27 Febrero 2018

Gran Tierra Energy Inc. Provides Operations Update Highlighted by 248% Increase in Acordionero Production Since August 2016 and Ongoing Progress in A-Limestone Play

CALGARY, Alberta, Feb. 27, 2018 (GLOBE NEWSWIRE) — Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE) (NYSE MKT:GTE) (TSX:GTE), a company focused on oil and gas exploration and production in Colombia, is pleased to provide today an operations update. All dollar amounts are in United States (“U.S.“) dollars and all production, reserves and resources volumes are on a working interest before royalties (“WI“) basis, unless otherwise stated.


  • Production
    • Gran Tierra’s Colombia only production averaged a record high of 34,477 barrels of oil equivalent per day (“BOEPD“) during fourth quarter 2017, which was 21% higher compared with 28,481 BOEPD in first quarter of 2017 and 6% higher compared with 32,570 BOEPD in third quarter of 2017
    • The Company’s Colombia only production in fourth quarter 2017 was also up 53% from second quarter 2015 when the strategy to refocus Gran Tierra on Colombia began
  • Continued Strong Performance at Acordionero, 100% WI
    • Record Production: Since acquiring the Acordionero field in the Middle Magdalena Valley Basin (“MMV“) in August 2016, Gran Tierra has increased its production by 248% to a record high average rate during January 2018 of 16,478 barrels of oil per day (“bopd”)
    • Free Cash Flow: From the acquisition date of August 23, 2016, until December 31, 2017, the MMV assets have generated $172 million in oil and natural gas sales and $127 million of operating netback1, while the Company made capital investments of $105 million
    • Active 2018 Development Program: the Company plans to drill 8 development oil wells, 3 water injectors and 1 water source well, as well as expand the central processing facilities
    • Enhanced Oil Recovery (“EOR”): Gran Tierra’s plans for early optimization and EOR are underway with a source injection water well on stream, injectivity and facility tests successfully executed and the waterflood now into the full development phase
  • Strong A-Limestone Production from Vonu-1 Exploration Well, Putumayo 1 (“PUT-1”) Block, 55% WI
    • This important discovery well in the A-Limestone is currently producing 1,974 bopd (100% gross) from the A-Limestone, or 1,086 bopd WI, with less than 1% water cut (January 2018 average)
    • Vonu-1 is Gran Tierra’s strongest A-Limestone well to date in terms of oil production performance and has already produced a cumulative 415,000 barrels (“bbl“) of oil (100% gross)
  • Progress with A-Limestone Results in Costayaco, Chaza Block, 100% WI
    • Six wells from the Costayaco field have now produced from the A-Limestone an approximate combined cumulative 1,000,000 bbl of oil, with less than 1% water cut, since September 19, 2016, when CYC-19 was brought on production as the Company’s first A-Limestone test well
    • The CYC-30 vertical well, drilled in third quarter 2017, yielded encouraging results from the A-Limestone after the initial completion; however, after stimulation, pressure analysis indicates that the completion fluids damaged the formation
    • Gran Tierra is working to redesign and optimize the completion fluids to be more compatible with the A-Limestone
    • The completion rig has been brought back to CYC-30 to re-stimulate the well with the optimized completion fluids and to recommence production testing
    • The plan is to apply the Company’s learnings from CYC-30 to Siriri-1 and to future wells in the A-Limestone
  • Ongoing A-Limestone Assessment in Siriri-1 Exploration Well, Putumayo 4 (“PUT-4”) Block, 100% WI
    • During December 2017, 15 feet out of 70 feet of oil pay in the A-Limestone were perforated and stimulated
    • An oil gradient was measured in the wellbore using wireline pressure gauges and samples of oil were recovered; the oil properties tested 29o API and fingerprint analysis suggests that the oil is from a similar source as the Vonu-1 well
    • The well is currently shut-in with a static wellhead pressure of 1,720 pounds per square inch
    • The potential for further stimulation of the A-Limestone is currently being studied
    • Shallower potential net oil pay has been identified in the M2 Limestone, the N Sand and the Upper Pepino Sand; the Company plans to test the N Sand after full assessment of the A-Limestone is completed
  • Successful Infill Development Well in Legacy Reservoirs in Costayaco, Chaza Block, 100% WI
    • In first quarter 2018, Gran Tierra drilled the fastest well yet in Costayaco, the CYC-31, an infill development well which encountered good reservoir in the N, U and Caballos Sands, as well as the M2 and A-Limestones; production testing of the well in the U and Caballos Sands is currently underway; an additional two infill development wells are planned to be drilled later in 2018 towards the top of the Costayaco structure to continue optimizing reservoir management and oil recovery
  • Consistent Performance with N Sand Wells in Putumayo 7 (“PUT-7”) Block, 100% WI
    • Cumplidor-1: production has averaged 678 bopd of 19o API oil and less than 1% water cut since July 1, 2017
    • Confianza-1: was perforated in two bypassed N Sand zones and started producing from all three zones on December 5, 2017; since the recompletion, production has average 751 bopd of 19o API oil, with less than a 1% water cut, an increase of approximately 450 bopd
    • A drilling rig is currently being mobilized to the Cumplidor-Confianza drilling pad site with a plan to begin drilling 2 additional development wells in sequence, starting in late first quarter 2018

