Gran Tierra Energy Inc. Announces Third Quarter 2012 Results and Positive Moqueta-7 Drilling Results

Gran Tierra Energy Inc. Announces Third Quarter 2012 Results and Positive 
Moqueta-7 Drilling Results 
Quarter Highlighted by Record Production and Revenue, and Significant 
Additional Potential Pay in Moqueta Field Appraisal Well, Colombia 
CALGARY, Nov. 7, 2012 /CNW/ - Gran Tierra Energy Inc. ("Gran Tierra Energy") 
(NYSE MKT: GTE), (TSX: GTE), a company focused on oil and gas exploration and 
production in South America, today announced its financial and operating 
results for the quarter ended September30, 2012.All dollar amounts are in 
United States dollars unless otherwise indicated. 
Highlights for the quarter include: 


    --  Quarterly production, net after royalty ("NAR") and adjusted
        for inventory changes, was a record 19,491 barrels of oil
        equivalent per day ("BOEPD"). This represents a 6% increase in
        average daily production, adjusted for inventory changes, from
        the comparable period in 2011 of 18,369 BOEPD NAR;
    --  Production, NAR before inventory changes, for the month of
        October 2012 averaged 20,000 BOEPD;
    --  Revenue and other income for the quarter was a record $168.9
        million, a 12% increase over the same quarter in 2011;
    --  Net income for the quarter was $44.6 million or $0.16 per share
        basic and diluted, compared with net income of $49.1 million or
        $0.18 per share basic and $0.17 per share diluted in the same
        quarter in 2011;
    --  Funds flow from operations for the quarter was $89.9 million
        compared with $72.8 million for the same quarter in 2011;
    --  Cash and cash equivalents were $127.6 million at September 30,
        2012, compared with $351.7 million at December 31, 2011. The
        change in cash and cash equivalents during the nine months
        ended September 30, 2012, was primarily the result of funds
        flow from operations being more than offset by capital
        expenditures, an increase in working capital excluding cash and
        an increase in restricted cash;
    --  The Moqueta-7 appraisal well yielded extremely encouraging
        results with a total of 215 feet of potential net pay
        encountered with no oil-water contacts interpreted in the
        primary reservoirs in the main field, nor in two new
        oil-bearing fault blocks encountered by the well, which  has
        revealed the potential for oil bearing repeat sections of the
        Caballos  reservoir below the main Moqueta field;
    --  Subsequent to the end of the third quarter, Gran Tierra Energy
        was the successful bidder on Blocks Sinu-1 and Sinu-3 in the
        Sinu Basin of northern Colombia in Colombia's National
        Hydrocarbon Agency ("ANH") 2012 Bid Round and is expected to
        become operator of both blocks, subject to final government
        approval;
    --  In Argentina, Gran Tierra Energy continues its workover and
        development activity at the Puesto Morales field, which
        included drilling two appraisal wells in the undeveloped area
        of the Sierras Blancas formation, three infill wells in the
        Sierras Blancas waterflooding area, and one horizontal well to
        develop the Loma Montosa formation as a tight oil reservoir,
        the latter to be multi-stage fracture stimulated in November
        2012;
    --  In Peru, Gran Tierra Energy increased its working interest to
        100% in exploration Blocks 123 and 129 and is expected to
        assume operatorship, subject to final government approval;
    --  In Brazil, subsequent to the end of the quarter, production was
        initiated from two new wells drilled in the Tiê Field on Block
        155, with production growing to approximately 1,000 BOPD gross
        or 850 BOPD NAR.

"Gran Tierra Energy had an outstanding third quarter, attaining record levels 
of production and adding substantial potential reserves, subject to testing, 
at the Moqueta field in Colombia,"said Dana Coffield, President and Chief 
Executive Officer of Gran Tierra Energy. "More recently, we have added 
significantly to our prospective land position, in Peru by assuming 100% 
working interest and operatorship of Blocks 123 and 129, and in Colombia by 
winning the award of Sinu-1 and Sinu-3 Blocks in the recent ANH bid-round. 
These new interests remain subject to final customary Peru and Colombia 
government approvals," added Coffield. "We are focused on executing the 
balance of our 2012 capital program. Brazil gross production has now risen to 
a record of approximately 1,000 BOPD, drilling of our first horizontal well in 
Brazil and testing of our first horizontal well in Argentina are about to be 
initiated, planning for the next appraisal well in the Moqueta field has 
begun, and location construction for our first exploration well to appraise 
the Bretaña oil discovery in Peru is well advanced. Gran Tierra Energy 
remains financially strong and expects to fund the remainder of its 2012 
capital program with cash flow and cash on hand at current oil prices and 
production levels." concluded Coffield.

