CALGARY, Alberta, July 10, 2019 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE)(TSX:GTE)(LSE:GTE) today announced an operations update. Production amounts are unaudited and on an average working interest before royalties (“WI”) basis unless otherwise indicated.
Key Highlights
- Southern Putumayo Blockades Lifted – Production Restored: Gran Tierra has been able to restore oil production from both the Suroriente and PUT-7 Blocks, which is currently approximately 4,500 barrels of oil per day equivalent (“BOEPD”)
- Acordionero Commissioning On-Track: The commissioning of the expansion of Acordionero’s central processing and water injection facilities, as well as the installation of gas-to-power turbines (“Acordionero Projects”), are progressing as planned with first oil flowing through the new additional processing equipment on July 3, 2019; the remaining water treatment and power systems are scheduled to be commissioned by July 15, 2019, which is expected to allow a rapid increase in water injection in the Acordionero field up to 40,000 barrels of water injected per day (“bwipd”) in August 2019
- Acordionero Near-Term Drilling Targeting Lisama E Sand: The Company is currently drilling the AC-48 development oil well, which is targeting the Lisama E Sand (currently no reserves assigned to this sand) which, if successful, would add reserves and production; if the E Sands are not productive, the well would be completed in the Lisama A
- Total Company Production: Current production is approximately 34,500 BOEPD, an increase of 5,500 BOEPD from the previously reported average level of 29,000 BOEPD (5-day average during June 13 to 17, 2019); 4,500 BOEPD of this increase is attributable to the Company bringing the Suroriente and PUT-7 Blocks fully back on-line; for second quarter 2019, Gran Tierra’s average production was approximately 35,550 BOEPD
- Planned Update to Guidance: Gran Tierra expects to update its guidance with its second quarter 2019 results press release, which is scheduled to be issued before market open on August 8, 2019; by that time the Company expects to have fully assessed the startup of the Acordionero Projects
- 3D Seismic Update: The planned 341 square kilometer (“km”) 3D seismic shoot has been operating across the Alea-1848A, the Nancy-Burdine-Maxine, PUT-4, and PUT-25 Blocks; the program is over 80% surveyed on the ground and shot-recording has been initiated; the program is scheduled to finish recording in August 2019, with a processed 3D volume expected to be interpreted in September 2019
- ANH Bid Round Awards: Gran Tierra has won two blocks in the recent Agencia Nacional de Hidrocarburos (“ANH”) bid round in Colombia, the LLA-85 Block in the Llanos Basin and the VMM-24 Block in the Middle Magdalena Valley (“MMV”) Basin; the Company believes these blocks may be highly prospective
- Exploration Drilling: during the second half of 2019, Gran Tierra plans to drill one exploration well in the PUT-1 Block (100% WI) and to participate in the drilling of one exploration well in the LLA-10 Block (50% WI)
- HSE Update: Surpassed over 7.7 million person-hours without a lost time incident
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented, "We are very pleased that the Colombian national government has successfully negotiated an end to the blockades in the southern Putumayo. Gran Tierra continues to seek additional ways to amplify our business benefits for the people near our operations. Through our operations, local hiring policies and social programs, we are providing legal, economic and entrepreneurship opportunities. Gran Tierra has also been awarded four “Work for Taxes” projects by the Colombian government. Through this program, the Company plans to develop infrastructure projects for communities that will be credited against our future tax liabilities. With our ongoing commissioning of the Acordionero water injection and gas-to-power projects, recent development drilling, as well as the lifting of the blockades which were affecting the southern Putumayo producing fields, we expect to restore the Company’s production back to over 40,000 BOEPD. Bringing our southern Putumayo production fully back on-line has been an important first step in this forecasted production increase. The next crucial step to get production back on track is the expected positive oil rate response at Acordionero due to our planned major ramp-up in water injection in August 2019.”
