Oil and gas shows and potential pay on electric logs results in testing program design
CALGARY, June 7 /PRNewswire-FirstCall/ - Gran Tierra Energy Inc. (NYSE Amex: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today announced initial drilling results from Moqueta-1. Oil and gas shows were recorded through the Villeta T Sandstone and the Caballos Formation with electric logs indicating a total potential hydrocarbon net pay of 108 feet in the two primary reservoir zones combined. In additional to the two primary reservoir targets, the Villeta Lower U Sandstone also recorded hydrocarbon shows with a potential hydrocarbon net pay of 25 feet. As a result of these initial indications, a program is being designed to test the fluid content and productivity of the zones. This test program is expected to start immediately and take approximately three weeks to complete.
"We are extremely pleased with the initial results from the first well in our 2010 exploration program," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy Inc. "In light of these early positive results, a comprehensive flow test program is being designed and implemented for the prospective zones. In addition, the existing well pad is being prepared for drilling of a delineation well with a deviated well bore in the event the flow test is successful."
Moqueta-1 Exploration Well, Chaza Block
The Moqueta-1 exploration well, located 5 kilometers north of the Costayaco Field, spud on May 16, 2010, and reached total measured depth (MD) in basement at 4,080 feet or 4,073 feet true vertical depth (TVD) on May 29, 2010. The same sandstone reservoir sequences encountered in the Costayaco Field were found in Moqueta-1, including the Villeta T Sandstone and the underlying Caballos Formation. Oil and gas shows were encountered in both reservoirs during drilling. Log interpretations from data acquired after drilling indicate the presence of reservoir sandstones in the T Sandstone beginning at 3,684 feet MD (3,677 feet TVD) with an approximate potential net pay thickness of 55 feet, and in the Caballos Formation beginning at 3,825 feet MD (3,818 feet TVD) with approximately 53 feet of potential net pay interpreted from the well logs. No oil-water contact is evident on the well logs in any of the reservoir zones.
Pressure gradient data obtained with the wireline testing tool indicates the U sand is gas bearing with approximately 25 feet of potential net gas pay. In addition, the entire T Sandstone and the uppermost Caballos sandstone also appears gas bearing. The Lower Caballos interval appears to have a gross oil column of 40 feet, of which 26 feet appears to be net oil pay. No gas-water or oil-water contact is apparent from the pressure gradient data. Subject to successful testing and subsequent delineation drilling, there remains potential for additional oil down-dip.
Moqueta-1 is the first of seven exploration wells budgeted for 2010 in the Putumayo Basin of Colombia. Taruka-1 in the Piedemonte Sur block is the next exploration well scheduled to be drilled in the 2010 program and Gran Tierra Energy expects to utilize the same drilling rig as is currently being used at Moqueta-1.
Other Colombia Operations
Costayaco-11 has been drilled in the northern portion of the Costayaco field, and is expected to be used as a Caballos producer and as a water-injector to provide pressure maintenance in the T-Sandstone reservoir.
Two seismic acquisition programs are ongoing. The 92 square kilometer 3D Rumiyaco program in the Rumiyaco Block and the 76 square kilometer 3D Florida West program in the Azar block are being acquired to support drilling prospects for 2010 and 2011. Additional seismic programs are budgeted for the Putumayo area in preparation for 2011 exploration drilling.
Peru Operations Update
Gran Tierra Energy is initiating seismic crew mobilization to Block 128 to begin 480 kilometers of 2D seismic data acquisition on Blocks 122 and 128. Exploration drilling on up to four prospects in Blocks 122 and 128 is expected to take place in the third and fourth quarter of 2010.
Argentina Operations Update
The re-entry and sidetrack of the VM.x-1001 well in the Valle Morado Block in the Noroeste Basin is ahead of schedule and is expected to commence drilling in July. Operations for access road improvements and location construction are approximately 60% complete. This sidetrack is planned to be drilled to 20,177 feet MD (or 19,964 feet TVD) to test the productive capacity of the Valle Morado gas field.
In the Santa Victoria block, the contractor tendering process has been completed for a 150 km2 3D and 188 km 2D seismic acquisition program in the third quarter of 2010 to define structural and stratigraphic traps in a gas-condensate trend identified from existing seismic data. Environmental impact assessment permit approvals are nearly complete. Seismic data acquisition is expected to be initiated in August, 2010. This data is expected to be used for mapping potential exploration drilling opportunities for 2011.
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. 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 Argentina, Colombia and Peru, and has opened a business development office in Rio de Janeiro, 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 "expect", "plan" and "scheduled" identify forward-looking statements. In particular, but without limiting the foregoing, this news release contains forward-looking statements regarding: the expected timing of the Moqueta-1 test program, the expected drilling of Taruka-1, the expected use of Costayaco-11, the expected commencement of drilling of VM.x-1001, and the expected timing of initiation of the acquisition of seismic data in the Santa Victoria block and its expected use.
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: Gran Tierra Energy's operations are located in South America, and unexpected problems can arise due to guerilla activity, technical difficulties and operational difficulties which impact or delay its testing and drilling operations; geographic, political and weather conditions can impede testing and drilling operations; 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 modify its exploration activities. 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 May 10, 2010. 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.