Gran Tierra Energy Announces US$198 Million 2009 Capital Program
Inc. (NYSE Alternext: GTE; TSX: GTE), a company focused on oil exploration and
production in
seven exploration wells and six development wells in
seismic acquisition programs in
expected to grow to approximately 20,000 barrels of oil per day (BOPD), net
after royalty, in the second half of 2009, in contrast to previous
expectations of approximately 15,000 BOPD, net after royalty.
Gran Tierra Energy currently has approximately
no debt. The 2009 work program and budget is expected to be executed using
cash and cash-flow from operations, assuming a West Texas Intermediate oil
price remaining above
Energy, stated, “In today’s troubled markets, Gran Tierra Energy is
extraordinarily well positioned to execute its work program and budget to
develop its existing land base and grow its production from current
undeveloped reserves, and simultaneously undertake an active exploration
program to continue its growth strategy, within its available cash and cash
flow from operations. As operator of 24 of its 26 blocks of land,
encompassing 7.1 million gross acres in three countries, the company is well
positioned to continue being a solid growth company in the international oil
and gas arena.”
Colombia
Putumayo Basin
Gran Tierra Energy is one of the largest exploration landholders in the
Putumayo Basin of southern
exploration licenses, in addition to two technical evaluation areas currently
under consideration for conversion to exploration licenses. The total acreage
encompasses 938,494 gross acres, or 828,064 net acres. Gran Tierra Energy is
the Operator of all its Putumayo licenses.
Chaza Block (100% working interest)
The bulk of 2009 capital spending is scheduled to be dedicated to further
developing the Costayaco field. Four additional development wells are
budgeted for the year, Costayaco-7 through 10. In addition, one water
injector well is scheduled to be drilled, and 3 existing well workovers
undertaken. New infrastructure construction is planned to continue, including
support facilities, crude gathering lines, water lines, two pumping stations
and storage batteries.
A contemplated 100 kilometer new pipeline construction project connecting
the Costayaco field to the Orito gathering facilities is being deferred.
Recent pressure testing of the existing pipeline system and testing of
friction reducers injected into the oil stream indicates the existing pipeline
system can accommodate an estimated 15,000 BOPD gross from the Costayaco field
with new pumps, in addition to crude from the other existing producing fields.
Trucking capacity can handle an additional 10,000 BOPD capacity from the
Costayaco field. This will allow 2009 production from Costayaco to grow to an
estimated 25,000 BOPD gross in the second half of 2009 from the previous
estimate of 15,000 BOPD for 2009.
By deferring the contemplated pipeline project, a savings of
million
plateau production of 35,000 BOPD in 2010 is expected to be reduced to an
estimated 25,000 BOPD, this new production plateau is projected to begin
sooner (in the second half of 2009) and is expected to extend for a longer
period of time — to three years. An economic evaluation (after tax net
present value) indicates that it is more economical to not build the pipeline
for the Costayaco development when West Texas Intermediate oil price is below
can be used to reactivate the pipeline project quickly should additional
reserves or economics warrant.
In addition to the ongoing Costayaco field development activities, new
seismic acquisition and one exploration well are currently budgeted for the
year in the Chaza Block. The Moqueta-1 prospect is scheduled to be drilled to
the north of the Costayaco field in the second half of 2009.
Guayuyaco Block (70% working interest)
The Guayuyaco Block contains both the Guayuyaco and Juanambu producing
fields. During 2009 a 50 Km2 3D seismic program is scheduled to be conducted
over the Verdeyaco prospect. This seismic program straddles both the
Guayuyaco Block and the Chaza block (30 Km2 of the 3D seismic program is
expected to be acquired in the Guayuyaco Block and 20 Km2 is expected to be
acquired in the Chaza block). In addition, the Juanambu-2 development well is
scheduled to be drilled during the second quarter of 2009.
Azar Block (40% working interest)
During 2009, two seismic programs are planned for the Azar Block, a 40 Km
2D program and a 50 Km2 3D program. A long-term production test is being
evaluated for the Palmera-1 heavy oil discovery and an exploration well
(Yaniyaco-1) is planned to be drilled during the fourth quarter of 2009.
