Gran Tierra Energy announces first quarter 2009 results



    
    Record Average Quarterly Production of 10,390 BOPD Attained; Positioning
    for Renewed Exploration in Late 2009 and 2010
    

    CALGARY, May 7 /CNW/ - Gran Tierra Energy Inc. (NYSE Amex:   GTE, TSX:
GTE), a company focused on oil exploration and production in South America,
today announced financial and operating results for the quarter ended March
31, 2009. All dollar amounts are in United States dollars unless otherwise
indicated.
    Selected highlights comparing the quarters ended March 31, 2009 and 2008:

    
    -   265% increase in production to 10,390 barrels of oil per day (BOPD),
        net after royalty (NAR), compared with 2,843 BOPD NAR, for the same
        period in 2008;
    -   61% increase in revenue and interest to $33.6 million compared with
        $20.8 million for the same period in 2008;
    -   202% increase in net income to $14.1 million compared with
        $4.7 million for the same period in 2008. On a per share basis, net
        income increased to $0.06 per share basic and diluted, compared with
        $0.05 per share basic and $0.04 per share diluted for the first
        quarter of 2008;
    -   Cash and cash equivalents of $147.7 million at March 31, 2009; and
    -   Gran Tierra Energy continues to be debt free.
    

    "The first quarter 2009 results reflect our continued focus on operating
performance in Colombia, Peru and Argentina, and continuing development of the
Costayaco Field," said Dana Coffield, President and Chief Executive Officer of
Gran Tierra Energy. "The company is currently evaluating the optimum
production plateau for the Costayaco field taking into consideration reserves,
reservoir performance, good operating practice, and net present value of the
project. Accordingly, we are revising the planned production plateau for
Costayaco to 19,000 BOPD gross, and extending the plateau period to
approximately four years. Economic modeling shows no material reduction in
value in producing reserves at this new plateau, and at the same time, we
believe operating performance will be enhanced long-term. We are now expecting
to maintain an average consolidated company production rate between 14,000 to
16,000 BOPD NAR for the balance of 2009. In addition, our capital expenditure
plans have been revised to focus on the highest impact investment
opportunities in our portfolio as Gran Tierra Energy strives to deliver the
best value to its shareholders.
    "We will continue to explore our large land position encompassing 5.6
million net acres through a program that anticipates four exploration wells in
Colombia in the second half of 2009, as well as multiple seismic programs in
Colombia and Peru in preparation for additional exploration drilling in 2010.
Our balance sheet remains very strong, and we expect that our capital
expenditure program for 2009 will be fully funded from cash flow and cash on
hand."

    First Quarter 2009 Financial Highlights:

    Revenue and interest increased by 61% to $33.6 million for the three
months ended March 31, 2009 compared with $20.8 million for the same period in
2008. While partially offset by lower oil prices, increased revenue this
quarter was the result of a 265% increase in production, primarily due to
increased production from the continued development of the Costayaco field in
the Chaza Block in Colombia, the addition of production from Solana Resources'
interests in Colombia following the acquisition, and the successful drilling
of the Proa-1 exploration well in the Surubi Block in Argentina. The average
price received per barrel of oil in the first quarter of 2009 decreased 56% to
$35.36 per barrel from $80.21 per barrel in the first quarter of 2008.
    Operating expenses increased by 180% to $7.1 million for the quarter
ended March 31, 2009 compared with $2.5 million for the same quarter in 2008.
On a per barrel basis, operating costs for the first quarter of 2009 declined
by 23% to $7.56 per barrel compared with $9.77 per barrel for the same period
in 2008.
    Depletion, depreciation and amortization for the first three months of
2009 increased to $27.5 million or $29.36 per barrel from $3.1 million for the
same quarter in 2008 due to higher production levels as well as amortization
of $20.9 million related to the fair value of property, plant and equipment
recorded on the acquisition of Solana Resources on November 14, 2008.
    General and administrative expenses increased by 24% to $5.1 million for
the quarter ended March 31, 2009 compared with $4.1 million for the same
period in 2008. However, on a per barrel basis, general and administrative
costs in the first quarter of 2009 decreased by 66% to $5.47 per barrel
compared with $15.97 per barrel in the first quarter of 2008.
    Included in the first quarter 2009 results is a $20.2 million foreign
exchange gain of which $18.9 million is due to an unrealized foreign exchange
gain related to translation of the deferred tax liability recorded on the
acquisition of Solana Resources.
    Net income for the first quarter of 2009 increased by 202% to $14.1
million compared with $4.7 million for the same period in 2008. On a per share
basis, net income increased to $0.06 per share basic and diluted, compared
with $0.05 per share basic and $0.04 per share diluted in the first quarter of
2008.