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented “We are very proud of the ongoing excellent results that our technical and operational teams have delivered over the last 18 months from the Acordionero field, which has exceeded our original expectations for production growth and profitability. Acordionero was Gran Tierra’s growth engine throughout 2017 in terms of material production and reserves increases. Since acquiring Acordionero in August 2016, our teams have increased the field’s production by 248% to almost 16,500 bopd as of January 2018. Since the acquisition and during an active capital program in which we have drilled and brought online 11 oil wells, two water injectors and one water source well, the Acordionero field has also generated free cash flow and we expect that to continue as we further develop the field.

With the ongoing ramp up of Acordionero, our average Colombia production increased to a record high of almost 34,500 BOEPD in fourth quarter 2017, which was 21% higher compared with first quarter 2017. We are very pleased that this 2017 production growth was organic and achieved through the drill bit. The all-time high production that we achieved in fourth quarter 2017 also represented growth of 53% from second quarter 2015.

Our A-Limestone play in the Putumayo Basin continues to deliver strong production results from the Vonu-1 well on the PUT-1 Block and the Costayaco field. We are confident that the A-Limestone may represent a significant basin-wide conventional carbonate oil resource play, as recognized by our independent qualified reserve evaluator McDaniel & Associates Consultants Ltd. at 2017 year-end, who assigned Gran Tierra gross unrisked mean prospective resources in the A-Limestone of 822 million barrels of oil equivalent2. As expected with any new play, there are occasional challenges such as the Siriri-1 and CYC-30 wells and a learning curve which we are quickly navigating. The A-Limestone play is still in its infancy and is barely more than a year old. We remain very encouraged about the material prospectivity of the A-Limestone. We look forward to many more years of drilling in this exciting new play in the Putumayo Basin.

With our large prospective resource base throughout Colombia, we plan to drill 30 to 35 exploration wells over the next three years, which are all expected to be funded by cash from operating activities. This exploration campaign is designed to test the vast majority of our massive portfolio of total unrisked mean prospective resources of 1.462 billion barrels of oil equivalent2, including our dominant position in the Putumayo Basin oil play fairways of the A-Limestone, other carbonates and the N Sand.

Our strategy of focusing on capital efficiency and returns on invested capital is delivering results on many fronts in Colombia. With our self-funded, sustainable business model, we believe Gran Tierra is well-positioned for potential profitable growth throughout 2018 and beyond.”


Gran Tierra Production Growth Since 2015

From fourth quarter 2015 through fourth quarter 2017, the Company’s Colombia production has grown at a compound annual rate of 23% (see graph below). Gran Tierra’s Colombia production averaged a record high of 34,477 BOEPD during fourth quarter 2017, which was 21% higher compared with 28,481 BOEPD in the first quarter of 2017 and 6% higher compared with 32,570 BOEPD in third quarter of 2017.

Figure 1 – Gran Tierra Production Growth Graph

Acordionero Field Development (Gran Tierra 100% WI and Operator)

After acquiring the MMV assets in August 2016, Gran Tierra spud its first Acordionero development well as operator in October 2016 and has since drilled, completed and brought on production 11 oil wells, two water injection wells and one water source well. The AC-14i water injection well and the AC-18, AC-16 and AC-21 development oil wells were brought on stream during fourth quarter 2017. Following AC-21, drilling commenced from the new AC-6 pad at the end of December 2017 with the AC-20 development oil well. Completion operations for AC-20 commenced at the end of January 2018 and the well was brought online February 26, 2018. The second new well on this pad, AC-6, spud on February 9, 2018. Gran Tierra expects to drill a total of four development oil wells and one injector from the AC-6 pad by the end of the second quarter 2018.

