Gran Tierra Energy Announces Second Quarter 2009 Results



    Record Quarterly Production of 12,611 Barrels of Oil Per Day Attained

    CALGARY, Aug. 10 /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 June 30,
2009. All dollar amounts are in United States dollars unless otherwise
indicated.

    
    Key facts about the quarter:

    -  271% increase in production to 12,611 barrels of oil per day (BOPD)
       net after royalty (NAR) for the quarter ended June 30, 2009, compared
       with 3,399 BOPD NAR for the same period in 2008;

    -  Net loss for the quarter ended June 30, 2009 was $28.2 million and
       includes a foreign exchange loss of $33.7 million, of which
       $31.0 million was an unrealized foreign exchange loss;

    -  Funds flow from operations for the quarter ended June 30, 2009 was
       $36.0 million as compared to $17.9 million for the same period in
       2008 (see table below);

    -  Cash and cash equivalents of $146.5 million at June 30, 2009;

    -  Gran Tierra Energy continues to be debt free;

    -  Ecopetrol's oil pipeline in Southern Colombia was disrupted between
       June 7 and June 20: consolidated production averaged 2,963 BOPD NAR
       during this period;

    -  Three new highly prospective exploration contracts signed for a total
       of 235,264 acres in Putumayo Basin of Southern Colombia with 100%
       working interest; and

    -  Costayaco-8 logging demonstrates that reservoirs lie completely
       within the field's oil column; subsequent testing produced 2,640 BOPD
       from the lower reservoir and 2,211 BOPD from the upper reservoir.
    

    "During the second quarter we executed our exploration and development
program, grew production to record levels, and generated strong cash flow from
operations," said Dana Coffield, President and Chief Executive Officer of Gran
Tierra Energy. "Non-cash depletion, depreciation and accretion expenses of
$32.7 million and unrealized foreign exchange losses of $31.0 million,
contributed to our net loss for the quarter of $28.2 million. However, our
funds flow from operations was $36.0 million in the second quarter and our
underlying asset base remains strong. We believe we have successfully
positioned ourselves to generate the cash necessary to fund future growth and
allow us to fund our ongoing development and exploration program, including
fourteen exploration wells in Colombia and Peru beginning in late 2009 and
continuing through 2010. Our balance sheet remains very strong, and we expect
that our capital expenditure program for the next twelve months will be more
than fully funded from cash flow and cash on hand."

    
    Production Review

                        Three Months Ended          Three Months Ended
                           June 30, 2009               June 30, 2008
                ------------------------------- -----------------------------
    (Barrels
     of Oil)     Colombia Argentina      Total  Colombia Argentina     Total
                ------------------------------- -----------------------------

    Gross
     Production 1,213,251    91,444  1,304,695   326,845    55,247   382,092

    Royalties    (155,966)  (11,089)  (167,055)  (55,052)   (6,630)  (61,682)

    Inventory
     Adjustment     1,257     8,698      9,955   (13,130)    2,089   (11,041)
                ------------------------------- -----------------------------

    Production
     (NAR)      1,058,542    89,053  1,147,595   258,663    50,706   309,369
                ------------------------------- -----------------------------
                ------------------------------- -----------------------------
    Barrels of
     Oil Per Day
     (BOPD)(NAR)   11,632       979     12,611     2,842       557     3,399
                ------------------------------- -----------------------------
                ------------------------------- -----------------------------


                          Six Months Ended           Six Months Ended
                           June 30, 2009               June 30, 2008
                ------------------------------- -----------------------------
    (Barrels
     of Oil)     Colombia Argentina      Total  Colombia Argentina     Total
                ------------------------------- -----------------------------

    Gross
     Production 2,191,556   198,609  2,390,165   583,764   112,359   696,123

    Royalties    (281,022)  (24,451)  (305,473)  (95,460)  (13,483) (108,943)

    Inventory
     Adjustment     1,730    (1,328)       402   (14,304)   (4,785)  (19,089)
                ------------------------------- -----------------------------

    Production
     (NAR)      1,912,264   172,830  2,085,094   474,000    94,091   568,091
                ------------------------------- -----------------------------
                ------------------------------- -----------------------------
    BOPD (NAR)     10,565       955     11,520     2,604       517     3,121
                ------------------------------- -----------------------------
                ------------------------------- -----------------------------


