Enters into agreement to acquire a 60% interest and operatorship of Block 95 in the prolific Marañon Basin
CALGARY, Dec. 12 /PRNewswire-FirstCall/ - Gran Tierra Energy Inc. ("Gran Tierra Energy") (NYSE Amex: GTE, TSX: GTE), a company focused on oil and gas exploration and production in South America, today announced it has entered into an agreement to farm into Global Energy Development PLC Block 95 in Peru's Marañon Basin. Pursuant to the terms of the agreement, Gran Tierra Energy will acquire a 60% working interest and operatorship in Block 95.
"This farm-in will allow Gran Tierra Energy to expand and diversify its exploration portfolio while also reducing technical risk given that petroleum resources have already been discovered and tested on the block," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. "With this agreement, Gran Tierra Energy will be amongst the largest onshore exploration acreage holders in Peru and will be well positioned to test both existing and new hydrocarbon plays in the region."
Block 95 consists of 1.3 million gross acres, and is located in north-east Peru, due south of Gran Tierra Energy's existing acreage in the prolific Marañon Basin where over 1 billion barrels of recoverable oil have been discovered to date. The contract area contains the Bretaña-1 well, which was drilled in 1974 and tested 18° API gravity oil on natural flow rates of approximately 800 barrels of oil per day. Under the agreement, Gran Tierra Energy will assume the cost of drilling an exploration well, up to a cap of US$15 million, along with its share of past costs incurred in respect of the well. Upon reaching the US$15 million cap, Gran Tierra Energy will pay only its pro rata share of costs going forward.
Gran Tierra Energy expects to start drilling the exploration well before year-end 2011, once final environmental permits are obtained.
The transaction is subject to PeruPetro S.A. approval, which is expected to take approximately four to six months.
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 Argentina, Colombia, 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 "expects", "expected" 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 Peru, as well as expected plans, results and benefits regarding commitments and exploration, production and development for the Block 95 farm-in and expectations regarding the timing of the approval of PeruPetro S.A. and the timing of commencement of drilling Bretaña-2.
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 flow rates in the Bretaña field and recoverability in the Marañon Basin. 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 transaction is subject to regulatory approval by PeruPetro S.A., the timing and results of which are outside of Gran Tierra Energy's control, which approval if not obtained or delayed could cause the transaction not to occur; 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 Bretaña-2; geographic, political and weather conditions can impede testing, which could impact or delay the commencement of drilling Bretaña-2; 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 intention to expand its presence in Peru. 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 November 5, 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.