Production review
               Three Months Ended September 30, 2012     Three Months Ended September 30, 2011  

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

Gross         1,925,808    389,081   7,110   2,321,999   1,882,078   332,067           2,240,212
production                                                                    26,067

Royalties     (515,764)   (49,312)   (916)   (565,992)   (511,571)  (37,473) (3,269)   (552,313)

Inventory        31,002     4,814   1,365       37,181     (3,032)     6,430 (1,374)       2,024
adjustment

Production,   1,441,046   344,583   7,559    1,793,188   1,367,475   301,024  21,424   1,689,923
NAR
                                                                                                 

Production       15,664      3,745      82      19,491      14,864     3,272     233      18,369
per day,
NAR (BOEPD)
                                                                                                
                  Nine Months Ended September 30, 2012    Nine Months Ended September 30, 2011  

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

Gross         5,290,331 1,074,797   36,376   6,401,504   5,531,724   736,975  31,210   6,299,909
production

Royalties   (1,377,128)  (128,705) (4,323) (1,510,156) (1,553,486)  (83,855) (3,835) (1,641,176)

Inventory     (282,958)    (5,588)   (478)   (289,024)     (7,676)       852 (1,938)     (8,762)
adjustment

Production,   3,630,245    940,504  31,575   4,602,324   3,970,562   653,972  25,437   4,649,971
NAR
                                                                                                

Production       13,249      3,433     115      16,797      14,544     2,396      93      17,033
per day,
NAR (BOEPD)

Financial review
         Three Months Ended September      Nine Months Ended September
                     30,                              30,  
           2012        2011          %      2012        2011          %
                                Change                           Change

Revenue $ 168,933   $ 151,033      12    $ 440,034   $ 435,672      1  
and                                                           
Other
Income
($000s)

Net     $  44,605   $  49,085      (9)   $  57,396   $  94,365     (39)
Income                                                        
($000s)

Net     $  0.16     $  0.18       (11)   $  0.20     $  0.35       (43)
Income
Per
Share -
Basic

Net     $  0.16     $  0.17        (6)   $  0.20     $  0.34       (41)
Income
Per
Share -
Diluted

Net income reconciled to funds flow from operations((1)) is as follows:
                  Three Months Ended   Nine Months Ended September
                       September 30,                           30,

Funds Flow      2012        2011        2012              2011
From
Operations -
Non-GAAP
Measure
($000s)
                                                                  

Net income     $ 44,605     $ 49,085   $  57,396   $        94,365

Adjustments to                                                    
reconcile net
income to
funds flow
from
operations

  DD&A           45,044       49,852     137,982           160,174
  expenses

  Deferred        1,195      (5,977)     (8,855)          (14,727)
  taxes

  Stock-based     2,932        3,438       9,854            9,383 
  compensation

  Unrealized    —      —     —           (1,354)
  gain on
  financial
  instruments

  Unrealized    (2,092)     (20,071)      14,072             (625)
  foreign
  exchange
  (gain) loss

  Settlement    —      —       (404)             (309)
  of asset
  retirement
  obligation

  Equity tax    (1,749)      (3,510)     (3,534)           2,741  

  Gain on       —      —     —          (21,699)
  acquisition

Funds flows    $ 89,935     $ 72,817   $ 206,511   $       227,949
from
operations

((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 Gran Tierra Energy's 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 Gran Tierra Energy's 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. Gran Tierra Energy's 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, unrealized gain on financial
instruments, unrealized foreign exchange gain or loss, settlement of
asset retirement obligation, equity tax and gain on acquisition.

Third Quarter 2012 Financial Highlights:

Revenue and other income increased by 12% to $168.9 million for the third 
quarter of 2012 compared with $151.0 million in the comparable quarter in 2011 
due to increased production and increased average realized oil prices. Revenue 
and other income for the nine months ended September 30, 2012, was comparable 
with the corresponding period in 2011. The increase in production during the 
third quarter of 2012 was primarily due to excellent reservoir performance 
from the Moqueta and Costayaco fields in Colombia and new oil wells in 
Argentina, partially offset by the impact of pipeline disruptions in Colombia.

Average realized oil prices in the third quarter of 2012 increased by 4% to 
$96.75 per barrel ("bbl") from $92.76 per bbl in the third quarter of 2011 and 
increased by 2% to $98.42 per bbl from $96.02 per bbl for the nine months 
ended September 30, 2012. Gran Tierra Energy received a premium to WTI in 
Colombia during the nine months ended September 30, 2012. Average West Texas 
Intermediate ("WTI") oil prices for the three and nine months ended 
September30, 2012, were $92.27 and $96.21 per bbl, respectively, compared 
with $89.70 and $95.40 per bbl in the comparable periods in 2011. Average 
Brent oil prices for the three and nine months ended September30, 2012, were 
$109.61 and $112.20 per bbl.

