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Management attributed the 2025 net loss of $193 million primarily to $136 million in ceiling test impairment losses and lower Brent oil prices affecting EBITDA and funds flow.
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The company successfully executed a bond exchange for 88% of its 2029 notes, which management views as a pivot point from near-term refinancing to opportunistic debt reduction.
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Operational growth was driven by a 32% increase in production following exploration success in Ecuador and the full-year integration of Canadian assets.
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Management highlighted a structural reduction in operating expenses per barrel, achieved through the integration of i3 Energy and transitioning from diesel to gas-to-power in Ecuador.
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Strategic entry into Azerbaijan via a partnership with SOCAR is intended to provide a capital-efficient, scaled entry into a stable jurisdiction supplying European markets.
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The company maintained strong reserve replacement in South America, exceeding 100% on a 2P basis, despite reclassifying some Canadian gas reserves due to low pricing environments.
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The 2026 capital program is fixed across price scenarios, with any excess free cash flow prioritized for cash accumulation or discounted bond repurchases.
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Management is targeting a long-term net debt to EBITDA ratio of 1.0x by 2028, with current high oil prices potentially accelerating this timeline.
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The hedging strategy for 2026 covers approximately 50% of production with a $60 floor and $74 ceiling to balance downside protection with upside participation.
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Capital allocation for the new Azerbaijan entry will be detailed in 2027 guidance, following the expected ratification of the Production Sharing Contract.
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The Suroriente capital carry commitment in Colombia is on track for completion by mid-2026, supported by the outperformance of the Rahoo-2 well.
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The termination of the Colombia credit facility and amendment of the prepayment agreement provided $175 million in incremental capacity to support the debt exchange.
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Pipeline disruptions in southern Colombia and Ecuador impacted 2025 production, though management has now established alternative export routing directly through Colombia.
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The Simonette disposition in Canada is expected to close in early 2026, which will result in a minor downward revision to total production guidance.
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Canadian natural gas reserves were reclassified as contingent resources due to low price standards, though management retains 0.3 Tcf of unrisked 3C resources for future development.