CALGARY, Canada, September 13, 2007 - Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE), a company focused on oil exploration and production in South America, today announced that initial estimates of reserves from the independent reserve auditor's report by Gaffney, Cline & Associates (GCA) for two recent oil discoveries in Colombia reported August 13, 2007, have been updated to incorporate a third party over-riding royalty on Gran Tierra Energy's interests in certain properties in Colombia, including the Chaza and Guayuyaco Blocks where the discoveries are located. These amendments do not materially impact the scale of these discoveries which, as previously reported, more than tripled Gran Tierra Energy's acquired proved, probable and possible oil reserves base, and almost doubled its acquired proved oil reserve base with its drilling program executed in the first half of 2007.
For the Costayaco oil discovery, GCA has now allocated to Gran Tierra Energy proved reserves of 2.7 million barrels of oil (3.0 million previously reported), with additional probable reserves of 5.5 million barrels of oil (6.0 million previously reported), and additional possible reserves of 7.4 million barrels of oil (8.2 million previously reported).
The discovery of the Costayaco field in the Chaza Block, located in the Putumayo Basin of Colombia and operated by Gran Tierra Energy, was the result of drilling the Costayaco-1 exploration well in the second quarter of 2007. As previously reported, this well tested 5,906 barrels of oil per day. A staged development program is being planned. Test oil production is currently being transported by truck to existing facilities. A flow line is being designed to replace trucking operations and to accommodate full commercial production. Two additional wells are currently scheduled to be drilled. Drilling will be initiated late in the fourth quarter of 2007 and will carry on into early 2008. Additional drilling and infrastructure construction will be contingent on these well results. In addition, a new 3-D seismic survey planned for the fourth quarter of 2007 has been expanded to cover 70 square kilometers.
For the Juanambu discovery, GCA has now allocated to Gran Tierra Energy proved reserves of 0.1 million barrels of oil (0.1 million previously reported), with additional probable reserves of 0.3 million barrels of oil (0.3 million previously reported), and additional possible reserves of 0.9 million barrels of oil (1.1 million previously reported).
The discovery of the Juanambu field in the Guayuyaco Block, also located in the Putumayo Basin of Colombia and operated by Gran Tierra Energy, was the result of drilling the Juanambu-1 exploration well early in 2007. As previously reported, this well tested 778 barrels of oil per day. Application for commerciality of this discovery is proceeding. Test oil production is currently being transported by truck to existing facilities. A flow line is being designed to replace trucking operations and to accommodate full commercial production. A second Juanambu well is being planned for drilling in 2008.
As a result of the adjustments and production for the first half of 2007, Gran Tierra Energy's estimate of proved reserves, net of royalties, as of June 30, 2007, stands at 5.6 million barrels of oil (5.9 million previously reported), with additional probable reserves at 7.0 million barrels of oil (7.5 million previously reported), and additional possible reserves of 11.2 million barrels of oil (12.2 million previously reported), for a total of 23.8 million barrels of proved, probable and possible oil reserves (25.6 million previously reported). This contrasts to Gran Tierra Energy's December 31, 2006, proved reserves of 3.0 million barrels of oil, probable reserves of 1.2 million barrels of oil, and possible reserves of 2.9 million barrels of oil, or a total of 7.1 million barrels of proved, probable and possible oil reserves.
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).
General Statements
GCA's statement of Proved reserves have been prepared in accordance with the definitions set out in Rule 4-10 of Regulation S-X of the United States Securities and Exchange Commission. GCA's statement of Probable and Possible reserves have been prepared in accordance with generally accepted petroleum engineering principles provided for in the document entitled Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information, promulgated by the Society of Petroleum Engineers (SPE). Reserve definitions utilized are those approved by the Society of Petroleum Engineers, World Petroleum Council, American Association of Petroleum Geologists and the Society of Petroleum Evaluation Engineers in March 2007 and issued under the name of Petroleum Resources Management System in March of 2007.
Forward Looking Statements
The statements in this press release regarding Gran Tierra's expectations relating to the initiation of drilling of additional wells in 2007 and 2008, the plan for the 3-D Seismic survey and the plan to design a flow line to replace trucking operations and to accommodate full commercial production 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, unexpected delays in drilling due to equipment failure or other unforeseen reasons; unforeseen events, such as unexpected difficulties in drilling or unexpected discoveries, may cause Gran Tierra Energy to reallocate resources, which may delay drilling, surveys, design plans and production or alter the mix of development drilling and exploration drilling in Gran Tierra Energy's portfolio; and unexpected costs may decrease funds available to carry out Gran Tierra Energy's plans described in the press release, which could delay or prevent execution of these plans. 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.