San Angel Exploration Well Encounters Gas Shows, Testing Initiated;
Canangucho-1 Exploration Well Plugged and Abandoned and Moqueta-5
Delineation Well Expected to Spud This Week
CALGARY, April 6 /CNW/ - Gran Tierra Energy Inc. (NYSE AMEX: GTE; TSX: GTE) ("Gran Tierra Energy"), a company focused on oil and gas exploration and production in South
America, today announced a drilling and operations update in the
Putumayo and Lower Magdalena Basins of Colombia, an acreage update in
Argentina, and a general Corporate update.
Magdalena Block, Lower Magdalena Basin (100% working interest and
Drilling and logging of the San Angel-1 natural gas exploration well in
the Magdalena Block of the Lower Magdalena Basin has been completed.
Gas shows were encountered over two intervals totaling 415 feet
(gross). Wireline logs and repeat formation tester data was not
conclusive in quantifying reservoir quality or gas saturation. Testing
operations have been initiated and are expected to be completed in late
Chaza Block, Putumayo Basin (100% working interest and Operator)
The Canangucho-1 exploration well reached total true vertical depth of
9,667 feet on March 23, 2011. After the evaluation of wireline logs,
it was determined that the T Sandstone and Caballos formations were
water bearing. The Canangucho well was plugged and abandoned.
The Moqueta-5 delineation well is expected to start drilling this week
from the same well pad as the Moqueta-4 delineation well. New 3D
seismic acquisition is expected to start in June 2011 and will assist
in the site location for the Moqueta-6 delineation well expected to
start drilling in the fourth quarter, 2011. The Moqueta to Costayaco
flow line is currently under construction with the first long-term
production test anticipated to start in May.
Development of the Costayaco field continues with the drilling of
Costayaco-12 and -13. Costayaco-12 was completed and placed on
production at approximately 600 barrels of oil per day. Completion and
testing operations are currently ongoing at Costayaco-13. Both wells
are expected to be converted to water injectors once the oil reserves
are depleted around their respective drainage areas.
Guayuyaco Block, Putumayo Basin (70% Working Interest and Operator)
The Juanambu-3 development well began drilling on March 3, 2011.
Drilling operations are expected to be completed in April, 2011.
Rumiyaco Block, Putumayo Basin (100% Working Interest and Operator)
Environmental permitting has been approved for the Rumiyaco-1
exploration well in the Rumiyaco Block of the Putumayo basin. Civil
construction work is expected to start in April, 2011 and the well is
expected to begin drilling in July, 2011.
Gran Tierra Energy is pleased to announce it has successfully farmed out
a 50% interest in its Santa Victoria block (2,091.5 km2 or 516, 815.3 acres) in the Noroeste Basin of northwestern Argentina to
Apache Corporation ("Apache"). Both Gran Tierra Energy and Apache have agreed to proceed into the
second exploration phase, which has a work commitment that will be
fulfilled with an exploration well. Gran Tierra Energy, as operator,
is interested in testing the gas potential of the Permo-Carboniferous
reservoirs, a proven play in nearby wells.
Subsequent to closing the acquisition of Petrolifera Petroleum Ltd. ("Petrolifera") on March 18, 2011, company average production has been approximately
18,000 barrels of oil equivalent per day ("BOEPD"), net after royalty ("NAR"), weighted 95% to light oil. Oil production in Colombia has averaged
approximately 15,000 barrels of oil per day ("BOPD") NAR, while oil production in Argentina has averaged approximately
2,300 BOPD NAR and gas production has averaged approximately 4 million
standard cubic feet per day, or approximately 700 BOEPD.
In connection with the acquisition of Petrolifera, Gran Tierra Energy
initially assigned no value to investments that Petrolifera held in
Asset Backed Commercial Paper ("ABCP") given concerns over the liquidity of the investment. Gran Tierra
Energy subsequently sold the ABCP and received a net amount of US$22.7
million including accrued interest.
