CALGARY, Canada, July 9, 2007 - Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE), a company focused on oil exploration and production in South America, today announced that it has successfully completed six drill stem tests (DSTs) on its recently drilled Costayaco-1 exploration well in the Chaza Block, Putumayo Basin, in southern Colombia.
Dana Coffield, President and CEO stated "These successful test results have established the presence of a significant oil accumulation. Planning has been initiated for a substantial development, including additional drilling, and new pipeline and facility infrastructure, in order to optimize the development of this field through the balance of 2007 and into 2008."
The cased hole DST program commenced on June 10, 2007 and six DSTs have been completed over the Lower Caballos Formation, Middle Caballos Formation, Lower and Middle Villeta T Formations, the Villeta U Formation, and the Rumiyaco Kg Formation. Production at a combined flow rate of up to 5,906 barrels of oil per day (bopd) of 23 degree to 31 degree API oil, including one zone that flowed with a jet pump, was obtained in the six formations tested. Gran Tierra had previously announced on June 20, 2007 the completion of three DSTs in the lower three zones with production at a combined natural flow rate of up to 3,997 bopd obtained from these three zones. Three additional DSTs over three additional zones have now been completed resulting in additional production at a combined natural flow rate of up to 1,489 bopd plus an additional 420 bopd that flowed with a jet pump.
DST-1 tested an 8 foot thick sandstone interval in the Lower Caballos Formation to test a potential oil-water contact. After initial swabbing, the well started to flow naturally, reaching a maximum oil rate of 206 bopd with only a trace of water. A preliminary review of DST-1 indicates no evidence of an oil-water contact.
DST-2 tested a 95 foot thick sequence of sandstones in the Lower and Middle Caballos Formations, including the Lower Caballos zone perforated in DST-1. After one swab the well started to flow naturally, reaching a maximum oil rate of 2,655 bopd with only a trace of water.
DST-3 tested an additional potential oil water contact within a 12 foot sandstone interval in the Lower Villeta T Formation. After swabbing, the well started to flow naturally, reaching a maximum oil rate of 1,342 bopd with only a trace of water.
DST-4 tested a 40 foot thick sandstone interval in the Lower and Upper Villeta T Formations, including the Lower Villeta T zone perforated in DST-3. After swabbing the well started to flow naturally, reaching a maximum oil rate of 2,212 bopd with only a trace of water.
DST-5 tested a 10 foot thick sandstone interval in the Villeta U Formation Formation to test an additional potential oil-water contact. The formation did not flow naturally. Using a jet pump, the formation produced at 420 bopd with a low pump rate and 1% water cut.
DST-6 tested a 10 foot thick sandstone interval in the Rumiyaco Kg Formation Formation to test a further potential oil-water contact. Without swabbing the well started to flow naturally, reaching a maximum oil rate of 619 bopd of 23 degree API oil with only a trace of water.
Costayaco-1 is close to infrastructure allowing for early monetization of production. Gran Tierra will commence production from the well immediately by trucking the oil while planning and construction of long term and permanent facilities are implemented.
Planning for a field development has been initiated. The Pride-17 drilling rig, used to drill Costayaco-1, is under contract and available to conduct additional delineation and development drilling. Two development wells are currently being planned based on currently available seismic data. To optimize positioning of future drilling locations, a new 3-D seismic data acquisition program over the Costayaco structure is also being planned.
Gran Tierra holds a 50% working interest and is the Operator of the Chaza Block. Solana Resources Limited holds the remaining 50% working interest. The Chaza Block is subject to the new and fiscally attractive Agencia Nacional de Hidrocarburos royalty/tax contract which includes no additional state participation.
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 holds interests in producing and prospective properties in Argentina, Colombia and Peru. To date, Gran Tierra 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 http://www.grantierra.com. Investor inquiries may be directed to email@example.com or 1-800-916-GTRE (4873).
Forward Looking Statements
The statements in this press release regarding the potential development of the Costayaco-1 exploration well 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, actual production deviating from the initial test results. 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 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 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's business. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, Gran Tierra's actual results may vary materially from those expected or projected.