity, with two exploration wells planned in Azerbaijan in 2027.

Grand Tierra Energy does not break out financial performance for separate product segments in this call. Aggregate corporate results for Q2 2026 are as follows: net income of $25 million, compared to a net loss of $119 million in Q1 2026 and a net loss of $13 million in Q2 2025; adjusted EBITDA of $85 million, up from $74 million in Q1 2026 and $77 million in Q2 2025; funds flow from operations of $60 million ($1.70 per share), up 41% sequentially and 12% year-over-year; free cash flow of approximately $6 million, up from $2.7 million in Q2 2025; capital expenditures of $54 million, compared to $45 million in Q1 2026 and $51 million in Q2 2025; oil sales revenue of $187 million, up 25% year-over-year and 9% sequentially; average working interest production of 41,500 barrels of oil per day, down 9% sequentially and 12% year-over-year; total operating expenses of $52 million, down 22% sequentially and 7% year-over-year. At quarter end, the company held $127 million in cash, $606 million in total gross debt, and $479 million in net debt.

• The closed Colombia-Ecuador border required use of alternative transportation routes, which increased quality and transportation discounts for Colombian oil volumes, partially offsetting revenue gains from higher commodity prices.
  • The company had only one lifting during Q2 2026, which reduced reported sales volumes for the quarter.
  • Temporary unplanned artificial lift system failures at the Accordion Aero field in Cohembe reduced Q2 2026 production.
  • Prospective resources in Canada are undiscovered accumulations that require future drilling confirmation before development can proceed.
  • The pending sale of the Colombia and Ecuador businesses requires approval via a special stockholder meeting before closing can be completed.

Q: With the upcoming sale of Colombia and Ecuador assets, can you outline 2027 capital plans for Canada, including whether the budget will increase materially, if M&A is planned, and how large the water flood allocation will be? Also, what is the 2027 spending plan for Azerbaijan and what is the company's international go-forward strategy? / A: Management is excited about Canada's prospects, having consolidated land for a continuous development program at Dawson Clearwater. Mount Head, which targets light oil, is a new addition that will be tested with horizontal drilling. In Azerbaijan, the company will conduct gravity surveys in summer 2026 and plans to drill two wells in 2027 in a prolific oil and gas region, and is also progressing joint exploitation studies with the Azerbaijani government. The company will continue to evaluate international opportunities that fit its basin-focused criteria, prioritizing stable basins similar to Azerbaijan and Western Canada. (312 characters)

Q: Did the Lodge Pole disposition include production, reserves, or resources, and what was the volume impact? / A: The disposition removed approximately 850 barrels of oil per day of production from the company's base, but also eliminated $13 million in asset retirement obligations, resulting in a net benefit for Grand Tierra. (147 characters)

Q: How will the pending sale of Colombia and Ecuador assets impact the company's G&A run rate, and when will you provide post-transaction G&A guidance? / A: Management will provide updated guidance for 2027, including post-transaction financial projections, as the transaction gets closer to closing. (101 characters)