Acordionero Update (100% WI, Operator)
- Commissioning On-Track:
° The planned full commissioning of the Acordionero Projects during July 2019 is expected to allow expanded water injection from a current level of approximately 19,000 bwipd to 40,000 bwipd by August 2019 and the release of rental facilities, which is expected to reduce operating costs
° Water injection of 40,000 bwipd is expected to replace voidage from production in both the Lisama A and C Sands, increase the field’s oil production rate, sweep oil to the producers, and enhance ultimate recovery efficiency of oil and gas in the Acordionero field
° Start-up of the 20 megawatt gas-to-power project at the same time is expected to significantly enhance power reliability, improve electric submersible pump (“ESP”) performance and significantly lower operating costs
° All of these activities are expected to restore Acordionero’s production back to levels achieved in first quarter 2019 and to grow production in 2020
- Drilling Efficiencies Continue to be Achieved:
° The AC-42 and AC-43 wells were both drilled to total depth (“TD”) in 4.4 days, which was 0.6 days faster than AC-41 and 2.3 days faster than AC-40, respectively; the cost per well to TD has improved by 22% over these last 4 wells at the Central Pad
° Both the AC-42 and AC-43 wells are expected to be on production prior to the end of July 2019
- Production:
° As previously announced on June 18, 2019, the Company proactively shut-in two oil producers (AC-21 and AC-13) with high gas-oil ratios ("GOR"); the gas was produced predominately from the Lisama C Sand, where 20% of the original oil in place is currently booked; in AC-21, the Company has isolated production from Lisama C, replaced the well’s ESP and restored production from the Lisama A only; the Company plans to convert the AC-13 to a gas injection well to maximize the oil recovery factor in the field
° The AC-18 well went off-line as a result of an ESP failure on June 10, 2019 and is expected to be back on production on or around July 21, 2019
- Upcoming Drilling Schedule: Plans are in place to drill approximately five additional oil producers, three water injectors, and one water source well at Acordionero through to the end of 2019
Suroriente Update (52% WI, Operator)
- Cohembi Facility Expansion:
° As part of an expanded water flood program, activities have commenced to expand the Cohembi water treatment, injection and processing facilities under a two-phase expansion program
° Phase I is focused on expanding current water treatment and injection facilities, while Phase II is focused on fluid handling and processing trains beyond central processing facilities limitations by first quarter 2020
° This expansion is expected to boost injection capacity from a current level of 19,000 bwipd to 60,000 bwipd
° Cohembi’s oil production is expected to increase to over 4,000 BOPD over the course of the next year as a result (the Cohembi field alone had May 2019 WI average production of 2,774 BOEPD)
° Water treatment and injection facility expansion (Phase I) are scheduled for completion during fourth quarter 2019
Costayaco Update (100% WI, Operator)
- The CYC-39 infill oil well was drilled and cased in 18 days, within one day of the fastest well drilled in the field; the well is currently being completed and is expected to be on production later in July 2019
- The CYC-40 well is planned to be spud in late July 2019 and expected to be put on production during August 2019
Appraisal/Development Update - Middle Magdalena Valley
Ayombero Update (100% WI, Operator)
- The Ayombero-1 well in the Ayombero-Chuira field was recently successfully cleaned out, re-perforated across the Galembo formation of the La Luna Carbonate and has reinitiated long-term production testing; during July 1 to 6, 2019, the well has flowed naturally at a controlled average rate of 205 barrels of oil per day (18 degree API gravity) with an average GOR of 227 standard cubic feet per barrel, water cut of 0.1% and natural flowing wellhead pressure of 1,515 pounds per square inch; the well performance is being carefully monitored to determine if additional production increases could be achieved by opening up the restricted choke further
- Gran Tierra is contracting and importing a snubbing unit (equipment capable of working with high pressure wells) in order to continue with completion operations in both the Ayombero-2 and Ayombero-3 wells
- The Company continues to be 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
Exploration Update
Putumayo Basin
- The planned 341 square km 3D seismic shoot has been operating across the Alea-1848A, the Nancy-Burdine-Maxine, PUT-4, and PUT-25 Blocks; the program is over 80% surveyed on the ground and shot-recording has been initiated; the program is scheduled to finish recording in August 2019, with a processed 3D volume expected to be interpreted in September 2019; the Company has identified multiple prospects over the area and the 3D seismic is expected to significantly de-risk the program; Gran Tierra expects to commence exploration drilling on the blocks in the first quarter of 2020
- The Company expects to drill the Vonu Este well in the fourth quarter of 2019 on the PUT-1 Block (100% WI); this well is designed to target the fractured A-Limestone and the U Sand; the Vonu-1 well has produced approximately 800,000 barrels of oil from the A-Limestone and is still producing over 500 BOEPD; the Costayaco-19 well in the Chaza Block, has produced over 730,000 barrels of oil from the A-Limestone
Llanos Basin
- The Company has been awarded the LLA-85 Block following the recent ANH bid round; this block covers 136,400 acres within the prolific Llanos Basin in Colombia, and is on trend with fields that produce medium to light oil from the Mirador, Une and Gacheta Formations; the block is currently 65% covered with 3D seismic and the Company has preliminarily identified four leads on the block with plans to start the environmental permitting process for the future required 3D seismic program; under the terms of the award of the block, the Company is committed to undertaking a 50 square km 3D seismic survey and one exploration well within a six year exploration period
- Gran Tierra expects to participate in a non-operated exploration well (50% WI) in the LLA-10 Block in the second half of 2019
MMV Basin
- The Company has also been awarded the VMM-24 Block in the same ANH bid round; the block covers 26,867 acres contiguous to Gran Tierra’s core assets in the prolific MMV Basin and is on-trend with the Colon, Juglar and Acordionero oil fields, which produce medium gravity oil from reservoirs such as the Umir, Lisama & La Paz sandstones intervals; this block is close to Gran Tierra’s facilities and other existing infrastructure; the Company has preliminarily identified two leads on the block and plans to start the environmental licensing process as soon as possible; the Company is committed to undertaking an 80 square km 3D seismic survey and two exploration wells within a six year exploration period
- The Company plans to test the Lisama E Sand in the AC-48 well, which is currently being drilled; in a previous Acordionero well, over 90 feet of potential pay was identified based on cuttings, oil shows and mud gas data, but the zone was over-pressured and was not tested
Contact Information
For investor and media inquiries please contact:
Gary Guidry, Chief Executive Officer
Ryan Ellson, Executive Vice President & Chief Financial Officer
Rodger Trimble, Vice President, Investor Relations
+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 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. 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,” “should,” “would,” 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, and developments, including planned drilling and operation activities, the commissioning and expected benefits of the Acordionero Projects, the anticipated benefits of new blocks, new technology and techniques, and development wells in new areas, the Company’s drilling plans and expected results, the Company’s expectations as to future production amounts, the announcement of new guidance. 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 and other local events; 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; 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.