CALGARY, Alberta, August 14, 2008, Gran Tierra Energy Inc. (AMEX: GTE; TSX: GTE), a company focused on oil exploration and production in South America, today announced that it had successfully tested the Popa-2 exploration well in the Rio Magdalena Block in central Colombia at a combined rate of 8.5 million cubic feet of gas per day and 236 barrels of oil and condensate per day. The well is being suspended for additional testing and evaluation prior to production completion.
Gran Tierra Energy initiated drilling of the Popa-2 exploration well in the Rio Magdalena Block in the Middle Magdalena Basin, on May 8, 2008, and reached total measured depth of 8,646 feet in basement on June 21, 2008. Electric log interpretations together with mud log and the shows encountered during drilling indicated potential hydrocarbon pay in the Guaduas Formation, the Monserrate Formation, and Basement. A drill-stem test (DST) program was initiated on July 4 and a total of seven DST’s were conducted; the test program was completed on August 8, 2008.
DST-1 and DST-2 tested Basement and the lower Monserrate Formation, and recovered 58 barrels of water per day and 259 barrels of water per day respectively by swabbing.
DST-3 in the Monserrate Formation at 7,770 to 7,790 feet, tested 1.400 million standard cubic feet of gas per day with 85 barrels of 39.9 degree API oil per day and 370 barrels of water per day, by natural flow from a 16/64″ choke.
DST-4 in the Monserrate Formation at 7,730 to 7,760 feet, tested 3.186 million standard cubic feet of gas per day with 77 barrels of 61.3 degree API condensate per day and only a trace of water, by natural flow from a 64/64″ choke.
DST-5 in the upper Monserrate Formation at 7,624 to 7,630 feet, 7,640 to 7,646 feet, and 7,662 to 7,666 feet, tested 3.953 million standard cubic feet of gas per day with 74 barrels of 61.7 degree API condensate per day and only a trace of water, by natural flow from a 48/64″ choke.
DST-6 in the Guaduas Formation recovered 989 barrels of water per day by natural flow and DST-7 in the Guaduas Formation recovered 15 barrels of water per day by swabbing.
The Popa-2 well bore will be suspended for further testing and evaluation prior to production completion.
Popa-2 was drilled to the same reservoirs at a shallower depth and 2,035 meters away from a non-commercial oil discovery made by Gran Tierra Energy in 2006 at Popa-1, which tested approximately 160 barrels of oil per day. Gran Tierra Energy acquired a new 89 kilometer 2-D seismic program after the initial discovery, and used it to pick the location of Popa-2.
Gran Tierra Energy, with a 100% working interest, is the operator of the 144,670 acre Rio Magdalena Block. Under the terms of a recently completed farm-in agreement, Omega Energy Colombia will earn a 60% share of the company’s interest by paying 100% of the costs associated with drilling, testing and completing the Popa-2 well. In the event of a commercial discovery, Ecopetrol S.A. has a right to back in for a 30% working interest, to be split proportionally between Gran Tierra Energy and Omega Energy Colombia.
Commenting on progress, Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy Inc., stated, “These initial test results from Popa-2 are exciting, confirming a new exploration play initially identified on our lands in 2006. The Rio Magdalena block is a large block near existing infrastructure with numerous leads and prospects for further testing as our confidence in this new exploration play continues to mature.”
About Gran Tierra Energy Inc.:
Gran Tierra Energy Inc. is an international oil and gas exploration and production company operating in South America, headquartered in Calgary, Canada, incorporated in the United States, and trading on the American Stock Exchange (GTE) and the Toronto Stock Exchange (GTE). The company holds interests in producing and prospective properties in Argentina, Colombia and Peru. The company has a strategy that focuses on growing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a base for future growth. Additional information concerning Gran Tierra Energy is available at 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 news release regarding Gran Tierra Energy’s plans and expectations for Popa-2 and results of these testing operations are forward looking information, forward looking statements or financial outlooks (collectively, “forward-looking statements”) under the meaning of applicable securities laws, including Canadian Securities Administrators’ National Instrument 51-102 Continuous Disclosure Obligations and the United States Private Securities Litigation Reform Act of 1995. 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. Important factors that could cause the results or outcomes discussed herein to differ materially from those indicated by these forward-looking statements include, among other things: unexpected problems due to technical difficulties, operational difficulties, guerilla activity, and weather conditions. Further information on potential factors that could affect Gran Tierra Energy are included in risks detailed from time to time in Gran Tierra Energy’s Securities and Exchange Commission filings, including, without limitation, under the caption “Item 1A - Risk Factors” in Part II of Gran Tierra Energy’s Quarterly Report on Form 10-Q for the period ended June 30, 2008, filed with the Securities and Exchange Commission on August 11, 2008. These filings are available on a Web site maintained by the Securities and Exchange Commission at http://www.sec.gov. The forward-looking statements contained herein are made as at the date of this press release. Subject to its obligations under applicable law, Gran Tierra Energy does not undertake an obligation to update forward-looking or other statements in this release. Gran Tierra Energy’s forward-looking statements are expressly qualified in their entirety by this cautionary statement.