Mecaya Block (15% working interest)
During 2009 a work-over and long-term test of Mecaya-1 is planned. In
addition, an exploration well (Mecaya-2) is planned to be drilled during the
third quarter of 2009.
During 2009 upgrades to the refinery are scheduled. No exploration
activities are planned for the Santana block during 2009.
Putumayo West A and B Technical Evaluation Areas (100% working interest)
During 2009, Gran Tierra Energy expects portions of the Putumayo West A
Technical Evaluation Area to be converted to one or more ANH exploration
contracts with new seismic acquisition program commitments in 2009. In
addition, a portion of the Putumayo West B Technical Evaluation Area is
expected to be converted to an exploration license called the Rumiyaco Block,
also with a new seismic acquisition program commitment for 2009.
Llanos Basin
Gran Tierra Energy has an interest in five blocks in the Llanos Basin;
four operated and one non-operated, encompassing 391,280 gross acres, or
290,069 net acres.
Guachiria Block (70% net working interest)
Long term testing of the Los Aceites-1 discovery well is scheduled to
continue into 2009. The 2009 scheduled expenditures include seismic
reprocessing and environmental obligations. Additional drilling or facilities
will be contingent on the long term testing results. Currently the well is
producing approximately 1,200 BOPD gross (700 BOPD net after royalties) under
natural flow with approximately 32% water cut.
Guachiria Norte Block (70% net working interest)
The 2009 scheduled expenditures include costs for an obligation
exploration well that is expected to spud in February to further evaluate the
stratigraphic trap potential of the area.
Guachiria Sur Block (70% net working interest)
The 2009 scheduled expenditures include a 115 Km2 3D seismic program to
further map the stratigraphic trap potential of channel sands near the Los
Aceites-1 discovery.
San Pablo (100% working interest)
The planned 2009 expenditures include costs to drill one obligation
exploration well, Amatista-1.
Garibay (50% non-operated working interest)
The 2009 scheduled expenditures include a 100 Km2 3D seismic program to
further define the exploration potential of the area.
Magdalena Basin
Gran Tierra Energy is the Operator of three blocks in the Magdalena Basin;
two in the Middle Magdalena Basin (
the Lower Magdalena (Magangue Block) encompassing 273,651 gross acres, or
87,340 net acres.
During 2009 a 75 Km2 3D seismic program is planned over the new Popa
gas-condensate discovery and an adjacent exploration prospect. A long-term
production test is planned for the Popa-2 gas-condensate discovery. An
exploration well, Cantarrana-1, is scheduled to be drilled during the third
quarter of 2009.
Talora Block (20% working interest)
No exploration activities are planned for the Talora block during 2009.
Magangue Block (37.8% working interest)
A new compressor is currently being installed at the Guepaje gas field,
which is forecast to produce an average of 2.7 million cubic feet per day
(MMCF/D) gross, 0.8 MMCF/D net after royalty, during 2009. No exploration
activities are planned for the Magangue block during 2009.
Catatumbo Basin
Catguas Block (50% working interest in Area A and 85% working interest in
Area B)
During 2009 two exploration well commitments are scheduled to be fulfilled
in Area B based on the results of new seismic data acquired in 2008.
Peru
Maranon Basin
Gran Tierra Energy is the Operator and holds a 100% working interest in
two exploration blocks on the eastern flank of the Maranon Basin of northern
of the Iquitos Arch, an area that has never before been tested by the
drill-bit. Over one billion barrels of recoverable oil has been discovered to
date in the Maranon Basin around the flanks of the Iquitos Arch. Gran Tierra
Energy has identified 24 leads based on interpretation of a 20,000 linear
kilometer airborne gravity and magnetic survey completed over the blocks in
2008.
