Significant exploration upside added to existing drilling portfolio in Latin America
CALGARY, Alberta, June 9, 2006, Gran Tierra Energy, Inc. (OTC Bulletin Board: GTRE.OB) today announced that the Company has signed a License Contract for the Exploration and Exploitation of Hydrocarbons in Peru, covering Block 122. The contract was signed on June 8, 2006 between Gran Tierra Energy Peru and Per'uPetro S.A. and will become effective once ratified by Supreme Decree, which is expected in July, 2006.
Block 122 is located on the eastern flank of the prolific Mara~non Basin of northern Peru, on the crest of the Iquitos Arch. This is a frontier exploration block covering approximately 1.2 million acres, in a geologic position that is analogous to significant petroleum accumulations found elsewhere in the world. The nearest producing field is the Corrientes field, with estimated ultimate reserves in excess of 200 million barrels.
The exploration term is divided into four exploration periods spread over seven years. The minimum committed work program includes technical studies, seismic acquisition and the drilling of one exploration well, with a total financial commitment of US$ 5.0 million. The exploitation term for oil is thirty years.
Dana Coffield, President and Chief Executive Officer of Gran Tierra, stated, "Our entry into Peru essentially completes the first stage of our growth strategy in Latin America. The addition of the Peru acreage to our current asset base and pending acquisitions in Argentina and Colombia creates a diverse portfolio across three countries. That portfolio provides a broad base of proven reserves and cash flow, development opportunities and exploration lands with a mix of risk and reward profiles, positioning us to move into a second phase of growth that is focused on drilling activity. Block 122 is a unique addition to our portfolio: a pure exploration play with higher risk but huge potential. It is an asset that makes sense in our expanding company, offering an opportunity for quantum growth in the medium/long-term to supplement an aggressive drilling and work campaign in the shorter term."
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. The Company currently holds interests in producing and non-producing properties in Argentina and is pursuing a strategy that focuses on establishing a portfolio of producing properties, and development and exploration opportunities, through selective acquisitions, to provide a base for future growth.
Gran Tierra initiated three acquisitions in the first quarter of 2006: one significant acquisition of producing properties in Argentina to expand and broaden its activities in the Noroeste region of the country; one smaller "tuck-in" acquisition, also in the Noroeste Basin, providing additional production and drilling opportunities; and a third acquisition of Argosy Energy International, which provides a sizeable entry for the company into Colombia. Gran Tierra is continuing to assess growth opportunities and expects to continue its strategy of moving aggressively and sensibly to build a diverse, self-sustaining and active international oil and gas company. Additional information concerning Gran Tierra is available at www.grantierra.com. Investor inquiries may be directed to email@example.com or 1-800-916-GTRE(4873).
Forward Looking Statements
This press release contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, including without limitation those statements regarding the Company's ability to exploit oil and gas exploration opportunities. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished. Although the forward-looking statements in this release 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, our ability to complete each of the potential acquisitions discussed above on anticipated terms and in a timely manner, including the completion of financing relating thereto on satisfactory terms, our ability to discover reserves that may be extracted on a commercially viable basis, difficulties inherent in estimating oil and gas reserves, intense competition in the oil and gas industry, environmental risks, regulatory changes and general economic conditions including the price of oil and gas. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any forward-looking statements in order 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 made by us in the our reports filed with the Securities and Exchange Commission, including those risks set forth in the Company's Current Report on Form 8-K filed on November 10, 2005, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. We undertake no obligation to update these forward looking statements.