Last updated on April 16, 2014 at 5:49 EDT

Gran Tierra Energy Announces Fourth Quarter and 2011 Year-End Results

February 27, 2012

Company Reports Record Levels of Proved Reserves, Production Volumes,
and Revenues

CALGARY, Feb. 27, 2012 /PRNewswire/ – Gran Tierra Energy Inc. (“Gran Tierra Energy”) (NYSE Amex: GTE, TSX:
a company focused on oil exploration and production in South America,
today announced financial and operating results for the quarter and
year ended December 31, 2011.  All dollar amounts are in United States
dollars unless otherwise indicated.

Financial and operating highlights for the year include:

        --  In 2011, oil and natural gas production net after royalty
            ("NAR") and inventory adjustments averaged 17,408 barrels of
            oil equivalent per day ("BOEPD"), an increase of 20% over 2010;
        --  Estimated proved oil and natural gas liquids ("NGL") reserves,
            NAR, as at December 31, 2011, were 30.9 million barrels
            ("MMbbl"), a 31% increase from Gran Tierra Energy's estimated
            proved reserves as at December 31, 2010;
        --  Estimated proved gas reserves, NAR, as at December 31, 2011,
            were 18.3 billion cubic feet ("Bcf") compared with 1.2 Bcf as
            at December 31, 2010;
        --  Revenue and other income increased by 60% to $597.4 million in
            2011 compared with $374.5 million in 2010;
        --  Net income grew by 241% from the prior year to $126.9 million,
            representing basic net income per share of $0.46 and diluted
            net income per share of $0.45. This compares with net income of
            $37.2 million, or $0.15 per share basic and $0.14 per share
            diluted, in 2010;
        --  Funds flow from operations increased 57% to $319.0 million in
            2011 from $203.1 million in 2010;
        --  Cash and cash equivalents was $351.7 million as at December 31,
            2011 compared to $355.4 million as at December 31, 2010;
        --  Completed the acquisition of Petrolifera Petroleum Limited
            ("Petrolifera") on March 18, 2011;
        --  Commenced production from the Moqueta field in Colombia in June
            of 2011 and successfully drilled three additional appraisal
        --  Discovered oil on the Rinconada Norte Block in Argentina with
            the RN x-1004 exploration well and made a second oil discovery
            on the Garibay Block in Colombia with the Melero-1 exploration
        --  Stabilized production from the Puesto Morales Block in
            Argentina and drilled two new development wells on the Puesto
            Morales Este Block;
        --  Announced two farm-in agreements with Statoil do Brasil Ltda.
            ("Statoil"). Statoil is a partner in a joint venture with
            PetróleoBrasileiro S.A. in the two blocks in Brazil's deepwater
            offshore Camamu-Almada Basin; and
        --  Expanded Gran Tierra Energy's partnership with Compania
            Espanola de Petroleos, S.A.U. ("CEPSA") with two farm-in
            agreements, adding new exploration acreage in the Llanos Basin.

“2011 was another year of success strategically, operationally and
financially.  Strategically, we added new exploration acreage and
drilling prospects to the portfolio in all four countries of
operations, and established partnerships with strategic players in the
region.  Operationally, we attained record levels of production and
reserves through a combination of superior reservoir management of
existing reserves, appraisal success of recent exploration discoveries,
and the acquisition of Petrolifera.  Financially, revenues, net income
and funds flow from operations reached record levels due to record
production levels and robust oil markets,” said Dana Coffield,
President and CEO of Gran Tierra Energy. “Although we had a number of
exploration disappointments last year, this year is starting with
positive indications at Ramiriqui-1 in Colombia, and we have several
other very exciting exploration wells to be drilled this year in Peru
and Brazil.  As before, our balance sheet remains strong, with our 2012
capital program expected to be funded out of cash flow and cash at
current oil prices, as we diligently execute on the continued growth of
Gran Tierra Energy.”