    Balance Sheet Highlights:

    The company reported cash and equivalents of $147.7 million at March 31,
2009 as compared with $176.8 million at December 31, 2008. Working capital
increased to $135.1 million at March 31, 2009, compared with $132.8 million at
December 31, 2008. Shareholders' equity increased to $807.9 million at March
31, 2009 from $791.9 million at December 31, 2008, and the company had no
outstanding long-term debt as of March 31, 2009.
    Accounts receivable increased to $33.5 million as at March 31, 2009
compared with $7.9 million as at December 31, 2008, reflecting a return to
regular operations following the suspension of production in Colombia due to
the general strike that affected the region.

    2008 Reserve Review:

    Externally audited proved oil reserves (as per SEC Reserves Definitions)
NAR to Gran Tierra Energy as of December 31, 2008 tripled to 19.2 million
barrels of oil (BO) proved compared with 6.4 million BO proved as of December
31, 2007.
    As per Canadian NI 51-101 and the Reserves definitions in the COGE
Handbook, reserves NAR to Gran Tierra Energy as at December 31, 2008 increased
to 18.8 million BO proved, 8.7 million BO probable, and 18.6 million BO
possible. This compares to reserves as at December 31, 2007 of 6.4 million BO
proved, 5.0 million BO probable and 4.9 million BO possible.
    The company has recently completed a core analysis study on the
Costayaco-4 well indicating significantly lower water saturation (higher oil
saturation) than previously assumed in the year end reserve audit. This
information will be utilized in future reserve audits, and is expected to have
a positive impact on reserves in all categories.

    Production Highlights:

    Average daily consolidated light and medium crude oil production for the
three months ended March 31, 2009 increased 265% to 10,390 BOPD NAR compared
with 2,843 BOPD NAR for the same period of 2008. Average daily consolidated
gas production for the first quarter of 2009 was 27 barrels of oil equivalent
per day (BOEPD) NAR.
    Average daily Colombian production of light and medium crude oil for the
three months ended March 31, 2009 increased 300% to 9,459 BOPD NAR compared
with 2,366 BOPD NAR for the same period in 2008. Natural gas production was 27
BOEPD NAR during the first quarter of 2009, compared with no production in the
same period of the previous year.
    Average daily Argentine production of light and medium crude oil for the
quarter ended March 31, 2009 increased 95% to 931 BOPD NAR compared with 477
BOPD NAR for the same quarter in 2008.
    While production increased on a year-over-year basis, production in the
Putumayo region of Colombia was negatively impacted by the strike at the
Ecopetrol operated Orito facilities, which resulted in a suspension of crude
oil transportation in southern Colombia from November 20, 2008 through to
January 11, 2009.

    2009 Capital Plan Update:

    Gran Tierra Energy's planned capital program has been revised to $160
million for exploration and production development operations in Colombia,
Peru, and Argentina for 2009. Approximately $145 million is allocated to
Colombia, with $115 million for development drilling and associated facilities
construction and approximately $30 million for exploration drilling and new
seismic data acquisition. This budget includes the drilling of four
exploration wells in Colombia, and three additional development wells
following Costayaco-7 in the Costayaco field.

