GTE Tanks 30% on Loss of Peru Reserves Gran Tierra Energy Provides Operations Update
09:00 EST Tuesday, January 20, 2015
2014 Production Within Guidance, Exploration and Appraisal Well Results in Colombia and Peru
CALGARY, Jan. 20, 2015 /CNW/ - Gran Tierra Energy Inc. ("Gran Tierra Energy") (NYSE MKT, TSX: GTE), a company focused on oil exploration and production in South America, today provided an operations update.
Production
Oil and natural gas production from continuing operations averaged approximately 25,200 barrels of oil equivalent per day ("BOEPD") gross working interest ("WI") in 2014, or approximately 19,300 BOEPD net after royalties ("NAR") before adjustment for inventory changes and losses, or approximately 18,500 BOEPD NAR adjusted for inventory changes and losses. Approximately 99% of the 2014 production is oil, with the balance consisting of natural gas.
Colombia
Chaza Block, Putumayo Basin (100% WI and Operator)
The Eslabón Sur exploration well reached a true vertical depth of 9,708 feet. Mud log and electric log data acquired during and after drilling indicate only non-commercial hydrocarbons present in the primary Caballos Reservoir. The secondary Kg Reservoir was encountered twice as a result of faulting in the structure. The upper Kg Reservoir encountered 24 feet of net oil pay and the lower Kg Reservoir encountered 4 feet of net oil pay. The Eslabón Sur well has been suspended for further evaluation of these pay zones.
The Moqueta-16 and Moqueta-17 wells have successfully been drilled, with Moqueta-16 tied in and currently on production, and Moqueta-17 currently being tested.
Putumayo-1 Block, Putumayo Basin (55% WI and Operator)
Work continues at the Vonu-1 exploration well location, which will target the same Cretaceous sandstones encountered at the Costayaco and Moqueta discoveries. Gran Tierra Energy expects to begin drilling this well in the second quarter of 2015.
Peru
Block 95, Bretaña Field (Gran Tierra Energy 100% WI and Operator)
The Bretaña Sur appraisal well completed drilling operations on the L4 lobe on the Bretaña field and encountered approximately six feet of oil pay above the oil-water contact in the Vivian Sandstone Reservoir. This oil column is less than what was estimated by Gran Tierra Energy prior to drilling and Gran Tierra Energy expects the Bretaña Sur results will remove the Possible reserves that have been booked for the Bretaña field. A reduction in Probable reserves in the field is also expected, the magnitude of which is unknown at the moment. Gran Tierra Energy will prepare a revised reserve report and information respecting the exact amount of the reduction in Gran Tierra Energy's reserves will be provided after new mapping and the reservoir characterization is updated. This is expected to follow our year-end 2014 reserve report, which will not include this new data as it has only become available after year-end.
Gran Tierra Energy is continuing with a design for a revised development scenario based upon new resource estimates that contemplates a field development from the existing northern (L2) platform and associated oil processing facilities, consistent with the first stage of the original draft development plan.
Equipment for the first long term test ("LTT") production from the Bretaña discovery well has been delivered to the L2 platform and testing of facility components has begun, with first production expected to begin in the second quarter of 2015. The startup time, duration and level of production for the LTT may be adjusted further within the context of the operating and oil price environment at that time.