CALGARY, Alberta, September 18, 2006, Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE.OB) today announced that the Company is preparing to commence the second phase of testing of the new field wildcat well in the Rio Magdalena Block, located in the Middle Magdalena Basin of Colombia. Popa-1 was drilled to a final depth of 9,285 feet in July, 2006, with significant light oil and gas shows encountered during drilling from 8,700 feet to final depth. The first phase of testing of Popa-1 confirmed the presence of a light oil accumulation; that testing program was suspended due to physical constraints of the rig and testing equipment.
A work-over rig is to be moved to the Popa-1 well during the fourth quarter of 2006 to continue testing operations. These operations will include the perforation of zones deeper in the well bore that were not perforated in the initial test. A new 3-D seismic acquisition program covering approximately 140 square kilometers has been designed over the discovery to establish the potential volume of the hydrocarbon accumulation, and will cover several other exploration drilling leads adjacent to Popa-1. This program will also be acquired through the fourth quarter of 2006, and is designed to identify both potential exploration and development drilling opportunities for 2007.
Other Colombia Operations
A total of seven wells are planned or scheduled for the fourth quarter of 2006/early 2007.
In the Rio Magdalena Block, a new exploration well will be drilled adjacent to the Popa-1 well. This well, Patricia-1, will test the potential of a shallow Tertiary reservoir interval that contained oil shows in Popa-1, and is scheduled to be drilled in December, 2006.
In the Talora Block, adjacent to the Rio Magdalena Block, plans are continuing for the drilling of the Laura-1 exploration well. This well is to be drilled in the fourth quarter of 2006.
Locations have also been identified and rig options are being evaluated for two exploration prospects in the Putumayo Basin, both operated by Gran Tierra Energy (Argosy). The Juanambu-1 prospect in the Guayuyaco Block and the Cafelina Sur-1 prospect in the adjacent Chaza Block are scheduled to be drilled back-to-back beginning in the fourth quarter 2006 and continuing into 2007. Construction of the Juanambu-1 location has begun.
One well re-entry in the Mecaya Block is also scheduled for early 2007, and two exploration wells in the Primavera Block in the eastern Llanos Basin are scheduled for the first quarter of the year.
Argentina Operations
Drilling plans are also advancing in Argentina. In the El Vinalar Block, located in the Noroeste Basin of northern Argentina, work has begun on a sidetrack to the Puesto Climaco-2 well. This sidetrack will test the up-dip potential of an undrained reservoir interval in an existing proven producing field. This will be Gran Tierra Energy's first operated well in Argentina and is scheduled to be drilled in November, 2006.
Gran Tierra's acquisition of assets from Compa~n'ia General de Combustibles S.A. (CGC) continues to be subject to various authorizations within Argentina, including court approval for the sale of CGC's interests in the eight properties. Pursuant to the terms of the current offer, court approval is to be obtained by September 29, 2006.
Production
Net production to Gran Tierra in August, 2006 totaled approximately 1,100 barrels per day - in line with anticipated results (excluding production associated with the CGC acquisitions).
Dana Coffield, President and Chief Executive Officer of Gran Tierra, stated "Over the past three months since the completion of the Argosy and Golden Oil acquisitions, we have expanded our drilling program for late-2006/early-2007 to include eight wells. We are identifying work programs to enhance current production. We continue to pursue new business opportunities. We are moving our Company forward along the path we identified early in the year, and we are focused on this next phase of our growth that is aimed on creating value through the drill bit."
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.