Test Results of Arawana-J1 Discovery and Provides Ecuador Exploration Update

CALGARY, Alberta, May 28, 2024 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE) (TSX:GTE) (LSE:GTE) today announced an operational update. All dollar amounts are in United States dollars, and production amounts are on an average working interest before royalties (“WI”) basis unless otherwise indicated. Per barrel (“bbl”) and bbl of oil per day (“BOPD”) amounts are based on WI sales before royalties.

Message to Shareholders

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: “Gran Tierra is thrilled to announce the test results from the Arawana-J1 well (100% WI, Operator), marking a significant milestone for our operations in Ecuador. These results not only highlight the potential of the Arawana field area but continues to demonstrate the success of our exploration program in our core southern Colombia (Rose discovery) and northern Ecuador (Bocachico and Charapa Norte discoveries). We are very excited that the closest analogue to the Arawana field area, in terms of closure, thickness, rock and fluid properties, is our Cohembi field located in Colombia's South Putumayo Basin, which we operate and is located just 20 km to the north. As disclosed with our latest annual Company reserves disclosure as of December 31, 2023, the ultimate gross Proved plus Probable (“2P”) original recoverable reserves from Cohembi as estimated by McDaniel & Associates Consultants Ltd., the Company’s independent qualified reserves evaluator is 82 million bbls. A major advantage of operating in both Ecuador and Colombia is the ability to quickly monetize production from new discoveries. With nearby infrastructure and regulatory approvals already in place, we are well-positioned to quickly appraise and develop the Arawana field. We will utilize Gran Tierra's strong cash flow, solid balance sheet, and new production from this discovery to fund the development.

In addition, to our progress testing Arawana-J1, we are pleased to provide an update on our drilling operations. The rig that drilled Arawana-J1 was moved to the Bocachico Norte-J1 well cellar, where the Bocachico Norte-J1 well (100% WI, Operator) was spud on May 24th, marking the start of the second exploration well in our 2024 exploration plan. As of May 27th, the well is drilling ahead at approximately 6,670 feet to an expected total depth of approximately 10,800 feet. Following the drilling and completion of the Bocachico Norte-J1 well, the rig will move to the Charapa Block (100% WI, Operator) to commence drilling three exploration wells. Once this phase is complete, the rig will return to the Chanangue block to drill two additional exploration wells from the K pad, Zabaleta-K1 and Zabaleta Oeste-K1 (100% WI, Operator). We are particularly excited about the Zabaleta wells, as they are positioned up dip from Arawana-J1 and on the structural high, promising further potential for significant discoveries in the vertically stacked intervals of the Basal Tena, U-Sand, T-Sand and Hollin high permeability sandstones. Gran Tierra is currently working closely with the Ministry of Energy and Mines of Ecuador to fast track the exploration and development of all of Gran Tierra’s Ecuadorian blocks.

The Arawana-J1 discovery, which was the highest-risk well in our 2024 exploration program, has set the stage for Gran Tierra to deliver strong reserve results and has opened another development horizon in Ecuador that we expect to fully fund from internally generated cash flow. This success also validates our refined geological model, which has proven effective with the last four exploration wells yielding four oil discoveries. We are confident that our future development and exploration programs will continue to drive our growth and success in the region.”

Arawana-J1 Oil Discovery:

Gran Tierra has run production casing, cemented and perforated the Basal Tena oil zone and has begun production testing.

The Basal Tena was perforated over 23.5 ft of reservoir. A jet pump was run and the well has produced at stabilized rates over 48 hours at 1,174 barrels oil per day (“bopd”), 20-degree API gravity oil, less than 1% water cut, and a gas-oil ratio (“GOR”) of 258 standard cubic feet per stock tank barrel (“scf/stb”).

The well continues to clean-up and over the past 12 hours the well has produced at stabilized rates of 1,358 BOPD of 20-degree API gravity oil, less than 1% water cut, and a GOR of 239 scf/stb.

The analogue for the Arawana field area is the Cohembi field 20 km north, where Gran Tierra is in the process of expanding the waterflood to optimize recovery from the field. Cohembi produces from the N-sands, the geologic equivalent of the Basal Tena at the Arawana field area. The closure, thickness, rock and fluid properties are very similar to that of the Arawana field area. One notable difference of the Arawana field area is a higher gas-oil ratio providing a lower oil viscosity which is excellent for enhanced oil recovery by waterflooding while providing natural gas for power generation.

1 Reserves refers to gross ultimate Proven plus Probable original recoverable reserves

*Cohembi information is based on GTE’s McDaniel Reserves Report as of December 31, 2023. Arawana information is based on initial production data from May 2024. See “Presentation of Oil and Gas Information”

TBD – To be determined

Exploration Update:

Bocachico Norte-J1 (100% WI, Operator):

Upon completion of drilling the Arawana-J1 well, the drilling rig was moved on the same well pad and commenced drilling the Bocachico Norte-J1 exploration well. The Bocachico Norte-J1 exploration well is a follow-up to the successful Bocachico-J1 (100% WI, Operator) exploration well to test both the deeper T-Sandstone and Basal Tena prospectivity.