    Financial Review

                   Three Months Ended June 30,     Six Months Ended June 30,
                ------------------------------- -----------------------------
                     2009      2008   % Change      2009      2008  % Change
                ------------------------------- -----------------------------
    (Thousands
     of U.S.
     Dollars)
    Revenue and
     Interest    $ 58,511  $ 33,144         77  $ 92,076  $ 53,963        71
                ------------------------------- -----------------------------
                ------------------------------- -----------------------------
    Net income
     (loss)      $(28,200) $  8,526       (431) $(14,068) $ 13,202      (207)
                ------------------------------- -----------------------------
                ------------------------------- -----------------------------

    (US Dollars
     per Share)
    Net Income
     (Loss) Per
     Share -
     Basic       $  (0.12) $   0.08       (250) $  (0.06) $   0.13      (146)
                ------------------------------- -----------------------------
                ------------------------------- -----------------------------
    Net Income
     (Loss) Per
     Share -
     Diluted     $  (0.12) $   0.07       (271) $  (0.06) $   0.11      (155)
                ------------------------------- -----------------------------
                ------------------------------- -----------------------------


    Funds flow from operations reconciled to net income (loss) is as follows:

    Funds flow From Operations -      Three Months Ended   Six Months Ended
     Non-GAAP Measure (1)                    June 30,           June 30,
                                     ------------------- --------------------
                                          2009      2008      2009      2008
                                     ------------------- --------------------
    (Thousands of U.S. Dollars)

    Net income (loss)                 $(28,200) $  8,526  $(14,068) $ 13,202
    Adjustments to reconcile net
     income to net cash (used in)
     provided by operating activities
      Depletion, depreciation and
       accretion                        32,691     5,400    60,220     8,464
      Deferred taxes                      (971)   (1,487)   (4,953)     (866)
      Stock-based compensation           1,160       399     2,285       847
      Unrealized loss on financial
       instruments                         284     5,077       371     5,770
      Unrealized foreign
       exchange loss                    31,007         -    12,709         -
                                     ------------------- --------------------
    Funds flows from operations       $ 35,971  $ 17,915  $ 56,564  $ 27,417
                                     ------------------- --------------------
                                     ------------------- --------------------

    (1) Gran Tierra Energy has disclosed the non-GAAP measure "funds flow
        from operations" in this press release which does not have any
        standardized meaning prescribed under GAAP. Management uses this
        financial measure to analyze operating performance and the income
        (loss) generated by Gran Tierra Energy's principal business
        activities prior to the consideration of how non-cash items affect
        that income, and believes that this financial measure is also useful
        supplemental information for investors to analyze operating
        performance and Gran Tierra Energy's financial results. Investors
        should be cautioned that this measure should not be construed as an
        alternative to net income (loss) or other measures of financial
        performance as determined in accordance with GAAP. Gran Tierra
        Energy's method of calculating this measure may differ from other
        companies and, accordingly, it may not be comparable to similar
        measures used by other companies. Funds flow from operations, as
        presented, is based on net income (loss) adjusted for depletion,
        depreciation and accretion, deferred taxes, stock based compensation,
        unrealized loss (gain) on financial instruments and unrealized
        foreign exchange losses (gains).
    

    Second Quarter 2009 Financial Highlights:

