CALGARY, ALBERTA--(Marketwired - May 3, 2017) - 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 an operational update. All dollar amounts are in United States ("U.S.") dollars, unless otherwise indicated.
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented "2017 is off to an exciting start for Gran Tierra with several important new oil discoveries. We are pleased to report that the Acordionero field in the Middle Magdalena Valley Basin continues to exceed our expectations and are encouraged by the discovery of two new potential oil reservoirs in the field, which we plan to effectively develop using our existing infrastructure. The new Lisama D Sand reservoir has tested 24-27° API oil in the AC-8i and AC-9 wells. The potential Lisama B Sand reservoir observed in the AC-9 will be tested at a later date.
In the Putumayo Basin, we continue to see encouraging results with our emerging "A" Limestone play in the Costayaco field, with a recent third recompletion in the field in the CYC-2 well and the start of testing operations on CYC-28, our first horizontal well drilled in this new play.
In the Putumayo-7 Block ("PUT-7"), the Confianza-1 exploration/appraisal well has encountered potential oil pay in three reservoirs, two of which are new zones for this block. We are very excited by the results so far with Confianza-1 testing 28° API gravity oil in a new Villeta "U" Sand play, extending the oil potential for the "A" Limestone play into the southern Putumayo Basin with 24° API gravity oil tested and continuing the successful appraisal of the "N" Sand. As of May 2, 2017, the Confianza-1 well was producing on pump from the "N" Sand at an average rate of 705 barrels of oil per day ("bopd") of gross working interest before royalties ("WI") production over 24 hours with less than 1 % water cut.
Testing of new zone discoveries at the Acordionero and Confianza wells required Gran Tierra to delay the startup of approximately 3,000 bopd WI production during first quarter 2017. It was essential to obtain this test information for further exploration and development planning.
Subsequent to the end of first quarter 2017, we plan to spud the Vonu-1 multi-horizon target exploration well on May 4, 2017, in the Putumayo-1 ("PUT-1") Block. We are also very excited with plans to drill the Totumillo-1 and Ayombero-1 prospects in the second half of 2017 in the Midas Block, located in the Middle Magdalena Valley Basin. These two high-impact exploration prospects were acquired in the PetroLatina acquisition.
We believe that our Colombia-focused strategy continues to deliver results on several fronts, with exploration and development being funded from funds flow from operations. With our ongoing positive results from development drilling in Acordionero, our exciting new "A" Limestone play at Costayaco, and our high potential Putumayo "N" Sand and "A" Limestone exploration program, Gran Tierra is well positioned for potential growth in 2017 and beyond."
Update on Mocoa Disaster in the Putumayo Basin
Heavy rain during the night of April 1, 2017 caused catastrophic flooding and mudslides in Mocoa, the regional capital of the Putumayo Department, resulting in the tragic loss of over 300 lives and major damage to the city's infrastructure. A number of our employees were directly impacted and we offered our deepest condolences to them and the people of Mocoa. Immediately starting April 1, 2017 until the present, Gran Tierra has provided assistance to the disaster recovery efforts. Our initial focus and efforts were to assist the Government and rescue teams.
So far, we have delivered over 20 tons of food and water and more than 5 tons of goods and basic necessities. Gran Tierra has also provided equipment, civil works and infrastructure to help with the re-opening of roads and assisted in the reconstruction of bridges to allow the entry of humanitarian aid to Mocoa. We also provided electricity to the regional hospital and the Mocoa mayor's office building, as well as transported a water treatment plant from Bogota to Mocoa. We continue to cooperate and coordinate with the national and regional governments to implement infrastructure projects to support Mocoa's recovery.
As a consequence of the damage to regional infrastructure, especially the temporary loss of electrical power, as well as the diversion of some company assets to provide emergency relief, Gran Tierra's Putumayo Basin operations were temporarily impacted. Our Costayaco and Moqueta operations were running solely on diesel and gas-fired electricity generation in this interim period which led to reduced oil production and water injection for a period of approximately two weeks during April 2017. After power was restored to the city of Mocoa, effective actions by government agencies, working in collaboration with Gran Tierra and other oil companies, led to a full restoration of electrical power elsewhere in the Putumayo region, effective April 13, 2017. Gran Tierra's Costayaco and Moqueta oil operations are now back to normal operating conditions.
