S&P turns Gran Tierra view to stable

S&P said it revised its outlook for Gran Tierra Energy Inc. to stable from positive and affirmed the B ratings on the company and its 9½% senior secured amortizing notes due 2029. At the same time, the agency affirmed the B- issue-level rating on its senior unsecured notes due 2025 and 2027.

“EBITDA did not increase as we expected ($400 million in 2023 versus our forecast of $507 million) due to higher operating costs stemming from the El Nino climate pattern that lifted energy expenses, and lower-than-expected reference prices. As a result, the company reported higher-than-expected adjusted debt to EBITDA above 2x as of Sept. 30, 2023,” S&P said in a press release.

“We believe that the company will continue to face higher-than-expected operating costs during 2024, because Colombia generates a large amount of energy from hydropower, while the drought effect from El Nino will likely pressure energy generation, pushing up prices. We expect that as Colombia expands the use of cleaner energy sources, prices will be less volatile in the long term,” the agency added.

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