gran Tierra Energy Inc. Announces Operations Update

 
TIDMGTE 
 
   CALGARY, Alberta, June 19, 2019 (GLOBE NEWSWIRE) -- Gran Tierra Energy 
Inc. ("Gran Tierra" or the "Company") (NYSE 
American:GTE)(TSX:GTE)(LSE:GTE) today announced an operations update 
regarding activities and results during second quarter 2019 to date. All 
dollar amounts are in United States ("U.S.") dollars unless otherwise 
indicated. Production amounts are unaudited and on an average working 
interest before royalties ("WI") basis unless otherwise indicated. 
 
   Key Highlights 
 
 
   -- The expansions of Acordionero's central processing and water injection 
      facilities, as well as the installation of gas-to-power turbines 
      ("Acordionero Projects"), are mechanically complete with commissioning 
      expected during July 2019, which represents a significant milestone for 
      the Company and its largest oil producing asset 
 
   -- Record drilling results achieved in Acordionero: the AC-40 and AC-41 
      wells were drilled in 9.5 and 7.4 days respectively, each a consecutive 
      record short drilling time for the field 
 
   -- Received the Global Environmental License for Acordionero on June 12, 
      2019 from the Autoridad Nacional de Licencias Ambientales, the Colombian 
      environmental regulator; this license is expected to allow accelerated 
      and optimized full field development of Acordionero 
 
   -- The Company believes the successful drilling and operations activities at 
      both Acordionero and Suroriente to date will support increases in Proved 
      ("1P") and Probable ("2P") reserves 
 
   -- Surpassed over six million person-hours without a lost time incident 
 
   -- Gran Tierra has preliminarily won two blocks in the recent Agencia 
      Nacional de Hidrocarburos ("ANH") bid round in Colombia; the Company 
      believes these blocks may be highly prospective; as part of the bidding 
      process, other companies can offer more than Gran Tierra's proposed work 
      commitment until June 26, 2019 in an attempt to win the blocks, but Gran 
      Tierra has a right of first refusal in respect of such offers since the 
      Company's initial bid was the highest 
 
   -- Gran Tierra has officially signed contracts for our three exploration 
      blocks in Ecuador; the Company is making progress and plans to drill its 
      first exploration well in Ecuador in late 2019 or early 2020 
 
   -- New personnel hired to improve operations: a new Vice President of Asset 
      Management and a new Director of Completions both recently joined the 
      Company 
 
   -- Gran Tierra is currently addressing some temporary operational issues 
      which have impacted our production; the Company is taking the necessary 
      steps to get production back on track and believes our oil reserves and 
      values remain intact as these challenges represent deferral of 
      production; the Company does not believe these issues are related to the 
      underlying quality of the assets; further information is provided below: 
      deg  From April 1, 2019 to May 23, 2019, Company production averaged 
      37,700 barrels of oil per day equivalent ("BOEPD"), and was expected to 
      meet our previously published full year 2019 guidance  deg  Starting in 
      late May 2019, production decreased as a result of the following: 
      --  Acordionero: the Company proactively shut-in two oil producers with 
      high gas-oil ratios ("GOR"); two other oil producers went off-line due to 
      electric submersible pump ("ESP") failures; total current, temporary 
      impact to production is approximately 4,500 BOEPD      --  Suroriente and 
      PUT-7: local farmers have set up blockades in the southern Putumayo 
      region to protest against the Colombian national government; these 
      protests are not directed at the oil industry or Gran Tierra; as a result 
      of these blockades, Gran Tierra has had to shut in all production at both 
      of these blocks; total current, temporary impact to production is 
      approximately 4,500 BOEPD  deg  For second quarter to June 17, 2019 
      Company production has averaged approximately 36,200 BOEPD; for the five 
      days up to and including June 17, 2019, the Company's production was 
      approximately 29,000 BOEPD  deg  As a result of these events, Gran Tierra 
      will be revisiting its guidance over the coming months and expects to 
      revise its guidance once the impact of the blockades and the startup of 
      the Acordionero Projects can be fully assessed 
 