                                 Three Months Ended December 31, 2011                               Three Months Ended December 31, 2010

    (Barrels of
    Equivalent)      Colombia     Argentina           Brazil         Total         Colombia          Argentina             Brazil         Total

    Production      1,938,687       303,374           22,620     2,264,681        1,877,879             86,153                -       1,964,032

                    (513,372)      (35,690)          (2,822)     (551,884)        (505,372)            (9,922)                -       (515,294)

    Adjustment        (2,390)       (4,298)          (2,177)       (8,865)           17,180              (514)                -          16,666

    Net After
    (NAR)           1,422,925       263,386           17,621     1,703,932        1,389,687             75,717                -       1,465,404

    Barrels of
    Per Day
    (NAR)              15,467         2,863              192        18,521           15,105                823                -          15,928

                                       Year Ended December 31, 2011                                       Year Ended December 31, 2010

    (Barrels of
    Equivalent)      Colombia     Argentina           Brazil         Total         Colombia          Argentina             Brazil         Total

    Production      7,470,409     1,040,349           53,830     8,564,588        6,784,261            324,674                -       7,108,935

                  (2,066,860)     (119,545)          (6,657)   (2,193,062)      (1,799,947)           (37,727)                -     (1,837,674)

    Adjustment       (10,062)       (3,446)          (4,115)      (17,623)            4,992            (2,903)                -           2,089

    Net After
    (NAR)           5,393,487       917,358           43,058     6,353,903        4,989,306            284,044                -       5,273,350

    Barrels of
    Per Day
    (NAR)              14,777         2,513              118        17,408           13,670                778                 -         14,448


                  Three Months Ended December 31,               Year Ended December 31,

                                                 %                                       %
                    2011        2010        Change          2011        2010        Change

    of U.S.

    and Other
    Income     $ 161,735   $ 112,667            44     $ 597,407   $ 374,460            60

    Net income
    (loss)     $  32,552   $  13,118           148     $ 126,917   $  37,172           241

    per Share)                                                                            

    Net Income
    (Loss) Per
    Share -
    Basic      $    0.12   $    0.05           140     $    0.46   $    0.15           207

    Net Income
    (Loss) Per
    Share -
    Diluted    $    0.11   $    0.04           175     $    0.45   $    0.14           221

    Funds flow
    Operations -
    Measure                     Three Months Ended December 31,                     Year Ended December 31,

                                      2011                     2010                 2011                   2010

    (Thousands of
    U.S. Dollars)                                                                                              

    Net income
                    $               32,552                   13,118     $        126,917                 37,172

    to reconcile
    net income to
    funds flow

    accretion and
    impairment                      71,061                   56,335              231,235                163,573

    taxes                         (13,734)                    7,936             (29,222)               (20,090)

    compensation                     3,384                    2,601               12,767                  8,025

    gain on
    instruments                        -                        -                (1,354)                   (44)

    (gain) loss                    (1,831)                 (12,350)              (1,695)                 14,786

    of asset
    obligation                        (36)                     (23)                (345)                  (286)

    taxes payable
    long-term                        (999)                      -                  2,442                    -  

    Gain on
    acquisition                        -                        -               (21,699)                    -  

    Funds flows
    operations      $               90,397     $             67,617     $        319,046     $          203,136

    (1)      Funds flow from operations is a non-GAAP measure which does
             not have any standardized meaning prescribed under generally
             accepted accounting principles in the United States of America
             ("GAAP"). Management uses this financial measure to analyze
             operating performance and the income generated by the
             principal business activities prior to the consideration of
             how non-cash items affect that income, and believes that this
             financial measure is also useful supplemental information for
             investors to analyze operating performance and financial
             results. Investors should be cautioned that this measure
             should not be construed as an alternative to net income or
             other measures of financial performance as determined in
             accordance with GAAP. The method of calculating this measure
             may differ from other companies and, accordingly, it may not
             be comparable to similar measures used by other companies.
             Funds flow from operations, as presented, is net income
             adjusted for depletion, depreciation, accretion and impairment
             ("DD&A"), deferred taxes, stock-based compensation, gain on
             financial instruments, unrealized foreign exchange (gain)
             loss, settlement of asset retirement obligation, equity tax
             and gain on acquisition.

