Gran Tierra Energy Announces Fourth Quarter and 2007 Year-End Financial Results



    
    Company Reports Record Increase in Year over Year Reserves, Production
    Volumes, and Revenues - Net Proved Reserves Double to 6.4 Million Barrels
    of Oil.
    

    CALGARY, Alberta, March 13 /CNW/ -- Gran Tierra Energy Inc. (TSX:
GTE)(OTC Bulletin Board:   GTRE), a company focused on oil exploration and
production in South America, today announced financial and operating results
for the quarter and year ended December 31, 2007.
    Average oil production for the year ended December 31, 2007, net of
royalties, increased 109% to 1,482 barrels of oil per day (BOPD) from 704 BOPD
in 2006. The increase in production is due primarily to the inclusion of a
full year of Colombia and Argentina production, the commencement in the third
quarter of production from two new discovery wells in Colombia drilled during
the first half of 2007, and the commencement in the first quarter of
production from a discovery well in Argentina.
    Average oil production for the fourth quarter of 2007, net after
royalties, was approximately 2,371 BOPD. Production continued growing through
the fourth quarter resulting in an exit rate of approximately 3,300 BOPD for
2007.
    The average price received per barrel of oil increased 30% to $58.79 per
barrel for 2007 from $45.33 per barrel in 2006. The average price of oil
realized in Colombia during 2007 was $71.28 per barrel compared to $51.17 per
barrel in 2006. In Argentina, the average realized price for oil during 2007
was $38.76 per barrel compared to $39.41 per barrel in 2006.
    Revenue and other income for 2007 was $32.3 million, an increase of 167%
from $12.1 million for 2006. The net loss for 2007 was $8.5 million or ($0.09)
per share, compared to a net loss of $5.8 million or ($0.08) per share in
2006. The 2007 results reflect a full year of Colombian and Argentine
operating activities and the impact of new oil production from the company's
2007 discoveries in Colombia and Argentina. The 2007 financial results were
impacted by non-cash expenses of $7.4 million (2006 - $1.5 million) related to
liquidated damages arising from the company's 2006 financing and a $3.0
million loss on valuation of derivative financial instruments.
    Revenue and other income for the fourth quarter ended December 31, 2007
was $16.0 million, a 354% increase from $3.5 million for the same period of
2006. Net income for the quarter was $2.2 million or $0.02 per share as
compared to a net loss of $4.0 million, or ($0.04) per share for the same
period in 2006. The fourth quarter 2007 results reflect the increase in the
company's oil production in Colombia during the quarter resulting from the oil
discoveries in the first half of 2007.
    Cash provided by operations for 2007 was $6.2 million compared to cash
used in operations of $0.8 million in 2006.
    The company reported cash and equivalents of $18.2 million at 2007 year
end as compared to $24.1 million at December 31, 2006. Working capital
decreased to $8.1 million as compared to $14.5 million at the end of 2006.
Shareholders' equity increased from $76.2 million at December 31, 2006 to
$76.8 million at December 31, 2007, and the company reported no outstanding
long-term debt as of year end 2007.
    Externally audited oil reserves net after royalty to Gran Tierra Energy
as of December 31, 2007 increased significantly from 2006 and included 6.4
million barrels of oil (BO) proved, 5.0 million BO probable, and 5.1 million
BO possible, for a total of 16.5 million BO of proved, probable and possible
reserves. Reserves as of December 31, 2006 were 3.0 million BO proved, 1.2
million BO probable, and 2.9 million BO possible, for a total of 7.1 million
BO of proved, probable and possible reserves. The 2007 year end reserves do
not include the impact of the positive results from the two recently completed
delineation wells in the Costayaco oil discovery in Colombia.
    Commenting on the results, Dana Coffield, President and Chief Executive
Officer of Gran Tierra Energy Inc., stated, "2007 was an extraordinary year
for Gran Tierra Energy. Dramatic oil reserve additions resulting from drilling
success on company operated properties in Colombia and Argentina in 2007
transformed the company from an exploration led company to a rapidly growing
exploration and production company. Gran Tierra Energy has entered 2008 with
an exciting portfolio of exploration and development opportunities and a solid
production base. The company is the operator of all of its nine exploration
and production contracts in Colombia, seven of its eight contracts in
Argentina and both of its two contracts in Peru. Gran Tierra Energy's 2008
capital program is focused on developing oil reserves, growing production and
increasing cash flow by drilling six delineation and development wells. In
parallel, we will continue conducting exploration operations, with three
exploration wells budgeted for 2008 targeting additional prospects to
potentially grow our reserve base in Colombia and Argentina, in addition to
gravity and magnetic data acquisition on our vast exploration land position in
Peru."
    Coffield concluded, "Our 2007 operating results have set the company in
motion to achieve our long term goal of becoming a significant player in the
international oil and gas exploration and production arena."
    
