Gran Tierra Energy Announces Conceptual Development Plan for Costayaco Field, Colombia



    
    Base Case of 35,000 BOPD Under Revision Due to New Oil Reserves
Encountered
    by Costayaco-5

    
    CALGARY, Alberta, Sept. 23 /CNW/ -- Gran Tierra Energy Inc. (Amex:   GTE;
TSX: GTE), a company focused on oil exploration and production in South
America, today provided details on it's conceptual development plan for the
Costayaco field in Colombia.  Test results from the recently drilled
Costayaco-5 delineation well suggest new oil reserves encountered by the well
will require increasing the scale of the full field development, in addition
to the reservoir productivity confirmed by the recently tested development
well, Costayaco-4.
    The Costayaco field is located in the Chaza Block in the Putumayo Basin,
where Gran Tierra Energy has a 50% working interest and is the operator, with
Solana Resources holding the remaining 50% working interest. Gran Tierra
Energy announced on July 29, 2008 that the two companies have entered into a
definitive agreement providing for the business combination of Gran Tierra
Energy Inc. and Solana Resources Limited. The proposed transaction is subject
to regulatory, stock exchange, court and shareholder approvals.
    
    Costayaco-4 Testing
    
    Costayaco-4 is a new deviated well drilled from the Costayaco-2 surface
location near the crest of the Costayaco field to a total measured depth of
8,884 feet (true vertical depth of 8,616 feet).  The bottom-hole location is
approximately 1,775 feet northeast of the surface location.  Approximately 77
feet of core was cut in the Caballos and Villeta T reservoirs during drilling
for reservoir engineering studies.
    Gran Tierra Energy conducted a combination of drill stem testing, flow
testing and production testing in the two major reservoir sequences, the
Caballos Formation and the Villeta T Sandstone.  The Caballos Formation was
perforated in the intervals 8,610 to 8,652 feet, 8,660 to 8,668 feet, 8,675 to
8,686 feet and 8,694 to 8,728 feet.  The company obtained a stabilized gross
production rate of 3,042 barrels of oil per day (BOPD) of 29.9 degree API
gravity oil with 0.8% watercut with a jet pump.  The Villeta T Sandstone was
perforated in the intervals 8,463 to 8,472 feet and 8,475 to 8,514 feet.  The
company obtained a stabilized gross production rate from natural flow of 1,401
BOPD of 30.1 degree API gravity oil with 1.8% watercut through a 92/64 inch
choke.
    
    Costayaco-5 Testing
    
    Costayaco-5 is a new vertical delineation well drilled to a total
measured depth of 8,703 feet on the west flank of the Costayaco field
approximately 3,450 feet northwest of Costayaco-1.  Gran Tierra Energy
conducted a combination of drill stem testing and production testing on the
two major reservoir sequences, the Caballos Formation and the Villeta T
Sandstone.  The Middle Caballos Formation was perforated in the intervals
8,519 to 8,544 feet and produced 535 barrels of water per day (BWPD).  The
Upper Caballos Formation was perforated in the intervals 8,480 to 8,498 feet
and 8,502 to 8,504 feet, and produced 20 BOPD with 26.9 degree API gravity and
5% watercut.
    The Lower Villeta T reservoir was perforated in the intervals 8,376 to
8,381 feet, 8,384 to 8,388 feet and 8,390 to 8,396 feet.  The zones produced
600 BWPD with a trace of oil.  The Upper Villeta T reservoir was perforated in
the intervals 8,336 to 8,348 feet and 8,350 to 8,360 feet.  These zones
produced a gross 1,152 BOPD with 29.5 degree API gravity and 1.2% water cut
with a jet pump.  These results are the first identification of the water leg
in the Villeta T reservoirs in the Costayaco Field.  The depth of the oil-
water contact is poorly defined but is interpreted to be located at
approximately 8,375 feet (-7,090 feet sub-sea).
    The recently reported Costayaco mid-year reserve update did not
incorporate potential oil at the Costayaco-5 location as this well was drilled
outside the control provided by previously drilled Costayaco wells.  In
addition, the reservoirs were encountered approximately 80 feet shallower than
prognosis, suggesting the west flank of the Costayaco field is shallower and
encompasses a broader area with more reserve potential than previously mapped.
    
    Costayaco Field Conceptual Development Plan
    
    The positive well test results at Costayaco-5 further extends the field's
western boundary and is expected to add proved, probable, and possible
reserves to the Costayaco Field.  The recent mid-year Costayaco reserves
update reported proved, proved plus probable, and proved plus probable plus
possible gross reserves of 20.54 million barrels of oil (MMBO), 34.91 MMBO and
61.38 MMBO respectively, excluding any new reserve potential associated with
Costayaco-5 results.
    The base case conceptual field development prepared prior to drilling of
Costayaco-5 included 50 MMBO of gross reserves for the Costayaco Field with a
plateau production rate of 35,000 BOPD gross beginning in the first quarter of
2010.  For full field development of this case, approximately fifteen oil
producer and five water injector wells would be required, in addition to a new
pipeline from Uchupayaco to Orito stations and associated facilities. With the
new additional reserve potential, the option to increase the plateau rate with
additional drilling and infrastructure upgrades is being evaluated.
    Gran Tierra Energy is in the process of updating the Costayaco
Development Plan with the latest data from the Costayaco-5 delineation well. 
The company will submit a revised Costayaco Development Plan, with all data
available at the time, to the National Hydrocarbon Agency for approval in
March 2009.
    
    Additional Drilling
    
    The drilling of Costayaco-6 and Costayaco-7 remain on the 2008 drilling
program, with a continuous delineation and development drilling campaign in
the Costayaco field continuing through 2009.  The details of the 2009 program
will be finalized in the fourth quarter of 2008.
    
