Colombia-focused oil firm Gran Tierra Energy Inc (NYSE:GTE) is rated 'buy' by broker Eight Capital after its second quarter results showed a 22% increase in output and a good financial performance.
The firm is currently producing 34,178 boepd (barrels of oil equivalent per day), and expects the fourth quarter average wi (working interest) production before royalties to be between 35,000 and 37,000 boepd.
Its second quarter working interest production was 31.4 million barrels of oil equivalent per day (MBoe/d) against the broker's expectations of 31.9 MBoe/d and consensus of 31.7 MBoe/d.
Analyst Ian Macqueen said that he was repeated a 'buy' rating and $6.50 a share price target, which is along chalk from where they are now at $2.24.
He reckons significant value can still be unlocked from the company's assets.
"Positive financial and Q2 operational results should be well received by the market," he said.
On June 30, this year, the firm completed the sale of its assets in Brazil, which produced around 1.4mln barrels a day, for $35 million, which resulted in cash consideration of approximately $38 million.
Thereafter management lowered its 2017 guidance from 34-38 MBoe/d to 33.3-34.3MBoe/d but Eight Capital has left its forecasts unchanged.