    Colombia Operations Update

    
    Putumayo Basin
    --------------
    
    Gran Tierra Energy is one of the largest exploration landholders in the
Putumayo Basin of southern Colombia, with production from three contract
areas, as well as five other exploration blocks, three of which are pending
final approval by the National Hydrocarbon Agency (ANH). The total Putumayo
acreage encompasses 494,758 gross acres, or 384,328 net acres. Gran Tierra
Energy is the Operator of all of its Putumayo licenses.

    
    Putumayo West A and B Technical Evaluation Areas - New Exploration
    Licenses Pending
    

    Following the completion of 400 kilometers of seismic reprocessing in
2008, Gran Tierra Energy made application for three exploration and
exploitation licenses on the highest potential prospects in these two areas.
Negotiations with the ANH have recently been completed for these new
exploration licenses in the Putumayo basin, two of which are on trend with the
Costayaco Field discovery. The Piedemonte Norte Block, encompassing 78,743
acres, lies southwest of the Chaza Block where the Costayaco field is located.
The Piedemonte Sur Block, encompassing approximately 73,897 acres, is located
immediately west of the Orito Field, the largest oil field in the Putumayo
Basin. Further south, the Rumiyaco Block, encompassing 82,625 acres in the
central Putumayo Basin, is also pending approval. Upon final approval by
regulatory authorities, Gran Tierra Energy will have a 100% working interest
and be operator of these prospective blocks. These new blocks will be the
focus of exploration drilling efforts by Gran Tierra Energy in 2010.

    Chaza Block (100% working interest, 80,242 gross acres)

    The bulk of Gran Tierra Energy's 2009 capital spending is scheduled to be
dedicated to further developing the Costayaco field. The company reported the
recent drilling completion of Costayaco-7 at the northern limit of the
Costayaco Field. Testing is to be initiated in mid-May and is expected to take
approximately 2 weeks. Costayaco-8, a development well located 600 meters
south of Costayaco-1, is expected to begin drilling on May 8th, with drilling
expected to take approximately one month. Costayaco-9 and possibly
Costayaco-10 (the latter subject to rig timing) are scheduled to follow this
year.
    New infrastructure construction is planned to continue, including support
facilities, crude gathering lines, water lines, two pumping stations, and
storage batteries. The company will continue evaluating the optimum production
plateau for the field taking into consideration reserves, reservoir
performance, good operating practice, and net present value of the project.
Current plans for the Costayaco field contemplate reaching a plateau of 19,000
BOPD gross in the fourth quarter of 2009, and maintaining that plateau for
approximately four years.
    In addition to the ongoing Costayaco field development activities, new
seismic acquisition and one exploration well is currently budgeted for 2009 in
the Chaza Block. The Rio Mocoa prospect is scheduled to be drilled to the west
of the Costayaco field in the fourth quarter of 2009. Drilling of a second
prospect, Moqueta, is planned for early 2010.

    Guayuyaco Block (70% working interest, 52,366 gross acres)

    The Guayuyaco Block contains both the Guayuyaco and Juanambu producing
oil fields. At this time, no further exploration activity has been budgeted
for this block in 2009.

    Azar Block (40% working interest, 51,639 gross acres)

    During 2009, two seismic programs are planned for the Azar Block, a 40
kilometer 2D program and a 50 square kilometer 3D program. The exploration
well (Yaniyaco-1) that was scheduled to be drilled during the fourth quarter
of 2009 is being deferred until 2010.

    Mecaya Block (15% working interest, 74,128 gross acres)

    In the second quarter of 2009 a work-over test of Mecaya-1 is planned. In
addition, an exploration well (Mecaya-2) is planned to be drilled during the
third quarter of 2009.

    Santana Block (35% working interest, 1,119 gross acres)

    During 2009 upgrades to the refinery are scheduled. No exploration
activities are planned for the Santana block during 2009.

    
    Llanos Basin
    ------------
    
    Following the divestiture of Guachiria, Guachiria Norte, and Guachiria
Sur in April, Gran Tierra Energy has an interest in two blocks in the Llanos
Basin; one of which it operates, encompassing 180,471 gross acres, or 142,502
net acres.