    Revenue and interest increased by 77% to $58.5 million for the three
months ended June 30, 2009 compared with $33.1 million for the same period in
2008. For the six months ended June 30, 2009 revenue and interest increased by
71% to $92.1 million compared with $54.0 million for the same period the
previous year. While partially offset by the effect of lower oil prices,
increased revenue this quarter was the result of a 271% increase in
production, primarily due to increased production from the continued
development of the Costayaco field in the Chaza Block in Colombia, and the
addition of production from Solana Resources' interests in Colombia following
the acquisition on November 14, 2008. The average price received per barrel of
oil in the second quarter of 2009 decreased 52% to $50.79 per barrel from
$106.80 per barrel in the second quarter of 2008.
    Operating expenses increased by 138% to $8.9 million for the quarter
ended June 30, 2009 compared with $3.7 million for the same quarter in 2008.
On a per barrel basis, operating expenses for the second quarter of 2009
declined by 36% to $7.74 per barrel compared with $12.04 per barrel for the
same period in 2008. For the six months ended June 30, 2009, operating
expenses increased by 155% to $16.0 million compared with $6.3 million for the
same period in 2008. On a per barrel basis, operating expenses for the first
half of 2009 declined by 30% to $7.66 per barrel compared with $11.01 per
barrel in the first half of 2008. Per barrel operating expenses in both
periods of 2009 were lower due to high production wells and increases in
operational efficiency.
    Depletion, depreciation and accretion expenses (DD&A) for the first three
months of 2009 increased to $32.7 million or $28.49 per barrel from $5.4
million or $17.45 per barrel for the same quarter in 2008 due to higher
production levels and amortization of $24.6 million in the quarter related to
the fair value of property, plant and equipment recorded on the acquisition of
Solana Resources. DD&A for the six months ended June 30, 2009 was $60.2
million or $28.88 per barrel, including $45.5 million related to Solana
Resources property, plant and equipment, compared with $8.5 million or $14.90
per barrel for the same period in 2008.
    General and administrative expenses (G&A) increased by 51% to $7.0
million for the quarter ended June 30, 2009 compared with $4.6 million for the
same period in 2008. However, on a per barrel basis, general and
administrative costs in the second quarter of 2009 decreased by 59% to $6.12
per barrel compared with $15.00 per barrel in the second quarter of 2008. G&A
expenses for the six months ended June 30, 2009 were $12.2 million or $5.83
per barrel compared with $8.8 million or $15.44 per barrel for the same period
in 2008. The decrease in G&A expenses on a per barrel basis for the periods
ending June 30, 2009 was the result of higher production offsetting the
increase in employee related costs in connection with Gran Tierra Energy's
expanded operations in Colombia.
    Included in the second quarter 2009 results is a $33.7 million foreign
exchange loss of which $31.0 million is due to a non-cash unrealized foreign
exchange loss related to translation of the deferred tax liability recorded on
the acquisition of Solana Resources. For the six months ended June 30, 2009,
the company recorded a non-cash $12.7 million foreign exchange loss due to the
translation of the same deferred tax liability. A strengthening in the
Colombian peso against the U.S. dollar results in foreign exchange losses,
estimated at $70,000 for each one peso decrease in the exchange rate of the
Colombian peso to one U.S. dollar.
    The net loss for the second quarter of 2009 was $28.2 million compared
with a net income of $8.5 million for the same period in 2008. On a per share
basis, the net loss was $0.12 per share basic and diluted, compared with a net
income of $0.08 per share basic and $0.07 per share diluted in the second
quarter of 2008. For the six months ended June 30, 2009 the net loss was $14.1
million compared with net income of $13.2 million for the same period in 2008.
The net loss for the first half of 2009 was $0.06 per share basic and diluted
compared to net income of $0.13 per share basic and $0.11 per share diluted
for the first half of 2008.

    Balance Sheet Highlights:

    The company reported cash and equivalents of $146.5 million at June 30,
2009 as compared with $176.8 million at December 31, 2008. Working capital
increased to $152.3 million at June 30, 2009, compared with $132.8 million at
December 31, 2008. Shareholders' equity decreased to $781.7 million at June
30, 2009 from $791.9 million at December 31, 2008, and the company had no
outstanding long-term debt as of June 30, 2009.

    Production Highlights:

    Average daily consolidated light and medium crude oil production for the
three months ended June 30, 2009 increased 271% to a record 12,611 BOPD NAR
compared with 3,399 BOPD NAR for the same period of 2008.
    Average daily Colombian production of light and medium crude oil for the
three months ended June 30, 2009 increased 309% to a record 11,632 BOPD NAR
compared with 2,842 BOPD NAR for the same period in 2008.
    Average daily Argentine production of light and medium crude oil for the
quarter ended June 30, 2009 increased 76% to a record 979 BOPD NAR compared
with 557 BOPD NAR for the same quarter in 2008.
    While production increased on a year-over-year basis, production was
negatively impacted by the 14 day disruption of Ecopetrol's Trans Andean
pipeline in Southern Colombia between June 7 and June 20, 2009. During this
period, consolidated production averaged approximately 2,963 BOPD NAR. As a
result of this disruption, production was reduced by approximately 3,400 BOPD
NAR (or 309,400 barrels of oil) for the second quarter.

    2009 Capital Plan Update:

    Gran Tierra Energy's planned capital program for 2009 has decreased by $9
million to $151 million for exploration and production development operations
in Colombia, Peru, and Argentina for 2009. This decrease is mainly due to
activity deferred to 2010. Approximately $141 million is allocated to
Colombia, with $115 million for development drilling and associated facilities
construction and approximately $26 million for exploration drilling and new
seismic data acquisition. Approximately $5 million is allocated to Peru for
seismic operations and approximately $5 million is allocated to Argentina for
production maintenance operations.

