First exploration well in program to be drilled in 2011
CALGARY, Sept. 15, 2011 /PRNewswire/ - Gran T i erra Energy Inc. ("Gran Tierra Energy") (NYSE Amex: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today announced that it has entered into two farm-in agreements with Statoil do Brasil Ltda. ("Statoil"), whereby Gran Tierra Energy will earn a 10% working interest in Concession Contract BM-CAL-7 operated by PetróleoBrasileiro S.A. ("Petrobras"), and a 15% working interest in Concession Contract BM-CAL-10 operated by Statoil, in the offshore Camamu-Almada Basin, Brazil. The completion of the two transactions is subject to obtaining regulatory approval from Agência Nacional de Petróleo, Gás Natural e Biocombustíveis ("ANP") and other customary conditions of closing.
"The conclusion of these farm-in opportunities will establish Gran Tierra Energy in offshore Brazil, one of the most important petroleum regions in the world today. Partnering with Petrobras and Statoil will provide Gran Tierra Energy with an opportunity to participate in multiple highly prospective exploration plays with two world-class offshore operators experienced in those plays" said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy.
BM-CAL-7 encompasses approximately 1,362 square kilometers (336,558 acres), and BM-CAL-10 encompasses approximately 1,680 square kilometers (415,137 acres); water depths range from approximately 400 to 2,800 meters. Multiple leads and prospects have been identified on the two blocks.The Camamu-Almada Basin lies immediately south and offshore from the onshore Recôncavo Basin, where Gran Tierra Energy is the operator of four blocks and is poised to begin both development drilling and exploration drilling operations. Under the terms of the farm-in agreements, Gran Tierra Energy will be a non-operating partner and will pay its participating interest share of costs incurred to date and in the future on the Concession Contracts as well as a carry on the drilling of the first exploration obligation well with respect to Concession Contract BM-CAL-7 and Concession Contract BM-CAL-10 . Additional amounts may also be payable in the event one of the first exploration obligation wells results in a discovery and in the event of future development. The Gran Tierra Energy 2011 budget impact is expected to be US$17 million. The first exploration well on Concession Contract BM-CAL-10 is anticipated to be drilled late 2011.