Gran Tierra Energy Inc. Completes a Transformational Year and Announces a 91% Increase in 2P Reserves and a 146% increase in 3P Reserves

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CALGARY, ALBERTA--(Marketwired - Jan. 23, 2017) - Gran Tierra Energy Inc. ("Gran Tierra" or the "Company") (NYSE MKT:GTE)(TSX:GTE), a company focused on oil exploration and production in Colombia, today announced the Company's 2016 year-end estimated reserves as evaluated by the Company's independent qualified reserve evaluator McDaniel & Associates Consultants Ltd. ("McDaniel") in a report with an effective date of December 31, 2016 (the "GTE McDaniel Reserves Report"). Gran Tierra has also updated its corporate presentation, which is available on the Company's website.

All dollar amounts are in United States ("U.S.") dollars, unless otherwise indicated. Unless otherwise expressly stated, all reserves and resources values contained in this press release have been calculated in compliance with Canadian National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGEH").

Message to Shareholders

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented, "Gran Tierra had a transformational year during 2016 in which we expanded, upgraded and diversified our portfolio in Colombia through four strategic and accretive acquisitions: Petroamerica, PetroGranada, PetroLatina and the Ecopetrol 2016 Bid Round, which is expected to close in 2017. We are pleased that in 2016 we were able to add approximately 9.2 million barrels of oil equivalent ("MMBOE") of Proved plus Probable ("2P") working interest before royalties ("WI") reserves organically in both our existing assets and our new assets post-acquisition, despite only commencing exploration and appraisal drilling in late September 2016. Our 2016 exploration drilling delivered 2016 2P WI reserve additions of 2.1 MMBOE in our N-sands exploration play in the acquired Putumayo-7 ("PUT-7") Block. Total 2P WI reserves booked on PUT-7 are now 5.4 MMBOE. Development activities delivered 2P WI reserves additions of 2.6 MMBOE in our newly acquired asset at Acordionero in the Middle Magdalena Basin and 2.0 MMBOE of 2P WI reserves in our legacy asset at Costayaco in the Putumayo Basin from the "A" Limestone. We look forward in 2017 to further proving up Acordionero through ongoing development drilling which targets 48 MMBOE of Possible reserves (out of Acordionero's total Proved plus Probable plus Possible ("3P") WI reserves of 96 MMBOE), and developing the "A" Limestone in Costayaco through horizontal drilling, which commenced at the end of 2016.

During 2016, Gran Tierra's total 2P WI reserves increased by 91% compared with year-end 2015, while the Company's 3P WI reserves increased by 146% over the same time period. In addition, the Company's exploration portfolio has been substantially enhanced and expanded. Our 2P reserves replacement ratio in 2016 was 708%1 including acquisitions. We are also pleased that we were able to increase our 2P reserve life index from 7.8 years to 11.1 years.

Since our senior management team joined the Company in May 2015, 2016 represents our first full year in which we have been delivering on our focused strategy. We have grown our before tax net asset value per share during 2016 by 5%, on a 2P reserves basis and by 37% on a 3P reserves basis, despite a 10% decrease in forecasted pricing. Not only have we increased 2P WI reserves by 60 MMBOE, we increased 3P WI reserves by 118 MMBOE and our exploration inventory has increased to 72 locations and over 680 MMBOE WI unrisked net prospective resources3. After effectively no reserves growth between 2010 and 2015, we are also pleased that the Company is once again significantly growing reserves on an accretive basis. During 2016, Gran Tierra's portfolio demonstrated its robust economic returns as we achieved a 2P finding, development and acquisition, excluding changes in future development costs, cost of $9.81 per barrel of oil equivalent ("BOE") and a 2P recycle ratio of 2.1 times excluding changes in future developments costs and 1.5 times including changes in future development costs. We believe that Gran Tierra now has visible production growth from our existing asset base through 2019 on a 2P reserves basis and through 2020 on a 3P reserves basis and a world class exploration portfolio that can be funded through cash flow.