Fiscal 2011 Highlights

Net income was $126.9 million, or $0.46 per share basic and $0.45 per
share diluted, in 2011 compared with $37.2 million, or $0.15 per share
basic and $0.14 per share diluted, in 2010. Increased oil and natural
gas sales due to increased production and higher realized oil prices, a
$21.7 million gain on the Petrolifera acquisition and the absence of
foreign exchange losses were partially offset by a $42.0 million
impairment loss in the Peru cost center, a $25.7 million impairment
loss in the Argentina cost center, a Colombian equity tax of $8.3
million and increased operating, depreciation, depletion, and accretion
and general and administrative (“G&A“) expenses.

Oil and NGL production, NAR and inventory changes, in 2011 increased to
6.1 MMbbl, a 17% increase compared with 5.2 MMbbl in 2010. The increase
was due to improved production from the Moqueta, Jilguero and Juanambu
fields, production from Petrolifera and the reduced impact of pipeline
interruptions. Petrolifera’s oil and NGL production for the period
since the acquisition date, NAR, was 0.5 MMbbl.

Average realized oil prices in 2011 increased by 36% to $96.60 per
barrel from $71.19 per barrel in 2010 reflecting higher West Texas
Intermediate (“WTI“) oil prices and the premium to WTI received in Colombia during 2011.
The average WTI oil price for 2011 was $95.06 as compared to $79.43 in

Increased production and higher oil prices resulted in a 60% increase in
revenue and other income to $597.4 million for 2011 compared with 2010.

Operating expenses for 2011 amounted to $86.5 million, or $13.61 per
barrel of oil equivalent (“BOE), compared with $59.4 million or $11.27 per BOE, in 2010. The increase
in operating expenses was primarily due to an increase of $18.3 million
in operating costs in Argentina ($15.9 million related to properties
acquired from Petrolifera) and increases of $7.7 million in Colombia
and $1.0 million in Brazil as a result of expanded operations.

DD&A expenses for 2011 increased to $231.2 million compared with $163.6
million in 2010. DD&A expenses for 2011 includes a $42.0 million
ceiling test impairment for the Peru cost center relating to seismic
and drilling costs from two blocks which were relinquished, a $25.7
million impairment loss in the Argentina cost center related to an
increase in estimated future operating and capital costs to produce the
remaining Argentine proved reserves and a decrease in reserve volumes
and $18.4 million of depletion, depreciation and accretion related to
properties acquired from Petrolifera. DD&A expenses in 2010 included a
$23.6 million ceiling test impairment in the Argentina cost center, of
which $17.9 million related to the abandonment of the GTE.St.VMor-2001
sidetrack operations. On a BOE basis, DD&A in 2011 was $36.39 compared
with $31.02 for 2010, representing a 17% increase resulting from the
same factors.

G&A expenses of $60.4 million for 2011 were 50% higher than in 2010 due
to increased employee related costs reflecting the expanded operations
in all business segments, $1.2 million of expenses associated with the
acquisition of Petrolifera and the inclusion of Petrolifera G&A
expenses of $7.3 million (including interest on bank debt of $1.6
million, which was retired in August 2011). G&A expenses per BOE
increased 25% to $9.50 per BOE compared with $7.63 per BOE for 2010 due
to the same factors.

Equity tax represents a Colombian tax of 6% on a legislated measure
which is based on the Colombian segment’s balance sheet equity at
January 1, 2011. The equity tax is assessed every four years.

The gain on acquisition in 2011 relates to the acquisition of
Petrolifera. This gain reflects the impact on Petrolifera’s
pre-acquisition market value of its lack of liquidity and capital
resources required to maintain production and reserves and further
develop and explore its inventory of prospects. 

There were essentially no foreign exchange gains or losses as a result
of an unrealized non-cash foreign exchange gain of $1.7 million being
offset by realized foreign exchange losses. The non-cash foreign
exchange gain primarily relates to the translation of deferred tax
liabilities. This compares to a foreign exchange loss of $16.8 million
recorded in 2010, of which $14.8 million was an unrealized non-cash
foreign exchange loss. Under GAAP, deferred taxes are considered a
monetary liability and require translation from local currency to U.S.
dollar functional currency at each balance sheet date. This translation
results in the recognition of unrealized exchange losses or gains. The
Colombian Peso devalued by 1.5% against the US dollar in the year ended
December 31, 2011 resulting in an unrealized foreign exchange gain
which was offset by realized foreign exchange losses. In 2010, the
Colombian Peso strengthened against the US dollar by 6%.