    Infrastructure
    
    An 8 inch, 10 kilometer pipeline from the Costayaco field to the
Uchupayaco Station on the existing pipeline system was completed on July 29,
2008 and is currently transporting approximately 9,000 barrels of oil per day.
This new pipeline has capacity of 25,000 BOPD.  Initial throughput will be
constrained due to facility capacity limitations further downstream in the
existing pipeline system.  Gran Tierra Energy is developing options to
increase production utilizing trucks to by-pass infrastructure constraints and
expects gross Costayaco field production to rise to approximately 15,000 BOPD
by year-end 2008.  Additional production growth in 2009 will occur as a result
of increased trucking utilization. In addition, production capacity in new
development wells will grow while the new Uchupayaco to Orito pipeline
infrastructure is built.
    Commenting on the drilling and testing progress, Dana Coffield, President
and Chief Executive Officer of Gran Tierra Energy Inc., stated, "These are
outstanding results from Costayaco-5.  The successful testing of oil from this
well should add to the total reserve potential of the Costayaco field, which
has already grown significantly in size as delineation drilling has shown in
the first half of 2008.  With new reservoir information and additional reserve
additions being identified, Gran Tierra Energy is making significant progress
in developing a full field development plan and defining associated
infrastructure requirements."
    
    About Gran Tierra Energy Inc.:
    
    Gran Tierra Energy Inc. is an international oil and gas exploration and
production company operating in South America, headquartered in Calgary,
Canada, incorporated in the United States, and trading on the American Stock
Exchange (GTE) and the Toronto Stock Exchange (GTE). The company holds
interests in producing and prospective properties in Argentina, Colombia and
Peru. The company has a strategy that focuses on growing a portfolio of
producing properties, plus production enhancement and exploration
opportunities to provide a base for future growth. Additional information
concerning Gran Tierra Energy is available at http://www.grantierra.com.
Investor inquiries may be directed to info@grantierra.com or 1-800-916-GTRE
(4873).
    
    Cautionary Statement:
    
    Possible reserves are those additional reserves that are less certain to
be recovered than probable reserves.  There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of proved plus
probable plus possible reserves. The estimate of reserves for individual
properties may not reflect the same confidence level as estimates of reserves
for all properties, due to the effects of aggregation.
    
    Forward Looking Statements:
    
    The statements in this news release regarding Gran Tierra Energy's plans
and expectations for reserves, production, drilling, testing, infrastructure
and submission of a revised Costayaco Development Plan to the National
Hydrocarbon Agency, including the timing of commencement and completion of
these events, are forward looking information, forward looking statements or
financial outlooks (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.  These
forward-looking statements 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.  Although, Gran Tierra
Energy believes that the assumptions underlying, and expectations reflected
in, these forward-looking statements are reasonable, it can give no assurance
that these assumptions and expectations will prove to be correct. Important
factors that could cause the results or outcomes discussed herein to differ
materially from those indicated by these forward-looking statements include,
among other things:  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 the production,
transportation or sale of oil and gas; and unexpected problems due to
technical difficulties, operational difficulties, and weather conditions.
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 "Item 1A - Risk Factors" in Part II of Gran Tierra Energy's
Quarterly Report on Form 10-Q for the period ended June 30, 2008, filed with
the Securities and Exchange Commission on August 11, 2008.  These filings are
available on a Web site maintained by the Securities and Exchange Commission
at http://www.sec.gov. The forward-looking statements contained herein are
made as at the date of this press release. Subject to its obligations under
applicable law, Gran Tierra Energy does not undertake an obligation to update
forward-looking or other statements in this release. Gran Tierra Energy's
forward-looking statements are expressly qualified in their entirety by this
cautionary statement.
    
    Additional Information
    
    Shareholders are urged to read the joint proxy statement/management
information circular regarding the proposed transaction and the registration
statement filed on Form S-3 by Gran Tierra when they become available, because
they will contain important information. Shareholders will be able to obtain a
free copy of the joint proxy statement/management information circular, as
well as other filings including the registration statement on Form S-3
containing information about Gran Tierra, without charge, at the Securities
and Exchange Commission's internet site http://www.sec.gov. Copies of the
joint proxy statement and the filings with the Securities and Exchange
Commission that will be incorporated by reference in the joint proxy statement
and registration statement on Form S-3 can also be obtained, without charge,
by directing a request to Gran Tierra at 1-800-916-4873.
    The respective directors and executive officers of Gran Tierra and Solana
and other persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information regarding Gran
Tierra's directors and executive officers is available in the 2007 Annual
Report on Form 10-K/A filed with the Securities and Exchange Commission by
Gran Tierra on May 12, 2008, and information regarding Solana's directors and
executive officers will be included in the joint proxy statement/management
information circular. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, will be contained in the joint proxy
statement and other relevant materials to be filed with the Securities and
Exchange Commission when they become available.
    No regulatory authority has approved or disapproved the content of this
release. Neither the TSX Venture Exchange nor the Toronto Stock Exchange
accepts responsibility for the adequacy or accuracy of this release.

    
     Contacts:
    

    
     Dana Coffield                           Al Palombo
     Gran Tierra Energy, Inc.                Cameron Associates
     President & Chief Executive Officer     Investor Relations
     (800) 916-4873                          (212) 245-8800 Ext. 209
     info@grantierra.com                     al@cameronassoc.com

    




For further information:

For further information: Dana Coffield, President & Chief Executive
Officer of Gran Tierra Energy, Inc., 1-800-916-4873, info@grantierra.com; or
Al Palombo, Investor Relations of Cameron Associates, +1-212-245-8800, Ext.
209, al@cameronassoc.com, for Gran Tierra Energy Inc. Web Site:
http://www.grantierra.com

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