5 exploration wells and 11 development & appraisal wells plus infrastructure in Colombia, Brazil, Peru and Argentina
CALGARY, Dec. 10, 2013 /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 announced a 2014 capital spending program of $467 million for its exploration and production development operations in Colombia, Brazil, Peru and Argentina. The capital spending program allocates $227 million for drilling, $102 million for facilities, equipment and pipelines, $136 million for seismic activities and $2 million associated with corporate activities. The budget currently contemplates the drilling of 12 gross wells in Colombia, 2 gross wells in Argentina, and 2 gross wells in Peru. Approximately 59% of the drilling budget is for development and appraisal drilling and approximately 41% is for exploration drilling. The approved 2014 capital spending program also includes funds for 2,213 km of 2D and 228 km 2 of 3D seismic acquisition programs in Colombia, Peru, and Brazil, primarily in preparation for additional exploration and production drilling operations in 2014 and beyond.
Gran Tierra Energy is expecting 2014 production to average between 30,000 and 31,000 barrels of oil equivalent per day (" BOEPD") gross working interest or between 23,500 and 24,500 BOEPD net after royalty (" NAR") with Costayaco contributing approximately 12,000 BOEPD NAR and Moqueta contributing approximately 4,700 BOEPD NAR assuming a 4% contingency for potential delivery disruptions and $95 average price for Brent. Approximately 96% of this production consists of oil, with the balance consisting of natural gas. Production expectations are based on the development of existing discoveries and could prove to be conservative with exploration success in Colombia.
Gran Tierra Energy had $353 million in cash and equivalents and no debt at the end of the third quarter 2013. Based on current oil prices, Gran Tierra Energy expects the 2014 work program and budget to be funded primarily from cash flows from operations and cash on hand."Gran Tierra Energy is poised to execute the largest capital spending program in our history in 2014, as a direct result of our success in managing existing reserves, production and cash flow, finding new reserves to develop during this year and setting the stage to explore for new reserves during the coming year. As 2013 is coming to an end, Gran Tierra Energy remains financially strong, and expects to remain debt free and fund the 2014 capital spending program from cash flow and cash on hand at current oil prices and expected higher production levels. The development of our diverse assets has provided a range of risk and reward drilling opportunities that has positioned Gran Tierra Energy for significant reserves and production growth in the years to come. Key milestones in 2014 include attaining the Global Development Permit for the Moqueta field and subsequent development activity in Colombia, booking reserves and initiating long-term test production from our new Bretaña oil development in Peru and ongoing operations in Brazil and Argentina," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. "We look forward to sharing news on our wells currently drilled and testing, and our progress on an exciting 2014 capital spending program as it unfolds." Colombia The Colombia capital spending program for 2014 is $243 million and Gran Tierra Energy expects it to include drilling 4 gross exploration wells and 8 gross appraisal and development wells. Gran Tierra Energy's oil exploration drilling program will target oil prospects in the Putumayo and Llanos Basins, while development drilling will focus on the Moqueta and Costayaco oil fields, with total drilling expenditures expected to be $118 million. Facilities work primarily consists of water injection and infrastructure work at Moqueta and Costayaco, central processing facility expansion at Jilguero, and compression and storage systems at Ramiriqui and is expected to be $54 million. Geological and geophysical (" G&G") work consisting of 228 km 2 of 3D seismic and 1,913 km of 2D seismic, along with other costs, is expected to be $71 million. Gran Tierra Energy plans G&G work for the Putumayo, Cauca and Sinu-San Jacinto Basins to mature leads and prospects for drilling in 2014 and beyond. Putumayo Basin Chaza Block (100% Working Interest (" WI") and Operator) With the continued successful appraisal of the Moqueta oil discovery throughout 2013, plans are in place to continue drilling in the field with the Moqueta-13, -14, -15 and -16 wells. Gran Tierra Energy is continuing to pursue its application for a Global Development Permit, which it expects to be granted in the first quarter of 2014.