Gran Tierra Energy Announces Increased Working Interest and Contingent Resource Estimate for Block 95, Peru
Gran Tierra Energy Inc. (NYSE: GTE) today provided updates for its operations in Colombia, Argentina and Peru.
Block 95, Mara on Basin (Gran Tierra Energy 100% WI and operator subject to PeruPetro S.A. and Peruvian Government approvals)
Gran Tierra Energy Peru S.R.L. has entered into an agreement to purchase the remaining 40% working interest in Block 95 from Global Energy Development PLC. Subject to PeruPetro S.A. and Peruvian Government approvals, Gran Tierra Energy will have a 100% working interest in Block 95.
In addition, Gran Tierra Energy announces the results of a contingent gross lease resource estimate for an oil discovery on Block 95, provided by its independent reserves auditor, GLJ Petroleum Consultants ("GLJ") effective June 1, 2012. The resource estimate has been prepared in compliance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook.
Low estimate "1C" contingent resources of 11.5 million stock tank barrels of oil ("MMSTB") Best estimate "2C" contingent resources of 31.6 MMSTB High estimate "3C" contingent resources of 88.1 MMSTB There is no certainty that it will be commercially viable to produce any portion of the resources. Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Contingent resources are further classified in accordance with the level of certainty associated with the estimates and may be subclassified based on project maturity and/or characterized by their economic status. The recoverable resources attributed to the Block 95 discovery were considered sub-commercial (contingent resources) due to the absence of a commitment to proceed with development and the fact that development is in the very early stages as considered from the point of view of both regulatory requirements, and development strategy. It is premature to determine the economic status; the economic status is undetermined until additional fluid samples confirm the market for the crude and Gran Tierra Energy has done additional work on the oil market, development capital and environmental/regulatory matters.
The oil field discovered on Block 95, with the Breta a 10-16-1X discovery well drilled in 1974, flowed 807 barrels of oil per day naturally without pumps for approximately six hours from the Vivian Formation. Well records indicate inconsistent oil gravity values of 13.1 API and 17.6 API. As the Breta a well is located in a remote location, an oil gravity of 13.1 API will make this project challenging to develop in the current economic environment. If the oil gravity is 17.6 API, this project will likely be economic to develop in the current economic environment. Gran Tierra Energy is planning to drill a new exploration well in the fourth quarter of this year to further delineate this field and to explore deeper reservoir horizons not penetrated by the discovery well. A drilling site location has been identified and civil construction initiated for the Breta a Norte 95-2-1X exploration well on this structure.
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