The developed reserves base is currently producing approximately 32,000 barrels of oil equivalent per day ("BOEPD") (January 2017 year to date) and we expect that cash flow from the 2P WI reserves base will be more than enough to fund our exciting exploration portfolio. Our asset portfolio is forecasted to generate cumulative net cash provided by operating activities on a 2P basis of approximately $1.0 billion during the next three years (2017 - 2019), with which we expect to fund our development and exploration programs over this time period. With our operated, low cost, high netback, positive cash-flowing asset base, our focus is on organic reserves development for production growth and drilling 30 to 35 exploration wells over the next three years, all funded from cash from operating activities. We are excited to commence our 2017 exploration program and appraisal of the new regional "A" Limestone play."

Highlights

  • Year-end 2016 WI oil and gas reserves based on the GTE McDaniel Reserves Report:
    • After production of 9.9 MMBOE, year-end 2016 1P reserves were 72.8 MMBOE compared to 48.4 MMBOE at year-end 2015;
    • Year-end 2016 2P reserves were 126.1 MMBOE compared to 66.0 MMBOE at year-end 2015. 1P reserves accounted for 58% of 2P reserves. Proved developed producing reserves represent 68% of 1P reserves and 39% of 2P reserves;
    • Year-end 2016 3P reserves were 199.2 MMBOE after 2016 production compared to 81.0 MMBOE at year-end 2015.
  • 2P reserves per share increased by 24% and 3P reserves per share increased by 60%.
  • Finding and Development ("F&D") costs including future development costs ("FDC") were $13.75 per BOE for 1P reserves, $9.10 per BOE for 2P reserves and $6.95 per BOE for 3P reserves.
  • 62% of the 2P reserves are classified as light to medium oil.
  • 2P reserve life index increased by 42% to 11.1 years.
  • The number of Company net undeveloped drilling locations has increased significantly as follows:
    • Number of net 1P undeveloped drilling locations is 18.6, up from 5 at year-end 2015
    • Number of net 2P undeveloped drilling locations is 36, up from 9 at year-end 2015
    • Number of net 3P undeveloped drilling locations is 53.8 up from 9 at year-end 2015
  • Year-end 2016 before tax net present values ("NPV") discounted at 10% for Gran Tierra's reserves based on the GTE McDaniel Reserves Report increased in all reserves categories as follows:
    • 1P of $1,229.2 million compared to $814.0 million at year-end 2015, a 51% increase;
    • 2P of $2,154.3 million compared to $1,100.1 million at year-end 2015, a 96% increase;
    • 3P of $3,350.5 million compared to $1,373.7 million at year-end 2015, a 144% increase.
  • The above increases in NPV resulted despite the January 1, 2017, McDaniel Brent price forecast being 10% lower than the January 1, 2016, McDaniel Brent price forecast. Using the January 1, 2016, McDaniel Brent price forecast Gran Tierra's after tax 2P NPV as at December 31, 2016 would increase by approximately 15%.
  • Increased the before tax NPV discounted at 10% of 2P reserves for the assets acquired through the PetroLatina acquisition to $998.6 million and the after tax NPV discounted at 10% of 2P reserves to $779.3 million.
  • Net asset value of $4.682 per share, based on before tax NPV discounted at 10% of 2P reserves, and estimated year-end 2016 net working capital and bank debt of $120.0 million deficit, increased by 5% from the year-end 2015 value despite the 10% decrease in pricing. Net asset value per share, based on after tax NPV discounted at 10% of 2P reserves increased 6% percent to $3.532 per share.
  • Net asset value of $7.432 per share, based on before tax NPV discounted at 10% of 3P reserves, and estimated year-end 2016 net working capital and bank debt of $120.0 million deficit, increased by 37% from the year-end 2015 value despite the 10% decrease in pricing. Net asset value per share, based on after tax NPV discounted at 10% of 3P reserves increased 35% percent to $5.352 per share.
  • Colombia WI Prospective Resources 3,4:
Mean Unrisked Prospective Resources (MMBOE) Mean Risked Prospective Resources (MMBOE)
Year-end 2016 Colombia Only (excludes prospective resources for PetroLatina, A Limestone and blocks purchased in the Ecopetrol bid round) 681.7 178.2
  • Annual WI production for 2016 averaged 27,063 BOEPD, or 23,187 BOEPD net after royalty.

