Gran Tierra Energy Initiates Exploration Drilling Operations in Brazil and Colombia
Additional Oil Identified With Moqueta-6 Delineation Well
CALGARY, Oct. 12, 2011 /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 announced that it has initiated exploration drilling operations on two oil prospects in Brazil and exploration drilling operations on one oil prospect in Colombia. Delineation and development drilling is ongoing in Colombia, with additional oil column identified in the Moqueta-6 delineation well.
"Two years after announcing a strategic decision to enter Brazil, Gran Tierra Energy has assembled a large land position and a diverse exploration and development drilling portfolio, with exploration drilling operations now initiated on two prospects, one onshore and one offshore. In parallel, our delineation and development drilling operations on recently discovered reserves in Colombia are ongoing, with exciting new delineation results indicating additional oil column in the Moqueta oil discovery. We have also begun additional exploration drilling on our lands in the Putumayo Basin of Colombia," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy.
BM-CAL-10 Block (Statoil 45% WI & Operator, Petrobras 40% WI, Gran Tierra Energy 15% WI)
Statoil do Brasil Ltda. ("Statoil") commenced drilling operations on October 1, 2011 on the 1-STAT-7-BAS exploration well. The well is located in the deepwater portion of the Camamu Basin at a water depth of 6,200 feet, directly offshore from Salvador and the onshore Recôncavo Basin where Gran Tierra Energy's operated acreage is located, and is expected to take 60 days to drill.
Documents associated with Gran Tierra Energy's two farm-in agreements with Statoil, whereby Gran Tierra Energy will be entitled to earn a 10% working interest in Concession Contract BM-CAL-7 operated by PetróleoBrasileiro S.A. ("Petrobras"), and a 15% working interest in Concession Contract BM-CAL-10 operated by Statoil, in the offshore Camamu Basin, are being prepared for submission to the Agência Nacional de Petróleo, Gás Natural e Biocombustíveis ("ANP") for regulatory approval.
REC-T-142 Block (Gran Tierra Energy 70% WI & Operator, Alvorada 30% WI)
Drilling of the 1-GTE-01-BA oil exploration well began on October 7, 2011. The well is located in Block REC-T-142 in the prolific onshore Recôncavo Basin. This operation is commencing with the drilling of a vertical pilot hole from which core will be acquired from the prospective reservoir section. The pilot well is planned to reach a total measured depth of approximately 6,070 feet and take approximately 35 days to drill.
Upon completion of the well and subsequent evaluation to determine if adequate reservoir is present, a drilling rig is planned to return late in 2011 to drill a horizontal sidetrack from the pilot hole at the optimum depth to test the productivity of the sandstone reservoir target. This will be the first of three horizontal wells Gran Tierra Energy plans to drill in late 2011 and continuing into the first quarter of 2012.
REC-T-129 Block (Gran Tierra Energy 70% WI & Operator, Alvorada 30% WI)
Drilling of the 1-GTE-02-BA oil exploration well is scheduled to begin in mid-October, 2011. This well is located in Block REC-T-129 in the Recôncavo Basin and is targeting two independent light oil reservoir targets. The well is expected to reach a total measured depth of approximately 6,400 feet and take approximately 35 days to drill.
Rumiyaco Block (Gran Tierra Energy 100% WI and Operator)
The Rumiyaco-1 oil exploration well began drilling on October 9, 2011. This prospect lies in the southern Putumayo Basin approximately 85 kilometers southwest of Gran Tierra Energy's existing producing properties, and between two existing oil producing trends. The well is expected to test a structural closure defined by 3-D seismic data at a total measured depth of approximately 10,700 feet and take approximately 45 days to drill.
Chaza Block (Gran Tierra Energy 100% WI and Operator)
The Moqueta-6ST1 delineation well in the 2010 Moqueta oil discovery reached total measured depth of 5,724 feet in basement after encountering oil shows in the Kg Sandstone, the U Sandstone, the T Sandstone and the Caballos reservoirs. The primary T Sandstone and Caballos reservoirs were encountered approximately 250 feet deeper than the equivalent reservoirs in Moqueta-5. Electric log interpretations and pressure gradient data indicate oil pay in the T Sandstone and Caballos reservoirs. A testing program is currently being designed to confirm the nature of the fluids and reservoir productivity of the sandstones.
Testing results are expected in approximately one month.
Sierra Nevada Block (Gran Tierra Energy 100% WI and Operator)
Drilling of the Brillante SE-2 delineation well is expected to begin late October, 2011. This gas field was discovered in 2010 and lies in the Lower Magdalena Basin in northern Colombia. This is the first of two delineation wells that are planned to be drilled in late 2011 and early 2012, with the intent to define adequate reserves to justify the construction of a gas pipeline and commit to long term gas sales contracts. The field is currently producing a nominal volume of gas which is transported by a third party utilizing compressed natural gas trucks. Gran Tierra Energy plans to increase this production to approximately 2 million standard cubic feet of gas per day before the end of 2011. The well is expected to reach total measured depth of approximately 6,000 feet and take approximately 25 days to drill.
Garibay Block (CEPSA 50% WI and Operator, Gran Tierra Energy 50% WI)
Drilling of the Jilguero-2 delineation well in the 2010 Jilguero oil discovery in the Llanos Basin of eastern Colombia is ahead of schedule. The well is expected to reach total measured depth of approximately 9,830 feet in mid-October.
Planning for the initiation of long-term testing of Melero-1, a new oil discovery made in 2011, is continuing, with first production expected in December.
"In summary, the Fourth Quarter of 2011 is going to be a very exciting time for our company, with exploration, delineation and development drilling results expected in Brazil and Colombia, and planning ongoing for a robust 2012 drilling program in those countries as well as in Peru and Argentina, all expected to be fully funded with cash and cash flow at current oil prices and production volumes," concluded Coffield.
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", "planned", "plans", "scheduled", "may", "will" and derivations thereof 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 Brazil and Colombia including, without limitation: anticipated drilling locations, depths and timelines; the results of Gran Tierra Energy's two farm-in agreements with Statoil; expectations respecting testing, pilot hole and delineation drilling; the timing and amount of production expected from drilling activities; and the funding of drilling and operations.
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: the two farm-in agreements with Statoil are subject to regulatory approval by the ANP, the timing and results of which are outside of Gran Tierra Energy's control, which approval if not obtained or delayed could cause these farm-ins not to occur or to be delayed; 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 exploration, development and/or delineation wells; geographic, political and weather conditions can impede testing, which could impact or delay the commencement of drilling exploration, development and/or delineation 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 contracts, or to fund the drilling operations solely from cash and cash flow from operations. Although Gran Tierra Energy's plans for its drilling operations 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 and there can be no assurance as at the date of this press release as to how drilling operations may be altered or funds reallocated. Should any one of a number of issues arise, Gran Tierra Energy may find it necessary to alter its current business strategy and/or capital spending program. 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.
SOURCE Gran Tierra Energy Inc.
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