Americas Petrogas, Gran Tierra Hit Oil Pay in Argentina

- Americas Petrogas, Gran Tierra Hit Oil Pay in Argentina

Monday, September 12, 2011
Americas Petrogas

Americas Petrogas announced Monday that it, along with its co-venturer, Gran Tierra Energy, have made a new significant discovery of oil (1,023 barrels of oil equivalent per day) in the 1st of the three exploration wells on the Rinconada Norte block located in the Neuquen Basin of Argentina (Americas Petrogas Argentina S.A. is operator).

The RN x-1004 well flowed a total combined test rate of approximately 944 barrels (150 m3) per day of oil and 13,360 m3 per day of gas (79 barrels of oil equivalent per day) for a total of approximately 1,023 barrels of oil equivalent per day from two intervals tested separately in the Precuyo formation. This well also flowed 43 barrels (5 m3) per day of water or a 4% water cut.

From the depths of the zones tested (982-992 meters and 1022-1032 meters) and electric logs information, the Company estimates an oil column thickness of approximately 60 meters or 197 feet. The oil is 29.6 degrees API, sweet light crude similar to crude oil produced from the equivalent formation in Americas Petrogas' Medanito Sur block. This well has been completed and the service rig will now move on to the next two wells, which have already been drilled, logged and production casing has been installed. Americas Petrogas' wholly-owned Argentina subsidiary, Americas Petrogas Argentina S.A., is the operator of the Rinconada Norte block, holding a 65% working interest, while Gran Tierra Energy, through its Argentina subsidiary, holds a 35% working interest.

Commenting on this most recent discovery, Guimar Vaca Coca, Managing Director of Americas Petrogas Argentina S.A., stated, "We are very excited about this new find on the first well of this three-well exploratory drilling program because of the strong production rates and possibility of significant commercial reserves. We are also optimistic about the prospects for the remaining two wells."

The Rinconada Norte block is currently under an Exploitation concession, which will allow Americas Petrogas and Gran Tierra Energy, with previous approvals from the authorities, to move ahead with development activities in the near term. The Company anticipates building test production facilities in the fourth quarter of 2011. This drilling program on Rinconada Norte represents the initial phase of Americas Petrogas' previously-announced drilling plans for 2011-2012 (see press release of June 3, 2011).

The Rinconada Norte block (approximately 96 sq.km or 37 sections) is located immediately south of and adjoins Americas Petrogas' Medanito Sur block in La Pampa Province in the eastern region of the Neuquen Basin of Argentina.

Barclay Hambrook, President & CEO of Americas Petrogas, stated, "We are very pleased with this discovery and Americas Petrogas is well-funded to accelerate and expand its planned capex program in order to increase production and reserves."

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Gran Tierra Reaches 'Significant Milestones' in 2Q11

- Gran Tierra Reaches 'Significant Milestones' in 2Q11

Tuesday, August 09, 2011
Gran Tierra Energy Inc.

Gran Tierra announced its financial and operating results for the quarter ended June 30, 2011. All dollar amounts are in United States dollars unless otherwise indicated.

Highlights for the quarter include:

• Quarterly production of 18,141 barrels of oil equivalent per day ("BOEPD") net after royalty ("NAR"), a 36% increase in average daily production from the same period in 2010 of 13,376 BOEPD due to additional production from existing field developments, new production from recent field discoveries, and production growth from the recently acquired assets of Petrolifera Petroleum Ltd. ("Petrolifera");
• Quarterly oil production of 17,525 barrels of oil per day ("BOPD") NAR, a 32% increase in average daily production from the same period in 2010 of 13,234 BOPD NAR;
• Quarterly gas production of 3.7 million cubic feet per day ("MMCFD") NAR, a 334% increase in average daily production from the same period in 2010 of 0.8 MMCFD NAR;
• Revenue and other income for the quarter of $162.1 million, a 93% increase over the same period in 2010;
• Net income of $31.6 million or $0.11 per share basic and diluted compared to net income of $17.4 million or $0.07 per share basic and diluted in the same period in 2010;
• Funds flow from operations of $88.6 million compared to $44.3 million for the same period in 2010;
• Cash and cash equivalents were $211.4 million at June 30, 2011 compared to $355.4 million at December 31, 2010 and working capital decreased to $215.4 million at June 30, 2011 compared to $265.8 million at December 31, 2010;
• Moqueta-5 delineation well testing was initiated from a single zone at production rates of approximately 730 BOPD over 10 days with a jet pump, with additional testing ongoing;
• Major infrastructure projects were completed including the construction and commissioning of the Moqueta to Costayaco flow-line with first short-term test production commencing in June, and the connection of the Costayaco field into Colombia's national electrical system;
• First production contribution from Gran Tierra Energy's Brazil assets in the Recôncavo Basin was recorded in the quarter;
• Continued to mature plans for robust exploration, delineation and development drilling campaigns in Colombia, Brazil, Peru and Argentina through 2011 and into 2012.

