Gran Tierra Energy Reports Second Quarter 2007 Results of Operations



    CALGARY, ALBERTA, August 14 /CNW/ - Gran Tierra Energy Inc. (OTCBB:
GTRE.OB) a company focused on oil exploration and production in South America,
today announced the financial results of operations for the second quarter
ended June 30, 2007.

    Total revenue for the quarter was $3.7 million as compared to $2.1
million for same quarter of 2006. Net loss for the quarter amounted to $5.1
million or $(0.05) per share as compared to a net loss of $0.6 million or
$(0.01) per share for the comparable quarter of 2006.

    For the six month period ended June 30, 2007 the company reported total
revenue of $8.3 million as compared to $3.1 million for same period of 2006.
Net loss for the period amounted to $11.7 million or $(0.12) per share as
compared to a net loss of $1.8 million or $(0.04) per share for the comparable
period of 2006.

    Included in the year to date results are non-cash expenses of
approximately $7.4 million in liquidated damages, recorded as $4.2 million and
$3.2 million in the first and second quarters, respectively. The liquidated
damages were potentially payable in cash to stockholders who purchased 50
million units in a 2006 financing, as a result of a delay in the registration
statement for the units becoming effective. The registration of these shares
became effective May 14, 2007 and stockholders holding a majority of the units
approved a proposal whereby Gran Tierra amended the terms of the warrants
associated with the financing in lieu of the company paying the liquidated
damages in cash. As a result, no liquidated damages were payable. There was no
comparable expense in the second quarter of 2006.

    The company reported cash and cash equivalents of $9.8 million at the end
of the second quarter of 2007 as compared to $24.1 million at December 31,
2006. Total working capital reported at the end of the quarter was $7.2
million as compared to $14.3 million at December 31, 2006 and Shareholders'
equity was reported at $72.2 million as compared to $76.2 million at December
31, 2006. The company reported no outstanding long-term debt.

    Commenting on the results of the quarter, Dana Coffield, President and
Chief Executive Officer of Gran Tierra Energy Inc., stated, "The second
quarter of 2007 continued Gran Tierra Energy's capital spending program which
was dedicated to an aggressive exploration drilling campaign initiated in the
first quarter of 2007. As a result of this capital investment, at the end of
the second quarter of 2007, Gran Tierra had increased its proved oil reserves
197% to 5.9 million barrels of oil, and increased proved, probable and
possible oil reserves 361% to 25.6 million barrels of oil (all net after
royalty) compared to year-end 2006. This drilling campaign will continue
through the balance of 2007 and into 2008, and will include the addition of
development drilling programs along with continued exploration drilling."

    The company reported oil and condensate production for the six month
period ended June 30, 2007 of 1,140 barrels per day, net after royalty, as
compared to 329 barrels per day, net after royalty, for the comparable period
of 2006.

    The company has working interests in 19 exploration and production
contracts in Argentina, Colombia, and Peru, encompassing approximately 6.5
million acres of land. Gran Tierra Energy operates 18 of these blocks,
bringing its net acreage position to approximately 5.8 million acres.

    Conference Call Information:

    Gran Tierra Energy Inc. will hold a conference call to review its second
quarter results on Tuesday, August 14, 2007 at 11:00 a.m. Eastern. The call
will be hosted by Dana Coffield, President and Chief Executive Officer.
Interested parties may access the conference call by dialing (800) 599-9816
(domestic) or (617) 847-8705 (international), pass code # 64124577.

    The call will also be available via web cast at www.grantierra.com,
http://www.streetevents.com, http://www.fulldisclosure.com and will be
available on the Gran Tierra website until the next earnings conference call.

    If you are unable to participate, an audio replay of the call will be
available beginning two hours after the call and will be available until 11:59
p.m. on August 21, 2007, by dialing (888) 286-8010 (domestic) or (617)
801-6888 (international) using confirmation pass code 78933699. An audio
replay of the call will also be available on Gran Tierra's web site,
www.grantierra.com, until the next earnings call.

    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. The Company holds
interests in producing and prospective properties in Argentina, Colombia and
Peru. To date, the Company has pursued a strategy that focuses on establishing
a portfolio of producing properties, development and exploration
opportunities, through selective acquisitions, to provide a base for future
growth. Additional information concerning Gran Tierra is available at
www.grantierra.com. Investor inquiries may be directed to info@grantierra.com
or 1-800-916-GTRE (4873).

    Forward Looking Statements

    The statement in this press release regarding Gran Tierra Energy's
expectation that its drilling campaign will continue through the balance of
2007 and into 2008, and will include the addition of development drilling
programs along with continued exploration drilling, is a 'forward-looking
statement' 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 this forward-looking statement reflects 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 this
forward-looking statement including, but not limited to, in the case of this
forward-looking statement: unexpected delays in drilling 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 and production and/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 drilling plans, which could delay or prevent production and/or
development. 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 its
quarterly report on Form 10-Q filed on May 15, 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.

