CALGARY, Alberta, November 21, 2006, Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE.OB) today announced that the Company has completed the testing of the new field wildcat Popa-1 well in the Rio Magdalena Block, Colombia, and has initiated the mobilization of three rigs in preparation for exploration drilling programs in Colombia and Argentina.
Popa-1 was drilled to a final depth of 9,285 feet on July 14, 2006. Drill-stem testing executed in two of the uppermost prospective sandstone intervals of the Monserrate Formation indicated flow rates of up to 200 barrels of oil per day. The produced fluid consisted of light oil (34 degree API) with a relatively high gas/oil ratio and no water. The initial testing program did not result in definitive reservoir performance characterization due to constraints in the test equipment and as a result, a second phase of testing was undertaken. This second testing program commenced in late-October and is now completed. Testing was unable to prove commercial rates of production and the well will be plugged and abandoned.
The Popa-1 well establishes a new light oil exploration play trend for continuing activity in the Rio Magdalena Block. Gran Tierra Energy is now initiating plans for acquiring seismic data in early 2007 to further delineate the Popa structure and assess the potential of additional exploration leads adjacent to the Popa location.
The Company continues to ramp up drilling activities in other arenas. Ten exploration wells are currently scheduled to be drilled in the coming year. In Colombia, a drilling rig is being mobilized to drill the Laura prospect in the Talora Block, Middle Magdalena Basin, with drilling scheduled to begin in early December, 2006. The rig is then planned to be moved to drill the Caneyes prospect in the adjacent Rio Magdalena Block in early January, 2007. A second drilling rig is currently being mobilized to drill the Juanambu prospect in the Putumayo Basin of Colombia with drilling expected to begin in early January, 2007. The rig is then planned to be moved to the adjacent Chaza Block to drill the Naboyaco prospect. In Argentina, a drilling rig is being mobilized to drill the Puesto Climaco-2 sidetrack in the Vinalar Block in the Noroeste Basin, with drilling expected to begin in early December, 2006. Five additional new wells are scheduled to be drilled in Colombia and Argentina in 2007 by the Company. A significant workover program is also planned in parallel to enhance production from existing wells.
Dana Coffield, President and Chief Executive Officer of Gran Tierra, stated "The results of the testing program at Popa-1 are disappointing; nevertheless, the results of this high-risk exploration well have opened the door on a new exploration play on our existing lands which we intend to pursue. With rigs contracted and being mobilized, we are now entering the second phase of our strategy, creating value through the drill bit. With an extensive drilling opportunity portfolio and a continuous drilling program ahead of us, we expect it will be a busy and exciting year for our Company."
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. 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.