CALGARY, Alberta, August 3, 2006, Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE.OB) today announced that the Company has successfully completed the first phase of testing of a new field wildcat well in the Rio Magdalena Block, located in the Middle Magdalena Basin of Colombia. The testing of Popa-1 has established the presence of a new light oil accumulation in the Middle Magdalena Basin of Colombia.
Popa-1 was drilled to a final depth of 9,285 feet on July 14, 2006. Significant light oil and gas shows were encountered during drilling from 8,700 feet to final depth, and subsequent logging of the well indicated that hydrocarbons were present.
A drill-stem testing program was designed and executed in two of the most prospective sandstone intervals of the Monserrate Formation. Stabilized oil flow was attained in two flow periods. The produced fluid consists of light oil of 34oAPI with a relatively high gas/oil ratio and no water. This testing program was constrained by the physical limits of the surface equipment available on location and the use of the drilling rig for testing.
Plans are now to suspend operations while bringing in a service rig to complete and test the full production capability of the existing perforated zones, and to test secondary zones deeper in the well that were not tested with the current operations.
The Popa-1 is the first oil accumulation discovered in the Rio Magdalena Block and establishes a new light oil play trend for future exploration and production drilling. Gran Tierra Energy is now initiating plans for acquiring 3-D seismic that will be used for future exploration and development drilling on the Block.
Popa-1 is a commitment well in the third phase of the Rio Magdalena Association Contract. Gran Tierra is the operator of the Block via its acquisition of Argosy Energy International, which was completed on June 20, 2006. The Company currently holds a 100% working interest in the Block. Ecopetrol, the state company, has a right to 30% participation subject to commerciality, and a sliding scale royalty applies.
Dana Coffield, President and Chief Executive Officer of Gran Tierra, stated "Gran Tierra Energy is very excited with these early testing results. This was the highest risk prospect in our drilling portfolio for the coming year; we are very pleased with these positive results. We are eager to move forward in quickly evaluating this discovery, and creating additional value through the active drilling program we have scheduled for the coming year in both Colombia and Argentina."
About Gran Tierra Energy, Inc.
Gran Tierra Energy, Inc. is an international oil and gas exploration and production company, headquartered in Calgary, Canada, incorporated and traded in the United States and operating in South America. The Company now holds interests in producing and prospective properties in Argentina, Colombia and Peru. To date, the Company has pursued a strategy that focuses on establishing a portfolio of producing properties, development and exploration opportunities, through selective acquisitions, to provide a base for future growth.
Gran Tierra is advancing a multi-well work program for 2006/early-2007 and expects to continue its strategy of moving aggressively and sensibly to build a diverse, self-sustaining and active international oil and gas company. Additional information concerning Gran Tierra is available at www.grantierra.com. Investor inquiries may be directed to [email protected] or 1-800-916-GTRE (4873).
Forward Looking Statements
This press release contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, including without limitation those statements regarding the Company's ability to exploit oil and gas exploration opportunities. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished. Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements including, but not limited to, our ability to complete each of the potential acquisitions discussed above on anticipated terms and in a timely manner, including the completion of financing relating thereto on satisfactory terms, our ability to discover reserves that may be extracted on a commercially viable basis, difficulties inherent in estimating oil and gas reserves, intense competition in the oil and gas industry, environmental risks, regulatory changes and general economic conditions including the price of oil and gas. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in the our reports filed with the Securities and Exchange Commission, including those risks set forth in the Company's Current Report on Form 8-K filed on November 10, 2005, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. We undertake no obligation to update these forward looking statements.