    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, in addition to five other exploration blocks. The total Putumayo
acreage encompasses 494,758 gross acres, or 384,329 net acres. Gran Tierra
Energy is the operator of all of its Putumayo licenses.

    New Exploration Licenses Granted

    Gran Tierra Energy successfully negotiated three new exploration and
exploitation licenses during the quarter for three blocks totaling 235,264
acres. Two of these blocks are on the same geological trend with the Costayaco
Field discovery. The Piedemonte Norte Block, encompasses 78,742 acres, and
lies southwest of the Chaza Block where the Costayaco field is located. The
Piedemonte Sur Block, which encompasses approximately 73,898 acres, is located
immediately west of the Orito Field, the largest oil field in the Putumayo
Basin. Further south, the Rumiyaco Block, encompasses 82,624 acres in the
central Putumayo Basin. Gran Tierra Energy has a 100% working interest and is
the operator of these 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)

    Gran Tierra Energy successfully completed the drilling and logging of
Costayaco-8 towards the end of the quarter, revealing that both the Upper T
Sandstone of the Villeta formation and the Caballos formation were within the
field's oil column. Subsequent to the quarter, the well underwent further
testing. The Caballos interval produced oil at an average rate of 2,640 BOPD
with no water for 11 hours using a jet pump. The Upper T Sandstone interval
produced oil at an average rate of 2,211 BOPD with no water for 7 hours when
tested with a jet pump. This well is currently being tied into existing
infrastructure. Costayaco-9 spudded July 17, 2009 and Costayaco-10 is
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.
    The 2D seismic program planned for the Chaza block has been completed.
There continues to be one exploration well budgeted for 2009 in the Chaza
Block. The Rio Mocoa-1 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 is budgeted for this
block in 2009.

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

    The two seismic programs planned for the Azar Block, a 40 kilometer 2D
program and a 50 square kilometer 3D program, have been initiated.

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

    In the third quarter of 2009 a work-over test of Mecaya-1 is planned. The
exploration well (Mecaya-2) that was planned for the third quarter of 2009 has
been deferred to 2010.

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

    No exploration activities are planned for the Santana block during 2009.

    
    Llanos Basin
    ------------
    

    In April 2009, Gran Tierra Energy closed the sale of the company's
interests in the Guachiria Norte, Guachiria, and Guachiria Sur blocks in
Colombia. Principal terms included consideration of $7.0 million comprising an
initial cash payment of $4.0 million at closing, followed by 15 monthly
installments of $200,000 each which began on June 1, 2009 and extending
through August 3, 2010. Gran Tierra Energy recorded net proceeds of $6.3
million after settlement of outstanding obligations. Gran Tierra Energy
retained a 10% overriding royalty interest on the Guachiria Sur block, which,
in the event of a discovery, is designed to reimburse 200% of the costs for
previously acquired seismic data. Gran Tierra Energy has an interest in two
other blocks in the Llanos Basin; one of which it operates, encompassing
180,471 gross acres, or 142,503 net acres.

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

    The 50 square kilometer 3D seismic program, which replaced the commitment
to drill one obligation exploration well, has been initiated to further define
the prospectivity of the identified leads prior to drilling.

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

    The 110 square kilometer 3D seismic program, to further define the
exploration potential of the area, has been completed.

    
    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)

    The 75 square kilometer 3D seismic program over the new Popa
gas-condensate discovery and an adjacent exploration prospect has been
completed along with the long-term production test of the Popa-2
gas-condensate discovery.
    While this block previously encompassed 144,670 gross acres, Gran Tierra
Energy 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 National Hydrocarbon Agency of Colombia
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. Production is currently shut in while liquid metering is being
installed. 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):

    The well re-entry and two exploration well commitments scheduled for the
second half of 2009 have been deferred until 2010.

    Peru Operations Update:

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

    The expanded environmental impact assessments for Blocks 122 and 128 have
been submitted to the Peruvian government for review and approval.
Consultations with communities in the region have begun.
    These assessments are in preparation for a 500 kilometer 2D seismic
survey expected to be acquired in 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, the pre-feasibility engineering field development study has been
completed.

    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.