   -- Gran Tierra is taking the following mitigation actions to address these 
      temporary operational issues with production:  deg  Acordionero: the 
      planned full commissioning of the Acordionero Projects during July 2019 
      is expected to allow a rapid increase in water injection from 
      approximately 16,000 barrels of water injected per day ("bwipd") to 
      40,000 bwipd and the release three rental facilities which will reduce 
      operating costs; this full implementation of the Acordionero waterflood 
      is forecasted to repressure the reservoir over the next few months, which 
      should reduce the field's GOR, which in turn would allow the Company to 
      increase oil production rates from several wells and to bring back online 
      those wells which were temporarily shut-in; start-up of the 20 megawatt 
      gas-to-power project at the same time is expected to significantly 
      improve power reliability, improve ESP reliability and significantly 
      lower operating costs; all of these activities are expected to restore 
      Acordionero's production back to levels achieved in first quarter 2019 
      over the next few months and grow in 2020, despite the recent production 
      decrease  deg  Suroriente and PUT-7: Colombian government authorities are 
      currently addressing farmers' concerns and expect to restore normal 
      conditions within the next several days; Gran Tierra is working closely 
      with government officials to safely resume operations and production on 
      these two blocks as soon as possible; the Company may continue to have 
      short-term interruptions in the area which are difficult to predict; the 
      Company expects to restore Suroriente's and PUT-7's oil production back 
      to normal levels once the blockades are resolved  deg  Costayaco: the 
      Company is currently drilling the CYC-39 infill oil well which is 
      expected to be on production in July 2019; in mid-July 2019, the Company 
      expects to spud the first of two horizontal water injectors (one each for 
      the T Sand and the Caballos Formation) to improve ultimate oil recovery; 
      these actions are expected to improve Costayaco's oil production 
      performance  deg  Ayombero: the Company expects to contract a snubbing 
      unit (equipment capable of working with high pressures) to retrieve 
      parted coiled tubing in both the AY-2 and 3 wells in order to continue 
      with completion operations; the AY-1 well was recently successfully 
      cleaned out and re-perforated across the entire Galembo formation and is 
      expected to be placed on long-term production test; we are very 
      encouraged by the three Ayombero wells drilled to date which have 
      confirmed similar lithologies, oil saturations and over-pressure in the 
      Galembo Member of the La Luna Carbonate reservoir, suggesting reservoir 
      and structural continuity; the Company's estimates of oil in place and 
      prospective resources are unchanged by these short-term issues 
 
 
   Gary Guidry, President and Chief Executive Officer of Gran Tierra, 
commented, "With the receipt of the Acordionero Global Environmental 
License and the planned commissioning of the Acordionero Projects, as 
well as the lifting of the blockades in the southern Putumayo, we 
believe we are capable of restoring our production back up to over 
40,000 BOEPD. The timing of this forecasted production increase depends 
on the water injection response at Acordionero and the impacts of 
community blockades in the southern Putumayo. We believe the current 
production decrease is a deferral, not a loss of reserves, and that we 
are taking the necessary steps to get production back on track. Overall, 
while the delay in the Acordionero Projects has deferred production in 
the short term, we are very encouraged by the continuity and quality of 
the sands in Acordionero and the expected commissioning of these 
projects in July 2019 is a major milestone. Based on the drilling to 
date in Acordionero and the commissioning of the Acordionero Projects, 
we expect to increase the original oil in place and recovery factor 
which will increase both the 1P and 2P reserves in Acordionero." 
 
   Exploration Update (All Projects 100% WI) 
 
   Llanos Basin: Prosperidad-1 Well, El Porton Block 
 
 
   -- While sufficient oil shows and gas log response warranted testing the 
      lower Gacheta Formation, only formation water was recovered; as a result 
      Gran Tierra plans to abandon this well 
 
   -- This exploration commitment well was part of the Petroamerica acquisition 
      in early 2016 and Gran Tierra was required to drill it in under the terms 
      of the ANH contract 
 
   -- The one positive result is that Prosperidad-1 was successfully drilled to 
      a depth of approximately 17,000 feet, which was the deepest well ever 
      drilled by the Company and demonstrated the technical skills of Gran 
      Tierra's drilling team 
 
 
   Putumayo Basin: Pomorroso, Almendrillo and Pecari Wells, PUT-7 Block 
 
 
   -- All three exploration wells have found producible oil in multiple zones 
      (U Sand, A-Limestone and N Sand), at rates ranging from 100 to 300 BOEPD 
      in each zone 
 
   -- We are encouraged about encountering oil in multiple wells and are 
      currently determining the optimal completion and stimulation design; a 
      go-forward plan is expected to be determined during July 2019 
 
   -- The Company is currently working to seek approval to commingle several 

      productive zones within a single wellbore (a production method used at 
      the Costayaco and Moqueta fields) to further improve the ultimate 
      recovery and enhance the economics of the wells 
 
   -- Currently, activity is ceased as a result of the blockades referenced 
      above 
 
 
   Contact Information 
 
   For investor and media inquiries please contact: 
 
   Gary Guidry, Chief Executive Officer 
 
   Ryan Ellson, Chief Financial Officer 
 
   Rodger Trimble, Vice President, Investor Relations 
 
   [phone] 
 
   [e-mail] 
 
   About Gran Tierra Energy Inc. 
 
   Gran Tierra Energy Inc. together with its subsidiaries is an independent 
international energy company focused on oil and natural gas exploration 
and production in Colombia and Ecuador. The Company is focused on its 
existing portfolio of assets in Colombia and Ecuador and will pursue new 
growth opportunities throughout Colombia and South America, leveraging 
our financial strength. The Company's common shares trade on the NYSE 
American, Toronto Stock Exchange and London Stock Exchange under the 
ticker symbol GTE. Additional information concerning Gran Tierra is 
available at www.grantierra.com. Information on the Company's website 
does not constitute a part of this press release. Investor inquiries may 
be directed to [e-mail] or [phone]. 
 