The table below summarizes the productivity from recent Acordionero development oil wells:

WellIP30 (bopd)1Start DateProducing Zone
AC-211,537Dec.08, 2017Lisama A+C
AC-201,2292Feb.26, 2018Lisama A+C
1 IP30 represents initial production averaged over first 30 days of production
2 AC-20 production is single day rate for February 26, 2018

AC-14i injection tests were successfully conducted in November 2017 in the Lisama A and C Sands. The AC-8i water injection well was stimulated in December 2017 to improve Lisama C Sand injectivity. Both wells have been injecting water continuously into the Lisama Sands since early December 2017.

MMV Exploration and Appraisal

Elsewhere in the MMV, Gran Tierra spud the Ayombero-1 exploration well on November 13, 2017, which is targeting the La Luna Formation conventional fractured carbonate oil play. This well was drilled within the Midas Norte Block (GTE 100% WI). Gran Tierra produces from the La Luna Formation at the Chuira field, west of the Ayombero location. Testing this play is designed to help Gran Tierra better understand the potential of the La Luna. After encouraging indications of oil presence while drilling and well log results in the La Luna Formation, casing was set and completion operations commenced in February 2018. Operations are ongoing and results are expected by the end of first quarter 2018.

Gran Tierra spud the Totumillo exploration well on January 28, 2018, within the Acordionero exploitation area, which is designed to target Lisama Sand reservoirs similar to Acordionero’s but in a separate structural accumulation. Drilling operations are currently ongoing.

The Ayombero and Totumillo exploration wells may demonstrate additional diversified potential within the original acquisition of the MMV assets.

PUT-1 Block (Gran Tierra 55% WI and Operator)

With the success of the A-Limestone in the Vonu-1 exploration well in the PUT-1 Block, Gran Tierra is currently evaluating options to drill new wells in the block starting later in 2018. As Vonu-1 also discovered oil in the U Sand and net oil pay in the N Sand, the Company’s evaluation is designed to identify the best drilling locations to test the stacked multi-zone potential of the PUT-1 Block.

Gas-to-Power Upgrades, Chaza Block, (Gran Tierra 100% WI and Operator)

Gran Tierra is now in a position to generate all of its electricity needs using associated natural gas production for fuel in the Costayaco field and plans to be in a similar position for the Moqueta field early in second quarter 2018. The Company has a combined generation capability of over 9 megawatts (“MW“) at Costayaco and plans to increase the existing 1 MW capability to 4 MW at Moqueta. These gas-to-power upgrades are designed to allow full independence from the national electricity grid and provide continuous reliable power supply to Gran Tierra’s wells, injection pumps and facilities.

Nancy-Burdine-Maxine (“NBM”) Block (Gran Tierra 100% WI and Operator)

Nancy-1 well was successfully reactivated in the N Sand on January 6, 2018 using a jet pump. The well was last produced by the previous operator in June 2015. Between January 6 and February 19, 2018, the well produced 14,667 barrels of oil, for an average producing day rate of 402 bopd. Average water cut over the week to February 19, 2018 was 5.8%, and average GOR over the same week was 79 scf/bbl.

Gran Tierra has moved the rig from Nancy-1 to the currently shut-in Burdine-5 well to test the A-Limestone, which Company analysis indicates may be prospective across the block. Operations are currently ongoing.

1 Operating netback is a non-GAAP measure and does not have a standardized meaning under generally accepted accounting principles in the United States of America (“GAAP”). Refer to “Non-GAAP Measures” in this press release for a description of this non-GAAP measure and a reconciliation to the most directly comparable measure (oil and natural gas sales) calculated and presented in accordance with GAAP.

2 All resources values and ancillary information 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“) and are based on the Company’s 2017 year-end estimated prospective resources as evaluated by the Company’s independent qualified reserve evaluator McDaniel & Associates Consultants Ltd. (“McDaniel“) in reports with an effective date of December 31, 2017 (the “GTE McDaniel Prospective Resources Report“), unless otherwise expressly stated.

Contact Information

For investor and media inquiries please contact:

Gary Guidry
Chief Executive Officer

Ryan Ellson
Chief Financial Officer

Rodger Trimble
Vice President, Investor Relations


About Gran Tierra Energy Inc.

Gran Tierra Energy Inc. together with its subsidiaries is an independent international energy company focused on oil and natural gas exploration and production in Colombia. The Company is focused on its existing portfolio of assets in Colombia and will pursue new growth opportunities throughout Colombia, leveraging our financial strength. The Company’s common shares trade on the NYSE American and the Toronto Stock Exchange under the ticker symbol GTE. Additional information concerning Gran Tierra is available at www.grantierra.com. Information on the Company’s website does not constitute a part of this press release. Investor inquiries may be directed to info@grantierra.com or (403) 265-3221.

