🕐23.09.08 - 16:48 Uhr
GRAN TIERRA ENERGY ANNOUNCES CONCEPTUAL DEVELOPMENT PLAN FOR COSTAYACO FIELD, COLOMBIA
GRAN TIERRA ENERGY ANNOUNCES CONCEPTUAL DEVELOPMENT PLAN FOR COSTAYACO
FIELD, COLOMBIA
Base Case of 35,000 BOPD Under Revision Due to New Oil Reserves Encountered
by Costayaco-5
CALGARY, Alberta, September 23, 2008 - Gran Tierra Energy Inc.
(AMEX: GTE;
TSX: GTE), a company focused on oil exploration and production in South
America, today provided details on its conceptual development plan for the
Costayaco field in Colombia.
Test results from the recently drilled
Costayaco-5 delineation well suggest new oil reserves encountered by the
well will require increasing the scale of the full field development, in
addition to the reservoir productivity confirmed by the recently tested
development well, Costayaco-4.
The Costayaco field is located in the Chaza Block in the Putumayo Basin,
where Gran Tierra Energy has a 50% working interest and is the operator,
with Solana Resources holding the remaining 50% working interest.
Gran
Tierra Energy announced on July 29, 2008 that the two companies have entered
into a definitive agreement providing for the business combination of Gran
Tierra Energy Inc.
and Solana Resources Limited.
The proposed transaction is
subject to regulatory, stock exchange, court and shareholder approvals.
Costayaco-4 Testing
Costayaco-4 is a new deviated well drilled from the Costayaco-2 surface
location near the crest of the Costayaco field to a total measured depth of
8,884 feet (true vertical depth of 8,616 feet).
The bottom-hole location is
approximately 1,775 feet northeast of the surface location.
Approximately
77 feet of core was cut in the Caballos and Villeta T reservoirs during
drilling for reservoir engineering studies.
Gran Tierra Energy conducted a combination of drill stem testing, flow
testing and production testing in the two major reservoir sequences, the
Caballos Formation and the Villeta T Sandstone.
The Caballos Formation was
perforated in the intervals 8,610 to 8,652 feet, 8,660 to 8,668 feet, 8,675
to 8,686 feet and 8,694 to 8,728 feet.
The company obtained a stabilized
gross production rate of 3,042 barrels of oil per day (BOPD) of 29.9 degree
API gravity oil with 0.8% watercut with a jet pump.
The Villeta T Sandstone
was perforated in the intervals 8,463 to 8,472 feet and 8,475 to 8,514 feet.
The company obtained a stabilized gross production rate from natural flow of
1,401 BOPD of 30.1 degree API gravity oil with 1.8% watercut through a 92/64
inch choke.
Costayaco-5 Testing
Costayaco-5 is a new vertical delineation well drilled to a total measured
depth of 8,703 feet on the west flank of the Costayaco field approximately
3,450 feet northwest of Costayaco-1.
Gran Tierra Energy conducted a
combination of drill stem testing and production testing on the two major
reservoir sequences, the Caballos Formation and the Villeta T Sandstone.
The Middle Caballos Formation was perforated in the intervals 8,519 to 8,544
feet and produced 535 barrels of water per day (BWPD).
The Upper Caballos
Formation was perforated in the intervals 8,480 to 8,498 feet and 8,502 to
8,504 feet, and produced 20 BOPD with 26.9 degree API gravity and 5%
watercut.
The Lower Villeta T reservoir was perforated in the intervals 8,376 to 8,381
feet, 8,384 to 8,388 feet and 8,390 to 8,396 feet.
The zones produced 600
BWPD with a trace of oil.
The Upper Villeta T reservoir was perforated in
the intervals 8,336 to 8,348 feet and 8,350 to 8,360 feet.
These zones
produced a gross 1,152 BOPD with 29.5 degree API gravity and 1.2% water cut
with a jet pump.
These results are the first identification of the water
leg in the Villeta T reservoirs in the Costayaco Field.
The depth of the
oil-water contact is poorly defined but is interpreted to be located at
approximately 8,375 feet (-7,090 feet sub-sea).
The recently reported Costayaco mid-year reserve update did not incorporate
potential oil at the Costayaco-5 location as this well was drilled outside
the control provided by previously drilled Costayaco wells.
In addition,
the reservoirs were encountered approximately 80 feet shallower than
prognosis, suggesting the west flank of the Costayaco field is shallower and
encompasses a broader area with more reserve potential than previously
mapped.
Costayaco Field Conceptual Development Plan
The positive well test results at Costayaco-5 further extends the fields
western boundary and is expected to add proved, probable, and possible
reserves to the Costayaco Field.
The recent mid-year Costayaco reserves
update reported proved, proved plus probable, and proved plus probable plus
possible gross reserves of 20.54 million barrels of oil (MMBO), 34.91 MMBO
and 61.38 MMBO respectively, excluding any new reserve potential associated
with Costayaco-5 results.
