Gran Tierra acquired a 14% interest in the Palmar Largo Joint Venture in September, 2005. Gran Tierra's share of production from the Palmar Largo Joint Venture averaged approximately 325 barrels per day (net before royalties) over the fourth quarter of 2005. Based upon initial review of well logs, initial production from the Ramon Lista-1001 well is estimated to be in the range of 500 barrels per day (gross before royalties) which would represent an additional 70 barrels per day net to Gran Tierra's interest.
Ramon Lista-1001 reached a final measured depth of 4,301 meters on December 25, 2005. Its primary objective was the Palmar Largo Formation, the major producing horizon of the Palmar Largo Field. An upper member of the Yacoraite Formation, the Puesto Guardian, was the secondary objective. Initial interpretation of logs indicates net hydrocarbon pay of approximately 27 meters and 15 meters for the two reservoirs respectively. A 7 inch liner has been run. The drilling rig will be moved off site and a wireline unit will be used to perforate the reservoirs in the coming week, with first production following tie-in to nearby facilities currently projected to begin within one month.
Dana Coffield, the Company's President and CEO, stated, "We are very pleased with the initial prognosis for this well. The potential for near-term addition of new reserves and production to our established production base is an important element of our basic strategy to build a mixed portfolio of exploration and production opportunities to create substantial value for our shareholders."
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