- Continued "A" Limestone Success at Costayaco
- CYC-2, 9 and 19 producing a combined total from "A" Limestone of 2,583 bopd (April 2017 WI average) with less than 2% water cut
- Successfully obtained key core and open hole log information from the vertical pilot hole at CYC-28
- Successfully drilled the play's first horizontal well at CYC-28 which has been completed and is currently being stimulated prior to production testing
- Confianza-1 Discovery, PUT-7 Block
- "N" Sands: confirmed stratigraphic continuity, on production at 705 bopd WI, 20.7° API, with less than 1% water cut
- New Reservoirs at PUT-7:
- Villeta "U" sand: 28° API oil tested at 350 bopd
- "A" Limestone: 24° API oil tested at 227 bopd
- New Reservoirs at Acordionero
- Lisama D: confirmed 24-27° API oil in a new reservoir with tests in AC-8i and AC-9 wells
- Lisama B: strong indications of a new oil reservoir, to be tested when operations permit
Development Program Update
Acordionero Field Development (Gran Tierra 100% Working Interest ("WI") and Operator)
In the Acordionero field, Gran Tierra has discovered a new, deeper oil reservoir in the Lisama D Sand in the AC-8i and AC-9 wells. The Company identified the Lisama D on logs in two of Acordionero's original wells, though this zone was not tested by the previous operator in the initial four wells that they drilled. Therefore, the AC-8i injection well and the AC-9 development well were both deliberately deepened to appraise the Lisama D to assess the potential productivity of this new zone. The Lisama D is present elsewhere in Gran Tierra's landholdings in the Middle Magdalena Valley Basin and is now considered to have potential. Based on petrophysical analysis of logs, the Lisama D is also present in the AC-3 well with 13 feet ("ft") of net oil pay and in the AC-4 well with 18 ft of net oil pay.
The test results for the Lisama D at AC-8i and AC-9 are encouraging as they prove the existence of a new 24-27° API gravity oil reservoir. No Lisama D oil-water contact ("OWC") has been encountered in any of the wells drilled to date. The lowest known oil ("LKO") elevation for the Lisama D has been established at -9642 ft true vertical depth subsea.
In the AC-8i well, a total of 8 ft of gross pay was perforated in the Lisama D. It has produced over 6,789 barrels ("bbls") of 24.4° API oil, on natural flow and on jet pump, at an average rate of 101 bopd over 67 days starting on February 3, 2017. The AC-9 well produced 3,011 bbls of 26.8° API oil on natural flow at an average rate of 177 bopd from the Lisama D (19 ft net pay) and was tested for 17 days starting on March 3, 2017.
The AC-8i development well was spud on December 26, 2016 and drilled to a total depth ("TD") of 10,340 ft total measured depth ("MD") and 10,028 ft true vertical depth ("TVD"). This well is planned as a water injector in the Lisama A and C reservoirs, as a pilot test for enhanced oil recovery. The well was drilled in the lowest structural position to date in the field, and crossed the OWC in the Lisama A at a depth 143 ft deeper than the previous LKO depth. Petrophysical analysis of the AC-8i's well logs indicates that the Lisama C reservoir's Proved plus Probable OWC was found at the expected depth. Appraisal of the Lisama D zone has finished and operations to complete the AC-8i as an injector commenced on April 23, 2017.
The AC-9 development well was spud on February 6, 2017 and reached 8,929 ft MD and 8,708 ft TVD on February 23, 2017 and completion operations began on the same day. The Lisama A sand was cored and 88 ft of core was recovered. Total cost to drill, core, complete and tie-in this well was $4.0 million ($2.1 million to drill and $1.9 million to complete and tie-in), which is the Company's lowest cost to date in Acordionero. Based on logging while drilling ("LWD") data, the following potential net pays were identified: Lisama A (240 ft); Lisama C (140 ft); and Lisama D (19 ft). Following the Lisama D short-term test, 188 ft of gross pay were perforated in the Lisama C and the well was equipped with an electric submersible pump ("ESP"). Since April 1, 2017, the well has produced over 23.850 bbls of 25.7° API oil at an average rate of 1,038 bopd. It is important to note that the decision to properly evaluate the discovery of the Lisama D sand in the AC-9 well caused a start-up delay of 4 weeks of Lisama C sand oil production from this well.
The next development well, AC-10, was spud on March 29, 2017 and reached 10,012 ft MD and 9,474 ft TVD on April 19, 2017. Based on LWD data, the following preliminary net pays were identified: Lisama A (1,004 ft MD, 883 ft TVD); Lisama C (213 ft MD, 187 ft TVD); and Lisama D (13.5 ft MD, 12 ft TVD). Completion operations commenced on April 24, 2017 and the well is scheduled to be on production this week. This well was designed to target reserves in the Lisama A and C reservoirs. AC-10 is the first of 3 wells in the next phase of the development targeting the northern area of the field, from a pad where the existing AC-2 well is located.
