Initial 3 Zones Flow Up To 3,997 Barrels of Oil Per Day; Three Additional Zones To Be Tested
CALGARY, Canada, June 20 - 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 three drill stem tests (DST) on its recently drilled Costayaco-1 exploration well in the Chaza Block, Putumayo Basin, in southern Colombia.
The cased hole DST program commenced on June 10, 2007. Six DSTs have been scheduled over the Lower Caballos Formation, Middle Caballos Formation, Lower and Middle Villeta T Formations, the Villeta U Formation, and the Rumiyaco Kg Formation. Three DSTs have now been completed in the lower three zones. Production at a combined natural flow rate of up to 3,997 barrels of oil per day (bopd) of 30 degree to 31 degree API oil was obtained in the three formations tested to date. Three additional DSTs over three additional zones are scheduled.
DST-1 tested an 8 foot thick sandstone interval in the Lower Caballos Formation to test a potential oil-water contact. After initial swabbing the well started to flow naturally, reaching a maximum oil rate of 206 barrels of oil per day (bopd) with only a trace of water. A preliminary review of DST-1 indicates no evidence of an oil-water contact.
DST-2 tested a 95 foot thick sequence of sandstones in the Lower and Middle Caballos Formations, including the Lower Caballos zone perforated in DST-1. After one swab the well started to flow naturally, reaching a maximum oil rate of 2,655 bopd with only a trace of water.
DST-3 tested another potential oil water contact within a 12 foot sandstone interval in the Lower Villeta T Formation. After swabbing, the well started to flow naturally, reaching a maximum oil rate of 1,342 bopd with only a trace of water.
Testing will continue with DST-4 in the overlying main Villeta T Formation and then two additional DSTs will be conducted in the Villeta U and the Rumiyaco Kg Formations. Initial log interpretations, combined with hydrocarbon shows encountered during drilling, indicate oil bearing reservoir quality sandstones in these zones. Additionally, these zones are productive in the nearby Santana Block, as well as in the recently tested Juanambu-1 discovery well located on the adjacent Guayuyaco block operated by Gran Tierra Energy.
Planning for a potential field development has been initiated. The Pride-17 drilling rig, used to drill Costayaco-1, is under contract and available to conduct additional delineation and development drilling. To optimize positioning of future drilling locations, a new seismic acquisition program over the Costayaco structure is being considered. Costayaco-1 is proximal to infrastructure allowing for early monetization of commercial production.
Gran Tierra Energy holds a 50% working interest and is the Operator of the Chaza Block. Solana Resources Limited holds the remaining 50% working interest. The Chaza Block is subject to the new and fiscally attractive Agencia Nacional de Hidrocarburos royalty/tax contract which includes no additional state participation.
Dana Coffield, President and CEO stated "These initial test results are extraordinary and greatly exceeded our expectations. The initial reservoir performance tested to date is far superior to any of our existing assets in Colombia."
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 future testing and potential development of the Costayaco-1 exploration well are forward-looking statements' within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States 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 the initial test results. 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 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 in its reports filed with the Securities and Exchange Commission, in particular its quarterly report on Form 10-Q filed on May 15, 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.