Gran Tierra Energy Expands 2008 Exploration and Development Activities in Colombia, Argentina And Peru

Delineation drilling and testing initiated at Costayaco Field in Colombia


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CALGARY, Canada, February 4, 2008 - Gran Tierra Energy Inc. (OTC BB: GTRE), a company focused on oil exploration and production in South America, today provided an update on its advancement of development drilling and testing operations in Colombia, and oil exploration activities in Colombia, Argentina and Peru.

 

Colombia

 

Drilling operations in the Costayaco field, a new oil field discovery made in 2007 in the Chaza Block in the Putumayo Basin of southern Colombia, are proceeding as planned. Testing operations on Costayaco-2, the second well in the Costayaco field, were initiated on January 26, 2008, and are expected to be completed before the end of February, 2008. Drilling of the third well, Costayaco-3, commenced on January 25 and is expected to be completed in late February, with testing to follow afterwards.

 

Production from the discovery well, Costayaco-1, averaged approximately 3,460 barrels of oil per day (BOPD) gross with 0.3 percent water cut, or 1,557 BOPD net after royalty, to Gran Tierra Energy in January, 2008.

 

Acquisition of 41 kilometers of new 2-D seismic data to define additional exploration potential in the Chaza Block is in progress.

 

Construction of a six kilometer six inch pipeline for the Juanambu field, another oil discovery made in 2007 on the adjacent Guayuyaco Block, is ongoing. The pipeline is expected to be operational in mid-February. The pipeline will replace trucking operations which handled approximately 1,750 BOPD gross with 0.3 percent water cut, or 551 BOPD net after royalty, to Gran Tierra Energy in January, 2008.

 

On the Azar Block, immediately east of the Guayuyaco Block, the acquisition of 35 square kilometers of new 3D seismic has been completed. This seismic will be used to determine the location of Mandiyaco-1, an exploration well expected to be drilled in the second half of 2008. In addition, a work-over of an untested oil discovery, Palmera-1, is scheduled for the first quarter of 2008.

 

Technical evaluation work continues on the Putumayo West A TEA and the Rumiyaco E&P block (previously called Putumayo West B TEA). Gran Tierra Energy holds a 100% working interest in both of these blocks.

 

A successful farmout of the Rio Magdalena Block in the Middle Magdalena Basin has been executed. Under the terms of the farmout agreement, Gran Tierra Energy will remain operator and will retain a 40% working interest in the block, and will receive a full carry on the cost of the drilling of the Popa-2 exploration well, which is expected to be drilled in the second quarter of 2008 near a non-commercial oil discovery made by Gran Tierra Energy in 2006 with the Popa-1 well. Transfer of the interest in the Rio Magdalena Association Contract to the farmee is subject to approval by Ecopetrol and ANH (Agencia Nacional de Hidrocarburos).

 

Argentina

 

Technical evaluation work continues on all seven blocks in the Noroeste Basin in northern Argentina, with well design and planning continuing for the Proa-1 exploration well in the Surubi Block, expected to be drilled in the third quarter of 2008. An active work-over program of existing wells has been budgeted to maintain the company's base production.

Peru

Acquisition of approximately 20,000 linear kilometers of new high definition airborne gravity and magnetic data over the entire area of Blocks 122 and 128 is continuing. Approximately 3,000 linear kilometers has been acquired to date. This data will be used to define exploration leads over which 2-D seismic data will be acquired in the Second Exploration Period of each block. Block 122 encompasses approximately 1.2 million acres and Block 128 encompasses approximately 2.2 million acres of land. Gran Tierra Energy is operator and holds a 100% working interest in both exploration blocks.

2008 Capital Program Update

 

Gran Tierra Energy has a working interest in nineteen blocks encompassing 6.5 million gross acres, or 5.9 million net acres, of land in Colombia, Argentina and Peru. Gran Tierra Energy is the operator of eighteen of the nineteen blocks. Capital expenditures of US$26.6 million have been budgeted for 2008 for drilling three exploration wells and six development wells, all operated by the company, in addition to fourteen workovers of existing wells. Additional contingent expenditures of US$20.1 million have been budgeted for infrastructure construction which may be required for the development of oil discoveries made in 2007. The company expects to fund the capital expenditure program through existing cash on hand, cash flow from operations and, if necessary, an existing credit facility. Gran Tierra Energy's production continues to be maintained at approximately 3,300 barrels of oil per day (BOPD), net after royalty, with approximately 2,700 BOPD coming from Colombia operations and approximately 600 BOPD coming from Argentina operations.

 

Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy Inc., stated "The first quarter of 2008 is developing into another pivotal quarter for the company on both an operational front and from the perspective of the company's shareholders. Gran Tierra Energy's 2008 oil development drilling and oil exploration programs continue to gain momentum in parallel with the satisfaction of conditions for the pending listing of common shares of Gran Tierra Energy on the Toronto Stock Exchange."

 

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 Energy holds interests in producing and prospective properties in Argentina, Colombia and Peru. The company's strategy is focused on establishing a portfolio of drilling opportunities to exploit undeveloped reserves to grow production, as well as undertaking exploration to grow future reserves. Additional information concerning Gran Tierra Energy 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 statements in this press release regarding Gran Tierra Energy's expectations with respect to the timing of testing and drilling operations, transportation of crude oil, acquisition of seismic data, and the construction of the pipeline, the use to which seismic data will be put, the ability of Gran Tierra Energy to plan a full field development, including additional drilling, facilities and pipeline to handle new production as appropriate through 2008, and the expectation as to sources of funding, 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: unexpected delays in drilling or pipeline or other transportation infrastructure completion 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, surveys, design plans, transportation infrastructure development and production 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 Gran Tierra Energy's plans described in this press release, which could delay or prevent execution of these plans. 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 under the caption "Item 1A - Risk Factors" of its quarterly report on Form 10-Q filed on November 8, 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.