Potential net oil pay and total oil column height increases, no indication of oil-water contacts
CALGARY, Alberta, August 3, 2010, Gran Tierra Energy Inc. (NYSE Amex: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today announced initial drilling results from Moqueta-2 in the Chaza block in Colombia. Oil and gas shows were recorded through the Villeta Lower U Sandstone, the Villeta T Sandstone and the Caballos Formation with electric logs indicating total net oil pay in Moqueta-2 increasing to 44 feet from the 26 feet encountered in Moqueta-1. As a result of these initial indications of increased oil pay, a test program is being designed to confirm the fluid content and productivity of the zones encountered. This test program is expected to start immediately and take approximately three weeks to complete.
In addition, a new drilling location approximately 1.5 km southwest of the Moqueta-1 discovery well is being constructed for the drilling of the Moqueta-3 delineation well.
Planning has begun for the immediate acquisition of approximately 30 kilometers of 2D seismic data and approximately 90 square kilometers of 3D seismic data to further delineate the configuration of the Moqueta discovery.
"We continue to be very pleased with our early success at Moqueta," said Dana Coffield, President and CEO of Gran Tierra Inc. "Next steps include testing these new zones that appear to be oil bearing, and continuing to delineate the discovery with a third well to assess its size and productive capacity, with long term testing via a pipeline to our existing facilities scheduled for the first quarter of 2011."
Moqueta-2 Delineation Well, Chaza Block
The Moqueta-2 delineation well, directionally drilled from the existing Moqueta-1 drilling pad, spud on July 9, 2010, reached total measured depth (MD) in basement at 4,330 feet or 4,150 feet true vertical depth (TVD) on July 22, 2010. The Moqueta-2 bottom hole location is approximately 890 feet southeast of the Moqueta-1 well.
The same sandstone reservoir sequences encountered in the Moqueta-1 discovery well were found in Moqueta-2. The results from Moqueta-2 have shown the oil column to be 61 feet deeper than found in Moqueta-1, resulting in a gross oil column height of 100 feet. A total potential hydrocarbon net pay of 103 feet in the three reservoir zones combined including gas bearing zones is indicated. Two additional zones, the U Sandstone and the Middle Caballos Sandstone now appear to be oil bearing; these were gas bearing in Moqueta-1. The Lower Caballos Sandstone appears to be oil bearing and the T Sandstone appears to be gas bearing as in Moqueta-1.
Log evaluation shows that the Villeta Lower U Sandstone has approximately seven feet of net pay, with no evidence of gas as found in Moqueta-1, suggesting the section may be oil bearing.
Oil and gas shows encountered during drilling and log interpretations from data acquired after drilling indicate the presence of reservoir sandstones in the underlying T Sandstone beginning at 3,929 feet MD (3,750 feet TVD) with an approximate potential net pay thickness of 31 feet. Both well logs and pressure gradient data obtained with the wireline testing tool indicate the entire T Sandstone is gas bearing as in Moqueta-1.
The underlying Caballos Formation was encountered at 4,057 feet MD (3,878 feet TVD) with approximately 65 feet of potential net pay interpreted from the well logs. The uppermost Caballos sandstone also appears gas bearing as in Moqueta-1, with approximately 28 feet of potential gas pay. The Middle Caballos interval appears to be oil bearing with approximately 20 feet of net pay; this section was gas bearing in Moqueta-1. Similar to Moqueta-1, the entire Lower Caballos interval appears to be oil bearing. It has a gross oil column of 44 feet, of which 17 feet appears to be net oil pay. No gas-water or oil-water contact is apparent from well logs for any of the reservoirs. Subject to successful testing and subsequent delineation drilling, there remains potential for additional oil down-dip.
The Moqueta-3 delineation well will be located approximately 1.5 km southwest of Moqueta-1. The main objective is to delineate the Moqueta discovery approximately 360 feet down-dip of the discovery as no gas-water or oil-water contact is evident at Moqueta-1 and Moqueta-2. Moqueta-3 is expected to spud in early December. As demonstrated in Moqueta-2, drilling down-dip has the potential to extend the oil columns encountered so far and establishing that an oil leg may exist in current gas bearing zones.
Planning for building a flow-line from Moqueta to the Costayaco facilities approximately 7 kilometers to the south has been initiated, with long-term testing through the line expected to be initiated in the first quarter of 2011.
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 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 "expect", "potential" and "scheduled" identify forward-looking statements. In particular, but without limiting the foregoing, this news release contains forward-looking statements regarding planned and expected testing and results regarding Moqueta-1, Moqueta-2 and Moqueta-3, and planned construction of the pipeline from Moqueta to the Costayaco facilities.
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 and operational difficulties which impact or delay its testing and drilling operations; geographic, political and weather conditions can impede 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.
Additional information is available on Gran Tierra Energy's website at www.grantierra.com. For media and investor inquiries please contact Jason Crumley, Director, Investor Relations at 403-265-3221 or [email protected].