Good afternoon ladies and gentlemen and welcome to the Gran Tierra Energy's Results conference call for the quarter ended June 30th 2015. My name is Roland and I'll be your coordinator for today. At this time all participants are in a listen only mode. Following the initial remarks we'll conduct a question and answer session for securities analysts and institutions. Instructions will be provided at that time for you to queue up for questions. [Operator Instructions], I would like to remind everyone that this conference call is being webcast and recorded today Wednesday August 5th 2015 at 5:00pm Eastern Time. Please be advised that in addition to historical information, certain comments made during this conference call, particularly those anticipating future financial performance, business prospects and overall operating strategies, constitute forward-looking information within the meaning of applicable Canadian securities laws and forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as anticipate, believe, estimate, expect, intend, predict and hope or similar expressions. Such statements, which include estimated or forward-looking production and financial information or results, are based on management's current expectation, a number of significant assumptions and are subject to a number of other factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. Listeners are urged to carefully review and consider the various disclosures made by Gran Tierra Energy in its reports filed with the Securities and Exchange Commission, including those assumptions and risks set forth in the Gran Tierra Energy's Quarterly Report on Form 10-Q for the quarter ended June 30th 2015, filed with the Securities and Exchange Commission, August 5th, 2015. If one or more of these risks or uncertainties materialize or…

Thank you. Good morning and welcome to Gran Tierra's second quarter 2015 results conference call. My name is Gary Guidry, Gran Tierra's President and Chief Executive Officer and with me today is Ryan Ellson our Chief Financial Officer. Earlier this morning we disseminated a press release that included detailed financial information about the second quarter 2015, in addition Gran Tierra Energy's 2015 report on Form 10Q for the three months ended June 30th 2015 has filed on EDGAR and is available at our website www.grantierra.com. I'm going to begin today by talking about some key developments over the quarter and over the year. Ryan will take a few minutes to discuss key aspects of this quarter's financial results and we will open the line for questions. First of all our new management team additions and directors were in place over May and June of this year. We have elected to continue with a field development plans of both Costayaco and Moqueta in Columbia and minimized investments in Peru and Brazil. We have focused our business development efforts on acquisition opportunities across all of the productive basins in Columbia, in Brazil we are in discussions with several prospective buyers and in Peru we have completed the process of suspending and securing the company's investments and assets in the country and we'll look to secure external financing maximizing the value to our shareholders. I will now turn over the call to Ryan Ellson our Chief Financial Officer.

Good afternoon everyone. As I start the call you know, we are shareholders at Gran Tierra commits great long term value for the company. The company remains in annual position with strong balance sheet, excellent liquidity including working capital of approximately $200 million, zero debt and undrawn current facility. As a [indiscernible] we believe the longer the period of lower commodity prices the more opportunities we will have to become a better, stronger company in the future. We continue to aggressively and systematically review acquisition opportunities, however we have a long term view and any acquisition must offer compelling value and have a strategic fit. We'll continue to focus on our cost structure and capital efficiencies to ensure that we can thrive in all commodity cycles. In the morning’s release we provided several sensitivities and I’ll just quickly highlight them for anyone who didn't have a chance to look at them. For the remainder of the year from July 1st to the end of December Brent work averaged $50 our funds flowed be $110 to $115 and $60 for 2016 our funds flow is $150 million to $170 million that’s compared to enterprise value of approximately $400 million. Brent priced beyond $63 for July to August fund flow to 130 to 140 but for 2016 Brent price of $66.70, our funds flow will be 180 to 195 and more of a high case we’re just surprised to say the high case is $72 for 2016 that would result a fund flow of 195 million to 210 million. You will notice that’s not linear on the pricing and that really is because of the HPR in the [cutting] cost fiasco so higher the oil price the more the government takes away. So it’s not linear in nature. With respect to production,…

Before we open up the line for questions I think we are on schedule to resume our development drilling at both Costayaco and Moqueta during the third quarter. We are also on schedule to deliver the financials that we forecasted as well as our production targets for the year. I will now turn the call back over to the operator and both Ryan and myself will be happy to take any questions.

Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session for securities analyst. [Operator Instructions] Our first question comes from the line Nathan Piper with RBC Capital Markets. Your line is now open. Your question, please.

Hi guys, a few quick ones from me if I may, first of all on the excess production guidance that you set out in the results of 25,000 to 26,000 a day, from my point of view, it seems that you've got greater confidence in this asset base that you're looking to investing in it, but is that exit rate something that we can take into the full year for 2016 or is there indeed more potential to come from this asset -- these asset bases over the next 18 months?

Nathan, I think it's fair to say that that exit rate, we would carry into 2016, we anticipate flat production to slightly growing and we feel very confident in maintaining that both the growing program will extend them to 2016 and production would remain flat.

I guess 25 to 26 is just 10% year-on-year increase, is that what -- I mean I just know that's a huge increase but, you do think production will be up year-on-year?

We do.

I wanted to get a bit more color on the Jilguero field, not something that something I've been looking at very hard following the Unitization agreement, and so what's the potential of that field and how can you put it in a bit of context please?

