Gran Tierra Energy holds a 50% working interest and is Operator of this block. Partner, Solana Resources Limited, holds a 50% working interest. The Chaza Block is subject to the most recent Agencia Nacional de Hidrocarburos (ANH) contract terms, with attractive fiscal terms including a sliding scale royalty commencing at 8% and no back-in rights by the state company Ecopetrol.
Gran Tierra reported that its Costayaco-1 well reached a total measured depth of 8,570 feet on May 10, 2007. The well encountered reservoir quality sandstones with oil and gas shows in four zones. Initial log interpretations indicate potential oil pay in the Kg Sand Unit of the Rumiyaco Formation, the U Sandstone Unit of the Villeta Formation, the T Sandstone Unit of the Villeta Formation and in the Caballos Formation. These are the same four zones currently undergoing drill stem tests in Gran Tierra's recent Juanambu-1 oil discovery in the adjacent Guayuyaco Block, and are proven producing reservoirs in fields in the adjacent Santana and Guayuyaco Blocks operated by Gran Tierra Energy.
The Costayaco-1 well bore has been cased in preparation for testing. The service rig currently testing Juanambu-1 will move to the Costayaco-1 location to begin testing operations in June. Planning for a seismic acquisition infill program over the Costayaco structure has been initiated to optimize potential delineation and development drilling locations.
Dana Coffield, President and Chief Executive Officer of Gran Tierra, stated, "These early positive results justify an extensive testing program to evaluate the commercial potential of the encountered hydrocarbons zones similar to those currently underway at our Juanambu-1 discovery. This has the potential to be our third oil discovery this year, following the nearby Juanambu oil well in March which is currently being tested, and the Puesto Climaco-2D oil well in Argentina in January which is currently on production."
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. Gran Tierra holds interests in producing and prospective properties in Argentina, Colombia and Peru. To date, Gran Tierra has pursued a strategy that focuses on establishing a portfolio of producing properties, development and exploration opportunities, through selective acquisitions, to provide a base for future growth.
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