Delineation drilling and testing initiated at Costayaco Field in Colombia
CALGARY, Alberta, Feb. 4 /CNW/ -- Gran Tierra Energy Inc. (OTC Bulletin
Board: GTRE), a company focused on oil exploration and production in South
America, today provided an update on its advancement of development drilling
and testing operations in Colombia, and oil exploration activities in
Colombia, Argentina and Peru.
Drilling operations in the Costayaco field, a new oil field discovery
made in 2007 in the Chaza Block in the Putumayo Basin of southern Colombia,
are proceeding as planned. Testing operations on Costayaco-2, the second well
in the Costayaco field, were initiated on January 26, 2008, and are expected
to be completed before the end of February, 2008. Drilling of the third well,
Costayaco-3, commenced on January 25 and is expected to be completed in late
February, with testing to follow afterwards.
Production from the discovery well, Costayaco-1, averaged approximately
3,460 barrels of oil per day (BOPD) gross with 0.3 percent water cut, or 1,557
BOPD net after royalty, to Gran Tierra Energy in January, 2008.
Acquisition of 41 kilometers of new 2-D seismic data to define additional
exploration potential in the Chaza Block is in progress.
Construction of a six kilometer six inch pipeline for the Juanambu field,
another oil discovery made in 2007 on the adjacent Guayuyaco Block, is
ongoing. The pipeline is expected to be operational in mid-February. The
pipeline will replace trucking operations which handled approximately 1,750
BOPD gross with 0.3 percent water cut, or 551 BOPD net after royalty, to Gran
Tierra Energy in January, 2008.
On the Azar Block, immediately east of the Guayuyaco Block, the
acquisition of 35 square kilometers of new 3D seismic has been completed. This
seismic will be used to determine the location of Mandiyaco-1, an exploration
well expected to be drilled in the second half of 2008. In addition, a
work-over of an untested oil discovery, Palmera-1, is scheduled for the first
quarter of 2008.
Technical evaluation work continues on the Putumayo West A TEA and the
Rumiyaco E&P block (previously called Putumayo West B TEA). Gran Tierra
Energy holds a 100% working interest in both of these blocks.
A successful farmout of the Rio Magdalena Block in the Middle Magdalena
Basin has been executed. Under the terms of the farmout agreement, Gran
Tierra Energy will remain operator and will retain a 40% working interest in
the block, and will receive a full carry on the cost of the drilling of the
Popa-2 exploration well, which is expected to be drilled in the second quarter
of 2008 near a non-commercial oil discovery made by Gran Tierra Energy in 2006
with the Popa-1 well. Transfer of the interest in the Rio Magdalena
Association Contract to the farmee is subject to approval by Ecopetrol and ANH
(Agencia Nacional de Hidrocarburos).
Technical evaluation work continues on all seven blocks in the Noroeste
Basin in northern Argentina, with well design and planning continuing for the
Proa-1 exploration well in the Surubi Block, expected to be drilled in the
third quarter of 2008. An active work-over program of existing wells has been
budgeted to maintain the company's base production.
Acquisition of approximately 20,000 linear kilometers of new high
definition airborne gravity and magnetic data over the entire area of Blocks
122 and 128 is continuing. Approximately 3,000 linear kilometers has been
acquired to date. This data will be used to define exploration leads over
which 2-D seismic data will be acquired in the Second Exploration Period of
each block. Block 122 encompasses approximately 1.2 million acres and Block
128 encompasses approximately 2.2 million acres of land. Gran Tierra Energy
is operator and holds a 100% working interest in both exploration blocks.
2008 Capital Program Update
Gran Tierra Energy has a working interest in nineteen blocks encompassing
6.5 million gross acres, or 5.9 million net acres, of land in Colombia,
Argentina and Peru. Gran Tierra Energy is the operator of eighteen of the
nineteen blocks. Capital expenditures of US$26.6 million have been budgeted
for 2008 for drilling three exploration wells and six development wells, all
operated by the company, in addition to fourteen workovers of existing wells.
