Drilling Programs Advance in Colombia and Brazil, Production Update
CALGARY, March 29, 2012 /PRNewswire/ - Gran Tierra Energy Inc. ("Gran Tierra Energy") (NYSE Amex: GTE) (TSX: GTE), a company focused on oil exploration and production in South America, today provided updates for its operations in Argentina, Colombia and Brazil.
Surubi Block, Noroeste Basin (Gran Tierra Energy 85% WI and Operator, Recursos y Energia de Formosa S.A. 15% WI)
Gran Tierra Energy has completed drilling and testing the Proa-2 appraisal well, the second well in the Proa oil field. The successful well encountered approximately 31 meters of net pay in two Palmar Largo intervals. Production tests were performed on the two intervals independently, resulting in combined natural flow rates of 6,300 barrels of oil per day ("BOPD") gross of 46° API oil with no water cut. The well is expected to be on production in April, 2012, initially at approximately 2,000 BOPD gross to further analyze reservoir performance while additional transportation capacity is evaluated.
Llanos-22 Block, Llanos Basin (CEPSA 55% WI and Operator, Gran Tierra Energy 45% WI subject to Agencia Nacional de Hidrocarburos approval)
The Ramiriqui-1 oil exploration well in the Llanos-22 block, located in the Andean foothills trend of the Llanos Basin, has reached total depth at 19,519 feet measured depth in basement. A testing program has been designed to test the reservoir and hydrocarbon character of the zones with oil shows encountered during drilling the Mirador Formation. Results from this testing are expected in April, 2012.
REC-T-155 Block (Gran Tierra Energy 70% WI & Operator, Alvorada 30% WI)
The 3-GTE-03D-BA and 3-GTE-4DPA-BA appraisal wells, located 1.2 kilometers north and 0.70 kilometers south of the 1-ALV-2-BA oil discovery well respectively, are scheduled to be tested and expected to be on production by June, 2012. In addition, Gran Tierra Energy is currently preparing the necessary Agência Nacional de Petróleo, Gás Natural e Biocombustíveis documents for the declaration of commerciality and the plan of development for the field.
REC-T-142 Block (Gran Tierra Energy 70% WI & Operator, Alvorada 30% WI)
Drilling of the first horizontal sidetrack well, currently planned to be drilled from the 1-GTE-01-BA pilot hole, has been delayed to June, 2012 due to rig availability. This will be the first of three horizontal sidetrack wells that Gran Tierra Energy expects to be drilled to test the productivity of the light oil sandstone reservoir targets in the Recôncavo Basin.
First quarter production and sales have been impacted by approximately 26 days of oil delivery restrictions due to three separate Ecopetrol-operated Oleoducto Transandino ("OTA") pipeline disruptions in Colombia, the latest of which occurred on March 13, 2012. Gran Tierra Energy continued production at a reduced rate while the OTA pipeline was down, selling a portion of its crude through trucking and storing excess crude. The pipeline has been repaired and was back in service on March 24, 2012. Gran Tierra Energy's current production is approximately 19,200 barrels of oil equivalent per day ("BOEPD").
Also, as a result of entering into new crude oil sales and transportation agreements with Ecopetrol as of February 1, 2012, which changed the sales point of produced oil from Orito to Tumaco, Gran Tierra Energy's reported crude oil inventory will increase representing ownership of oil in the OTA and associated Ecopetrol owned facilities. This change in sales point and the increase in crude oil inventory will have a corresponding one-time reduction in oil sales of approximately 1,600 BOEPD net after royalty ("NAR") to be reported for the quarter. As a result of the OTA pipeline disruptions and the new crude oil sales and transportation agreements, sales for all Gran Tierra Energy properties are expected to average approximately 16,000 BOEPD NAR, from January 1, 2012 to March 31, 2012.
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 and Advisories
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", "planned", "scheduled", "will" 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 Argentina, Brazil and Colombia including, without limitation, anticipated production, drilling and testing timelines.
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, production or testing; geographic, political and weather conditions can impede testing, which could impact or delay the commencement of drilling, production or testing; 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 chante its current drilling, production and testing plans. 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. 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 Annual Report on Form 10-K filed February 27, 2012. 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.
Barrels of oil equivalent ("BOE") 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.
SOURCE Gran Tierra Energy Inc.