    San Pablo Block (100% working interest, 104,534 gross acres)

    The commitment to drill one obligation exploration well, Amatista-1 has
been traded for 50 square kilometers of 3D seismic to further define the
prospectivity of the identified leads prior to drilling.

    Garibay Block (50% non-operated working interest, 75,936 gross acres)

    The 2009 scheduled expenditures include a 100 square kilometer 3D seismic
program to further define the exploration potential of the area.

    
    Magdalena Basin
    ---------------
    
    Gran Tierra Energy is the Operator of three blocks in the Magdalena Basin
encompassing 201,293 gross acres, or 58,396 net acres; two in the Middle
Magdalena Basin (Rio Magdalena and Talora Blocks) and one in the Lower
Magdalena (Magangue Block).

    Rio Magdalena Block (40% working interest, 72,312 gross acres)

    A 75 square kilometer 3D seismic program has been initiated over the new
Popa gas-condensate discovery and an adjacent exploration prospect. A
long-term production test has also been initiated on the Popa-2 gas-condensate
discovery. Production is currently averaging 0.5 million cubic feet of gas per
day (MMCF/D).
    While this block previously encompassed 144,670 gross acres, Gran Tierra
was required to relinquish 50% of its area during the first quarter of 2009 as
part of the end of the fifth phase of exploration on this block.

    Talora Block (20% working interest, 108,334 gross acres)

    Approval has been sought from the ANH for Gran Tierra Energy to assign
its interest to PetroSouth Energy. No additional work is budgeted for this
block.

    Magangue Block (37.8% working interest, 20,647 gross acres)

    A new compressor has been installed at the Guepaje gas field, which is
forecast to produce an average of 2.7 MMCF/D gross, 0.8 MMCF/D NAR, during
2009. No exploration activities are planned for the Magangue block during
2009.

    
    Catatumbo Basin
    ---------------
    
    The Catatumbo Basin is an extension of the Maracaibo basin in Venezuela.
Gran Tierra Energy is the Operator of one block encompassing 393,150 gross
acres, or 294,351 net acres.

    Catguas Block Area A (50% working interest, 113,792 acres gross)

    No work is scheduled in Catguas Area A in 2009.

    Catguas Block Area B (85% working interest, 279,358 acres gross):

    In the second half of 2009 one well re-entry and two exploration well
commitments are scheduled to be fulfilled in Area B based on the results of
new seismic data acquired in 2008.

    Peru Operations Update:

    Blocks 122 and 128 (100% working interest and Operator)

    Gran Tierra Energy has expanded its environmental impact assessment on
Blocks 122 and 128 in the Maranon Basin of northeastern Peru to include
stratigraphic test drilling which is expected to expedite the exploration
process in 2010. The environmental impact assessment for Block 128 has been
submitted to the Peruvian government for review and approval; Gran Tierra
Energy anticipates the submission for Block 122 to follow in the second
quarter.
    These assessments are in preparation for a 500 kilometer 2D seismic
survey expected to be acquired in the fourth quarter of 2009 and the first
quarter of 2010 over 16 principal leads amongst the 24 leads identified on the
two blocks. Stratigraphic test drilling on up to four prospects is expected to
take place in 2010 also. In addition, a pre-feasibility engineering field
development study is scheduled to be completed in the second quarter of 2009
to assist with planning in the event a commercial discovery is made in 2010.
Total 2009 capital budgeted for Peru is $10 million.

