Gran Tierra Energy Announces Successful Oil Flow Tests in Colombia and Argentina
Moqueta-7 flows 1,146 BOPD from four oil flow tests; Loma Montosa flows 840 BOPD from first horizontal fracture stimulated well
CALGARY, Alberta, January 7, 2013, Gran Tierra Energy Inc. (“Gran Tierra Energy”) (NYSE MKT: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today provided updates for its exploration and operation activities in Colombia, Argentina, Peru and Brazil.
“Gran Tierra Energy has confirmed additional resource potential with successful oil flow testing of the Moqueta-7 appraisal well at the Moqueta oil discovery in Colombia, which we are continuing to evaluate with the recently drilled Moqueta-8 appraisal well. We have yet to define the boundaries of the growing field, and are currently planning the next three wells to continue the appraisal program in the first half of 2013.” said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. “In addition, Gran Tierra Energy has successfully completed its first multi-stage fracture stimulated horizontal well. This successful application of technology to a new tight reservoir in Argentina has delivered outstanding results, and the experience from this well will serve us well as we expand the application of this technology to our drilling program in Brazil,” concluded Coffield.
Chaza Block, Putumayo Basin, Colombia (Gran Tierra Energy 100% working interest and operator)
Gran Tierra Energy completed initial testing of Moqueta-7 by collecting reservoir data and fluid samples with a hydraulic jet pump from the T-Sandstone and Caballos formations in three repeated fault blocks. The T-Sandstone formation in the primary fault block consisted of 44 feet true vertical depth (“TVD”) gross reservoir or 33 feet TVD of net reservoir thickness. It was perforated and tested from 6,641 feet to 6,710 feet measured depth (“MD”) for 78 hours at a rate of 463 barrels of oil per day (“BOPD”) of 23.7° API oil with a 0.4% water cut. The underlying Caballos formation consisted of 200 feet TVD gross reservoir or 68 feet TVD net reservoir thickness. It was perforated and tested from 6,890 feet to 7,183 feet MD for 59 hours at a rate of 267 BOPD of 23.8° API oil with a 1.1% water cut.
A repeated oil-bearing Caballos Sandstone reservoir section was encountered in a new, previously unrecognized, fault block with 90 feet TVD of gross reservoir or 55 feet TVD of net reservoir thickness. The interval from 7,466 feet to 7,528 feet MD was perforated and tested with a hydraulic jet pump for 5 hours at 100 BOPD of 25.3° API oil with a stabilized water cut of approximately 1%.
As drilling continued, a second fault was crossed and another repeated oil-bearing Caballos Sandstone reservoir section was encountered in a new, previously unrecognized fault block. It had 139 feet TVD of gross reservoir or 60 feet TVD of net reservoir thickness. The interval from 7,680 feet to 7,790 feet MD was perforated and tested for 13 hours with a hydraulic jet pump at 316 BOPD of 26.5° API oil with a 2.8% water cut.
Moqueta-7 bottom hole location is believed to be near the western extremity of the main block of the Moqueta field. The well, because of its bottom hole position, will be completed as a water injector for pressure maintenance to enhance oil recovery and production from producing wells in the main block.
Initial drilling results have been obtained from the Moqueta-8 appraisal well, with a bottom-hole location 450 meters southeast of the Moqueta-5 producing well. Oil shows encountered during drilling indicate the presence of oil-bearing reservoir sandstones in the Villeta U Sandstone beginning at 4,865 feet MD (4,283 feet TVD) with an approximate potential gross reservoir thickness of 40 feet MD (32 feet TVD). The Villeta T Sandstone with oil shows were encountered at 5,152 feet MD (4,515 feet TVD) with an approximate potential gross reservoir thickness of 106 feet MD (70 feet TVD). The underlying Caballos formation with oil shows was encountered at 5,350 feet MD (4,674 feet TVD) with approximately 260 feet MD (97 feet TVD) of potential gross thickness.
Gran Tierra Energy is planning to conduct the initial testing for Moqueta-8 in January 2013. Moqueta-9, the next well in the appraisal program to further define the reserve potential of the field, is expected to begin drilling in February 2013.
Puesto Morales Block, Neuquen Basin (100% working interest and operator)
The PMN-1117 horizontal well reached a total depth of approximately 2,130 meters MD (1,408 meters TVD) on October 27, 2012. The well was drilled with a 483 meter horizontal section and multi-stage fracture stimulation was conducted on the well with production testing initiated on December 2, 2012. During the first 24 hours, this well flow tested at a rate of approximately 840 BOPD from the tight oil Loma Montosa reservoir. This well is currently flowing naturally at a choke-restricted rate of 212 BOPD of 33.8°API oil with a 0% water cut.
