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Press release from CNW Group

Gran Tierra Energy Announces 2010 Year-End Reserves

Tuesday, February 08, 2011

Gran Tierra Energy Announces 2010 Year-End Reserves07:00 EST Tuesday, February 08, 2011New field discoveries along with reservoir performance at Costayaco results in another record year for reserves CALGARY, Feb. 8 /CNW/ - Gran Tierra Energy Inc. (NYSE Amex: GTE; TSX: GTE) ("Gran Tierra Energy"), a company focused on oil exploration and production in South America, today announced the results of an independent reserve evaluation of the company's reserves by GLJ Petroleum Consultants Ltd. effective December 31, 2010.Year-end 2010 Highlights (net after royalties ("NAR"), calculated in accordance with Securities and Exchange Commission ("SEC") rules):Total Proved ("1P") oil reserves increased 7% to approximately 23.6 million barrels of oil;Total Proved plus probable ("2P") oil reserves increased 11% to approximately 31.0 million barrels of oil;Total Proved plus probable plus possible ("3P") oil and liquids reserves increased 20% to approximately 47.3 million barrels of oil and liquids;Reservoir performance expectations were exceeded at the Costayaco field in Colombia  and Costayaco 1P reserves changed to 17.7 million barrels of oil at year-end 2010, from 18.7 million barrels of oil at year-end 2009 despite total production of 4.4 million barrels of oil NAR at the Costayaco field in 2010;The Moqueta new field discovery in Colombia added total 3P working interest reserves of 12.3 million barrels of oilorNAR 3P reserves of 9.7million barrels of oilbased onthe evaluation of three wells completed before year-end 2010. The 2010 year-end reserves do not include the results of the Moqueta-4 delineation well, which is currently testing;Gran Tierra Energy produced approximately 7.1 million barrels of company interest oil before royalties and 338.6 million cubic feet of company interest gas before royalties in 2010;Annual production for 2010 averaged approximately 19,300 company interest barrels of oil per day ("BOPD") before royalties, or 14,300 BOPD NAR, an increase of approximately 13% versus 12,684 BOPD NAR in 2009. Production in the fourth quarter of 2010 averaged approximately 15,800 BOPD NAR.All reserves values contained in the 2010 Highlights, provided above, have been calculated using United States SEC rules. For reserves values calculated in compliance with Canadian National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGEH"), see "Reserves Reported in Accordance with Canadian Reporting Requirements" below in this press release."Gran Tierra Energy attained record levels of reserves and production in 2010 through successful exploration for new reserves and successful management of existing reserves," said Dana Coffield, President and CEO. "In 2011, we are focused on continuing growing reserves through exploration drilling in Colombia, Peru and Brazil, continued delineation drilling of new reserves discovered at the Moqueta oil field in Colombia, and growing production through development drilling and reservoir management in existing producing fields in Colombia, Argentina and Brazil. It remains our intent to execute our capital program in 2011 through available cash and cash flow from operations, allowing the company to remain debt free."Reserves Reported in Accordance with United States Reporting RequirementsThe following reserves are reported consistent with United States Securities and Exchange Commission rules.The following table summarizes Gran Tierra Energy's year-end 2010 working interest reserves and net after royalty reserves (with average start-of month 2010 oil prices). Also shown in the following table are Gran Tierra Energy's net after royalty reserves for year-end 2009 (with average start-of month 2009 oil prices).Total Company      Total Company Light and Medium Oil and Liquids (SEC Compliant)  2010 Year-End Gran Tierra Energy Working Interest Reserves2010 Year-End Gran Tierra Energy NAR* Reserves2009 Year-End Gran Tierra Energy NAR ReservesReserves CategoryMBO **MBOMBOProved     Developed Producing 24,10518,02220,375 Developed Nonproducing 1,6281,445899 Undeveloped 5,3904,130808Total Proved31,12423,59822,082Total Probable9,2977,4195,820Total Proved plus Probable40,42131,01727,902Total Possible21,71216,30511,538Total PPP62,13347,32139,440*NAR (net after royalty).**MBO (thousand barrels of oil).Reserves were added through development drilling and technical revisions in the Costayaco and Juanambu fields, along with the Moqueta discovery on the Chaza block and the Jilguero discovery on the Garibay block, both in Colombia.Partially offsetting reserve additions was 2010 full year production of 7.1 million barrels of company interest oil before royalties and 338.6 million cubic feet of company interest gas before royalties.1P light and medium oil reserves increased 7% largely due to development drilling in the Costayaco Field and the Moqueta and Jilguero discoveries, partially offset by full year 2010 production.2P light and medium oil reserves increased 11% mainly due to development drilling at Costayaco combined with the Moqueta and Jilguero discoveries.3P light and medium oil and liquids reserves increased by 20% or 7.9 million barrels, largely due to Moqueta discovery.      