CALGARY, Canada, June 12 - Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE), a company focused on oil exploration and production in South America, today announced that it has initiated a drill stem test (DST) program on its recently drilled Costayaco-1 exploration well in the Chaza Block, Putumayo Basin, in southern Colombia.
Oil shows were encountered in four different reservoir packages during the drilling of the well. Oil saturations were subsequently confirmed by electric logging. The zones being tested include (from the lower to upper zones) the Caballos sandstone, T sandstone, U sandstone, and Kg sandstone. The well has been cased and approximately 155 feet of reservoir section will be perforated in the six DSTs. The DST program is expected to last approximately six weeks.
These reservoirs are the same reservoirs that were recently tested in the Juanambu-1 exploration well in the adjacent Guayuyaco Block, for which an application for commerciality is currently under preparation, and are the same reservoirs that are producing oil in adjacent oil fields operated by Gran Tierra Energy.
Gran Tierra Energy 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.
Dana Coffield, President and CEO stated "The initiation of testing in Costayaco-1 is another milestone in the continuation of the ongoing success of our 2007 drilling campaign. This is our second exploration well in the Putumayo Basin to encounter hydrocarbons this year and, like Juanambu-1, is located near infrastructure operated by Gran Tierra Energy which should enable rapid initiation of production if we are able to successfully complete testing at commercial rates."
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 selective portfolio of producing properties and exploration opportunities 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 firstname.lastname@example.org or 1-800-916-GTRE (4873).
Forward Looking Statements
The statements in this press release regarding the planned testing of the oil discovery at Costayaco-1 exploration well and the ability to begin production if testing is successfully completed are ‘forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the 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 test results, mechanical problems, equipment limitations and weather conditions, which could delay or prevent the completion of the testing or the commencement of production if testing is successfully completed. 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 in order 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" in 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.