__________________

1 Reserve replacement based on 70.1 MMBOE of 2P reserve additions including acquisitions, and 2016 estimated company interest production of 27,063 BOEPD.
2 Based on number of shares of Gran Tierra's common stock and exchangeable shares issued and outstanding at December 31, 2016, adjusted to assume conversion of convertible notes outstanding, of 434.8 million and number of shares of Gran Tierra's common stock and exchangeable shares issued and outstanding at December 31, 2015, of 282.0 million. Estimated net working capital and bank debt at December 31, 2016, and working capital at December 31, 2015, prepared in accordance with generally accepted accounting principles in the United States of America.
3 Based on the independent evaluation of Prospective Resources prepared by McDaniel as at September 30, 2015, with respect to Gran Tierra's Colombian properties (the "GTE McDaniel Prospective Resources Report"), the independent evaluation of Prospective Resources of Petroamerica Oil Corp. ("Petroamerica") prepared by McDaniel as at December 31, 2015 (the "PTA McDaniel Prospective Resources Report") and derived from the PTA McDaniel Prospective Resources Report as PetroGranada Colombia Limited ("PGC") owns the remaining 50% WI in the Putumayo-7 Block, the other 50% WI being owned by Petroamerica.
4 Prospective Resources exclude additions from PetroLatina, properties purchased from Ecopetrol at the end of 2016 and the regional "A" Limestone play developed internally at Gran Tierra.

Total Company Working Interest Reserves

The following table summarizes Gran Tierra's NI 51-101 and COGEH compliant reserves in Colombia and Brazil derived from the GTE McDaniel Reserves Report calculated using forecasted oil and gas prices and costs.

Light and Medium Oil Heavy Oil Natural Gas 2016 Year-End 2015 Year-End
Reserves Category Mbbl(*) Mbbl(*) MMcf(**) MBOE(***) MBOE(***)
Proved Developed Producing 38,712 9,890 3,561 49,196 37,106
Proved Developed Non-Producing 3,271 94 - 3,365 1,677
Proved Undeveloped 8,831 10,906 3,171 20,266 9,567
Total Proved 50,814 20,890 6,732 72,827 48,350
Total Probable 27,683 25,077 3,319 53,313 17,612
Total Proved plus Probable 78,497 45,967 10,051 126,140 65,962
Total Possible 33,550 38,898 3,931 73,103 15,047
Total Proved plus Probable plus Possible 112,047 84,865 13,982 199,243 81,009

(*) Mbbl (thousand barrels of oil).
(**) MMcf (million cubic feet).
(***) MBOE (thousand barrels of oil equivalent).

Reserve Life Index

(years) 2016(1) 2015(2)
Total Proved 6.4 5.7
Total Proved plus Probable 11.1 7.8
Total Proved plus Probable plus Possible 17.5 9.6

(1) Calculated using average fourth quarter 2016 WI production of 31,031 BOEPD.
(2) Calculated using average fourth quarter 2015 WI production of 23,138 BOEPD.

NPV Summary

Gran Tierra's reserves were evaluated using McDaniel's commodity price forecasts at January 1, 2017. The NPV is prior to provision for general and administrative and interest expenses. It should not be assumed that the NPV of cash flow estimated by McDaniel represents the fair market value of the reserves. The NPV of Gran Tierra's reserves increased relative to year-end 2015, despite a 10% decrease in the January 1, 2017 McDaniel price forecast as outlined in the price forecast table below. NPVs on both a before- and after-tax basis are presented below.