A 15,000 bopd expansion program for the central processing facility ("CPF") is on schedule, and is designed to accommodate the forecasted 2017 production development at Acordionero. The CPF expansion is a two phase program with Phase 1 scheduled for completion by the end of second quarter 2017. Phase 2 of the CPF expansion is designed to provide a fluid processing capacity of up to 45,000 bbls of fluid per day, water injection of up to 30,000 bbls water per day, power generation of 10 megawatts and is scheduled to be completed by third quarter 2018.
Elsewhere in Gran Tierra's Middle Magdalena Valley Basin operations, a successful workover campaign has increased production in the Los Angeles field (Tisquirama Association Contract) and other minor fields by approximately 460 bopd (gross 30-day initial rate average in first quarter 2017).
Costayaco Field Development (Gran Tierra 100% WI and Operator)
Encouraging production results continue with the new "A" Limestone play in the Costayaco field.
The three recompleted "A" Limestone vertical wells, CYC-2, CYC-9 and CYC-19, continue to perform well on jet pump. During April 2017, these 3 wells produced at a total combined average rate of 2,583 bopd (30° API) from the "A" Limestone with an average water cut of less than 2%.
The CYC-28 was spud on December 31, 2016 and is the first horizontal well that Gran Tierra has drilled into the "A" Limestone. A pilot hole was successfully drilled to 8,173 ft MD through the M2 and "A" Limestone formations, where 78 ft of core was recovered and open hole logs obtained. The pilot hole phase was completed on March February 2, 2017. The core showed extensive fracturing and strong oil shows including visible oil, not only from the fractures but also the matrix structure of the rock. Extensive core analysis is currently underway to better understand the "A" Limestone throughout the Costayaco field and the Putumayo basin. While oil shows were found throughout the cored interval, a specific 25-ft interval was identified as having the best fracture density and was the target for the horizontal wellbore.
After two attempts, the CYC-28 well was successfully sidetracked to drill the horizontal section and reached TD on April 11, 2017. A total of 1,718 ft of horizontal section was drilled in the "A" Limestone pay zone. A slotted liner was run in the horizontal section, and the well is currently being stimulated prior to testing the well. As a result of mechanical challenges drilling the horizontal section, testing, stimulation and ultimately production was delayed 12 weeks later than planned. After production testing of the CYC-28 well is finished, Gran Tierra plans to provide another operational update.
Waterflood operations are continuing at Costayaco for enhanced oil recovery in the lower Villeta T and Caballos reservoirs. Increased water injection in to the north end of the field is a primary objective for 2017. A combination of conversions of production wells to injection (CYC-23) and well stimulations (CYC-5 and CYC-23) have occurred during first quarter 2017. All of these actions are predicted to provide better required pressure support and sweep efficiency to optimize and enhance ultimate oil recovery from the Villeta T and Caballos reservoirs in the Costayaco field.
Moqueta Field Development (Gran Tierra 100% WI and Operator)
With the previously reported increase in water injection into Moqueta, the overall GOR in this field has started to decrease (indicating reservoir pressure is increasing), and production has started to increase in numerous key wells. In particular, the MQT-12 well's production has increased by about 400 bopd since September of 2016 and is currently producing record high volumes for that well of around 1,000 bopd. The Company anticipates the trend to continue field-wide, resulting in a forecasted minimal oil production decline at Moqueta during 2017, with minimal capital requirements.
On March 25, 2017, the MQT-21 was stimulated in the Caballos formation with excellent results. Production rates were increased roughly by a factor of 17 from 60 bopd to 1,000 bopd. The well continues to perform well with production rates being maintained just over 1,000 bopd and a water cut of 2.4%.
Operations are currently underway for the first "N" sand recompletion in the Moqueta field. On April 12, 2017, 36 ft of "N" Sand was perforated in the MQT-18 wellbore, which had been suspended since 2015. Although measurable rates have yet to be produced from MQT-18, an oil sample was recovered from the pump verifying the presence of 12.7° API heavy oil. Alternatives to stimulate the "N" Sands are being considered in to determine if a commercial oil rate can be established.
Santana Block (Gran Tierra 100% WI and Operator)
Gran Tierra announced the successful bid for this block from Ecopetrol late fourth quarter 2016. This block is strategic for its reserves, exploration and infrastructure in the Putumayo basin. The block is expected to initially contribute an additional 500 bopd of production to Gran Tierra, as enhanced oil recovery alternatives are considered. Colombia's Agencia Nacional de Hidrocarburos ("ANH") approved the sale to Gran Tierra on April 17, 2017, the sale closed on April 27, 2017 and the Company assumed operations at noon on April 28, 2017.
