Gran Tierra Energy Announces US$195 Million Capital Program for 2010
Drilling Programs in
Gran Tierra Energy had US$151.6 million in cash at the end of Q3 2009 and has no debt. The 2010 work program and budget is expected to be funded from cash-flow from operations with the balance from cash on hand as necessary. The budget is based on a West Texas Intermediate oil price of US$70 per barrel of oil in 2010.
"Gran Tierra Energy's strong balance sheet and extensive land position containing a broad portfolio of exploration opportunities, with a balance of risk and reward, places us in an excellent position to execute our 2010 exploration work program," said
The
Putumayo Basin
Gran Tierra Energy is one of the largest exploration landholders in the Putumayo Basin of southern
Chaza Block (100% working interest)
New infrastructure construction planned for the Costayaco field includes crude gathering lines, water lines, pumping stations, storage batteries, crude unloading facilities, water injection and disposal, and Costayaco electrification and field support facilities. Cost savings of US$6.0 million per year are expected from the electrification project as a result of reduced diesel consumption required to generate power for the down-hole pumps at the Costayaco Field.
In addition to the ongoing Costayaco field development activities, new seismic acquisition and one exploration well are planned in the Chaza Block. The Moqueta-1 prospect is scheduled to be drilled to the north of the Costayaco field in Q1 of 2010.
Guayuyaco Block (70% working interest)
The Guayuyaco Block contains both the producing Guayuyaco and Juanambu oil fields. During Q1 2010 a 75 Km(2) 3-D is scheduled to be acquired. The 3-D program will overlap Gran Tierra Energy's adjacent Chaza Block with an approximate split of 40 Km(2) in Guayuyaco and 35 Km(2) in the Chaza Block. In addition, one exploration well (Nabueno-1) is scheduled to be drilled in Guayuyaco during Q4 of 2010.
Azar Block (40% working interest)
During 2010 a 75 Km(2) 3-D seismic program will be acquired and two exploration wells are planned to be drilled during Q3 and Q4 2010.
Rumiyaco Block (100% working interest)
During 2010 a 95 Km(2) 3-D and a 12 Km 2-D seismic programs will be acquired and one exploration well is planned to be drilled during Q4 2010.
During 2010 upgrades to the Santana Pumping Station are scheduled to continue. The objective is to improve storage and pumping capacity and reduce the volume of oil currently being trucked between Santana and Orito, resulting in estimated cost savings in excess of US$3.0 million in 2010. No exploration activities are planned for the
Putumayo Piedmonte Norte Block (100% working interest)
During 2010, Gran Tierra Energy plans to acquire 120 Km(2) of 3-D seismic data and drill one high impact exploration well (Rio Blanco-1), with timing possible in Q4 2010 subject to obtain prompt permitting with authorities.
Putumayo Piedmonte Sur Block (100% working interest)
During 2010, Gran Tierra Energy plans to acquire 10 Km 2-D seismic data and drill one exploration well (Taruka-1), in Q2 2010.
Llanos Basin
Gran Tierra Energy currently has a non-operated interest in one block in the Llanos Basin.
Garibay (50% non-operated working interest)
Gran Tierra Energy continues to evaluate the prospectivity of the Garibay Block. No capital has been budgeted for 2010.
Lower Magdalena ValleyBasin
Magangue Block (37.8% working interest)
Gran Tierra Energy has nominal capital spending for facility upgrades planned for the Magangue Block in 2010.
Property Rationalization
Gran Tierra Energy continues to execute its ongoing rationalization of non-core properties in its portfolio.
On
Effective
Gran Tierra Energy has signed a letter of intent with another party covering the sale of the Company's interests in the Catguas Block in the Catatumbo basin. Approval by the regulatory authorities in
The San
Maranon Basin
Blocks 122 & 128 (100% working interest)
These blocks are located on the eastern flank of the Maranon Basin of northern
Gran Tierra Energy has entered the second exploration period for both Blocks 122 and 128. An environmental impact survey has been completed in preparation for initiating a 554 Kms 2-D seismic acquisition survey beginning in the second quarter of 2010 over the principal leads identified on the two blocks. Gran Tierra Energy is planning on drilling four exploration wells in the second half of 2010. The total 2010 capital budget for
Noroeste Basin
Gran Tierra Energy is the largest exploration landholder in the Noroeste Basin of northern
The work program for 2010 consists of US$4.5 million for 2-D and 3-D seismic acquisition in the
In the Valle Morado block, a re-entry and sidetrack of the VM.x-1001 well is scheduled for Q3 2010, for an estimated cost of US$15.1 million. The sidetrack well is being drilled to test the resource potential discovered by the VM.x-1001 well. Existing pipeline and gas processing plant capacity is capable of handling 30 million standard cubic feet of gas per day (MMSCF/day). Gran Tierra Energy has signed a gas sales agreement with Albanesi S.A. for the sale of up to 7 MMSCF/day at a price of US$2.90 per MMbtu. This gas will be sold until the commencement of the workover and sidetrack operations; pricing can be renegotiated subsequent to the operations once new production volumes are confirmed.
The 2010 budget also includes US$3.9 million for workovers and facilities costs on other Company properties in the Noroeste Basin.
Oil production is expected to show some decline in
Gran Tierra Energy established a business development office in
Operations Update
Gran Tierra Energy initiated drilling of the Dantayaco-1 exploration well in the Chaza Block in the Putumayo basin on
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. is an international oil and gas exploration and production company, headquartered in
Additional information concerning Gran Tierra Energy is available at www.grantierra.com, on SEDAR (www.sedar.com) and with the Securities and Exchange Commission (www.sec.gov).
Forward-Looking Statements
The statements in this press release regarding Gran Tierra Energy's expectations, plans, projections and actions currently contemplated for 2010 relating to its 2010 capital program and its planned exploration, drilling and production activities and estimated costs, as well as statements made regarding expected production, source of cash to fund the exploration plan, divestment plans, are "forward-looking statements" within the meaning of the U.S. federal and Canadian securities laws, including Canadian Securities Administrators' National Instrument 51-102 Continuous Disclosure Obligations and the U.S. Private Securities Litigation Reform Act of 1995. Statements containing the words "estimates", "expects", "plans", "projects", "will", "scheduled", "forecast", "may", and variations of these words are forward-looking statements. These forward-looking 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. Although, Gran Tierra Energy believes that the assumptions underlying, and expectations reflected in, these forward-looking statements are reasonable, it can give no assurance that these assumptions and expectations will prove to be correct.
Factors that could cause results to differ materially from those described in the forward-looking statements include: Gran Tierra Energy's operations are located in
All forward-looking statements in this press release are expressly qualified by information contained in the Company's filings with regulatory authorities and, subject to its obligations under applicable securities laws, Gran Tierra Energy does not undertake to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.
For further information: For media and investor inquiries please contact David Feick, Equicom Group, (866) 973-4873, (403) 218-2862, [email protected]
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