Operating expenses for the third quarter of 2012 amounted to $36.3 million, or 
$20.24 per BOE, compared with $21.7 million, or $12.86 per BOE, in the 
comparable quarter in 2011. The increase in operating expenses was mainly the 
result of an increase of $13.8 million in Colombia, primarily due to 
Ecopetrol-operated Trans-Andean oil pipeline ("OTA pipeline") oil 
transportation costs of $3.77 per BOE, previously deducted from realized sales 
prices and now included as operating costs due to the change in sales point in 
February 2012, and increased trucking due to OTA pipeline disruptions.

Operating expenses for the nine months ended September 30, 2012 amounted to 
$88.1 million, or $19.15 per BOE, compared with $61.3 million, or $13.18 per 
BOE, in the comparable period of 2011. The increase in operating costs on a 
per BOE basis was due to the addition of OTA pipeline transportation costs and 
increased trucking costs referenced above.

DD&A expenses for the third quarter of 2012 were $45.0 million compared with 
$49.9 million for the comparable quarter in 2011. On a per BOE basis, DD&A 
expenses in the third quarter of 2012 were $25.12 compared with $29.50 in the 
comparable period in 2011, representing a 15% decrease. The decrease resulted 
from increased reserves and lower impairment charges which more than offset 
increased future development costs in the depletable base.

For the nine months ended September 30, 2012, DD&A expenses decreased to 
$138.0 million from $160.2 million in the comparable period in 2011. DD&A 
expenses for the nine months ended September 30, 2012 included a $20.2 million 
ceiling test impairment in Gran Tierra Energy's Brazil cost center related to 
seismic and drilling costs on Block BM-CAL-10. DD&A expenses for the 
comparable period in 2011 included a $40.8 million ceiling test impairment in 
the company's Peru cost center relating to drilling costs from a dry well and 
seismic costs on relinquished blocks. On a per BOE basis, the depletion rate 
decreased by 13% to $29.98 from $34.45. The decrease was mainly due to lower 
impairment charges of $4.59 per BOE in the nine months ended September 30, 
2012, compared with $8.77 per BOE recorded in the comparable period in 2011.

General and administrative ("G&A") expenses of $12.9 million for the third 
quarter of 2012 decreased by 21% from $16.3 million in the comparable quarter 
in 2011 primarily due to increased recoveries, increased capitalized costs in 
Peru due to increased exploration and development activity, and the absence of 
interest expense of $0.8 million relating to Petrolifera Petroleum Ltd. 
("Petrolifera") debt, which was repaid in August 2011. These G&A expense 
reductions were partially offset by increased employee related costs 
reflecting expanded operations. G&A expenses per BOE in the third quarter in 
2012 were 25% lower than in the comparable quarter in 2011 at $7.19 per BOE 
due to the same factors and increased production.

For the nine months ended September 30, 2012, G&A expenses of $46.4 million 
were consistent with the comparable period in 2011. Increased employee related 
costs and bank fees reflecting expanded operations were offset by increased 
recoveries, the absence of expenses related to the 2011 Petrolifera 
acquisition and increased capitalized costs in Peru. G&A expenses in the 
comparable period of 2011 included $1.2 million of expenses associated with 
the acquisition of Petrolifera and $1.6 million of interest on the Petrolifera 
debt. G&A expenses per BOE in the nine months ended September 30, 2012 of 
$10.08 were consistent with the prior year comparable period.

The foreign exchange gain was $1.3 million in the third quarter of 2012 and 
included an unrealized non-cash foreign exchange gain of $2.1 million. For the 
comparable quarter in 2011, the foreign exchange gain was $15.9 million and 
included an unrealized foreign exchange gain of $20.1 million.

For the nine months ended September 30, 2012 and 2011, the foreign exchange 
loss was $27.9 million, of which $14.1 million was an unrealized non-cash 
foreign exchange loss, and $3.8 million, of which $0.6 million was an 
unrealized non-cash foreign exchange gain, respectively. The Colombian Peso 
strengthened by 7.3% and weakened by 0.1% against the U.S. dollar in the nine 
months ended September 30, 2012 and 2011, respectively.

Income tax expense for the third quarter of 2012 was $31.4 million compared 
with $30.0 million recorded in the comparable quarter in 2011. The increase 
was a result of lower income before tax being offset by an increase in 
non-deductible royalty payments and decrease in valuation allowance. Income 
tax expense was $82.3 million for the nine months ended September 30, 2012 
compared with $84.7 million recorded in the comparable period in 2011. The 
decrease was primarily due to lower taxable income from Gran Tierra Energy's 
Colombian operations.

Net income was $44.6 million, or $0.16 per share basic and diluted, for the 
third quarter of 2012 compared with net income of $49.1 million, or $0.18 per 
share basic and $0.17 per share diluted, for the comparable quarter in 2011. 
In the third quarter of 2012, higher oil and natural gas sales and lower DD&A 
and G&A expenses were more than offset by increased operating and income tax 
expenses and lower foreign exchange gains.