Block 95 (100% working interest and operator subject to PeruPetro S.A. and Peruvian Government approvals)
Gran Tierra Energy began drilling the Bretaña Norte 95-2-1XD exploration well in Block 95 on December 15, 2012. This well will continue drilling into the first quarter of 2013, with initial results expected at the end of the quarter. The bottom-hole target is located approximately 3.7 kilometers south of the Bretaña-1 well, which was drilled in 1974 and tested 18° API gravity oil on natural flow rates of approximately 807 BOPD. Gran Tierra Energy Peru S.R.L. currently holds a 60% working interest in Block 95 and has entered into an agreement to purchase the remaining 40% working interest from Global Energy Development PLC. Subject to PeruPetro S.A. and Peruvian Government approvals, Gran Tierra Energy will have a 100% working interest in Block 95.
In its press release dated June 11, 2012, Gran Tierra Energy announced the results of a contingent gross lease resource estimate for the oil discovery on Block 95, provided by its independent reserves auditor, GLJ Petroleum Consultants effective June 1, 2012. The resource estimate has been prepared in compliance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook. The estimates included a low estimate “1C” contingent resources of 11.5 million stock tank barrels of oil (“MMSTB”), a best estimate “2C” contingent resources of 31.6 MMSTB, and a high estimate “3C” contingent resources of 88.1 MMSTB. In addition to evaluating the reservoir with discovered oil, the well will explore deeper horizons for additional potential pay zones. Additional information respecting such contingent resource estimates is included in the June 11, 2012 press release. There is no certainty that it will be commercially viable to produce any portion of the resources.
Blocks 123 and 129 (100% working interest, subject to government approval, and operator)
PeruPetroS.A. has approved Gran Tierra Energy Perú S.R.L. assumption of operatorship of Blocks 123 and 129, located on the eastern flank of the prolific Marañon Basin of northern Peru, effective January 1, 2013. Assumption of 100% working interest is pending government approval.
The 1-GTE-05HP-BA horizontal oil exploration well on Block 142 onshore Recôncavo Basin Brazil has been drilled, the horizontal liner has been set and the multi-stage fracture stimulation is planned for February, 2013. The 1-GTE-06HP-BA horizontal sidetrack on Block 129 spud January 4, 2013 and planning continues for the 1-GTE-07HP-BA horizontal oil exploration well on Block 155, with operations expected to commence in first quarter and be completed in the second quarter of 2013.
About Gran Tierra Energy Inc.
Gran Tierra Energy 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 Energy holds interests in producing and prospective properties in Colombia, Argentina, Peru, and Brazil. Gran Tierra Energy 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.
Gran Tierra Energy’s Securities and Exchange Commission filings are available on a web site maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at http://www.sedar.com.
Forward Looking Statements and Advisories
Readers are cautioned that the well-flow test results disclosed in this press release are not necessarily indicative of long term performance or of ultimate recovery.
This news release contains certain forward-looking information and forward-looking statements (collectively, “forward-looking statements”) under the meaning of applicable securities laws, including Canadian Securities Administrators’ National Instrument 51-102 - Continuous Disclosure Obligations and the United States Private Securities Litigation Reform Act of 1995. The use of the words “will”, “plan”, “expected”, “estimate” and “potential” and derivations thereof and similar terms identify forward-looking statements. In particular, but without limiting the foregoing, this news release contains forward-looking statements regarding the accuracy of testing and production results and seismic data; and the effects of certain drilling techniques, exploration and development activities, expected drilling locations, the expected application of multi-stage fracture stimulation and timing of activities and results. Gran Tierra Energy 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.
Statements relating to “resources” are forward-looking statements as they involve the implied assessment, based on estimates and assumptions, that the resources described exist in the quantities predicted or estimated and can be profitably produced in the future.
The forward-looking statements contained in this news release reflect several material factors and expectations and assumptions of Gran Tierra Energy including, without limitation: assumptions relating to log evaluations; that Gran Tierra Energy will continue to conduct its operations in a manner consistent with past operations; the accuracy of testing and production results and seismic data; the effects of certain drilling techniques; cost and price estimates; and the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions. Gran Tierra Energy 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.
The forward-looking statements contained in this news release are subject to risks, uncertainties and other factors that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements, including, among others: unexpected technical difficulties and operational difficulties may occur, which could impact or delay the completion or continuation of drilling; the application of multi-stage fracture stimulation may not have the impact on recoveries currently anticipated by Gran Tierra Energy; geographic, political and weather conditions can interrupt drilling, which could impact or delay the commencement or continuation of drilling; and the risk that current global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra Energy currently predicts, which could cause Gran Tierra Energy to change its current drilling, stimulation, production and testing plans. Further information on potential factors that could affect Gran Tierra Energy are included in risks detailed from time to time in Gran Tierra Energy’s Securities and Exchange Commission filings, including, without limitation, under the caption “Risk Factors” in Gran Tierra Energy’s Quarterly Report on Form 10-Q filed November 7, 2012. These filings are available on a Web site maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at www.sedar.com. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this press release are made as of the date of this press release and Gran Tierra Energy 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 legislation.
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