The base case conceptual field development prepared prior to drilling of
Costayaco-5 included 50 MMBO of gross reserves for the Costayaco Field with
a plateau production rate of 35,000 BOPD gross beginning in the first
quarter of 2010.
For full field development of this case, approximately
fifteen oil producer and five water injector wells would be required, in
addition to a new pipeline from Uchupayaco to Orito stations and associated
facilities.
With the new additional reserve potential, the option to
increase the plateau rate with additional drilling and infrastructure
upgrades is being evaluated.
Gran Tierra Energy is in the process of updating the Costayaco Development
Plan with the latest data from the Costayaco-5 delineation well.
The
company will submit a revised Costayaco Development Plan, with all data
available at the time, to the National Hydrocarbon Agency for approval in
March 2009.
Additional Drilling
The drilling of Costayaco-6 and Costayaco-7 remain on the 2008 drilling
program, with a continuous delineation and development drilling campaign in
the Costayaco field continuing through 2009.
The details of the 2009
program will be finalized in the fourth quarter of 2008.
Infrastructure
An 8 inch, 10 kilometer pipeline from the Costayaco field to the Uchupayaco
Station on the existing pipeline system was completed on July 29, 2008 and
is currently transporting approximately 9,000 barrels of oil per day.
This
new pipeline has capacity of 25,000 BOPD.
Initial throughput will be
constrained due to facility capacity limitations further downstream in the
existing pipeline system.
Gran Tierra Energy is developing options to
increase production utilizing trucks to by-pass infrastructure constraints
and expects gross Costayaco field production to rise to approximately 15,000
BOPD by year-end 2008.
Additional production growth in 2009 will occur as a
result of increased trucking utilization.
In addition, production capacity
in new development wells will grow while the new Uchupayaco to Orito
pipeline infrastructure is built.
Commenting on the drilling and testing progress, Dana Coffield, President
and Chief Executive Officer of Gran Tierra Energy Inc., stated, "These are
outstanding results from Costayaco-5.
The successful testing of oil from
this well should add to the total reserve potential of the Costayaco field,
which has already grown significantly in size as delineation drilling has
shown in the first half of 2008.
With new reservoir information and
additional reserve additions being identified, Gran Tierra Energy is making
significant progress in developing a full field development plan and
defining associated infrastructure requirements."
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 or 1-800-916-GTRE (4873).
Cautionary Statement:
Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves.
There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of proved plus
probable plus possible reserves.
The estimate of reserves for individual
properties may not reflect the same confidence level as estimates of
reserves for all properties, due to the effects of aggregation.
Forward Looking Statements:
The statements in this news release regarding Gran Tierra Energys plans and
expectations for reserves, production, drilling, testing, infrastructure and
submission of a revised Costayaco Development Plan to the National
Hydrocarbon Agency, including the timing of commencement and completion of
these events, 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: Gran Tierra
Energys operations are located in South America, and unexpected problems
can arise due to guerilla activity, technical difficulties and operational
difficulties which impact the production, transportation or sale of oil and
gas; and unexpected problems due to technical difficulties, operational
difficulties, 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 Energys Securities and Exchange Commission
filings, including, without limitation, under the caption "Item 1A - Risk
Factors" in Part II of Gran Tierra Energys Quarterly Report on Form 10-Q
for the period ended June 30, 2008, filed with the Securities and Exchange
Commission on August 11, 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 Energys forward-looking
statements are expressly qualified in their entirety by this cautionary
statement.
Additional Information
Shareholders are urged to read the joint proxy statement/management
information circular regarding the proposed transaction and the registration
statement filed on Form S-3 by Gran Tierra when they become available,
because they will contain important information.
Shareholders will be able
to obtain a free copy of the joint proxy statement/management information
circular, as well as other filings including the registration statement on
Form S-3 containing information about Gran Tierra, without charge, at the
Securities and Exchange Commissions internet site www.sec.gov.
Copies of
the joint proxy statement and the filings with the Securities and Exchange
Commission that will be incorporated by reference in the joint proxy
statement and registration statement on Form S-3 can also be obtained,
without charge, by directing a request to Gran Tierra at 1-800-916-4873.
The respective directors and executive officers of Gran Tierra and Solana
and other persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction.
Information regarding Gran
Tierras directors and executive officers is available in the 2007 Annual
Report on Form 10-K/A filed with the Securities and Exchange Commission by
Gran Tierra on May 12, 2008, and information regarding Solanas directors
and executive officers will be included in the joint proxy
statement/management information circular.
Other information regarding the
participants in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained in
the joint proxy statement and other relevant materials to be filed with the
Securities and Exchange Commission when they become available.
No regulatory authority has approved or disapproved the content of this
release.
Neither the TSX Venture Exchange nor the Toronto Stock Exchange
accepts responsibility for the adequacy or accuracy of this release.
Cameron Associates
1370 Avenue of the Americas, Ste 902
New York, NY 10019
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