For the nine months ended September 30, 2012, net income was $57.4 million, a 
39% decrease from the comparable period in 2011. On a per share basis, net 
income decreased to $0.20 per share basic and diluted from $0.35 per share 
basic and $0.34 per share diluted in the comparable period in 2011. For the 
nine months ended September 30, 2012, increased oil and natural gas sales, 
decreased DD&A and income tax expenses and the absence of the Colombian equity 
tax expense were more than offset by increased operating expenses and foreign 
exchange losses and the absence of the comparable period gain on acquisition. 
Net income in the comparable period in 2011 included a gain on the acquisition 
of Petrolifera of $21.7 million.

Balance Sheet Highlights:

Cash and cash equivalents were $127.6 million at September30, 2012, compared 
with $351.7 million at December31, 2011. The decrease in cash and cash 
equivalents during the nine months ended September 30, 2012 was primarily the 
result of funds flow from operations of $206.5 million and proceeds from 
issuance of common shares of $3.8 million being more than offset by an 
increase in assets and liabilities from operating activities of $190.6 
million, capital expenditures of $222.1 million and a $21.7 million increase 
in restricted cash related to the pending 30% working interest acquisition in 
Brazil.

Working capital (including cash and cash equivalents) was $191.9 million at 
September30, 2012, a $21.2 million decrease from December31, 2011. The 
decrease was primarily a result of a $224.1 million decrease in cash and cash 
equivalents, partially offset by a $102.6 million increase in accounts 
receivable due to the timing of collection of Ecopetrol receivables, a $14.5 
million increase in inventory primarily due to the new commercialization 
agreement in Colombia which changed the sales point from Orito Station to the 
Port of Tumaco, a $59.9 million decrease in taxes payable due to the payment 
of 2011 income taxes in Colombia, and a $25.9 million decrease in accounts 
payable, accrued liabilities and other due to the payment of royalties and 
indirect taxes.

Production Highlights:

Average daily consolidated light and medium crude oil and natural gas 
production NAR after inventory adjustments for the three months ended 
September30, 2012, increased 6% to 19,491 BOEPD NAR compared with 18,369 
BOEPD NAR for the corresponding period in 2011. Approximately 96% was oil and 
natural gas liquids. Third quarter production and sales reflect increased 
production from the Moqueta, Jilguero, Melero and Surubi oil discoveries 
offset by approximately 36 days of oil delivery restrictions due to 
disruptions in the OTA pipeline. Gran Tierra Energy continued production at a 
reduced rate while the OTA pipeline was down, selling a portion of its oil 
through trucking and storing excess oil.

Average daily Colombian production of light and medium crude oil and natural 
gas for the three months ended September30, 2012 increased 5% to 15,664 
BOEPD NAR, compared with 14,864 BOEPD NAR for the comparable period in 2011. 
Approximately 99% of the production is oil and natural gas liquids. The 
production is primarily from the Costayaco field in the Chaza Block in which 
Gran Tierra Energy has a 100% working interest.

Average daily Argentine production of light and medium crude oil and natural 
gas for the three months ended September30, 2012 increased 14% to 3,745 
BOEPD NAR, compared with 3,272 BOEPD NAR for the comparable period in 2011. 
Approximately 84% of the production is oil and natural gas liquids.

Average daily Brazil production of light and medium crude oil for the three 
months ended September30, 2012 was 82 BOPD NAR, compared with 233 BOPD NAR 
for the comparable period in 2011.

Production, NAR before inventory changes, for the month of October 2012 
averaged approximately 20,000 BOEPD.

2012 Capital Program Update:

Gran Tierra Energy's capital program for 2012 has been revised to $380 million 
from $396 million. Gran Tierra Energy's 2012 capital program includes: $172 
million for Colombia; $94 million for Brazil; $46 million for Argentina; $66 
million for Peru; and $2 million associated with corporate activities.

The capital program includes $243 million for drilling, $48 million for 
acquisitions, $30 million for facilities, pipelines and other, and $59 million 
for geological and geophysical expenditures. Of the $243 million allocated to 
drilling, approximately $117 million is for exploration and the balance is for 
delineation and development drilling.

The capital budget revisions are not expected to have an impact on 2012 
production expectations. Provided there are no production disruptions, Gran 
Tierra Energy anticipates it will be producing between 20,000 to 21,000 BOEPD 
NAR before inventory changes in December, 2012.

Gran Tierra Energy believes that its revised 2012 capital expenditure program 
can be funded from cash flow from existing operations and cash on hand, given 
current pricing and production levels.

COLOMBIA 

Chaza Block, Putumayo Basin (Gran Tierra Energy 100% WI and operator)

Moqueta Field

The Moqueta-7 appraisal well has reached a total depth at 9,295 feet measured 
depth ("MD") in basement. The well was drilled to test the down-dip extent of 
the previously drilled oil column in the Moqueta field, and to find the 
interpreted oil-water contact approximately 950 meters southwest of Moqueta-4, 
100 meters beyond the current independently audited 3P reserves area. Due to 
encountering additional unexpected oil bearing reservoirs, the well was 
extended 450 meters, or approximately 1,400 meters southwest of Moqueta-4.