Total Company Gas (SEC Compliant) 2010 Year-End Gran Tierra Energy Working Interest Reserves2010 Year-End Gran Tierra Energy NAR Reserves2009 Year-End Gran Tierra Energy NAR ReservesReserves CategoryMMSCF***MMSCFMMSCFProved     Developed Producing 1,5401,2321,113 Developed Nonproducing 00756 Undeveloped 000Total Proved1,5401,2321,869Total Probable1841471,739Total Proved plus Probable1,7241,3803,608Total Possible48,81142,06134,520Total PPP50,53543,44038,128***MMSCF (million standard cubic feet).Gran Tierra Energy has year-end 2010 NAR 3P gas reserves of approximately 43.4billion cubic feet, an increase of 14% from 38.1 billion cubic feet NAR at year-end 2009 largely associated with the Valle Morado block in northern Argentina.ColombiaGran Tierra Energy's Colombia year-end 2010 working interest and net after royalty reserves are shown in the following table (with average start-of month 2010 oil prices). Also shown in the following table is Gran Tierra Energy's Colombian net after royalty reserves for year-end 2009 (with average start-of month 2009 oil prices).     Colombia Light and Medium Oil (SEC Compliant) 2010 Year-End Gran TierraEnergy Working Interest Reserves2010 Year-End Gran Tierra Energy NARReserves2009 Year-End Gran Tierra Energy NAR ReservesReserves CategoryMBOMBOMBOProved     Developed Producing 23,06917,12219,350 Developed Nonproducing 1,5831,406844 Undeveloped 5,1913,957597Total Proved29,84322,48520,791Total Probable8,6416,8504,972Total Proved plus Probable38,48429,33525,762Total Possible19,32314,2229,430Total PPP57,80743,55635,192    The increase in proved oil reserves is mainly associated with development drilling in the Costayaco Field in Colombia.The increase in 3P reserves is mainly associated with the Moqueta discovery on the Chaza block and the Jilguero discovery on the Garibay block in Colombia.      Colombia Gas (SEC Compliant) 2010 Year-End Gran Tierra Energy Working Interest Reserves2010 Year-End Gran Tierra Energy NAR Reserves2009 Year-End Gran Tierra Energy NAR ReservesReserves CategoryMMSCFMMSCFMMSCFProved     Developed Producing 1,5401,2321,113 Developed Nonproducing 000 Undeveloped 000Total Proved1,5401,2321,113Total Probable184147652Total Proved plus Probable1,7241,3801,765Total Possible2261811,388Total PPP1,9501,5603,153    Colombian gas reserves are associated with the Magangue field in the Lower Magdalena basin.The Costayaco Field 2010 year-end net after royalty reserves are shown in the following table (with average start-of month 2010 oil prices). Also shown in the following table is a comparison of the Costayaco Field 2010 year-end gross lease reserves (with average start-of month 2010 oil prices) to the gross lease reserves estimated in December 31, 2009 (with average start-of month 2009 oil prices).      Costayaco Light and Medium Oil (SEC Compliant) 2010 Year-End Costayaco Gran Tierra Energy NAR Reserves2010 Year-End Costayaco Gross Lease Reserves2009 Year-End Costayaco Gross Lease ReservesReserves CategoryMBOMBOMBOProved     Developed Producing 14,88820,56824,016Total Proved17,66524,44024,810Total Probable3,4024,7616,133Total Proved plus Probable21,06729,20130,943Total Possible6,5699,21711,718Total PPP27,63638,41842,661    Gran Tierra Energy successfully completed workovers on Costayaco-1, -3 and -11 thereby enhancing the productivity of the field. In September 2010, a water injection facility was completed with water injection commencing in October 2010 into the T Sand reservoir through the Costayaco-5 and -6 wells. The Costayaco-11 well was put on production in early July, 2010. Approximately 4.4 million barrels of oil NAR was produced from the Costayaco field in 2010. Through a successful field development program in 2010, Gran Tierra Energy managed to successfully mitigate reserve declines at the Costayaco field.ArgentinaGran Tierra Energy's Argentina working interest and net after royalty reserves are shown in the following table (with average start-of month 2010 oil prices). Also shown in the following table is Gran Tierra Energy's Argentina net after royalty reserves for year-end 2009 (with average start-of month 2009 oil prices).      Argentina Light and Medium Oil and Liquids (SEC Compliant) 2010 Year-End Gran Tierra Energy Working Interest Reserves2010 Year-End Gran Tierra Energy NAR Reserves2009 Year-End Gran Tierra Energy NAR ReservesReserves CategoryMBOMBOMBOProved     Developed Producing 1,0369001,025 Developed Nonproducing 453955 Undeveloped 199173211Total Proved1,2811,1131,291Total Probable656569850Total Proved plus Probable1,9371,6822,140Total Possible2,3892,0832,109Total PPP4,3263,7654,248      Argentina Gas (SEC Compliant) 2010 Year-End Gran Tierra Energy Working Interest Reserves2010 Year-End Gran Tierra Energy NAR Reserves2009 Year-End Gran Tierra Energy NAR ReservesReserves CategoryMMSCFMMSCFMMSCFProved     Developed Producing 000 Developed Nonproducing 00756 Undeveloped 000Total Proved00756Total Probable001,087Total Proved plus Probable001,843Total Possible48,58541,88033,132Total PPP48,58541,88034,975Gran Tierra Energy recorded no 1P or 2P gas reserves at year-end 2010 at Valle Morado as the indicated reserves were uneconomic based on budgeted expenditures.Reserves Reported in Accordance with Canadian Reporting RequirementsThe following reserves