Income tax expense for 2011 was $107.3 million compared with $57.2
million in 2010. This represents an increase of 103%, primarily as a
result of higher net income in Colombia. For the year ended December
31, 2011, the effective income tax rate was 46% compared with 61% in
2010 due to a decrease in non-taxable foreign currency translation
adjustments and the non-taxable gain on acquisition in 2011, partially
offset by an increase in the valuation allowance on deferred tax assets
mainly in Peru. The variance in the effective tax rates compared with
the 35% U.S. statutory rate was attributable to the same factors and
other permanent differences.

Balance Sheet Highlights

Cash and cash equivalents was $351.7 million as at December 31, 2011
compared to $355.4 million as at December 31, 2010. The change in cash
and cash equivalents during 2011 was primarily the result of $333.2
million of capital expenditures offset by funds flow from operations of
$319.0 million and a decrease in non-cash working capital of $37.8
million.  Gran Tierra Energy is debt free.

Reserve and Production Highlights

Estimated proved oil and NGL reserves, NAR, as at December 31, 2011,
were 30.9 MMbbl, a 31% increase from the estimated proved reserves as
at December 31, 2010. The increase was due to the acquisition of
Petrolifera which had reserves in Argentina and Colombia, positive
technical revisions to Costayaco reserves (based on reservoir
performance), the drilling of additional appraisal wells in the Moqueta
field and the acquisition of a 70% working interest in Block 155 in
Brazil which more than offset 2011 oil production of approximately 6.1
MMbbl NAR. Estimated probable and possible oil and NGL reserves, NAR,
as at December 31, 2011 were 10.5 MMbbl and 17.6 MMbbl, respectively. 

Estimated proved gas reserves, NAR, as at December 31, 2011, were 18.3
Bcf compared with 1.2 Bcf at December 31, 2010. The increase was due to
the acquisition of Petrolifera. At December 31, 2011, 75% of proved gas
reserves were in the Sierra Nevada Block and 19% were in the Puesto
Morales Block, both of which were acquired in the Petrolifera
acquisition. Estimated probable and possible gas reserves, NAR, as at
December 31, 2011 were 25.7 Bcf and 116.5 Bcf, respectively

As per Canadian National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101“) and the reserves definitions in the Canadian Oil and Gas Evaluation
Handbook (“COGEH”), oil reserves NAR to Gran Tierra Energy as at December 31, 2011 are
approximately 31.0 MMbbl proved, 10.6 MMbbl probable, and 18.2 MMbbl
possible, and 59.8 MMbbl total 3P reserves. This compares to reserves
as at December 31, 2010 of 23.3 MMbbl proved, 7.3 MMbbl probable and
16.2 MMbbl possible, and total 3P reserves of approximately 46.8 MMbbl.

Similarly, as per NI 51-101 and COGEH, gas reserves NAR to Gran Tierra
Energy as at December 31, 2011 are approximately 18.3 Bcf proved, 25.8
Bcf probable, and 116.5 Bcf possible, and 160.6 Bcf total 3P reserves.
This compares to reserves as at December 31, 2010 of 1.2 Bcf proved,
0.1 Bcf probable and 42.1 Bcf possible, and total 3P reserves of
approximately 43.4 Bcf.

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 (3P) reserves.

Annual production for 2011 averaged approximately 23,400 company
interest BOEPD before royalties, or 17,408 BOEPD NAR, an increase of
approximately 21% versus 14,440 BOEPD NAR in 2010.  Production in the
fourth quarter of 2011 averaged approximately 18,600 BOEPD NAR.

BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 thousand cubic feet to one barrel is based on an
energy equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.

Fourth Quarter 2011 Operational Highlights


Gran Tierra Energy announced that it had entered into a farm-in
agreement with CEPSA Colombia S.A., a wholly-owned subsidiary of CEPSA,
whereby Gran Tierra Energy will earn a 45% working interest (“WI“) in Concession Contract Llanos-22 (CEPSA will retain a 55% WI and
Operatorship) and CEPSA will farm-in for a 30% WI on the Piedemonte
Norte Block (Gran Tierra Energy will retain a 70% WI and
Operatorship).  The completion of the two transactions is subject to
obtaining regulatory approval from Colombia’s Agencia Nacional de
Hidrocarburos (“ANH“) and other customary conditions of closing.