Moqueta-7 encountered the primary T Sandstone and Caballos reservoirs 
approximately 45 feet shallower than prognosis, indicating the Moqueta 
structure is broader and has more areal extent to the west than previously 
interpreted. Based on mud logs and electric log interpretations, the T 
Sandstone was oil bearing with approximately 44 feet true vertical depth 
("TVD") gross thickness and 33 feet TVD net thickness; no oil-water contact 
was identified. Based on well cuttings and electric log interpretations, the 
Caballos was also oil bearing with approximately 200 feet gross thickness TVD 
and 68 feet TVD net thickness; no oil-water contact was identified.

While drilling the underlying basement, a fault was crossed and a repeated 
oil-bearing Caballos Sandstone reservoir section was encountered in a new, 
previously unrecognized, fault block with 90 feet TVD gross thickness or 55 
feet TVD net thickness; no oil-water contact was identified.

While drilling basement in the new fault block, a second fault was crossed and 
another repeated oil-bearing Caballos Sandstone reservoir section was 
encountered in another new, previously unrecognized, fault block with 139 feet 
TVD gross thickness or 60 feet TVD net thickness; no oil-water contact was 
identified.

While drilling basement in the second new fault block, a third fault was 
crossed and another repeated Caballos Sandstone reservoir section was 
encountered; this time the reservoir section was water-bearing and the well 
completed drilling in basement.

A total of 215 feet of potential net pay has been encountered in Moqueta-7, 
with no oil-water contacts encountered in the primary reservoirs in the main 
field, nor in the two new fault blocks encountered by the well, based on well 
cuttings and electric log interpretations. In the main Moqueta structure, 
based on this data, the Caballos oil column is now at least 639 feet, with the 
basal oil-water contact yet to be defined, and the T Sandstone oil column is 
now at least 477 feet, with the basal oil-water contact yet to be defined. 
This is in addition to the oil columns encountered in the two new fault 
blocks. Actual oil pay thicknesses are subject to testing of the 
reservoirs. This testing has begun and is expected to be completed by the 
end of November. Moqueta -7 has revealed the potential for oil bearing 
repeat sections of the Caballos reservoirs below the main Moqueta field; 
results are being integrated into the recently acquired 3-D seismic survey 
over the field.

Plans are now being finalized for the drilling of the Moqueta-8 appraisal 
well, which is scheduled to begin drilling at the end of November, 2012.

Costayaco Field

The Costayaco-16 development well was successfully drilled and completed on 
August 26, 2012 and is on production. The Costayaco-17 development well is 
expected to test the northern extension of the Costayaco field and is 
scheduled to spud before the end of 2012.

Azar Block, Putumayo Basin (Gran Tierra Energy 40% WI and operator, Lewis 
Energy 40%, Gold Oil 20%)

The La Vega Este-1 oil exploration well was drilled and reached a total MD of 
11,384 feet with uneconomic oil and gas shows. The La Vega Este-1 well was 
plugged and abandoned.

Sinu-1 and Sinu-3 Block, Sinu San Jacinto Basin

Gran Tierra Energy submitted successful consortium bids in the ANH's 2012 Bid 
Round for the Sinu-1 and Sinu-3 Blocks in the Sinu Basin. The open and 
competitive process was available to those pre-qualified by the ANH, with the 
bid contract signatures expected to be finalized before year end.

The Sinu-3 Block is located in the Sinu Basin of northern Colombia. Subject 
to ANH approval, Gran Tierra Energy is operator with a 51% working interest 
("WI"), while Perenco Colombia Limited has a 49% WI. The Sinu-1 Block is 
adjacent to and immediately west of the Sinu-3 Block, with Gran Tierra Energy 
operating and holding a 60% WI and Pluspetrol Colombia Corporation holding a 
40% WI, also subject to ANH approval.

The Sinu-1 and Sinu-3 Blocks offer Gran Tierra Energy and its joint venture 
partners large exploration acreage, encompassing approximately 986,000 gross 
acres in an attractive underexplored basin. There is a proven petroleum 
system in the area with a previous oil discovery and oil seeps present on the 
block. The blocks are in close proximity to the oil transportation network 
and oil export terminal on the Caribbean coast. Multiple leads have already 
been identified based on existing data, with additional geological studies 
planned for 2013.

BRAZIL

Recôncavo Basin (Gran Tierra Energy 100% and operator)

In August 2011, Gran Tierra Energy established an initial exploration and 
production position in Brazil by acquiring a 70% working interest in four 
blocks in the onshore Recôncavo Basin. In January 2012, Gran Tierra Energy 
signed an agreement to secure the remaining 30% from Alvorada Petróleo S.A., 
which was subject to approval by Agência Nacional de Petróleo Gás Natural e 
Biocombustíveis ("ANP"). Approval has been received and assignment agreements 
with respect to this acquisition were executed on October 8, 2012. Gran 
Tierra Energy now owns 100% of the four Recôncavo Basin blocks.