The Bocachico-J1 well had initial 90-day production rates in the Basal Tena (N-Sand geologic equivalent to Cohembi) of greater than 1,100 BOPD, continues to produce at approximately 850 BOPD, 20-degree API oil, and has less than 1% water cut.

Charapa Seismic Program:

The 20km Charapa-block 2D seismic commitment was successfully completed and the data is now being processed. The 238km2 3D program is 13% complete and will be finished shooting in mid-June. The processed 3D dataset is expected to be delivered by the third quarter of 2024 and will be used to high-grade multiple compelling structural leads identified on vintage 2D seismic lines, which are expected to be drilled in 2025.

Remainder of the 2024 Ecuador Exploration Program:

Upon completion of the Bocachico Norte-J1 exploration well, the rig will be moved to the Charapa Block to drill three exploration wells and finally back to the Chanangue Block to target two Zabaleta exploration wells to test the Basal Tena up dip from Arawana-J1, and test additional deeper U- and T-Sandstone units on the structural high.

Corporate Presentation:

Gran Tierra’s Corporate Presentation has been updated and is available at www.grantierra.com.

About Gran Tierra Energy Inc.

Presentation of Oil and Gas Information

All reserves value and ancillary information contained in this press release have been prepared by the Company's independent qualified reserves evaluator McDaniel & Associates Consultants Ltd. (“McDaniel”) in a report with an effective date of December 31, 2023 (the “GTE McDaniel Reserves Report”) and calculated in compliance with Canadian National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) and the Canadian Oil and Gas Evaluation Handbook (“COGEH”), unless otherwise expressly stated.

Estimates of net present value contained herein do not necessarily represent fair market value. Estimates of reserves for individual properties may not reflect the same level of confidence as estimates of reserves for all properties, due to the effect of aggregation. Total Proved plus Probable reserves of Gran Tierra in Colombia and Ecuador (presented on a consolidated basis by foreign geographic area) pursuant to the GTE McDaniel Reserves Report is 147 million bbls. There is no assurance that the forecast price and cost assumptions applied by McDaniel in evaluating Gran Tierra’s reserves will be attained and variances could be material. There are numerous uncertainties inherent in estimating quantities of crude oil reserves. The reserve information set forth in the GTE McDaniel Reserves Report are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than or less than the estimates provided therein.

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. 2P reserves are proved plus provable reserves.

Certain information in this press release may constitute “analogous information” as defined in NI 51-101, including but not limited to, information relating to the properties or wells in geographical proximity to properties that are or may be held by Gran Tierra. Such information has been obtained from independent government sources, regulatory agencies or other industry participants. Gran Tierra believes the information is relevant as it helps to define the reservoir or asset characteristics in which Gran Tierra holds or may hold an interest. Gran Tierra is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor pursuant to NI 51-101 COGEH. Such information is not an estimate of the reserves or asset characteristics attributable to properties held or potentially to be held by Gran Tierra and there is no certainty that the reservoir data and economics information for the properties held or potentially to be held by Gran Tierra will be similar to the information presented in this press release. The reader is cautioned that the data relied upon by Gran Tierra may be in error and/or may not be analogous to such properties held or to be held by Gran Tierra. The type curves referenced in this press release reflect a selection from a type curves library provided by McDaniel. In each case the type curve referenced is that which in management’s assessment feels best represents the expected average technical drilling results based upon Gran Tierra wells in the area as well as non-Gran Tierra wells determined by management to be analogous for purposes of the type curve assignments. Type curves presented incorporate the most recent data from actual well results and would only be representative of the specific drilled locations. There is no guarantee that Gran Tierra will achieve the estimated or similar results derived therefrom. The potential technical estimates have been generated using the relevant oil type curve noted above, Arawana test results and incorporating management assumptions relating to such amounts which are based on historical results. Accordingly, undue reliance should not be placed on the same. Such information has been prepared by management for the purposes of making capital investment decisions and for internal budget preparation only.

This press release discloses 2P drilling locations in Cohembi, which are Proved locations and Probable locations derived from the GTE McDaniel Reserves Report and account for drilling locations that have associated Proved and/or Probable reserves, as applicable.

Disclosure of Reserve Information and Cautionary Note to U.S. Investors

Unless expressly stated otherwise, all estimates of proved, probable and possible reserves disclosed in this press release have been prepared in accordance with NI 51-101. Estimates of reserves made in accordance with NI 51-101 will differ from corresponding GAAP standardized measure prepared in accordance with applicable 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 estimates based on forecast prices and costs, whereas SEC and FASB standards require that reserves be estimated using average prices for the previous 12 months and that the standardized measure reflect discounted future net income taxes related to the Company’s operations. In addition, NI 51-101 permits the presentation of reserves estimates on a “company gross” basis, representing Gran Tierra’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 COGEH, and those applicable under SEC and FASB requirements. 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.