Gran Tierra Energy announced the Rumiyaco-1 and Brillante SE-2 wells
were plugged and abandoned. New 3-D seismic data over the Brillante
field indicates the original fault block with the discovery well is
larger than originally interpreted from old 2-D seismic data; future
drilling will focus on proving additional reserves in that area.


Drilling of the 1-GTE-01-BA vertical pilot oil exploration well was
completed on November 24, 2011.  The well is located in Block REC-T-142
in the prolific onshore Recôncavo Basin.  Core samples were acquired
from the prospective reservoir section of the pilot well and Gran
Tierra Energy plans to drill a horizontal sidetrack in mid-2012 to test
the productivity of the light oil sandstone reservoir targets.

Drilling of the 1-GTE-02-BA oil exploration well began on November 23,
2011.  This well is located in Block REC-T-129 in the Recôncavo Basin. 
The well reached total depth of approximately 6,412 feet measured depth
(“MD“) and is suspended while plans are finalized for drilling a horizontal
leg in mid-2012.

Drilling of the 3-GTE-03-BA delineation well began on December 1, 2011
to further develop the existing discovery on Block REC-T-155 in the
Recôncavo Basin.  The well is situated 1.2 kilometers north of the
1-ALV-2-BA discovery well.  Oil bearing reservoir intervals in the
Sergi and Agua Grande formations were encountered and the company is
moving forward with plans to complete and place the well on production.


A drilling location was identified for the first exploration well on
Block 95, with civil construction initiated in the third quarter of
2011.  Drilling is expected to be undertaken in the second half of 2012,
pending regulatory approvals.  An oil field has already been discovered
on Block 95, with the discovery well drilled in 1974 flowing 807 BOPD
naturally without pumps.  The new exploration well is expected to
further delineate this field and explore deeper reservoir horizons not
penetrated by the discovery well.

Permitting for drilling on Block 107 was advanced. A 390 km infill 2D
seismic program is planned for the second half of 2012 on Block 107 in
the Ucayali Basin in preparation for oil exploration drilling in 2013.
The prospects on Block 107 are on trend with the world class
gas-condensate discoveries that have been made in the Camisea region in
southern Peru.  Both oil and gas seeps are present on Block 107. 
Geologic studies are ongoing on the adjacent Block 133 in preparation
for seismic acquisition in 2013.

Gran Tierra Energy is evaluating the prospectivity of Blocks 123 and 129
based on recently acquired 2D seismic data together with its joint
venture partners ConocoPhillips (Operator) and Talisman.  An infill
seismic program consisting of 567 km of 2D seismic is planned to be
acquired in the first half of 2012.


Gran Tierra Energy has completed drilling PME.a-1003 and PMEa-1004, the
first of four new development wells planned in the Puesto Morales field
of the Neuquen Basin, with the purpose of improving recovery and
growing production from this mature oil field. Since taking over
operatorship in March, the production decline of the last several years
has been halted with a work-over program on existing wellbores.

Operational Events Subsequent to Year-End 2011

In Colombia, drilling continues on the Ramiriqui-1 exploration well in
the Llanos-22 Block, located in the Andean foothills trend of the
Llanos Basin.  The Mirador formation is interpreted as oil bearing with
up to 130 feet MD gross thickness based on cuttings and logging while
drilling. Casing has been set and drilling is continuing in order to
evaluate deeper reservoir potential. Testing is planned after the
completion of drilling.

Also in Colombia, the Pacayaco-1ST1 exploration well reached total true
vertical depth of 5,343 feet. Approximately ten feet of oil column in
the T-Sandstone was interpreted from cuttings and evaluation of
wireline logs. It was determined that the formation did not contain
economic quantities of hydrocarbons so the well was plugged and

In Brazil, drilling of the 3-GTE-04-BA delineation well in Block
REC-T-155 began on January 8, 2012.  The well is situated 0.70
kilometers south-southeast of the 1-ALV-2-BA discovery well.

