January 14, 2016 - 8:14 PM EST
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Gran Tierra Announces Strategic Acquisition Consolidating Interests in the Putumayo-7 Block

CALGARY, ALBERTA--(Marketwired - Jan. 14, 2016) -

All dollar amounts are in United States ("U.S.") dollars unless otherwise indicated.

Gran Tierra Energy Inc. ("Gran Tierra" or the "Company") (TSX:GTE) (NYSE:GTE) is pleased to announce that today the Company entered into an agreement with PetroGranada Limited to acquire all of the issued and outstanding shares of PetroGranada Colombia Limited ("PGC") (the "Acquisition"). Subject to approval by the Agencía Nacíonal de Hidrocarburos of Colombia ("ANH"), PGC holds a full 50% undivided working interest in the exploration and production contract for the Putumayo-7 block ("PUT-7 Block"), in the Putumayo Basin of Colombia. Consideration for the Acquisition is $19 million, subject to customary adjustments, to be paid on the closing of the Acquisition. In addition, the Company has agreed to pay an additional $4 million to PGC if the cumulative production from the PUT-7 Block plus gross Proved plus Probable reserves under the PUT-7 Block meet or exceed 8 million barrels ("MMbbls"). As a result of its previous acquisition of Petroamerica Oil Corp., the Company already holds the rights to the other 50% undivided working interest of the PUT-7 Block, which is subject to ANH approval. Upon receiving ANH approval with respect to both interests, the Company will hold a 100% undivided working interest and be the operator of the PUT-7 Block.

The Acquisition will be funded with cash-on-hand, and the Company will remain debt free with an undrawn $200 million credit facility.


The PUT-7 Block is highly prospective in the Company's view. Based on an NI 51-101 independent report prepared by GLJ Petroleum Consultants Ltd., as of December 31, 2014, there were 1.9 MMbbls of Proved plus Probable reserves with respect to the 50% undivided working interest of Petroamerica Oil Corp. In addition, the Company believes there are multiple seismically identified drill ready exploration prospects on the PUT-7 Block, including the emerging N Sands play.

"This acquisition is strategic to the Company in consolidating reserves and high potential exploration opportunities in the Putumayo Basin, and throughout the hydrocarbon producing basins in Colombia. This operated block will provide a focal point for potential new infrastructure in the southern Putumayo as we begin the exciting exploration and development programs in this region," commented Gary Guidry, President and Chief Executive Officer of Gran Tierra.


The Acquisition has the following characteristics and metrics:

Total consideration   $19 million1
Total net acres of undeveloped land (50% of block)   65,093 acres
Working Interest Proved plus Probable reserves   1.9 MMbbls2
Consideration paid for barrel of 2P reserves   $10.00/bbl
  1. Gran Tierra has agreed to pay an additional $4 million to PGC if cumulative production from the PUT-7 Block plus gross Proved plus Probable reserves under the PUT-7 Block meet or exceed 8 MMbbls.
  2. Based on NI 51-101 independent report prepared by GLJ Petroleum Consultants Ltd. as of December 31, 2014, with respect to the 50% undivided working interest of Petroamerica Oil Corp.

There are commitments to drill two exploration wells on the PUT-7 Block during 2016, after which there will remain a commitment to perform approximately 167 square kilometers of 3D seismic. The Company considers the drill ready prospects on the PUT-7 Block to be in the top quartile of its exploration portfolio. 

Gran Tierra continues to execute its business plan of creating sustainable value-added growth in reserves, production and cash flow through management's integrated strategy of acquiring, exploring, developing and enhancing high-quality assets in Colombia.



This press release contains opinions, forecasts, projections, and other statements about future events or results that constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"). Such forward-looking statements include, but are not limited to, statements about: The Company's interest in PUT-7 following ANH approval; drill ready exploration prospects; and infrastructure projects. Statements respecting reserves and resources are forward-looking statements as they involve the implied assessment, based on estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future. 

The forward-looking statements contained in this press release reflect several material factors and expectations and assumptions of Gran Tierra including, without limitation, the accuracy of reserves estimates, that Gran Tierra will continue to conduct its operations in a manner consistent with its current expectations, the accuracy of testing and production results and seismic data, and the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions including in areas of potential expansion, and the ability of Gran Tierra to execute its current business and operational plans in the manner currently planned. Gran Tierra believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct.

