Gran Tierra announced the results of an independent reserve evaluation of the company's reserves by GLJ Petroleum Consultants Ltd. effective December 31, 2010.
Year-end 2010 Highlights (net after royalties (NAR), calculated in accordance with Securities and Exchange Commission (SEC) rules):
- Total Proved (1P) oil reserves increased 7% to approximately 23.6 million barrels of oil;
- Total Proved plus probable (2P) oil reserves increased 11% to approximately 31.0 million barrels of oil;
- Total Proved plus probable plus possible (3P) oil and liquids reserves increased 20% to approximately 47.3 million barrels of oil and liquids;
- Reservoir performance expectations were exceeded at the Costayaco field in Colombia and Costayaco 1P reserves changed to 17.7 million barrels of oil at year-end 2010, from 18.7 million barrels of oil at year-end 2009 despite total production of 4.4 million barrels of oil NAR at the Costayaco field in 2010;
- The Moqueta new field discovery in Colombia added total 3P working interest reserves of 12.3 million barrels of oil or NAR 3P reserves of 9.7 million barrels of oil based on the evaluation of three wells completed before year-end 2010. The 2010 year-end reserves do not include the results of the Moqueta-4 delineation well, which is currently testing;
- Gran Tierra Energy produced approximately 7.1 million barrels of company interest oil before royalties and 338.6 million cubic feet of company interest gas before royalties in 2010;
- Annual production for 2010 averaged approximately 19,300 company interest barrels of oil per day (BOPD) before royalties, or 14,300 BOPD NAR, an increase of approximately 13% versus 12,684 BOPD NAR in 2009. Production in the fourth quarter of 2010 averaged approximately 15,800 BOPD NAR.
All reserves values contained in the 2010 Highlights, provided above, have been calculated using United States SEC rules.
"Gran Tierra Energy attained record levels of reserves and production in 2010 through successful exploration for new reserves and successful management of existing reserves," said Dana Coffield, President and CEO. "In 2011, we are focused on continuing growing reserves through exploration drilling in Colombia, Peru and Brazil, continued delineation drilling of new reserves discovered at the Moqueta oil field in Colombia, and growing production through development drilling and reservoir management in existing producing fields in Colombia, Argentina and Brazil. It remains our intent to execute our capital program in 2011 through available cash and cash flow from operations, allowing the company to remain debt free."
Reserves were added through development drilling and technical revisions in the Costayaco and Juanambu fields, along with the Moqueta discovery on the Chaza block and the Jilguero discovery on the Garibay block, both in Colombia.
- Partially offsetting reserve additions was 2010 full year production of 7.1 million barrels of company interest oil before royalties and 338.6 million cubic feet of company interest gas before royalties.
- 1P light and medium oil reserves increased 7% largely due to development drilling in the Costayaco Field and the Moqueta and Jilguero discoveries, partially offset by full year 2010 production.
- 2P light and medium oil reserves increased 11% mainly due to development drilling at Costayaco combined with the Moqueta and Jilguero discoveries.
- 3P light and medium oil and liquids reserves increased by 20% or 7.9 million barrels, largely due to Moqueta discovery.
- Gran Tierra Energy has year-end 2010 NAR 3P gas reserves of approximately 43.4 billion cubic feet, an increase of 14% from 38.1 billion cubic feet NAR at year-end 2009 largely associated with the Valle Morado block in northern Argentina.
Gran Tierra Energy's Colombia year-end 2010 working interest and net after royalty reserves are shown in the following table (with average start-of month 2010 oil prices). Also shown in the following table is Gran Tierra Energy's Colombian net after royalty reserves for year-end 2009 (with average start-of month 2009 oil prices).
- The increase in proved oil reserves is mainly associated with development drilling in the Costayaco Field in Colombia.
- The increase in 3P reserves is mainly associated with the Moqueta discovery on the Chaza block and the Jilguero discovery on the Garibay block in Colombia.
- Colombian gas reserves are associated with the Magangue field in the Lower Magdalena basin.
The Costayaco Field 2010 year-end net after royalty reserves are shown in the following table (with average start-of month 2010 oil prices). Also shown in the following table is a comparison of the Costayaco Field 2010 year-end gross lease reserves (with average start-of month 2010 oil prices) to the gross lease reserves estimated in December 31, 2009 (with average start-of month 2009 oil prices).
- Gran Tierra Energy successfully completed workovers on Costayaco-1, -3 and -11 thereby enhancing the productivity of the field.
- In September 2010, a water injection facility was completed with water injection commencing in October 2010 into the T Sand reservoir through the Costayaco-5 and -6 wells.
- The Costayaco-11 well was put on production in early July, 2010.
- Approximately 4.4 million barrels of oil NAR was produced from the Costayaco field in 2010. Through a successful field development program in 2010, Gran Tierra Energy managed to successfully mitigate reserve declines at the Costayaco field.