Gran Tierra Energy Announces Second Quarter 2008 Results of Operations - Another Record Quarter



    Revenues grow to $33.1 Million and Net Income to $8.5 Million

    CALGARY, Alberta, Aug. 11 /CNW/ -- Gran Tierra Energy Inc. (Amex:   GTE;
TSX: GTE), a company focused on oil exploration and production in South
America, today announced financial and operating results for the second
quarter ended June 30, 2008.
    Total revenue for the second quarter of 2008 was $33.1 million compared
to $3.8 million for the same quarter of 2007, and $20.8 million for the first
quarter of 2008. Net income for the quarter was $8.5 million, or $0.08 per
share basic ($0.07 per share diluted), compared to a net loss of $5.1 million
or $0.05 per share basic and diluted for the corresponding quarter of 2007,
and compared to net income of $4.7 million or $0.05 per share basic ($0.04 per
share diluted) for the first quarter of 2008.
    For the six month period ended June 30, 2008, revenue was $54.0 million
compared to $8.3 million for same period of 2007. Net income for the period
was $13.2 million, or $0.13 per share basic ($0.11 per share diluted),
compared to a net loss of $11.7 million or $0.12 per share basic and diluted
for the same period of 2007.
    Cash and cash equivalents were $35.3 million at June 30, 2008 compared to
$18.2 million at December 31, 2007, and $26.0 million at the end of the first
quarter of 2008. Total working capital was $31.7 million at June 30, 2008,
compared to $8.1 million at December 31, 2007. Shareholders' equity was $107.6
million at June 30, 2008, compared to $76.8 million at December 31, 2007. The
company has no long-term debt.
    Average oil production for the second quarter of 2008 was 3,399 barrels
per day (BOPD), net after royalty, compared to 1,021 BOPD for the same quarter
of 2007, and 2,842 BOPD for the first quarter 2008. Second quarter oil
production in Argentina grew to 557 BOPD, net after royalty, from 476 BOPD for
the first quarter 2008, and second quarter oil production in Colombia grew to
2,842 BOPD, net after royalty, from 2,366 BOPD for the first quarter 2008. The
company's current production is averaging approximately 4,100 BOPD, net after
royalty.
    Average oil production for the six month period ended June 30, 2008 was
3,121 BOPD, net after royalty, compared to 1,140 BOPD, net after royalty, for
the comparable period of 2007.
    Average realized oil sales prices, net after royalty, were $106.80 per
barrel for the second quarter of 2008 and $94.69 per barrel for the six months
ended June 30, 2008.
    The company attained several operational milestones in the second quarter
of 2008 that it believes should lead to continued growth for the balance of
2008 and beyond. In Colombia, development activities at the Costayaco Field
continued. The company drilled Costayaco-3 and -4, and initiated drilling
Costayaco-5 which has since been completed. Truck loading and unloading
facilities for crude transportation were constructed, and pipeline
construction for a line to connect the Costayaco Field to the existing
pipeline system was initiated. This line has since been completed and is
currently being tested. A mid-year independent reserve engineering report for
the Costayaco field was completed. It reported that effective July 1, 2008,
the Costayaco field had gross proved reserves of 20.5 million barrels of oil,
gross proved plus probable reserves of 34.9 million barrels of oil and gross
proved plus probable plus possible reserves of 61.4 million barrels of oil.
    In addition, the company drilled an exploration well in the Rio Magdalena
Block, Popa-2, which is currently being tested. In the Azar Block, the company
tested the Palmera-1 well and development plans for the well are currently
being evaluated.
    In Argentina, the company completed plans for drilling the Proa.x-1
exploration well in the Surubi Block and is currently drilling this well. In
Peru, results of a new 20,000 linear kilometer aeromagnetic and gravity data
program over Blocks 122 and 128 are being evaluated and an environmental
impact assessment has been initiated in preparation for 2-D seismic data
acquisition in late 2009.
    Commenting on the results of the quarter, Dana Coffield, President and
Chief Executive Officer of Gran Tierra Energy, stated, "The outstanding second
quarter 2008 results represent the fourth consecutive quarterly increase in
revenues and profitability. This continuous quarter over quarter growth is the
direct result of our focus on developing the full breadth of our exploration
and development portfolio as efficiently as possible, with the success of the
Costayaco field remaining the focus of our capital program."

    Conference Call Information:

    Gran Tierra Energy Inc. will hold a conference call to review its second
quarter results on Monday, August 11, 2008 at 11:00 a.m. Eastern. The call
will be hosted by Dana Coffield, President and Chief Executive Officer.
Interested parties may access the conference call by dialing (888) 713-4213
(domestic) or (617) 213-4865 (international), pass code # 37148965.

    Participants may pre-register for the call at:
    https://www.theconferencingservice.com/prereg/key.process?key=PFTHEDJUC.

    Pre-registrants will be issued a pin number to use when dialing into the
live call which will provide quick access to the conference by bypassing the
operator upon connection.
    The call will also be available via web cast at
http://www.grantierra.com, http://www.streetevents.com, and
http://www.fulldisclosure.com, and will be available on the Gran Tierra Energy
website until the next earnings conference call.
    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 August 18, 2008, by dialing (888) 286-8010 (domestic) or (617) 801-
6888 (international) using confirmation pass code 71727488. An audio replay of
the call will also be available on Gran Tierra Energy's web site,
http://www.grantierra.com, until the next earnings call.

    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 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 1-800-916-4873.