Total Company Discount Rate
($ millions) 0% 5% 10% 15% 20%
Before tax
Proved Developed Producing 1,120 969 854 763 691
Proved Developed Non-Producing 89 73 62 53 46
Proved Undeveloped 628 433 314 237 184
Total Proved 1,837 1,475 1,230 1,053 921
Total Probable 1,589 1,198 925 730 586
Total Proved plus Probable 3,426 2,673 2,155 1,783 1,507
Total Possible 2,730 1,749 1,196 862 647
Total Proved plus Probable plus Possible 6,156 4,422 3,351 2,645 2,154
After tax
Proved Developed Producing 959 832 734 657 595
Proved Developed Non-Producing 58 48 40 34 30
Proved Undeveloped 502 351 258 196 153
Total Proved 1,519 1,231 1,032 887 778
Total Probable 1,072 808 622 487 388
Total Proved plus Probable 2,591 2,039 1,654 1,374 1,166
Total Possible 1,830 1,168 795 569 424
Total Proved plus Probable plus Possible 4,421 3,207 2,449 1,943 1,590

Future Development Costs

FDC reflects the independent evaluator's best estimate of what it will cost to bring the proved undeveloped and probable reserves on production. Changes in forecast FDC occur annually as a result of development activities, acquisition and disposition activities, and changes in capital cost estimates based on improvements in well design and performance, as well as changes in service costs. FDC for total 2P reserves increased to $392.9 million at year-end 2016 from $132.2 million at year-end 2015. The increase in FDC in 2016 was predominantly attributed to costs to develop acquired properties.

($ millions) Total Proved Total Proved Plus Probable
2017 103.6 138.1
2018 55.9 167.1
2019 21.2 66.5
2020 2.4 16.2
2021 - 0.8
Remainder 4.1 4.2
Total (undiscounted) 187.2 392.9

Finding, Development and Acquisition Costs

Reserves (MBOE) 2016
Total Proved 72,827
Total Proved plus Probable 126,140
Total Proved plus Probable plus Possible 199,243
Capital expenditures ($ millions)
Exploration and Development
- excluding acquired properties 76.7
- acquired properties 39.3
Total Exploration and Development 116.0
Net Acquisitions and Dispositions 571.2
Total Capital Expenditures 687.2
Operating Netbacks ($/BOE, per WI sales volume)
Operating Netback - fourth quarter1 20.83

1 Operating netback is a non-GAAP measure which does not have any standardized meaning prescribed under GAAP. Refer to "Non-GAAP Measures" in this press release for a descriptions of this non-GAAP measure.

Finding and Development Costs, excluding FDC(1)(2)(3)(4)

Total Proved Year Ended December 31, 2016
Reserve Additions (MBOE) 6,332
F&D Costs ($/BOE) 12.12
F&D Recycle Ratio 1.7
Total Proved plus Probable
Reserve Additions (MBOE) 5,755
F&D Costs ($/BOE) 13.33
F&D Recycle Ratio 1.6
Total Proved plus Probable plus Possible
Reserve Additions (MBOE) 8,361
F&D Costs ($/BOE) 9.18
F&D Recycle Ratio 2.3

(1) In all cases, the F&D or FD&A number is calculated by dividing the identified capital expenditures by the applicable reserves additions both before and after changes in FDC costs.
(2) Both F&D and FD&A costs take into account reserves revisions during the year on a per BOE basis.
(3) Recycle ratio is defined as fourth quarter operating netback per working interest sales volume BOE divided by the appropriate F&D or FD&A costs on a per BOE.
(4) The aggregate of the exploration and development costs incurred in the financial year and the changes during that year in estimated future development costs may not reflect the total F&D costs related to reserves additions for that year.

