CALGARY, ALBERTA--(Marketwired - Sept. 14, 2016) - Gran Tierra Energy Inc. ("Gran Tierra" or the "Company") (NYSE MKT:GTE)(TSX:GTE), a company focused on oil and gas exploration and production in Colombia, is pleased to provide today the following operational update:
Exploration Program Update
Guriyaco-1 Exploration Well (Gran Tierra 100% Working Interest ("WI") and Operator)
The Guriyaco-1 exploration well was spud on August 20, 2016 and reached a total measured depth of 9,715 feet in a drilling time of 20 days. This drill time was 6.7 days faster than Costayaco-23i, making the Guriyaco-1 the best operational drilling time by the Company in this area. This well targeted a separate structure adjacent to the Costayaco field with multiple potential oil reservoir targets in the N, U, T and Caballos sands. These are the same reservoirs that produce oil in the Costayaco field.
Guriyaco-1 has shown encouraging signs of oil potential within multiple zones based on well log evaluations. Gran Tierra is casing the well and planning to conduct pressure and production testing to verify the potential. The planned completion testing is expected to start in the third week of September 2016. If the testing is successful, Gran Tierra would expect to place Guriyaco-1 on production in early October 2016.
Interpretation of wireline well logs indicates the following range of potential net oil pays within the targeted zones:
- N sands: 4 - 8 feet
- U sands: 10 - 18 feet
- T sands: 35 - 45 feet (across three reservoir zones)
- Caballos sands: 38 - 48 feet (across three reservoir zones)
Further updates will be provided once the well has been tested.
Putumayo 7 ("PUT-7") Block (Gran Tierra 100% WI and Operator)
Gran Tierra has contracted a rig for the drilling of the two exploration wells (Cumplidor-1 and Alpha-1). Civil works were suspended for approximately one month over the course of July and August 2016 due to a regional community strike in the southern Putumayo Basin which has since been resolved. The civil works operations have thus resumed and the Company expects to spud the first exploration well (Cumplidor-1) early in the fourth quarter of 2016. It is expected to be followed immediately by the drilling of the Alpha-1 well from the same pad and an appraisal/development well (Cumplidor-3) contingent on successful test results.
These wells will be the first to test the N sands play in PUT-7, which Gran Tierra believes is highly prospective and could potentially lead to long term reserves and production growth.
Putumayo 4 ("PUT-4") Block (Gran Tierra 100% WI and Operator)
Progress is being made with the environmental permitting for the planned Siriri-1 exploration will, which is expected to target the N sands exploration play. The Company expects to spud this well in December 2016.
El Porton Block - Llanos Basin - (Gran Tierra 100% WI and Operator)
Land access has been secured and Gran Tierra expects to spud the Crypto-1 exploration well in December 2016.
Development Program Update
Acordionero Field (Gran Tierra 100% WI and Operator)
Since the August 23, 2016 closing of the acquisition of PetroLatina Energy Ltd. ("PetroLatina"), Gran Tierra commenced preparations for a fourth quarter 2016 development drilling program in the Acordionero field in the Middle Magdalena Basin. The Company plans to drill three wells in 2016 consisting of two oil producers and one water injector. All wells will be located on the same pad as the central production facility. The drilling of the first well (Acordionero-5) is expected to commence in early fourth quarter 2016 and is expected to be followed immediately by the drilling of the next producer (Acordionero-7) and then the drilling of the water injector (Acordionero-8i). Civil works and rig mobilization for the three new wells are progressing and are expected to be completed by the end of third quarter 2016.
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "We are excited to be developing the upside potential in our new core area in the Acordionero field in the prolific Middle Magdalena Basin and commencing our multi-well exploration program. We expect the development of Acordionero's significant Proved, Probable and Possible reserves and our four exploration wells to enhance our long-term growth strategy and net asset value."
Suroriente Block (Gran Tierra 15.8% WI, non-operated)
The well workover campaign at the Cohembi and Quinde oil fields is underway and partially complete. The pump replacements completed in the first three wells are expected to add approximately 175 barrels of oil equivalent per day ("boepd") of WI incremental production. There are four remaining workovers scheduled for the remainder of 2016 which are expected to add approximately 175 to 225 boepd of WI incremental production.
The Suroriente block was also affected by the same regional community strike in the southern Putumayo and operations were suspended for approximately one month during July and August 2016. Operations have since resumed and production is currently being increased.