The 3-GTE-03D-BA and 3-GTE-4DPA-BA appraisal wells in the Tiê field on Block 
REC-T-155, located 1.2 kilometers north and 0.7 kilometers south of the 
1-ALV-2-BA oil discovery well, respectively, were drilled and completed in 
June 2012. Gran Tierra Energy prepared and submitted the necessary ANP 
documents for the declaration of commerciality and anticipated production for 
the field, and received approval in September 2012. The wells were put on 
production and achieved flow rates of approximately 1,000 BOPD gross or 850 
BOPD NAR on October 18, 2012.

Drilling of the first horizontal sidetrack well, currently planned to be 
drilled from the 1-GTE-01-BA pilot hole located on Block REC-T-142, is 
scheduled to spud in mid November. This will be the first of three 
horizontal sidetrack wells that Gran Tierra Energy expects to drill to test 
the productivity of the light oil sandstone reservoir targets in the 
Recôncavo Basin.

PERU

Block 95, Marañon Basin (Gran Tierra Energy increased from 60% to 100% WI, 
subject to government approval, and operator)

A drilling site location has been identified and civil construction initiated 
for the first exploration well on Block 95. 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 will further 
delineate this field and will explore deeper reservoir horizons not penetrated 
by the discovery well. Construction at the wellsite is ongoing with an 
anticipated well spud in December, 2012.

Block 107 and 133, Marañon Basin (Gran Tierra Energy 100% WI and operator)

Permitting for drilling on Block 107 is advancing, with drilling expected to 
begin in 2014. The prospects on Block 107 are on trend with the world 
class gas-condensate discoveries that have been made around the Camisea region 
in southern Peru. Both oil and gas seeps are present on Block 107.

A previously completed 2-D seismic acquisition program on Blocks 107 and 133, 
consisting of approximately 950 kilometers of data, has identified six 
prospects on this acreage.

Block 123 and 129, Marañon Basin (Gran Tierra Energy 100% WI and operator 
subject to Government approval)

Gran Tierra Energy is expected to assume 100% working interest and 
operatorship of Blocks 123 and 129 in Peru subject to government approval. 
Both blocks are in their third exploration period and the seismic acquisition 
programs have been fulfilled, while the technical evaluation of the new data 
is ongoing.Two 2-D seismic acquisition programs, consisting of approximately 
1,479 kilometers of data have been completed with twelve prospects and leads 
identified on this acreage.

ARGENTINA

Puesto Morales / Puesto Morales Este Blocks, Neuquen Basin (Gran Tierra Energy 
100% WI and operator)

Gran Tierra Energy continues its workover and development activity at Puesto 
Morales field, which included drilling two appraisal wells in the undeveloped 
area of the Sierra Blancas formation, three infill wells in the Sierras 
Blancas waterflooding area, and one horizontal multi-stage fracture well to 
develop the tight oil Loma Montosa reservoir. The latter well has been 
drilled, encountering 1,214 feet of potential net pay. Fracture stimulation 
operations, the first in this play in the basin, is expected to be conducted 
in late November 2012. In the Sierras Blancas waterflooding area, a polymer 
injection pilot project has been initiated with the intention of improving 
recovery of the remaining reserves, minimizing water channeling and 
subsequently growing production.

Rinconada Norte Block, Neuquen Basin (Gran Tierra Energy 35% WI and 
non-operator; Americas Petrogas 65% and operator)

Gran Tierra Energy, together with its partner, drilled two successful 
appraisal wells and one dry exploration well on the Rinconada Norte Block of 
the Neuquen Basin.The successful wells, 1009 and 1018, contained oil in the 
Pre-Cuyano and Sierras Blancas formations and are awaiting completion.

Conference Call Information:

Gran Tierra Energy Inc. will host its third quarter 2012 results conference 
call on Wednesday, November7, 2012, at 2:00 p.m. Mountain Time (MT).

President and Chief Executive Officer, Dana Coffield, Chief Operating Officer, 
Shane O'Leary, and Chief Financial Officer, 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 1-800-510-0146 
(domestic) or 1-617-614-3449 (international), pass code 21631706. The call 
will also be available via webcast at www.grantierra.com, 
www.streetevents.com, or www.fulldisclosure.com. The webcast will be available 
on Gran Tierra Energy's website until the next earnings call.

For interested parties unable to participate, an audio replay of the call will 
be available beginning two hours after the call until 11:59 p.m. on November 
21, 2012.To access the replay dial 1-888-286-8010 (domestic) or 
1-617-801-6888 (international) pass code 87679738.

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 Inc. is an international oil and gas exploration and 
production company, headquartered in Calgary, Canada, incorporated in the 
United States, trading on the NYSE MKT (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. Additional information 
concerning Gran Tierra Energy is available at www.grantierra.com. Investor 
inquiries may be directed to info@grantierra.com or (403) 265-3221.