Among the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements in this press release are: risks relating to Gran Tierra's ability to realize the anticipated benefits from the Acquisition as well as the acquisition of Petroamerica; Gran Tierra's operations are located in South America, and unexpected problems can arise due to guerilla activity; technical difficulties and operational difficulties may arise which impact the production, transport or sale of our products; geographic, political and weather conditions can impact the production, transport or sale of our products; the risk that current global economic and credit conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts; the risk that unexpected delays and difficulties in developing currently owned properties may occur; the failure of exploratory drilling to result in commercial wells; unexpected delays due to the limited availability of drilling equipment and personnel; the risk that oil prices could continue to fall, or current global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; and the risk factors detailed from time to time in Gran Tierra's periodic reports filed with the Securities and Exchange Commission, including, without limitation, under the caption " Risk Factors" in Gran Tierra's Annual Report on Form 10-K filed March 2, 2015, and its Quarterly Report on Form 10-Q filed November 3, 2015. These filings are available on the Web site maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at www.sedar.com. Although the current capital spending program and long term strategy of Gran Tierra is based upon the current expectations of the management of Gran Tierra, should any one of a number of issues arise, Gran Tierra may find it necessary to alter its business strategy and/or capital spending program and there can be no assurance as at the date of this press release as to how those funds may be reallocated or strategy changed.

All forward-looking statements are made as of the date of this press release and the fact that this press release remains available does not constitute a representation by Gran Tierra that Gran Tierra believes these forward-looking statements continue to be true as of any subsequent date. Actual results may vary materially from the expected results expressed in forward-looking statements. Gran Tierra disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities laws. Gran Tierra's forward-looking statements are expressly qualified in their entirety by this cautionary statement.


All estimates of proved, probable and possible reserves and related future net revenue disclosed in this news release have been prepared in accordance with NI 51-101. Estimates of reserves and future net revenue made in accordance with NI 51-101 will differ from corresponding estimates prepared in accordance with applicable U.S. Securities and Exchange Commission ("SEC") rules and disclosure requirements of the U.S. Financial Accounting Standards Board ("FASB"), and those differences may be material. NI 51-101, for example, requires disclosure of reserves and related future net revenue estimates based on forecast prices and costs, whereas SEC and FASB standards require that reserves and related future net revenue be estimated using average prices for the previous 12 months. In addition, NI 51-101 permits the presentation of reserves estimates on a "company gross" basis, representing the company's working interest share before deduction of royalties, whereas SEC and FASB standards require the presentation of net reserve estimates after the deduction of royalties and similar payments. There are also differences in the technical reserves estimation standards applicable under NI 51-101 and, pursuant thereto, the Canadian Oil and Gas Evaluation Handbook, and those applicable under SEC and FASB requirements.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

In addition to being a reporting issuer in certain Canadian jurisdictions, Gran Tierra is a registrant with the SEC and subject to domestic issuer reporting requirements under U.S. federal securities law, including with respect to the disclosure of reserves and other oil and gas information in accordance with U.S. federal securities law and applicable SEC rules and regulations (collectively, "SEC requirements"). Disclosure of such information in accordance with SEC requirements is included in the Company's Annual Report on Form 10-K and in other reports and materials filed with or furnished to the SEC and, as applicable, Canadian securities regulatory authorities. The SEC permits oil and gas companies that are subject to domestic issuer reporting requirements under U.S. federal securities law, in their filings with the SEC, to disclose only estimated proved, probable and possible reserves that meet the SEC's definitions of such terms. Gran Tierra has disclosed estimated proved, probable and possible reserves in its filings with the SEC. In addition, Gran Tierra prepares its financial statements in accordance with United States generally accepted accounting principles, which require that the notes to its annual financial statements include supplementary disclosure in respect of the Company's oil and gas activities, including estimates of its proved oil and gas reserves and a standardized measure of discounted future net cash flows relating to proved oil and gas reserve quantities. This supplementary financial statement disclosure is presented in accordance with FASB requirements, which align with corresponding SEC requirements concerning reserves estimation and reporting.

Gran Tierra Energy Inc.
Gary Guidry
Chief Executive Officer
Tel: +1.403.767.6500

Gran Tierra Energy Inc.
Ryan Ellson
Chief Financial Officer
Tel: +1.403.767.6501

Gran Tierra Energy Inc.
Chris Metcalfe
Director Investor Relations
Tel: +1.403.698.7946

Source: Marketwired (January 14, 2016 - 8:14 PM EST)

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