Combined Testing Program Flows 778 Barrels of Oil Per Day; Testing Operations To Commence At Costayaco-1
CALGARY, Canada, May 29 - Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE), a company focused on oil exploration and production in South America, today announced that it has successfully completed a drill stem test (DST) program on its recently drilled Juanambu-1 exploration well in the Guayuyaco Block, Putumayo Basin, in southern Colombia.
Production at a combined natural flow rate of 589 barrels of oil per day (BOPD) of 32O API oil with constant well-head flowing pressure was obtained in three independent reservoir intervals. In addition, two additional zones produced oil with swabbing. One produced 6 BOPD and the other produced 183 BOPD with a jet pump.
An optimum well completion program is currently being designed; typical completions in adjacent producing fields utilize jet pumps, which can significantly increase production rates above natural flow rates.
Final test results are being integrated into an application for declaration of commerciality for submission to Ecopetrol, the state oil and gas company of Colombia. Early production will be initiated by trucking to nearby facilities operated by Gran Tierra Energy. Upon approval of commerciality, additional facilities may have to be constructed to handle the production and transport the oil by pipeline.
Six different reservoir intervals were tested by six independent DSTs as follow from the lower to upper zones: Lower Caballos sandstone, Middle Caballos sandstone, T sandstone, U sandstone, A limestone and Kg sandstone:
DST-1 (Lower Caballos) perforated and tested intervals 9041'-9046' and 9048'-9054' (11 feet). After swabbing, the stabilized well production in natural flow was 77 BOPD (32.4O API) with a trace of water (completion fluid). The well was producing in natural flow for 14 hours.
DST-2 (Middle Caballos) perforated and tested intervals 8998'-9004' and 9006'-9023' (23 feet). After swabbing, the stabilized well production in natural flow was 354 BOPD (32.5O API) with a trace of water (completion fluid). The well was producing in natural flow for 24 hours.
DST-3 (T sandstone) perforated and tested intervals 8867'-8882' and 8886'-8910' (39 feet). After swabbing, the stabilized well production in natural flow was 158 BOPD (31.4O API) with a trace of water (completion fluid). The well was producing in natural flow for 30 hours.
DST-4 (U sandstone) perforated and tested interval 8710-8714 (4 feet). The well production by swabbing was 6 BOPD (27O API) with 71% BSW and 19,000 ppm of chlorides (completion fluid).
DST-5 (A limestone) perforated and tested intervals 8560'-8566' and 8572'-8600' (34 feet). These intervals did not flow any measurable fluid volume.
DST-6 (Kg sandstone) perforated and tested interval 7995'-8010' (15 feet). After swabbing, the well was not able to flow naturally. The oil production rate on jet pump was 183 BOPD (21O API) with 12% BSW during the last 8 hours.
Gran Tierra Energy holds a 50% working interest and is the Operator of the Guayuyaco Block. Solana Resources Limited holds a 50% working interest and Ecopetrol has a 30% interest back-in right on commercial discoveries, which if exercised, would reduce Gran Tierra Energy working interest to 35% and Solana Resources Limited working interest to 35% in this new commercial field.
The service rig used in these testing operations is being redeployed to the Costayaco-1 exploration well location in the adjacent Chaza Block to begin testing operations. Costayaco-1 encountered similar oil shows in the same reservoirs that were tested in Juanambu-1, and which are currently producing in adjacent oil fields operated by Gran Tierra Energy. Gran Tierra Energy is the operator of the Chaza block with a 50% working interest.
Dana Coffield, President and CEO stated "We are thrilled with the results of the test program. The oil quality is better, and the reservoir performance is far superior than is found in our adjoining producing fields. We look forward to working with Ecopetrol to attain commerciality of this new field, and bring on new production utilizing the local infrastructure operated by Gran Tierra Energy."
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. Gran Tierra holds interests in producing and prospective properties in Argentina, Colombia and Peru. To date, Gran Tierra 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 http://www.grantierra.com. Investor inquiries may be directed to [email protected] or 1-800-916-GTRE (4873).
Forward Looking Statements
The statements in this press release regarding the oil discovery at Juanambu-1 and the planned initiation of testing of the Costayaco-1 exploration well are 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. Although these forward-looking statements 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, in the case of these forward-looking statements, actual production deviating from test results, mechanical problems, equipment limitations and weather conditions, which could delay or prevent the completion of the testing. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Gran Tierra Energy assumes no obligation to update these 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, including the risk factors, made by Gran Tierra Energy in its reports filed with the Securities and Exchange Commission, in particular its quarterly report on Form 10-Q filed on May 15, 2007 and the Registration Statement filed on May 4, 2007, which attempt to advise interested parties of the risks and factors that may affect Gran Tierra's business. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, Gran Tierra's actual results may vary materially from those expected or projected.