    
    Gran Tierra Energy Inc.
    Consolidated Statement of Operations and Accumulated Deficit
    (unaudited)
    Stated in US dollars

                         Three Months Ended          Six Months ended
                              June 30,                   June 30,
                     -----------------------------------------------------
                         2007          2006         2007          2006
                     -----------------------------------------------------

    REVENUE AND
     OTHER INCOME
     Oil sales       $  3,623,671  $ 2,089,984  $  7,899,720  $ 3,072,394
     Natural gas
      sales               (12,633)           -        35,494       67,219
     Interest and
      other               138,696            -       331,350            -
                     -----------------------------------------------------
                        3,749,734    2,089,984     8,266,564    3,139,613
                     -----------------------------------------------------
    EXPENSES
     Operating          1,925,156    1,089,540     4,105,980    1,442,620
     Depletion,
      depreciation
      and accretion     2,376,824      511,991     4,700,898      874,465
     General and
      administrative    2,679,734      880,554     4,618,855    2,471,583
     Liquidated
      damages           3,234,799            -     7,366,949            -
     Derivative
      financial
      instruments          19,984            -       676,984            -
     Foreign
      exchange loss      (238,386)      99,308        (6,134)       3,842
                     -----------------------------------------------------
                        9,998,111    2,581,393    21,463,532    4,792,510
                     -----------------------------------------------------

    LOSS BEFORE
     INCOME TAX        (6,248,377)    (491,409)  (13,196,968)  (1,652,897)
     Income tax         1,176,292      (80,325)    1,474,700     (137,783)
    ----------------------------------------------------------------------
    NET LOSS         $ (5,072,085) $  (571,734) $(11,722,268) $(1,790,680)
    ----------------------------------------------------------------------

    ACCUMULATED
     DEFICIT,
     beginning of
     period           (14,693,567)  (3,438,628)   (8,043,384)  (2,219,680)
    ----------------------------------------------------------------------
    ACCUMULATED
     DEFICIT, end of
     period          $(19,765,652) $(4,010,362) $(19,765,652) $(4,010,360)
    ----------------------------------------------------------------------

    NET LOSS PER
     COMMON SHARE -
     BASIC & DILUTED        (0.05)       (0.01)        (0.12)       (0.04)

    Weighted average
     common shares
     outstanding -
     basic & diluted   95,205,518   49,349,778    95,329,950   46,789,749
    

    
    Gran Tierra Energy Inc.
    Consolidated Balance Sheet (Unaudited)
    Stated in US dollars

                                                             December 31,
                                               June 30, 2007      2006
    ----------------------------------------------------------------------
    ASSETS
    Current assets
       Cash and cash equivalents               $  9,842,179  $ 24,100,780
       Restricted cash                                    -     2,291,360
       Accounts receivable                        5,260,786     5,089,561
       Taxes receivable                           4,283,197       404,120
       Inventory                                    583,701       811,991
       Prepaids                                     334,886       676,524
    ----------------------------------------------------------------------
    Total Current Assets                         20,304,749    33,374,336
    ----------------------------------------------------------------------
    Oil and gas properties, using the full
     cost method of accounting
       Proved                                    43,092,577    37,760,231
       Unproved                                  17,622,039    18,333,054
    ----------------------------------------------------------------------
    Total Oil and Gas Properties                 60,714,616    56,093,285
    ----------------------------------------------------------------------
       Other assets                                 676,574       614,104
    ----------------------------------------------------------------------
    Total Property, Plant and Equipment          61,391,190    56,707,389
    ----------------------------------------------------------------------
    Long term assets
       Deferred tax asset                           496,147       444,324
       Long term investment and other             1,567,282       379,678
       Goodwill                                  15,005,083    15,005,083
    ----------------------------------------------------------------------
    Total Long Term Assets                       17,068,512    15,829,085
    ----------------------------------------------------------------------
    Total Assets                               $ 98,764,451  $105,910,809
    ----------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
       Accounts payable                        $  6,665,489  $  6,729,839
       Accrued liabilities                        4,946,155     9,199,820
       Liquidated damages                                 -     1,527,988
       Current taxes payable                      1,539,603     1,642,045
    ----------------------------------------------------------------------
    Total Current Liabilities                    13,151,247    19,099,692
    ----------------------------------------------------------------------
       Long term liabilities                      1,019,401       412,929
       Deferred tax liability                    11,373,307     9,875,657
       Derivative financial instruments             676,984             -
       Asset retirement obligation                  340,618       327,752
    ----------------------------------------------------------------------
    Total Long Term Liabilities                  13,410,310    10,616,338
    ----------------------------------------------------------------------
    Shareholders' equity
       Common shares                                 94,506        95,455
    (78,951,358 common shares and 15,555,554 exchangeable shares, par
     value $0.001 per share, issued and outstanding)
    (2006 common and exchangeable shares respectively
     78,789,104 and 16,666,661)
       Additional paid in capital                70,853,039    71,311,155
       Warrants                                  21,021,001    12,831,553
       Accumulated deficit                      (19,765,652)   (8,043,384)
    ----------------------------------------------------------------------
    Total Shareholders' Equity                   72,202,894    76,194,779
    ----------------------------------------------------------------------
    Total Liabilities and Shareholders' Equity $ 98,764,451  $105,910,809
    ----------------------------------------------------------------------
    




For further information:

For further information: Gran Tierra Energy Inc. Dana Coffield,
800-916-4873 President & Chief Executive Officer info@grantierra.com or
Cameron Associates Al Palombo, 212-245-8800 Ext. 209 Investor Relations
al@cameronassoc.com

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Gran Tierra Energy Inc.

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