CALGARY, Alberta, December 2, 2011, Gran Tierra Energy Inc. (“Gran Tierra Energy”) (NYSE Amex: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today announced initial drilling results in Colombia, Brazil and Argentina.
“Substantive progress has been made in our fourth quarter drilling program to date. We have completed the coring and drilling of our first pilot hole for our horizontal drilling program onshore in Brazil, and are now executing on our development drilling program in Argentina with good initial results. In contrast, our initial exploration drilling results in Colombia have been disappointing,” said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. “With one exploration well currently drilling and a second exploration well poised to begin drilling in Colombia, we remain focused on the potential for additional reserve growth this year. We are very excited with where the company is today, with its large prospect inventory on our very large land position, and we anticipate our ongoing exploration and development program, which will continue through 2012, will be funded from cash and cash flow in the coming year,” concluded Coffield.
Rumiyaco Block (Gran Tierra Energy 100% WI and Operator)
The Rumiyaco-1 exploration well reached total depth (“TD”) in basement at 10,648 feet measured depth (“MD”) on November 19, 2011. Mud log and electric log data acquired during and after drilling indicate only non-commercial hydrocarbons present.
Sierra Nevada Block (Gran Tierra Energy 100% WI and Operator)
Drilling of the Brillante SE-2 delineation well reached TD of 5,520 feet MD on November 6, 2011. This well was drilled on the adjacent fault block to the Brillante SE-1 gas field that was discovered in 2010 in the Lower Magdalena Basin in northern Colombia. Mud log, electric log, and pressure gradient data acquired during and after drilling indicates no reservoir is present, so the well has been plugged and abandoned. New 3-D seismic data indicates the original fault block with the discovery well is larger than originally interpreted from old 2-D seismic data; future drilling will focus on proving additional reserves in that new area.
Llanos-22 Block (CEPSA 55% WI and Operator, Gran Tierra Energy 45% WI subject to ANH approval)
The Ramiriqui-1 oil exploration well in the Llanos-22 block, located in the Andean foothills trend of the Llanos Basin, is currently drilling ahead and is expected to reach TD in late December.
Chaza Block (Gran Tierra Energy 100% WI and Operator)
The Pacayaco-1 ST1 oil exploration well on the Chaza block of the Putumayo basin is expected to spud on December 10, 2011 and is expected to take 25 days to drill. The Pacayaco-1 ST1 well is targeting the same reservoir intervals present at Gran Tierra Enegy’s Costayaco and Moqueta discoveries.
REC-T-142 Block (Gran Tierra Energy 70% WI & Operator, Alvorada 30% WI)
Drilling of the 1-GTE-01-BA oil exploration well was completed on November 24, 2011. The well is located in Block REC-T-142 in the prolific onshore Recôncavo Basin. This operation commenced with the drilling of a vertical pilot hole from which core samples were acquired from the prospective reservoir section. Gran Tierra Energy plans to drill a horizontal sidetrack from the pilot hole to test the productivity of the light oil sandstone reservoir target in late December. Two additional horizontal wells testing similar sandstone reservoirs are anticipated to be drilled in early 2012.
REC-T-129 Block (Gran Tierra Energy 70% WI & Operator, Alvorada 30% WI)
Drilling of the 1-GTE-02-BA oil exploration well began on November 23, 2011. This well is located in Block REC-T-129 in the Recôncavo Basin. The well is expected to reach a TD of approximately 6,068 feet MD and take approximately 32 days to drill.
REC-T-155 Block (Gran Tierra Energy 70% WI & Operator, Alvorada 30% WI)
Drilling of the 3-GTE-03-BA delineation well began on December 1, 2011. This well is located in Block REC-T-155 in the Recôncavo Basin and is situated 1.2 kilometers north of the 1-ALV-2-BA discovery well. Upon completion of the delineation well, this drilling rig is expected to return to Block REC-T-142 to drill the horizontal sidetrack well.
Puesto Morales / Puesto Morales Este Blocks, Neuquen Basin
Gran Tierra Energy has completed drilling PME.a-1003, the first of four new development wells in the Puesto Morales field, with the purpose of improving recovery and growing production from this mature oil field. The well is being completed for production. Since taking over operatorship in March, the production decline of the last several years has been halted with a workover program on existing wellbores. The rig has moved and is now being used to drill the PMN-1116 development well in the same field.
About Gran Tierra Energy Inc.
Gran Tierra Energy 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 Colombia, Argentina, 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 “expected”, “planning”, “anticipate”, “will”, “potential” and derivations thereof and similar terms identify forward-looking statements. In particular, but without limiting the foregoing, this news release contains forward-looking statements regarding: Gran Tierra Energy’s planned and expected drilling operations in Brazil and Colombia including, without limitation, anticipated drilling locations, depths and timelines; and the anticipated funding of Gran Tierra Energy’s ongoing exploration and development program.
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 log evaluations; that Gran Tierra Energy will continue to conduct its operations in a manner consistent with past operations; the accuracy of testing and production results and seismic data; the effects of certain drilling techniques; and the general continuance of current or, where applicable, assumed operational, regulatory 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: unexpected technical difficulties and operational difficulties may occur, or the obtaining of environmental permits may be delayed, which could impact or delay the commencement of drilling exploration, development and/or delineation wells; geographic, political and weather conditions can impede testing, which could impact or delay the commencement of drilling exploration, development and/or delineation wells; 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 not fund its 2012 exploration and development program solely from cash and cash flow from operations. Although Gran Tierra Energy’s plans for its ongoing exploration and development and the funding thereof are based upon the current expectations of the management of Gran Tierra Energy, there may be circumstances where, for unforeseen reasons, a change in such plans may be necessary as may be determined at the discretion of Gran Tierra Energy. Should any one of a number of issues arise, Gran Tierra Energy may find it necessary to alter its current business strategy and/or capital spending program. 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 November 8, 2011. 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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