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

Forward Looking Statements and Legal Advisories:

This news release contains certain forward-looking information, 
forward-looking statements and forward-looking financial outlook 
(collectively, "forward-lookingstatements") 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 
"expect", "plan", "estimate", "believe", "anticipate", "will", "potential", 
"may" derivations of these words and similar expressions are intended to 
identify forward-looking statements. In particular, but without limiting the 
foregoing, forward-looking statements include statements regarding: drilling, 
testing and production expectations, including without limitation, the timing 
of operations, the oil-bearing potential of certain reservoirs and 
expectations with respect to the results of drilling, testing and exploration 
activities; Gran Tierra Energy's planned capital program and the allocation of 
capital, including under the caption "2012 Capital Program Update" expected 
funding of the capital program out of cash flow and cash on hand at current 
production and commodity price levels; production expectations; Gran Tierra 
Energy's planned operations, including as described under the captions 
"Colombia", "Peru", "Brazil" and "Argentina" together with all other 
statements regarding expected or planned development, testing, drilling, 
production, expenditures or exploration, or that otherwise reflect expected 
future results or events.

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, pricing and cost estimates, rig availability, the 
effects of drilling down-dip, the effects of waterflood and multi-stage 
fracture stimulation operations 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: 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 may impact 
its testing and drilling operations, and the production, transportation or 
sale of its products; geographic, political, regulatory and weather conditions 
can impact testing and drilling operations and the production, transportation 
or sale of its products; the OTA pipeline may continue to experience 
disruptions and if further disruptions occur, service at the OTA pipeline may 
not resume on the timelines or to the capacity expected by or favorable to 
Gran Tierra Energy; waterflood and multi-stage fracture stimulation operations 
may not have the impact, including with respect to reserve recovery 
improvements, currently anticipated by Gran Tierra Energy; permits and 
approvals from regulatory and governmental authorities may not be received in 
the manner or on the timelines expected or at all; 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 modify its exploration, drilling and/or construction 
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 in which, 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 Quarterly 
Report on Form 10-Q filed November7, 2012. These filings are available on a 
website 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.

BOE's 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.

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.  

Gran Tierra Energy Inc.
Condensed Consolidated Statements of Operations and Retained Earnings 
(Unaudited)
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
                  Three Months Ended September     Nine Months Ended September
                                           30,                             30,
                       2012            2011            2012            2011

REVENUE AND                                                                   
OTHER INCOME

  Oil and        $   168,616     $   150,824     $   438,406     $   434,784  
  natural gas
  sales

  Interest               317             209           1,628             888  
  income
                     168,933         151,033         440,034         435,672  

EXPENSES                                                                      

  Operating           36,295          21,727          88,115          61,283  

  Depletion,          45,044          49,852         137,982         160,174  
  depreciation,
  accretion and
  impairment

  General and         12,896          16,316          46,394          46,364  
  administrative

  Equity tax         —         —         —           8,271  

  Financial          —         —         —         (1,522)  
  instruments
  gain

  Gain on            —         —         —        (21,699)  
  acquisition

  Foreign            (1,315)        (15,921)          27,867           3,773  
  exchange
  (gain) loss
                      92,920          71,974         300,358         256,644  
                                                                              

INCOME BEFORE         76,013          79,059         139,676         179,028  
INCOME TAXES

  Income tax        (31,408)        (29,974)        (82,280)        (84,663)  
  expense

NET INCOME AND        44,605          49,085          57,396          94,365  
COMPREHENSIVE
INCOME

RETAINED             197,805         103,377         185,014          58,097  
EARNINGS,
BEGINNING OF
PERIOD

RETAINED         $   242,410     $   152,462     $   242,410     $   152,462  
EARNINGS, END OF
PERIOD
                                                                              

NET INCOME PER   $      0.16     $      0.18     $      0.20     $      0.35  
SHARE —
BASIC

NET INCOME PER   $      0.16     $      0.17     $      0.20     $      0.34  
SHARE —
DILUTED

WEIGHTED AVERAGE 281,695,212     277,608,572     280,387,484     272,006,775  
SHARES
OUTSTANDING -
BASIC

WEIGHTED AVERAGE 284,605,162     284,026,236     283,968,384     279,485,895  
SHARES
OUTSTANDING -
DILUTED
                                                    
                                                    

Gran Tierra Energy Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(ThousandsofU.S.Dollars, Except Share and Per Share Amounts)
                                        September 30,    December 31,
                                              2012               2011

ASSETS                                                               

Current Assets                                                       

  Cash and cash equivalents             $   127,591     $   351,685  

  Restricted cash                             2,734           1,655  

  Accounts receivable                       171,935          69,362  

  Inventory                                  21,599           7,116  

  Taxes receivable                           20,431          21,485  

  Prepaids                                    2,510           3,597  

  Deferred tax assets                         3,499           3,029  

Total Current Assets                        350,299         457,929  
                                                                     

Oil and Gas Properties (using the full                 
cost method of accounting)                                           