We do see the potential and the contracts as being attractive, we have rights under the Unitization contract to alleged after drilling and we have just seen a well gross it looks good to us but we are going to exercise our rights to see where production stabilizes and make our election. So, yes we wish we have more of those, it is attractive and it is one of the things that attracts us back to the Llanos basin.

And then just a last one, you touched on the acquisition outlook, against to the offers where it isn't and everything else, it would seem that doing something in a short term is a little unlikely because the longer you leave it the more tamed other people will be in, so I'll asked you a couple of times, what's your own level of patience, how long do you think you could lead it before you start to build out the Gran Tierra portfolio?

Are you talking about acquisition state, and that's the question?

I guess the point is how do you balance patience and waiting for the right time whereas trying to change this asset base, so I guess the asset base has expanded solid, but not really offering much growth or things like that so, I guess how do you assess how soon you need to make some acquisition and obviously the long you leave it better but I just wanted to think of -- what is your thought process or in acquisition does?

I understand the question and I can answer most of them if you look at the Gran Tierra growth portfolio that the one thing that we are very focused on is the [indiscernible] sands play in the Putumayo, it's exciting there's no question to us that the perspective resource will be material and it will be exciting, we're still going through our internal classification of what that was like but I will say that it is exciting to us, the downside of that is it's going to take us 18 to 24 months to be drill ready and drill up that portfolio and the gap between now and then is something that we've said very publicly we're looking to diversify our growth portfolio, not only through product streams looking at value versus products whether its heavy oil, light oil or natural gas but also geography looking at the different basins and I can tell you we're not sitting waiting for anything in particular we are working through potential acquisitions whether they're public, private, corporate -- we're in discussions on assets that we believe may be attractive and may come available so we're taking a very proactive approach to acquisitions to put our balance sheet to work in Columbia and I can say that there are more and more things that are starting to come available as the volatility and the market but the answer to your question is what drives us and what drives our company, it's very clear that our guidelines are creating NAV per share and that's what we do control and controlling the timeframe that which we create that NAV and that is the sustainability of cash flow, so we are not looking at five to 10 year type projects to create value or to create cash flow, we're looking at near term opportunities and we're doing that on a very proactive basis.

And I think Nathan, the reality is that we're never going to buy at the 52 week low and sell at the 52 week high, so we're looking at the acquisitions, like I said at that compelling value and a strategic fit, so if it meets those criteria now, we will transact on that.

If I can ask -- one final and slightly more specific question then and the move or do you see a move by senate to increase the tariffs across a number of their pipelines in Columbia, I wonder if you got a sense of what that could mean for the OTA and some of the infrastructure that you're particularly, I'll take a critical view.

Yes, and there was word on the street that that was in the works, an increase in the outer pipeline and I can tell you what is public knowledge because we attended a public meeting with the highest level of government in Columbia and the response was increases in tariffs, need to take into account what operating capital and costs are but they need to be realistic, they need to be reasonable and what the President, President Santos the direction he gave to the ministry of mines to senate and to us as an industry that are producing enough [pickings] specifically about the [indiscernible] and the Putumayo is let's freeze, let's freeze tariffs where they're at for the next few months and you go away as an industry and as a shipping entity and come back with something reasonable and so there is a an undertone of wanting to increase tariffs to account for operating costs but within reason and I can tell you that our team in Columbia are participating in that panel group and working with senate and there's active participation by the ministry of mines.

That's clear, thank you very much.

Thank you, our next question comes from the line of Jessica Lindskog with Dundee Capital Markets, your line is now open, your question please.

Hi there, I was just hoping to get a little bit more color around your [indiscernible] sales. Was it deliberate, deliberate act to build up your inventories to keep OpEx flat or was it simply the outcome due to delivery restriction. And also if you could comment on whereabouts the 320,000 barrels of inventory was kept at Reto or at local storage at Costayaco. And if you could also please remind me of your total storage capacity. Thanks.

Thanks Jessica. The inventory wasn't deliberate. It was really just the accounting [indiscernible] of it of when the, you know the risks and rewards of ownership transfer, later before where both of the OTA as soon as they hit the endpoint with storage on the other side of the OTA that's delivery point so we're reliant on a lifting for those barrels to get lifted, whereas when it goes through the OTP as well as when we truck the whole coal and then it's shipped to Convenus. Then delivery or the sales actually doesn't happen till the lifting occurs, so that really is out of our control. You know the pipeline went down June 7th and normally for whole coal for instance if we give them two months advance notice to nominate barrels then we would, as soon as we shipped they would have the appropriate lifting schedule and we'd sell those barrels. The problem is when we're at short notice going down June 7th, it was only 23 days between June 7th and the end of the quarter then it really is out of our control, so it really is a timing difference of two weeks.

Okay and so what about total storage capacity?

We were five days. Our storage capacity at the field is five days.

Thank you, our next question comes from the line of Jamie Summerville with TD Securities, your line is now open, your question please.