Also in Brazil, on February 17, 2012, in accordance with the terms of a
farmout agreement, Gran Tierra Energy gave notice to Statoil that Gran
Tierra Energy would not enter into and assume its share of the work
obligations of the second exploration period of Block BM-CAL-10. As a
result, the farmout agreement has terminated and Gran Tierra Energy
will not receive any interest in the block. Pursuant to the farmout
agreement, Gran Tierra Energy is obligated to make payment for a
certain percentage of the costs relating to Block BM-CAL-10, which
relate primarily to the well that was drilled during the term of the
farmout agreement. Gran Tierra Energy expects to make that payment, in
the approximate amount of $26 million, in March 2012.  In the first
quarter of 2012, Gran Tierra Energy received government approval
relating to the farmout agreement for Block BM-CAL-7.

In Peru, on January 17, 2012, PeruPetro signed the assignment documents
for Block 95, officially transferring a 60% WI in the Block to Gran
Tierra Energy.

2012 Work Program and Capital Expenditure Program

Gran Tierra Energy previously announced a $367 million planned capital
program for its exploration and production operations in Colombia,
Brazil, Peru and Argentina in 2012.  The capital spending program
allocates $246 million for drilling, $39 million for facilities,
equipment, pipelines, and $82 million for seismic activities.  The
budget currently contemplates the drilling of 11 wells in Colombia, 13
wells in Argentina, two wells in Brazil and one well in Peru. The
approved 2012 capital spending program also includes funds for 1,154 km
of 2D and 427 km(2) of 3D seismic acquisition programs in Colombia, Peru, Argentina and
Brazil, primarily in preparation for additional exploration and
production drilling operations in 2013 and beyond. The 2012 work
program and budget is expected to be funded primarily from cash flows
from operations, with the balance from cash on hand as necessary, at
current oil prices.

Excluding potential exploration success, production in 2012 is expected
to range between 26,000 to 27,000 BOEPD gross, or 20,000 to 21,000
BOEPD NAR.  Approximately 95% of this production consists of light oil,
with the balance consisting of natural gas.

In early February 2012, a pipeline disruption on the Ecopetrol-operated
OTA pipeline in Colombia resulted in reduced oil sales for a portion of
early February.  Gran Tierra Energy production from January 1, 2012 to
February 21, 2012, has averaged approximately 18,300 BOEPD NAR. 
Production has now resumed to approximately 19,000 BOEPD NAR.

Conference Call Information:

Gran Tierra Energy Inc. will host its fourth quarter and year-end 2011
results conference call on Tuesday , February 27th at 4:00 p.m. Eastern
Standard Time (EST). Prior to the conference call, Gran Tierra Energy
will release its financial results on February 27(th) before markets open. 

President and CEO Dana Coffield, COO Shane O’Leary and acting CFO James
Rozon will discuss Gran Tierra Energy’s financial and operating results
for the quarter and then take questions from securities analysts and
institutional shareholders.

Interested parties may access the conference call by dialing
1-800-299-7635 (domestic) or 617-786-2901 (international), pass code
28864986. The call will also be available via web cast at www.grantierra.com, www.streetevents.com, or www.fulldisclosure.com. The web cast will be available on Gran Tierra Energy’s website until
the next earnings call. 

If you are unable to participate, an audio replay of the call will be
available beginning two hours after the call until 11:59 p.m. on March
12, 2012.  To access the replay dial 888-286-8010 (domestic) or
617-801-6888 (international) pass code 44218592. 

Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
join the webcast.

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 Amex Exchange (GTE) and the
Toronto Stock Exchange (GTE), and operating in South America. Gran
Tierra Energy holds interests in producing and prospective properties
in Argentina, Colombia, 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.

Gran Tierra Energy’s Securities and Exchange Commission filings are
available on a web site maintained by the Securities and Exchange
Commission at http://www.sec.gov and on SEDAR at http://www.sedar.com.

Additional information concerning Gran Tierra Energy is available at
www.grantierra.com, on SEDAR (www.sedar.com) and with the Securities and Exchange Commission (www.sec.gov).