New Exit Production Guidance
With the PetroLatina producing properties now part of Gran Tierra's Colombian portfolio, the Company now expects 2016 WI exit production before royalties from its assets in Colombia and Brazil of approximately 34,000 to 36,000 boepd.
Current WI production before royalties is approximately 30,000 boepd.
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 MKT (GTE) and the Toronto Stock Exchange (GTE), and operating in South America. Gran Tierra holds interests in producing and prospective properties in Colombia, Peru, and Brazil. Gran Tierra 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. Additional information concerning Gran Tierra is available at www.grantierra.com. Investor inquiries may be directed to [email protected] or (403) 265-3221.
Forward Looking Statements and Legal Advisories:
This press release contains opinions, forecasts, projections, and other statements about future events or results that constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"). Such forward-looking statements include, but are not limited to, the Company's strategies, the Company's operations including planned operations, the development of the Acordionero Field and the PUT-7, PUT-4, El Porton and the Suroriente Blocks, the base capital program, allocation of capital, production estimates and drilling including trends, infrastructure schedules and the expected timing of certain projects.
The forward-looking statements contained in this press release reflect several material factors and expectations and assumptions of Gran Tierra including, without limitation, that Gran Tierra will continue to conduct its operations in a manner consistent with its current expectations, the accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates), rig availability, the effects of drilling down-dip, the effects of waterflood and multi-stage fracture stimulation operations, the extent and effect of delivery disruptions, and the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions including in areas of potential expansion, and the ability of Gran Tierra to execute its current business and operational plans in the manner currently planned. Gran Tierra believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct.
Among the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements in this press release are: sustained or future declines in commodity prices and potential resulting future impairments and reductions in proved reserve quantities and value; Gran Tierra's operations are located in South America, and unexpected problems can arise due to guerrilla activity; technical difficulties and operational difficulties may arise which impact the production, transport or sale of our products; geographic, political and weather conditions can impact the production, transport or sale of our products; the risk that current global economic and credit conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts; the ability of Gran Tierra to execute its business plan; the risk that unexpected delays and difficulties in developing currently owned properties may occur; the timely receipt of regulatory or other required approvals for our operating activities; the failure of exploratory drilling to result in commercial wells; unexpected delays due to the limited availability of drilling equipment and personnel; the risk that oil prices could continue to fall, or current global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; and the risk factors detailed from time to time in Gran Tierra's periodic reports filed with the Securities and Exchange Commission, including, without limitation, under the caption "Risk Factors" in Gran Tierra's Annual Report on Form 10-K filed February 29, 2016 and its Quarterly Report on Form 10-Q filed August 8, 2016. These filings are available on the Web site maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at www.sedar.com. Although the current capital spending program and long term strategy of Gran Tierra is based upon the current expectations of the management of Gran Tierra, should any one of a number of issues arise, Gran Tierra may find it necessary to alter its business strategy and/or capital spending program and there can be no assurance as at the date of this press release as to how those funds may be reallocated or strategy changed.
All forward-looking statements are made as of the date of this press release and the fact that this press release remains available does not constitute a representation by Gran Tierra that Gran Tierra believes these forward-looking statements continue to be true as of any subsequent date. Actual results may vary materially from the expected results expressed in forward-looking statements. Gran Tierra 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 laws. Gran Tierra's forward-looking statements are expressly qualified in their entirety by this cautionary statement.
Estimates of future production may be considered to be future-oriented financial information or a financial outlook for the purposes of applicable Canadian securities laws. Financial outlook and future-oriented financial information contained in this press release about prospective financial performance, financial position or cash flows are based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available, and to become available in the future. In particular, this press release contains projected operational information for 2016. These projections contain forward-looking statements and are based on a number of material assumptions and factors set out above. Actual results may differ significantly from the projections presented herein. These projections may also be considered to contain future-oriented financial information or a financial outlook. The actual results of Gran Tierra's operations for any period will likely vary from the amounts set forth in these projections, and such variations may be material. See above for a discussion of the risks that could cause actual results to vary. The future-oriented financial information and financial outlooks contained in this press release have been approved by management as of the date of this press release. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results.
Oil and Gas Disclaimer:
BOEs have been converted on the basis of 6 thousand cubic feet ("Mcf") of natural gas to 1 barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of oil as compared with natural gas is significantly different from the energy equivalent of six to one, utilizing a BOE conversion ratio of 6 Mcf: 1 barrel would be misleading as an indication of value.
Chief Executive Officer
Chief Financial Officer
Vice President, Investor Relations