Block 122 is located on the eastern flank of the prolific Maranon Basin of northern Peru, on the crest of the Iquitos Arch. This is a frontier exploration block covering approximately 1.2 million acres, in a geologic position that is analogous to significant petroleum accumulations found elsewhere in the world. The nearest producing field is the Corrientes field, with estimated ultimate reserves in excess of 200 million barrels.
The exploration term is divided into four exploration periods spread over seven years. The minimum committed work program includes technical studies, seismic acquisition and the drilling of one exploration well, with a total financial commitment of US$ 5.0 million. The exploitation term for oil is thirty years.
Dana Coffield, President and Chief Executive Officer of Gran Tierra, stated, "Our entry into Peru essentially completes the first stage of our growth strategy in Latin America. The addition of the Peru acreage to our current asset base and pending acquisitions in Argentina and Colombia creates a diverse portfolio across three countries. That portfolio provides a broad base of proven reserves and cash flow, development opportunities and exploration lands with a mix of risk and reward profiles, positioning us to move into a second phase of growth that is focused on drilling activity. Block 122 is a unique addition to our portfolio: a pure exploration play with higher risk but huge potential. It is an asset that makes sense in our expanding company, offering an opportunity for quantum growth in the medium/long-term to supplement an aggressive drilling and work campaign in the shorter term."
Gran Tierra Energy, Inc. is an international oil and gas exploration and production company, headquartered in Calgary, Canada, incorporated and traded in the United States and operating in South America. The Company currently holds interests in producing and non-producing properties in Argentina and is pursuing a strategy that focuses on establishing a portfolio of producing properties, and development and exploration opportunities, through selective acquisitions, to provide a base for future growth.
Gran Tierra initiated three acquisitions in the first quarter of 2006: one significant acquisition of producing properties in Argentina to expand and broaden its activities in the Noroeste region of the country; one smaller "tuck-in" acquisition, also in the Noroeste Basin, providing additional production and drilling opportunities; and a third acquisition of Argosy Energy International, which provides a sizeable entry for the company into Colombia. Gran Tierra is continuing to assess growth opportunities and expects to continue its strategy of moving aggressively and sensibly to build a diverse, self-sustaining and active international oil and gas company.
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