Finding and Development Costs, including FDC(1)(2)(3)(4)

Total Proved Year Ended December 31, 2016
Change in FDC ($ millions) 10.3
Reserve Additions (MBOE) 6,332
F&D Costs ($/BOE) 13.75
F&D Recycle Ratio 1.5
Total Proved plus Probable
Change in FDC ($ millions) (24.3 )
Reserve Additions (MBOE) 5,755
F&D Costs ($/BOE) 9.10
F&D Recycle Ratio 2.3
Total Proved plus Probable plus Possible
Change in FDC ($ millions) (18.6 )
Reserve Additions (MBOE) 8,361
F&D Costs ($/BOE) 6.95
F&D Recycle Ratio 3.0

(1) The calculation of F&D and FD&A costs incorporates the change in FDC required to bring proved undeveloped and developed reserves into production. In all cases, the F&D or FD&A number is calculated by dividing the identified capital expenditures by the applicable reserves additions both before and after changes in FDC costs.
(2) Both F&D and FD&A costs take into account reserves revisions during the year on a per BOE basis.
(3) Recycle ratio is defined as 2016 fourth quarter operating netback per working interest sales volume BOE divided by the appropriate F&D or FD&A costs on a per BOE.
(4) The aggregate of the exploration and development costs incurred in the financial year and the changes during that year in estimated future development costs may not reflect the total F&D costs related to reserves additions for that year.

Finding, Development and Acquisition Costs, excluding FDC(1)(2)(3)(4)

Total Proved Year Ended December 31, 2016
Reserve Additions, including Net Acquisitions (Dispositions) (MBOE) 34,381
FD&A Costs ($/BOE) 19.99
FD&A Recycle Ratio 1.0
Total Proved plus Probable
Reserve Additions, including Net Acquisitions (Dispositions) (MBOE) 70,083
FD&A Costs ($/BOE) 9.81
FD&A Recycle Ratio 2.1
Total Proved plus Probable plus Possible
Reserve Additions, including Net Acquisitions (Dispositions) (MBOE) 128,138
FD&A Costs ($/BOE) 5.36
FD&A Recycle Ratio 3.9

(1) In all cases, the F&D or FD&A number is calculated by dividing the identified capital expenditures by the applicable reserves additions both before and after changes in FDC costs.
(2) Both F&D and FD&A costs take into account reserves revisions during the year on a per BOE basis.
(3) Recycle ratio is defined as fourth quarter operating netback per working interest sales volume BOE divided by the appropriate F&D or FD&A costs on a per BOE.
(4) The aggregate of the exploration and development costs incurred in the financial year and the changes during that year in estimated future development costs may not reflect the total F&D costs related to reserves additions for that year.

Finding. Development and Acquisition Costs, including FDC(1)(2)(3)(4)

Total Proved Year Ended December 31, 2016
Change in FDC ($ millions) 118.1
Reserve Additions, including Net Acquisitions (Dispositions) (MBOE) 34,381
FD&A Costs ($/BOE) 23.42
FD&A Recycle Ratio 0.9
Total Proved plus Probable
Change in FDC ($ millions) 260.7
Reserve Additions, including Net Acquisitions (Dispositions) (MBOE) 70,083
FD&A Costs ($/BOE) 13.52
FD&A Recycle Ratio 1.5
Total Proved plus Probable plus Possible
Change in FDC ($ millions) 369.9
Reserve Additions, including Net Acquisitions (Dispositions) (MBOE) 128,138
FD&A Costs ($/BOE) 8.25
FD&A Recycle Ratio 2.5

(1) The calculation of F&D and FD&A costs incorporates the change in FDC required to bring proved undeveloped and developed reserves into production. In all cases, the F&D or FD&A number is calculated by dividing the identified capital expenditures by the applicable reserves additions both before and after changes in FDC costs.
(2) Both F&D and FD&A costs take into account reserves revisions during the year on a per BOE basis.
(3) Recycle ratio is defined as fourth quarter operating netback per working interest sales volume BOE divided by the appropriate F&D or FD&A costs on a per BOE.
(4) The aggregate of the exploration and development costs incurred in the financial year and the changes during that year in estimated future development costs may not reflect the total F&D costs related to reserves additions for that year.