Hi guys and thank you for the 2016 cash flow guidance, very principal actually. I was wondering, I think you already alluded to it, that's based on assuming the 2015 exit production guidance remains roughly flat or grows very slightly through 2016 is that the production assumption underlies that cash flow guidance.

Correct.

Any indication of what kind of capital would be required to keep production flat, you said the drilling will continue into 2016 presumably there's not a lot required beyond finishing that drilling program about to start.

Yes Jamie the amount is $50 million to $70 million.

Maintenance capital to key production, roughly.

Yes, and there'll be a few more wells drilled in the first part of Q1, but really it's $50 million to $70 million so if you run the numbers we'll be generating a fair amount of free cash flow next year.

Sure, that's very useful to know as well. Coming back to your budget for this year. You indicated that you committed to the additional spending once you'd achieved a service cost reduction. Can you quantify that and is that mainly on the operating cost side, what are wells costing to drill in the Costayaca and Moqueta fields currently.

I'll start with the discount and on average it's about 15%. It's not as substantial as you might get in other basins where you have more choices on services but we are seeing capital reductions in those costs and it's about $6 million to drill. What was the rest of your question, Jamie? Sorry.

I think you’ve answered it actually. Thank you.

Thank you. Our next question comes from the line of Louis with HSBC. Your line is now open. Your question please.

Good afternoon everyone. Gary, Ryan just two questions from me, the first one we saw some impairments in Brazil around $25 million in Peru if I am not wrong about $5 million [indiscernible] there are some plans that you’re pursing in terms of let`s say reducing [indiscernible] two countries focused in Columbia, are we going to see some further impairments in the future, any additional cost on this front? And second you’re planning actually to get out of Santana Block, is there any cost to be booked in the third quarter this year that we might expect in the next results. Thank you.

I will answer the question on Santana that has been officially handed back to [Ecopetrol] it is an Ecopetrol operated field now. We’ve gone through all of the requirements to turn that field back over. I will say that we are continuing discussions with Ecopetrol because we would like to see the infrastructure maintained specifically the pipeline that we find very useful but to follow the process we needed to as per the contract expiring hand back over the employees and the CO operation it was a net change of about 150 barrels on a gross basis so it’s immaterial to our ongoing operation, that was a planned handover. But we are in continuing discussions on the infrastructure side.

Yes, and in respect to the fueling test rate I think that was in the context of Brazil and Peru.

[Indiscernible]

Depending on -- as you know there are a lot of factors that go into the ceiling test calculation with one of the middle drivers being priced? So then what priced us in the next quarter and so is not up to a good start than there could be further impairments in Brazil.

Thank you. Our next question comes from the line of Pedro Medeiros with Citigroup. Your line is open. Your question, please.

I have three very objective questions actually. The first one is a follow up to previous questions on inventory buildup in the second quarter, what I’m trying to understand that since the sales will be bought by the beginning of the third quarter and the fact that in a very first week of the third quarter oil prices were down almost 9%. Is there a point where you would collect a lower realization price on that or was that already fully contracted in media and accounting issue for your sales?

I will answer that question. We will if the five day prior average due to sales price we will see the lower average sales price on that.

Okay. Thanks. The second question also related to Brazil you mentioned in the beginning of the call that you’re talking to multiple players you have seen a significant interest on your Brazilian acreage I’m just trying to measure the level of attractiveness and the if the understanding is that your base case should divest from Brazil by the second half of this year and when I look at your presentation you’re showing the NAV of Brazil at $99 as of December, 2014. Should I basically deduct from that the impairment charge that you just posted as a basis for the year-over-year?

I will say is that really is the NPV of the asset before taxes discount at 10% which isn't necessarily a fair market at where you can sell those assets in the open market for. So I won't use view as a [indiscernible] for what we would sell it for.

And second part of your question, we do have -- we have lots of interest in the assets in Brazil. We have I will say a couple that are in what we believe is an acceptable transaction range we are going through the process with those parties to see if they are real and if we can get close we believe we're encouraged that that may occur. If it does not occur we will shift Brazil into a harvest mode and try to get that NPV up as quickly as we can and put it on the balance sheet. So our guidance would be it will happen in the second half of or not.

Okay, perfect. Fair enough. Very good, thank you. And just one last question about the strategy and how you’re guys thinking about acquisitions. But in the beginning of the call you also mentioned that if you stop trading at three times operating cash flow and when you approached the discussion about M&A, talking about the strategy that the company is going to focus on near-term cash flow as an M&A opportunity, is it fair that, are you guys comparing potential deal acquisitions valuation with devaluation of your shares and as a result should we expect those acquisitions should be accretive to the multiple?

The guidance that we'll give you when we say near term cash flow that's line of sight within three years, four years, five years not 10 years, and so that part is relative. Our real focus on creating value is on a mass per share neutral basis that we can diversify our portfolio with growth opportunities and create -- our targets we've said publicly, our target's is -- is we believe we can create a three times or greater return on equity in diversifying within the basins of Columbia and that's really our target of accretion is NAV per share basis. And based on our balance sheet we have ample liquidity to do both buyback as well so be active in the M&A market.

Thank you, gentlemen, there are no further questions at this time. Please continue.