“Gran Tierra views the Contract as a strategic opportunity to obtain operatorship of assets, upon completion of the initial work program, and subject to Executive Committee approval of the corresponding plans with significant original oil in place (“OOIP”) that has historically seen limited development or secondary recovery and currently has a relatively low recovery factor. We believe this creates a compelling opportunity to apply Gran Tierra’s proven operating model and waterflood expertise to enhance recovery and extend field life. The Fields are adjacent to our Acordionero field and share similar geological characteristics, in which we have successfully implemented waterflood development to maximize recovery. By leveraging the technical expertise and operational efficiencies demonstrated at Acordionero, we believe there is a clear opportunity to waterflood the assets and significantly improve the recovery factor. In addition, we see potential to apply modern technologies, including potential application of horizontal and multi-lateral drilling techniques utilized in our Canadian operations, to increase reservoir contact and improve recovery. The proximity of these assets to our existing operations would also create meaningful synergies, including the ability to integrate water management across the fields and to utilize natural gas to implement a gas to power project, thereby lowering operating costs across the area. Operating these Fields alongside Acordionero would allow Gran Tierra to manage the area as a single operating hub, improving efficiency and maximizing long-term value for all stakeholders. The transaction further strengthens the longstanding partnership between Ecopetrol and Gran Tierra” said
The Contract is subject to the satisfaction of certain conditions precedent including regulatory approval by the Superintendence of Industry and Commerce of
Key Terms
- Phase 1 capital activity is expected to focus initially on waterflood expansion from Gran Tierra’s operated Acordionero field into the adjoining Fields before accelerating development through wellbore optimization and low-risk infill drilling of the identified OOIP across the Block. Completion of Phase 1 is achieved with a minimum of
$15 million , and previous approval of the Executive Committee, gross capital expenditures and implementation of continuous water injection which is currently anticipated to be achieved in the first quarter of 2027. - Upon completion of Phase 1, Gran Tierra will receive 49 percent of existing base production in addition to 49 percent of incremental production. The Fields averaged 2,500 boepd on a gross basis in 2025. Upon completion of the carry commitment, ongoing capital expenditures would be shared between the parties, with Gran Tierra continuing as operator and applying its waterflood expertise to further expand secondary recovery and accelerate development, with anticipated potential production levels in excess of 13,000 boepd (gross) if development proceeds as expected.
- Expenditure commitment for a
$92.4 million carry capital by Gran Tierra of approximately$47.1 million on a gross capital program over 40 months. - In addition to development opportunities, there are near-field exploration prospects in proven plays on the Block.
- The contract term extends until the economic limit of the Fields, providing long-term development visibility and allowing Gran Tierra and Ecopetrol to fully develop the Block’s resource potential.
Refer here for a map of the Block.
- The reservoirs share similar geological characteristics to Gran Tierra’s adjoining Acordionero field, where the Company has successfully applied waterflood techniques to enhance recovery. Management will utilize a similar development strategy as at Acordionero, with active waterflood development and efficient low-cost infill drilling. There are greater than 60 unbooked drilling locations across the Block and Gran Tierra and Ecopetrol will evaluate the potential use of multi-leg horizontal drilling techniques to increase reservoir contact and optimize capital efficiencies.
- The development wells will be targeting the same formations and depths in Acordionero which we are currently drilling and completing for less than
$2.0 million . We have drilled over 100 wells in the Acordionero field. - Proximity to Acordionero will provide operational synergies including optimizing water management and injection across the Fields. Natural gas from the blocks may support gas-to-power infrastructure, enabling self-generated electricity and lowering operating costs across the area.