are compliant with NI 51-101 and COGEH (with forecasted oil price and costs):Total Company      Total company Light and Medium Oil and Liquids (NI 51-101 compliant) 2010 Year-End Gran Tierra Energy Working Interest Reserves2010 Year-End Gran Tierra Energy NAR Reserves2009 Year-End Gran Tierra Energy NAR ReservesReserves CategoryMBbl*MBblMBblProved     Developed Producing 24,12517,73019,705 Developed Nonproducing 1,6281,445898 Undeveloped 5,4034,094784Total Proved31,15523,26921,386Total Probable9,3157,3615,410Total Proved plus Probable40,47030,63126,795Total Possible21,69616,17311,085Total PPP62,16646,80437,880*MBbl (thousand barrels of oil).ColombiaGran Tierra Energy's year-end 2010 Colombia working interest and net after royalty reserves are shown in the following table (NI 51-101 compliant with forecast oil price and cost). Also shown in the following table are Gran Tierra Energy's Colombian net after royalty reserves for year-end 2009 (NI 51-101 compliant with forecast oil price and cost).      Colombia Light and Medium Oil (NI 51-101 compliant) 2010 Year-End Gran Tierra Energy Working Interest Reserves2010 Year-End Gran Tierra Energy NAR Reserves2009 Year-End Gran Tierra Energy NAR ReservesReserves CategoryMBblMBblMBblProved     Developed Producing 23,09116,83218,647 Developed Nonproducing 1,5831,406843 Undeveloped 5,2043,921585Total Proved29,87722,15920,075Total Probable8,6396,7754,557Total Proved plus Probable38,51628,93424,632Total Possible19,29114,0758,980Total PPP57,80743,00933,611The Costayaco Field 2010 year-end net after royalty reserves are shown in the following table (with forecast oil price and cost). Also shown in the following table is a comparison of the Costayaco Field 2010 year-end gross lease reserves (with forecast oil price and cost) to the gross lease reserves estimated at December 31, 2009 (with forecast oil price and cost).      Costayaco Light and Medium Oil (NI 51-101 compliant) 2010 Year-End Costayaco  Gran Tierra Energy NAR Reserves2010 Year-End CostayacoGross Lease Reserves2009 Year-End Costayaco Gross Lease ReservesReserves CategoryMBblMBblMBblProved     Developed Producing 14,65120,56824,257Total Proved17,38424,44025,079Total Probable3,3514,7615,864Total Proved plus Probable20,73529,20130,943Total Possible6,4709,21711,718Total PPP27,20538,41842,661ArgentinaGran Tierra Energy's Argentina year-end 2010 working interest and net after royalty reserves are shown in the following table (NI 51-101 compliant with forecast oil price and cost). Also shown in the following table is Gran Tierra Energy's Argentina net after royalty reserves for year-end 2009 (NI 51-101 compliant with forecast oil price and cost).      Argentina Light and Medium Oil and Liquids (NI 51-101 compliant) 2010 Year-End Gran Tierra Energy Working Interest Reserves2010 Year-End Gran Tierra Energy NAR Reserves2009 Year-End Gran Tierra Energy NAR ReservesReserves CategoryMBblMBblMBblProved     Developed Producing 1,0348981,058 Developed Nonproducing 453955 Undeveloped 199173199Total Proved1,2781,1101,311Total Probable676587853Total Proved plus Probable1,9541,6972,164Total Possible2,4052,0982,105Total PPP4,3593,7954,269About 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 Amex Exchange (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, subject to regulatory approval, in 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, on SEDAR (www.sedar.com) and with the Securities and Exchange Commission (www.sec.gov).Cautionary Statements:Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. The estimate of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.A barrel of oil equivalent (BOE) is calculated using the conversion factor of 6,000 cubic feet ("6Mcf") of natural gas being equivalent to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf : 1 barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.Forward-Looking StatementsThe statements in this press release regarding Gran Tierra Energy's expectations, plans, projections and actions including Gran Tierra Energy's expectations regarding its 2011 exploration drilling campaign, reservoir management and production, and expected funding of Gran Tierra Energy's 2011 capital program 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", "will", "scheduled", "may", "intends" and variations of these words are forward-looking statements. 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 the accuracy of its reserves estimates, the continuity of certain industry conditions, the ability of Gran Tierra Energy to execute its current business and operational plans in the manner currently planned. 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. The forward-looking statements contined in this press 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. 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 South America, and unexpected problems can arise due to 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; 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 November 5, 2010, and available at the Securities and Exchange Commission's internet site 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 Gran Tierra Energy'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.For further information: Jason Crumley Director, Investor Relations 403-265-3221 info@grantierra.com