    Argentina Operations Update:

    Gran Tierra Energy is the largest exploration landholder in the Noroeste
Basin of northern Argentina. The company has a working interest in eight
blocks of land, seven operated by Gran Tierra Energy, encompassing
approximately 1.6 million gross acres, or 1.3 million net acres. The company
drilled one exploration well in 2008, Proa-1, resulting in the discovery of
the Proa oil field. The work program for 2009 consists of conducting nine
workovers of existing producing wells, and facilities upgrades. A 162 square
kilometer 3D seismic acquisition in the Chivil and Surubi Blocks to define
additional structural and stratigraphic traps on the Proa oil field discovery
trend is currently being deferred. Additional exploration drilling is
contemplated in 2010 once the 3D seismic program is acquired. Production is
expected to be maintained at approximately 1,000 BOPD, NAR, in 2009. Total
2009 capital budgeted for Argentina is $5 million.

    Conference Call Information:

    Gran Tierra Energy Inc. will host its first quarter 2009 results
conference call on Thursday, May 7th at 11:00 a.m. Eastern Daylight Time
(EDT). Prior to the conference call, Gran Tierra Energy will release its
financial results at 8:00 a.m. EDT.
    President and CEO Dana Coffield, CFO Martin Eden, and COO Shane O'Leary
will discuss Gran Tierra Energy's financial and operating results for the
quarter and then take questions from securities analysts and institutional
shareholders.
    To pre-register for this conference call, please visit:
    https://www.theconferencingservice.com/prereg/key.process?key=PLTPAHQJP
    Interested parties may access the conference call by dialing (888)
680-0878 (domestic) or (617) 213-4855 (international), pass code 93524500. The
call will also be available via web cast at www.grantierra.com,
www.streetevents.com, or www.fulldisclosure.com. The web cast will be
available on Gran Tierra Energy's website until the next earnings call.
    If you are unable to participate, an audio replay of the call will be
available beginning two hours after the call until 11:59 p.m. on May 14th,
2009. To access the replay dial (888) 286-8010 (domestic) or (617) 801-6888
(international) pass code 95375467.
    Please connect at least 15 minutes prior to the conference call to ensure
adequate time for any software download that may be required to join the
webcast.

    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 Exchange (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 and
Peru. 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. Additional information
concerning Gran Tierra Energy is available at www.grantierra.com. Investor
inquiries may be directed to info@grantierra.com or (866) 973-4873.
    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.

    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.
    Estimates of total net proved oil reserves at December 31, 2008 reflected
as being calculated as per SEC Reserves Definitions have been prepared in
accordance with the definitions for proved reserves set out in Rule 4-10 of
Regulation S-X of the U.S. Securities and Exchange Commission. Estimates of
reserves per Canadian requirements for proved, proved plus probable and proved
plus probable plus possible cases were under the reserve definitions of
National Instrument 51-101 (NI 51-101) of Canada. The evaluation was conducted
in accordance with standard industry practice and reserves definitions,
procedures and guidance contained in the Canadian Oil and Gas Evaluation
Handbook (COGE Handbook).

    Gas volumes are converted to barrels of oil equivalent ("boe") at the
rate of 20 thousand cubic feet ("mcf") of gas per barrel of oil based upon the
approximate relative values of natural gas and oil. Natural gas liquid ("NGL")
volumes are converted to boe on a one-to-one basis with oil.

    Forward Looking Statements:

    The statements in this news release regarding Gran Tierra Energy's belief
that the company's planned production plateau will be 19,000 BOPD extending to
approximately four years, that its performance will be enhanced long-term,
that its production will be 14,000 - 16,000 BOPD, net after royalty, for the
balance of 2009, its plans to conduct additional testing and results of
drilling operations in the Costayaco field, its exploration drilling plans,
its revised capital expenditure plans and its beliefs that this will focus on
the highest impact opportunities in its portfolio, and the allocation of
capital to projects with the potential to increase shareholder value, together
with all other statements that reflect expected future results or events, are
forward looking statements or financial outlook (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 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,
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 its testing and
drilling operations and the production, transport or sale of its products;
geographic, political and weather conditions can impact testing and drilling
operations and the production, transport or sale of its products; and the risk
that the current global economic and credit crisis may impact oil prices and
oil consumption more than Gran Tierra Energy currently predicts, which could
cause Gran Tierra Energy to modify its exploration 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 27, 2009. 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.

