S&P cuts Gran Tierra Energy

S&P said it downgraded Gran Tierra Energy Inc. to B from B+ citing the agency’s revision of its oil and gas price assumptions.

“The fall in oil prices will compromise GTE’s credit metrics. Our latest revision to our crude oil and gas price assumptions reflects the price war between Saudi Arabia and Russia as well as a likely massive drop in demand due to Covid-19,” said the agency in a press release.

“In the event of an economic downturn, oil and gas companies tend to contract production activities, which leads to a decrease in EBITDA generation. We expect GTE to reduce production 19.0% for 2020, a trend that could taint production for 2021,” said S&P.

The outlook is negative.

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