    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:

    Estimates of total net proved oil reserves for the Costayaco field at
June 30, 2008 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. Reserves were estimated for proved, proved plus probable
and proved plus probable plus possible cases under the reserve definitions of
National Instrument 51-101 (NI 51-101) of Canada and for the proved case under
the definitions of the Securities Exchange Commission (SEC) of the United
States. 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).
    The statement in this news release regarding Gran Tierra Energy's belief
that the company's attainment of several operational milestones in the second
quarter of 2008 should lead to continued growth for the balance of 2008 and
beyond is a forward looking statement 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. This statement is subject to risks,
uncertainties and other factors that could cause actual results or outcomes to
differ materially from those contemplated by the forward-looking statement.
There are a number of important factors that could cause the result or outcome
discussed herein to differ materially from that indicated by the forward-
looking statement, 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 the production, transport or sale of its products; and geographic,
political 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 "Risk Factors" in Gran Tierra
Energy's Annual Report on Form 10-K/A filed May 12, 2008. These filings are
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.
    Condensed Consolidated Statements of Operations and Accumulated Deficit
     (Unaudited)
    (Thousands of US Dollars, Except Per Share Amounts)

                                    Three Months Ended      Six Months Ended
                                          June 30,               June 30,
                                      2008        2007        2008       2007
    REVENUE AND OTHER INCOME
    Oil and natural gas sales      $33,042      $3,611     $53,791     $7,935
    Interest                           102         139         172        332
                                    33,144       3,750      53,963      8,267
    EXPENSES
    Operating                        3,726       1,925       6,253      4,106
    Depletion, depreciation and
     accretion                       5,400       2,377       8,464      4,701
    General and administrative       4,641       2,680       8,774      4,619
    Liquidated damages                   -       3,235           -      7,367
    Derivative financial
     instruments                     6,278          20       7,462        677
    Foreign exchange gain             (397)       (239)       (383)        (7)
                                    19,648       9,998      30,570     21,463



    INCOME (LOSS) BEFORE
     INCOME TAXES                   13,496      (6,248)     23,393    (13,196)


    INCOME TAX (EXPENSES)
     RECOVERIES                     (4,970)      1,176     (10,191)     1,474


    NET INCOME (LOSS) AND
     COMPREHENSIVE INCOME (LOSS)     8,526      (5,072)     13,202    (11,722)


    ACCUMULATED DEFICIT,
     BEGINNING OF PERIOD           (11,835)    (14,694)    (16,511)    (8,044)


    ACCUMULATED DEFICIT,
     END OF PERIOD                 $(3,309)   $(19,766)    $(3,309)  $(19,766)


    NET INCOME (LOSS)
     PER COMMON SHARE - BASIC        $0.08      $(0.05)      $0.13     $(0.12)
    NET INCOME (LOSS) PER
     COMMON SHARE - DILUTED          $0.07      $(0.05)      $0.11     $(0.12)
    WEIGHTED AVERAGE COMMON
     SHARES OUTSTANDING -
     BASIC                     105,123,188  95,205,518 101,054,083 95,329,950
    WEIGHTED AVERAGE COMMON
     SHARES OUTSTANDING -
     DILUTED                   123,979,074  95,205,518 119,136,907 95,329,950



    Gran Tierra Energy Inc.
    Condensed Consolidated Balance Sheets (Unaudited)
    (Thousands of U.S. dollars)
                                                     June 30,     December 31,
                                                       2008           2007
    ASSETS
    Current Assets
      Cash and cash equivalents                      $35,303         $18,189
      Accounts receivable                             39,157          10,695
      Inventory                                          628             787
      Taxes receivable                                 1,272           1,177
      Prepaids                                           486             442
      Deferred tax asset                               1,148             220
    Total Current Assets                              77,994          31,510
    Oil and Gas Properties (using the full
     cost method of accounting)
      Proved                                          50,116          44,292
      Unproved                                        21,655          18,910
    Total Oil and Gas Properties                      71,771          63,202
    Other Assets                                       1,593             716
    Total Property, Plant and Equipment               73,364          63,918
    Long Term Assets
      Deferred tax asset                                 684           1,839
      Taxes receivable                                   560             525
      Goodwill                                        15,005          15,005
    Total Long Term Assets                            16,249          17,369
    Total Assets                                    $167,607        $112,797


    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
      Accounts payable                               $13,307         $11,327
      Accrued liabilities                             13,825           6,139
      Derivative financial instruments                 5,540           1,594
      Current taxes payable                           12,843           3,284
      Deferred tax liability                             810           1,108
    Total Current Liabilities                         46,325          23,452
      Long term liabilities                              115             132
      Deferred tax liability                           8,510           9,235
      Deferred remittance tax                          1,262           1,332
      Derivative financial instruments                 2,879           1,055
    Asset retirement obligation                          938             799
    Total Long Term Liabilities                       13,704          12,553
    Shareholders' Equity
      Common shares                                      218              95
       (99,582,314 and 80,389,676 common shares
       and 11,192,859 and 14,787,303 exchangeable
       shares, par value $0.001 per share, issued
       and outstanding as at June 30, 2008 and
       December 31, 2007, respectively)
      Additional paid in capital                      99,807          72,458
      Warrants                                        10,862          20,750
      Accumulated deficit                             (3,309)        (16,511)
    Total Shareholders' Equity                       107,578          76,792
    Total Liabilities and Shareholders' Equity      $167,607        $112,797


     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
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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