Gran Tierra Energy's CEO Discusses Q2 2012 Results - Earnings Call Transcript

This morning we disseminated a press release that included detailed financial information about the quarter. In addition Gran Tierra Energy's report on Form 10-Q for the six months ending June 30, 2012 has been filed on EDGAR and SEDAR and will be available on our website at www.grantierra.com.

I am going to begin today about talking about some of the key developments for the quarter. James will then take a few minutes to discuss key aspects of this quarter's financial results. Shane will provide an operational overview and I will return to provide an outlook and closing remarks.

The key highlight for the quarter was a positive mid-year reserve evaluation of the Costayaco field, Gran Tierra Energy's largest asset in Colombia. After producing 1.7 million barrels of oil since yearend 2011, we’re able to still add an additional 4.9 million barrels of crude reserves and 5.8 million barrels of 2P reserves, representing 33% and 35% growth respectively according to SEC figures.

This is remarkable for a field that has been on plateau production for three years and is a testament to our team’s ability to manage this field effectively and extend the expected plateau production and associated cash flow. In addition, we confirmed an exploration success with the Ramiriqui oil discovery in the Llanos basin in Colombia where we're currently evaluating options for implementation of an early production program for the well and the drilling of an appraisal well in the discovery.

Finally, in Brazil we drilled two development wells and expect to soon be drilling production from the [Tia] field. These successes in exploration and reserve additions during the quarter were offset in part by continued challenges to production due to pipeline disruptions on Ecopetrol operated OTA pipeline in Colombia.

Grand Tierra Energy's production in the second quarter averaged 14,127 barrels of oil equivalent per day net after royalty and inventory adjustment, comprised of 10,308 barrels of oil equivalent per day in Colombia, 3,693 barrels of oil equivalent per day in Argentina and 126 barrels of oil equivalent per day in Brazil.

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