Production Testing in Valle Morado Field in Argentina Completed; Now Negotiating Gas Sales Contract
CALGARY, Dec. 10 /CNW/ - Gran Tierra Energy Inc. (NYSE Amex: GTE; TSX: GTE), a company focused on oil exploration and production in South America, today announced it has completed drilling and logging operations at Costayaco-10, the last development well in the planned 2009 Costayaco development drilling program. Gran Tierra Energy also provided an operational update for the Dantayaco-1 exploration well in the Chaza Block and the well testing operation at the Valle Morado Field in Argentina.
"Throughout 2009, our primary focus has been our core Colombian properties, successfully completing the 2009 Costayaco development drilling program with the drilling and logging of the final development well, Costayaco-10, and reaching our production plateau of 19,000 BOPD gross (13,000 BOPD net after royalty)," said Dana Coffield, President and CEO of Gran Tierra "Going forward, we are preparing to begin the largest exploration drilling program in company's history, focusing on Colombia and Peru. In conjunction, we are also working to derive value from our Argentine gas assets and are continuing our business development initiatives in Brazil."
Costayaco-10, Chaza Block
Gran Tierra Energy has completed drilling and logging operations for Costayaco-10, a directional development well located approximately 2,500 feet southwest of Costayaco-9. Well logs and pressure gradient data indicate that the T Sandstone of the Villeta formation lies completely within the field's oil column and that the Caballos formation encountered an oil-water contact consistent with the established Caballos oil-water contact for the field.
The well reached a total measured depth (MD) of 8,862 feet, or 7,354 feet true vertical depth (TVD subsea), on December 1, 2009 after drilling through the same reservoir sequences encountered in previous wells drilled in the field. Log interpretations from data acquired after drilling indicate the presence of reservoir sandstones in the T Sandstone beginning at 8,463 feet MD (6,992 feet TVD subsea) with an approximate net pay thickness of 25 feet, as well as in the Caballos Sandstone beginning at 8,599 feet MD (7,114 feet TVD subsea) with approximately 68 feet of net pay. These results are consistent with pre-drill estimates.
Core from the T Sandstone and Caballos reservoirs, with 100% recovery, was recovered and will be utilized for reservoir analysis and reservoir modeling.
Completion and testing operations will be carried out with a service rig. Testing results are expected towards the end of December. Gran Tierra Energy is the operator and has a 100% working interest in the Chaza Block.
The drilling rig used at Costayaco-10 will move and begin drilling Juanambu-2, the second development well in the Juanambu Field in the adjacent Guayuyaco Block, with drilling expected to commence on December 23, 2009.
Dantayaco-1, Chaza Block
Gran Tierra Energy is currently preparing to spud the Dantayaco-1 exploration well in the Chaza Block. Dantayaco-1 is located 4.9 miles (7.8 km) northwest of Costayaco-5. Lease construction is 98% completed and rig mobilization is currently underway. The estimated spud date for Dantayaco-1 is December 16, 2009. Dantayaco-1 is drilling the crest of a four-way structural closure identified on new 2-D seismic and is planned to drill to a total depth (TD) of approximately 2,600 feet with drilling expected to take approximately two weeks.
VM.x-1001, Valle Morado Block
On November 3, 2009, Gran Tierra Energy commenced an extended production test on the VM.x-1001 discovery well in the Valle Morado Field in Argentina. The production test duration was 24 days. The Lumbrera Formation (at approximately 17,500 feet MD) was tested at approximately 7 million standard cubic feet per day (MMSCF/day) of natural gas with approximately 3,500 barrels of water per day. The estimated wellhead flowing pressure was 2,550 psi.
A comparison study done on the produced water and the regional water indicates that the produced water is likely to be coming from the shallower Garganta Formation (above the producing Lumbrera Formation). Furthermore, the cement bond logs show poor to no cement bond behind casing between these two intervals.
Gran Tierra Energy plans to conduct production logging operations to confirm the source of the water production. Once the source of water production is confirmed, a remedial cement job is planned for July 2010, after the rainy season.
The original VM.x-1001 was drilled in 1987 by BHP and subsequently deepened by CGC-Reef in 1997. Prior to a previous operator experiencing a mechanical problem with the wellbore in January 2000, the Yacoraite interval was producing approximately 21 MMSCF/day of natural gas through a new pipeline and gas processing plant that connects the field to the main gas trunk line of northern Argentina. Gran Tierra Energy's Valle Morado gas plant has a total capacity of approximately 35 MMSCF/day of natural gas. The exact production capacity from the Valle Morado field will be determined once operations are completed in Q4 2010.
Gran Tierra Energy is currently negotiating a gas sales agreement for the Valle Morado field. Up to 7 MMSCF/day of gas will be sold until the commencement of the workover operations targeted for July 2010. Gas price can then be renegotiated once new production volumes are established. Gran Tierra Energy is the operator and currently has a 93.2% working interest in the Valle Morado Block.
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, and has opened a business development office in Rio de Janeiro, Brazil. 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.
Forward Looking Statements:
The statements in this news release regarding Gran Tierra Energy's expectations regarding the testing and analysis of results at Costayaco-10, planned drilling of Juanambu-2 and Dantayaco-1, and planned activities and production from the Valle Morado field, 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 (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 November 5, 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.
SOURCE Gran Tierra Energy Inc.
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