    Conference Call Information:

    Gran Tierra Energy Inc. will host its second quarter 2009 results
conference call on Monday, August 10th at 10:00 a.m. Eastern Daylight Time
(EDT). Prior to the conference call, Gran Tierra Energy will release its
financial results at 7:00 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=PAFK7EB3M
    Interested parties may access the conference call by dialing
1-888-713-4199 (domestic) or 617-213-4861 (international), pass code 85503441.
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 August 17,
2009. To access the replay dial 888-286-8010 (domestic) or 617-801-6888
(international) pass code 41557388.
    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.

    Forward Looking Statements:

    The statements in this news release regarding Gran Tierra Energy's belief
that the company has successfully positioned itself to generate cash as
necessary, the company's capital expenditure program for the next twelve
months will be funded from cash flow and cash on hand, together with all other
statements regarding expected or planned development, testing, drilling or
exploration, or that otherwise 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 Quarterly Report on
Form 10-Q filed May 7, 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.

    
    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        Six Months Ended
                                      June 30,                 June 30,
                          ------------------------ --------------------------
                                 2009         2008         2009         2008
                          ------------------------ --------------------------
    REVENUE AND OTHER INCOME
      Oil and natural
       gas sales          $    58,284  $    33,042  $    91,435  $    53,791
      Interest                    227          102          641          172
                          ------------ ------------ ------------ ------------
                               58,511       33,144       92,076       53,963
                          ------------ ------------ ------------ ------------
    EXPENSES
      Operating                 8,878        3,726       15,964        6,253
      Depletion,
       depreciation and
       accretion               32,691        5,400       60,220        8,464
      General and
       administrative           7,025        4,641       12,150        8,774
      Derivative financial
       instruments loss           284        6,278          284        7,462
      Foreign exchange
       (gain) loss             33,708         (397)      13,486         (383)
                          ------------ ------------ ------------ ------------
                               82,586       19,648      102,104       30,570
                          ------------ ------------ ------------ ------------

    INCOME (LOSS) BEFORE
     INCOME TAXES             (24,075)      13,496      (10,028)      23,393
      Income tax expense       (4,125)      (4,970)      (4,040)     (10,191)
                          ------------ ------------ ------------ ------------
    NET INCOME (LOSS) AND
     COMPREHENSIVE INCOME
     (LOSS)                   (28,200)       8,526      (14,068)      13,202
    RETAINED EARNINGS
     (ACCUMULATED DEFICIT),
     BEGINNING OF PERIOD       21,116      (11,835)       6,984      (16,511)
                          ------------ ------------ ------------ ------------
    ACCUMULATED DEFICIT,
     END OF PERIOD        $    (7,084) $    (3,309) $    (7,084) $    (3,309)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    NET INCOME (LOSS) PER
     SHARE - BASIC        $     (0.12) $      0.08  $     (0.06) $      0.13
    NET INCOME (LOSS) PER
     SHARE - DILUTED      $     (0.12) $      0.07  $     (0.06) $      0.11
    WEIGHTED AVERAGE
     SHARES OUTSTANDING -
     BASIC                241,426,744  105,123,188  239,962,497  101,054,083
    WEIGHTED AVERAGE
     SHARES OUTSTANDING -
     DILUTED              241,426,744  123,979,074  239,962,497  119,136,907



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

                                                        June 30, December 31,
                                                    -------------------------
                                                           2009         2008
                                                    -------------------------
    ASSETS
    Current Assets
      Cash and cash equivalents                     $   146,534  $   176,754
      Restricted cash                                     1,664            -
      Accounts receivable                                52,766        7,905
      Inventory                                           2,275          999
      Taxes receivable                                    2,278        5,789
      Prepaids                                            1,619        1,103
      Derivative financial instruments                        -          233
      Deferred tax assets                                 1,218        2,262
                                                    -------------------------

    Total Current Assets                                208,354      195,045
                                                    -------------------------

    Oil and Gas Properties (using the full
     cost method of accounting)
      Proved                                            382,577      380,855
      Unproved                                          358,937      384,195
                                                    -------------------------

    Total Oil and Gas Properties                        741,514      765,050

      Other Capital Assets                                3,309        2,502
                                                    -------------------------

    Total Property, Plant and Equipment                 744,823      767,552
                                                    -------------------------

    Other Long Term Assets
      Deferred tax assets                                 4,100       10,131
      Other long-term assets                                975        1,315
      Goodwill                                           98,210       98,582
                                                    -------------------------

