Expands Dominant Land Position in Putumayo Basin and Adds New Frontier Exploration Acreage
CALGARY, Alberta, June 24, 2010, Gran Tierra Energy Inc. (NYSE Amex: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today announced successful bids on three blocks in the recently completed 2010 Colombia Bid Round administered by Colombia's National Hydrocarbon Agency (ANH). The open and competitive process was available to those pre-qualified by the ANH and successful bid contracts are expected to be finalized by October 2010.
"These successful bids expand Gran Tierra Energy's exploration portfolio," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy Inc. "Putumayo 10 will enable us to leverage existing knowledge of our Piedemonte Norte and Piedemonte Sur Blocks, while Cauca 6 and 10 provide new frontier exploration opportunities for the company."
Putumayo 10 is located close to Gran Tierra Energy's core existing areas in the Putumayo Basin of southern Colombia and offers exploration opportunities expected to be similar to the company's Piedemonte Norte and Piedemonte Sur exploration blocks. This Block captures additional acreage on a structural trend that will enable Gran Tierra Energy to leverage existing knowledge from the Chaza Block, with the recently developed Costayaco Field and adjacent potential discovery at Moqueta-1. Multiple leads have already been identified on these blocks based on existing data with additional seismic acquisition planned for 2011 in preparation for 2012 drilling. The Block encompasses 114,097 net acres of land under an initial 3 year exploration period, during which Gran Tierra Energy is committed to drill two exploration wells and acquire 70 kilometers of 2D seismic data.
The Cauca 6 and 7 Blocks encompass frontier exploration acreage in the southern portion of the Cauca Basin in southern Colombia approximately 100 kilometers north of the Putumayo Basin. The Cauca 6 Block encompasses 571,197 net acres of land and has an initial three year exploration period with a commitment to drill one well along with 200 kilometers of 2D seismic acquisition, while the Cauca 7 Block encompasses 785,450 net acres of land with a commitment to drill one well and acquire 250 kilometers of 2D seismic data in the initial three year exploration period. This vast exploration acreage encompasses a fold and thrust belt similar to that found in the Putumayo Basin, with Cretaceous and Tertiary reservoir objectives and surface oil and gas seeps. The blocks contain a loose grid of old 2D seismic data, but it has never been drilled. New 2D seismic data may be acquired in 2011, with drilling expected to follow in 2012 or 2013.
Including the blocks awarded in the bid round, this brings Gran Tierra Energy's gross land acreage under contract to approximately 2.5 million gross acres in Colombia. This is in addition to approximately 3.4 million gross acres in Peru and 1.6 gross acres in Argentina, for a total company gross acreage of approximately 7.6 million acres.
Due to a recent disruption of the Ecopetrol operated OTA pipeline, production from the Putumayo Basin has been reduced. Current production is expected to be maintained between 4,000 to 7,000 barrels of oil per day while pipeline repairs are made. Repairs are expected to take approximately two weeks.
The drilling rig from the recently drilled Moqueta-1 exploration well has been released and is being moved in preparation to drill Moqueta-2, a delineation well to be drilled directionally from the Moqueta-1 location. Test results from Moqueta-1 are expected to be released shortly.
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, forward-looking statements and forward-looking financial outlook (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", "may", "will", and "planned" identify these forward-looking statements. These forward-looking statements are regarding: the expected finalization date of the bid contracts; the expectation that Putumayo 10 will enable Gran Tierra Energy to leverage its existing knowledge of the Piedemonte Norte and Piedmonte Sur Blocks and Chaza Block; and the plans to acquire additional seismic data in 2011 with drilling following in 2012 or 2013.
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 primary risk of the bid contracts not being finalized in October, which could cause the finalization of the bid contracts to be delayed or not to occur at all; Gran Tierra Energy's operations are located in South America, and unexpected problems can arise due to guerilla activity, technical difficulties, operational difficulties which could impact its time schedule for acquiring seismic data and testing and drilling operations; geographic, political and weather conditions can impact testing and drilling operations; the risk that seismic data acquired may not provide the type of information that Gran Tierra Energy expects, which could cause Gran Tierra Energy existing knowledge of the Chaza Block to not be as useful as Gran Tierra Energy expects; 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.