  Proved                                    680,789         618,982  

  Unproved                                  428,827         417,868  

Total Oil and Gas Properties              1,109,616       1,036,850  

  Other capital assets                        9,274           7,992  

Total Property, Plant and Equipment       1,118,890       1,044,842  
                                                                     

Other Long-Term Assets                                               

  Restricted cash                            33,852          13,227  

  Deferred tax assets                         9,307           4,747  

  Taxes receivable                            1,547         —  

  Other long-term assets                      6,553           3,454  

  Goodwill                                  102,581         102,581  

Total Other Long-Term Assets                153,840         124,009  
                                                                     

Total Assets                            $ 1,623,029     $ 1,626,780  

LIABILITIES AND SHAREHOLDERS' EQUITY                                 

Current Liabilities                                                  

  Accounts payable                      $    55,551     $    82,189  

  Accrued liabilities                        67,186          66,832  

  Taxes payable                              35,602          95,482  

  Asset retirement obligation                    41             326  

Total Current Liabilities                   158,380         244,829  
                                                                     

Long-Term Liabilities                                                

  Deferred tax liabilities                  197,619         186,799  

  Equity tax payable                          3,498           6,484  

  Asset retirement obligation                15,353          12,343  

  Other long-term liabilities                 1,946           2,007  

Total Long-Term Liabilities                 218,416         207,633  
                                                                     

Shareholders' Equity                                                 

Common shares (Note 6) (268,178,818 and                              
262,304,249 common shares and
13,526,615 and 16,323,819 exchangeable
shares, par value $0.001 per share,
issued and outstanding as at September
30, 2012 and December 31, 2011,
respectively)                                 7,986           7,510

  Additional paid in capital                995,837         980,014  

  Warrants                                  —           1,780  

  Retained earnings                         242,410         185,014  

Total Shareholders' Equity                1,246,233       1,174,318  
                                                                     

Total Liabilities and Shareholders'       1,623,029     $ 1,626,780  
Equity                                  $              
                                                           

Gran Tierra Energy Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(ThousandsofU.S.Dollars)
                                        Nine Months Ended September 30,
                                               2012                2011

Operating Activities                                                   

Net income                              $  57,396     $  94,365        

Adjustments to reconcile net income to                                 
net cash provided by operating
activities:

  Depletion, depreciation, accretion      137,982       160,174        
  and impairment

  Deferred taxes                          (8,855)      (14,727)        

  Stock-based compensation                  9,854         9,383        

  Unrealized gain on financial            —       (1,354)        
  instruments

  Unrealized foreign exchange loss         14,072         (625)        
  (gain)

  Settlement of asset retirement            (404)         (309)        
  obligation

  Equity tax                              (3,534)         2,741        

  Gain on acquisition                     —      (21,699)        

Net change in assets and liabilities                                   
from operating activities

  Accounts receivable and other          (96,656)      (90,014)        
  long-term assets

  Inventory                               (9,769)             4        

  Prepaids                                  1,087           224        

  Accounts payable and accrued and       (25,960)       (7,224)        
  other liabilities

  Taxes receivable and payable           (59,281)         9,658        

Net cash provided by operating             15,932       140,597        
activities
                                                                       

Investing Activities                                                   

  (Increase) decrease in restricted      (21,704)           260        
  cash

  Additions to property, plant and      (222,119)     (252,073)        
  equipment

  Proceeds from disposition of oil and    —         3,253        
  gas property

  Cash acquired on acquisition            —         7,747        

  Proceeds on sale of asset-backed        —        22,679        
  commercial paper

Net cash used in investing activities   (243,823)     (218,134)        
                                                                       

Financing Activities                                                   

  Settlement of bank debt                 —      (54,103)        

  Proceeds from issuance of common          3,797         2,582        
  shares

Net cash provided by (used in)              3,797      (51,521)        
financing activities
                                                                       

Net decrease in cash and cash           (224,094)     (129,058)        
equivalents

Cash and cash equivalents, beginning of   351,685       355,428        
period

Cash and cash equivalents, end of       $ 127,591     $ 226,370        
period
                                                                       

Cash                                    $  99,442     $  84,146        

Term deposits                              28,149       142,224        

Cash and cash equivalents, end of       $ 127,591     $ 226,370        
period





Contact Information

For investor and media inquiries please contact: Jason Crumley Director, 
Investor Relations 403-265-3221 info@granterra.com www.grantierra.com

SOURCE: Gran Tierra Energy Inc.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/November2012/07/c5668.html

CO: Gran Tierra Energy Inc.
ST: Alberta
NI: OIL ERN FIELD CONF 

-0- Nov/07/2012 11:00 GMT


 
Press spacebar to pause and continue. Press esc to stop.