Forward Looking Statements:

The statements in this news release regarding Gran Tierra Energy’s
expected funding of its 2012 capital spending program out of cash flow
and current cash, its planned drilling and explorations activities for
2012, and expected production for 2012, together with all other
statements regarding expected or planned development, testing, drilling
or exploration, or that otherwise reflect expected future results or
events, constitute forward looking information and forward looking
statements or financial outlook (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. Words such as “will,” “expected,”
“plans, “planned” and similar words identify statements as
forward-looking statements.

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
the accuracy of Gran Tierra Energy’s reserves estimates, the accuracy
of test results, that Gran Tierra Energy will continue to conduct its
operations in a manner consistent with past operations and the general
continuance of current or, where applicable, assumed operational 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

These 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, including, among
others: Gran Tierra Energy’s operations are located in South America,
and unexpected problems can arise due to guerilla activity, technical
difficulties and operational difficulties which impact its testing and
drilling operations and the production, transport or sale of its
products; geographic, political and weather conditions can impact
testing and drilling operations and the production, transport or sale
of its products; and the risk that the current global economic and
credit crisis may impact oil prices and oil consumption more than Gran
Tierra Energy currently predicts, which could cause Gran Tierra Energy
to modify its exploration activities. Although the current capital
spending program of Gran Tierra Energy is based upon the current
expectations of the management of Gran Tierra Energy, there may be
circumstances where, for unforeseen reasons a reallocation of funds may
be necessary as may be determined at the discretion of Gran Tierra
Energy and there can be no assurance as at the date of this press
release as to how those funds may be reallocated. Should any one of a
number of issues arise, Gran Tierra Energy may find it necessary to
alter its current business strategy and/or capital spending program.
Accordingly, readers should not place undue reliance on the
forward-looking statements contained herein. 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 Annual Report on Form
10-K filed February 27, 2012.These filings are available on a Web site
maintained by the Securities and Exchange Commission at
http://www.sec.gov and on SEDAR at www.sedar.com.  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.

Basis of Presentation of Financial Results: 

Gran Tierra Energy’s financial results are reported in United States
dollars and prepared in accordance with generally accepted accounting
principles in the United States. 

                                            ThreeMonths Ended December 31,                                    Year Ended December 31,

                                            2011                              2010                     2011                              2010

    OTHER INCOME                                                                                                                             

       Oil and
    natural gas
    sales            $                   161,407     $                     112,527     $            596,191     $                     373,286

       Interest                              328                               140                    1,216                             1,174

                                         161,735                           112,667                  597,407                           374,460


       Operating                          25,214                            20,418                   86,497                            59,446

    accretion, and
    impairment                            71,061                            56,335                  231,235                           163,573

       General and
    administrative                        14,025                            12,393                   60,389                            40,241

       Equity tax
                                             -                                   -                    8,271                                 -

    gain                                     -                                   -                  (1,522)                              (44)

       Gain on
    acquisition                              -                                   -                 (21,699)                                 -

    (gain) loss                          (3,784)                          (16,902)                     (11)                            16,838

                                         106,516                            72,244                  363,160                           280,054

    INCOME TAXES                          55,219                            40,423                  234,247                            94,406

       Income tax
    expense                             (22,667)                          (27,305)                (107,330)                          (57,234)

    INCOME                                32,552                            13,118                  126,917                            37,172

    PERIOD                               152,462                            44,979                   58,097                            20,925

    OF PERIOD        $                   185,014     $                      58,097     $            185,014     $                      58,097

    SHARE --
    BASIC            $                      0.12     $                        0.05     $               0.46     $                        0.15

    SHARE --
    DILUTED          $                      0.11     $                        0.04     $               0.45     $                        0.14

    BASIC                            277,897,512                       257,286,475              273,491,564                       253,697,076

    DILUTED                          287,547,237                       268,150,493              281,287,002                       264,304,831

                                                      As at December 31,

                                            2011                              2010



       Cash and
    equivalents       $                  351,685       $                   355,428

    cash                                   1,655                               250

    receivable                            69,362                            43,035

       Inventory                           7,116                             5,669

    receivable                            21,485                             6,974

       Prepaids                            3,597                             1,940

    tax assets                             3,029                             4,852

    Total Current
    Assets                               457,929                           418,148

