Gran Tierra Energy Announces Record Quarterly Production of 21,860 BOEPD and Operations Update
Preliminary Front End Engineering Design Initiated for Bretaña Norte Field Development in Peru
CALGARY, April 17, 2013 /PRNewswire/ - Gran Tierra Energy Inc. ("Gran Tierra Energy") (NYSE MKT: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today provided updates for its production and exploration drilling in Colombia, Peru and Brazil.
"Gran Tierra Energy is pleased to start the year with record levels of production as we continue to successfully mitigate transportation disruptions in Colombia," commented Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. "Operationally, we believe the northern boundary of the Moqueta field has now been successfully delineated with the Moqueta-9 appraisal well. The balance of this year will focus on increasing water injection for pressure support and increasing production capacity from the field. Once permits are in place, we can then direct our attention to appraising the eastern flank of the Moqueta structure, which remains undrilled. In Peru, the evaluation of our Bretaña Norte oil discovery continues, with initial testing of our well extension expected in the coming month, preliminary field development planning initiated, and long term testing expected to begin within a year. Our exploration program in the onshore Recôncavo Basin in Brazil, testing a new play with horizontal drilling and multi-stage fracture stimulation, is ongoing with results expected mid-year," concluded Coffield.
Average daily consolidated light and medium crude oil and natural gas production net after royalty (NAR) before inventory adjustments for the three months ended March 31, 2013, increased 21% to approximately 21,860 barrels of oil equivalent per day ("BOEPD") NAR compared with 18,148 BOEPD NAR for the corresponding period in 2012. Approximately 97% was oil and natural gas liquids. First quarter production reflects increased production in all countries in which we are producing with the largest contribution to the increase from the Costayaco, Moqueta, and Surubi oil discoveries. This increase was partially offset by approximately 44 days of oil delivery restrictions due to disruptions in the Ecopetrol-operated Trans-Andean oil pipeline (the "OTA pipeline") in Colombia. Gran Tierra Energy continued production while the OTA pipeline was down, selling oil through an alternative pipeline and trucking and storing excess oil.
Average daily Colombian production of light and medium crude oil and natural gas for the three months ended March 31, 2013 increased 18% to approximately 17,850 BOEPD NAR before inventory adjustments, compared with 15,163 BOEPD NAR before inventory adjustments for the comparable period in 2012. The production is primarily from the Costayaco and Moqueta fields in the Chaza Block in which Gran Tierra Energy has a 100% working interest.
Additionally, preliminary indications show approximately 139,800 barrels NAR net liquidation of inventory during the quarter. Inventory volumes will be finalized near the end of April 2013 and, as such, this figure is subject to change.
Chaza Block (100% working interest and operator)
In Colombia, the Moqueta-9D appraisal well was spud on January 20, 2013 to test the northwest extent of the Moqueta field. It discovered hydrocarbons in a different fault block, separate from the main Moqueta oil accumulation. The T-Sandstone tested gas and the combined Caballos and U-Sandstone formations tested oil and water. Further isolation testing on the Caballos and U-Sandstone formations will be conducted to define their hydrocarbon potential. These results, integrated with seismic and other wells drilled to date, indicate the well has defined the northern margin of the main Moqueta oil accumulation. The down-dip extent of the oil column to the west, south and east, and the lateral extent of the structure to the east, have not yet been defined by drilling, with this additional resource potential to be defined with our ongoing drilling campaign.
The Moqueta-10 well has begun drilling. This well will be used as a water injection well to assist with pressure support in the Moqueta field to support production growth from existing and future planned production wells. This well is being drilled to the far western flank of the field, and may provide additional information on the down-dip extent of the oil column in the primary reservoirs in the main block, which has not yet been determined. This well will be followed by Moqueta-11, which is planned to be a production well.
Block 95 (100% working interest and operator)
Gran Tierra Energy has initiated drilling of the horizontal side-track extension of the Bretaña Norte 95-2-1XD oil discovery well. Casing has been set at the top of the Vivian reservoir, where very high quality sands with very good oil shows were encountered, and the drilling of a 500 meter horizontal leg has been initiated. Upon completion, a short test will be conducted. Plans are ongoing to initiate long-term testing from this horizontal well, with production to be initiated within a year. In addition, a Preliminary Front End Engineering Design has been initiated for the Bretaña Norte field development to support reserves booking, with results expected before year-end.
Block 142 (100% working interest and operator)
Gran Tierra Energy's horizontal multi-stage fracture stimulation exploration drilling program in the Recôncavo Basin onshore Brazil is ongoing, with results of the program expected mid-year.
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 MKT (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
A barrel of oil equivalent ("BOE") is calculated using the conversion factor of six thousand cubic feet ("Mcf") of natural gas being equivalent to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf : 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. In addition, given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalent of six to one, utilizing a BOE conversion ratio of 6 Mcf: 1 barrel of oil would be misleading as an indication of value.
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 "planning", "will", "expected", "estimate", "believe" and "potential" 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 anticipated exploration, testing and development activities, expected drilling locations and expected timing of activities and results.
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 resource estimates; the accuracy of testing and production results and seismic data; the effects of certain drilling techniques; cost and price estimates; 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, which
could impact or delay the completion or continuation of drilling,
production or testing; geographic, political and weather conditions can
interrupt operations, which could impact or delay the commencement or
continuation 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 change its current
drilling, production and testing plans. 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 for the year ended December 31, 2012, filed with the Securities
and Exchange Commission on February 26, 2013. 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
SOURCE Gran Tierra Energy Inc.