Suroriente Block (Gran Tierra 15.8% WI, Non-operated)
In the Suroriente block, the 2017 development drilling program is currently underway. The first well, Cohembi-19, reached TD in first quarter 2017 and is on production with an average rate of 478 bopd gross, 75 bopd WI. The second well, Cohembi-20, is currently drilling and is expected to be followed by four remaining development locations during 2017. A workover was also completed on the Cohembi-14 well, restoring 500 bopd of average gross production (79 bopd WI).
Exploration Program Update
Putumayo 7 ("PUT-7") Block (Gran Tierra 100% WI and Operator)
Confianza-1 is the third exploration/appraisal well drilled within the Cumplidor-Alpha complex on the PUT-7 block. This well was located on enhanced amplitudes in the "N" Sands interpreted from two dimensional ("2D") seismic between the Cumplidor-1 and Alpha-1 wells. The well was spud on January 17, 2017. In addition to serving as an appraisal well for the "N" Sand of the Villeta formation discovered in Cumplidor-1 and Alpha-1, the well tested deeper potential horizons including the "A" Limestone and the "U" Sand of the Villeta formation. The well reached the planned TD of 12,500 ft MD (10,118 ft TVD) in the Caballos formation on February 24, 2017.
Based on well logs and oil shows while drilling, the well has encountered interpreted oil pay in the "U" Sand (6-9 ft TVD), the "A" Limestone (50 ft of gross interval with 15 ft of net pay TVD), and the "N" Sand. The "N" Sand shows three potential reservoir intervals totaling 24 ft of net pay TVD as expected from seismic predictions of "N" Sand thickness.
With additional success and confidence in the "N" Sand discoveries, the decision was taken to test the "U" Sand and "A" Limestone sections downhole to better understand the potential within the block, notwithstanding the timing implications for the completion of the "N" Sands in Confianza-1 and timing of the planned workover of the Cumplidor-1, as discussed below.
The "U" Sand was perforated on March 14, 2017 and flowed naturally at a rate of 209 bopd over 22 hours, 28° API oil with a water cut of less than 2%. A jet pump was installed and, on March 19, 2017, the well produced at an average rate 350 bopd and a water cut of less than 2% over 64 hours. Results from the test are significant for further "U" Sand exploration in the PUT-7 block. A three dimensional ("3D") seismic program scheduled for third quarter 2017 may be helpful in further delineating these new discoveries in the area.
For the "A" Limestone, 16.5 ft MD (14.5 ft TVD) of net pay was interpreted from a 50 foot gross carbonate section and 39 ft of this zone was perforated and then stimulated. A production test then commenced on April 18, 2017. On jet pump, the well produced at a rate of 393 bbls of total fluid per day of which there was 227 bopd of 24° API oil. The fluid other than oil was drilling mud and completion fluids with no formation water detected. Although this well may not be in an optimal location for "A" Limestone production, this oil production result from Confianza-1 further suggests potential for regional oil charge in the "A" Limestone play.
For the "N" Sands, the lower 13 ft out of 24 ft TVD of net pay has been perforated and as of May 2, 2017, is producing on ESP at an average rate over 24 hours of 705 bopd, 20.7° API and a water cut of less than 1 %. The well is producing sand, as expected, and production indices are expected to further increase as the well produces more sand. The remaining 11 ft TVD of net pay is expected to be perforated and brought on production in the future.
The Cumplidor-1 well produced 19° API oil with a GOR of less than 100 scf/stb and a water cut of less than 1% at a rate of 236 to 1,043 bopd over 18 days from January 17 to February 3, 2017. A maximum instantaneous rate of approximately 1,900 bopd was achieved in the 3 hours prior to jet pump failure on February 3, 2017. Progressively larger jet pump nozzles were run in the well, and the last attempt resulted in sticking a tool string and wireline in the well. The well is on the same pad as the Confianza-1 well, and a workover could not occur at Cumplidor-1(thereby deferring production) until drilling, testing and completion operations on Confianza-1 were completed. We expect the Confianza-1 and Cumplidor-1 to each produce at approximately 1,000 bopd.
Gran Tierra has obtained the regulatory approvals to acquire 95 square kilometers of 3D seismic starting in second quarter 2017 in two separate programs, over the Cumplidor field area and the exploration prospects in the central area of PUT-7 called Pomorroso and Northwest, and which fulfills the contractual commitments for the block in the current contractual phase.