    Basis of Presentation of Financial Results:

    Gran Tierra Energy's financial results are reported in United States
dollars and prepared in accordance with generally accepted accounting
principles in the United States.



    
    ITEM 1 - FINANCIAL STATEMENTS
    -----------------------------
    Gran Tierra Energy Inc.
    Condensed Consolidated Statements of Operations and Retained Earnings
    (Accumulated Deficit) (Unaudited)
    (Thousands of U.S. Dollars, Except Share and Per Share Amounts)


                                                 Three Months Ended March 31,
                                                 ----------------------------
                                                        2009            2008
                                                 ----------------------------

    REVENUE AND OTHER INCOME
      Oil and natural gas sales                  $    33,151     $    20,749
      Interest                                           414              70
                                                 ----------------------------
                                                      33,565          20,819
                                                 ----------------------------
    EXPENSES
      Operating                                        7,086           2,527
      Depletion, depreciation and accretion           27,529           3,064
      General and administrative                       5,125           4,133
      Derivative financial instruments loss                -           1,184
      Foreign exchange (gain) loss                   (20,222)             14
                                                 ----------------------------
                                                      19,518          10,922
                                                 ----------------------------

    INCOME BEFORE INCOME TAXES                        14,047           9,897
      Income tax recovery (expense)                       85          (5,221)
                                                 ----------------------------
    NET INCOME AND COMPREHENSIVE INCOME               14,132           4,676
    RETAINED EARNINGS (ACCUMULATED DEFICIT),
     BEGINNING OF PERIOD                               6,984         (16,511)
                                                 ----------------------------
    RETAINED EARNINGS (ACCUMULATED DEFICIT),
     END OF PERIOD                               $    21,116     $   (11,835)
                                                 ----------------------------
                                                 ----------------------------


    NET INCOME PER SHARE - BASIC                        0.06            0.05
    NET INCOME PER SHARE - DILUTED                      0.06            0.04
    WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC  238,907,060      96,984,978
    WEIGHTED AVERAGE SHARES OUTSTANDING -
     DILUTED                                     248,914,219     119,127,570

    (See notes to the condensed consolidated financial statements)


    Gran Tierra Energy Inc.
    Condensed Consolidated Balance Sheets (Unaudited)
    (Thousands of U.S. Dollars)

                                                    March 31,    December 31,
                                                 ----------------------------
                                                        2009            2008
                                                 ----------------------------

    ASSETS
    Current Assets
      Cash and cash equivalents                  $   147,710     $   176,754
      Accounts receivable                             33,537           7,905
      Inventory                                        2,628             999
      Taxes receivable                                 2,538           5,789
      Prepaids                                         1,563           1,103
      Derivative financial instruments                   146             233
      Deferred tax assets                              1,222           2,262
                                                 ----------------------------

    Total Current Assets                             189,344         195,045
                                                 ----------------------------

    Oil and Gas Properties (using the full cost
     method of accounting)
      Proved                                         402,366         380,855
      Unproved                                       353,454         384,195
                                                 ----------------------------

    Total Oil and Gas Properties                     755,820         765,050

      Other Assets                                     2,252           2,502
                                                 ----------------------------

    Total Property, Plant and Equipment              758,072         767,552
                                                 ----------------------------

    Long Term Assets
      Deferred tax assets                              3,245          10,131
      Other long-term assets                           1,599           1,315
      Goodwill                                        98,210          98,582
                                                 ----------------------------

    Total Long Term Assets                           103,054         110,028
                                                 ----------------------------

    Total Assets                                 $ 1,050,470     $ 1,072,625
                                                 ----------------------------
                                                 ----------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
      Accounts payable                           $    16,590     $    21,134
      Accrued liabilities                             11,526          12,841
      Current taxes payable                           25,686          28,163
      Deferred tax liability                               -             100
      Asset retirement obligation - current              475               -
                                                 ----------------------------

    Total Current Liabilities                         54,277          62,238
                                                 ----------------------------
                                                 ----------------------------

