Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view Gran Tierra Energy's (GTE) ESG as "Adequate", in line with the scores for the Social and Governance pillars. However, the company's Environmental score is "Weak", mostly due to a lack of target disclosure. Moreover, this pillar has the greatest bearing for GTE's industry. Controversies are "Immaterial" and Disclosure is "Weak".

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).  We view Gran Tierra Energy's (GTE) ESG as "Adequate", in line with the scores for the Social and Governance pillars. However, the company's Environmental score is "Weak", mostly due to a lack of target disclosure. Moreover, this pillar has the greatest bearing for GTE's industry. Controversies are "Immaterial" and Disclosure is "Weak". 

Gran Tierra Energy - ESG Report - Lucror Analytics

Global Cross-Asset Energy Analyst, VAC Investments

Aaditya Chintalapati, CFA

Global Cross-Asset Energy Analyst

VAC Investments

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/25655" target="_blank" data-smartkarma-citation="entities:25655:1">Frontera Energy (FEC CN)</a>'s Acorazado exploration well (Llanos 25, Colombia) discovered significant oil &amp; gas pay, albeit achieving lower than expected flow rates and uncertain commerciality. A successful well was expected to help address investor concern around Frontera's resource upside and production growth potential. However, given the mixed results at the well, we believe management will now need to focus on building a robust hopper of exploration prospects for 2019, via licensing rounds and acquisitions. Crucially, with the company generating c.US$300m of FCF per year, we believe Frontera is well placed for accretive resource acquisitions in the region. We see c.50% upside to our C$27/share price target, which is based on our Base Case NAV.

Frontera Energy (FEC CN)'s Acorazado exploration well (Llanos 25, Colombia) discovered significant oil &amp; gas pay, albeit achieving lower than expected flow rates and uncertain commerciality. A successful well was expected to help address investor concern around Frontera's resource upside and production growth potential. However, given the mixed results at the well, we believe management will now need to focus on building a robust hopper of exploration prospects for 2019, via licensing rounds and acquisitions. Crucially, with the company generating c.US$300m of FCF per year, we believe Frontera is well placed for accretive resource acquisitions in the region. We see c.50% upside to our C$27/share price target, which is based on our Base Case NAV.

Frontera Energy (FEC CN): Mixed Results at Acorazado Reiterate Investor Concerns

Thematic (Sector/Industry)

<h2>Oil Price</h2>
Crude oil prices fell for the sixth straight week, with WTI ending the week at USD 68.5/bbl and Brent at USD 73/bbl. Expectations of rising global demand for crude in the medium-term and potential supply disruptions from Iranian sanctions were overshadowed by market concerns around the risks of global trade disruptions from the US and China's ongoing dispute, likely downside risks to European crude demand from Turkey's crude imports given ongoing currency weakness and increased supply…

Oil Price
Crude oil prices fell for the sixth straight week, with WTI ending the week at USD 68.5/bbl and Brent at USD 73/bbl. Expectations of rising global demand for crude in the medium-term and potential supply disruptions from Iranian sanctions were overshadowed by market concerns around the risks of global trade disruptions from the US and China's ongoing dispute, likely downside risks to European crude demand from Turkey's crude imports given ongoing currency weakness and increased supply…

Gran Tierra Energy Inc / Equity Bottom-Up

Gran Tierra Energy (GTE US)'s 2Q results once again highlight - (i) its strong operational performance from core on-shore Colombian assets; (ii) management's continued focus on lowering transportation costs and maintaining production growth whilst remaining cashflow neutral; and (iii) significant oil price leverage to revenue and cash flows.We like Gran Tierra's high-quality core assets, line-of-sight for 50 Kbo/day production from existing 2P reserves, and a well-regarded management team. With on-track production and cash flow growth underpinned by a robust balance sheet and multiple catalysts, GTE is well placed for near-term share price re-rating, we think.

Gran Tierra Energy (GTE US)'s 2Q results once again highlight - (i) its strong operational performance from core on-shore Colombian assets; (ii) management's continued focus on lowering transportation costs and maintaining production growth whilst remaining cashflow neutral; and (iii) significant oil price leverage to revenue and cash flows.We like Gran Tierra's high-quality core assets, line-of-sight for 50 Kbo/day production from existing 2P reserves, and a well-regarded management team. With on-track production and cash flow growth underpinned by a robust balance sheet and multiple catalysts, GTE is well placed for near-term share price re-rating, we think. 

Gran Tierra Energy (GTE US): Oil Price Leverage & Operational Delivery; BUY

Canada

Gran Tierra Energy, Inc. is an international oil and gas exploration and production company. The Company operates in South America.

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Gran Tierra Energy Inc (GTE US)

Gran Tierra Energy - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view Gran Tierra Energy's (GTE)...

Lucror Analytics

Frontera Energy (FEC CN): Mixed Results at Acorazado Reiterate Investor Concerns

Frontera Energy (FEC CN)'s Acorazado exploration well (Llanos 25, Colombia) discovered significant oil & gas pay, albeit achieving lower than...

Aaditya Chintalapati, CFA

Global E&Ps: Energy Weekly Vol. 21

Oil Price Crude oil prices fell for the sixth straight week, with WTI ending the week at USD 68.5/bbl and Brent at USD 73/bbl. Expectations of...

Aaditya Chintalapati, CFA

Gran Tierra Energy (GTE US): Oil Price Leverage & Operational Delivery; BUY

Gran Tierra Energy (GTE US)'s 2Q results once again highlight - (i) its strong operational performance from core on-shore Colombian assets; (ii)...

Aaditya Chintalapati, CFA

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