   Gran Tierra's Securities and Exchange Commission filings are available 
on the Securities and Exchange Commission website at http://www.sec.gov 
and on SEDAR at http://www.sedar.com and UK regulatory filings are 
available on the National Storage Mechanism website at 
www.morningstar.co.uk/uk/nsm. 
 
   Forward Looking Statements and Legal Advisories: 
 
   This press release contains opinions, forecasts, projections, and other 
statements about future events or results that constitute 
forward-looking statements within the meaning of the United States 
Private Securities Litigation Reform Act of 1995, Section 27A of the 
Securities Act of 1933, as amended, and Section 21E of the Securities 
Exchange Act of 1934, as amended, and financial outlook and forward 
looking information within the meaning of applicable Canadian securities 
laws (collectively, "forward-looking statements"). The use of the words 
"expect", "plan", "intend", "will" "guidance," and "believes", 
derivations thereof and similar terms identify forward-looking 
statements. In particular, but without limiting the foregoing, this 
press release contains forward-looking statements regarding: the 
Company's strategies, operations, including planned drilling and 
operation activities, and developments, the commissioning and expected 
benefits of the Acordionero Projects, the expected benefits of the 
Global Environmental License, the anticipated benefits of the two blocks 
in the ANH bid round and the Company's success in the bidding process, 
the Company's drilling plans and expected results, the expected 
production for second quarter 2019 and the Company's expectations as to 
future production amounts, the future impact of adverse events on 
production, and the resolution and effect to the Company of the strikes 
in Colombia and the timing of such resolution. The forward-looking 
statements contained in this press release reflect several material 
factors and expectations and assumptions of Gran Tierra including, 
without limitation, that Gran Tierra will continue to conduct its 
operations in a manner consistent with its current expectations, the 
accuracy of testing and production results and seismic data, pricing and 
cost estimates (including with respect to commodity pricing and exchange 
rates), rig availability, the effects of waterflood and the general 
continuance of assumed operational, regulatory and industry conditions 
in Colombia and Ecuador, and the ability of Gran Tierra to execute its 
business and operational plans in the manner currently planned. 
 
   Among the important factors that could cause actual results to differ 
materially from those indicated by the forward-looking statements in 
this press release are: sustained or future declines in commodity prices 
and potential resulting future impairments and reductions in proved 
reserve quantities and value; Gran Tierra's operations are located in 
South America, and unexpected problems can arise due to guerrilla 
activity; technical difficulties and operational difficulties may arise 
which impact the production, transport or sale of our products; 
geographic, political and weather conditions can impact the production, 
transport or sale of our products; the risk that current global economic 
and credit conditions may impact oil prices and oil consumption more 
than Gran Tierra currently predicts; the ability of Gran Tierra to 
execute its business plan, including the successful award of blocks in 
the ANH bid round in Colombia; the risk that unexpected delays and 
difficulties in developing properties may occur; the timely receipt of 
regulatory or other required approvals for our activities; the failure 
of exploratory drilling to result in commercial wells; unexpected delays 
due to the limited availability of drilling equipment and personnel; the 
risk that oil prices could continue to fall, or current global economic 
and credit market conditions may impact oil prices and oil consumption 
more than Gran Tierra currently predicts, which could cause Gran Tierra 
to further modify its strategy and capital spending program; and the 
risk factors detailed from time to time in Gran Tierra's periodic 
reports filed with the Securities and Exchange Commission, including, 
without limitation, under the caption "Risk Factors" in Gran Tierra's 
Annual Report on Form 10-K for the year ended December 31, 2018, as 
amended, and its other filings with the Securities and Exchange 
Commission. These filings are available on the Securities and Exchange 
Commission website at http://www.sec.gov and on SEDAR at www.sedar.com. 
 
   The forward-looking statements contained in this press release are based 
on certain assumptions made by Gran Tierra based on management's 
experience and other factors believed to be appropriate. Gran Tierra 
believes these assumptions to be reasonable at this time, but the 
forward-looking statements are subject to risk and uncertainties, many 
of which are beyond Gran Tierra's control, which may cause actual 
results to differ materially from those implied or expressed by the 
forward looking statements. All forward-looking statements are made as 
of the date of this press release and the fact that this press release 
remains available does not constitute a representation by Gran Tierra 
that Gran Tierra believes these forward-looking statements continue to 
be true as of any subsequent date. Actual results may vary materially 
from the expected results expressed in forward-looking statements. Gran 
Tierra 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 
law. 
 
 
 
 

(END) Dow Jones Newswires

June 19, 2019 01:00 ET (05:00 GMT)

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