CALGARY, ALBERTA--(Marketwired - Nov. 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 updates:
Development Program Update
Acordionero Field (Gran Tierra 100% Working Interest ("WI") and Operator)
As previously announced, the Acordionero-5 well was drilled and cased as a producer in the Lisama A and C formations with 997 feet of gross oil pay. The well has subsequently been completed with 866 feet of perforations and a large capacity electric submersible pump was installed. The well began producing on November 10, 2016, and is currently on stable clean up at 1,557 barrel of oil per day ("bopd"), gas-oil ratio of 98 standard cubic feet per barrel and 1% water-cut. Cycle time from the acquisition of the Acordionero field, by way of the acquisition of PetroLatina Energy Limited which closed on August 23, 2016, to the first Gran Tierra-operated well being onstream, was approximately 10 weeks during which contracting of a new rig, civil works, surface tie-in and drilling and completion activities were executed.
The drilling rig has been moved to Acordionero-7, the next development well and is expected to spud over the next few days. The Acordionero-7 well is designed to be drilled horizontally sin the Lisama A formation to a maximum depth of 10,894 feet, and will help appraise the as yet unconfirmed oil-water contact in the pool. The well is expected to be placed on production before the end of December 2016.
Exploration Program Update
Putumayo 7 ("PUT-7") Block (Gran Tierra 100% WI and Operator)
Gran Tierra commenced its "N" sands exploration program on the PUT-7 Block with the drilling of the Cumplidor-1 exploration/appraisal well. Cumplidor-1 has a target zone defined by amplitudes on 3D seismic, and was spud on October 20, 2016. The well reached a final total measured depth of 11,280 feet (9,399 vertical feet of total depth) on November 8, 2016 and was drilled as per plan in 19.5 days.
The well encountered 65 feet of gross interval in the "N" sands, with two sands having 34 feet measured depth of interpreted net oil pay based on logging while drilling ("LWD") logs obtained while drilling, which is approximately 15% greater than pre-drill estimates. Average porosities from log evaluation are estimated to be 21%, with maximum porosities of up to 28%. The "N" sands reservoirs encountered in Cumplidor-1 appear to be thicker than those currently producing within the adjacent Quinde field.
Gran Tierra has run 7-inch diameter production casing in the Cumplidor-1 well which was cemented in place on November 13, 2016. The well is expected to be tested over the next two weeks, prior to putting the well on long-term production testing and releasing the drilling rig to Alpha-1.
Gran Tierra expects to spud the Alpha-1 exploration well from the same pad as the Cumplidor-1 well prior to the end of November 2016. The well is designed to test the "N" sand amplitude anomaly identified on 2D seismic, further extending the success observed with the Cumplidor-1 well. Drilling is expected to take 24 days and if successful, is expected to be on production before the end of 2016.
The early production facility for the Cumplidor-1 and Alpha-1 wells, and other potential follow-up development wells, is currently in the final stages of construction; mechanical and electrical works continue on schedule. The facility is on schedule to be complete in late November 2016.
Guriyaco-1 Exploration Well (Gran Tierra 100% Working Interest ("WI") and Operator)
Gran Tierra has mobilized stimulation equipment and was be pumping the first acid stimulation in this well on November 14, 2016. As previously disclosed, selective testing and stimulation of the different reservoir zones are expected to begin in mid-November 2016 with results expected late November 2016.
Costayaco-19 and -9 "A" Limestone Wells (Gran Tierra 100% Working Interest ("WI") and Operator)
Costayaco-19 continues to show strong production performance with no production decline and produced an average of 2,072 bopd over 24 hours on November 12, 2016.
Costayaco-9 has been producing approximately 450 bopd on natural flow. A coiled tubing unit is currently on this well running the final jet pump for production.
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "We are excited to have kicked off the development drilling program at Acordionero, and about the early N sands success at Cumplidor in PUT-7. We also have mobilized a drilling rig to Costayaco to further appraise the new A Limestone play later this year."
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.
Gran Tierra's Securities and Exchange Commission filings are available on a website maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at http://www.sedar.com.
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 operations including planned operations, the development of the Acordionero and Costayaco Fields, the PUT-7 Block and the Guriyaco-1 discovery, the base capital program, allocation of capital 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 November 4, 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.
References to thickness of "oil pay" or of a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. Well test results should be considered as preliminary and not necessarily indicative of long-term performance or of ultimate recovery. Well log interpretations indicating oil and gas accumulations are not necessarily indicative of future production or ultimate recovery. If it is indicated that a pressure transient analysis or well-test interpretation has not been carried out, any data disclosed in that respect should be considered preliminary until such analysis has been completed.
Chief Executive Officer
Chief Financial Officer
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