First of two scheduled delineation wells for new Costayaco Field
CALGARY, Canada, December 11, 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 has initiated drilling Costayaco-2 in the Chaza Block, located in the Putumayo Basin of southern Colombia.
Costayaco-2 is the first of two delineation wells that will be drilled in the Costayaco field. Drilling is anticipated to take approximately one month with completion and testing operations to follow. The second delineation well, Costayaco-3, will be drilled in the first quarter of 2008 following completion of Costayaco-2.
The Costayaco oil field was discovered in the second quarter of 2007. The discovery well, Costayaco-1, tested a maximum of 5,906 barrels of oil per day (BOPD) from four reservoirs. The well has recently been producing approximately 2,200 BOPD (approximately 1,000 BOPD, net to Gran Tierra Energy after royalty) from a single zone on natural flow with production trucked to the nearby Toroyaco facility. During this period infrastructure at Uchupayaco, to handle new production, has been under construction. Testing of a jet-pump that will commingle production from two zones is currently under way.
Crude oil loading and unloading facilities for trucking operations from the Costayaco field to the existing pipeline network at Uchupayaco have been completed and trucking to this facility initiated. Planning for a 15 kilometer 8 inch production line from Costayaco to Uchupayaco is continuing. Construction of the production line is scheduled to start in March, 2008, and be completed in mid-2008.
The acquisition of 70 square kilometers of new 3-D seismic data over the Costayaco field was completed in early December and the data is currently being processed. The interpretation results from this data will be used for planning additional wells in 2008.
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 of Gran Tierra Energy, stated "The delineation drilling that we are now initiating will increase our production and greatly enhance our understanding of the full reserve potential of the Costayaco oil discovery. These results, integrated with our new 3-D seismic data, will allow us to plan a full field development, including additional drilling, facilities and pipeline to handle additional production as appropriate 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. The company strategy is focused on establishing a portfolio of drilling opportunities to exploit undeveloped reserves to grow production, as well as undertaking exploration to grow future reserves. Additional information concerning Gran Tierra Energy is available at 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 with respect to the timing and drilling of Costayaco-2 and Costayaco-3 and the timing of construction of the production line, the benefits which will result to Gran Tierra Energy from the drilling and the 3-D seismic data, and the use to which the data will be put, 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 field operations to acquire the data 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 the acquisition of data, the completion of drilling Costayaco-2, the drilling of Costayaco-3 and/or the construction of the production line; 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 under the caption "Item 1A - Risk Factors" of its quarterly report on Form 10-Q filed on November 8, 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.