Development plans initiated to prepare for long term testing
CALGARY, Alberta, June 28, 2010, Gran Tierra Energy Inc. (AMEX: GTE; TSX: GTE), a company focused on oil exploration and production in South America, today announced that it had completed initial testing of the Moqueta-1 exploration well, a new field discovery on the Chaza Block in the Putumayo Basin, Colombia, while preparations to drill the Moqueta-2 appraisal well are under way. Gran Tierra Energy has a 100% working interest and is the Operator of the Chaza Block.
"The successful discovery of oil with the first well in Gran Tierra Energy's 2010 exploration program further reinforces the strength of our exploration portfolio," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy Inc. "We are preparing to drill a second well and initiate a 3-D seismic acquisition survey in the area to give us further information on the size and productive capacity of the new discovery. Finally, planning to initiate long term testing has begun, with early production anticipated in the first quarter of 2011."
Gran Tierra Energy has completed initial testing on Moqueta-1 by collecting reservoir data and fluid samples from two zones - the lower Caballos Formation and the Villeta T Sandstone. The Caballos Formation has 53 feet of total hydrocarbon pay, subdivided into 27 feet of net gas pay in the Upper Caballos and 26 feet of net oil pay in the Lower Caballos. A 20 foot net (39 feet gross) interval, in the lower portion of the lower Caballos oil bearing interval was tested and perforated from 3,950 feet to 3,970 feet measured depth. A variety of tests were performed resulting in natural flow rates, without pumps, of up to 349 barrels of oil per day with a 32/64 inch choke and a 0.2% watercut with 29 API gravity oil.
In the Villeta T Sandstone, a short 12 foot (3,734 feet to 3,746 feet measured depth) interval of the 55 feet of net gas pay was perforated and tested at 13 million standard cubic feet per day using a 48/64 inch choke size. No additional gas testing was conducted in the T Sandstone in order to preserve the casing integrity for future oil production from the Lower Caballos.
Planning is underway to construct an 8 kilometer pipeline to tie Moqueta-1 into the Costayaco infrastructure, with anticipated initiation of long term oil testing and early production in the first quarter of 2011.
The drilling rig is currently being mobilized to drill Moqueta-2, an appraisal well to be drilled from the existing Moqueta-1 pad. The bottom-hole location is planned to be approximately 270 meters east of the Moqueta-1 bottom-hole location. The objective is to delineate the volume of the lower Caballos oil pool by targeting the reservoir approximately 60 feet deeper down the flank of the structure. Moqueta-2 will also test the potential for a gas/oil contact in the Villeta U, Villeta T and upper Caballos zones down structure.
Pending results from Moqueta-2, Moqueta-3 would be drilled from a new pad location approximately 1.5 kilometers southwest of the Moqueta-1 surface location.
A 230 square kilometer 3D seismic survey is scheduled to be conducted to cover the Moqueta discovery and adjacent prospects and leads. This survey will overlap existing 3D surveys that cover the Costayaco Field in the Chaza Block; the Juanambu, Toroyaco, Linda, Mary, and Miraflor Fields in the adjacent Gran Tierra Energy operated Santana and Guayuyaco Blocks; as well as the upcoming Verdeyaco 3D survey on the Chaza and Guayuyaco Blocks.
OTA Pipeline Update
Gran Tierra Energy is also pleased to announce the OTA pipeline has been repaired, with deliveries expected to resume in the coming week.
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 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 "will", "planning", "anticipated" and "would" identify these forward-looking statements. These forward-looking statements are statements made with respect to Gran Tierra Energy's expectations and plans regarding drilling, testing, seismic acquisition, production, and construction of pipeline.
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, 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; 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.