Forecast prices

The pricing assumptions used in estimating NI 51-101 and COGEH compliant reserves data disclosed above with respect to net present values of future net revenue are set forth below. The price forecasts are based off McDaniel's standard price forecast effective January 1, 2017 and 2016. McDaniel is an independent qualified reserves auditor pursuant to NI 51-101.

Brent Crude Oil WTI Crude Oil
Year $US/bbl $US/bbl
January 1, 2017 January 1, 2016 January 1, 2017 January 1, 2016
2017 $56.00 $56.20 $55.00 $53.60
2018 $59.70 $65.00 $58.70 $62.40
2019 $63.40 $71.70 $62.40 $69.00
2020 $70.10 $75.80 $69.00 $73.10
2021 $76.90 $80.10 $75.80 $77.30

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 MKT (GTE) and the Toronto Stock Exchange (GTE), and operating in South America. Gran Tierra holds interests in producing and prospective properties in Colombia, Peru and Brazil. Gran Tierra 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's Securities and Exchange Commission filings are available on a website maintained by the Securities and Exchange Commission at www.sec.gov and on SEDAR at www.sedar.com.

For more information on Gran Tierra please go to: www.grantierra.com.

DISCLAIMER

This press release contains opinions, forecasts, projections, and other statements about future events or results that constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward-looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"). Such forward-looking statements include, but are not limited to, the Company's drilling efficiencies, strategies, operations including planned operations, productions estimates and infrastructure schedules.

The forward-looking statements contained in this press release reflect several material factors and expectations and assumptions of Gran Tierra including, without limitation, that Gran Tierra will continue to conduct its operations in a manner consistent with its current expectations, the accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates), rig availability, the effects of drilling down-dip, the effects of waterflood and multi-stage fracture stimulation operations, the extent and effect of delivery disruptions, and the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions including in areas of potential expansion, and the ability of Gran Tierra to execute its current business and operational plans in the manner currently planned. Gran Tierra 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.

Among the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements in this press release are: risks relating to Gran Tierra's ability to complete the previously announced acquisition of assets in the Ecopetrol 2016 Bid Round; Gran Tierra's operations are located in South America, and unexpected problems can arise due to guerilla activity; technical difficulties and operational difficulties may arise which impact the production, transport or sale of our products; geographic, political and weather conditions can impact the production, transport or sale of our products; the ability of Gran Tierra to execute its business plan; the risk that unexpected delays and difficulties in developing currently owned properties may occur; the timely receipt of regulatory or other required approvals for our operating activities; the failure of exploratory drilling to result in commercial wells; unexpected delays due to the limited availability of drilling equipment and personnel; the risk that oil prices could remain weak or continue to decline, or global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; and the risk factors detailed from time to time in Gran Tierra's periodic reports filed with the Securities and Exchange Commission, including, without limitation, under the caption " Risk Factors" in Gran Tierra's Annual Report on Form 10-K filed February 29, 2016, and its Quarterly Report on Form 10-Q filed November 4, 2016. These filings are available on the Web site maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at www.sedar.com. Although the current capital spending program and long term strategy of Gran Tierra is based upon the current expectations of the management of Gran Tierra, should any one of a number of issues arise, Gran Tierra may find it necessary to alter its business strategy and/or capital spending program and there can be no assurance as at the date of this press release as to how those funds may be reallocated or strategy changed.

Statements relating to "reserves" or "resources" are also deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, including that the reserves and resources described can be profitably produced in the future.

