Initiates Planning for 2008 Exploration Drilling Program
CALGARY, Canada, August 1, 2007 - Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE), a company focused on oil exploration and production in South America, today announced that it has farmed out 50% of its 80% interest in the Azar Block in the Putumayo Basin of Colombia. Gran Tierra Energy will retain a 40% interest in the Azar Block and will retain Operatorship. Under the terms of the farmout, Gran Tierra Energy's share of costs for its retained 40% interest in work commitments in the first three exploration phases will be carried by the new partner. The farmout arrangement creates for Gran Tierra Energy a more attractive capital risk/reward profile for this prospective asset, and positions the company for additional drilling in 2008 with an experienced partner to complement emerging development plans related to two recent oil discoveries in Colombia.
The Azar Block covers 51,639 acres (209 square kilometers). It is located immediately east of Gran Tierra Energy's current operations and production in the Santana and Guayuyaco Blocks and is located approximately 20 kilometers east of the recent Juanambu-1 and Costayaco-1 oil discoveries operated by Gran Tierra Energy that tested flow rates up to 5,906 barrels of oil per day and 778 barrels of oil per day respectively. The Azar Block is located approximately 60 kilometers east of the two new technical evaluation areas that were recently awarded 100% to Gran Tierra Energy by the Agencia Nacional de Hidrocarburos (ANH) and announced on July 23, 2007.
Work commitments in the Azar Block consist of six consecutive phases. The first phase requires the acquisition of new seismic data, which will be acquired in 2007. The second phase requires a workover of an existing exploration well, Palmera-1, which encountered oil shows during drilling and in which oil pay was interpreted from logs after drilling. The well was never tested as it was not deemed commercial at the time it was drilled in 1996. The third phase requires the drilling of a new exploration well. The subsequent three phases each contain one exploration well commitment per phase. The Azar block is subject to the new and fiscally attractive ANH royalty/tax contract which includes no additional state participation.
Dana Coffield, President and CEO stated "The assignment of interests and Operatorship of this block to Gran Tierra Energy in early 2007, and subsequent award of the two recently announced technical evaluation contracts, continues to advance our strategy of actively acquiring under-developed assets to replenish and maintain a substantial inventory of drilling prospects as our existing inventory of prospects is drilled. With our new partner, we are now advancing the execution of our work commitments in the Azar Block and will add an exploration well to our 2008 drilling program, which will include exploration drilling in addition to the development drilling program associated with our recent oil discoveries 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 Energy holds interests in producing and prospective properties in Argentina, Colombia and Peru. To date, Gran Tierra Energy has pursued a strategy that focuses on establishing a portfolio of producing properties, and development and exploration opportunities, through selective acquisitions, to provide a base for future growth. Additional information concerning Gran Tierra Energy 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 acquisition of new seismic data and
Gran Tierra Energy's intention to add an exploration well to its 2008 drilling program 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, delay's in
the acquisition of seismic data or cancellation or postponement of the exploration well resulting from
unexpected technical or operational difficulties arising in connection with pursuing these actions.
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 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, which attempt to advise interested parties
of the risks and factors that may affect Gran Tierra Energy's business. If one or more of these risks
or uncertainties materialize, or if the underlying assumptions prove incorrect, Gran Tierra Energy's
actual results may vary materially from those expected or projected.