Additional contingent expenditures of US$20.1 million have been budgeted for
infrastructure construction which may be required for the development of oil
discoveries made in 2007. The company expects to fund the capital expenditure
program through existing cash on hand, cash flow from operations and, if
necessary, an existing credit facility. Gran Tierra Energy's production
continues to be maintained at approximately 3,300 barrels of oil per day
(BOPD), net after royalty, with approximately 2,700 BOPD coming from Colombia
operations and approximately 600 BOPD coming from Argentina operations.
Dana Coffield, President and Chief Executive Officer of Gran Tierra
Energy Inc., stated "The first quarter of 2008 is developing into another
pivotal quarter for the company on both an operational front and from the
perspective of the company's shareholders. Gran Tierra Energy's 2008 oil
development drilling and oil exploration programs continue to gain momentum in
parallel with the satisfaction of conditions for the pending listing of common
shares of Gran Tierra Energy on the Toronto Stock Exchange."
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. is an international oil and gas exploration and
production company, headquartered in Calgary, Canada, incorporated and traded
in the United States and operating in South America. Gran Tierra Energy holds
interests in producing and prospective properties in Argentina, Colombia and
Peru. The company's strategy is focused on establishing a portfolio of
drilling opportunities to exploit undeveloped reserves to grow production, as
well as undertaking exploration to grow future reserves. Additional
information concerning Gran Tierra Energy is available at www.grantierra.com.
Investor inquiries may be directed to firstname.lastname@example.org or 1-800-916-GTRE
Forward Looking Statements
The statements in this press release regarding Gran Tierra Energy's
expectations with respect to the timing of testing and drilling operations,
transportation of crude oil, acquisition of seismic data, and the construction
of the pipeline, the use to which seismic data will be put, the ability of
Gran Tierra Energy to plan a full field development, including additional
drilling, facilities and pipeline to handle new production as appropriate
through 2008, and the expectation as to sources of funding, are 'forward-
looking statements' within the meaning of Section 27A of the United States
Securities Act of 1933, as amended, and Section 21E of the United States
Securities Exchange Act of 1934. Although these forward-looking statements
reflect the good faith judgment of management, forward-looking statements are
inherently subject to known and unknown risks and uncertainties that may cause
actual results to be materially different from those discussed in these
forward-looking statements including, but not limited to, in the case of these
forward-looking statements: unexpected delays in drilling or pipeline or other
transportation infrastructure completion due to equipment failure or other
unforeseen reasons; unforeseen events, such as unexpected difficulties in
drilling or unexpected discoveries, may cause Gran Tierra Energy to reallocate
resources, which may delay drilling, surveys, design plans, transportation
infrastructure development and production or alter the mix of development
drilling and exploration drilling in Gran Tierra Energy's portfolio; and
unexpected costs may decrease funds available to carry out Gran Tierra
Energy's plans described in this press release, which could delay or prevent
execution of these plans. Readers are urged not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
release. Gran Tierra Energy assumes no obligation to update these forward-
looking statements to reflect any event or circumstance that may arise after
the date of this release, other than as may be required by applicable law or
regulation. Readers are urged to carefully review and consider the various
disclosures, including the risk factors, made by Gran Tierra Energy in its
reports filed with the Securities and Exchange Commission, in particular under
the caption "Item 1A - Risk Factors" of its quarterly report on Form 10-Q
filed on November 8, 2007, which attempt to advise interested parties of the
risks and factors that may affect Gran Tierra Energy's business. If one or
more of these risks or uncertainties materialize, or if the underlying
assumptions prove incorrect, Gran Tierra Energy's actual results may vary
materially from those expected or projected.
For further information:
For further information: Dana Coffield, Gran Tierra Energy Inc.,
President & Chief Executive Officer, +1-800-916-4873, email@example.com; Al
Palombo, Cameron Associates, Investor Relations, +1-212-245-8800 Ext. 209,
firstname.lastname@example.org Web Site: http://www.grantierra.com