Gran Tierra Energy Inc. Announces Positive Test Results from Bocachico Norte-J1

Rhea-AI Summary

Gran Tierra Energy (NYSE American:GTE) announced successful test results from its Bocachico Norte-J1 well in Ecuador. The T-Sand oil zone produced a stabilized rate of 1,353 barrels of oil per day (BOPD) with 35.5-degree API gravity oil and less than 1% water cut over a 51-hour period. This is the fourth consecutive oil discovery in Ecuador, underlining the company's strong technical proficiency and valuable landholdings in the Oriente/Putumayo basin. Multiple producing zones were identified, enhancing operational flexibility. The Arawana field continues strong production, contributing over 74,000 bbl to date. Both fields are expected to drive production growth, reserve additions, and free cash flow in the coming years.

Positive

• Test results from Bocachico Norte-J1 well show a stabilized production rate of 1,353 BOPD.
• The T-Sand oil zone produced 35.5-degree API gravity oil with less than 1% water cut.
• This marks the fourth consecutive oil discovery in Ecuador.
• Multiple producing zones identified, enhancing operational flexibility.
• Arawana field has produced over 74,000 bbl to date and continues strong.
• Expected to drive production growth, reserve additions, and free cash flow.

Negative

• None.

Petroleum Engineer

The Bocachico Norte-J1 well test results are highly encouraging. The stabilized production rate of 1,353 BOPD with 35.5-degree API gravity oil indicates a high-quality, light oil reservoir. The low water cut (<1%) and moderate gas-oil ratio suggest excellent reservoir conditions and potential for sustained production.

The multi-zone potential across T-Sand, B-Limestone and Basal Tena is particularly promising, as it could significantly enhance the field's overall productivity and economics. The success of this well, combined with the nearby Arawana field's performance, points to a potentially substantial new oil-producing region for Gran Tierra.

However, investors should note that long-term production rates may differ from initial test results and further appraisal will be needed to fully assess the field's potential.

Financial Analyst

This discovery represents a significant positive development for Gran Tierra Energy. The successful well test at Bocachico Norte-J1, coupled with the ongoing production from Arawana, could substantially boost the company's reserves and production capacity. The multi-zone potential enhances the economic viability of these fields.

Investors should focus on the potential impact on Gran Tierra's financials:

• Increased production could lead to higher revenue and cash flow
• Successful exploration reduces the risk profile of the company's asset portfolio
• The lighter oil grade (35.5-degree API) may command premium pricing, potentially improving profit margins

However, it's important to consider the capital expenditure required for full field development and the impact of oil price volatility on project economics. Overall, this news is likely to be viewed favorably by the market, potentially supporting Gran Tierra's stock price in the near term.

Energy Market Analyst

Gran Tierra's success in Ecuador marks a significant shift in their portfolio diversification strategy. The discovery of lighter crude (35.5-degree API) is particularly noteworthy in the current market context:

• Lighter crudes typically command premium prices and are easier to refine, potentially boosting Gran Tierra's revenue per barrel
• The multi-zone potential could lead to more efficient and cost-effective production operations
• Successful exploration in Ecuador reduces Gran Tierra's reliance on Colombian assets, mitigating geopolitical risks

The energy market is likely to view this positively, especially given the current global focus on energy security and diversification of supply sources. However, investors should also consider broader market factors such as global oil demand projections and potential regulatory changes in Ecuador that could impact future operations.

CALGARY, Alberta, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE) (TSX:GTE) (LSE:GTE) today announced an operational update.  Production amounts are on an average working interest before royalties (“WI”) basis unless otherwise indicated. Per barrel (“bbl”) and bbl of oil per day (“BOPD”) amounts are based on WI sales before royalties.

Message to Shareholders

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: “We are thrilled with the continued success of the Bocachico Norte-J1 well which marks the fourth consecutive oil discovery in Ecuador. These discoveries are a testament to our strong technical analysis and understanding of the geology, as well as our well-positioned land in the Oriente/Putumayo basin in Ecuador and Colombia. The production from the T-Sand and identified net pay in the B-Limestone and Basal Tena highlights the multi zone potential in our blocks. The presence of multiple producing zones and the ability to comingle production enhance our operational flexibility and economics. Together with the Arawana field, we expect these fields to be key drivers of production growth, reserve additions and free cash flow for the Company for years to come.”