The estimates of cumulative net cash may be considered to be future-oriented financial information or a financial outlook for the purposes of applicable Canadian securities laws. Financial outlook and future-oriented financial information contained in this press release about prospective financial performance, financial position or cash flows are based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available, and to become available in the future. In particular, this press release contains projected cash positions to 2019. These projections contain forward-looking statements and are based on a number of material assumptions and factors set out above. Actual results may differ significantly from the projections presented herein. These projections may also be considered to contain future-oriented financial information or a financial outlook. The actual results of Gran Tierra's operations for any period will likely vary from the amounts set forth in these projections, and such variations may be material. See above for a discussion of the risks that could cause actual results to vary. The future-oriented financial information and financial outlooks contained in this press release have been approved by management as of the date of this press release. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results.

All forward-looking statements are made as of the date of this press release and the fact that this press release remains available does not constitute a representation by Gran Tierra that Gran Tierra believes these forward-looking statements continue to be true as of any subsequent date. Actual results may vary materially from the expected results expressed in forward-looking statements. Gran Tierra 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 laws. Gran Tierra's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

Non-GAAP Measures

This press release includes non-GAAP financial measures which do not have a standardized meaning under GAAP. Investors are cautioned that these measures should not be construed as alternatives to net loss or other measures of financial performance as determined in accordance with GAAP. Gran Tierra's method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to similar measures used by other companies.

Operating netback as presented is oil and gas sales net of royalties and operating and transportation expenses. Management views operating netback as a financial performance measure. Management believes that operating netback is a useful supplemental measure for investors to analyze financial performance and provide an indication of the results generated by Gran Tierra's principal business activities prior to the consideration of other income and expenses.

Unaudited Financial Information

Certain financial and operating results included in this news release include working capital, capital expenditures, production information and operating netbacks are based on unaudited estimated results. These estimated results are subject to change upon completion of the Company's audited financial statements for the year ended December 31, 2016, and changes could be material. Gran Tierra anticipates filing its audited financial statements and related management's discussion and analysis for the year ended December 31, 2016 on or before March 1, 2017.

This press release contains a number of oil and gas metrics, including net asset value, F&D, FD&A, recycle ratio, reserve replacement and reserve life index, which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies. Such metrics have been included herein to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods.

DISCLOSURE OF OIL AND GAS INFORMATION

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

Possible reserves are those additional reserves that are less certain to be recovered than Probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of Proved plus Probable plus Possible reserves. The estimate of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

Estimates of net present value contained herein do not necessarily represent fair market value of reserves. Estimates of reserves and future net revenue for individual properties may not reflect the same level of confidence as estimates of reserves and future net revenue for all properties, due to the effect of aggregation.

BOEs have been converted on the basis of six thousand cubic feet ("Mcf") natural gas to 1 barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of oil as compared with natural gas is significantly different from the energy equivalent of six to one, utilizing a BOE conversion ratio of 6 Mcf: 1 bbl would be misleading as an indication of value.

Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Not all exploration projects will result in discoveries. The chance that an exploration project will result in the discovery of petroleum is referred to as the "chance of discovery." Thus, for an undiscovered accumulation the chance of commerciality is the product of two risk components-the chance of discovery and the chance of development. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources.

Estimates of the Company's prospective resources are based upon the GTE McDaniel Prospective Resources Report, and the PTA 2015 Prospective Resources Report. The estimates of prospective resources provided in this press release are estimates only and there is no guarantee that the estimated prospective resources will be recovered. Actual resources may be greater than or less than the estimates provided in this in this press release and the differences may be material. There is no assurance that the forecast price and cost assumptions applied by McDaniel in evaluating Gran Tierra's, Petroamerica's and PGC's prospective resources will be attained and variances could be material. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources.

Estimates of prospective resources are by their nature more speculative than estimates of proved reserves and would require substantial capital spending over a significant number of years to implement recovery. Actual locations drilled and quantities that may be ultimately recovered from our properties will differ substantially. In addition, we have made no commitment to drill, and likely will not drill, all of the drilling locations that have been attributable to these quantities.

