Gran Tierra Updates Ops in South America

Gran Tierra Updates Ops in South America

Wednesday, April 06, 2011

Gran Tierra Energy Inc.

Gran Tierra announced a drilling and operations update in the Putumayo and Lower Magdalena Basins of Colombia, an acreage update in Argentina, and a general Corporate update.

 

Colombia
Magdalena Block, Lower Magdalena Basin (100% working interest and Operator)

Drilling and logging of the San Angel-1 natural gas exploration well in the Magdalena Block of the Lower Magdalena Basin has been completed. Gas shows were encountered over two intervals totaling 415 feet (gross). Wireline logs and repeat formation tester data was not conclusive in quantifying reservoir quality or gas saturation. Testing operations have been initiated and are expected to be completed in late April, 2011.

 

Chaza Block, Putumayo Basin (100% working interest and Operator)

The Canangucho-1 exploration well reached total true vertical depth of 9,667 feet on March 23, 2011. After the evaluation of wireline logs, it was determined that the T Sandstone and Caballos formations were water bearing. The Canangucho well was plugged and abandoned.
The Moqueta-5 delineation well is expected to start drilling this week from the same well pad as the Moqueta-4 delineation well. New 3D seismic acquisition is expected to start in June 2011 and will assist in the site location for the Moqueta-6 delineation well expected to start drilling in the fourth quarter, 2011. The Moqueta to Costayaco flow line is currently under construction with the first long-term production test anticipated to start in May.

Development of the Costayaco field continues with the drilling of Costayaco-12 and -13. Costayaco-12 was completed and placed on production at approximately 600 barrels of oil per day. Completion and testing operations are currently ongoing at Costayaco-13. Both wells are expected to be converted to water injectors once the oil reserves are depleted around their respective drainage areas.

 

Guayuyaco Block, Putumayo Basin (70% Working Interest and Operator)

The Juanambu-3 development well began drilling on March 3, 2011. Drilling operations are expected to be completed in April, 2011.

 

Rumiyaco Block, Putumayo Basin (100% Working Interest and Operator)

Environmental permitting has been approved for the Rumiyaco-1 exploration well in the Rumiyaco Block of the Putumayo basin. Civil construction work is expected to start in April, 2011 and the well is expected to begin drilling in July, 2011.

 

Argentina

Gran Tierra Energy has successfully farmed out a 50% interest in its Santa Victoria block (2,091.5 km2 or 516, 815.3 acres) in the Noroeste Basin of northwestern Argentina to Apache Corporation ("Apache"). Both Gran Tierra Energy and Apache have agreed to proceed into the second exploration phase, which has a work commitment that will be fulfilled with an exploration well. Gran Tierra Energy, as operator, is interested in testing the gas potential of the Permo-Carboniferous reservoirs, a proven play in nearby wells.

 

Corporate Update

Subsequent to closing the acquisition of Petrolifera Petroleum Ltd. ("Petrolifera") on March 18, 2011, company average production has been approximately 18,000 barrels of oil equivalent per day ("BOEPD"), net after royalty ("NAR"), weighted 95% to light oil. Oil production in Colombia has averaged approximately 15,000 barrels of oil per day ("BOPD") NAR, while oil production in Argentina has averaged approximately 2,300 BOPD NAR and gas production has averaged approximately 4 million standard cubic feet per day, or approximately 700 BOEPD.

In connection with the acquisition of Petrolifera, Gran Tierra Energy initially assigned no value to investments that Petrolifera held in Asset Backed Commercial Paper ("ABCP") given concerns over the liquidity of the investment. Gran Tierra Energy subsequently sold the ABCP and received a net amount of US $22.7 million including accrued interest.