    Conference Call Information:
    
    Gran Tierra Energy Inc. will hold a conference call to review its fourth
quarter and full year 2007 results on Friday, March 14, 2008 at 10:00 a.m.
Eastern Daylight Time. The call will be hosted by Dana Coffield, President and
Chief Executive Officer. Interested parties may access the conference call by
dialing (888) 680-0879 (domestic) or (617) 213-4856 (international), pass code
# 45103243. The call will also be available via web cast at
http://www.grantierra.com, or http://www.streetevents.com,
http://www.fulldisclosure.com
    If you are unable to participate, an audio replay of the call will be
available beginning two hours after the call and will be available until 11:59
p.m. on March 21, 2008, by dialing (888) 286-8010 (domestic) or (617) 801-6888
(international) using confirmation pass code 18215037.
    
    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 Toronto Stock Exchange (GTE) and the OTC
Bulletin Board (GTRE), and operating in South America. The company holds
interests in producing and prospective properties in Argentina, Colombia and
Peru. The company 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 http://www.grantierra.com.
Investor inquiries may be directed to info@grantierra.comor 1-800-916-GTRE
(4873).
    
    Forward Looking Statements:
    
    Estimates of total remaining recoverable hydrocarbon liquid, gas, and
plant product quantities at December 31, 2007 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. Probable and Possible
reserves have been prepared in accordance with the generally accepted
petroleum engineering principles provided for in the document entitled
Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves
Information, promulgated by the Society of Petroleum Engineers (SPE). Reserve
definitions utilized are those approved by the SPE and the World Petroleum
Congress in March of 1997.
    The statements in this news release regarding Gran Tierra Energy's 2008
plans for exploration and acquiring gravity and magnetic data on its
exploration land position in Peru are "forward-looking statements" that 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. There are a number of important factors that could
cause the results or outcomes discussed herein to differ materially from those
indicated by these forward-looking statements, including, among others: Gran
Tierra Energy's operations are located in South America, and unexpected
problems can arise due to technical difficulties and operational difficulties
which impact the production, transport or sale of its products, and geographic
and weather conditions; and whether Gran Tierra Energy will be successful in
its drilling efforts and whether Gran Tierra Energy's estimates for its
reserves are accurate. 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, Gran Tierra Energy's Quarterly Report on Form 10-Q for the
period ended September 30, 2007, filed with the Securities and Exchange
Commission on November 8, 2007, and available on a Web site maintained by the
Securities and Exchange Commission at http://www.sec.gov. Gran Tierra Energy
does not undertake an obligation to update forward-looking or other statements
in this release.
    
    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.



    
    Gran Tierra Energy Inc.
    Consolidated Statements of Operations and Accumulated Deficit
    Prepared in accordance with generally accepted accounting principles in
     the United States
    

    
                         Year Ended December 31,   Quarter Ended December 31,
                            2007         2006            2007         2006
                                   (Expressed in U.S. dollars)
    

    
    REVENUE AND
     OTHER INCOME
    Oil sales          $31,807,641  $11,645,553     $15,915,273   $3,351,933
    Natural gas sales       44,971       75,488           9,477       10,187
    Interest               425,542      351,872          48,110      156,056
                        32,278,154   12,072,913      15,972,860    3,518,176
    

    
    EXPENSES
    Operating           10,474,368    4,233,470       3,754,915    1,530,963
    Depletion,
     depreciation
     and accretion       9,414,907    4,088,437       2,865,055    1,764,279
    General and
     administrative     10,231,952    6,998,804       2,648,231    3,000,608
    Liquidated damages   7,366,949    1,527,988               -    1,266,806
    Derivative
     financial
     instruments         3,039,690            -       2,246,110            -
    Foreign exchange
     (gain) loss           (77,275)     370,538          14,497       93,012
                        40,450,591   17,219,237      11,528,808    7,655,668
    

    
    INCOME (LOSS) BEFORE
     INCOME TAX         (8,172,437)  (5,146,324)      4,444,052   (4,137,492)
    Income tax            (294,767)    (677,380)     (2,280,685)     170,820
    

    NET INCOME (LOSS)  $(8,467,204) $(5,823,704)     $2,163,367  $(3,966,672)

    
    ACCUMULATED
     DEFICIT,
     beginning of
     period             (8,043,384)  (2,219,680)    (18,673,955)  (4,076,712)
    

    
    ACCUMULATED
     DEFICIT, end of
     period           $(16,510,588) $(8,043,384)   $(16,510,588) $(8,043,384)
    

    
    NET INCOME
     (LOSS) PER
     COMMON SHARE --
     BASIC & DILUTED
     - BASIC                 (0.09)       (0.08)           0.02        (0.04)
     - FULLY DILUTED         (0.09)       (0.08)           0.02        (0.04)
    Weighted average
     common shares
     outstanding
     - Basic            95,096,311   72,443,501      95,049,083   95,455,759
     - Fully Diluted    95,096,311   72,443,501     110,577,835   95,455,759
    



