CALGARY, Canada, September 27, 2007 - Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE), a company focused on oil exploration and production in South America, today announced that the Company's net after royalty production has averaged approximately 2,034 barrels of oil per day (BOPD) since September 10, 2007 as the result of recent increased production from two new oil field discoveries in Colombia operated by Gran Tierra Energy. A staged new field development program has been initiated to allow for continued production growth through 2008.
The first stage of development is being implemented at the new Costayaco oil field in the Chaza Block, located in the Putumayo Basin of Colombia. Production with natural flow has averaged approximately 1,748 BOPD gross (788 BOPD net after royalty) since September 10, 2007 from selected reservoir zones in the discovery well Costayaco-1.
This production is currently being transported by truck to existing facilities. A ten kilometer eight inch pipeline is being designed to replace trucking operations. This pipeline is expected to have a physical capacity of up to 25,000 BOPD to handle any new production from future development wells, although the initial throughput will be limited to existing infrastructure capacity which is estimated at 5,000 to 6,000 BOPD. This pipeline is expected to be operational at mid year 2008.
Two development wells are currently planned for the Costayaco field, with drilling to be initiated late in the fourth quarter of 2007 and continuing into 2008. A new 3-D seismic acquisition program encompassing 70 square kilometers over the field has been initiated and is expected to be completed in the fourth quarter of 2007. The results of this seismic program will be used to plan development drilling in 2008. A second stage of additional development drilling and infrastructure construction will be contingent on the results of these initial wells.
A staged development program is also being implemented for the new Juanambu oil field in the Guayuyaco Block, located adjacent to the Chaza Block in the Putumayo Basin of Colombia. Early production testing has been completed and the application process for commerciality is continuing. The construction of a six kilometer six inch flowline is being planned to transport oil from the Juanambu-1 discovery well to existing infrastructure and should be operational in late fourth quarter of 2007. A second stage of development drilling and infrastructure construction is being evaluated for 2008.
Since September 10, 2007 Gran Tierra Energy's production in Colombia has averaged approximately 1,491 BOPD, net after royalty, and production from operations in Argentina has averaged approximately 543 BOPD. Gran Tierra Energy's 2,034 BOPD net after royalty average production for this period is up from 1,140 BOPD average for the first half of 2007.
Dana Coffield, President and CEO, stated "My objective of attaining a 2007 exit rate for Gran Tierra Energy in excess of 2,000 BOPD net after royalty has been attained three months ahead of schedule. Gran Tierra Energy's work program focus is now transitioning from exploration to development activities which are intended to continue our production growth into 2008. These development programs will be complemented by continued exploration activity in our three countries of operations through 2008."
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 Gran Tierra Energy's expectations relating to expected pipeline capacities and the timing of pipelines and flowlines becoming operational, and planned drilling and exploration activity 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. Words such as "may", "expect", "believe", "intend" and similar expressions are intended to identify forward-looking statements. 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 or pipeline completion 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 August 14, 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.