Oil and Gas Shows Encountered; Preparations for Testing Program Initiated
CALGARY, Alberta, June 27, 2008, Gran Tierra Energy Inc. (AMEX: GTE; TSX: GTE), a company focused on oil exploration and production in South America, today announced that it had successfully drilled the Popa-2 exploration well in the Rio Magdalena Block in central Colombia, and was preparing to initiate well testing operations.
Gran Tierra Energy initiated drilling of the Popa-2 exploration well in the Rio Magdalena Block in the Middle Magdalena Basin, on May 8, 2008, and reached total measured depth of 8,646 feet in basement on June 21, 2008. Electric logs have been run and preparations are being made to run a 7 inch liner into the wellbore and then initiate drill stem testing operations. Gran Tierra Energy expects testing operations to take approximately two weeks and to be completed by mid-July.
Gran Tierra Energy encountered oil and gas shows during drilling in sandstones in the Cretaceous Monserrate Formation, the primary reservoir target in the Popa prospect, and in the underlying basement. Electric log interpretations together with mudlog and the shows encountered during drilling indicate potential net hydrocarbon pay of approximately 80 feet has been penetrated by the wellbore in the Monserrate Formation.
Popa-2 was drilled 2,035 meters from a non-commercial oil discovery made by Gran Tierra Energy in 2006 at Popa-1, which tested approximately 160 barrels of oil per day. Gran Tierra Energy acquired a new 89 kilometer 2-D seismic program after the initial discovery, and used it to pick the location of Popa-2.
Gran Tierra Energy, with a 100% working interest, is the operator of the 144,670 acre Rio Magdalena Block. Under the terms of a recently completed farm-in agreement, Omega Energy Colombia will earn a 60% share of the company's interest by paying 100% of the costs associated with drilling, testing and completing the Popa-2 well. In the event of a commercial discovery, Ecopetrol S.A. has a right to back in for a 30% working interest, to be split proportionally between Gran Tierra Energy and Omega Energy Colombia.
Commenting on progress, Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy Inc., stated, Preliminary results from Popa-2 are very exciting, building on the knowledge acquired from the drilling of Popa-1 and the new 2-D seismic data that we have acquired since then. Testing of Popa-2 will determine the potential of this prospect and, if successful, will confirm a new exploration play on our lands in Colombia.
About Gran Tierra Energy Inc.:
Gran Tierra Energy Inc. is an international oil and gas exploration and production company operating in South America, headquartered in Calgary, Canada, incorporated in the United States, and trading on the American Stock Exchange (GTE) and the Toronto Stock Exchange (GTE). The company holds interests in producing and prospective properties in Argentina, Colombia and Peru. The company has a strategy that focuses on growing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a base for future growth. 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 news release regarding Gran Tierra Energy's plans and expectations for testing Popa-2 and results of these testing operations are forward looking information, forward looking statements or financial outlooks (collectively, "forward-looking statements") under the meaning of applicable securities laws, including Canadian Securities Administrators National Instrument 51-102 Continuous Disclosure Obligations and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements. Although, Gran Tierra Energy believes that the assumptions underlying, and expectations reflected in, these forward-looking statements are reasonable, it can give no assurance that these assumptions and expectations will prove to be correct. Important factors that could cause the results or outcomes discussed herein to differ materially from those indicated by these forward-looking statements include, among other things: unexpected problems due to technical difficulties, operational difficulties, guerilla activity, and weather conditions. Further information on potential factors that could affect Gran Tierra Energy are included in risks detailed from time to time in Gran Tierra Energy's Securities and Exchange Commission filings, including, without limitation, under the caption Item 1A Risk Factors in Part II of Gran Tierra Energy's Quarterly Report on Form 10-Q for the period ended March 31, 2008, filed with the Securities and Exchange Commission on May 12, 2008. These filings are available on a Web site maintained by the Securities and Exchange Commission at http://www.sec.gov. The forward-looking statements contained herein are made as at the date of this press release. Subject to its obligations under applicable law, Gran Tierra Energy does not undertake an obligation to update forward-looking or other statements in this release. Gran Tierra Energy's forward-looking statements are expressly qualified in their entirety by this cautionary statement.