Gran Tierra Energy has entered the second exploration period of both
blocks 122 and 128. An environmental impact survey is currently being
undertaken in preparation for a 500 kilometer 2-D seismic survey expected to
be acquired in the fourth quarter of 2009 and into the first quarter of 2010
over the principal leads identified on the two blocks. Exploration drilling
is expected to take place in the second half of 2010. In addition, a
pre-feasibility engineering field development study is scheduled to be
undertaken during 2009 to assist with early planning in the event a commercial
discovery is made in 2010. Total 2009 capital budgeted for
million
Argentina
Noroeste Basin
Gran Tierra Energy is the largest exploration landholder in the Noroeste
Basin of northern
blocks of land, seven operated by Gran Tierra Energy, encompassing
approximately 1.6 million gross acres, or 1.3 million net acres. The company
drilled one exploration well in 2008, Proa.x-1, resulting in the discovery of
the Proa oil field. The work program for 2009 consists of conducting nine
workovers of existing producing wells, facilities upgrades, and 162 Km2 of 3-D
seismic acquisition in the Chivil and Surubi Blocks to define additional
structural and stratigraphic traps on the Proa oil field discovery trend. One
contingent development well, not included in the approved budget, may be
drilled in the fourth quarter of 2009, depending on production performance of
Proa.x-1. Additional exploration drilling is contemplated in 2010, based on
the results of the 3-D seismic program, in concert with the development well.
Production is expected to grow to approximately 1,000 BOPD, net after royalty,
in 2009. Total 2009 capital budgeted for
About Gran Tierra Energy Inc.
Gran Tierra Energy is an international oil and gas exploration and
production company operating in
Canada
producing and prospective properties in
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. Gran Tierra Energy trades on the NYSE
Alternext under the symbol “GTE” and on the Toronto Stock Exchange under the
symbol “GTE”.
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 press release regarding Gran Tierra Energy’s
expectations, plans, projections and actions currently contemplated for 2009
and 2010 relating to its 2009 capital program and its exploration, drilling
and production activities, are “forward-looking statements” within the meaning
of the U.S. federal and Canadian securities laws, including Canadian
Securities Administrators’ National Instrument 51-102 Continuous Disclosure
Obligations and the U.S. Private Securities Litigation Reform Act of 1995.
Statements containing the words “estimates”, “expects”, “plans”, “projects”,
“will”, “scheduled”, “forecast”, “may”, and variations of these words are
forward-looking statements. 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.
Factors that could cause results to differ materially from those described
in the forward-looking statements include: Gran Tierra Energy’s operations
are located in
guerilla activity, technical difficulties and operational difficulties which
impact the production, transportation or sale of oil and gas; changing prices
for crude oil may cause some scheduled projects or actions to become
uneconomical, or may change Gran Tierra Energy’s focus to other projects or
actions which could be of more benefit to Gran Tierra Energy, which could
cause projects or actions currently contemplated to be postponed or cancelled;
unexpected problems due to technical difficulties, operational difficulties,
and weather conditions; the current strike and state of emergency in
may continue for longer than Gran Tierra Energy expects, which could impact
Gran Tierra Energy’s ability to complete testing and drilling on schedule and
may also impact production, heightened unrest could imperil the safety and
security of Gran Tierra Energy’s assets and personnel despite the safety
measures Gran Tierra Energy has put in place to address the current situation,
which could also delay the testing and drilling and could also impact
production; and those other risks found in the periodic reports filed by Gran
Tierra Energy with the United States Securities and Exchange Commission,
including in the section entitled “Risk Factors” in its Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission on
2008
www.sec.gov and on SEDAR at www.sedar.com.
All forward-looking statements in this press release are expressly
qualified by information contained in each company’s filings with regulatory
authorities and, subject to its obligations under applicable securities laws,
Gran Tierra Energy does not undertake to publicly update forward-looking
statements, whether as a result of new information, future events or
otherwise.
Dana Coffield Al Palombo
Gran Tierra Energy Inc. Cameron Associates
President & Chief Executive Officer Investor Relations
(800) 916-4873 (212) 554-5488
info@grantierra.com al@cameronassoc.com
SOURCE Gran Tierra Energy Inc.