Gran Tierra Energy received an average realized oil price of US$78.13
per barrel during the fourth quarter of 2010 in Colombia, reflecting a
discount to West Texas Intermediate ("WTI"). In the first quarter of
2011, Gran Tierra Energy received an average realized oil price of
US$95.50, reflecting a premium in the Colombia South Blend oil price
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. is an international oil and gas exploration and
production company, headquartered in Calgary, Canada, incorporated in
the United States, trading on the NYSE Amex (GTE) and the Toronto Stock
Exchange (GTE), and operating in South America. Gran Tierra Energy
holds interests in producing and prospective properties in Argentina,
Colombia, Peru and, subject to regulatory approval, Brazil. Gran Tierra
Energy has a strategy that focuses on establishing a portfolio of
producing properties, plus production enhancement and exploration
opportunities to provide a base for future growth.
Gran Tierra Energy's Securities and Exchange Commission filings are
available on a web site maintained by the Securities and Exchange
Commission at http://www.sec.gov and on SEDAR at http://www.sedar.com.
Advisories and Forward Looking Statements:
This news release contains certain forward-looking information and
forward-looking statements (collectively, "forward-looking statements")
under the meaning of applicable securities laws, including Canadian
Securities Administrators' National Instrument 51-102 - Continuous Disclosure Obligations and the United States Private Securities Litigation Reform Act of 1995.
The use of words such as "expect", "potential" and "will" identify
these forward-looking statements. In particular, but without limiting
the foregoing, this news release contains forward-looking statements
regarding the expected timing of commencement of 3D seismic acquisition
and its expected application, the expected conversion of Costayaco-12
and -13, and the expected timing of drilling operations of Moqueta-5
and -6 and construction of the flowline from Moqueta to Costayaco,
expected timing of long-term production tests, Juanambu-3 and
Rumiyaco-1 (including civil construction work), the Argentina work
program and expectations of realized oil prices.
The forward-looking statements contained in this news release reflect
several material factors and expectations and assumptions of Gran
Tierra Energy including, without limitation, assumptions relating to
log evaluations, the accuracy of certain testing results and seismic
data, that Gran Tierra Energy will continue to conduct its operations
in a manner consistent with past operations and the general continuance
of current or, where applicable, assumed operational and industry
conditions. Gran Tierra Energy believes the material factors,
expectations and assumptions reflected in the forward-looking
statements are reasonable at this time but no assurance can be given
that these factors, expectations and assumptions will prove to be
The forward-looking statements contained in this news release are
subject to risks, uncertainties and other factors that could cause
actual results or outcomes to differ materially from those contemplated
by the forward-looking statements, including, among others: Gran Tierra
Energy's operations are located in South America, and unexpected
problems can arise due to guerilla activity, technical difficulties and
operational difficulties which impact or delay its testing and drilling
operations; geographic, political and weather conditions can impede
testing and drilling operations; and the risk that current global
economic and credit market conditions may impact oil prices and oil
consumption more than Gran Tierra Energy currently predicts, which
could cause Gran Tierra Energy to modify its exploration, drilling
and/or construction activities. Further information on potential
factors that could affect Gran Tierra Energy are included in risks
detailed from time to time in Gran Tierra Energy's Securities and
Exchange Commission filings, including, without limitation, under the
caption "Risk Factors" in Gran Tierra Energy's Annual Report on Form
10-K filed February 25, 2011. These filings are available on a Web site
maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at www.sedar.com. The forward-looking statements contained herein are expressly
qualified in their entirety by this cautionary statement. The
forward-looking statements included in this press release are made as
of the date of this press release and Gran Tierra Energy disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as expressly required by applicable securities
legislation. A BOE conversion ratio of 6 thousand cubic feet to 1
barrel of oil is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
SOURCE Gran Tierra Energy Inc.
For further information:
For investor and media inquiries please contact:
Director, Investor Relations