    
    Gran Tierra Energy Inc.
    Consolidated Balance Sheets
    Prepared in accordance with generally accepted accounting principles in
     the United States
                                                   Year Ended December 31,
                                                   2007              2006
                                                 (Expressed in U.S. dollars)
    ASSETS
    Current assets
    Cash and cash equivalents                  $18,188,817       $24,100,780
    Restricted cash                                      -         2,291,360
    Accounts receivable                         10,694,705         5,089,561
    Inventory                                      786,921           811,991
    Taxes receivable                             1,177,076           404,120
    Prepaids                                       442,271           676,524
    Deferred tax asset                             220,000                 -
    

    Total Current Assets                        31,509,790        33,374,336

    
    Oil and gas properties, using the
     full cost method of accounting
    Proved                                      44,292,203        37,760,230
    Unproved                                    18,910,229        18,333,054
    

    Total Oil and Gas Properties                63,202,432        56,093,284

    Other assets                                   715,470           614,104

    Total Property, Plant and Equipment         63,917,902        56,707,388

    
    Long term assets
    Deferred tax asset                           1,838,436           444,324
      Taxes receivable                             525,350                 -
    Other long-term assets                               -             5,826
    Goodwill                                    15,005,083        15,005,083
    

    Total Long Term Assets                      17,368,869        15,455,233

    
    Total Assets                              $112,796,561      $105,536,957
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Accounts payable                           $11,327,292        $6,729,839
    Accrued liabilities                          6,138,684         8,932,966
    Liquidated damages                                   -         1,527,988
    Derivative financial instruments             1,593,629                 -
    Current taxes payable                        3,284,334         1,642,045
    Deferred tax liability                       1,107,802                 -
    

    Total Current Liabilities                   23,451,741        18,832,838

    
    Long term liabilities                          131,821            39,077
    Deferred tax liability                       9,234,926         7,153,112
    Deferred remittance tax                      1,332,016         2,722,545
    Derivative financial instruments             1,054,716                 -
    Asset retirement obligation                    799,486           594,606
    

    Total Long Term Liabilities                 12,552,965        10,509,340

    
    Shareholders' equity
    Common shares                                   95,176            95,455
    Additional paid in capital                  72,457,519        71,311,155
    Warrants                                    20,749,748        12,831,553
    Accumulated deficit                        (16,510,588)       (8,043,384)
    

    Total Shareholders' Equity                  76,791,855        76,194,779

    
    Total Liabilities and Shareholders'
     Equity                                   $112,796,561      $105,536,957
    



    
    Consolidated Statements of Cash Flow
    For the Years ended December 31, 2007 and 2006 and
     Prepared in accordance with generally accepted accounting principles in
     the United States
    

    
                                                    Year Ended December 31,
                                                     2007             2006
                                                 (Expressed in U.S. dollars)
    Operating Activities
    Net loss                                    $(8,467,204)     $(5,823,704)
    Adjustments to reconcile net loss to
     net cash provided by operating activities:
      Depletion, depreciation and accretion       9,414,907        4,088,437
      Deferred tax                                 (702,827)         892,998
      Stock based compensation                      809,522          260,495
      Liquidated damages                          5,838,961        1,527,988
      Unrealized loss on financial instruments    2,648,346                -
    Net changes in non-cash working capital
      Accounts receivable                        (5,605,144)      (4,280,601)
      Inventory                                      25,070         (364,983)
      Prepaids and other current assets             234,253         (633,823)
      Deferred tax asset                           (220,000)               -
      Accounts payable and accrued liabilities      261,658        3,799,554
      Taxes receivable and payable                  869,333         (295,981)
      Deferred tax liability                      1,107,802                -
    Net cash provided by (used in)
     operating activities                         6,214,677         (829,620)
    

    
    Investing Activities
      Restricted cash                             1,010,409       (1,020,490)
      Oil and gas property expenditures         (13,429,570)      (7,434,463)
      Business acquisition                                -      (36,911,959)
      Long term assets and liabilities             (426,782)               -
    

    Net cash used in investing activities       (12,845,943)     (45,366,912)

    
    Financing Activities
      Restricted cash                                     -       (1,280,993)
      Proceeds from issuance of common stock        719,303       69,356,849
    

    Net cash provided by financing activities       719,303       68,075,856

    
    Net (decrease) increase in cash and
     cash equivalents                            (5,911,963)      21,879,324
    Cash and cash equivalents, beginning
     of period                                   24,100,780        2,221,456
    

    Cash and cash equivalents, end of period    $18,188,817      $24,100,780




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 
Investor Relations, Al Palombo 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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