CALGARY, ALBERTA, FEBRUARY 26, 2007, Gran Tierra Energy Inc. (OTCBB: GTRE) today announced that the Company has been advised by its outside legal counsel, McGuireWoods LLP, that there has been possible unauthorized trading of the Company's common stock in accounts controlled by Louis Zehil, a former partner at McGuireWoods in connection with a private offering of securities made by the Company in late 2005.
In the private offering of securities by the Company, which was exempt from registration under the Securities Act of 1933, as amended, Strong Branch Ventures IV LP and Chestnut Ventures Capital Partners II LLC, two entities allegedly controlled by or related to Louis Zehil, a former partner at McGuireWoods who worked on the Gran Tierra account., purchased a total of 500,000 units, and, giving effect to the subsequent exercise of warrants, acquired an aggregate of 750,000 shares of the Company's common stock. The Company's offering involved the sale of an aggregate of 15,047,606 units consisting of one share of Gran Tierra's common stock and warrants to acquire 7,523,811 shares of common stock. At February 23, 2007, the Company had outstanding approximately 95.5 million shares of common stock.
McGuireWoods recently informed Gran Tierra that the certificates evidencing the 750,000 shares issued to Strong Branch Ventures and Chestnut Ventures were issued without restrictive legends and that Mr. Zehil either directly or indirectly caused the shares to be sold in the public market without complying with federal and applicable state securities laws.
As a result, Gran Tierra has commenced a review into the matter and any findings material to the Company will be reported when the review is complete. The Company has engaged the law firm of Cooley Godward Kronish LLP to assist the Company in this matter.
If the actions described above took place, they took place without the knowledge or authorization of the Company.
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 firstname.lastname@example.org or 1-800-916-GTRE (4873).
Forward Looking Statements
This press release contains '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, including without limitation those statements regarding the Company's ability to exploit oil and gas exploration opportunities. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished. Although the forward-looking statements in this release 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, our ability to rely on the private offering exemption in connection with the Company's private offering of securities in 2005. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any 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 made by us in the our reports filed with the Securities and Exchange Commission, including those risks set forth in the Company's Annual Report on Form 10-KSB filed on March 10, 2006, as amended, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. We undertake no obligation to update these forward looking statements.