Costayaco-3 Drilling Completed; Logging Operations Initiated
The cased hole DST program, designed to evaluate only the primary reservoirs in the field, commenced on February 2, 2008. Five DSTs were completed over the Lower, Middle and Upper Caballos Formation, and in the Villeta T Formation. Secondary reservoirs in the U Sandstone Unit of the Villeta Formation and the Kg Sandstone Unit of the Rumiyaco Formation, which had potential pay zones indicated from log interpretations and which were successfully tested in the Costayaco-1 discovery well, were not tested. These zones will be tested and considered for completion later in field life when primary reservoirs become depleted.
The Costayaco-2 well bore is currently being completed for production. Produced oil will be transported through a new six inch flow line to the Costayaco -1 truck loading facility, where it will be mixed with crude oil from Costayaco-1 for trucking to Uchupayaco and the existing pipeline network.
DST-1 (8,494 - 8,498 foot interval; 4 feet of perforations) tested the Lower Caballos reservoir. No flow was obtained. Additional perforations were added in DST-1A (8,490 - 8,498 foot interval; 8 feet of perforations) and 26 BOPD of 17.4 API gravity oil with 40% water cut was obtained by swabbing.
DST-2 (8,330 - 8,342 foot interval; 12 feet of perforations) tested the Upper Caballos reservoir. Swabbing produced 25 BOPD of 29.1 API oil with 8% water cut.
DST-3 (8,330 - 8,474 foot interval; 88 feet of perforations) tested the Upper and the primary Middle Caballos reservoirs combined. Initial swabbing was followed by production of a maximum of 2,376 BOPD of 30.7 API oil through a 122/64 inch choke by stabilized natural flow. Only a trace of water (0.3%) was noted.
DST-4 (8,200 - 8,236 foot interval; 31 feet of perforations) tested the primary Villeta T Formation reservoir. Initial swabbing was followed by production of a maximum of 4,208 BOPD of 30.3 API oil through a 192/64 inch choke by stabilized natural flow. Only a trace of water (0.3%) was noted.
The Costayaco-1 discovery well is continuing to produce approximately 3,500 BOPD gross with only a trace of water (0.3%) from the Caballos and Villeta T sandstone reservoirs.
Costayaco-3, the third well in the Costayaco Field, reached TD at 8,620 feet on February 20, and is currently logging.
Gran Tierra Energy holds a 50% working interest and is the Operator of the Costayaco Field and the Chaza Block. Solana Resources Limited holds the remaining 50% working interest.
Separately, Gran Tierra Energy is the operator of a total of seven independent license areas in the Putumayo Basin, and is the largest private license holder in the basin.
Dana Coffield, President and CEO of Gran Tierra Energy stated "The outstanding production rates by natural flow established in Costayaco-2, without the assistance of supplementary pumping, confirms the superior reservoir continuity and production capacity found in the original discovery well can be replicated in the Costayaco Field. Planning and permitting for additional drilling in the Costayaco field is continuing, and results from the new drilling are being integrated with the recently acquired seventy square kilometer 3-D seismic program to optimize the development of this field through the balance of 2008 and continuing into 2009."
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. is an international oil and gas exploration and production company, headquartered in Calgary, Canada, incorporated in the United States of America, trading on the OTC Bulletin Board and on the Toronto Stock Exchange, and operating in South America. Gran Tierra Energy holds interests in producing and prospective properties in Argentina, Colombia and Peru. The company's 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 of testing and drilling operations, transportation of crude oil, acquisition of seismic data, and the construction of the pipeline, the use to which seismic data will be put, the ability of Gran Tierra Energy to plan a full field development, including additional drilling, facilities and pipeline to handle new production as appropriate through 2008, and the expectation as to sources of funding, 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 or pipeline or other transportation infrastructure 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, transportation infrastructure development 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 this 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