    Total Other Long Term Assets                        103,285      110,028
                                                    -------------------------

    Total Assets                                    $ 1,056,462  $ 1,072,625
                                                    -------------------------
                                                    -------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
      Accounts payable                              $    22,690  $    21,134
      Accrued liabilities                                17,350       12,841
      Derivative financial instruments                      138            -
      Taxes payable                                      15,603       28,163
      Deferred tax liability                                  -          100
      Asset retirement obligation                           280            -
                                                    -------------------------

    Total Current Liabilities                            56,061       62,238
                                                    -------------------------

      Deferred tax liability                            213,867      213,093
      Deferred remittance tax                             1,124        1,117
      Asset retirement obligation                         3,740        4,251
                                                    -------------------------

    Total Long Term Liabilities                         218,731      218,461
                                                    -------------------------

    Commitments and Contingencies
    Shareholders' Equity
      Common shares                                         230          226
      (209,011,873 and 190,248,384 common shares
       and 32,449,365 and 48,238,269 exchangeable
       shares, par value $0.001 per share, issued
       and outstanding as at June 30, 2009 and
       December 31, 2008, respectively)
      Additional paid in capital                        759,648      753,236
      Warrants                                           28,876       31,480
      Retained earnings (accumulated deficit)            (7,084)       6,984
                                                    -------------------------

    Total Shareholders' Equity                          781,670      791,926
                                                    -------------------------

    Total Liabilities and Shareholders' Equity      $ 1,056,462  $ 1,072,625
                                                    -------------------------
                                                    -------------------------


    Gran Tierra Energy Inc.
    Condensed Consolidated Statements of Cash Flows (Unaudited)
    (Thousands of U.S. Dollars)

                                                    Six Months Ended June 30,
                                                    -------------------------
                                                           2009         2008
                                                    -------------------------
    Operating Activities

    Net income (loss)                               $   (14,068) $    13,202
    Adjustments to reconcile net income to net cash
     (used in) provided by operating activities:
      Depletion, depreciation and accretion              60,220        8,464
      Deferred taxes                                     (4,953)        (866)
      Stock based compensation                            2,285          847
      Unrealized loss on financial instruments              371        5,770
      Unrealized foreign exchange loss                   12,709            -
      Settlement of asset retirement obligations            (52)           -

    Net changes in non-cash working capital
      Accounts receivable                               (43,142)     (28,462)
      Inventory                                            (225)         159
      Prepaids                                             (516)         (44)
      Accounts payable and accrued liabilities            1,505        3,888
      Taxes receivable and payable                       (9,049)       9,464
                                                    -------------------------

    Net cash provided by operating activities             5,085       12,422
                                                    -------------------------

    Investing Activities
      Oil and gas property and other capital
       asset expenditures                               (39,268)     (11,712)
      Proceeds from disposition of oil and
       gas property                                       4,200            -
      Long term assets and liabilities                      340          (52)
                                                    -------------------------

    Net cash used in investing activities               (34,728)     (11,764)
                                                    -------------------------

    Financing Activities
      Restricted cash                                    (1,664)           -
      Proceeds from issuance of common stock              1,087       16,456
                                                    -------------------------

    Net cash provided by (used in)
     financing activities                                  (577)      16,456
                                                    -------------------------

    Net (decrease) increase in cash and
     cash equivalents                                   (30,220)      17,114
    Cash and cash equivalents, beginning of period      176,754       18,189
                                                    -------------------------

    Cash and cash equivalents, end of period        $   146,534  $    35,303
                                                    -------------------------
                                                    -------------------------

    Cash                                            $    37,532  $    17,506
    Term deposits                                       109,002       17,797
                                                    -------------------------
    Cash and cash equivalents, end of period        $   146,534  $    35,303
                                                    -------------------------
                                                    -------------------------

    Supplemental cash flow disclosures:
      Cash paid for taxes                           $    16,680  $     2,179
                                                    -------------------------
                                                    -------------------------
    Non-cash investing activities:
      Non-cash working capital related to
       capital additions                            $    15,656  $    14,037
                                                    -------------------------
                                                    -------------------------
    





For further information:

For further information: For media and investor inquiries please contact
Thomas McMillan, Equicom Group, (866) 973-4873, (403) 536-5903,
info@grantierra.com

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Gran Tierra Energy Inc.

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