(Gran Tierra Energy Inc., 6.Apr.2016) – Gran Tierra Energy Inc. announced, through one of its wholly owned subsidiaries, recently transacted Colombian peso (COP) hedges with two banks, providing additional stability to forecasted cash outflows for approximately 110 billion COP or $36 million from June 2016 to May 2017. To complement the recently announced commodity hedges for forecasted production which cover the same period, Gran Tierra has hedged certain forecasted COP denominated costs, with multiple underlying contracts to provide downside protection from an appreciation in COP at foreign exchange rates below 3,000 COP per USD to December 31, 2016 and 3,100 COP per USD to May 31, 2017, but also allow upside participation in a depreciation of the COP at foreign exchange rates up to 3,265 COP per USD and ranging as high as 3,370 COP per USD.
Gran Tierra management believes that the added protection from fluctuations in these USD equivalent costs is prudent and the recent weakening of COP rates provides an opportunity to stabilize cash flows.
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