Initial logs indicate oil encountered at the Moqueta-12 and Mayalito-1 wells in Colombia; First Shipment of Gran Tierra Energy oil sold through the Port of Esmeraldas, Ecuador
Gran Tierra Energy Inc. ("Gran Tierra Energy") (NYSE MKT: GTE) (TSX: GTE), a company focused on oil exploration and production in South America, today provided updates for its operations in Colombia.
"Gran Tierra Energy continues its successful 2013 drilling program with encouraging initial data from the Moqueta-12 and Mayalito-1 wells in the Putumayo and Llanos Basins in Colombia. Moqueta-12, based on log interpretations, does not appear to have encountered any water, suggesting we have yet to define the boundaries of the Moqueta field. Similarly, Mayalito-1 log interpretations indicate oil has been found in the Mirador formation, further extending the known lateral extent of the oil accumulation in the Ramiriqui discovery," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. "In addition, Gran Tierra Energy's 2013 exploration drilling has increased significantly with the Corunta-1, Miraflor West-1 and Zapotero-1 exploration wells initiating drilling in the Putumayo Basin," concluded Coffield.
Colombia
Chaza Block, Putumayo Basin (Gran Tierra Energy 100% Working Interest ("WI") and Operator)
Initial drilling and logging results have been obtained from the Moqueta-12 delineation well. Oil and gas shows encountered during drilling and log interpretations from data acquired after drilling, indicate the presence of oil-bearing reservoir sandstones in the Villeta T Sandstone beginning at 5,545 feet measured depth ("MD") or 4,825 feet true vertical depth ("TVD") with an approximate potential net oil pay thickness of 141 feet MD. The underlying Caballos formation was encountered at 5,818 feet MD or 5,066 feet TVD with approximately 201 feet MD of potential net pay interpreted from the well logs. Another planned objective for the Moqueta-12 well was to target a structure south of the main Moqueta field. The Moqueta-12 well was unable to intersect this sub-block due to steeper bedding planes than anticipated. This objective will be tested at a later date once the global development permit is received. The Moqueta-12 bottom hole location is approximately 1,300 feet west of Moqueta-11 and the lowest interpreted oil pay is approximately 150 feet lower than the lowest known oil encountered at Moqueta-11.
Testing is underway to confirm the fluid content and productivity of the encountered zones and is expected to be completed in December. If successful, this well is expected to add additional reserves to the resource base of this growing field.
The Corunta-1 well was spud on November 5, 2013 and is drilling in a northeast direction from the Costayaco-17 well pad targeting a downthrown fault block west of the Moqueta field.
The Zapotero-1 well was spud on December 1, 2013 and is targeting the eastern portion of the Moqueta field.
Guayuyaco Block, Putumayo Basin (Gran Tierra Energy 70% WI and Operator, Ecopetrol 30% WI)
The Miraflor West-1 exploration well on the Guayuyaco Block, targeting the same Cretaceous sandstone reservoirs encountered at the Costayaco and Moqueta oil fields, was spud on November 23, 2013 and is expected to reach TD in December.
Llanos-22 Block, Llanos Basin (Gran Tierra Energy 45% WI, CEPCOLSA 55% WI and Operator)
The Mayalito-1 oil exploration well on the Llanos-22 Block, located in the Andean foothills trend of the Llanos Basin, has reached total depth at 18,540 feet MD or 18,051 feet TVD. Oil and gas shows encountered during drilling and log interpretations indicate the presence of an oil-bearing sandstone reservoir in the Mirador formation. The Mirador formation was encountered at 18,139 feet MD or 17,650 feet TVD with a potential net oil column thickness of 29 feet.
Testing is underway to confirm the fluid content and productivity of the encountered zones and is expected to be completed in December.
Production Update
Production, net after royalties and before changes in inventory for the months of October and November averaged approximately 21,500 barrels of oil equivalent per day ("BOEPD"). Gran Tierra Energy has recently completed its first Colombian crude sale of approximately 216,000 barrels of oil through the port of Esmeraldas, Ecuador. Year-to-date production, net after royalties and before changes in inventory, is approximately 22,200 BOEPD, above the mid-point of our projections of a range between 21,500 BOEPD and 22,500 BOEPD for 2013.
About Gran Tierra Energy Inc.
Gran Tierra Energy is an international oil and gas exploration and production company, headquartered in Calgary, Canada, incorporated in the United States, trading on the NYSE MKT Exchange (GTE) and the Toronto Stock Exchange (GTE), and operating in South America. Gran Tierra Energy holds interests in producing and prospective properties in Colombia, Argentina, Peru, and Brazil. Gran Tierra Energy has a strategy that focuses on establishing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a base for future growth.
Forward Looking Statements and Advisories
This news release contains certain forward-looking information and forward-looking statements (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. The use of the words "expected" and similar terms identify forward-looking statements. In particular, but without limiting the foregoing, this news release contains forward-looking statements regarding Gran Tierra Energy's expected testing and drilling operations in Colombia including, without limitation, anticipated completion timelines, and the potential for the addition of reserves in the Moqueta field.
The forward-looking statements contained in this news release reflect several material factors and expectations and assumptions of Gran Tierra Energy including, without limitation: assumptions relating to log evaluations; that Gran Tierra Energy will continue to conduct its operations in a manner consistent with past operations; the accuracy of testing and production results and seismic data; the effects of certain drilling techniques; and the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions. Gran Tierra Energy believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct.
The forward-looking statements contained in this news release 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, including, among others: unexpected technical difficulties and operational difficulties may occur, or the obtaining of environmental permits may be delayed, which could impact or delay the commencement of drilling, production or testing; geographic, political and weather conditions can impede testing, which could impact or delay testing; and the risk that current global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra Energy currently predicts, which could cause Gran Tierra Energy to change its current drilling, production and testing plans. Although Gran Tierra Energy's plans for its ongoing exploration and development and the funding thereof are based upon the current expectations of the management of Gran Tierra Energy, there may be circumstances where, for unforeseen reasons, a change in such plans may be necessary as may be determined at the discretion of Gran Tierra Energy. Should any one of a number of issues arise, Gran Tierra Energy may find it necessary to alter its current business strategy. 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 "Risk Factors" in Gran Tierra Energy's Quarterly Report on Form 10-Q filed November 12, 2013. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this press release are made as of the date of this press release and Gran Tierra Energy disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.
Barrels of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of oil as compared with natural gas is significantly different from the energy equivalent of six to one, utilizing a BOE conversion ratio of 6 Mcf: 1 bbl would be misleading as an indication of value.