Gran Tierra’s Securities and Exchange Commission filings are available on the Securities and Exchange Commission website at http://www.sec.gov, and Gran Tierra’s reports filed with the Canadian Securities Administrators are available on SEDAR at http://www.sedar.com.

Forward Looking Statements and Legal Advisories:

This press release contains opinions, forecasts, projections, guidance, plans 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 future operations including planned operations, the exploration and development of the Company’s blocks, areas and fields, the Company’s expectations regarding certain plays, the Company’s business model and the Company’s plans, including completion and testing plans, objectives, expectations, evaluations and intentions regarding production, exploration and exploration upside and development, the Company’s projected and forecasted growth and results, expected allocation of capital and drilling including trends, infrastructure schedules and the expected timing of certain projects.

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 high pressure 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 access capital and other resources and 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: Gran Tierra’s operations are located in Colombia, and unexpected problems can arise due to guerrilla activity; technical difficulties and operational difficulties may arise which impact the production, transport or sale of the Company’s products, including instability of electricity supply at our production facilities; geographic, political and weather conditions can impact the production, transport or sale of the Company’s products; the risk that current global economic and credit conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts; the ability of Gran Tierra to execute its business plan and its drilling and development 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 the Company’s 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 further 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 27, 2018. These filings are available on the Securities and Exchange Commission website at http://www.sec.gov and on SEDAR at www.sedar.com. Although the current guidance, 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 and how that would impact Gran Tierra’s results of operations and financing position.

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

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.

The estimates of future production set forth in this press release 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 production and operational information for 2018. 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 could 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.

Non-GAAP Measures:

Operating netback is a non-GAAP measure which does not have a standardized meaning prescribed under GAAP. Management views this supplemental measure as a performance measure. Investors are cautioned that this measure should not be construed as an alternative to net income or loss or other measures of financial performance as determined in accordance with GAAP. Our method of calculating this measure may differ from other companies and, accordingly, may not be comparable to similar measures used by other companies. Operating netback, as presented, is defined as oil and natural gas sales less operating and transportation expenses. Management believes that operating netback is a useful supplemental measure for management and investors to analyze financial performance and provides an indication of the results generated by our principal business activities prior to the consideration of other income and expenses. A reconciliation from oil and natural gas sales (GAAP) to operating netback is provided in the table below:

Middle Magdalena
Valley – acquisition
date until December
31, 2017
(Thousands of U.S. Dollars)
Oil and natural gas sales$171,982
Operating expenses(23,732)
Transportation expenses(21,733)
Operating netback$126,517

Disclosure of Oil and Gas Information

Gran Tierra’s Statement of Reserves Data and Other Oil and Gas Information on Form 51-101F1 dated effective as at December 31, 2017 (the “GTE 51-101F1”), which includes disclosure of its oil and gas reserves and other oil and gas information in accordance with NI 51-101 forming the basis of this press release, is available on SEDAR at www.sedar.com.

Estimates of net present value contained herein do not necessarily represent fair market value of resources. Estimates of resources and future net revenue for individual properties may not reflect the same level of confidence as estimates of resources 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.

See the GTE 51-101F1 for additional definitions regarding terms used in this press release.

References to thickness of “oil pay” or of a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. Well test results should be considered as preliminary and not necessarily indicative of long-term performance or of ultimate recovery. Well log interpretations indicating oil and gas accumulations are not necessarily indicative of future production or ultimate recovery. If it is indicated that a pressure transient analysis or well-test interpretation has not been carried out, any data disclosed in that respect should be considered preliminary until such analysis has been completed.

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.

Prospective Resources

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. 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 prospective resources will be attained and variances could be material. There is no uncertainty 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.

The prospective resources in this press release are classified as “mean” representing the arithmetic average of the expected recoverable volume. It is the most accurate single point representation of the volume distribution.

For a discussion of Gran Tierra’s interest in the prospective resources, the location of the prospective resources, the product type reasonably expected, the risks and level of uncertainty associated with recovery of the resources, the significant positive and negative factors relevant to the estimate of the prospective resources, a description of the applicable projects maturity sub -categories and other relevant information regarding the prospective resources estimates, please see the GTE NI 51-101F1 available on SEDAR at www.sedar.com.

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

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 website at www.sec.gov or by calling 1-800-SEC-0330.