"Several significant milestones were achieved in the second quarter of 2011, positioning the Company to achieve continued growth into the future. The completion of the Moqueta to Costayaco flow-line and initiation of production was a major achievement. This is the first time that an oil field in Colombia has been discovered and test production initiated with operations entirely supported by helicopter and without access by road minimizing the environmental footprint of Gran Tierra Energy's operations at this early stage of development," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. "We achieved record production in the quarter due to effective management of existing producing fields in Colombia and Argentina and new production from recent discoveries in Colombia and Brazil. Record cash flow, and progress in permitting and contracting, are supporting the execution of our planned exploration and drilling program scheduled for the balance of 2011 and into 2012," concluded Coffield.


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Gran Tierra Ups 2011 Capital Spending to Develop S. American Assets

Gran Tierra Ups 2011 Capital Spending to Develop S. American Assets

Monday, April 11, 2011
Gran Tierra Energy Inc.

Gran Tierra announced capital spending plans on the recently acquired Petrolifera Petroleum Limited ("Petrolifera") assets.

Gran Tierra Energy intends to spend approximately $55 million on the newly acquired assets with approximately $25 million in Colombia, $14 million in Peru and $16 million in Argentina. Drilling and completion costs are expected to amount to $41 million, including $14 million in Colombia, $13 million in Peru and $14 in Argentina. Seismic costs total $12 million, mostly in Colombia and facilities costs total $2 million, mostly in Argentina.

This capital program is in addition to the $299 million 2011 capital program previously announced for Colombia, Peru, Brazil and Argentina by Gran Tierra Energy, which remains unchanged. This new combined capital program of approximately $355 million for 2011 is expected to be funded from existing cash reserves and cash flow.

"Our evaluation of the new assets under management indicates that there is significant potential to grow reserves and production in the coming years. With appropriate allocation of capital, we believe we can unlock significant value from these assets," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy.

"In Colombia, Gran Tierra Energy intends to delineate a potential gas production platform in the Lower Magdalena basin, prepare for 2012 exploration drilling in Peru, and reverse production declines in Argentina where both oil and gas prices have consistently been rising."

Colombia

Gran Tierra Energy plans to spend approximately $14 million on drilling in Colombia, including one exploration well and one delineation well with the intention of evaluating a potential gas production platform in the Lower Magdalena Basin.

Sierra Nevada Block (100% working interest and operator)

Following Gran Tierra Energy's announcement of its offer to acquire Petrolifera, GLJ Petroleum Consultants Ltd. ("GLJ") independent resource evaluators, estimated 101.5 billion cubic feet ("BCF") of United States Securities and Exchange Commission ("SEC") compliant 3P natural gas reserves (15.6 BCF 1P and 34.3 BCF 2P) at the Brillante discovery well drilled in 2010. GLJ's estimate is effective December 31, 2010.

A delineation well in the Brillante discovery is planned for the third quarter of 2011 to further define the significant potential of this discovery. A regional gas market evaluation is underway, as well as an evaluation of transportation options in the area.

The La Pinta-1 well, drilled in 2010, encountered good oil shows while drilling in the Upper Porquero reservoirs. Gran Tierra Energy plans to re-enter this well and perforate this zone to test its oil potential in the third quarter of 2011.

Gran Tierra Energy also intends to acquire approximately 170 square kilometers of 3D seismic in preparation for future exploration and development drilling on the Sierra Nevada Block.

Magdelena Block (100% working interest and operator)

Testing operations on the San Angel-1 well continue and, contingent upon successful test results, Gran Tierra Energy may acquire approximately 150 square kilometers of 3D seismic in the area.

Turpial Block (50% working interest and operator)

One exploration well is planned for the Turpial Block to evaluate the heavy oil reservoirs encountered by stratigraphic drilling in the 1970's.

Peru

In 2011, Gran Tierra Energy intends to spend approximately $13 million in preparation for drilling in early 2012.

Block 107 (100% working interest and operator)

Gran Tierra Energy believes significant resource potential exists on Block 107 in Peru. One exploration well is planned for the second quarter of 2012, with 2011 spending dedicated to planning and purchase of long lead items in preparation for 2012 drilling.

Argentina

Capital spending in Argentina will initially focus on reversing production declines on properties in the Neuquen Basin. Gran Tierra Energy plans to spend $14 million on drilling and completions in Argentina.

Puesto Morales / Puesto Morales Este (100% working interest and operator)

Gran Tierra Energy plans to conduct work-over programs on approximately 16 wells, along with drilling approximately six development wells, including three producers and three new water injectors. Gran Tierra Energy believes it can improve recovery in the existing reservoirs by minimizing water channeling in the waterflood project through the use of polymer. The budgeted work program may be adjusted to accommodate results during implementation of the program.

Production and Reserves

Including the Petrolifera assets, Gran Tierra Energy anticipates average production in 2011 to range between 17,500 and 19,000 barrels of oil equivalent ("BOE") per day, net after royalty, weighted approximately 95% to oil.

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.