Gran Tierra Energy Announces Record Quarterly Production of 21,860 BOEPD and Operations Update 04/17 06:00 AM
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Preliminary Front End Engineering Design Initiated for Bretaña Norte Field Development in Peru
CALGARY, April 17, 2013 /PRNewswire/ - Gran Tierra Energy Inc. (GTE:$5.42,00$0.05,000.93%) ("Gran Tierra Energy") , a company focused on oil exploration and production in South America, today provided updates for its production and exploration drilling in Colombia, Peru and Brazil.
"Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) is pleased to start the year with record levels of production as we continue to successfully mitigate transportation disruptions in Colombia," commented Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) . "Operationally, we believe the northern boundary of the Moqueta field has now been successfully delineated with the Moqueta-9 appraisal well. The balance of this year will focus on increasing water injection for pressure support and increasing production capacity from the field. Once permits are in place, we can then direct our attention to appraising the eastern flank of the Moqueta structure, which remains undrilled. In Peru, the evaluation of our Bretaña Norte oil discovery continues, with initial testing of our well extension expected in the coming month, preliminary field development planning initiated, and long term testing expected to begin within a year. Our exploration program in the onshore Recôncavo Basin in Brazil, testing a new play with horizontal drilling and multi-stage fracture stimulation, is ongoing with results expected mid-year," concluded Coffield.
Production
Average daily consolidated light and medium crude oil and natural gas production net after royalty (NAR) before inventory adjustments for the three months ended March 31, 2013, increased 21% to approximately 21,860 barrels of oil equivalent per day ("BOEPD") NAR compared with 18,148 BOEPD NAR for the corresponding period in 2012. Approximately 97% was oil and natural gas liquids. First quarter production reflects increased production in all countries in which we are producing with the largest contribution to the increase from the Costayaco, Moqueta, and Surubi oil discoveries. This increase was partially offset by approximately 44 days of oil delivery restrictions due to disruptions in the Ecopetrol-operated Trans-Andean oil pipeline (the "OTA pipeline") in Colombia. Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) continued production while the OTA pipeline was down, selling oil through an alternative pipeline and trucking and storing excess oil.
Average daily Colombian production of light and medium crude oil and natural gas for the three months ended March 31, 2013 increased 18% to approximately 17,850 BOEPD NAR before inventory adjustments, compared with 15,163 BOEPD NAR before inventory adjustments for the comparable period in 2012. The production is primarily from the Costayaco and Moqueta fields in the Chaza Block in which Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) has a 100% working interest.
Additionally, preliminary indications show approximately 139,800 barrels NAR net liquidation of inventory during the quarter. Inventory volumes will be finalized near the end of April 2013 and, as such, this figure is subject to change.
Colombia
Chaza Block (100% working interest and operator)
In Colombia, the Moqueta-9D appraisal well was spud on January 20, 2013 to test the northwest extent of the Moqueta field. It discovered hydrocarbons in a different fault block, separate from the main Moqueta oil accumulation. The T-Sandstone tested gas and the combined Caballos and U-Sandstone formations tested oil and water. Further isolation testing on the Caballos and U-Sandstone formations will be conducted to define their hydrocarbon potential. These results, integrated with seismic and other wells drilled to date, indicate the well has defined the northern margin of the main Moqueta oil accumulation. The down-dip extent of the oil column to the west, south and east, and the lateral extent of the structure to the east, have not yet been defined by drilling, with this additional resource potential to be defined with our ongoing drilling campaign.
The Moqueta-10 well has begun drilling. This well will be used as a water injection well to assist with pressure support in the Moqueta field to support production growth from existing and future planned production wells. This well is being drilled to the far western flank of the field, and may provide additional information on the down-dip extent of the oil column in the primary reservoirs in the main block, which has not yet been determined. This well will be followed by Moqueta-11, which is planned to be a production well.
Peru
Block 95 (100% working interest and operator)
Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) has initiated drilling of the horizontal side-track extension of the Bretaña Norte 95-2-1XD oil discovery well. Casing has been set at the top of the Vivian reservoir, where very high quality sands with very good oil shows were encountered, and the drilling of a 500 meter horizontal leg has been initiated. Upon completion, a short test will be conducted. Plans are ongoing to initiate long-term testing from this horizontal well, with production to be initiated within a year. In addition, a Preliminary Front End Engineering Design has been initiated for the Bretaña Norte field development to support reserves booking, with results expected before year-end.
Brazil
Block 142 (100% working interest and operator)
Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) 's horizontal multi-stage fracture stimulation exploration drilling program in the Recôncavo Basin onshore Brazil is ongoing, with results of the program expected mid-year.