Bocachico Norte-J1 Oil Discovery:

• Gran Tierra has run production casing, cemented and perforated the T-Sand oil zone and has begun production testing.
• The T-Sand was perforated over 20 ft of reservoir with 29 ft of reservoir pay based on log evaluation. A jet pump was run and the well has produced at stabilized rates over 51 hours at 1,353 barrels oil per day (“BOPD”), 35.5-degree API gravity oil, less than 1% water cut, and a gas-oil ratio of 336 standard cubic feet per stock tank barrel.
• This positive test in the T-Sand builds confidence in the multizone potential (Basal Tena / U-Sand / T-Sand) for the Zabaleta well which is expected to be drilled in the second half of 2024 and is 200 feet up dip from the recent Arawana discovery well. Arawana continues to produce with strong results from the Basal Tena zone greater than 900 bopd. The artificial lift system will be converted from a jet pump to electrical submersible pump in the third quarter of 2024. The cumulative production to date from Arawana is approximately 74,000 bbl.
• This test verifies the Bocachico structure potential in the T-Sandstone and continues to diversify the corporate producing product stream to lighter hydrocarbons.

Contact Information

For investor and media inquiries please contact:

Gary Guidry
President & Chief Executive Officer

Ryan Ellson
Executive Vice President & Chief Financial Officer

+1-403-265-3221

info@grantierra.com

About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. together with its subsidiaries is an independent international energy company currently focused on oil and natural gas exploration and production in Colombia and Ecuador. The Company is currently developing its existing portfolio of assets in Colombia and Ecuador and will continue to pursue additional new growth opportunities that would further strengthen the Company’s portfolio. The Company’s common stock trades on the NYSE American, the Toronto Stock Exchange and the London Stock Exchange under the ticker symbol GTE. Additional information concerning Gran Tierra is available at www.grantierra.com. Except to the extent expressly stated otherwise, information on the Company’s website or accessible from our website or any other website is not incorporated by reference into and should not be considered part of this press release. Investor inquiries may be directed to info@grantierra.com or (403) 265-3221.

Gran Tierra’s Securities and Exchange Commission (the “SEC”) filings are available on the SEC website at http://www.sec.gov. The Company’s Canadian securities regulatory filings are available on SEDAR+ at http://www.sedarplus.ca and UK regulatory filings are available on the National Storage Mechanism website at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

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”). All statements other than statements of historical facts included in this press release regarding expectations regarding drivers of production growth, reserves additions and free cash flow for the Company; anticipated timing of the drilling of the Zabaleta well, and those statements preceded by, followed by or that otherwise include the words “expect,” “plan,” “can,” “will,” “should,” “guidance,” “forecast,” “budget,” “estimate,” “signal,” “progress” 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 drilling program and the Company’s expectations regarding drivers of production growth, reserves additions and free cash flow. 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, pricing and cost estimates (including with respect to commodity pricing and exchange rates), 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 our actual results to differ materially from the forward-looking statements in this press release include, but are not limited to, 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, 2023 filed February 20, 2024 and its other filings with the SEC. These filings are available on the SEC website at http://www.sec.gov and on SEDAR+ at www.sedarplus.ca.

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. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

Presentation of Oil and Gas Information

References to a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. Gran Tierra’s reported production is a mix of light crude oil and medium and heavy crude oil for which there is not a precise breakdown since the Company’s oil sales volumes typically represent blends of more than one type of crude oil. Well test results should be considered as preliminary and not necessarily indicative of long-term performance or of ultimate recovery. Well log interpretations indicating oil and gas accumulations are not necessarily indicative of future production or ultimate recovery. If it is indicated that a pressure transient analysis or well-test interpretation has not been carried out, any data disclosed in that respect should be considered preliminary until such analysis has been completed. References to thickness of “oil pay” or of a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume.

FAQ

What are the test results from Gran Tierra's Bocachico Norte-J1 well?

The Bocachico Norte-J1 well produced a stabilized rate of 1,353 barrels of oil per day with 35.5-degree API gravity oil and less than 1% water cut over a 51-hour period.

How many consecutive oil discoveries has Gran Tierra made in Ecuador?

Gran Tierra has made four consecutive oil discoveries in Ecuador.

What is the expected impact of the Bocachico Norte-J1 and Arawana fields on Gran Tierra's production?

The Bocachico Norte-J1 and Arawana fields are expected to drive production growth, reserve additions, and free cash flow for Gran Tierra.

How much oil has the Arawana field produced to date?

The Arawana field has produced over 74,000 barrels of oil to date.

What is the significance of the multiple producing zones identified in Gran Tierra's latest discovery?

The multiple producing zones identified enhance operational flexibility and diversify Gran Tierra's production stream to include lighter hydrocarbons.