      Long term liabilities                               25              40
      Deferred tax liability                         183,124         213,093
      Deferred remittance tax                            940           1,077
      Asset retirement obligation                      4,180           4,251
                                                 ----------------------------

    Total Long Term Liabilities                      188,269         218,461
                                                 ----------------------------

    Commitments and Contingencies
    Subsequent Event
    Shareholders' Equity
      Common shares                                      226             226

        (199,786,010 and 190,248,384 common shares
         and 39,533,780 and 48,238,269 exchangeable
         shares, par value $0.001 per share, issued
         and outstanding as at March 31, 2009 and
         December 31, 2008, respectively)

      Additional paid in capital                     755,726         753,236
      Warrants                                        30,856          31,480
      Retained earnings                               21,116           6,984
                                                 ----------------------------

    Total Shareholders' Equity                       807,924         791,926
                                                 ----------------------------

    Total Liabilities and Shareholders' Equity   $ 1,050,470     $ 1,072,625
                                                 ----------------------------
                                                 ----------------------------

    (See notes to the condensed consolidated financial statements)


    Gran Tierra Energy Inc.
    Condensed Consolidated Statements of Cash Flows (Unaudited)
    (Thousands of U.S. Dollars)
                                                 Three Months Ended March 31,
                                                 ----------------------------
                                                        2009            2008
                                                 ----------------------------
    Operating Activities

    Net income                                   $    14,132     $     4,676
    Adjustments to reconcile net income to net
     cash (used in) provided by operating
     activities:
      Depletion, depreciation and accretion           27,529           3,064
      Deferred taxes                                  (3,982)            621
      Stock based compensation                         1,125             448
      Unrealized loss on financial instruments            87             693
      Unrealized foreign exchange gain               (18,298)              -
      Settlement of asset retirement obligations         (52)              -
    Net changes in non-cash working capital
      Accounts receivable                            (25,260)        (12,189)
      Inventory                                          (57)            214
      Prepaids                                          (460)            (86)
      Accounts payable and accrued liabilities        (3,176)          5,934
      Taxes receivable and payable                       774           5,778
                                                 ----------------------------

    Net cash (used in) provided by operating
     activities                                       (7,638)          9,153
                                                 ----------------------------

    Investing Activities
      Oil and gas property expenditures              (21,627)         (6,530)
      Long term assets and liabilities                  (299)             (8)
                                                 ----------------------------

    Net cash (used in) investing activities          (21,926)         (6,538)
                                                 ----------------------------

    Financing Activities
      Proceeds from issuance of common stock             520           5,220
                                                 ----------------------------

    Net cash provided by financing activities            520           5,220
                                                 ----------------------------

    Net (decrease) increase in cash and cash
     equivalents                                     (29,044)          7,835
    Cash and cash equivalents, beginning of period   176,754          18,189

    Cash and cash equivalents, end of period     $   147,710     $    26,024
                                                 ----------------------------
                                                 ----------------------------

    Cash                                         $    22,877     $    26,024
    Term deposits                                    124,833               -
                                                 ----------------------------
                                                 ----------------------------
    Cash and cash equivalents, end of period     $   147,710     $    26,024
                                                 ----------------------------
                                                 ----------------------------

    Supplemental cash flow disclosures:
      Cash paid for taxes                        $     1,540     $         -
                                                 ----------------------------
                                                 ----------------------------
    Non-cash investing activities:
      Non-cash working capital related to capital
       additions                                 $     8,413     $    10,739
                                                 ----------------------------
                                                 ----------------------------

    (See notes to the condensed consolidated financial statements)
    





For further information:

For further information: Investor Contacts: Dana Coffield, Gran Tierra
Energy Inc., President & Chief Executive Officer, (866) 973-4873,
info@grantierra.com; Tom McMillan, Equicom Group, Investor Relations, (403)
536-5903, TMcMillan@equicomgroup.com

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Gran Tierra Energy Inc.

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