Contact Information
For investor and media inquiries please contact:
+1-403-265-3221
info@grantierra.com
About
Gran Tierra’s filings with the U.S. Securities and Exchange Commission (the “
Forward Looking Statements and Legal Advisories:
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”), which can be identified by such terms as “expect,” “plan,” “can,” “will,” “should,” “guidance,” “estimate,” “forecast,” “signal,” “progress,” “believes,” and “remains subject to,” derivations thereof and similar terms are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding the satisfaction of the conditions precedent to, and the timing of the effectiveness of, the Contract, including receipt of regulatory approvals from the SIC; Gran Tierra’s ability to earn its working interest in the Block; the expected timing, cost and scope of the committed work program and Phase 1 capital activities, including the capital carry and social investment; the expected timing of obtaining operatorship and entitlement to base production; the expected allocation of capital and operating expenditures following completion of the Phase 1 carry commitment; OOIP relating to the Block and the Acordionero field, planned waterflood expansion, drilling, development and water injection activities; potential production levels, recovery factors and development potential; the potential use of multi-leg horizontal drilling techniques; and anticipated operational synergies, including water management integration and the potential use of natural gas to support gas-to-power infrastructure.
The forward-looking statements contained in this press release reflect several material factors and expectations and assumptions of Gran Tierra including, without limitation, that Gran Tierra will obtain the required regulatory approvals and satisfy the conditions precedent for the Contract to become effective, 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, pricing and cost estimates (including with respect to commodity pricing and exchange rates), rig availability, the effects of drilling down-dip, the effects of waterflood and multi-stage fracture stimulation operations, the extent and effect of delivery disruptions, and the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions in
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: certain of Gran Tierra’s operations are located in
The forward-looking statements contained in this press release are based on certain assumptions made by Gran Tierra based on management’s experience and other factors believed to be appropriate. Gran Tierra believes these assumptions to be reasonable at this time, but the forward-looking statements are subject to risks and uncertainties, many of which are beyond Gran Tierra’s control, which may cause actual results to differ materially from those implied or expressed by the forward looking statements. 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.
The estimates of future production may be considered to be future-oriented financial information or a financial outlook for the purposes of applicable Canadian securities laws. Financial outlook and future-oriented financial information contained in this press release about prospective operational performance are provided to give the reader a better understanding of the potential future performance of the Company in certain areas and are based on assumptions about future events, including economic conditions and proposed courses of action, based on management’s assessment of the relevant information currently available, and to become available in the future. In particular, this press release contains projected operational information for the Block. These projections contain forward-looking statements and are based on a number of material assumptions and factors set out above. Actual results may differ significantly from the projections presented herein. The actual results of Gran Tierra’s operations for any period could vary from the amounts set forth in these projections, and such variations may be material. See above for a discussion of the risks that could cause actual results to vary. The future-oriented financial information and financial outlooks contained in this press release have been approved by management as of the date of this press release. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management’s best estimates and judgments, and represent, to the best of management’s knowledge and opinion, the Company’s expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results.
Presentation of Oil and Gas Information
Boes have been converted on the basis of six thousand cubic feet (“Mcf”) natural gas to 1 boe of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of oil as compared with natural gas is significantly different from the energy equivalent of six to one, utilizing a boe conversion ratio of 6 Mcf: 1 boe would be misleading as an indication of value.
References to a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. Gran Tierra’s reported production is a mix of light crude oil and medium heavy crude oil, tight oil, conventional natural gas, shale gas and natural gas liquids for which there is no precise breakdown since the Company’s sales volumes typically represent blends of more than one product type. Well test results should be considered as preliminary and not necessarily indicative of long-term performance or of ultimate recovery. Well log interpretations indicating oil and gas accumulations are not necessarily indicative of future production or ultimate recovery. If it is indicated that a pressure transient analysis or well-test interpretation has not been carried out, any data disclosed in that respect should be considered preliminary until such analysis has been completed. References to thickness of “oil pay” or of a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume.
The drilling locations disclosed in this press release are unbooked locations. Unbooked locations are internal estimates based on Gran Tierra’s assumptions as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources. Unbooked locations have been identified by management as an estimation of Company’s multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that Gran Tierra will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations considered for future development will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been derisked by the drilling of existing wells in relative close proximity to such unbooked drilling locations, other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.
Figure 1
