Five Million Barrel Cumulative Production Threshold Attained
CALGARY, Sept. 21 /CNW/ - Gran Tierra Energy Inc. (NYSE Amex: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today provided an operations update for the Costayaco Field in the Chaza Block, Putumayo Basin of southern Colombia. Gran Tierra Energy has a 100% working interest in the field and is the operator.
"On top of meeting our daily production plateau target of 19,000 BOPD at the end of August, ahead of schedule, we have now tied in an additional production well and are preparing to drill the final development well in the field for 2010, which will allow us to maintain these production levels as the field matures." said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy.
Costayaco-9 Production Test Results
Gran Tierra Energy has completed production testing on Costayaco-9, a vertical development well located 1,950 feet southwest of Costayaco-8. In early September, two separate production tests were conducted with a jet pump on Costayaco-9. A 24.5 hour production test was conducted on the T sandstone of the Villeta formation. This test covered a 40 foot interval and tested at approximately 926 BOPD with less than 1% watercut. A second 23.5 hour production test was conducted on the Caballos sandstone. This test covered a 64 foot interval and tested at approximately 1,840 BOPD with less than 1.5% watercut. Costayaco-9 has been tied in and is currently on production (from the T sandstone only) at approximately 1,860 BOPD.
Costayaco-10 will be drilled approximately 2,500 feet southwest of Costayaco-9. Lease construction is currently underway and the well is expected to spud in the last week of September. The main objective for Costayaco-10 is to add production capacity to assist in maintaining the gross production plateau of 19,000 BOPD from the Costayaco field. In addition, it is expected to convert probable and possible reserves into proven and probable reserves respectively. This is the last well planned to be drilled in the Costayaco field in 2009.
Costayaco field reached the five million cumulative barrels of oil production milestone on September 10, 2009. As stated in a previous announcement, an increase in royalties becomes effective once cumulative production exceeds five million barrels for the Costayaco field. The additional royalty is dependent on West Texas Intermediate (WTI) oil price, and is approximately 17.1% at $70.00/bbl WTI. The combined royalty rate at 19,000 BOPD gross production and $70 WTI is approximately 26.5%. This results in a net after royalty production level of approximately 13,000 BOPD for the Costayaco field (including third party Net Profits Interest). This is in addition to current production of approximately 1,100 BOPD net after royalty from Gran Tierra Energy's other operated fields in the Putumayo Basin, and approximately 1,200 BOPD net after royalty production from Argentina.
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.
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 expectations that it can maintain these production levels as the field matures and Costayaco-10 is expected to spud in the last week of September 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. 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 August 10, 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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