The acquisition of 43 square kilometers of 3D seismic over the Cumplidor field area is expected to provide high quality amplitude information to optimize any future development wells, and to plan for the future waterflooding of the field to enhance oil recovery. The seismic project timing was sequenced to locate the exploration wells to be drilled at the Pomorroso and Northwest prospects based on 3D seismic amplitudes. These exploration wells are scheduled to be drilled in fourth quarter 2017.
Putumayo 4 ("PUT-4") Block (Gran Tierra 100% WI and Operator)
On December 30, 2016, the license was granted to drill the Siriri-1 exploration well which is planned to test both "N" Sand amplitudes on 2D seismic and the deeper "A" Limestone exploration play. Civil works have started in April 2017 for access road and lease construction. Spud is scheduled for July 2017.
Putumayo 1 ("PUT-1") Block (Gran Tierra 55% WI and Operator)
Gran Tierra plans to spud the Vonu-1 exploration well on May 4, 2017, subsequent to the end of first quarter 2017. The well is planned to be a directional drill from an existing production pad located in the adjacent Costayaco field that targets an interpreted structural prospect, similar to the Costayaco field, imaged on 3D seismic. It is a multi-zone prospect with potential in the Villeta Caballos, U, and T sands, the Villeta "A" Limestone and the "N" sands.
Nancy-Burdine-Maxine ("NBM") Block
Gran Tierra announced the successful bid for this block from Ecopetrol late fourth quarter 2016. This block is strategic for existing reserves, exploration and infrastructure. Existing drilling pads may be used to test some of the potential for offset reserves extension and exploration upside in this new block. The ANH approved the sale on April 17, 2017, which led to the closing of the acquisition as at April 27, 2017 and the Company assuming operations at noon local time on April 28, 2017.
The planned near-term exploration program includes the acquisition of approximately 100 square kilometers of 3D seismic, three new drilling pad locations, and then the potential drilling of several multi-zone prospects. Similar to the other exploration blocks in the Putumayo Basin, Gran Tierra plans to explore for "N" Sand, "A" Limestone and deeper U, T, and Caballos Sands potential in this new block.
Llanos - El Porton Block (Gran Tierra 100% WI and Operator)
All regulatory approvals have been obtained and the civil works for road access and pad construction have been completed for the Prosperidad-1 exploration well. The drilling rig has been mobilized to the lease site, after resolving protester blockades with the support of all local, regional and federal authorities.
On April 28, 2017, the Company was informed of two Class Actions filed against Gran Tierra, ANH and Autoridad Nacional de Licencias Ambientales ("ANLA", Colombian federal environmental regulator). One action was filed directly by Corporinoquia (the regional environmental regulator) where the El Porton Block is located, and the other one by an individual. Both actions argue that the drilling of the Prosperidad-1 well will affect the water resources of the region. The actions have been admitted by the Tribunal in the city of Yopal, and the Tribunal has issued an injunction suspending Gran Tierra's preparatory work to spud this exploration well. We are currently meeting with the Colombian federal government on the issue.
Middle Magdalena Valley Basin - Acordionero Exploitation Area (Gran Tierra 100% WI and Operator)
Site access has been obtained that expected to allow Gran Tierra to drill the Totumillo-1 structural exploration prospect, which is located immediately south of the Acordionero field. The structural prospect is planned to target reservoirs of the Lisama Formation, as found in the Acordionero field. The prospect is within the Acordionero exploitation license, and the Totumillo-1 exploration well is planned to spud in the second quarter of 2017.
Midas Block North (Gran Tierra 100% WI and Operator)
The Ayombero-1 exploration well is planned to target the conventional Galembo Member of the La Luna Formation. This is a structural prospect within the Midas Block, and potentially an extension of Gran Tierra's operated producing field at Chuira from the same formation. The Ayombero-1 well is scheduled to spud in fourth quarter 2017.
Sinu-San Jacinto Basin - Sinu-3 Block (Gran Tierra 51% WI and Operator)
The recently acquired 2D seismic has been interpreted and a new prospect has been identified on this block called Tonga-1. An integrated scouting team has reviewed the existing environmental license and identified potential surface site access. The planned spud of this well is in third quarter 2017.
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 exploration and development of the Company's blocks, areas and fields, and the Company's plans, including completion plans, objectives, expectations, evaluations and intentions regarding production, exploration and exploration upside and development, the base capital program, the Company's projected and forecasted growth and results, 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: 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 and its drilling and development 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 remain weak or further decline, or 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 28, 2017. 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 2017. 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.
Investors are urged to consider closely the disclosures and risk factors in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in the other reports and filings with the SEC, available from the Company's offices or website. These forms can also be obtained from the SEC via the internet at www.sec.gov or by calling 1-800-SEC-0330.
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