Except as otherwise set forth herein, the prospective resources estimates that are referred to herein are un-risked as to both chance of discovery and chance of development . Risks that could impact the chance of discovery and chance of development include, without limitation: geological uncertainty and uncertainty regarding individual well drainage areas; uncertainty regarding the consistency of productivity that may be achieved from lands with attributed resources; potential delays in development due to product prices, access to capital, availability of markets and/or take-away capacity; and uncertainty regarding potential flow rates from wells and the economics of those wells.

The following classification of prospective resources is used in the presentation:

  • Low Estimate means there is at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.
  • Best Estimate means there is at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.
  • High Estimate means there is at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

In general, the significant factors that may change the prospective resources estimates include further delineation drilling, which could change the estimates either positively or negatively, future technology improvements, which would positively affect the estimates, and additional processing capacity that could affect the volumes recoverable or type of production. Additional facility design work, development plans, reservoir studies and delineation drilling is expected to be completed by the Company in accordance with its long-term resource development plan.

Disclosure of Reserve Information and Cautionary Note to U.S. Investors

Unless expressly stated otherwise, all estimates of proved, probable and possible reserves and related future net revenue disclosed in this press release have been prepared in accordance with NI 51-101. Estimates of reserves and future net revenue made in accordance with NI 51-101 will differ from corresponding estimates prepared in accordance with applicable U.S. Securities and Exchange Commission ("SEC") rules and disclosure requirements of the U.S. Financial Accounting Standards Board ("FASB"), and those differences may be material. NI 51-101, for example, requires disclosure of reserves and related future net revenue estimates based on forecast prices and costs, whereas SEC and FASB standards require that reserves and related future net revenue be estimated using average prices for the previous 12 months. In addition, NI 51-101 permits the presentation of reserves estimates on a "company gross" basis, representing Gran Tierra's working interest share before deduction of royalties, whereas SEC and FASB standards require the presentation of net reserve estimates after the deduction of royalties and similar payments. There are also differences in the technical reserves estimation standards applicable under NI 51-101 and, pursuant thereto, the COGEH, and those applicable under SEC and FASB requirements.

In addition to being a reporting issuer in certain Canadian jurisdictions, Gran Tierra is a registrant with the SEC and subject to domestic issuer reporting requirements under U.S. federal securities law, including with respect to the disclosure of reserves and other oil and gas information in accordance with U.S. federal securities law and applicable SEC rules and regulations (collectively, "SEC requirements"). Disclosure of such information in accordance with SEC requirements is included in the Company's Annual Report on Form 10-K and in other reports and materials filed with or furnished to the SEC and, as applicable, Canadian securities regulatory authorities. The SEC permits oil and gas companies that are subject to domestic issuer reporting requirements under U.S. federal securities law, in their filings with the SEC, to disclose only estimated proved, probable and possible reserves that meet the SEC's definitions of such terms. Gran Tierra has disclosed estimated proved, probable and possible reserves in its filings with the SEC. In addition, Gran Tierra prepares its financial statements in accordance with United States generally accepted accounting principles, which require that the notes to its annual financial statements include supplementary disclosure in respect of the Company's oil and gas activities, including estimates of its proved oil and gas reserves and a standardized measure of discounted future net cash flows relating to proved oil and gas reserve quantities. This supplementary financial statement disclosure is presented in accordance with FASB requirements, which align with corresponding SEC requirements concerning reserves estimation and reporting.

In this press release, the Company uses the term prospective resources. The SEC guidelines strictly prohibit the Company from including prospective resources in filings with the SEC. Investors are urged to consider closely the disclosures and risk factors in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in the other reports and filings with the SEC, available from the Company's offices or website. These forms can also be obtained from the SEC via the internet at www.sec.gov or by calling 1-800-SEC-0330.



For investor and media inquiries please contact:
Gran Tierra Energy Inc.
Gary Guidry
Chief Executive Officer
+1.403.767.6500

Gran Tierra Energy Inc.
Ryan Ellson
Chief Financial Officer
+1.403.767.6501

Gran Tierra Energy Inc.
Rodger Trimble
Vice President, Investor Relations
+1.403.698.7941