CALGARY, Alberta, September 14, 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 results of two exploration wells.
Garibay Block, Llanos Basin
Initial testing of the Melero-1 exploration well, located on the Garibay Block in the Llanos Basin, has been completed. The well spud on June 22, 2011, and reached total measured depth at 9,748 feet or 9,561 feet true vertical depth on July 16, 2011. Four drill stem tests were run and average production of 922 barrels of oil per day of 16.8 degrees API gravity with a 0.3% water cut was obtained from an interpreted 16 feet of net pay in the Upper Mirador reservoir. This well is currently suspended for long-term testing.
In addition, the Jilguero-2 appraisal well on the Garibay Block was spud on September 10, 2011. This well is located at the Jilguero oil discovery made by the joint venture between a subsidiary of Gran Tierra Energy and CEPSA Colombia S.A., a wholly-owned subsidiary of Compania Espanola de Petroleos, S.A. ("CEPSA").
The joint venture is also in the process of acquiring an additional 80 square kilometers of 3D seismic data to assist in the evaluation of other structures identified on 2D seismic on the block.
Gran Tierra Energy, through an indirect wholly owned subsidiary, holds a 50% working interest in the Garibay Block while, CEPSA holds the remaining 50% and is the operator of the property.
Rinconada Norte Block, Neuquen Basin
The first of three exploration wells to be drilled in the Rinconada Norte Block located in the Neuquen Basin of Argentina has made a new discovery of oil, testing 1,023 barrels of oil equivalent per day.
The RN x-1004 well flowed a total combined test rate of approximately 944 barrels of oil per day and approximately 0.5 million cubic feet per day of natural gas for a total of approximately 1,023 barrels of oil equivalent per day from two intervals tested separately in the Precuyo formation. This well also flowed 43 barrels of water per day or a 4% water cut.
Test and electric log data from the depths of the zones tested (3,222 - 3,255 feet and 3,353 - 3,386 feet) suggests a gross oil column thickness of approximately 197 feet. The oil is 29.6 degrees API gravity.
Having completed the first of the three exploratory wells, the service rig is set to move to complete and test the next two wells, which have already been drilled and cased.
Americas Petrogas Argentina S.A., the wholly-owned subsidiary of America Petrogas Inc., is the operator of the Rinconada Norte Block with a 65% working interest upon completing certain work program obligations, while Gran Tierra Energy, through an indirect wholly owned subsidiary holds a 35% working interest.
"Gran Tierra is pleased these oil discoveries will contribute to our existing base of reserves and production in Colombia and Argentina, while we prepare for additional exploration drilling in these countries and in Brazil in 2011", said Dana Coffield, President and CEO of Gran Tierra Energy.
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" and "will" 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 presence in Colombia and Argentina, planned acquisition of 3D seismic data, and the timing of drilling, testing and spudding the exploration wells.
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 production rates at Melero-1 and the RN x – 1004 wells. 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 drilling of the exploration wells; and geographic, political and weather conditions can impede testing, which could impact or delay the commencement of drilling, testing and spudding exploration 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 realize the benefit that it expects from the two oil discoveries in Colombia and Argentina described in this press release. 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 9, 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.
BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 thousand cubic feet:1 barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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