Gran Tierra Energy Successfully Closes the Sale of its Argentina Business
CALGARY, June 25, 2014
Operations in Second Half of 2014 to Focus on Exploration in the Putumayo
Basin of Colombia and Further Development of the Bretaña Field in Peru
CALGARY, June 25, 2014 /PRNewswire/ - Gran Tierra Energy Inc. ("Gran Tierra
Energy") (NYSE MKT: GTE, TSX: GTE), a company focused on oil exploration and
production in South America, today announces it has closed the sale of its
Argentina business and provides a corporate update.
"With the successful sale of the Argentina business, Gran Tierra Energy
increases its focus on its exciting exploration and development drilling
campaign in Colombia and Peru in the second half of 2014. We are currently
drilling ahead on the Moqueta-13 development well, intended to be completed as
a production well in the Moqueta field. In addition, planning is underway to
drill four exploration wells in the second half of 2014 in the Putumayo Basin
of Colombia" said Dana Coffield, Gran Tierra Energy President and Chief
Executive Officer. "We continue to work towards starting long term test
production at the Bretaña field in Peru, anticipated to start in the fourth
quarter of this year, in addition to drilling an appraisal well in the field
before year-end" concluded Coffield.
Gran Tierra Energy successfully closed the sale of its Argentina business to
Madalena Energy Inc. ("Madalena") (TSX-V: MVN) for an aggregate consideration
of approximately US$69 million, comprising US$49 million in cash, US$14
million in Madalena shares, and expected working capital adjustments of
approximately US$6 million. The effective date of this transaction is April
Chaza Block, Putumayo Basin (100% Working Interest ("WI") and Operator)
The Eslabón Sur Shallow-1 and Eslabón Sur Deep-1 exploration wells are
targeting the same Cretaceous Sandstones encountered in the Costayaco and
Moqueta discoveries and are expected to begin drilling in the third and fourth
quarters respectively of 2014.
The Corunta-1A exploration well is expected to spud in the third quarter of
2014 and will be drilled in a northeast direction from the Costayaco-17 well
pad targeting a downthrown fault block west of the Moqueta field.
The Moqueta-13 development well was spud on May 25, 2014, and is drilling in a
southeast direction from the Moqueta-1 well pad. Moqueta-13 is intended to
add to the production of the Moqueta field.
Putumayo-1 Block, Putumayo Basin (55% WI and Operator, Compania Espanola de
Petroleos Colombia, S.A.U. 45% working interest)
The Cabañas-1 exploration well is expected to be drilled in the fourth quarter
of 2014 in the Putumayo-1 Block. This block is immediately south of the Chaza
Block in the Putumayo basin where Gran Tierra Energy encountered multiple
explorations successes. The Cabañas-1 well is targeting the same Cretaceous
Sandstones encountered in the Costayaco and Moqueta discoveries.
Block 95, Bretaña Field(Gran Tierra Energy 100% WI and Operator)
Planning and construction is underway to initiate drilling of the Bretaña Sur
delineation well in the fourth quarter of 2014 to gather additional reservoir
data and further substantiate oil reserves in the field.
Work also continues towards starting long term test production at the Bretaña
field at approximately 2,500 barrels of oil per day, which is anticipated to
start in the fourth quarter of this year.
Production for the months of April and May was consistent with Gran Tierra
Energy's internal budget and averaged approximately 21,466 barrels of oil
equivalent per day ("BOEPD") net after royalty ("NAR") before adjustments for
inventory changes despite not having access to the Ecopetrol-operated
Trans-Andean oil pipeline in Colombia (the "OTA pipeline") for approximately
28 days during this time period. A recent landslide has damaged the OTA
pipeline, with repairs expected to be completed in July. During this time,
Gran Tierra Energy plans to transport its oil by truck to continue sales.
With the transaction to sell its Argentina business closed, Gran Tierra Energy
estimates the Argentina business unit contributed average production of
approximately 1,365 BOEPD NAR to its full-year 2014 production estimate. Gran
Tierra Energy plans to reduce its 2014 corporate capital spending program by
an amount comparable to the planned Argentina capital program of US$48
million, less the amount spent up to the closing date of the transaction.
About Gran Tierra Energy Inc.
Gran Tierra Energy is an international oil and gas exploration and production
company, headquartered in Calgary, Canada, incorporated in the United States,
trading on the NYSE MKT (GTE) and the Toronto Stock Exchange (GTE), and
operating in South America. Gran Tierra Energy holds interests in producing
and prospective properties in 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.
Forward Looking Statements and Advisories
This news release contains certain forward-looking information and
forward-looking statements (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 "will", "should", "planning", "intended", "continue",
"anticipated" and "expected" and derivations thereof and similar terms
identify forward-looking statements. In particular, but without limiting the
foregoing, this news release contains forward-looking statements regarding:
Gran Tierra Energy's drilling, testing and production expectations, including
without limitation, the timing of operations, the oil-bearing potential of
certain reservoirs and expectations with respect to drilling locations and
depth, the results of drilling, testing and exploration activities; the timing
of repairs to the OTA pipeline; Gran Tierra Energy's 2014 production
expectations and projections; and changes to Gran Tierra Energy's planned
capital program for 2014.
The forward-looking statements contained in this news release reflect several
material factors and expectations and assumptions of Gran Tierra Energy
including, without limitation: that Gran Tierra Energy will continue to
conduct its operations in a manner consistent with past operations; the
accuracy of testing and production results and seismic data; the effects of
certain drilling techniques; cost and price estimates; 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 where unexpected problems can arise due to guerilla
activity and labour disruptions; the OTA pipeline may continue to experience
disruptions and if further disruptions occur, service at the OTA pipeline may
not continue on the time lines or to the capacity expected by or favorable to
Gran Tierra Energy; attempts to mitigate the effect of disruptions of the OTA
pipeline may not have the impact currently anticipated by Gran Tierra Energy;
unexpected technical difficulties and operational difficulties may occur,
which could impact or delay the completion or continuation of drilling;
geographic, political and weather conditions can interrupt drilling, which
could impact or delay the commencement or continuation of drilling; the risk
that current global economic and credit market conditions may impact oil
prices and oil consumption more than Gran Tierra Energy currently predicts,
which could cause Gran Tierra Energy to change its current drilling,
production and testing plans; and production data should be considered
preliminary until a full well test interpretation has been done. 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 May 7, 2014. 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.
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.
SOURCE Gran Tierra Energy Inc.
For investor and media inquiries please contact:
Director, Investor Relations
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