Second quarter production impacted by OTA downtime
CALGARY, July 12, 2012 /PRNewswire/ - Gran Tierra Energy Inc. ("Gran Tierra Energy") (NYSE MKT: GTE, TSX: GTE), a company focused on oil exploration and production in South America, today provided a production and capital budget update and updates for its exploration operations in Colombia.
Preliminary corporate production estimates, net after royalties ("NAR") and before changes in inventory and losses, for the three months ending June 30,2012 averaged approximately 16,300 barrels of oil equivalent per day (" BOEPD") consisting of approximately 12,350 BOEPD in Colombia, 3,800 BOEPD in Argentina and 150 BOEPD in Brazil. Approximately 96% of this production consists of light oil, with the balance consisting of natural gas. Due to changes in inventory and pipeline losses, sales volumes in the quarter may be lower than stated production.Second quarter 2012 production and sales have been impacted by oil delivery restrictions due to disruptions on the Ecopetrol-operated Oleoducto Transandino (" OTA") pipeline in Colombia, the latest of which occurred on July 3, 2012. Gran Tierra Energy continued production at a reduced rate while the OTA pipeline was down, selling a portion of its crude through trucking and storing excess crude. The OTA pipeline continues to be offline with production expected to return to normal levels early next week. Due to the repeated OTA pipeline disruptions that have occurred to date, Gran Tierra Energy does not expect to attain its previously announced expected average production for 2012 of approximately 20,000 - 21,000 BOEPD NAR. Current production capacity stands at approximately 21,000 BOEPD NAR; uninterrupted consolidated production in April 2012 averaged approximately 20,700 BOEPD NAR before inventory adjustments. Revised expected average production guidance will be provided once stable production is established; exit production rate of 20,000 to 21,000 BOEPD NAR remains unchanged. Capital Budget Update In connection with curtailed production and lower commodity prices experienced this year, Gran Tierra Energy is targeting approximately $60 million capital expenditure deferments from its previously announced 2012 budget of $440 million. Deferred expenditures are expected to be from areas which do not impact production capacity or near term high value reserve addition projects. Exploration Update Garibay Block, Llanos Basin, Colombia (Gran Tierra Energy 50% working interest, CEPSA 50% working interest and operator) The Bordon-1 exploration well reached true vertical depth of 9,680 feet on June 16, 2012. Mud log and open hole log data acquired during and after drilling indicate only non-commercial hydrocarbons present. The Bordon-1 well was plugged and abandoned. Azar Block, Putumayo Basin, Colombia (Gran Tierra Energy 40% WI and operator, Lewis Energy 40%, Gold Oil 20%) La Vega Este-1 oil exploration well is currently drilling ahead after initiating sidetrack operations, and is now expected to reach total depth in early August.
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