Gran Tierra reveals Colombia, Peru exploration well program

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Friday, August 8, 2014

Gran Tierra Energy plans to drill four exploration wells in Colombia and one in Peru before year-end as it looks to the countries for growth, CEO Dana Coffield said in a conference call.

In the Chaza block, in Colombia's Putumayo basin, Gran Tierra plans to drill the Eslabón Sur Shallow-1 and Corunta-1A exploration wells this quarter, followed by the Eslabón Sur Deep-1 exploration well in Q4.

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South of Chaza, in the Putumayo-1 block, the firm plans to drill the Cabañas-1 exploration well, also in Q4, Coffield said.

Gran Tierra continues to drill the Moqueta-13 development well in the Chaza block, which was spudded May 25.

In Peru, Gran Tierra plans to drill the Bretaña Sur delineation well in Bretaña field's block 95 in Q4. The well will help define Bretaña's potential and the firm expects to see a 10-20% increase in resources, Coffield said.

In the same quarter, the firm plans to start long term Bretaña field test production at a forecast rate of 2,500b/d gross, CFO Shane O'Leary said.

Looking further ahead, Gran Tierra aims to drill an additional Peruvian exploration well in 2H15 in block 107 and two more in 2H16 in blocks 123 and 129, O'Leary added.

Gran Tierra's second quarter net income fell to US$9.14mn from US$47.8mn in same-period last year, according to the firm's unaudited second quarter financial report.

The decline was mainly attributed to a loss on the sale of the firm's Argentine unit to Madalena Energy.

Second quarter revenue dropped to US$148mn from US$151mn in 2Q13, while total expenses rose to US$88.6mn from US$76mn, the report said.

Gran Tierra also revised down its remaining 2014 capex to US$482mn from US$495mn, with the majority of investment earmarked for Colombia and Peru. The firm continues to explore conventional and unconventional potential in Brazil's Recôncavo basin. A 120km 3D seismic work program for the basin's blocks 86, 117, and 118 is planned for Q4.

"We're also exploring options to tie in gas production from the Chia field [in Brazil] to existing infrastructure, which has the potential to more than double the field's oil production due to gas flaring restrictions," O'Leary said.

Gran Tierra's net production dropped to 17,524boe/d in the second quarter from 19,058boe/d in same-period last year. Colombian production fell to 16,544boe/d from 18,322boe/d, while Brazil production grew to 980boe/d from 736boe/d.

A significant ramp up is expected in the second half, particularly in Colombia, with 2H14 net production forecast at 23,000b/d, Coffield said.

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