About Gran Tierra Energy Inc. (GTE:$5.42,00$0.05,000.93%)
Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) is an international oil and gas exploration and production company, headquartered in Calgary, Canada, incorporated in the United States, trading on the NYSE MKT (GTE) and the Toronto Stock Exchange (GTE), and operating in South America. Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) holds interests in producing and prospective properties in Colombia, Argentina, Peru, and Brazil. Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) has a strategy that focuses on establishing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a base for future growth.
Gran Tierra Energy (GTE:$5.42,00$0.05,000.93%) 's Securities and Exchange Commission filings are available on a web site maintained by the Securities and Exchange Commission at http://www.sec.gov and on SEDAR at http://www.sedar.com.
Forward Looking Statements and Advisories
GTE ops update
Re: GTE ops update
My Fair Value Estimate for GTE is $10/share and the model assumes 20,000 boepd production for 2013. They are now way ahead of schedule. The GTE model assumes $95/bbl for their oil and the probably got $100/bbl in the first quarter.
We are in a very risk adverse market. Most investors and fund managers can't figure out the risk of doing business in South America, so GTE may stay grossly undervalued for awhile. Regardless, the company is off to a very good start in 2013.
We are in a very risk adverse market. Most investors and fund managers can't figure out the risk of doing business in South America, so GTE may stay grossly undervalued for awhile. Regardless, the company is off to a very good start in 2013.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: GTE ops update
Analyst Actions: Gran Tierra Energy Estimates Raised at Credit Suisse 04/18 09:27 AM
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10:27 AM EDT, 04/18/2013 (MidnightTrader) -- Production Ahead of Estimates: "Gran Tierra reported Q1/13 production of 21,860 boe/d NAR, ahead of our forecast of 20,417 boe/d, as the company was able to continue producing with its trucking arrangements despite 44 days of delivery restrictions on the OTA pipeline in Colombia."
New Estimates: "We raise our 2013E production by 5% to 22,183 boe/d and also raise 2014E production by 2% to 23,767 boe/d. As a result, our cash flow estimates in both years have increased by roughly the same amount. We are raising our 2014 & 2015 EPS estimates to $0.62 & $0.65 from $0.59 & $0.60."
Moqueta Boundary to the North: "The Moqueta-9 well appears to have encountered the northern boundary of the Moqueta field. The T-Sandstone tested gas while the Caballos and U-Sandstone zones collectively tested both oil and water. Further testing from individual zones is required to determine oil potential at Moqueta-9. The next well, Moqueta-10, has already spud and is planned to be a water injector while Moqueta-11 is planned to be an oil producer."
Peru and Brazil: "The company plans to conduct a short production test at Bretana in Peru with its horizontal sidetrack. Long term testing is expected within a year and front-end engineering studies have been initiated to support booking reserves this year. Over in Brazil, we expect the company to be relatively mum on frac results at its unconventional oil play as there is an upcoming bid round in May 2013, with results in August 2013."
Recommendation: "We maintain our OP rating and TP US$8.50. Given the current market volatility, we continue to favor companies such as GTE that have a strong balance sheet and a steady/growing production profile."
Price: 5.50, Change: +0.02, Percent Change: +0.36
http://www.midnighttrader.com
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10:27 AM EDT, 04/18/2013 (MidnightTrader) -- Production Ahead of Estimates: "Gran Tierra reported Q1/13 production of 21,860 boe/d NAR, ahead of our forecast of 20,417 boe/d, as the company was able to continue producing with its trucking arrangements despite 44 days of delivery restrictions on the OTA pipeline in Colombia."
New Estimates: "We raise our 2013E production by 5% to 22,183 boe/d and also raise 2014E production by 2% to 23,767 boe/d. As a result, our cash flow estimates in both years have increased by roughly the same amount. We are raising our 2014 & 2015 EPS estimates to $0.62 & $0.65 from $0.59 & $0.60."
Moqueta Boundary to the North: "The Moqueta-9 well appears to have encountered the northern boundary of the Moqueta field. The T-Sandstone tested gas while the Caballos and U-Sandstone zones collectively tested both oil and water. Further testing from individual zones is required to determine oil potential at Moqueta-9. The next well, Moqueta-10, has already spud and is planned to be a water injector while Moqueta-11 is planned to be an oil producer."
Peru and Brazil: "The company plans to conduct a short production test at Bretana in Peru with its horizontal sidetrack. Long term testing is expected within a year and front-end engineering studies have been initiated to support booking reserves this year. Over in Brazil, we expect the company to be relatively mum on frac results at its unconventional oil play as there is an upcoming bid round in May 2013, with results in August 2013."
Recommendation: "We maintain our OP rating and TP US$8.50. Given the current market volatility, we continue to favor companies such as GTE that have a strong balance sheet and a steady/growing production profile."
Price: 5.50, Change: +0.02, Percent Change: +0.36
http://www.midnighttrader.com