CALGARY, Alberta, October 25, 2010, Gran Tierra Energy Inc. (NYSE AMEX: GTE; TSX: GTE) ("Gran Tierra Energy"), a company focused on oil and gas exploration and production in South America, today announced completion of drilling and testing of the Jilguero-1 exploration well, a new field discovery on the Garibay Block in the Llanos Basin, Colombia. Gran Tierra Energy, through its wholly-owned subsidiary Solana Petroleum Exploration Colombia Limited (“Solana”), has a 50% working interest under the Garibay exploration and production contract executed with Colombia’s National Hydrocarbon Agency (“ANH”). CEPSA Colombia S.A. (“CEPCOLSA”), a wholly owned subsidiary of Compania Espanola de Petroleos, S.A. is the operator of the Garibay block and has the other 50% working interest. Solana had previously entered into a sale agreement with respect to its interest in the Garibay Contract. The sale agreement terminated on October 8, 2010, when certain conditions to closing with respect to required contractual and regulatory approvals were not fulfilled.
CEPCOLSA has completed initial testing on the Jilguero-1 well by collecting reservoir data and fluid samples from four formations, including the Une, Gacheta, Guadalupe and Mirador.
The Une Formation’s oil bearing interval was perforated and tested from 9,477 feet measured depth (“MD”) to 9,484 MD and was interpreted as having 19 feet of total hydrocarbon pay subdivided into 12 feet of net oil pay in the Upper Une zone and 7 feet of net oil pay in the Lower Une zone. A variety of tests were performed resulting in up to 2,175 barrels of oil per day (“BOPD”) of 39.9°API gravity oil with 11.5% watercut through a 52/64 inch choke. A second test was performed in the Upper Une zone from 9,445 feet to 9,451 feet MD and from 9,462 feet to 9,468 feet MD, which produced up to 862 BOPD of 39.9°API gravity oil with 0.3% watercut through a 28/64 inch choke.
The Gacheta Formation was interpreted as having 15 feet of total hydrocarbon pay. The interval was tested and perforated from 9,285 feet to 9,300 feet MD. The test produced up to 669 BOPD of 36.9°API gravity oil with 11% watercut through a 24/64 inch choke.
The Guadalupe Formation was interpreted as having 31 feet of total hydrocarbon pay. The lower interval was tested and perforated from 8,991 feet to 8,994 feet MD. The test produced 35 BOPD of 11.8°API gravity oil with 4% watercut.
The Mirador Formation was interpreted as having 46 feet of total hydrocarbon pay. The interval was tested and perforated from 8,852 feet to 8,898 feet MD. The test produced up to 1,015 BOPD of 24.7°API gravity oil with 0.11% watercut.
Plans for long term testing and crude sales are underway, with initial production expected to begin in December, 2010. Production from the Jilguero-1 well will be transported approximately 60 kilometers by truck to existing pipeline infrastructure.
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. is an international oil and gas exploration and production company, headquartered in Calgary, Canada, incorporated in the United States, trading on the NYSE Amex Exchange (GTE) and the Toronto Stock Exchange (GTE), and operating in South America. Gran Tierra Energy holds interests in producing and prospective properties in Argentina, Colombia, Peru and Brazil. Gran Tierra Energy has a strategy that focuses on establishing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a base for future growth.
Gran Tierra Energy’s Securities and Exchange Commission filings are available on a web site maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at http://www.sedar.com.
Forward Looking Statements:
This news release contains certain forward-looking information and forward-looking statements (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. The use of the words “expect”, “anticipate”, “potential”, “will”, “suggests” and “scheduled” identify these forward-looking statements. In particular, but without limiting the foregoing, this news release contains forward-looking statements regarding Gran Tierra Energy's plans for long term and initial crude sales and the timing of potential production on the Jilguero-1 well.
The forward-looking statements contained in this news release reflect several material factors and expectations and assumptions of Gran Tierra Energy including, without limitation, assumptions relating to reservoir data, fluid samples and interval testing, that Gran Tierra Energy will continue to conduct its operations in a manner consistent with past operations and the general continuance of current or, where applicable, assumed operational and industry conditions. Gran Tierra Energy believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct.
The forward-looking statements contained in this news release 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, including, among others: Gran Tierra Energy’s operations are located in South America, and unexpected problems can arise due to guerilla activity, technical difficulties and operational difficulties which impact or delay its testing and drilling operations; risks associated with early stage testing; geographic, political and weather conditions can impede testing and drilling operations; and the risk that current global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra Energy currently predicts, which could cause Gran Tierra Energy to modify its exploration activities. 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 “Risk Factors” in Gran Tierra Energy’s Quarterly Report on Form 10-Q filed August 6, 2010. These filings are available on a Web site maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at www.sedar.com. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this press release are made as of the date of this press release and Gran Tierra Energy disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.
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