    Oil and Gas
    (using the
    full cost
    method of

       Proved                            618,982                           442,404

       Unproved                          417,868                           278,753

    Total Oil and
    Properties                         1,036,850                           721,157

    assets                                 7,992                             5,867

    Plant and
    Equipment                          1,044,842                           727,024

    Other Long
    Term Assets                                                                   

    cash                                  13,227                             1,190

    tax assets                             4,747                               -  

       Other long
    term assets                            3,454                               311

       Goodwill                          102,581                           102,581

    Total Other
    Long Term
    Assets                               124,009                           104,082

    Total Assets      $                1,626,780       $                 1,249,254



    payable           $                   82,189       $                    76,023

    liabilities                           66,832                            32,120

    payable                               95,482                            43,832

    obligation                               326                               338

    Total Current
    Liabilities                          244,829                           152,313

    Long Term

    tax liability                        186,799                           204,570

       Equity tax
    payable                                6,484                               -  

    obligation                            12,343                             4,469

       Other long
    liabilities                            2,007                             1,036

    Total Long
    Liabilities                          207,633                           210,075


    shares                                 7,510                             4,797

    common shares
    shares, par
    value $0.001
    per share,
    issued and
    as at
    December 31,
    2011 and 2010

    paid in
    capital                              980,014                           821,781

       Warrants                            1,780                             2,191

    earnings                             185,014                            58,097

    Equity                             1,174,318                           886,866

    Equity            $                1,626,780       $                 1,249,254

                                                    ThreeMonths Ended December31                                      Year Ended December31

                                      2011                                  2010                  2011                                 2010


    Net income      $               32,552     $                          13,118     $         126,917     $                         37,172

    to reconcile
    net income to
    net cash
    provided by

    and accretion
    impairment                      71,061                                56,335               231,235                              163,573

    taxes                         (13,734)                                 7,936              (29,222)                             (20,090)

    compensation                     3,384                                 2,601                12,767                                8,025

       Gain on
    instruments                        -                                     -                 (1,354)                                 (44)

    (gain) loss                    (1,831)                              (12,350)               (1,695)                               14,786

    of asset
    obligations                       (36)                                  (23)                 (345)                                (286)

    taxes                            (999)                                   -                   2,442                                  -  

       Gain on
    acquisition                        -                                     -                (21,699)                                  -  

    Net changes
    in non-cash
    capital                            -                                     -                                                             

    receivable                      74,387                                29,872              (15,627)                              (5,323)

                                     (552)                               (1,222)                 (548)                              (1,221)

                                   (1,545)                                 (130)               (1,321)                                (120)

    payable and
    liabilities                     27,905                                 5,190                19,918                              (3,212)

    and payable                     25,764                                 1,067                35,422                               10,522

    Net cash
    provided by
    activities                     216,356                               102,394               356,890                              203,782


    cash                          (10,457)                                 (304)              (10,197)                                  352

       Oil and
    gas property
    expenditures                  (79,924)                              (63,345)             (333,194)                            (152,299)

    of oil and
    gas property                       -                                   6,386                 4,450                                7,986

    acquired on
    acquisition                        -                                     -                   7,747                                  -  

    on sale of
    asset backed
    paper                              -                                     -                  22,679                                  -  

       Long term
    assets and
    liabilities                    (3,201)                                     8               (3,138)                                   36

    Net cash used
    in investing
    activities                    (93,582)                              (57,255)             (311,653)                            (143,925)


    of bank debt                         -                                     -              (54,103)                                    -

    from issuance
    of common
    stock                            2,541                                 1,893                 5,123                               24,785

    Net cash
    (used in)
    provided by
    activities                       2,541                                 1,893              (48,980)                               24,785

    Net increase
    (decrease) in
    cash and cash
    equivalents                    125,315                                47,032               (3,743)                               84,642

    Cash and cash
    beginning of
    period                         226,370                               308,396               355,428                              270,786

    Cash and cash
    end of period   $              351,685     $                         355,428     $         351,685     $                        355,428

    Cash            $              172,645     $                         272,151     $         172,645     $                        272,151

    Term deposits                  179,040                                83,277               179,040                               83,277

    Cash and cash
    end of period   $              351,685     $                         355,428     $         351,685     $                        355,428




SOURCE Gran Tierra Energy Inc.

Source: PR Newswire